Supply Chain Management - Session 1

Front 1

What is the definition of SCM?

Back 1

SCM 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.

Front 2

Describe the information flow both to and from the customer

Back 2

Front 3

SUPPLY CHAIN INTEGRATION
What does vertical integration do? What does vertical integration require?

What company is an example of it

Back 3

DO: Assures supply
Reduces cost

REQUIRES: hugh investments
Production risks

Ford is an example

Front 4

SUPPLY CHAIN INTEGRATION
What is supply chain semi-integration? What company is an example of it?

Back 4

-Few suppliers
-Long-term agreements
-Coordinated business processes

Dell is an example (because does not own all its suppliers as part of vertical integration)

Front 5

What are the systemwide costs that SCM purports to minimize?

Back 5

1. Acquisition
2. Transportation
3. Inventory
4. Materials handling

Front 6

What are ways SCM works to minimize system wide costs?

Back 6

1. making decisions between global versus local optimization (the inventory / transportation tradeoff in that you either have holding costs or you have transportation costs)
2. Inventory is often seen as the greatest opportunity of cost reduction

Front 7

What is inventory turnover?

Back 7

Inventory turnover = annual sales / average inventory level

The amount of inventory turnover is dependent on the sector

Front 8

What is service level?

Back 8

the ability to satisfy customer's delivery date. So this could be measured by a % of all orders sent on or before delivery date

Front 9

What is risk pooling?

What is a way in which risk pooling exists?

Back 9

Risk pooling aims to aggregate demand across locations in order to reduce demand variability and thus required stock

Risk pooling can be carried out through centralized distribution centers

Front 10

The case ML Fisher talks about "what is the right supply chain for your product." What are the major dimensions on which this decision is determined?

Back 10

Cost versus responsiveness. So you select either primarily for cost/quality, or for speed/flexibility/quality

One is more focused on inventory turnover (costs) and the other is more focused on service level (responsiveness)

Front 11

What is the bullwhip effect and why does it exist?

Back 11

Order variability increases as we travel up the supply chain. This happens because:
-supply chain stages don't see real demand
-batch ordering
-price fluctuations
-inflated orders
-high lead times amplify effect

Front 12

What are the consequences of the bullwhip effect?

Back 12

– Higher inventory costs
– Lower service level
– Inadequate capacity planning

Front 13

What are solutions to the bull-whip effect? Give an example of each kind.

Back 13

– Reduce uncertainty
• Ex: Share point-of-sale (POS) data
– Reduce variability
• Ex: “Everyday Low Prices”
– Reduce lead times
– Strategic partnerships
• Ex: Vendor-managed inventory

Front 14

How do firms decide what / how much to produce?

Back 14

Push versus Pull

Front 15

What is a push strategy and what are the problems associated with it?

Back 15

– Production decisions based on long-term forecasts (“Make-to-stock”)
– Problems:
• Inability to meet changing demand patterns
• Obsolescence of inventories

Front 16

What is a pull strategy and what are the requirements, advantages, and problems associated with it?

Back 16

Front 17

Describe how a company knows when to use push or pull

Back 17

Front 18

Explain Amazon's supply chain strategy and why

Back 18

Front 19

Describe Dell's supply chain strategy (what it's called, what it is, and why)

Back 19