SCM-475 Exam 1

What is Supply Chain

-Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize systemwide costs while satisfying service level requirements.
-The objective of supply chain management is to be efficient and cost-effective across the entire system

What are ways supply chains are integrated

Raw materials
Manufacturing Plants
Manufacturing Warehouse
Wholesaler Warehouse
Retailer Warehouse
Retail Store

Supply Chain Flows

Product & Service Flows- Physical movement of goods and materials

Information Flow- Enabling the physical flow of product, decision making, supply chain collaboration

Cash Flow- Management of working capital

Demand Flow- Detect and understand demand signals, Synchronize demand vs supply

Why is supply chain difficult

-Cant be determined in isolation
-Difficult to maintain a chain that systemwide costs are minimized and service levels are maintained
-Uncertainty and risks are inherent
-One size fits all is not appropriate

Decision phases in a supply chain

-Longs term- Supply Chain strategy or design, How to structure over the next several years

-Mid term- Supply chain planning, Decisions over the next quarter or year

-Short term- Supply Chain operations, Daily or weekly (Production decisions)

What does CRM, ISCM and SRM stand for and what do they do and examples that fall under them.

-Customer Relationship Management- all processes at the interface between the firm and its customers. Market, price, sell

-Internal Supply Chain Management- all processes that are internal to the firm. Strategic planning, Demand planning, Supply Planning

-Supplier Relationship Management- all processes at the interface between the firm and its suppliers. Sourcing, Negotiate, Buy

What is achieving strategic fit

Competitive and supply chain strategies have aligned goals

3 Steps to achieve Staregic fit

-Understand the customer and supply chain uncertainty
-Understand the supply chain capabilities
-Achieving strategic fit(responsiveness is consistent/ all functions have the same strategy)

What are the 6 levels to deal with uncertainty

Facility, inventory, Time-Transporation, Information, Price, and Sourcing

Assembly Network

A supply chain in which the number of locations decreases as one moves downstream. Each location assembles products from many suppliers, then fulfills demand from a single downstream location.

Bullwhip effect:

The phenomenon by which the variance of demand increases as one moves upstream in a supply chain.

Buy back Contract:

A procurement contract between a buyer and a seller in which the seller offers the product to the buyer at a fixed wholesale price and accepts returns of unsold inventory at a buyback price. The buyback price is less than the wholesale price.

Centralized Supply chain:

A supply chain in which all decisions, including procurement, production, and distribution, are made centrally.

Decentralized Supply chain:

a supply chain in which different organizations independently make decisions for the activities they manage.

Differentiated supply chain:

A supply chain consisting of many organizations that own different stages of production and distribution.

Distribution supply chain:

a supply chain in which the number of locations increases as one moves downstream. Each location received product from a single supplier, then fulfills demand from many downstream locations.

Double Marginalization:

The phenomenon by which profit margin is split between buyer and seller organizations in a decentralized supply chain. Double marginalization leads to a decline in a total supply chain profit when each organization tries to maximize its own profit.

Make-buy Decision:

The choice between producing a product in house and buying it from an external supplier.

Multi-sourcing:

sourcing from a portfolio of suppliers with carrying cost, quality, and fulfillment capabilities. Multi-sourcing enables a firm to adjust procurement quantities sourced from each supplier to manage uncertainty and reduce risk.

Postponement flexibility:

the capability by which an organization can delay the time of differentiation of its product to be closer to the time the demand occurs.

Reactive production capacity:

production capacity that is deployed during the middle of a selling season to replenish product with a short lead time in reaction to the demand observed during the read period.

Sales and Operations Planning (S&OP):

an integrated process involving all functions of an organization to share forecasts, past performance, and information, and to use this information to make plans for sales, production, procurement, inventory, new product launch, and resulting financial goals.

Serial supply chain:

a supply in which product flows in a single sequence through locations that are arranged in series.

Statistical economies of scale:

the reduction in the cost of managing uncertainty that occurs when demand from multiple customer locations in pooled and served from a single location.

Supply chain coordination:

the alignment of decision across different stages of a supply chain in order to maximize its total profit. Coordination takes place through centralization of decision making, sharing of information, and design of incentives.

Supply chain footprint:

the location of the parts of a supply chain, such as factories, warehouses, retail stores.

Vanilla Boxes:

Undifferentiated products that can be converted into finished products late in the process when more accurate forecasts of demand are available.

Vertically integrated supply chain:

a supply chain in which all stages are owned by a single organization.

Wholesale price contract:

a procurement contract between a buyer and a seller in which the seller offers the product to the buyer at a fixed wholesale price and does not accept any returns.

What is the main measure for a firms performance and why

Return on equity(ROE) because it shows the return on investment made by a firm's shareholder

What does ROA measure

Return on assets measures the return earned on each dollar invested by the firm in assets

What does asset turnover measure

The efficiency of a company's assets in generating sales

What does Cash to Cash measure

The average amount of time from when cash enters the process as cost to when it returns as collected revenue

6 drivers of supply Chain + sort either logistical or cross-functional drivers

Logistical drivers= Inventory, Transportation and facilities.

Cross-Functional Drivers= Information, Sourcing and Pricing

What is Supply Chain Planning and what is the goal

Set of policies that govern mid-term operations. The goal is to maximize supply chain surplus given established constraints

What is the goal of supply chain operations

The goal is to handle incoming customer orders as effectively as possible

What are the 2 process views of supply chain

Cycle view and Push/Pull view.

Cycle view- is where the operations are divided up into consecutive steps

Push/Pull View- Pull is a process initiated for a customer order, push is initiated and performed in anticipation of a customer order

What is SCOR and what are the 5 attributes.

Supply Chain Operation Reference.
Reliability, Responsiveness, Agility, Costs and asset management efficiency

What is demand uncertainty

Uncertainty of customers demand for a product

What is service level

Percentage of delivered goods from an order compared to the total order, aiming to meet demand and fulfill customer requirements

What is supply chain responsiveness

Ability to adapt to the change in demand

What is fill rate

the percentage of your orders that you can ship from you available stock

What is the difference between Functional and innovative

Functional has a longer life cycle with a stable demand. innovative has a shorter life cycle which leads to a unpredictable demand

What is the difference between efficiency and responsiveness

Efficiency means meeting demand at a lower cost, while responsiveness ensures a quick response to the demand.

What is little's law

the average number of items in the queuing system

Which supply chain drivers impact asset turnover,APT, ART, Inventory, PPET and C2C

Asset turnover-Inventory and Facilities
APT- Sourcing
ART-Pricing
Inventory-inventory
PPET-Facility
C2C- Sourcing and inventory

What is Supply Chain

-Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize systemwide costs while satisfying service level requirements.
-The objective of supply chain management is to be efficient and cost-effective across the entire system

What are ways supply chains are integrated

Raw materials
Manufacturing Plants
Manufacturing Warehouse
Wholesaler Warehouse
Retailer Warehouse
Retail Store

Supply Chain Flows

Product & Service Flows- Physical movement of goods and materials

Information Flow- Enabling the physical flow of product, decision making, supply chain collaboration

Cash Flow- Management of working capital

Demand Flow- Detect and understand demand signals, Synchronize demand vs supply

Why is supply chain difficult

-Cant be determined in isolation
-Difficult to maintain a chain that systemwide costs are minimized and service levels are maintained
-Uncertainty and risks are inherent
-One size fits all is not appropriate

Decision phases in a supply chain

-Longs term- Supply Chain strategy or design, How to structure over the next several years

-Mid term- Supply chain planning, Decisions over the next quarter or year

-Short term- Supply Chain operations, Daily or weekly (Production decisions)

What does CRM, ISCM and SRM stand for and what do they do and examples that fall under them.

-Customer Relationship Management- all processes at the interface between the firm and its customers. Market, price, sell

-Internal Supply Chain Management- all processes that are internal to the firm. Strategic planning, Demand planning, Supply Planning

-Supplier Relationship Management- all processes at the interface between the firm and its suppliers. Sourcing, Negotiate, Buy

What is achieving strategic fit

Competitive and supply chain strategies have aligned goals

3 Steps to achieve Staregic fit

-Understand the customer and supply chain uncertainty
-Understand the supply chain capabilities
-Achieving strategic fit(responsiveness is consistent/ all functions have the same strategy)

What are the 6 levels to deal with uncertainty

Facility, inventory, Time-Transporation, Information, Price, and Sourcing

Assembly Network

A supply chain in which the number of locations decreases as one moves downstream. Each location assembles products from many suppliers, then fulfills demand from a single downstream location.

Bullwhip effect:

The phenomenon by which the variance of demand increases as one moves upstream in a supply chain.

Buy back Contract:

A procurement contract between a buyer and a seller in which the seller offers the product to the buyer at a fixed wholesale price and accepts returns of unsold inventory at a buyback price. The buyback price is less than the wholesale price.

Centralized Supply chain:

A supply chain in which all decisions, including procurement, production, and distribution, are made centrally.

Decentralized Supply chain:

a supply chain in which different organizations independently make decisions for the activities they manage.

Differentiated supply chain:

A supply chain consisting of many organizations that own different stages of production and distribution.

Distribution supply chain:

a supply chain in which the number of locations increases as one moves downstream. Each location received product from a single supplier, then fulfills demand from many downstream locations.

Double Marginalization:

The phenomenon by which profit margin is split between buyer and seller organizations in a decentralized supply chain. Double marginalization leads to a decline in a total supply chain profit when each organization tries to maximize its own profit.

Make-buy Decision:

The choice between producing a product in house and buying it from an external supplier.

Multi-sourcing:

sourcing from a portfolio of suppliers with carrying cost, quality, and fulfillment capabilities. Multi-sourcing enables a firm to adjust procurement quantities sourced from each supplier to manage uncertainty and reduce risk.

Postponement flexibility:

the capability by which an organization can delay the time of differentiation of its product to be closer to the time the demand occurs.

Reactive production capacity:

production capacity that is deployed during the middle of a selling season to replenish product with a short lead time in reaction to the demand observed during the read period.

Sales and Operations Planning (S&OP):

an integrated process involving all functions of an organization to share forecasts, past performance, and information, and to use this information to make plans for sales, production, procurement, inventory, new product launch, and resulting financial goals.

Serial supply chain:

a supply in which product flows in a single sequence through locations that are arranged in series.

Statistical economies of scale:

the reduction in the cost of managing uncertainty that occurs when demand from multiple customer locations in pooled and served from a single location.

Supply chain coordination:

the alignment of decision across different stages of a supply chain in order to maximize its total profit. Coordination takes place through centralization of decision making, sharing of information, and design of incentives.

Supply chain footprint:

the location of the parts of a supply chain, such as factories, warehouses, retail stores.

Vanilla Boxes:

Undifferentiated products that can be converted into finished products late in the process when more accurate forecasts of demand are available.

Vertically integrated supply chain:

a supply chain in which all stages are owned by a single organization.

Wholesale price contract:

a procurement contract between a buyer and a seller in which the seller offers the product to the buyer at a fixed wholesale price and does not accept any returns.

What is the main measure for a firms performance and why

Return on equity(ROE) because it shows the return on investment made by a firm's shareholder

What does ROA measure

Return on assets measures the return earned on each dollar invested by the firm in assets

What does asset turnover measure

The efficiency of a company's assets in generating sales

What does Cash to Cash measure

The average amount of time from when cash enters the process as cost to when it returns as collected revenue

6 drivers of supply Chain + sort either logistical or cross-functional drivers

Logistical drivers= Inventory, Transportation and facilities.

Cross-Functional Drivers= Information, Sourcing and Pricing

What is Supply Chain Planning and what is the goal

Set of policies that govern mid-term operations. The goal is to maximize supply chain surplus given established constraints

What is the goal of supply chain operations

The goal is to handle incoming customer orders as effectively as possible

What are the 2 process views of supply chain

Cycle view and Push/Pull view.

Cycle view- is where the operations are divided up into consecutive steps

Push/Pull View- Pull is a process initiated for a customer order, push is initiated and performed in anticipation of a customer order

What is SCOR and what are the 5 attributes.

Supply Chain Operation Reference.
Reliability, Responsiveness, Agility, Costs and asset management efficiency

What is demand uncertainty

Uncertainty of customers demand for a product

What is service level

Percentage of delivered goods from an order compared to the total order, aiming to meet demand and fulfill customer requirements

What is supply chain responsiveness

Ability to adapt to the change in demand

What is fill rate

the percentage of your orders that you can ship from you available stock

What is the difference between Functional and innovative

Functional has a longer life cycle with a stable demand. innovative has a shorter life cycle which leads to a unpredictable demand

What is the difference between efficiency and responsiveness

Efficiency means meeting demand at a lower cost, while responsiveness ensures a quick response to the demand.

What is little's law

the average number of items in the queuing system

Which supply chain drivers impact asset turnover,APT, ART, Inventory, PPET and C2C

Asset turnover-Inventory and Facilities
APT- Sourcing
ART-Pricing
Inventory-inventory
PPET-Facility
C2C- Sourcing and inventory