SCM : Exam Flashcards

Terms Definitions
visible to customers
Identify key sourcing requirements.
QualityCostDelivery PerformanceTechnological Capabilities
Multiple-Channel, multiple-phase
Multiple-Channel, multiple-phase- when customers can be served by one of the first-phase facilities but then require service from a second-phase facility, and so on. (a Laundromat)
Competitive Priorities
cost, quality, flexibility, speed/time
Define Crisis Management
____ is avoiding/managing organizational crisis in a systematic way
the coordinate planning and execution of product distribution through the supply chain, preparation of packaged product, movement itinerary, storage itinerary.
Rivertown Crossings
General Growth Properties, Inc. selected a layout that clustered competing stores together, to make shopping more convenient and compete against online shopping better. Some malls are trying to make more high-tech directories.
Select supplier and reach agreement
Competitive BidNegotiationsWeighted factor approach
Define Cost-of-Service
Buildup approach where the carrier establishes a rate based on the cost of providing the service plus a profit margin; most commonly used for low-value goods or in highly competitive situations
Information Visibility
(obstacle to supply chain integration) the inability to easily share or retrieve trading partner information in real time, as desired by the supply chain participants. RFID technology helps overcome this obstacle. Technology boards and user boards are being formed now to develop standards and electronic product codes for the RFID industry.
Little's Law
• Little’s Law- (not applicable in finite customer populations) a fundamental law that relates the number of customers in a waiting-line system to the waiting time of customers. Average people times average time each customer spent in the facility equals number of people waiting and being served. Also is the average number of units an hour that arrive at the process times the average lead time of a unit of product through a manufacturing process equals the average work in process.
3 categories of measurement
effective, efficient and adaptable
Qualitative vs. Quantitative Factors
Qualitative Factors- (more trustworthy, accurate) irrelevant current data, lack of current data, new products, new markets, query executives, experts, salespeople, consumersQuantitative Factors- (a lot of using old sales data) Trends, Cycles, Seasonal, Randomness.
Implementation Planning
Process design require managers to implement change. No process or functional area is immune to process design changes. Need management and stakeholder support and participation, most important step. Techniques of project management can help in breaking down implementation requirements into manageable pieces. Final step is monitoring performance after implementation. Comparing to other companies is a useful way to monitor performance and look for improvement opportunities.
Can occur when demand exceeds a supplier’s finished goods available, and in this case, the supplier may allocate product in proportion to what buyers ordered. (Ex: If the supply of goods is 75% of total demand, buyers would be allocated 75% of what they ordered)
What is VMI?
Vendor managed inventory: Inventory planning and replenishment system where supplier (vendor) accepts negotiated responsibilities that typically include monitoring and restockingValue to vendor and “retailer”- End customer is the focus- A better understanding of partner and their needs- Retailer: fewer responsibilities, decreases costs- Vendor: better understanding of demand rates, fewer retailer errors, responsive
International sourcing
It may bedifficult to impliment JIT and lead times may be 2 or 3 times as long.
Purchasing research/Material
Detailed short and long term purchaing plans are required for item subject to technological, economic or political change
***Define Buying Center***
***The ____ is the purchasing department, plus all other stakeholders in the result of a decision***
Define Classification
The grouping of the product being transported
Define Security
____ is the application of policies, procedures, and technology to protect assets and prevent the introduction to the supply chain of unauthorized items
Partner Identification
(part of the supply chain integration model) Identifying only the primary trading partners allows the firm to concentrate its time and resources on managing the important process links with these companies, enabling supply chain to perform well. Mapping the network of primary trading partners is something that should be done to help the firm decide which businesses to include in its supply chain management efforts.
Different types of Documents
Commercial Invoice- summation of entire transactions (terms of sale, quantities, prices, currency, dates, references. Precise description of items, must conform to all documents Like a big receiptPacking List- placed in each container of assorted merchandise by packer. Much more detailed than an invoice. Describes contents of each package in one or more containers.Shipper’s Letter of Instructions- provides information on handling, payment, etc. to an intermediary. (where needs to go, basically what is good/bad with it. Hand over to “travel agent” for cargo)Certificate of Origin- States origin of Cargo. Important to customers in collecting tariffs. Includes the origin of all different componentsBill of Lading- 3 purposes (contract of carriage between seller/shipper and the carrier, states ownership of cargo/acts as title, and receipt of goods for shipper)Shippers Export Declaration (SED)- used by customs in recording Export Types and Quantities. Required if Cargo greater than $2500 in value or validated Export License is required or destined for countries prohibited by Export Admin. RegulationsValidated Export License- US government authorization for controlled or policed items/services like those with potential dual purpose technologies, defense, weapons, ammo, nuclear, watercraft, drugs, narcotics, processing equipment, financial assets, patent sensitive items, agricultural plants and products) If you need this you will always need SED
one of the most flexible modes of transportation, has also become more cost effective, very few goods are moved without highway transportation at some point, better scheduling and use of vehicle capacity, better vehicles and increased cost competition due to deregulation. Neither the fastest nor the cheapest.
Idle time
the total unproductive time for all stations in the assembly of each unit. number of stations times the cycle time minus the total standard time required to assemble each unit
Successful Judgment Methods
clearly needed when no quantitative data are available to use quantitative forecasting approaches. Can be used in concert with quantitative approaches. Adjust quantitative forecasts when tend to be inaccurate and make adjustments to quantitative forecasts to compensate for specific events.Salesforce estimates- the forecasts that are compiled from estimates of future demands made periodically by members of a company’s salesforce. (they probably know it better because they deal with customers firsthand, forecasts of individual salesforce members can be combined easily, sales territories are often divided by district or region.)Executive opinion- a forecasting method in which the opinions, experience, and technically knowledge of one or more managers are summarized to arrive at a single forecast. (executive opinion can also be used for technological forecasting- an application of executive opinion to keep abreast of the latest advances in technology)Market research- a systematic approach to determine external consumer interest in a service or product by creating and testing hypotheses through data-gathering surveys.Delphi method- a process of gaining consensus from a group of experts while maintaining their anonymity.
Vertically Integrated Firm
a firm whose business boundaries extend to include one-time suppliers and/or customers.
What is RFID? Potential benefits/obstacles of RFID?
Radio Frequency Identification. Coming, but still a problem, very expensive large project, can give too much information to the store, compatibility, security. Benefits- planning, scheduling, execution, inventory and materials management, security issues, retail checkouts, advertising and marketing possibilities. Obstacles- market standardization, getting SC partners on board, justifying RFID costs with meaningful ROIs, hardware range, managing numerous signals, middeware development.• What is required from SC to roll-out an RFID program? Procurement, Manufacturing, Distribution, Transportation, Retail, Beyond Retail. Utilizing the right software, managing data, security and privacy issues
in the direction of the customer (ex: moving from distribution to retail sales)
Importance of measurement
Issues critical to the final design and implementation of a measurement system.What to Measure:Delivery PerformanceQuality PerformanceSupplier Cost ReductionIssues critical to the final design and implementation of a measurement system.Measurement and Reporting FrequencyUses of Measurement Data
Linking Purchasing and Corporate Strategy
Corporate strategy addresses long-term survival and a company’s ability to compete in a changing competitive environment.An organization must take in more revenues than it spends on operating costs in the long term to grow and increase profits.
Define Logrolling
____ is when both parties identify an important issue, and both give up something equal importance; quid pro quo
Define Lowest Total Product Cost
Focus on process achievement; realization that the overall lowest cost is not necessarily the lowest cost for each function included int he process
What is Dijkstra's Algorithm
____'s Algorithm finds the shortest path between two points on a network, by finding the shortest path between one node and all other nodes on the network
Interior and Lighting Design
• Interior Design- can be broken into two types of elements: the finishes applied to surfaces and the architectural shapes. All things from floor coverings placed over concrete or wood floors (creates a different impression on the shopper), covering walls, the ceiling. Hundreds of architectural design elements that can be incorporated.• Lighting Design- Lighting can greatly enhance store sales. Wine and movie stores use brighter lights. Department stores found that raising lighting levels in fashion departments can discourage sales because bright lighting suggests discount store image. Contemporary lighting design requires knowledge of electrical engineering and the effect of light on color and texture. Lighting is measured in foot-candles.
Operations Characteristics of Waiting Lines
Operations managers can use waiting-line models to balance the gains that might be made by increasing the efficiency of the service system against the costs of doing so. In addition managers should consider the costs of not making improvements to the system (long waiting lines or long waiting times may cause customers to balk or renege) Should be concerned with line length, number of customers in the system, waiting time in line, total time in system, and service facility utilization.
Free Trade Zones
Area where acceptable items can enter the country duty free for storage, display, manufacturing, transformation, assembly, repackaging, etc. Items then usually re-exported. Alternative to duty draw backs. Items can remain in country permanently if duties are levied. Many now have this, like item was never there. If sales area is in FTZ money never leaves your pocket but once item is in customer’s hand it will be charged when taken out of FTZ.
Steps involved in clearing customs
1. Who controls the product/service being exported?- Department of State (International Traffic in Arms Regulations, US Munitions List) or Department of Commerce (Export Administration Regulations, Commerce Control list where 99% of products are, like a series of phone books)2. Classify your item- many ways to classify basic items. May want to hire a specialist in your product.3. Get a License (if necessary)- for a new product minimum 12-16 weeks or as much as one year, consider requests to state-weapons, countries4. Export upon receipt of customers’ approval
use of more than one mode of transport during a single shipment
basic steps in the purchasing process
requisition (somebody needing something), supplier selection (new supplier, old supplier?), place order (bids, contracts, analyze competitive priorities, negotiate), track order (order early? Late? On time? Shelf space? Customer expectations?), receive order (inspect, record, shelve).
theoretical minimum
a benchmark or goal for the smallest number of stations possible, where the total time required to assemble each unit is divided by the cycle time.
Line of Visibility
line of customer visibility shows the separation between the back office and the front office with a line of customer visibility. Important because front office services require people with service management skills whereas back office operations rely more on production skills
Spine Layout
Based on a single main aisle running from the front to the back of the store, transporting customers in both directions. On either side of the spine, merchandise departments branch out toward the back or side walls. The spine is used in medium sized specialty stores, especially in fashion stores.
Basic Responsibilities of Supply Chain
- Meet customer demando Right items, right place, right timeo Reasonable priceso Quality- high performance, consistencyo Flexibility- customization and/or volume- Contribute to profitabilityo Support revenue streams: cost, quality, speed, flexibility offeringso Control costs: minimize waste and inventory- Continuous improvemento Capture data, measure performance, analyze datao Responsive to changes in market demand
What do managers have control over in queuing system?
- Customers- Servers- Waiting lines- Service facility
Supply Base OptimizationWhy is optimization critical?
The costs associated with multiple suppliers for each purchased good or service usually outweigh any perceived reduction in supply riskOptimization is a critical prerequisite to the development of a world-class supply base
Define Intermediated Exchange
A ____ is an exchange between buyers and suppliers where there is a 3rd party (auction provider) that intermediates or facilitates the exchange
Considering the Dynamic Facility Location dilemma, when should one change locations every year based on new demand?
Considering the ____ dilemma, one should change locations every year if the cost savings are higher than moving expenses
Describe sourcing Pre-Industrial Revolution
Pre-____, there were usually only one or two potential buyers
Continuous Improvement and Kaizen
Japanese term for approach to process improvements is kaizen, continuous improvements. At heart of continuous improvement- maintaining low inventories, periodically stressing the system to identify problems and focusing on elements of lean system. Many firms use trial and error. Services processes can be improved with lean systems also. Eliminating too much scrap, eliminating capacity imbalances for improving flexibility of workforce.
Supplier management, evaluation and strategic partnerships
Supplier management- getting your firm’s suppliers to do what you want.Supplier Evaluation- determining the capabilities of suppliersStrategic Partnerships- trading-partner relationships, which is strategic for firm and supplier.
MirroringCreation of new Customer Relationships
seeks to replace certain physical processes with virtual ones. • Creation of new customer relationships- involves taking raw information and organizing, selecting, synthesizing and distributing it in a manner that creates whole new sources of value.
How can supply chain hurt social responsibilities?
- Customer related issues- Business partner related issues- buyers and suppliers- Labor related issues- Culture related issues- Environment related issues
Waiting Line Theory
A waiting line is one or more ‘customers’ waiting for service. The customers can be people or inanimate objects. A waiting line forms because of a temporary imbalance between the demand for service and the capacity of the system to provide the service.
11. Identify and discuss the Steps Harley-Davidson took to create a high powered purchasing organization.
Created an onsite resedency program for suppliers to participate during the development of new products. Have purchasing personnel work directly with engineers.Created the position of purchaing engineer.created a supplier advisory council that meets on a regulr basis to share product devlopment plans and supply chain information create joint measures of success and work on long range goals and devopment.
What are Net-Zero Energy buildings?
____ buildings generate as much energy as they consume
What are Reasons to Expand Globally?
Reasons to ____ are:1) More customers2) Cheaper manufacturing3) Expanding before the competitor to create brand loyalty4) Economy of scale5) Take advantage of weather seasonality6) Distribute risks
Old School vs New School philosophies (Push vs Pull)
•Old School Philosophies- Push system, inventory is necessary to be high, quality control defects are inspected out, suppliers are adversaries, supply chain communication is nearly nonexistent, company dictates what the market will offer not the customer, best is always best.•New School Philosophies- pull system, inventory should be minimized, quality at the source not waiting for the end product to be tossed, suppliers are partners, open communication required, customer dictates what supply chain must produce, best today won’t be best tomorrow (everyone has to find it’s own best, “only the paranoid survive”-Intel)
TOFC, COFC and Double-stacks
TOFC- Trailer on a Flat Car (piggyback service)COFC- container on a flat carDouble-stacks- two containers on a railcar
What are some of the issues faced by developing countries that SCM can help improve?
- Corruption, black market- Counterfeit drugs, drugs going to US market- Procurement: purchasing drugs at lower prices (budgets)- Distribution: lack of infrastructure (national, local, disaster related)- Theft, spoilage- Lack of SC Consistency
Map the current supplier evaluation and selection process
identify the steps activities time and costs involved within a process and opportunities for improvement will become evident.
Define a Complete Chain of Custody
A ____ is taking responsibility for the entire supply chain, example: ensuring the entire supply chain is green
What is an Euler Tour?
A ____ is a circuit that traverses every edge of a graph exactly once, beginning and ending at the same point
Herman miller- DFE Team, goals and outcomes
Design for Environment Team. A chemical engineer incorporates findings from MBDC assessments in materials database. Purchasing agent acts as a connection and data source between SC and Herman Miller’s entire purchasing team to create coherent communication network transforming info into profitable opportunities and consistent procurement choices. Goal to establish a good link between assessment process and an engineer working on a new product design. Became a remarkably useful tool, can put some data against, track progress and something and engineer can understand.
Simple Moving Average vs. Weighted Moving Average
Simple moving average- the 4 period moving average forecast for week 6 would be the average of the 4 periods prior to week 6.Weighted moving average- 3 period weighted moving average oldest *.20, second oldest *.3, most recent * .54 period weighted moving average oldest *.10, second oldest *.2, third oldest .3, newest *.4It is appropriate to use simple moving average in industries where demand is fairly stable. It is appropriate to use weighted moving average • Simple moving average- most useful when demand has no pronounced trend or seasonal influences.Weighted moving average method- allows you to emphasize recent demand over earlier demand (can even handle seasonal effects but putting higher weights on prior periods in the same season)
Teams, Empowerment, Quality Circles
- Teams are small groups of people who have a common purpose, set their own performance goals and approaches, and hold themselves accountable for success. Employee empowerment is an approach to teamwork that moves responsibility for decisions further down the organizational chart- to the level of the employee actually doing the job. Quality circles- another name for problem-solving teams; small groups of supervisors and employees who meet to identify, analyze, and solve process and quality problems Quality at the source- a philosophy whereby defects are caught and corrected where they were created
Demand Planning - Cooper's def
A process by which managers strive to build a \"match\" between the demands of the customers and the productive capacity that the Operations Management System Provides
Define the Sin of Hidden Trade-off
The Sin of ____ is: (example) saying the manufacturing plant is LEED certified, but that doesn't say anything about the product being green
List 5 Common Weaknesses of Planning
5 ____ of Planning are:1) Failing to commit sufficient time2) Failing to establish clear objectives3) Failing to formulate convincing arguments4) Failing to consider a counterpart's needs5) Believing quick and clever is enough
What is the the Wagner Act?
The ____ Act is the National Labor Relations Act (NLRA)
Supply Chain Metrics discussed in lecture
Cash to cash cycle- amount of days money related to inventory is out of pocket. Days of inventory- good to be somewhat short, days of accounts receivable- better to be short, days of payables outstanding- good to be short. Capacity utilization- (actual output/design capacity) want to be below 1 because otherwise no room for growth and if defect no time to catch up. Process velocity- (throughput time/value added time) want high number, but not too high.
In the USA, the Uniform Commercial Code (UCC) Can be relied on to cover all but what 3 important terms?
The 3 important terms not covered by the ____ are:1) A description of the parties involved2) A description of the basic subject of the contract, and statement of work (including dates)3) A clearly definable or determinable quantity
When either Drivers or Facilitators is medium, and the other is low, how would one describe the relationship?
When either ____ or ____ is medium, and the other is low, the relationship could be described as a mutual recognition of a partnership
What are the four elements of waiting lines?
1. An input, or customer population, that generates potential customers2. A waiting line of customers.3. The service facility, consisting of a person, a machine, or both necessary to perform the service for the customer.4. A priority rule, which selects the next customer to be served by the service facility
What are usually the 3 Most Effective Sources of Power?
The 3 Most Effective Sources of ____ are:1) Informational2) Legitimate3) Expert
What are the seven economic drivers of Transportation Economics?
1) distance, 2) weight, 3) density, 4) stowability, 5) handling, 6) liability, 7) market
What are the three components of the Triple Bottom Line?
The 3 components of the ___ are:1) Social (people)2) Environmental (planet)3) Economic (Profit)
Warning Signs there may be a space problem
Open spaces on the selling floor, even if the product is on hand- Cluttered and disorganized tables, hallways, and stockrooms- Excessive time required to put away new receipts- Insufficient staging space for large shipments of advertised products- Sales associates continually required to leave the sales floor to locate additional merchandise- Poor utilization of vertical space and excessive time required to retrieve products stored on high shelves- Sales lag expectations for specific locations where space or fixtures are a known issue- Off-site storage or multiple stockrooms required for a single commodity
***What are the 6 Different Roles in a Buying Center?***
***The 6 Different Roles in a ____ are: Initiator; Decider; Influencer; Buyer; End user; Gatekeeper***
What are the 4 Types of Vehicle Routing?
The 4 types of ____ are: 1) Greedy heuristic 2) Closest-next 3) Sweep 4) Clarke-Wright savings method (FYI)
Ranges have to do what in order for a negotiation to occur?
____ have to overlap some for a negotiation to occur (this is the area open for negotiation!)
How are flow charts useful in: seeing ties to SCM, identifying quality problems, identifying important operational information, communicating with different business and IT functions, and identifying the resources needed to execute the problem?
Ties to SCM- it shows what needs to be done and what areas in the chain need to be worked on, quality problems- repeating may give a better quality and shows problems that can be corrected to make a better quality product/service. Important operational info- testing to find potential problems, system capacity, waiting line management, avg service time, variability concerns. Communicating- teach, catalog, demonstrate, analyze. IT- help build system you want, improve technology in system, plan for technology system. Identifying required resources- it’s a plan so you see what you will need.
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