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119 Cards in this Set
- Front
- Back
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Logistics Management |
Management of the flow and storage of inventory so that total costs are minimized and customer service is maximized |
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Supply Chain Management |
Integrating business processes between different functions: Operations Management, Distribution Management, Supply Management |
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Economies of Scale |
The higher the volume, the lower the cost. The lower the volume, the higher the cost |
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Process Improvement and Redesign |
Ordered set of activities |
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ROA |
Return on Assets = Higher ROA = Better Financial Performance |
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C's of Competitive Advantage |
Customers, Company, Competitor |
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Cost Advantage |
It is possible to identify and predict improvements in the rate of output of workers as they become more skilled in the processes and tasks on which they were working |
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Value Advantage |
Different groups of customers within the total market attach different importance to different benefits |
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Service |
The process of developing relationships with customers through the provision of an augmented offer |
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Experience Curve |
Demonstrates the value of early market share gains -- the higher you share relative to your competitors, the lower your costs should be |
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Primary Value Chain Activities |
Inbound logistics, Operations, Outbound logistics, Marketing, Sales, and Service |
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Support Value Chain Activities |
Infrastructure, Human Resources, Technology Department, and Procurement |
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Globalization |
Seeks to achieve competitive advantage by identifying world markets for its products and then to develop a manufacturing and logistics strategy to support its marketing strategy |
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Responsiveness |
The ability to change logistics and supply chain management activities quickly |
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Agility |
The ability to move quickly to meet customer demand sooner. Sense + Response |
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Reliability |
Being able to execute consistently on an activity or process and maintain a target level of performance |
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Resilience |
Being able to deal with unexpected disruptions in the supply chain |
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Relationships |
Being able to manage the connections, interactions, communication, and maintain relationships |
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Standard Deviation |
A measure of uncertainty |
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Safety Stock |
The expected number of units that are on hand just before the replenishment is received and available for sale |
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Hurdle Rate |
The minimum rate of return on investment |
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Inventory Turns |
COGS (Unit Sales)/Inventory |
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Competitive Advantage |
Successful companies will generally be those that deliver more customer value than their competitors |
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Quality
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The functionality, performance, and technical specification of the offer |
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Cost |
The customer's transaction costs including price and life cycle costs
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Time |
The time taken to respond to the customer requirements (delivery lead times) |
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Pre-Transaction |
How easy it is for a consumer to investigate products, utilize the website, and learn about company policies or programs |
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Transaction |
Customer service variables directly involved in performing the physical distribution function |
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Post-Transaction |
Product Warranty, Parts & Repair Service, Procedures for Customer Complaints, and Product Replacement |
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80/20 Rule |
80% of profits of the business come from 20% of the customers |
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Fill Item Rate |
Percentage of demand fulfilled from on hand inventory |
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Normal Distribution |
Bell Curve, Customer Service, Target Service Level |
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Optimal Service Level |
Produce enough; lose the money put into producing too many. If you don't product enough; lost margin on profit |
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SCM Metrics |
Inventory Turns, GMROI, ROA |
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Lead Time |
The time from when an order is placed to when it's actually received |
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Lead Time Gap |
The time it takes to procure, make and deliver the finished product to a customer is longer than the time the customer is prepared to wait for it |
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Customer's Order Cycle |
The length of time that the customer is prepared to wait, from when the order is placed, through when the goods are received |
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Seasonality |
Products with high amounts of demand during a certain time of year |
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Noise |
The demand points around the level that you can't explain (random occurrence) |
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Level of Demand |
How quickly the product sells |
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Promotional Activity |
Can make the product look like a trend when it's not |
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Pantry Loading |
Buying more than they should |
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Demand Management |
The various tools and procedures that enable a more effective balancing of supply and demand to be achieved through a deeper understanding of the causes of demand volatility |
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Demand Planning |
The translation of our understanding of what the real requirement of the market is into a fulfillment program |
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Sales and Operations Planning (S&OP) |
Seeks to ensure that the organization is able to anticipate the real requirement of the market and to react in the most cost-effective way |
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Qualitative Method |
Asking subject matter experts their opinion. Judgmental Method. Market Research |
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Quantitative Method |
Take a Poll. Causal Models (prediction) and Time Series Models (sales history & short term) |
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Delphi Method |
Qualitative. Ask the group for an estimate. Iterative Process |
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Moving Average |
A time series model where you are trying to figure out the level of demand using only the sales history. |
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Exponential Smoothing Method |
Only estimates the level of demand using last period's forecast and forecast error. As you increase alpha, it becomes more reactive |
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Bias Error |
Are we forecasting too high or too low? We want an unbiased forecast |
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Magnitude |
Ignoring the biases and asking how far off you are instead |
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Forecast Error |
The difference between actual demand and the forecast |
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Mean Absolute Percentage Error (MAPE) |
The average percent that the forecast is off. This is the most popular measure used |
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Standard Deviation of Forecast Error |
The key link between management system and inventory system |
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Preparation |
Assumptions are gathered and validated |
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Demand Review |
Looking only at the demand side: What is going to happen? |
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Supply Review |
Looking only at the supply side: What can be produced? |
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Consensus |
Make recommendations to the executive team |
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Executive Review |
Review Recommendations and then make a decision based off company strategies and financial goals |
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Lean |
We want to run EFFICIENTLY. We want to reduce inventory and waste |
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Agile |
We want to do things EFFECTIVELY. We want to satisfy the customer needs first |
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Volume Flexibility |
Scale production or distribution up and down quickly |
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Variety Flexibility |
Offer a variety of products within our distribution systems |
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Customization Flexibility |
Take core products and customize them |
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Product Introduction Speed |
Introduce new products rapidly into the market |
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Agility Framework |
Sense + Respond |
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Virtual |
The use of information technology to share data between buyers and suppliers |
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Process Alignment |
Collaborative working between buyers and suppliers |
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Network |
A confederation of partners linked together |
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Just - In - Time (JIT) |
Demand at the end of the pipeline PULLS products towards the market and behind those products the flow of components is also determined by that same demand |
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Economic Order Quantity (EOQ) |
Balances the cost of holding inventory against the costs of placing replenishment orders |
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Point - Of - Sale (POS) |
SKU Specific |
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Volume |
The amount of data has grown rapidly |
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Variety |
Unstructured Data and Structured Data |
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Unstructured Data |
Twitter and Facebook |
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Structured Data |
Customer Sentiment |
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Velocity |
The amount of data recorded and available |
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Functional Awareness |
What are they trying to accomplish? |
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Integrated Planning |
Moving Towards Same Objectives |
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Volume Flexibility |
Able to change volume dramatically |
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Variety Flexibility |
Omni Channel; deliver a wide set of products to a very diverse marketplace. |
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New Product Flexibility |
Maker Movement |
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Customization Flexibility |
Dell and Amazon. |
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Supply Chain Uncertainty |
Lead time and demand uncertainty depend on each other |
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Continuous Review |
WHEN to place an order |
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Periodic Review |
HOW MUCH to order |
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Inventory Policy |
HOW MUCH to order (Periodic) WHEN to place an order (Continuous) |
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Reorder Point (ROP) |
The amount you expect to sell during lead time Demand Rate x Lead Time |
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Raw Materials |
A good going into another finished good being made |
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Work In Process |
Inventory being turned into the final product |
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Finished Goods |
Final product of the production process (more expensive to hold) |
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Bottleneck |
Part of the process that is the slowest part |
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Cycle Stock |
Amount of inventory we go through on average between replenishment |
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Anticipatory Inventory |
Some supply of goods that held to buffer against planned disruptions or anticipated demand |
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Set - Up (Ordering) Costs |
Everything that is triggered by placing an order (time, labor, receiving)
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Shortage Costs |
How much will it cost the company if they stock out |
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Capital Costs |
The biggest cost and is the opportunity cost with carrying inventory |
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Hurdle Rate |
Minimum rate of return on investment |
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Risk Costs |
Damage and Shrink, Obsolescence (fresh produce) |
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Shrink |
Stolen items; inventory that disappears |
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Storage Costs |
The costs of holding inventory |
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Service Costs |
Taxes, Insurance |
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Drop Shipping |
Ship directly from supplier on behalf of the retailer |
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Service and Operating Components |
Cost, Transit Time, Reliability, Accessibility, Capability, Security, and Fuel Efficiency |
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Rail |
Largest mode of transportation in ton-miles in the U.S. |
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Motor Carriage |
Largest share of transportation spending in the U.S. |
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Truckload (TL) |
Taking a shipment from point A to point B |
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Less Than Truckload (LTL) |
Break bulk to line haul trucks |
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Water Transportation |
Two types: |
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Intermodal |
Using more than one mode for transportation |
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Freight Forwarders |
Trying to take a bunch of small shipments and combine it into a larger shipment |
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Freight Brokers |
Owner Operator (One) Midsize |
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Linear Ocean Transportation |
Follows Routes |
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Tramps Ocean Transportation |
For hire ships that are oil and grain carriers. These ships have a rate per day on ship |
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Non Vessel Operating Common Carrier (NVOCC) |
An intermediary between a ocean shipping company and a shipper |
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Delivery Lead Time |
The time between when the order is placed and when it becomes available for use |
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Terra |
Import Tax |
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Postponement |
Delay |
