SCM EXAM 1 CH 1-4 STUDY GUIDE
Supply Chain Management (SCM) - Answers - is the design and management of flows
of products, information, and funds throughout the supply chain.
Supply Chain - Answers - is the network of all entities involved in producing and
delivering a finished product to the final customer.
This includes sourcing raw materials and parts; manufacturing, producing, and
assembling the products; storing goods in warehouses; order entry and tracking;
distribution; and delivery to the final customer.
A typical supply chain may involve many different trading partners, called stages. These
stages may be: - Answers - -Suppliers
-Producers
-Wholesalers/Distributors
-Retailers
-Customers
>Each stage may not be present in a SC
> The number of stages in a SC and its design will depend on the customer's needs, the
roles of stages involved, and the value each stage provides.
Supply Chain is often called "Value Network" or "Value Chain" - Answers - -SC are
under increasing financial pressure, and stages that do not add value to the SC are
quickly bypassed or eliminated.
-"Value chain" was introduced by a Harvard professor, Michael Porter in the 1980's.
SCM Activities - Answers - 1. Coordination - coordinate the movement of goods,
services, and funds through the SC
2. Information Sharing - share forecasts, point-of-sale data, planned promotional
campaigns, and inventory levels
3. Collaboration - jointly plan, operate, and execute business decisions as one entity
Managing Flows through the SC (Products, Information, and Funds) - Answers - 1. Flow
of Products - from the beginning to the final customer. Goods also flow back through the
chain, called "reverse logistics"
,2. Flow of Information - simplifies SC utilize data from point-of-sale back to suppliers.
Real time info reduces uncertainty and inventory levels making it more timely and
accurate.
3. Flow of Funds - funds are transferred in both directions along the SC. "SC
compression" is a shorter order cycle time which means the customers will receive their
orders faster.
The Bullwhip Effect - Answers - - Fluctuation and distortion of information increases as it
moves up the SC, from retailers, to manufacturers, to suppliers.
> each stage of the chain carries progressively more inventory
> the longer the SC, the greater the opportunity for the BW effect
> sharing point-of-sale info with all members of the SC can combat the BW effect
Customer Focus - Answers - The final customer is the driving force of the SC
- products are "pulled" through the SC
The Service SC - Answers - - focus more on the interaction between the customer and
provider
- often rely on customers as the supplier of inputs
- tend to be shorter than manufacturing SC
- are often more like hubs than chains
- do not have inventory as a buffer
Boundary-Spanning nature of SCM - Answers - SCM spans and integrates functions
within and between enterprises of the SC through: INTRA-Organizational Integration
and CROSS-Enterprise Integration
INTRA-Organizational Integration - Answers - 1. Marketing - links the organization to its
customers
2. Operations - organizes the transformation of raw materials into finished products and
services
3. Sourcing - links the organization to its suppliers and ensuring an efficient supply of
materials
4. Logistics - is responsible for moving and positioning inventory throughout the SC
> To support SCM, each function must also have a systems viewpoint. This type of
effort requires company-wide integration that is different than the traditional "silo"
mentality, where each organizational function operates independently.
> Creating systems thinking can be a big challenge for many companies
CROSS-Enterprise Integration - Answers - - Various SC organizations functioning as a
single entity to satisfy the final customer by engaging in ongoing external efforts with
suppliers, transportation carriers, and distributors.
> The ultimate goal of a SC is to operate as a single entity
Keys:
, 1. IT as an enabler
2. Relationship Management
3. Collaborative Planning
4. Sharing risks and rewards
5. Win-win strategy
(SCM) vs Logistics - Answers - SCM: concerns the collaboration between SC partners
in a strategic effort to achieve superior competitiveness. (Strategic and Managerial
Concept)
> SCM manages different aspects of the coordination process such as:
Information, Technology, Distribution, Products, Finances, and Relationships
SCM vs. (Logistics) - Answers - Logistics is the part (SUPPORTS) of SCM that is
concerned with managing the flow of inventory.
> Involves order processing and tracking, inventory management, transportation,
warehousing, material handling, and packaging
The Rise of SCM - Answers - - SCM evolved in the 1990s and has proven to be
necessary for successful global competition.
> Contributing to the Trend:
- Companies found savings by planning and managing the SC more effectively
- Advances in IT
-Improvement in transportation methods
- Greater customer empowerment
Characteristics of a Competitive SC - Answers - (R.R.RM)
1. Responsiveness - the ability to move quickly to meet customer demands. Often
described as having "agility", shorter SCs, and demand-driven (responding to what the
customer demands) rather than forecast-driven.
2. Reliability -
>Uncertainty: is the main reason why companies carry safety stock resulting in higher
costs.
>Visibility: improves reliably in SC (Typically, the more further one goes up the SC, the
more limited the "visibility of downstream activities).
>SC Coordination: sharing of real-time data and info through IT improves visibility and
therefore SC reliability.
3. Relationship Management - SCM is primarily about the management of relationships
across networks of companies. >Traditional Adversarial Relationships is how it used to
be in the past.
>It is important to build relationships and collaborate
>"Single-Sourcing" is widespread. Such practices improve quality, product innovation,
design, and overall responsiveness.
Supply Chain Management (SCM) - Answers - is the design and management of flows
of products, information, and funds throughout the supply chain.
Supply Chain - Answers - is the network of all entities involved in producing and
delivering a finished product to the final customer.
This includes sourcing raw materials and parts; manufacturing, producing, and
assembling the products; storing goods in warehouses; order entry and tracking;
distribution; and delivery to the final customer.
A typical supply chain may involve many different trading partners, called stages. These
stages may be: - Answers - -Suppliers
-Producers
-Wholesalers/Distributors
-Retailers
-Customers
>Each stage may not be present in a SC
> The number of stages in a SC and its design will depend on the customer's needs, the
roles of stages involved, and the value each stage provides.
Supply Chain is often called "Value Network" or "Value Chain" - Answers - -SC are
under increasing financial pressure, and stages that do not add value to the SC are
quickly bypassed or eliminated.
-"Value chain" was introduced by a Harvard professor, Michael Porter in the 1980's.
SCM Activities - Answers - 1. Coordination - coordinate the movement of goods,
services, and funds through the SC
2. Information Sharing - share forecasts, point-of-sale data, planned promotional
campaigns, and inventory levels
3. Collaboration - jointly plan, operate, and execute business decisions as one entity
Managing Flows through the SC (Products, Information, and Funds) - Answers - 1. Flow
of Products - from the beginning to the final customer. Goods also flow back through the
chain, called "reverse logistics"
,2. Flow of Information - simplifies SC utilize data from point-of-sale back to suppliers.
Real time info reduces uncertainty and inventory levels making it more timely and
accurate.
3. Flow of Funds - funds are transferred in both directions along the SC. "SC
compression" is a shorter order cycle time which means the customers will receive their
orders faster.
The Bullwhip Effect - Answers - - Fluctuation and distortion of information increases as it
moves up the SC, from retailers, to manufacturers, to suppliers.
> each stage of the chain carries progressively more inventory
> the longer the SC, the greater the opportunity for the BW effect
> sharing point-of-sale info with all members of the SC can combat the BW effect
Customer Focus - Answers - The final customer is the driving force of the SC
- products are "pulled" through the SC
The Service SC - Answers - - focus more on the interaction between the customer and
provider
- often rely on customers as the supplier of inputs
- tend to be shorter than manufacturing SC
- are often more like hubs than chains
- do not have inventory as a buffer
Boundary-Spanning nature of SCM - Answers - SCM spans and integrates functions
within and between enterprises of the SC through: INTRA-Organizational Integration
and CROSS-Enterprise Integration
INTRA-Organizational Integration - Answers - 1. Marketing - links the organization to its
customers
2. Operations - organizes the transformation of raw materials into finished products and
services
3. Sourcing - links the organization to its suppliers and ensuring an efficient supply of
materials
4. Logistics - is responsible for moving and positioning inventory throughout the SC
> To support SCM, each function must also have a systems viewpoint. This type of
effort requires company-wide integration that is different than the traditional "silo"
mentality, where each organizational function operates independently.
> Creating systems thinking can be a big challenge for many companies
CROSS-Enterprise Integration - Answers - - Various SC organizations functioning as a
single entity to satisfy the final customer by engaging in ongoing external efforts with
suppliers, transportation carriers, and distributors.
> The ultimate goal of a SC is to operate as a single entity
Keys:
, 1. IT as an enabler
2. Relationship Management
3. Collaborative Planning
4. Sharing risks and rewards
5. Win-win strategy
(SCM) vs Logistics - Answers - SCM: concerns the collaboration between SC partners
in a strategic effort to achieve superior competitiveness. (Strategic and Managerial
Concept)
> SCM manages different aspects of the coordination process such as:
Information, Technology, Distribution, Products, Finances, and Relationships
SCM vs. (Logistics) - Answers - Logistics is the part (SUPPORTS) of SCM that is
concerned with managing the flow of inventory.
> Involves order processing and tracking, inventory management, transportation,
warehousing, material handling, and packaging
The Rise of SCM - Answers - - SCM evolved in the 1990s and has proven to be
necessary for successful global competition.
> Contributing to the Trend:
- Companies found savings by planning and managing the SC more effectively
- Advances in IT
-Improvement in transportation methods
- Greater customer empowerment
Characteristics of a Competitive SC - Answers - (R.R.RM)
1. Responsiveness - the ability to move quickly to meet customer demands. Often
described as having "agility", shorter SCs, and demand-driven (responding to what the
customer demands) rather than forecast-driven.
2. Reliability -
>Uncertainty: is the main reason why companies carry safety stock resulting in higher
costs.
>Visibility: improves reliably in SC (Typically, the more further one goes up the SC, the
more limited the "visibility of downstream activities).
>SC Coordination: sharing of real-time data and info through IT improves visibility and
therefore SC reliability.
3. Relationship Management - SCM is primarily about the management of relationships
across networks of companies. >Traditional Adversarial Relationships is how it used to
be in the past.
>It is important to build relationships and collaborate
>"Single-Sourcing" is widespread. Such practices improve quality, product innovation,
design, and overall responsiveness.
