SCMN 2150 Exam 3 - Robert Straw

Why are the Goals of Technology for SCM needed?

To plan, execute, and control SCM activities in real time.

What are the Goals of Technology for SCM?

Optimization

Cross-chain visibility

Speed to market

Agility

Collaboration

Adaptability

Differentiation

Risk Management

Optimization

Peak performance of a supply chain requires alignment of resources within and across organizations.

Cross-Chain Visibility

Visibility to events occurring across the supply chain is a pre-requisite for effective decision making.

Speed to Market

properly implemented technologies capture customer requirements, prioritize them, and recommend alternatives to ensure product velocity aligns with customer needs

Agility

Decision support tools provide the ability to model volatility scenarios. This helps the company sense and respond to changing market conditions.

Collaboration

Access to a common data pools supports collaboration on strategies, processes, and exception response... linking geographically dispersed supply chains to achieve seamless/smooth information sharing.

Adaptability

Managers must alter the design and capabilities of a supply chain to meet evolving market conditions.

Differentiation

Technology can help an organization align demand and supply to optimize profit, understand the cost to serve customers, and prioritize service execution.

Risk Management

Companies use predictive analytics and risk management technologies to understand and minimize threats.

Characteristics of High-Quality Data & Useful Supply Chain Information

Accurate

Accessible

Relevant

Timely

Transferable

Reliable

Usable

What does supply chain planning software do?

Strategic network design

Capacity planning

Demand planning & forecasting

Procurement planning

Production planning & scheduling

Distribution planning

What do supply chain execution applications do and what are some examples?

- Supply chain execution applications facilitate the efficient use of resources to control supply chain costs and achieve the quality and service requirements.

Examples:

-Warehouse Management Systems (WMS)

-Transportation Management Systems (TMS)

-Manufacturing Execution Systems (MES)

-Global Trade Management Tools (GTM)

-Distributed Order Management Tools (OM)

What do supply chain event management systems do?

-Provides visibility of critical flows and help provide early warning signals of deviations from plans.

-Triggers corrective actions or recovery recommendations based on predefined work-flow rules.

-Help decision-makers implement the best alternative in terms of cost, time, and customer service requirements.

Business Intelligence (BI) Tools

Tools that extract data from execution systems across the supply chain and provide summaries and data visualization that enable timely identification of anomalies, opportunities and solutions.

Business Analytics

The combination of skills, technologies, applications and processes used by organizations to gain insight in to their business based on data and statistics to drive business planning.

What does ERP stand for and what does it do?

Enterprise Resource Planning (ERP)

- business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back-office functions related to sales, finance, manufacturing, customers, supply chain, and human resources.

- helps you run your entire business

What is cloud computing and what does it do?

Cloud computing is emerging as a viable option for on-demand access to supply chain software applications and data sharing.

-> On-Demand Access

-> Pay-As-You-Go Structure

-> Third-Party Expertise

-> Accessible, Centralized Data

-> Allows supply chain tools to be more affordable for smaller companies.

From Reading: According to Gartner, what is the top expected benefit of becoming a digital business?

Improves operational efficiencies

From Reading: According to Gartner, what are the top 2 roadblocks to making a company a digital business?

1. Culture

2. Legacy Technology Systems

What is Global SCM?

Focuses on planning, implementing, and controlling the cross-border flows of materials, money, and information between companies in different countries.

Why has global production grown? (Key Drivers)

- Access to lower wage rates

- Access to customers in emerging markets

- Reduction in transport and communication costs

- Reduction in trade barriers

What are some of the key risks of global sourcing and outsourcing?

- Long lead times

- Exchange rate fluctuations

- Potential theft or loss

- Lack of visibility

What drives a company to consider off-shoring or near-shoring outsourced operations?

- Increased global competition

- Pressure to reduce costs

- Become more competitive

- Become more innovative

What is "Near-Shoring"?

Transfer of business or IT processes and development work to companies in neighboring or nearby countries within similar time zones.

What are the cons of "near-shoring"?

Cons:

- Production real estate costs & availability

- Labor costs, Availability and Expertise

- Available transportation capacity

- Available warehousing capacity

- Time to implement

- Location of suppliers

What are the pros of "near-shoring"?

Pros:

- Faster order cycle time

- Less inventory in pipeline

- Lower transport costs

- Less potential risks

- Rapid replenishment

- Greater control

What is Contract Manufacturing and why is it utilized?

- Production of goods by one firm, under the label and brand of another firm

- Provide such service to multiple firms based on their own or the customers' designs, formulas, and/or specification.

- Sometimes called off-shoring, outsourcing, or private label manufacturing.

What are some of the issues, considerations, and impacts of "off-shoring" operations?

- Higher risk of shortages and stock-outs

- Higher levels of inventory

- Uncertain and longer lead times

- Exchange rate fluctuations

- Potential theft or loss

- Lack of visibility

Readings: What are 7 Secrets to Navigating International Markets?

1. How deep your involvement should be.

2. How you will be paid.

3. Check U.S. export controls.

4. Protect your trademark.

5. Know international contract laws.

6. Respect cultural differences.

7. Secure free U.S. government services.

Readings: According to BCG, what are the 6 recommended steps companies should take to assess and adjust their supply chains?

1. Align design principles with the new reality.

2. Segment the portfolio by supply chain risk and understand performance drivers.

3. Identify levers and options at the segment level.

4. Evaluate supply chain design options for each segment.

5. Pressure test design choices across the company.

6. Put the network redesign in place and monitor performance.

What are Terms of Trade or "Incoterms" and how are they used?

- The global standard for the interpretation of the most common terms in foreign trade and identify seller's and buyer's obligations and responsibilities for transportation costs/charges

- Created by the International Chamber of Commerce

Why is "the paperwork" for export documentation so important and critical to the export process?

It drives the entire export process -- moving information in a timely fashion is key to uninterrupted freight flows.

What is a Commercial Invoice and how is it used?

- Key transaction document is the commercial invoice and it contains information relevant to the transaction from start to finish.

- The commercial invoice must identify the buyer and seller, and clear indicates the:

1) Date and Terms of sale

2) Quantity, Weight, and/or Volume of the shipment

3) Type of Packaging

4) Complete description of goods

5) Unit value and Total value

6) Insurance, Shipping, and other charges (as applicable)

What is the Bill of Lading and how is it used?

- The primary transportation document; It is required to move the freight.

- Must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative form the carrier, shipper, and receiver.

Purpose:

1) Evidence of Contract Carriage - details the type, quantity, and destination of the good being carried.

2) Receipt of Goods - provides proof that the carrier has received the goods from the shipper or their agent in good condition.

3) Document of Title to the Goods - serves as a proof of ownership (title) of the cargo.

What is Certificate of Origin and how is it used?

Verifies the country in which the goods were manufactured.

- Promotes trade compliance by attesting to the production or manufacturing origin of the export item.

- Usually signed through a semiofficial organization, such as a local chamber of commerce.

- Accuracy is critical as the country of origin affects duty rates, import quotas, trade compliance, and related issues.

Why is freight protection and insurance needed in global shipping?

Assures the coverage of loss or damage to the freight during transit.

Describe the global carrier's limited liability for freight loss.

Carriers are bailees but do not take title to the goods in their temporary possession and are only responsible for freight loss, damage, or delay due to the carrier's negligence.

What risk reduction strategies can be utilized by shippers in global shipping?

Strong suppliers, visibility, near-sourcing, & insurance

Readings: In 2014, the University of Tennessee Global Supply Chain Institute white paper titled "Managing Risk in the Global Supply Chain", what was the highest ranked risk mitigation strategy listed by supply chain executives?

Strong suppliers

What are the key selection factors tradeoffs in choosing your mode in international shipping?

- Type of Service (direct or indirect)

- Mode Selection

- Carrier Selection

Routing

What are the important considerations in carrier selection in international shipping?

- Geographic Coverage

- Equipment Availability

- Product Protection

- Reliability

- Transit Time

What considerations should be made when choosing international shipment routings?

- Port Capabilities

- Port Security

- Border Congestion

What are the steps in the customs clearance process?

1. Entry filing

2. Arrival

3. Examination

4. Classification

5. Taxation

6. Release

What happens in the customs clearance "examination" step?

Cargo is inspected to verify what it is, how safe it is, if it's legal, & value.

What are the classifications and how are they used in the import process?

Cargo is assigned to a class as defined in U.S. Harmonized Tariff Schedule so that it can be properly taxed/tariffed.

What are import duties and how are they determined?

Taxation/Duties:

Ad-valorum taxes based on the commodity being imported, its declared value, country of origin, and other factors like quotas

What is a customs broker and how are they used?

Third-Party logistics professionals hired by importers to interpret complex entry rules and help clear customs safely, securely, and quickly & ensure legal minimum duties are paid.

What is a free-trade zone and how are they used?

AKA: "foreign trade zones"

- Goods can enter the FTZ without formal customs entry or payment of duties.

- Goods in FTZ can be assembled, repackaged, relabeled, or combined with other products.

In the final delivery leg, when would rail typically be used. What are the advantages and drawbacks?

If the final leg is > 750 miles and has large capacity.

Pro: highly efficient, large capacity, and low costs

Con: Accessibility and inconsistent service

Readings: From the article, "Clearing Customs Quickly and Efficiently," what are the 10 tips for fast, reliable customs clearance?

1. Focus on what you can control.

2. Make someone accessible 24/7

3. Learn the lingo (FAST, PAPA, PIP)

4. Cross-training is crucial

5. Use IT

6. Don't cheat the system

7. Pay on time

8. Work with the best

9. Savings begin after the deal is done

7. Customs compliance may require personnel, training, and IT investment.

Module 9 Quiz

1. In complex and fast-changing markets, supply chain managers need decision support tools that will provide ___________, so they can recalibrate plans and adjust to volatility in supply and demand.

Agility

2. When a supply chain managers say, "data must be readily available for decision making purposes" they need the data to be _______________.

Accessible

3. Supply chain ________________ tools use mathematical modeling and other tools to quickly assess your options and find solutions that eliminate inefficiencies and leverage cost savings across supply chain communities.

Optimization

4. Order management systems, warehouse management systems, and transportation management systems are examples of _________________ software that help companies conduct day-to-day supply chain processes.

Supply Chain Execution Software

5. (T/F): To maximize supply chain capabilities and improve visibility of product flows, companies must develop a supply chain wide technology strategy to support multiple levels of decision making.

True

Module 10 Quiz

1. Match the three key pieces of international sourcing activities to their corresponding definition.

Preparation

Key questions and planning issues in global supply chain management.

Purchasing

Sourcing the materials, components, & modules for production.

Production

Creating the final goods, ready fro global distribution

2. Which of the following is NOT a growth driver of global manufacturing?

a) Risk Reduction

b) Emerging market potential

c) Increase in trade barriers

d) Labor cost differences

C) Increase in trade barriers

3. Reduce costs, expand capacity, reduce risk, access new designs & specialized skills/ideas are all goals of what procurement strategy?

Global Sourcing

4. __________ is the production of goods for sale in countries outside the home market of the organization

Global Manufacturing

5. (T/F): According to Louis Dejoie, the U.S. Department of Commerce does not provide a great deal of assistance for companies entering international markets.

False

Module 11 Quiz

1. Which of the following Global Supply Chain Management Activities involves negotiating the terms of trade, preparing the trade documents, and protecting the freight?

Export Preparations

2. Incoterms clarify important issues for buyers and sellers. which of the following is NOT one of those issues?

a) Provide the ground rules for price negotiations between parties

b) Assign responsibility for payments

c) Articulate the risks assumed by each party

d) Clarify the obligations of each party

A) Provide the ground rules for price negotiations between parties.

3. Match the following Global Trade Documents to their corresponding function/purpose.

Commercial Invoice

Must identify the buyer and seller.

Bill of Lading

Evidence of contract of carriage, receipt of goods, and document of title to the goods.

Insurance Certificate

Assures the coverage of loss or damage to the freight during transit.

Certificate of Origin

Verifies the country in which the goods were manufactured.

Letter of Credit

Guarantees the seller will receive payment as long as the delivery conditions are met.

4. Within the context of Freight Protection, which of the following is NOT a risk?

a. Shipment Delay

b. Product Damage

c. Poor Documentation

d. Limited Carrier Liability

e. Freight Theft

C) Poor Documentation