Supply Chain Management Exam 1

Operations

Activities that transform inputs into outputs

Supply Chain

The network or process that moves materials, information, and products from suppliers through the organization to customers

Transformation Process

Takes inputs and converts them into outputs

Five Supply Chain Processes

Sourcing, Making, Delivering, Returning, Planning

Sourcing

Obtaining materials / products / services from suppliers

Making

Producing the good or providing the service

Delivering

Getting products / services to customers

Returning

Handling returned products / materials

Planning

Coordinating supply and demand and determining what needs to happen

Goods

Physical / tangible products

Services

Activities or benefits provided to a customer

Four Service Features

Intangibility, Perishability, Simultaneity, Customer Participation

Intangibility

Services cannot be physically touched or possessed like a product

Perishability

Services generally cannot be stored for later use

Simultaneity

Services are often produced and consumed at the same time

Customer Participation

The customer often participates in the service process

Goods-Services Continuum

Products aren’t always completely goods or completely services

Product-Service Bundling

A company provides a combination of goods and services

Lean

Focuses on eliminating waste and improving efficiency

Just in Time (JIT)

Materials arrive when they are needed, rather than being held in large inventories

Total Quality Management (TQM)

An organization-wide approach to continuous improvement and quality

Six Sigma

A data-driven approach to reducing defects and process variation

Efficiency

Doing something with minimal resources / waste

Effectiveness

Achieving the desired goal

Value

The benefit received relative to the resources / cost required

OSCM Strategy

The plan for how an organization will use its operations and supply chain capabilities to support its competitive strategy

Cost

Being able to offer products/services at a low cost

Quality

Providing products/services with high quality

Delivery

Being fast and/or reliable

Flexibility

Ability to respond to changes

Innovation

Introducing new products, services, or processes

Trade-offs

Occurs when improving one competition dimension may make another more difficult or expensive to improve

Straddling

Trying to pursue two different strategic positions simultaneously, potentially creating conflicting requirements

Ordre Qualifiers

A characteristic that must meet a minimum level for a product to even be considered by a customer

Order Winner

The characteristic that actually helps a company win the customer’s business

Activity System Maps

Shows how a company’s fit together to support its strategy

Forecasting

Using information to estimate future demand or conditions

Strategic forecast

Long-term forecasting

Tactical forecast

Short-term forecasting

Level

The basic average amount of demand

Trend

Long-term upward or downward movement

Seasonality

Predictable pattern that repeats over a period

Random variation

Unpredictable fluctuations

Alpha

Determines how much weight is placed on the most recent actual demand

High a

Forecast responds more quickly to recent changes

Low a

Forecast changes more slowly and is more stable

Casual forecasting

Assumes that the variable being forecast is related to another variable

Qualitative Forecasting

Use judgement, opinions, experience, or expert knowledge rather than primarily numerical historical data

Market research

Gather information directly from customers / markets

Historical analogy

Use what happened in a similar situation / product in the past

Panel Consensus

A group of knowledgeable people reaches a forecast through discussion

Delphi Method

Experts provide forecasts independently, often through multiple rounds, with feedback between rounds

Collaborative planning, forecasting, and replenishment

Companies in a supply chain work together to improve forecasts and replenishment

Project

A temporary effort undertaken to create a unique product, service, or result

Project management

The process of planning, organizing, and controlling resources and activities to accomplish project objectives

Pure Project Structure

The project team is basically dedicated entirely to the project

Functional project structure

People remain organized primarily within their functional departments

Matrix project structure

Combination of functional and project structures

Statement of Work (SOW)

Describes what the project is supposed to accomplish

Work breakdown structure

Breaks a project down into progressively smaller pieces

Tasks

Specific pieces of work that must be completed

Work packages

The lowest level components of the work breakdown structure that can be planned, scheduled, assigned, and estimated

Milestones

Important events or checkpoints in a project

Critical path

The longest path through the project network and determines the minimum project completion time

Slack time

The amount of time an activity can be delayed without delaying the project

Project Crashing

Shortening the project duration by adding resources, usually at an additional cost

Project Information Systems

Help managers plan, monitor, and control projects

Gantt chart

Shows activities against time

Planned Value

How much work should have been completed, expressed in budgeted dollars

Earned value

How much work has actually been completed, expressed in budgeted dollars

Actual Cost

How much money has actually been spent