Supply Chain and Operations Management Lecture Notes

A comprehensive set of vocabulary flashcards derived from lecture notes covering Supply Chain and Operations Management, including forecasting models, global trade concepts, and process management.

Supply Chain Management

Cooperation between different firms to create value for customers.

Operations Management

The administration of transformation processes that create value for customers by meeting their needs or enabling them to meet their own needs.

Supply Chain and Operations

The planning, sourcing, making, and returning of products.

Process Design

Configuring inputs and resources in a way that provides value, enhances quality, and is productive.

Process Management

The act of executing and controlling the productive functions of a firm.

Process Control

The act of monitoring a process for its efficacy, including dimensions such as cost, timeliness, or quality.

Process Improvement

A proactive effort to enhance process performance, often in response to customer needs or competitive pressures.

Outsourcing

Moving production to another firm.

Nearsourcing

Moving production geographically closer to where products are sold.

Sustainability

The ability to be maintained at a certain rate or level; using resources (material and interpersonal) in an efficient way that leads to future growth.

Product Flows

Usually downstream; when moving from downstream to upstream, it is called reverse logistics.

Monetary Flows

Financial flows that move upstream in the supply chain.

Information Flows

Data that moves back and forth between customers and suppliers.

Service Supply Chain Complexity

Complexity caused by customer-created variation, making it difficult for managers to assess and improve the customer experience.

Integrative Model for SC&O Management

Includes supply management, operations management, and customer relationship management, linking suppliers, the firm, and customers.

The Four I's

Integrating, Innovating, Impacting, and Improving.

Alignment

Making SC&O decisions consistent with overall strategy.

Cost Leadership

A Porter's Generic Strategy where a firm aims to be the cost leader through economies of scale, standard products, and cost-effective procurement.

Differentiation

A Porter's Generic Strategy where a firm offers unique technology, design, or service for which customers pay a premium.

Cost Focus

A strategy that exploits specific market segments to serve them at a low cost, such as aircraft charter.

Differentiation Focus

A strategy serving a certain segment with differentiation, such as exclusive voyages.

Fischer's Supply Chain Alignment Model

Functional products require efficient supply chains, while interactive products require responsive supply chains.

Agility

The quick response to short-term changes in demand or supply.

Adaptability

The long-term capability to adjust a supply chain's design to meet structural shifts in the market.

Order Winners

Attributes that differentiate a product and make it worth having over a competitor's offering.

Order Qualifiers

Qualities and attributes necessary for a firm to enter a market and not be driven out of business.

Core Competency

Capabilities that provide a unique competitive advantage.

Transactional Relationship

Typically short-term relationships based on cost advantages.

Complementary Relationship

When each company needs the core competency of the other to maintain customer value.

Synergistic Relationship

Multiple companies working together to create something worth more than the sum of the individual parts.

Supply Forecasting

Using data about suppliers to project how much product will be available and when.

Demand Forecasting

Analyzing how much product customers are likely to want during a specific time period.

Price Forecasting

Projecting how factors like weather, seasons, and economic trends will affect price.

Naïve Forecasting Model

A simple calculation where the forecast for the next period equals the actual value of the last period.

Simple Linear Regression Forecasting Model

A complex model where Known $Y$'s = Demand, used to approximate the relationship between dependent and independent variables.

ABC Analysis - A Items

High-value items requiring accurate forecasts; they represent $70\%$ of value and $10\%$ of inventory.

ABC Analysis - B Items

Medium-value items requiring decent forecasts; they represent $20\%$ of value and $20\%$ of inventory.

ABC Analysis - C Items

Low-value items requiring rough forecasts; they represent $10\%$ of value and $70\%$ of inventory.

EOQ (Economic Order Quantity) Assumptions

1. Demand is uniform and known; 2. Delivery is reliable and instant; 3. Costs (carrying, holding, unit price) are constant.

EOQ (Economic Order Quantity) Purpose

To minimize the sum of ordering and holding costs.

Reorder Point Formula

$$\text{Average Daily Use} \times \text{Lead Time}$$

Offshoring

Moving work to a distant country.

Offshore Outsourcing

Hiring an external organization to perform business in a country other than where the products/services are developed or manufactured.

Farmshoring

Outsourcing to rural-located companies within the United States.

Technology Clusters

Regions of interconnected buyers, suppliers, and producers of complementary solutions, such as Silicon Valley.

Absolute Advantage

Producing goods and services more efficiently than competitors; concept discussed by Adam Smith.

Mercantilism

Countries controlling trade so they export more than they import.

Bretton Woods System

The foundation of world trade which established the U.S. dollar as the main trading currency and reduced tariffs.

PEST Analysis

An acronym for Political, Economic, Socio-cultural, and Technological factors.

Kaizen

A Japanese word meaning continuous improvement, requiring a lean system and close physical suppliers.

Insourcing

Moving processes handled by third-party firms back in-house.

Reshoring

The repatriation of business activities from overseas back to the home country.

Homeshoring

Moving service industry employment from offices to home-based settings.

Mitchell Principles

A set of values guiding negotiations by using only democratic and peaceful methods.

Intermediary

When a business provides a contract service to an organization while contracting out that same service.

Global Manufacturing Trade-off

The balance between cost, speed, dependability, and quality.

Sand Cone Model

A hierarchy created by Ferdow and De Meyers: quality -> dependability -> speed -> cost efficiency.

Comparative Advantage

Producing goods and services at a lower opportunity cost, such as cotton sheets from Egypt.

Thomas Friedman's World Model

The idea that the world has moved from being 'round' (high trade barriers) to 'flat' (low trade barriers).

RCEP (Regional Comprehensive Economic Partnership)

A free trade agreement creating the world's largest trading bloc in the Asia-Pacific region.

Protectionism

Taxing imports to protect domestic industries from international competition and encourage internal growth.