SC Textbook Notes.docx

SC Textbook Notes.docx - Chapter 1 Supply chain management...

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Chapter 1 Supply chain management is the idea of coordinating or integrating a number of goods and services related activities among supply chain participants to improve operating efficiencies, quality, and customer service. (p.6) - For supply chain management to be successful firms must work together by sharing information on things like demand, forecasts, production, plans, capacity changes, new marketing strategies, new product and service developments, new technologies employed, purchasing plans, deliver dates, and anything else impacting the supply chain members purchasing, production and distribution plans. - Also is including purchase orders. A comprehensive acquisition strategy is required to meet the organizations strategic objectives Free markets alliance -building that allows supply chain to operate more effectively than vertically integrated conglomerates. - Ex. Working with another company when a resource is scarce First tier = direct Supply chain collaboration is typically with direct suppliers and customers. Many firms are extending boundaries of their supply chains to include their second tier-suppliers, second-tier customers and logistics services (transportation and warehousing) providers. (p.9) Supply chain management can include second-tier (integrate) Bullwhip Effect : Erratic demand patterns and forecasts in trade. 12 to 25 percent more. Could be avoided with collaborative planning. (p.12) Sustainabilit y (in supply chain): Includes protecting the environment and some aspects of social responsibility as well as financial performance. Triple Bottom Line : people, planet and profits. Demand Management : help with seasonal demand variations (p.17) Lean Production: Low Inventory Level Six Sigma Quality Management : Quality compliance among suppliers and with internal production facilities Process integration example: Michigan and Ontario premier working together for the auto industry. Supply chain visibility : Where everyone involved knows where products are at any point in the supply chain. Chapter 2 Merchant : Wholesalers and retailers who primarily purchase for resale purposes (breaking bulk) Industrial Buyers: Purchase raw materials for conversion purposes (landscape, manufacturer) Purchase Spend : Money a firm spends on goods and services
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Profit leverage Effect : Measures the impact of a change in purchase spends on a firms profit before taxes, assuming gross sales and other expenses remain unchanged. The measure is commonly used to demonstrate that a decrease in purchase spend directly increase profits before taxes by the same amount (P.41) - Lower spend through a better purchase strategy. Return on Assets (ROA): Financial ratio of a firm’s net income in relation to its total assets. (Net income/Total Assets) Return on Investment (ROI ): Context of accounting, total assets consist of current and fixed costs.
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