Intro to Supply Chain Management - Chapter 1 Vocabulary

A comprehensive collection of vocabulary flashcards derived from Chapter 1 notes on Supply Chain Management, covering fundamental definitions, node structures, SCOR model elements, and operational strategies.

Three Major Links of a Supply Chain

The primary framework of a supply chain, consisting of Suppliers > Manufacturers > Customers.

Node or Link

A separate independent firm within a supply chain, such as an orchard that picks apples, an inspection company, or a logistics service.

Total Market Stockout

A complete lack of product availability occurring when a disruption at one link causes remaining inventory across all suppliers, distributors, and retailers to be fully bought up by customers.

First-tier Supplier

The supplier element that is closest to a company's actual production.

Second-tier Supplier

A supplier operating at an earlier stage in the supply chain process, supplying the first-tier supplier.

First-tier Customer

The customer element positioned immediately after distribution in the supply chain.

Supply Chain Management

The coordination of a network of otherwise independent trading partners to create a final product.

Costs of Good Sold

All the costs associated with production; a good supply chain sources the cheapest materials, labor, and shipping to achieve the lowest possible amount.

SCOR Model

The Supply Chain Operation Model, which encompasses Planning, Sourcing, Making, and Delivering.

Planning (SCOR Model)

The process of looking over the total supply chain, directing individual links on what to do, and determining how much product should be sold.

Sourcing (SCOR Model)

The stage focused on evaluating suppliers, determining current and future needs, deciding between lowest cost or best quality, and negotiating business terms.

Making (SCOR Model)

The heart of the supply chain involving manufacturing and operations to transform materials into something with more value efficiently.

Delivering (SCOR Model)

The stage involving transportation from factories, storage in warehouses between transport or demand, and return logistics.

Enable (SCOR Model)

Dedicated logistics operations companies or tools, such as AI, that manage or assist in the supply chain process.

Just In Time (JIT)

A philosophy based on the idea that you can get a material or product right when you need it.

Efficient Supply Chain Model

A cost-driven supply chain model aimed at securing the lowest costs, which typically results in longer delivery times.

Responsive Supply Chain Model

A supply chain model designed to react quickly to changing trends and market demands, utilizing higher profit margins to pay for faster production and customer satisfaction.

Make-to-Stock

A strategy where products are manufactured ahead of time and placed in inventory in anticipation of coming demand, accounting for 95\text{\textpercent} of supply chains.

Make-to-Order

A strategy where production is not initiated until there is confirmed customer demand, such as custom-made pizza.

Great TP Shortage of 2020

An artificial supply chain crisis caused by panic buying out of fear that future production would stop, which created retail stockouts despite actual demand remaining constant.