Supply Chain Management (SCM) Essentials

This set of vocabulary flashcards covers the fundamental definitions, structures, models, and technologies used in Supply Chain Management as presented in the lecture notes.

Supply chain

• The movement of goods, information, and money from suppliers to customers.

Supply chain visibility

• The ability to track and monitor supply chain activities in real time.

Suppliers

• Businesses or individuals that provide raw materials or components to companies.

Manufacturers

Entities that turn raw materials into finished products, such as car factories or electronics assembly plants.

Customers

End users who buy products at the end of the supply chain.

Supply Chain Management (SCM)

• Managing and improving the flow of goods, information, and services through the supply chain.

Upstream

• The supply chain activities related to suppliers and sourcing raw materials.

Internal

• The part of the supply chain involving a company’s own production and manufacturing processes.

Downstream

• The part of the supply chain focused on distributing and delivering products to customers.

Tier 3 Suppliers

• Suppliers that provide raw materials to the supply chain.

Tier 2 Suppliers

• Suppliers that provide components or parts to manufacturers.

Tier 1 Suppliers

• Suppliers that provide finished components or subsystems directly to manufacturers.

Product Flow

The movement of physical products from the supplier to the factory and then to the customer.

Information Flow

The sharing of forecasts, sales data, and shipping information to coordinate supply chain activities.

Financial Flow

The movement of payments, invoices, and credit within the supply chain.

ERP Systems

Enterprise Resource Planning is a Software that helps a company manage and connect different business activities in one system.

CRM Systems

• Software used to manage customer relationships and communication.

Plan

One of the five basic components of SCM; developing metrics and strategies such as forecasting demand and planning inventory.

Source

One of the five basic components of SCM; choosing suppliers and managing relationships, pricing, delivery schedules, and payment terms.

Make

One of the five basic components of SCM; production activities including manufacturing, packaging, and testing.

Deliver

One of the five basic components of SCM; managing warehouses, carriers, shipping, and invoicing.

Return

One of the five basic components of SCM; handling defective or excess products through returns, recycling, and repairs.

Interorganizational Information Systems (IOS)

• Systems that electronically connect different businesses to share information and work together.

Push Model

• A system where products are made before customer demand, based on forecasts.

Pull Model

• A system where products are only made after customer orders are received.

Friction

Problems in the supply chain that cause high costs, delays, and poor customer experience.

Uncertainty

Unpredictability in demand and supply caused by factors like oil price shocks, wars, and pandemics.

Demand Forecasting

Predicting future customer demand using historical data, analytics, and trends to optimize inventory and production.

Bullwhip Effect

• When small changes in customer demand cause bigger changes in orders further up the supply chain.

Just-in-Time (JIT)

• A system where materials arrive only when needed to reduce storage costs.

Vendor Managed Inventory (VMI)

• A system where the supplier manages the customer’s inventory levels.

APS Systems

• Software that helps companies plan and schedule supply chain activities more effectively.

Lean Manufacturing

• A production approach focused on reducing waste and improving efficiency.

Electronic Data Interchange (EDI)

• The electronic exchange of business documents between companies.

Extranet

A private network connecting a company with external partners like suppliers and dealers, usually utilizing a VPN.

VPN (Virtual Private Network)

A secure internet connection between organizations or users that provides remote access and protected data transfer.

SAP IBP

A cloud-based SCM planning tool for functions such as forecasting, inventory planning, demand planning, and supply optimization.

Oracle Fusion Cloud SCM

A cloud-based supply chain platform that handles manufacturing, logistics, procurement, and warehouse management with real-time analytics.