Exam 3 Zoom Review

Order Cycle Time

starts when customer recognizes they have a need and ends when the need is fulfilled

Supply Chain Order Cycle Time

summation of all the induvial plan, source, make, deliver and return cycle times for each entity in the supply chain from raw material to point of consumption

Relationship between time horizon and uncertainty

the further we project into the future the more the uncertain the projection is

lead time gap

how long the customer is willing to wait and how long it take the supply chain order cycle to fulfill that value. Retail is instantaneous so have to do everything in anticipation of demand

is the difference between the total supply chain order cycle time and the time customers are willing to wait to have their needs fulfilled (customer’s desired order cycle time)

demand penetration point

based on how long customer willing to wait, how far up the supply chain can we allow order to penetrate. Anything downstream-is pulled/done after after customer request. Anything upstream from point must be pushed in anticipation

Type of Value Fulfillment techniques (list 3)

anticipatory/efficient value creation, lean value creation, responsive value creation

Anticipatory/ Efficient Value Creation

standard/traditional cost optimization, do everything ahead of to get economies of scale & lower unit cost, but at the cost of higher inventory

Lean Value Creation

can do anticipatory value better if shorten & reduce cycle time variations. Still anticipatory but only a month-6 weeks in advance, reduces safety stock

Responsive value creation

the most accurate way to create value is wait until customer to tell you what they actually want. Needs faster procurement, techniques, transport, manufacture that cost more, but less to no inventory

Types of information flows

Planning- way into the future, especially capacity

Strategy??

Operational-based on having order in hand (procurement, manufacturing logistics) and how do we manage those info flows to actually execute supply chain operations- day to 2 weeks in advance, shorter time frame

EDI (Electronic data interchange)

connectivity between different enterprises in the supply chain, where you can exchange information in electronic format in real time/instantaneous

ERP (Enterprise resource planning systems)

base of IT, enables access to info from different areas to keep it in a consistent format so anybody in the organization can access data to analyze & execute decisions (like an operating system in a laptop)

Planning Software

sits on top of ERP system, enables access to info from across the source, make, deliver (and connected supply chain partners), so can plan in advance and execute DSI

Execution Software (4 kinds all in this one)

SRM=Supplier relationship management; CRM=customer relationship management- Both are electronic system to manage payment, performance, & interact with base

WMS=warehouse management system-helps manage all the activities that happen in warehouse

TMS=transportation management system-helps manage all transportation actives and operations

Why do companies go global in the first place?

look for new markets to sell to, finding supplier in lower labor cost areas, tax benefits

Global Supply Chain Tradeoffs

Get low-cost labour & new markets, but means having a much longer supply chain with larger transportation and increasing the risk of disruption

Characteristics of Complexity and Risk in Global Supply Chains

length of supply chains, exchange rate, and tariffs. Some of it is physical: crossing borders has more paperwork, handling, and potential for theft

have to look at the total cost and the risk of disruption

Definition of Supply Chain Risk???

The probability of a disruption multiplied by the consequence of the disruption

being able to try and prove the supply chain against disruptions, so continue to maintain the same level of value creation @ same cost exposure

Most supply chain risk comes from disruptions

Where supply chain risk occurs

across all elements of the supply chain-supply base, operations, info systems, downstream customer markets. Related to natural disasters (climate change), Cybersecurity & Geopolitics (Russia war & fertilizer, tariffs on china- elctronic & car parts, rebels in red sea)

Quantifying supply chain risk (how we deal with risk)

Risk profiling has two components:

1. What is the likelihood of that risk happening?

2. If it happened what impact would it have on our supply chain?

A resilient supply chain

is one that’s able to respond to risk and get back to standard operations as quickly as possible

Risk Mitigation

trying to make the supply chain resistant to risk before it happens- diversifying supplier locations to avoid natural disasters

Risk Management

there is a certain amount of risk, you can’t predict when it happens need to be flexible so can deal with it and get back to square one & have higher levels of resilience as soon as possible- build excess inventory, multiple distributors

Sustainbility

our ability to continue supply chains running in the world with scarce resources, social issues etc. Have to be aware how supply chain is impacting triple bottom line

The triple bottom line

economic (finances of firm), social, environmental

not altruistic- generally speaking, everything we do for the environment or society is also beneficial for financial performance, reducing carbon emissions, increasing talent diversity

Scope 1

emissions from our supply chain and operational components that we control emissions

Scope 2

includes emissions of our direct suppliers

Scope 3

broader supply chain emissions, including suppliers suppliers suppliers

Creating a sustainable supply chain

implement in each step

purchasing-emission standard & code of conduct for suppliers

Logistics: efficient transportation, full truck loads and EVs

Manufactering: energy effiecnt and reducing waste

Major changes in the macro environment

climate changes, disruptive technology (AI), geopolitics, talent scarcity

Supply Chain managers response (6)

strategy: management regarding supply chain as tool to create competitive advantage and value

relationship management: customer interactions from value-added standpoint, interact with them to find better ways to create value (same for suppliers)

Design: global network design, where are supplier, major markets, distribution centers, how much work we do ourselves vs outsource

Coordination: demand supply integration, information flow, process & plan info integration across function areas

Technology: create enhanced visibility to capture and analyze data to make decisions

Talent: recruit and retain better talent, more effienctly and effectively use labor to deal with scarcity