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54 Cards in this Set
- Front
- Back
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Procurement functions (5 activities) |
Purchasing Consumption managment Vendor selection Contract negotiation Contracr management |
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2 types of products that companys buy |
Direct materials Indirect or mro (maintenance, repair, operations) |
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Mechanics of purchasing |
Purchasing decisions made Purchase orders issued Vendors contracted Orders placed including (items+quantities, prices, delivery dates, delivery address, billing address, payment terms |
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Reasons from consumption management |
Theft prevention Waste management combine multiple smaller purchases of goods to get better deals on them |
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3 basic choices for selecting outside vendors |
Multiple sourcing single sourcing sole sourcing |
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Factors to consider while choosing vendors |
Price Product quality Service level jest in time delivery production capability and flexibility CSR (sustainability) |
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What should be negotiated and specified in an apparel purchase contract? |
Specifications of products prices deadlines delivery services responsibilities dispute solving solution |
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Vendor- manages inventory (VMI) |
Watch the inventory level of its products in its customer side Calculate EOQ Proactively replenish products to the customers locations that need them invoice the customer for these shipments under terms defined in the contract |
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3 main categories of activities in credit and collections function |
Setting a credit policy Implement Credit and collections practices Managing credit risks |
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Setting a credit policy |
Decided on by senior managers, Review the performance of the company’s receivables and related trends, Days of sales outstanding |
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Implement credit and collections practices |
Need credit policies and enforce them, company’s salespeople to approve sales, Credit analysis, letter of credits |
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managing credit risks |
Among members of supply chain, offering and accepting credits is a business necessary, creating credit programs, credit insurance, customer assets and government loan guarantees |
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Product design and the trend on product design |
Determine the components needed to make or build it Less components, standard components, lower inventory level and more reliable production |
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What expectations should be met in today's order management? |
Fast movement of accurate and timely data/information in the supply chain Quickly spot problems and give people the information needed to correct the problems Routine orders should be automated Orders requiring special handling need to be brought to the attention |
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4 principles for efficient order management |
Enter the order data once and only once Automate the order handling Make order status visible to customers and service agents Integrate order management system with other related systems to maintain data integrity |
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2 types of delivery methods |
Direct Delivers Milk Run deliveries |
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Direct Delivers |
One originating location to one receiving location The routing is simply a matter of selecting the shortest path between the two locations Simple and delivery coordination, it is efficient |
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Milk Run Deliveries |
Defers to the old-fashioned milkman, the diary delivery driver who stopped at every house to deliver fresh milk in glass bottles More complex task than direct deliveries |
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Advantages of Milk Run Deliveries |
Cost of receiving locations is lower More efficient use can be made of whatever mode of transportation is used If EOQ’s of different products needed by a receiving location are less-than-truckload (LTL) amounts, milk run deliveries allow orders for different products combined until the resulting quantity equals a TL amount It also works with small deliveries to multiple receiving location fully using TL amount |
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Walmart's Cross Docking technique |
Product flow faster in the supply chain, little inventory held in storage Less handling expenses Fit large, predictable volumes and when economies of scale impact both inbound and outbound transportation However, it demands a considerable coordination between inbound and outbound shipments |
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Future trends for distribution centers |
Put more functions into distribution center to get economic efficiency More flexible to adjust between responsive supply chain and efficient supply chain |
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Difficulties in managing returns |
Liberal return polices Customer want immediate resolution Items come in without packaging Returns are not scheduled, could be at any time Returns could be in good shape or damaged |
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Bullwhip Effect |
Small changes in apparel demand by consumers at the front end of supply chain translate into wider and wider swings in demand as they are experienced by companies further back in the supply chain |
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Bullwhip effect's on retailers, apparel producers, and entire supply chain |
Hurts business relationship Product markdown or overstocks Layoff workers, shut down plants Ultimate system-wide poorer performance |
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Factors that cause the bullwhip effect |
Companies have the separate ownership of different stages of the supply chain Forecasts are largely based on the existing data, and they are rarely perfectly accurate Order batching: method for reduction of ordering costs due to price discounts for bulk ordering, transportation expense decrease by ordering full- truck loads Liberal return polices |
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Walmart deals with the bullwhip effect by... |
If customers believe they are getting pretty good price whenever they purchase the product, they will make their purchases based on really need and not other considerations |
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Collaboration planning, forecasting, and replenishment (CPRF) |
- Facilitate the coordination needed in supply chains - An industry group known as the Voluntary inter-industry commerce standards (VICS) Association keeps up-to-date on the technique known as CPFR and its related issues -The model provides a basic framework for the flow of information goods, and services - The bullwhip effect is diminished because all companies in the supply chain can see real-time sales and share sales forecasts -There are benefits to quickly see a real variation in customer demand and coordinate with suppliers to reschedule the production -CPFR allows retailers to make timely replenishment from suppliers. |
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Radio-frequency identification (RFID) |
An automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders |
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How does RFID affect the supply chain management? |
Can improve inventory accuracy Reduce out of stocks Reduce time/ labor in taking inventory Improve loss prevention Locate/ track products Reduce markdowns |
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PLM System |
Is the process of managing the entire lifecycle of a product from inception, through engineering design and manufacture, to service and disposal of manufactured products. |
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4 basic market conditions |
Developing market (New market and products, supply and demand are low) Growth market (Demand exceeds supply) Steady market (established market, supply and demand are balanced) Mature market (Supply exceeds demand) |
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4 Measurement categories that assess a company or supply chain performance |
Customer service Internal efficiency Demand flexibility product development |
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Customer service |
The reason that any supply chain exists is to serve its customers/markets |
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Internal efficiency |
refers to the ability of a company or a supply chain to use its assets as profitably as possible |
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Demand flexibility |
describes a company’s ability to be responsive to new demands in the quantity and range of products and to act quickly to cope with fast-changing trends and related uncertainty |
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Product development |
is the ability to design, build, and deliver new products to serve its markets as those markets evolve over time |
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Build to stock (BTS) |
is on common, commodity-type products are supplied to a large market or customer base |
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Build-to-Order (BTO) |
is customized to meet a specific customer order, configured to meet the requirements defined by the custom, some have pre-made components that simply assemble to order |
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Popular measured of internal efficiency |
Inventory value inventory turns Return on sales Cash-to-Cash cycle time |
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Inventory value |
at a point in time, an average over time |
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Inventory turns |
A measurement of the profitability of inventory by tracking the speed with which it is sold during the course of a year |
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Return on sales |
A broad measure of how well an operation is being run, a measurement how well fixed and variable costs are being managed, take into account the gross profit generated on sales |
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Cash-to-cash cycle time |
the time it takes from when a company pays its suppliers for materials to when it gets paid by its customers |
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3 chief measurements of demand flexibility |
Activity cycle time - lead time Upside flexibility Outside flexibility |
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Activity Cycle time |
the amount of time it takes to perform a supply chain activity such as order fulfillment, product design, delivery and so on, in retail, order fulfillment is a critical measure of efficiency |
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Upside flexibility |
an ability to respond quickly to additional order volume for the product they carry, Upside flexibility can be measured as the percentage of increase over the expected demands that the supply chain can accommodate |
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Outside flexibility |
an ability to quickly provide the customer with additional products outside the bundle of products normally provided |
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How to measure the product development ability? |
Percentage of total products sold that were introduced in the last year Percentage of total sales from products introduced in the last year Cycle time (lead time) to develop and deliver a new product |
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What are the major areas identified as the opportunities for retailers and apparel suppliers to improve their visibility to each other, lower costs, get products to market more quickly, and/or improve their decision-making abilities? |
New Business mode – Mobile commerce, social commerce Design and Product development – PLM, new materials, affordable customized products - Logistics – 3PL (outsourcing logistics) – UPS, FedEx Product identification – labeling/ branding, RFID, QR code Warehouse management – visibility/ effective inventory level (VMI) New market entry |
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2 categories that supply chain opportunities fall into |
Fix or improve something already in place create or build something new |
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7 system design guidelines |
Align system designs with the business goals and performance targets Use system to change the competitive landscape Leverage the strengths of existing system’s infrastructure Use the simplest possible combination of technology and business procedures to achieve the maximum number of performance targets Break the system design into separate components or objectives as much as possible, run the work on individual objectives in parallel Do not build a system whose complexity exceeds the organization’s capabilities Do not renew a project using the same people or the same system if it has already failed once |
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3 steps and there durations in initial project planning |
Define what will be done – goal and objectives (2 to 6 months) Design how it will be done – the detailed specifications (1 to 3 weeks) Build what is specified (2 to 6 months) |
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3 types of cots in a system development project |
1. Hardware and software costs for the technical and communications network components, 2. Development costs as estimated by the time and cost needed to achieve each project objective, 3. Operating costs |
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4 types of benefits provided by a new system |
1. Direct benefits, 2. Increment benefits, 3. Cost avoidance benefits 4. Intangible benefits. |
