Supply Chain Management Flashcards

Vocabulary flashcards based on the introductory and planning modules for Supply Chain Management.

Supply Chain Management (SCM)

The flow of goods and/or services, money and information, from the point/moment of need identification to the point of value for the final customer.

Supply Chain Operations Reference (SCOR) Model

An integrated framework organized around six major management processes: Plan, Source, Make, Deliver, Return, and Enable, spanning from the suppliers' supplier to the customers' customer.

Core Competencies

The defining products, services, skills, and capabilities that give a business competitive advantages that no competitor can reasonably offer or replicate.

Four Performance Dimensions of SCM

Integration, Operations, Logistics, and Supply; measured to align dimensions to provide value to the end customer.

Supply Chain Resilience

The ability of a supply chain to withstand disruption and minimize the effects of upheaval on revenues, costs, and customers.

Second-Tier Suppliers and Customers

Refers specifically to the customer's customers and the supplier's suppliers.

Bullwhip Effect

Erratic demand causing forecasts to include safety stock, which in turn magnify supplier forecasts and cause production planning problems.

Sustainability

The ability to meet the needs of current supply chain members without hindering the ability to meet the needs of future generations.

Triple Bottom Line (TBL)

A performance framework that incorporates social, environmental, and financial dimensions, also referred to as the three Ps: people, planet, and profits.

Supplier Evaluation

The process of determining supplier capabilities to improve performance.

Supplier Certification

Third-party or internal certification used to assure product quality and service requirements.

Radio Frequency Identification (RFID)

Systems that scan cartons describing the contents of packages to extend order communication and inventory visibility.

Third-Party Logistics Providers (3PLs)

For-hire outside agencies providing transportation and other logistics services.

Supply Chain Process Integration

Occurs when supply chain participants work for common goals, requiring intra-firm functional integration and efforts to change adversarial relationships.

Supply Chain Visibility

Knowing exactly where products are at any point in the supply chain.

Performance Measurement

The process of quantifying the efficiency and effectiveness of various activities.

Balanced Scorecard (BSC)

A framework developed in 1992 by Kaplan, Norton, and company reps to align performance measures with strategic plans across four perspectives: Financial, Internal business process, Customer, and Learning and growth.

Carbon Footprint

An evaluation metric where supply chains assess design configurations and options for reducing total carbon emissions.

Collaborative, Planning, Forecasting, and Replenishment (CPFR)

A practice seeking cooperative management of inventory through joint visibility and replenishment via information sharing between suppliers and retailers.

Qualitative Forecasting Methods

Methods based on opinions and intuition, generally used when data is limited, unavailable, or not currently relevant (e.g., Jury of Executive Opinion, Delphi Method, Sales Force Composite, Customer Surveys).

Quantitative Forecasting Methods

Forecasting tools split into Time Series models (assuming the future extends the past) and Cause-and-Effect models (assuming independent variables predict demand).

Demand Sensing

A technique for identifying short-term trends quickly by capturing real-time data such as POS, social media, and weather patterns to adjust forecasts.

Aggregate Production Plan (APP)

A long-range operations plan covering a year or more that translates annual business plans and demand forecasts into a production plan for a product family.

Product Family

A group of different products sharing similar characteristics, components, or manufacturing processes.

Chase Production Strategy

An aggregate planning strategy that adjusts capacity to match demand by hiring and laying off workers while keeping finished goods inventory constant.

Level Production Strategy

An aggregate planning strategy that maintains a constant output rate while varying finished goods inventory and backlogs to meet fluctuating demand.

Master Production Schedule (MPS)

A detailed disaggregation of the aggregate production plan, listing the exact end items to be produced by a specific period.

Material Requirements Plan (MRP)

A system of converting end items from the master production schedule into a set of time-phased component part requirements.

System Nervousness

A situation where small changes in the upper-level production plan cause major changes in the lower-level production plan.

Time Fences

Boundaries used to manage system nervousness by dividing the planning horizon into a Firmed Segment (demand time fence) and a Tentative Segment (planning time fence).

Available-to-Promise (ATP) Quantity

The difference between confirmed customer orders and the quantity the firm planned to produce.

Bill of Materials (BOM)

A document showing an inclusive listing of all component parts and assemblies making up the final product across various levels.

Independent Demand Item

A Level 0 final product on a BOM affected by trends, seasonal patterns, and general market conditions.

Dependent Demand Item

A Level 1 component or subassembly on a BOM required for the final assembly of one unit.

Resource Requirement Planning (RRP)

A long-range capacity plan that checks whether aggregate resources (such as gross labor hours and machine hours) can satisfy the aggregate production plan.

Rough-Cut Capacity Plan (RCCP)

A medium-range capacity plan that checks the feasibility of the MPS by converting required production into capacity needed and comparing it to available capacity.

Distribution Requirements Planning (DRP)

A time-phased net requirements plan driven by customer demand for finished goods from warehouses and distribution centers, linking production with distribution planning.