(Chapter 1) Intro to Supply Chain

Keiretsu

A member of a keiretsu generally owns a limited amount of stock in other member companies. A keiretsu generally forms around a bank and a trading company, but distribution (supply chain) keiretsu alliances have been formed of companies ranging from raw material suppliers to retailers

Orchestrated Supply Chain

A supply chain where activities and resources are effectively synchronized and coordinated to improve performance, streamline operations, and enhance customer satisfaction

Service industry

Retail trade; wholesale trade; transportation and utilities; finance, insurance, and real estate; construction; professional, personal, and social services; and local, state, and federal governments

Echelon

A level of supply chain nodes

Stakeholder

People with a vested interest in a company, including managers, employees, stockholders, customers, and suppliers

Extended Enterprise (Strategic driver)

-Demand generation and fulfillment are fully integrated.

-The supply chain contributes to development of the organization’s overall strategy.

-Forecasting, planning, and replenishment are fully integrated and visible.

-Technological improvements, knowledge, and real-time information are shared with chain partners.

Integrated Enterprise (Proactive efficient)

-It proposes new raw materials or product designs to lower complexity and costs.

-It instigates changes to product designs for greater efficiencies.

-It invests in integrated information systems to facilitate sharing of information across functions.

Supply Chain

The network of suppliers that deliver products from raw materials to end customers through either an engineered or transactional flow of information, goods, and money

Lateral (Horizontal) Integration

Organization specializes in its core competencies and relies on other specialists for the rest of the supply chain

Supply Chain Management

The management of the flow of goods and services, including all processes that transform raw materials into final products. It involves planning and controlling supply chain activities to maximize customer value and achieve a sustainable competitive advantage

Vertical Integration

The practice of bringing the supply chain inside one organization

Multiple Dysfunction (Reactive)

-It fulfills demand but without much concern as to costs.

-It is perceived as a cost center.

-It needs minimal competitive or connectivity technologies and capital assets to respond to demand.

Semifunctional Enterprise (Reactive Efficient)

-It supports competitive positioning by serving as an efficient, low-cost, and integrated unit.

-It focuses efficiency and cost management on the total delivered cost of finished goods.

-It places greater importance on connectivity technology and new equipment to automate functions to reduce labor costs and improve capacity and throughput.