Supply Chain Management Exam 1

Supply chain management

the management of processes and relationships in a network of organizations

Strategic decisions

• Product/Process Selection

• Location (Production, Warehousing, Distribution)

• Capacity (Production, Warehousing, Distribution

Tactical Decisions (mid-term impact)

• Number of employees, number of hours worked

• Target inventory levels at each echelon in the supply chain

• Replenishment quantity and frequency in the supply chai

Operational Decisions (short-term impact)

• Job scheduling

• Priorities

Sourcing/Supply Management

The process of identifying, evaluating, and managing external suppliers to obtain the goods, services, and resources a business needs to support its operations and strategic goal

Operations management

the management (design, operation, and improvement) of the processes that transform material, labor, energy, and information into goods and services

Logistics

the coordinated management of related activities associated with the movement and storage of inventor

Core Competencies (Capabilities)

organizational strengths or abilities, developed over a long period of time, that customers find valuable and competitors find difficult to imitate

Value proposition

A statement of what the firm offers the customer that is viewed as attractive to the customer and different from what is offered by its competitors

Cost competitive dimension

Ability to produce or acquire products/services for lower cost than competitors

Quality competitive dimension

Ability to consistently deliver products/services with superior performance, reliability, or conformance to standard

performance

customers will pay more for products/services that offer more desirable features

Reliability

customers will pay more for products/services if they are less likely to incur maintenance cos

Conformance

customers are more likely to purchase products/services if they comply with specification

Delivery speed competitive dimension

The ability to deliver a product/service to a customer quicker than a competitor (time between when the customer orders and the product/service is delivered

Delivery reliability competitive dimension

The ability to consistently and accurately deliver a product to a customer at the time, location, quality level, and quantity specified

Innovation competitive dimension

The ability to bring new products, services, or processes to market faster or better than competitors

Trade-offs

Decisions that arise because of the inability of processes to excel simultaneously across multiple competitive dimensions

Order qualifier

characteristics of a product or service that qualify it for consideration for purchase by a customer or segment

order winner

the winning characteristic of a product or service that causes the customer to purchase it

Productivity

a common measure of how well a company is utilizing its resources

Forecasting

A tool for predicting future demand (typically based on past demand information

Grassroots

seeks advice from people in close contact with customer

Executive judgement

leverages expertise from high level executives focusing on strategic vision

Historical analogy

use historical information from similar product/service to gauge adoption of new product/service

Market research

gather data from potential customers to identify wants and needs, then use this to estimate market reach

Delphi method

iterative process of inquiry with a panel of experts

The simple average forecast

uses ALL THE HISTORY of demands to generate the forecast for the next period

Simple moving average forecast

uses ONLY THE n MOST RECENT period demands to generate the forecast for the next period

Weighted moving average forecast

weights each of the n most recent demands (possibly) DIFFERENTLY in generating the forecast for the next period

Responsiveness

Ability of forecast to respond quickly to a true change in mean level demand

Stability

Ability of forecast to ignore simple random variations

Seasonal index

ratio of that seasons demand over the average demand for all season

Supply management

identification, acquisition, and management of inputs and supplier relationships that a firm needs to attain its strategic objectives

Supply risk

probability of an unplanned event in the acquisition, delivery, or use of goods and services that negatively impacts a firm’s ability to serve its customers

Total cost of ownership

All costs incurred before, during and after the purchase of a good or service

Spend analysis

process to understand what purchases are being made, at what price and from what suppliers

Inventory

the raw material, component parts, work in process, or finished goods that are held at a location in the supply chai

Unit cost

cost of an item at the time it is placed in invento

Order cost or set-up cost

cost to issue a purchase order (if obtained

externally) or set up production (if produced internally

Stock out costs

Internal or external costs from shortage

Holding costs

cost associated with maintaining a product in storage

Cost of obsolescence

Original cost minus salvage cost, Older versions are worth less than new versions, Seasonal products worth less out of season

Damage costs

Any damage resulting from the movement while warehousing and transporting

Shrinkage costs

Theft, Misplaced (lost) inventor