Operations Management: Supply Chain Management

Vocabulary practice flashcards covering Chapter 13: Supply Chain Management from Operations Management: Processes and Supply Chains (14th Edition).

Supply Chain Design

Designing a firm's supply chain to meet the competitive priorities of the firm's operations strategy.

Supplier Relationship Process

A process that focuses on the interaction of the firm with its suppliers, comprising five major nested processes: sourcing, design collaboration, negotiation, buying, and vendor-managed inventories.

Sourcing Process

A nested process within the supplier relationship process that is involved in supplier selection, supplier certification and evaluation, and the management of supply contracts.

Total Annual Cost (Supplier Selection)

The cumulative yearly cost associated with choosing a supplier, given by the formula $p D + \text{Freight costs} + \left( \frac{Q}{2} + \bar{d} L \right) H + \text{administrative costs}$, where $p D$ is material cost and $\left( \frac{Q}{2} + \bar{d} L \right) H$ is annual inventory cost.

Cycle Inventory

The portion of inventory that varies directly with lot size, calculated as $\frac{Q}{2}$, where $Q$ is the shipping quantity.

Pipeline Inventory

Inventory that has been created but not yet delivered, calculated as $\bar{d} L$, where $\bar{d}$ is average daily demand and $L$ is the shipping lead time in days.

Green Purchasing

The practice of identifying, assessing, and managing the flow of environmental waste and finding ways to reduce it and minimize its impact on the environment.

Preference Matrix

A quantitative evaluation tool used in supplier selection when facing multiple criteria, calculated by multiplying performance scores by assigned criterion weights and summing the products.

Early Supplier Involvement

A program that includes suppliers in the design phase of a service or product so that suppliers can provide suggestions.

Presourcing

A strategy where suppliers are selected early in the product development lifecycle and are highly involved in the concept development stage.

Value Analysis

A systematic effort to reduce cost or improve performance of services or products, whether purchased or produced.

Competitive Orientation

A negotiation stance that views buyer-seller interaction as a zero-sum game in which one party's gain is the other party's loss.

Economic Dependency

A condition giving purchasing power to a buyer because the purchasing volume represents a significant share of the supplier's sales or because the purchased item is standardized with many available substitutes.

Cooperative Orientation

A negotiation approach emphasizing that the buyer and the seller are partners, each striving to assist the other as much as possible.

Sole Sourcing

The awarding of a contract for a service or item to only one supplier.

Vendor-Managed Inventories (VMI)

A system in which the supplier has access to the customer's inventory data and assumes responsibility for maintaining the inventory level required by the customer.

SA8000:2014

A set of social accountability standards covering nine dimensions of ethical workforce management: child labor, forced or compulsory labor, health and safety, freedom of association and right to collective bargaining, discrimination, disciplinary practices, working hours, remuneration, and management systems.

Order Fulfillment Process

A core process that produces and delivers the service or product to the firm's customers, consisting of four nested processes: customer demand planning, supply planning, production, and logistics.

Customer Demand Planning

An order fulfillment process that facilitates collaboration between a supplier and its customers to forecast customer requirements for a service or product.

Supply Planning

An order fulfillment process that generates a plan to meet demand using demand forecasts, customer service levels, inventory targets, and resources provided by sales and operations planning.

Logistics

An order fulfillment process responsible for delivering products or services to customers through decisions on ownership, facility location, mode selection, capacity, and cross-docking.

Cross-Docking

The packing of products on incoming shipments for easy sorting and immediate transfer at intermediate warehouses without long-term storage.

Expected Value Decision Rule

A decision-making approach used to evaluate alternative resource or capacity options under demand uncertainty by calculating the weighted average cost across demand scenarios and selecting the option that minimizes expected cost.

Customer Relationship Process

A core process addressing the interface between a firm and its customers in the supply chain, consisting of marketing, order placement, and customer service.

Electronic Commerce (e-Commerce)

The application of information and communication technology anywhere along the supply chain of business processes, including Business-to-Consumer (B2C) and Business-to-Business (B2B) systems.

Order Placement Process

A customer relationship process involving activities required to execute a sale, register order specifics, confirm order acceptance, and track order progress until completion.

Customer Service Process

A customer relationship process that assists customers with product or service inquiries, resolves problems, and provides information to facilitate customer interactions.