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95 Cards in this Set

  • Front
  • Back

Upstream

inputs that feed into operations

Downstream

firms that receive the outputs produced

First tier supplier

direct supply

Second tier supplier

supply the first tier supplier

First tier customer

downstream firms

Second tier customer

receive input from first tier customer

Supply chain is not

linear it is strategic

modern focus of supply chain management

systematic integration

Level 1 SCOR Model

Plan, Source, Make, Deliver, and Return

Three foundational functions in SCM

Sourcing, Operations, and Logistics

Sourcing

deals with quality, price, and delivery timing of incoming material to an organization,


evaluating, certifying, developing, and managing relationships with suppliers

Operations

deals with demand management, lean systems, six sigma, and quality management, production technology and planning

Logistics

deals with choice of transportation modes, warehouse management, inventory positioning, and distribution network design

Bullwhip effect

unexpected distortion in the supply chain due to repetitive variation in demand

Bullwhip effect magnifies

upstream

4 major causes of bullwhip effect

Price fluctuations


Order Batching


Shortage Gaming


Forecast inaccuracies

Bullwhip countermeasures

Everyday low prices


Frequent ordering


Forecast on sale history


Information sharing

Purchasing activities

-strategic function focused on value creation


-Evolved from purely clerical function

Capacity Planning

Work with accounting and finance for capital investments

Works with marketing and engineering to identify and qualify suppliers of goods and services as well as manage on-going supplier relationships

Purchasing

Works with marketing to manage the movement of goods throughout the supply chain

Logistics

Translates the business strategy into specific actions and coordinates with other areas

Functional Strategy

Mechanism for coordinating and guiding decisions regarding the elements of business - identifies core competencies and targeted customers, sets time frames

Business Strategy

Profit Margin

Earnings / Sales

ROA

Earnings / Total Assets

Decrease in COGS

Increase in pretax profit

Decrease in Merchandising inventory

Decrease in Total Assets

based on current profit margin, Dulaney, would have to generate __________ $'s in additional sales in order to have the same effect




EQUATION

(New pretax profit - Old pretax profit) / Old Profit Margin

Administrative costs for purchasing costs at $30 per unit, over 36 months, and 1 million units of demand




EQUATION

(30 x 36) / 1,000,000

Savings per unit

Total cost per unit of insourcing - outsourcing

Inputs

-Materials

-Intangible needs


-Information

Outputs

-Tangible goods


-Fulfilled needs


-Satisfied customers

Operations Management

Planning, Scheduling, and control of activities that transform inputs into finished goods and services

Network of manufacturers and service providers that work together to create products or services for end users

Supply Chain

Active management of supply chain activities and relationships in order to maximize customer value and achieve a sustainable competitive advantage

Supply chain management

SCOR Model

seeks to provide standard descriptions of the processes, relationships, and metrics that define supply chain management

5 broad areas of SCOR

Planning, Sourcing, Make, Delivery, Returns

Seek to balance demand requirements against resources and communicate these plans

Planning

Identifying, developing, and contracting with suppliers and scheduling the delivery of incoming goods and services

Sourcing

Make

actual production of a good or service

3 major developments that brought SCM to the forefront

-Electronic Commerce


-Increasing Competition and globalization


-Relationship management

Electronic Commerce

The use of computer and telecommunications technologies to conduct business via electronic transfer of data and documents

SCM professional society

APICS

identifies global sources of materials, selects suppliers, arranges contracts, and manages ongoing relationships

Sourcing managers

Acquires knowledge in a specific market in which the organization purchases significant quantities of materials and services. Helps formulate long term commodity strategies and manage long term relationships with selected suppliers

Commodity manager

Measures supplier performance, identifies suppliers requiring improvement, and facilitates efforts to improve suppliers' processes

Supplier development manager

Works closely with manufacturing, marketing, and purchasing to create timely, cost-effective import/export supply chains

International logistics manager

Design and implement the transformation processes that best meets the needs of the customer

Process selection

Forecasting

Develop the planning numbers needed for effective decision making

Capacity Planning

Establish strategic capacity levels and tactical capacity levels

Inventory management

Manage the amount and placement of inventory within the company and the supply chain

Schedule and manage the flow of work through an organization and the supply chain; match customer demand to supply chain activities

Planning and Control

Identify and qualify suppliers of goods and services; manage the ongoing buyer-supplier relationships

Purchasing

Manage the movement of physical goods throughout the supply chain

Logistics

Structural elements

buildings, equipment, IT, etc.

Infrastructural elements

People, policies, etc.

Mission statement

Reason for existence, core values, and domain

organizational strength, developed over a long period that customers find valuable and competitors find difficult or even impossible to copy

Core competencies

Strategy that translates a business strategy into specific actions for functional areas

Functional strategy

Subdimension of quality that addresses the basic operating characteristics of a product or service

Performance quality

Performance dimension that considers how quickly operations and supply chains can respond to the unique needs of customers

Flexibility

mix flexibility

ability to produce a wide range of products or services

Changeover flexibility

ability to provide a new product with minimal delay

Volume flexibility

ability to produce whatever volume the customer needs

Internally neutral alignment


STAGE 1

minimize any negative potential in the operations and supply chain areas

Externally neutral alignment


STAGE 2

what works for competitors will work for the company

Internally supportive alignment


STAGE 3

management recognizes that the operations and supply chain structural and infrastructural elements must be aligned with the business strategy

Externally supportive alignment


STAGE 4

the business strategy actively seeks to exploit the core competencies found within these areas

When much of a firm's revenue is spent on materials and service. SCM represents a major opportunity to increase profitability.

Profit Leverage Effect

Balance sheet item that shows the amount a company paid for the inventory it has on hand at a particular point in time

merchandise inventory

application of quantitative techniques to purchasing data in an effort to better understand spending patterns and identify opportunities for improvement

spend analysis

Profiles the major forces and trends that are impacting an industry, including pricing, competition, regulatory forces, substitutions, technology changes, and supply/ demand trends

industry analysis

Internal customers purchase directly from nonqualified suppliers

maverick spending

structured approach used by decision makers to develop a sourcing strategy for a product or service, based on the value potential and the relative complexity or risk represented by a sourcing opportunity

portfolio analysis

"Routine" quadrant

readily available and represent a relatively small portion of a firm's purchasing expenditures

"Routine" actions

automating purchasing


reducing the # of suppliers


Electronic data interchange

"Leverage" quadrant

standardized and readily available and represents a significant portion to spend



"Leverage" quadrant focuses on

leveraging the firm's spending levels to get the most favorable terms

"Bottleneck" quadrant

have unique or complex requirements that can be met only by a few potential suppliers

Primary goal of sourcing

supply continuity

"Critical" Quadrant

Complex or unique requirements coupled with a limited supply base

difference in "Critical" from "Bottleneck"

Items can represent a substantial level of expenditure for the sourcing firm

uses a single supplier for one particular part or service and another supplier with the same capabilities for a different part

Cross sourcing

two suppliers are used for the same product or service

Dual sourcing

Inquiry to a potential supplier about that supplier's products or services for potential use in the business

RFI (Request for Information)

formal request for the suppliers to prepare bids, based on the terms and conditions set by the buyer

RFQ (Request for Quotation)

description method used when a product or service is proprietory

Description by brand

Description method used when an organization needs to provide very detailed descriptions

Description by specification

Description by performance characteristics

description method that focuses attention on the outcomes the customer wants rather than on the precise configuration

E auctions and reverse auctions

potential qualified suppliers place bids on a website at a designated time

Negotation is a more costly,

interactive approach

Procure-to-Pay Cycle

set of activities required to first identify a need, assign a supplier, approve the specification, acknowledge receipt, and submit payment to the supplier

Five main steps of Procure-to-Pay cycle

-Ordering


-Follow up and expediting


-Receipt and inspection


-Settlement and payment


-Records maintenance

Document that authorizes a supplier to deliver a product or service and often includes key terms and conditions

PO (Purchase Order)

Terms and conditions for a purchased service that indicate what services will be performed and how the service provider will be evaluated

Statement of work, Scope of work