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Terms in this set (70)
, Evolution of the supply chain Early 1900's: clerical and tactical, focused on policies and
procedures
key challenges: availability of supply and cost management
Early 21st century:strategy orientation, global supply chains,
executive level leadership
key challenges: sustainability, security, globalization, risk
management
Spend in the supply chain lead times are usually in months, value add times as very small
percentages
Basically it pays to invest in supply chain to improve it as it is
often one of the most costly parts of an operation
Profit leverage effect the increase in corporate profit obtained by decreasing
purchase spend; measured by determining the increase in profit
obtained by a decrease in purchase spend (ex. in the book
shows that in order to achieve increased revenue of $6mil, the
company could either increase sales by 75% or decrease
purchase spend by 10%); more realistic in firms that have
neglected supply and given sales a lot of attention already
better to dec spending than inc sales
Return on assets displayed as a percentage; an indicator of how profitable a
company is relative to its total assets - gives an idea as to how
efficient management is at using its assets to generate earnings
(higher is better, in terms of attractiveness to investors)
Contributing to organizational strategy Operational vs Strategic Contribution
Operational= day to day issues
Strategic= Forward thinking
Direct vs Indirect Benefit
Direct= Tangible return, ROA, Profit leverage
Indirect "soft": information source, supplier relationships,
customer satisfaction
Supply Strategy Questions: Supply Strategy
who? what? where? when? why? how much? what price?
Supply Strategy: What? the most fundamental question.. make or buy, insourcing,
outsourcing
will the organization require standard items/materials that are
readily available, or will they need special, custom-specified
requirements
Supply Strategy: Quality? a more consistent quality of end product output is essential to
maintaining and growing market share - strategy for developing
suppliers' knowledge of quality requirements and helping them
implement program to achieve these is essential (zero defect
plans, process quality control programs, quality certification
programs)
Supply Strategy: How Much? how much will be acquired in total - and how much per delivery;
trending towards smaller quantities delivered as needed (JIT)
supply should analyze inventory position to figure out which
method is best
Supply Strategy: Who? who should make the supply decisions?
whether supply should be centralized, where staff should be
located, to what extend top management should be involved in
the total acquisition process
Supply Strategy: When? decision tied closely with how much; now vs. later
M
g
s
c
4
8
7
G
af
f
n
e
y
E
x
a
m
1
Students
also
studied
Fla
Terms in this set (70)
, Evolution of the supply chain Early 1900's: clerical and tactical, focused on policies and
procedures
key challenges: availability of supply and cost management
Early 21st century:strategy orientation, global supply chains,
executive level leadership
key challenges: sustainability, security, globalization, risk
management
Spend in the supply chain lead times are usually in months, value add times as very small
percentages
Basically it pays to invest in supply chain to improve it as it is
often one of the most costly parts of an operation
Profit leverage effect the increase in corporate profit obtained by decreasing
purchase spend; measured by determining the increase in profit
obtained by a decrease in purchase spend (ex. in the book
shows that in order to achieve increased revenue of $6mil, the
company could either increase sales by 75% or decrease
purchase spend by 10%); more realistic in firms that have
neglected supply and given sales a lot of attention already
better to dec spending than inc sales
Return on assets displayed as a percentage; an indicator of how profitable a
company is relative to its total assets - gives an idea as to how
efficient management is at using its assets to generate earnings
(higher is better, in terms of attractiveness to investors)
Contributing to organizational strategy Operational vs Strategic Contribution
Operational= day to day issues
Strategic= Forward thinking
Direct vs Indirect Benefit
Direct= Tangible return, ROA, Profit leverage
Indirect "soft": information source, supplier relationships,
customer satisfaction
Supply Strategy Questions: Supply Strategy
who? what? where? when? why? how much? what price?
Supply Strategy: What? the most fundamental question.. make or buy, insourcing,
outsourcing
will the organization require standard items/materials that are
readily available, or will they need special, custom-specified
requirements
Supply Strategy: Quality? a more consistent quality of end product output is essential to
maintaining and growing market share - strategy for developing
suppliers' knowledge of quality requirements and helping them
implement program to achieve these is essential (zero defect
plans, process quality control programs, quality certification
programs)
Supply Strategy: How Much? how much will be acquired in total - and how much per delivery;
trending towards smaller quantities delivered as needed (JIT)
supply should analyze inventory position to figure out which
method is best
Supply Strategy: Who? who should make the supply decisions?
whether supply should be centralized, where staff should be
located, to what extend top management should be involved in
the total acquisition process
Supply Strategy: When? decision tied closely with how much; now vs. later
