L6M3 Strategic Supply Chain Management Flashcards

A comprehensive set of vocabulary flashcards covering strategic supply chain management, organisational structures, growth models, risk management, and environmental factors based on the L6M3 revision notes.

Strategy

A broad, agreed plan that sets out an organisation’s long-term goals, aims and direction to achieve its operational objectives.

Tactics

Specific day-to-day actions and operational activities used to implement a strategy and focus on execution.

Multi-national Corporation (MNC)

An organisation that operates across many countries through structured global operations and a tiered international structure.

Transnational Corporation (TNC)

An organisation that operates from one country into others and crosses national borders but is less globally integrated than an MNC.

Horizontal differentiation

An organisational structure where business functions like marketing and production are separated centrally while serving multiple geographical regions.

Vertical differentiation

A structure where business functions are located closer to customers by duplicating departments within each geographical area or region.

Matrix organisation

A structure where employees report to both functional managers (e.g., Finance, Operations) and project managers.

Corporate level strategy

The highest strategic level that sets the organisation’s vision, long-term objectives, and overall direction.

Business level strategy

Strategies developed for specific divisions, brands, or product focuses to implement the corporate strategy.

Functional level strategy

Strategies developed by departments (e.g., logistics, HR) to support business and corporate objectives through operational excellence.

Joint Venture (JV)

A legally established organisation formed by two or more companies to carry out a specific project or activity.

Growth strategy

A strategy aimed at increasing market share, revenue, and profitability by expanding operations, product portfolios, or geographical markets.

Boston Consulting Group (BCG) Matrix

A model used to evaluate products based on relative market share and market growth rate, categorising them as Stars, Cash Cows, Problem Children, or Dogs.

Stars

Products in the BCG Matrix with high market share and high market growth, representing highest growth potential.

Cash Cows

Products in the BCG Matrix with high market share in a low-growth mature market that generate consistent profits.

Problem Children

Products in the BCG Matrix with low market share in a high-growth, attractive, but competitive market.

Dogs

Products in the BCG Matrix with low market share and low market growth that generate little value.

McKinsey Matrix

An evaluation tool developed with General Electric that measures industry attractiveness and a company’s competitive position.

Diversification

A strategy where an organisation expands into different products, services, or businesses to reduce dependence on one market.

Agile supply chain

A supply chain strategy focused on flexibility and rapid adaptation to changing customer or market demands.

Lean supply chain

A supply chain strategy focused on eliminating waste, reducing costs, and increasing efficiency.

Kando

A Yamaha corporate philosophy meaning the feeling of satisfaction and excitement from experiencing quality and value.

Stability strategy

A strategy aimed at maintaining a stable market position over the long term, often adopted by mature companies or those recovering from disruption.

Cost Leadership

A competitive strategy aimed at becoming the lowest-cost producer in an industry through process efficiency and economies of scale.

Differentiation

A competitive strategy offering unique and superior products or services that allow for premium pricing.

Cost Focus

A strategy competing by offering lower prices within a specific niche target market.

Differentiation Focus

A strategy providing unique products or services for a specific market segment.

SWOT Analysis

A strategic tool used to evaluate internal Strengths and Weaknesses and external Opportunities and Threats.

Non-decisions

Strategic choices about what an organisation deliberately decides not to do, defining its strategic focus.

Profit Formula

$$Profit = \text{Selling price} - \text{Total costs}$$

Opportunity cost

The profit lost by choosing one activity or product instead of a potentially more profitable alternative.

Mark-up

A percentage added to production costs to determine the selling price.

Fulfilment costs

Total costs including logistics, transport, shipping, packaging, delivery, and invoicing.

Working capital

The difference between current assets and current liabilities defined by the formula $\text{Working capital} = \text{Current Assets} - \text{Current Liabilities}$

Risk

A measurable event that has a likelihood of occurring and can produce negative outcomes or positive opportunities.

Uncertainty

Events that cannot be measured accurately or reliably, such as long-term weather predictions.

Bullwhip effect

An internal risk involving poor communication and planning that causes distorted demand signals across the supply chain.

Risk Score

A numerical value used to prioritise hazards calculated as $\text{Risk Score} = \text{Likelihood} \times \text{Severity}$

Risk appetite

The amount of risk an organisation is willing and able to accept, influencing decision-making and strategy.

Redundancy

A resilience strategy involving backup capacity like multiple supply sources or buffer stock.

Fail-safe systems

Controls such as multiple approvals or governance processes designed to prevent critical human errors.

Comparative Advantage

An economic theory by Ricardo suggesting countries or companies should produce what they are best at and outsource the rest.

Enterprise Profit Optimisation (EPO)

The use of data and technology to maximise profit by constantly adjusting prices and supply based on real-time variables.

Outsourcing

The practice of buying products or services from an external supplier instead of producing them internally.

Offshoring

Relocating an activity, manufacturing process, or service operation to another country.

Protectionism

Government actions such as quotas, duties, or tariffs taken to protect domestic industries from foreign competition.

Inshoring (Onshoring)

Bringing an operation, service, or manufacturing process back to the organisation’s home country.

Nearshoring

Moving work to a nearby country instead of a distant one to maintain lower costs while staying closer to the home market.

Insourcing

Bringing an activity, process, or function that was previously done by an external supplier back in-house.

STEEPLED Analysis

A tool used to evaluate the business environment covering Social, Technological, Economic, Environmental, Political, Legal, Ethical, and Demographic factors.

Internet of Things (IoT)

Interconnected devices like sensors and GPS trackers that collect and exchange data for real-time tracking.

Blockchain

A secure digital transaction record used for anti-counterfeit control, product authenticity, and smart contracts.

Facilitation payments

Small payments made to officials to speed up business processes, which may be illegal under the UK Bribery Act 2010.

Incremental Change

Small, gradual improvements made over time without destroying existing systems, also known as Quinn’s logical incrementalism.

Disruptive Change

Large, rapid changes that fundamentally transform an organisation or market and can make old business models obsolete.

Exogenous Change

Market change that comes from outside the organisation or market, such as new legislation or economic crises.

Actor-centric change

Changes driven by companies within a market, such as mergers, acquisitions, or company failures.

Economies of Scale (EOS)

The reduction of average unit costs by producing larger quantities and spreading fixed costs over more units.

Environmental, Social and Governance (ESG)

A framework for building ethical and sustainable supply chains focusing on carbon emissions, fair labour, and company policies.

ISO 14001

An international standard focused on environmental management systems.

Strategic Alignment

Ensuring that all levels of an organisation (corporate, business, and functional) work towards the same strategic goals.

Strategic Alignment Model (SAM)

A model by Venkatraman, Henderson & Oldach that measures how strategy fits business needs and how departments integrate.

Mendelow Matrix

A stakeholder management tool that maps individuals or groups based on their Power and Interest.

Customer Relationship Management (CRM)

The use of data to manage customer relationships, improve satisfaction, and personalise products.

Supplier Relationship Management (SRM)

The strategic management of supplier relationships to improve performance and create long-term value.

Collusion

Illegal cooperation between competitors to reduce competition, such as price-fixing or output restriction.