Supply Chain Final Exam!

Supply Chain Disruption

Various events causing interruptions in supply chain.

Probability of Disruption

Likelihood of multiple suppliers failing simultaneously.

Decision Tree

Tool to evaluate supplier failure scenarios.

Bullwhip Effect

Order size fluctuations increase up the supply chain.

Cause of Bullwhip Effect

Poor communication across supply chain partners.

Production Schedule Instability

Unpredictable changes in production due to disruptions.

Capacity Change Costs

Expenses incurred from adjusting production capacity.

Lead Times

Duration from order placement to delivery.

Obsolescence

Products becoming outdated due to delays.

Supplier Coordination

Collaborative planning to mitigate supply chain damage.

Real-time Visibility

Instant tracking of product location using RFID.

Supplier Selection Analysis

Evaluation process considering multiple supplier criteria.

Factor-weighting Technique

Assigning weights and scores to supplier factors.

Long-term Supplier Relationships

Strategic partnerships for sustained collaboration.

Supply Chain Management Objective

Maximize competitive advantage for consumer benefits.

Strategic Importance of Supply Chain

Coordinating activities from raw materials to customers.

Overall Optimization Strategy

Integrating supplier relationships for efficiency and innovation.

Supply Chain Cost Control

Managing costs to ensure organizational success.

Make-or-Buy Decisions

Choosing between outsourcing or internal production.

Outsourcing

Transferring activities to external vendors for efficiency.

Outsourcing Strategies

Approaches for managing supplier relationships effectively.

Arm's Length Transactions

Low-cost transactions with frequent supplier changes.

JIT Programs

Just-in-time systems for efficient inventory management.

Vertical integration

Producing goods/services previously purchased.

Forward integration

Integration towards the customer.

Backward integration

Integration towards the suppliers.

Joint ventures

Formal collaboration for mutual benefits.

Keiretsu networks

Japanese economic relationships among companies.

Supplier coalition

Suppliers become part of a company network.

Virtual companies

Fluid organizations meeting market demands.

Supply Chain risk

Increased risk from reliance on supply chains.

Accurate pull data

Data from point of sales information.

Lot size reduction

Diminished benefits of large orders.

Single stage control

One supply chain number for inventory management.

Vendor managed inventory (VMI)

Vendors manage inventory directly in buyer's facilities.

Mitigation tactics

Strategies to reduce supply chain disruptions.

Technological innovations

Improvements in security and inventory management.

Political risks

Risks from political instability affecting supply chains.

Currency risks

Risks from fluctuations in currency values.

Flexible supply chains

Adaptable supply chains for changing demands.

Long-term relationships

Expectations of stability among supply chain members.

Short-term relationships

Temporary connections in supplier networks.

Inventory holding costs

Costs associated with storing unsold goods.

Incentives in supply chain

Motivations that can distort inventory management.

Mutually Beneficial Relationship

Collaboration between customer and suppliers for optimal inventory.

Keys to VMI Success

Clear expectations, information sharing, ongoing collaboration.

Collaborative Planning, Forecasting, and Replenishment (CPFR)

Supply chain members share and plan inventory information.

Blanket Orders

Long-term supplier commitments for future item purchases.

Standardization

Using common components across different products for efficiency.

Postponement

Delaying modifications to products for mass customization.

Electronic Ordering and Funds Transfer

Speeds transactions, reduces paperwork via EDI.

Drop Shipping

Supplier ships directly to customers, bypassing seller.

Supplier Evaluation

Assessing potential suppliers for quality and reliability.

Supplier Selection

Crucial task for purchasing professionals to choose suppliers.

Supplier Certification

Prequalifying suppliers for special treatment and priority.

External Verification

ISO 9000 certification for quality assurance.

Supplier Development

Integrating suppliers into the supply chain for improvement.

Negotiation

Key skill in purchasing to determine pricing.

Cost-Based Price Model

Supplier reveals costs, increasing vulnerability.

Market-Based Price Model

Prices based on market conditions or indices.

Competitive Bidding

Common purchasing method, lessens supplier relationships.

Contracting

Agreements to share risks and benefits in supply chain.

Contract Mechanisms

Includes quality discounts, buybacks, and revenue sharing.

Centralized Purchasing

Deciding on centralized vs. local product sourcing.

E-Procurement

Online purchasing to speed processes and reduce costs.

Online Catalogs

Three types: vendor, intermediary, and hybrid catalogs.

Internet trading exchange

Centralized online system for industry transactions.

Online auctions

Mechanism for firms to sell excess inventory.

Reverse auction

Buyer submits request; suppliers bid lower prices.

Logistics Management

Integrates acquisition, movement, and storage of goods.

Competitive advantage

Gained through reduced costs and improved services.

Trucking

Flexible transport method for manufactured goods.

Railroads

Transport large loads; limited flexibility.

Airfreight

Fast transport for light, expensive items.

Waterways

Used for bulky, low-value cargo shipping.

Pipelines

Transport oil, gas, and chemicals efficiently.

Multimodal transport

Combines different shipping methods for efficiency.

Cost of shipments

Faster shipping is more expensive.

Warehousing

Stores goods; may offer additional functions.

Cross-docking

Consolidation point; minimal inventory holding.

Channel assembly

Distributors act as manufacturing partners.

Third-Party Logistics (3PL)

Outsourced logistics services to improve efficiency.

Distribution Management

Manages outbound product flow to customers.

Rapid response

Quickly meets customer demands and expectations.

Inventory turnover

Measures how quickly inventory is sold.

Benchmarking the Supply Chain

Evaluates performance against industry standards.

Weeks of supply

Measures inventory availability over time.

Why might an organization strive to form​ long-term relationships with a few dedicated​ suppliers?

Suppliers are encouraged to provide design innovations and technological expertise.

What is transferring a​ firm's activities that have traditionally been internal to external​ suppliers?

outsourcing

Which of the following is an advantage of shipping manufactured goods by​ truck?

flexibility

A lawnmower assembly plant uses a variety of​ nuts, bolts,​ screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule.

Vendor managed inventory

Which of the following tactics may reduce risks in supplier​ delivery, logistics, and​ distribution?

effective contracts with deliveries

What is a supply chain designed to optimize both forward and reverse​ flows?

closed-loop supply chain