Supply Chain Management
BMO-24806
Period 2 2021
Wageningen University
Concepts and Definitions
Anneli Janzer
, Benchmarking = The formal process of comparing the attributes of one
organization to those of another in order to:
Measure the gaps and areas for improvement.
Achieve realistic targets.
Learn about & improve best practice.
Bullwhip effect = when upstream suppliers hold safety stock to make up for poor
forecasts or supply disruptions
Commitment = endure desire to maintain a valued relationship; the relationship is
worth working on to ensure it endures indefinitely
Competence = something you learn and build up in your organization over time
Core competency= Set of activities, skills, or advantages that distinguishes a
company from its competitors; based on combinations of attributes or skill sets that
give an organization a unique advantage over its competitors
Cost Driver Analysis = identifies processes, activities, and decisions that actually
create costs for the supply chain; Cost reduction strategies must analyze cost drivers
in relation to their impact on the value proposition.
Cost Drivers = vary over time and among different products and services; are not
inherently good or bad; Generic cost drivers:
Level of outsourcing within a Key Cost Drivers (example)
company
Use of nonstandard materials,
components and parts
Scale of operations
High level of finished goods
product mix
Customer order = request from (a set
of) products by a customer
Customer Order Decoupling Point
= also “order penetration point” is an
inventory point in the supply chain up
to which customer orders are received and after which all activities are directly
related to customer orders; there is no free stock available after the CODP – all
products (parts) are ordered by customers; each organization can have multiple
CODPS depending upon the product-market characteristics; The CODP divides the
manufacturing stages that are forecast-driven (upstream) from those that are
customer-order-driven (downstream); 5 possible positions for CODP
Customer Satisfaction= The extent to which perceived quality fails/succeeds to
match pre-purchase expectations; The perception of a pleasurable fulfilment of a
service
1) A priori expectations
2) Perceived fulfilment by product/service
Delivery lead time=time it takes to receive the products after order placement
Downstream the supply chain=customers of customers (customers of customer-
compannies)
Dwell time ratio=evaluates the number of days inventory sits idle compared to the
number of days the inventory is moving
Dysfunctional behavior=decisions are made without regarding impacts on the rest
of the company; functional structures result in failure to see beyond the department
1
BMO-24806
Period 2 2021
Wageningen University
Concepts and Definitions
Anneli Janzer
, Benchmarking = The formal process of comparing the attributes of one
organization to those of another in order to:
Measure the gaps and areas for improvement.
Achieve realistic targets.
Learn about & improve best practice.
Bullwhip effect = when upstream suppliers hold safety stock to make up for poor
forecasts or supply disruptions
Commitment = endure desire to maintain a valued relationship; the relationship is
worth working on to ensure it endures indefinitely
Competence = something you learn and build up in your organization over time
Core competency= Set of activities, skills, or advantages that distinguishes a
company from its competitors; based on combinations of attributes or skill sets that
give an organization a unique advantage over its competitors
Cost Driver Analysis = identifies processes, activities, and decisions that actually
create costs for the supply chain; Cost reduction strategies must analyze cost drivers
in relation to their impact on the value proposition.
Cost Drivers = vary over time and among different products and services; are not
inherently good or bad; Generic cost drivers:
Level of outsourcing within a Key Cost Drivers (example)
company
Use of nonstandard materials,
components and parts
Scale of operations
High level of finished goods
product mix
Customer order = request from (a set
of) products by a customer
Customer Order Decoupling Point
= also “order penetration point” is an
inventory point in the supply chain up
to which customer orders are received and after which all activities are directly
related to customer orders; there is no free stock available after the CODP – all
products (parts) are ordered by customers; each organization can have multiple
CODPS depending upon the product-market characteristics; The CODP divides the
manufacturing stages that are forecast-driven (upstream) from those that are
customer-order-driven (downstream); 5 possible positions for CODP
Customer Satisfaction= The extent to which perceived quality fails/succeeds to
match pre-purchase expectations; The perception of a pleasurable fulfilment of a
service
1) A priori expectations
2) Perceived fulfilment by product/service
Delivery lead time=time it takes to receive the products after order placement
Downstream the supply chain=customers of customers (customers of customer-
compannies)
Dwell time ratio=evaluates the number of days inventory sits idle compared to the
number of days the inventory is moving
Dysfunctional behavior=decisions are made without regarding impacts on the rest
of the company; functional structures result in failure to see beyond the department
1
