Studied by 0 people
Looks like no one added any tags here yet for you.
Omni channel
a term used in ecommerce and retail to describe a business strategy that aims to provide a seamless shopping experience across all channels, including in store, mobile, and online
3rd party logistics provider (3PL)
companies that outsource a business's logistics operations, such as warehousing, fulfillment, and packaging (using a 3rd party to usually save money and efficiency)
Model
the design of your plan
Brick and Mortar
physical buildings where retailers sell goods (walmart)
Milk Run
multiple stops delivering or picking up product at different locations. Typically store locations (GNC being a small store that only needs like one pallet of stuff, so the truck stops at multiple locations of small stores)
Transactional
typically based just on price, not strategic. ex: transactional buying such as something like paper towels
Capitol goods
goods/equipment purchased to produce consumer goods. ex: manufacturing equipment to produce consumer goods, something that costs like 1000000$ and you are using it for like 30 years, can also be land, 'big ticket items'
Consumer goods
the end/finished product to be sold to consumers. ex: food, electronics
Request for information
(ex: company asking trucking company about where they are located, how many trucks do they have?)
Request for quote
(ex: how much will it cost?)
Request for proposal
(ex: company asks trucking company what is your plan?)
bid
offering a certain amount of money from a company to a trucking company (normally like $$ per mile)
The Market
the available supply or potential demand of specific goods or services (ex: everyone wanting Ozempic making the market tight, but now more companies are making it, so the market is loosening up)
Fixed costs
an expense that does not change regardless of production increases or decreases.
Variable costs
a cost that changes in proportion to production or sales.
Machine flexibility
a production machine capable of producing a variety of products without significant downtime between product runs.
Offshoring
the practice of moving production or service operations overseas with the intention of reducing the cost of doing business.
KPIs
Key Performance Indicators. Can be interchangeably used with the term 'metrics.'
drivers for updating a network design
changes to global trade pattern (better routes for drivers, bad infrastructure)
changing customer expectations (omni channels)
shifting customer/supply locations
change in corporate ownership
cost pressures (tarriffs/cheap labor)
Competitive Capabilitites (does your DC retract or attract value)
Major descision factors for DC locations
Transportation Infrastructure
How close are your customers? (snow mobile DC in Houston is unlikely)
quality of life (walton family making bike trails, the AMP, etc to attract people to work at their new building)
Tax and Industrial Deveopment Incentives
Supplier network proximity (want proximity to what you need to be close to)
Land and Utility costs (want cheap land also)
Avaliability of IT infrastructure
Executive preferences
Integrated Fulfillment Model
retailer has both “bricks and mortar” and online sales
they fufill both sales channels from same network
easy start-up, can have product size/quantity avaliability issues, can compete for same inventory
Office Depot
Integrated Fulfillment Model Example
Dedicated fulfillment Model
Retailer operates two seperate networks for “bricks and mortar” and online sales
Solves integrated model issues, but creates more inventory and more DCs. Allows ability to offer much more in online DCs
walmart
Dedicated fulfillment Model example
Pool Distribution Model
retailers that don’t have the density to create daily full truck loads for stores will “pool” several sotres, typically a 3PL to do deliver several stores each day w the same size delivery
Strip Mall Stores
Pool Distribution Model example
milk runs
Pool Distribution Model involves
Direct Store Delivery Model
Retailer requires supplier/vendor to deliver product from their DCs to the reatil stores directly
This eliminates inventory and allows the supplier/vendor to “mix” product and have control over stock outs
LAYS example where lays employee is stocking the shelf, not a Walmart employee, and this is good for lays because it looks nice on the shelf, this is good for walmart because they do not have to store the chips in their inventory
lays
Direct Store Delivery Model example
Store Fulfillment Model
Online order is sent to the nearest store for customer pick-up or delivery (could be parcel or local courier, etc)
Conflicts between store and online inventory. Requires real time inventory visibility at the store. Requires space at the store. Can be a stop gap to stand up proper online fufillment network
“ship to store” Target example during covid where product is shipped from store to your house. many conflicts can occur from this such as broken product
target
Store Fulfillment Model example
Flow through fufillment model
Similar to store fufillment, but the online orders are picked/packed at the DC and sent to the store on normal delivery truck for pick-up or delivery for customer
Major drawback is longer processing time/time to get to customer
purchasing
Focused on transactional, short-term relationships, primarily driven by price considerations.
Example: A company purchasing office supplies through a simple procurement process without long-term commitments.
type of sourcing
Largely transactional activity
Managing a firm’s acquisition procedures and standards
Facilitated by the placement & processing of a PO
Often follows formal sourcing process
Procurement
Broader scope with a longer-term focus, emphasizing value-driven decisions and supplier relationships.
Example: A business engaging in procurement to select suppliers and manage contracts for ongoing needs.
type of sourcing
Range of processes related to an organization’s need to procure (buy) goods & services
Examples of activities – supplier selection, price negotiation, contract management, supplier performance management
strategic
Collaborative approach that emphasizes long-term supplier relationships and total cost of ownership.
Example: A company implementing strategic sourcing to optimize its supply chain and reduce overall costs.
type of sourcing
Broader processes than procurement
Align with organizational and supply chain goals and objectives
Cross-disciplinary collaboration
Strategic sourcing unique
What makes ___ ___ ___?
Consolidate and leverage purchasing power
Emphasis on value (effectiveness)
Deeper, more meaningful supplier relationships
Attention directed to process improvement
Enhanced teamwork and professionalism
Strategic Sourcing Core Principles
Assess total value. Emphasis beyond acquisition cost, evaluating total cost of ownership and the value of the supplier relationship.
Develop individual sourcing strategies. Individual spend categories need customized sourcing strategies.
Evaluate internal requirements. Requirements and specifications thoroughly assessed and rationalized as part of the sourcing process.
Focus on supplier economics. Suppliers’ economics understood before identifying buying tactics (e.g. volume leveraging, price unbundling, price adjustment mechanisms).
Drive continuous improvement. Strategic sourcing initiatives as subset of continuous improvement process for procurement and sourcing organizations.
Types of Buys
Capital Goods
Rebuy- standard, modify
Maintenance, Repair, Operations (MRO)
Maintenance Repair Operations
MRO
Total Value Assessment
Evaluates all costs associated with a purchase, not just the initial price, to ensure comprehensive decision-making.
Example: A company considering maintenance costs, warranty, and supplier reliability in addition to purchase price.
Customized Strategies
Tailors sourcing approaches for different categories of goods, recognizing that one size does not fit all.
Example: A business adapting its sourcing strategy for raw materials versus finished goods.
Continuous Improvement
Emphasizes the need for regular evaluation and enhancement of sourcing processes to adapt to changing market conditions.
Example: A company conducting periodic reviews of supplier performance and sourcing strategies
Straight Rebuy
Routine purchase of standard items, such as office supplies, with minimal decision-making involved.
Example: A company regularly ordering printer paper from the same supplier.
Modified Rebuy
Involves purchasing familiar items with some modifications, such as upgrading software or changing specifications.
Example: A business upgrading its existing software to a newer version with additional features.
New Task
Refers to a first-time purchase of complex or expensive items, requiring extensive research and evaluation.
Example: A company purchasing new machinery for production for the first time.
Risks of Electronic Procurement
Cybersecurity threats, data breaches, and system failures are significant risks associated with electronic procurement.
Example: A company facing a data breach that compromises sensitive supplier information.
Electronic Procurement Pricing
Pricing teams analyze market trends, competitor pricing, and costs to develop optimal pricing strategies.
Example: A company adjusting its pricing based on competitor analysis to remain competitive in the market.
Preparation Techniques
Key techniques include researching suppliers, defining objectives, and practicing negotiation skills to enhance effectiveness.
Example: A negotiator preparing by gathering data on supplier performance and market conditions.
Negotiation Strategies
Strategies include competing, collaborating, compromising, avoiding, and accommodating, each with distinct approaches and outcomes.
Example: A collaborative strategy aiming for a win-win outcome in negotiations with suppliers.
Volume vs Variety
Economies of scale favor high volume and low variety, while economies of scope support low volume and high variety.
Example: A mass production facility benefiting from economies of scale by producing standard products.
Assembly Process Types
Types include MTS (Make to Stock), ATO (Assemble to Order), BTO (Build to Order), and ETO (Engineer to Order).
Example: A company using ETO for highly customized products that require specific engineering.
Make vs Buy Decisions
Considerations include cost, quality, control, and strategic alignment when deciding whether to produce in-house or outsource.
Example: A company evaluating whether to manufacture components internally or source them from external suppliers.
Made to order
MTO
made to stock
MTS
Assemble to order
ATO
Build to order
BTO
engineer to order
ETO
Note 
Flashcard (20)