Fundamentals of Supply Chain Management and Strategy

Vocabulary flashcards covering core supply chain definitions, historical evolution, globalization flows, product types, supply chain strategies, and network design factors.

Supply Chain

A network of all entities involved in producing and delivering a finished product or service to the final customer.

Value Chain

A concept wherein each activity or function in producing and delivering a product adds value to the final customer, either through minimizing costs or enhancing customer service.

Supply Chain Management (SCM)

The design and management of the flows of products, information, and funds/cash from suppliers to the final customer, ensuring products are available at the right quantities, right locations, and right time while minimizing costs and satisfying requirements.

1990s Supply Chains

Supply chains characterized by vertical integration, linear structures using outside entities, and little coordination between partners (e.g., Walmart, Ford Motor Co.).

Modern Supply Chains

Interdependent networks or 'webs' (e.g., Amazon) driven by information technology, globalization, and increased customer sophistication, affluence, and knowledge.

Main Business Goals of SCM

1. Meet/exceed customer requirements. 2. Differentiate products/services from competitors through responsiveness. 3. Generate and/or contribute to firm profitability through increased revenue, lower costs, or both.

Challenges of SCM

Primary challenges including conflicting objectives within and between firms, high operational complexity, and inherent environmental and operational variability.

Globalization

The process by which people, commerce, and countries become more integrated and function together through economic, technological, socio-cultural, and political forces.

Economic Globalization

The integration of national economies through trade, foreign direct investment (FDI), capital flows, immigration, and technology.

Four Economic Flows of Globalization

1. Goods and services (exports and imports). 2. Labor/people (immigration). 3. Capital (inward or outward investment). 4. Technology (transfer and integration).

Business and Supply Chain Strategy Framework

A model mapping business strategy to supply chain strategy across an efficiency/responsiveness continuum, supported by interconnected cross-functional drivers.

Competitive Strategy

A fundamental input to a supply chain that answers three key questions: What is our business/brand? Who is our customer segment? What does our customer segment demand?

Functional Products

Products satisfying basic customer needs with low differentiation, small assortment, lower cost and margin, stable demand, long lifecycles, and few updates.

Efficient Supply Chain

A supply chain suited for functional products whose primary goal is low cost; characterized by centralized operations, high-volume production, high equipment utilization, minimal inventory, and cost-efficient suppliers.

Innovative Products

Products fulfilling premium needs with high differentiation, high assortment, higher cost and margin, variable demand, short lifecycles, and frequent redesigns.

Responsive Supply Chain

A supply chain suited for innovative products whose primary goal is responsiveness; characterized by decentralized operations, lower volume production, variable utilization, buffer inventory, and flexible suppliers.

Network Design

A systemic and ongoing strategic process to determine the location and placement of supply chain functions that produce and distribute products or services.

Cross-Functional Drivers of Network Design

Key functional building blocks of a supply chain network consisting of Facilities, Sourcing/Suppliers, Logistics/Transportation, Inventory, Data/Information, and Marketing.