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35 Cards in this Set
- Front
- Back
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What are the 2 strategic supply decisions?
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1. Make/buy (outsourcing) decision
2. Vertical / Horizontal Integration |
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What does the make or buy (outsourcing) analysis depend upon?
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Core competencies
Supplier dominance Vulnerability |
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What are the rules of thumb when it comes to outsourcing?
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outsource everything, except:
(1) Activities that are critical to the company’s success or to customer perception, including important product attributes (2) Product that require specialized design and manufacturing skills (3) Activities that belong to company’s core competencies |
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What are the dangers out outsourcing? (7)
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1.Loss of control
2.Loss of client focus 3.Loss of clarity 4.Loss of cost control 5.Ineffective management 6.Loss of confidenciality 7.Double outsourcing (subcontrating) |
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What are the important factors to supply strategy development (5)
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• 1. Cost analysis (TLC)
• 2. Multiple source policy (make AND buy) • 3. Global Sourcing (Local vs International) • 4. Supplier development • 5. Supplier relationship management |
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On average, when the cost difference is less than 30% it justifying outsourcing to LCC is ______
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difficult
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What are the main costs in Total Logistics Costs?
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Acquisition Costs, Ownership Costs, Post-Ownership Costs
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Give an example of each kind of typical Total Logistics Cost
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Acquisition costs:
1. Purchase price 2. Purchasing planning process 3. Engineering costs 4. Taxes (international acquisitions) 5. Financing costs Ownership costs 1. Processing inventory 2. Repair 3. Training 4. Quality controls 5. Inventory carrying costs 6. Administration 7. Risks Post-ownership costs 1. Disposal and environment clean-up 2. Warranty 3. Customer dissatisfaction costs |
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What are 5 hidden costs in global sourcing?
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1. No recurrent costs to establish a Purchasing process in a new country
2. Recurrent costs of risk management in LCC 3. General overhead that are not reduced 4. Long term cost increase locally, due to social conflicts, image and productivity, etc 5. Stocks and transportation cost increase due to emergencies, not foreseen at the beginning |
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Supplier development guidelines:
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1. Identify and review performance gaps
2. Discuss specifics about how to implement the project 3. Achieve mutual agreement on project focus 4. Identify processes that result in waste 5. Compare performance gaps with desired objective 6. Establish project metrics 7. Gather and analyze data 8. Develop improvements strategies 9. Develop an implementation plan 10. Calculate ROI 11. Create and review the improvement proposal with supplier’s management 12. Execute and improve plan |
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What is the framework for supplier relationship management?
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o Assess Company’s costs
o Assess Company’s Competitive advantage o Assess the supply market o Calculate Total Logistics Cost o Identification of suitable suppliers o Assess Supplier’s demand flexibility o Assess Supplier’s Process capability o Assess Process maturity o Assess Strategic risk o Negotiation with suppliers (products, service levels, prices, geographical coverage, etc.) o Implementation of new supply structure o Track results and restart assessment (PDCA cycle) |
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What are the 5 structural decisions related to distribution?
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• Distribution Network Design
• SC inventory policy • Product / Process design strategies • SC Alliances • Push vs. Pull Based Supply Chains |
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What are the components related to the Distribution Network Design decision?
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(1) Determine scope, number and size of plant/warehouse (CDC, RDC, LDC)
(2) Assign customers to DCs (3) Assign products to plants (4) Define transportation assets |
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What are the components related to the SC Inventory Strategy decision?
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(1) Risk pooling: demand variability is reduced when demand is aggregated
across locations (2) Centralized Vs. decentralized systems (3) ABC approach |
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What are the components related to the Product/Process Design strategies decision?
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Mass customization (to offer unique products with zero to little additional work)
(1) Postponement: delayed product differentiation (2) Commonality: common product features at the component level (3) Modularity: product made by sub modules (4) Resequencing: capacity to rapidly shift production batches |
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What are push based supply chains? What do they imply?
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Based on long term forecasts.
This implies (1) Longer reacting time (2) Inability to meet changing demand patterns (3) Obsolescence (4) Bull whip effect: variability increase (5) Higher inventory / Lower Service level |
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What are pull based supply chains? What do they imply?
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Production is demand driven (e.g. customer pulls)
This implies (1) Decrease in Lead Times (2) Decrease in inventory (3) Decrease in variability (4) Difficult to implement when: We have long lead times We want to take advantage of economy of scale (no planning, implies higher costs) |
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What are the types of production in demand driven supply chain?
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Integral, Postponement, Direct Ship, Modular
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What does each type of production in demand-driven supply chain mean?
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Integral: Most efficient and creates standard, fully manufactured products
Postponement: Complete products, but leaves channel assembly to others Direct Ship: Configure to order Modular: Assembly to order, Configure to order, and service to order...most responsive. |
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What are the options for distribution strategy?
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• Centralized/Decentralized control system (IT dependency, alliances)
• Direct shipment: items shipped directly to the retailers • Cross-docking: items shipped through warehouses but without being stored • Warehousing • Transshipment (between facilities at the same level of the SC) • Central/Local facilities. Decision factors: Safety Stock, OverHead, Economy of scale, Lead Time, Service Level, Transportation costs |
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What do strategic alliances do?
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Add value to products
Improvemarketaccess StrengthenOperations Add technical strength Build financial strength Enhance organizational skills |
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What are the types of strategic alliances?
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3PL
RSR (Retail-Supplier Relationships) - reduce bullwhip effect Distributor Integration |
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When to comes to manufacturing strategy, what are the 3 kinds of decisions that need to be made?
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1. Decisions related to product
2. Decisions related to process 3. Decisions related to infrastructure |
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When it comes to manufacturing strategy, what are the decisions related to the product?
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• Product volume/variety matrix
• Product life cycle • Market entry and exiting timing |
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When it comes to manufacturing strategy, what are the decisions related to the process?
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• Types of processes and layouts
• Production Profile (MTO, MTS, ATO, ETO) |
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When it comes to manufacturing strategy, what are the decisions related to the infrastructure?
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• Job Shop
• Continuous Process • Work Cell • Line |
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Define each kind of infrastructural layout:
• Job Shop • Continuous Process • Work Cell • Line |
(1) Job shop - JUMBLED FLOW: with process segments connected by variable routings, usually customer-specified
(2) Work Cell - batch (3) Line - LINEAR FLOW: Process segments linked according to a pre- defined sequence, possibly decoupled by buffers (especially for man- paced lines) (4) Continuous process - CONTINUOUS FLOW: Process segments linked rigidly and tightly (in-transit units hardly stop, and when they do so they stop at a pre-defined stage) [Short throughput time] |
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What are some of the factors that affect the layout/infrastructure decision?
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Product Orientation
Products Grouped by Family Weight / Volume of Product Ratio / Load Capacity Layout movements |
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What are the different product profile options?
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• Make-to-stock
• Assembly-to-order • Make-to-order |
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Explain each product profile option:
• Make-to-stock • Assembly-to-order • Make-to-order |
• Make-to-stock: Includes processing, assembly, Product Inventory, and then delivery time is only shipping time
• Assembly-to-order: Includes Processing and product inventory, and then delivery time equals Assembly and shipping • Make-to-order: Includes only processing and then delivery time equals processing, assembly, and shipping |
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Job Shop
• Delivery: • Cost: • Quality: • Flexibility: • Innovativeness: |
• Job Shop
• Delivery: On time, but longer distances • Cost: Satisfactory • Quality: Satisfactory • Flexibility: Large variety of products, very low volumes • Innovativeness: Easy to make product changes |
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Continuous Process
• Delivery: • Cost: • Quality: • Flexibility: • Innovativeness: |
• Delivery: Fastest possible
• Cost: Lowest possible • Quality: Highest possible • Flexibility: Difficult to provide at high levels Fixed Speed of machinery. Expensive changes. • Innovativeness: Difficult to provide at high levels Fixed Speed of machinery. Expensive changes. |
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Work Cell
• Delivery: • Cost: • Quality: • Flexibility: • Innovativeness: |
• Delivery: Long delivery time and low reliability
• Cost: Higher volumes, more repeated orders, more cost-sensitive • Quality: Hard to compete with special purpose machines in a line flow system • Flexibility: High Level of due to General purpose machines and skilled operators • Innovativeness: High Level of due to General purpose machines and skilled operators |
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Equipment Paced Line
• Delivery: • Cost: • Quality: • Flexibility: • Innovativeness: |
• Delivery: Fast, reliable
• Cost: Low Cost • Quality: High Quality • Flexibility: Low because specialized • Innovativeness: Low because specialized |
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Operator Paced LIne
• Delivery: • Cost: • Quality: • Flexibility: • Innovativeness: |
• Operator Paced Line
• Delivery: High level • Cost: Low Cost • Quality: Good • Flexibility: Low because specialized • Innovativeness: Low because specialized |
