SCM300 Flashcards

Terms Definitions
Key Supplier Evaluation Criteria
• Cost/price• Quality• Delivery• Management Capability• Employee Capabilities• Supplier’s Cost Structure• Total Quality Performance, Systems, and Philosophy• Process and Technological Capability• Environmental Regulation Compliance• Financial Stability• Production Scheduling and Control Systems
Purchasers select the transportation services and providers
Single-channel, multiple-phase
Single-channel, multiple-phase- when the services are best performed in sequence by more than one facility, yet customer volume or other constraints limit the design to one channel. Customers form a single line and proceed sequentially from one service facility to the next. (McDonald’s drive-thru line)
raw materials, work-in-process, or finished goods that are maintained to support production or satisfy customer demand.
Single-channel, single-phase system
Single-channel, single-phase system- all services demanded by a customer can be performed by a single-server facility. Customers form a single line and go through the service facility one at a time.
Flex-Flow Systems
(make-to-order systems or process focused systems) everything is make-to-order, need more special skilled workers Demand: customized items, low volumes, dynamic industry. Layout- process focused/flexible flow layouts. Job shops. Slower production rates, high per-unit cost, labor intensive, general tools and equipment, skills laborers required, provides flexibility, high performance quality and design quality, long lead/delivery times, make-to-order.item can be made to customer’s specifications, low cost machinery, adjust quickly/cheaply to changing market conditions. Weaknesses- long lead times, next order unknown, high raw material and work in process inventory possible, slower processing rates, higher inventories and high materials handling more storage space required, more moving equipment required, longer, more costly system changeovers, production planning and control more difficult.
Supplier-Partnering Hierarchy
conduct joint improvement activities, share information intensively but selectively, develop suppliers’ technical capabilities, supervise your suppliers, turn supplier rivalry into opportunity, and understand how your suppliers work.
Value analysis
Value represents the the relationship between function and cost. the objective is to enhance value by reducing the cost of good or service without sacrificing quality, enhancing functionality without increasing cost, or provide greater functionality without increasing cost.
The process of directly contacting suppliers to determine the status of past due or near past due shipments
Define Nonasset-baased/Fourth-Party Provider
Specialize in providing comprehensive information services that facilitate supply chain arrangements
Importance of Performance Measurement
Measurement- Before measuring performances among supply chain partners, must first have good internal performance measurement capabilities. Measures need to drive a consistent emphasis on the overall strategy and corresponding process objectives. Performance is continually measured using a set of metrics designed for each process. ERP systems help performance measures improve. Performance measures similarly designed for each of the key processes and their corresponding functional objectives.
secondary packaging
contains end item and primary packaging (box, case, drum, shrink wrap)
Purchase Order
when a suitable supplier is identified, or a qualified supplier is on file, a feature is the terms and conditions of the purchase. It is the buyer’s offer and becomes a legally binding contract when accepted by the supplier.
Market Inventory
Inventory readily available on the shelf.
SCM Systems
Supply chain focuses mainly on material flows from suppliers through production process. SCM focuses on producing the right product, in the right quantity, at the right time, in the right location, to the right customer, at the right price. Effective coordination of physical and information flows requires a seamless integration of both hard and soft technology• Requirements/Goals of Business/SCM IT systems? How does this fit into big picture? How does this filter down to the business process level? Collect and store data, aid in planning and analysis, aid in execution, communication, support other functions/parties, facilitate supply chain compression. IT systems need to connect everything together (buy, make, move, sell, service it, etc) IT systems help create business processes (Visio assignments)Single point of contact, aids in strategic execution, promotes competitiveness, promotes compression of supply chain, ticket to play the game. Like before you had a drill, now you have an electric drill. Gives you a chance to be better.
Forward Buying
Occurs when retailers and consumers, between distributors and retailers, and between manufacturers and distributors due to pricing promotions at each stage of the supply chain, all contributing to erratic buying pattern, inaccurate forecasts, and consequently the bullwhip effect.
Process Integration
The term process integration means sharing information and coordinating resources to jointly manage a process. This can be an extremely difficult task because it requires proper training and preparedness, willing and competent trading partners, trust, compatible information systems, and potentially a change in one or more organizational cultures. Benefits of collaboration and information sharing include: reduced SCM costs, greater flexibility to respond to market changes, less supply chain safety stock, higher quality levels, reduced time to market and better utilization of resources.
Other responsibilities
Can assume a variety of other responsibilities such as receiving and warehousing, management of company travel arraingements, production planning and control, commodity futures trading, international materials management econimic forecasting and subcontracting.
Placement of Authority
Organizations must decide who will make what decisions.Decision making authority exists on a continuum ranging from complete authority at the corporate level to total authority in the hands of the operating units.
Define Buyer
The ____ obtains the purchased product or service
Define Relevance
Business success also depends upon a third perspective of value: customization of value-adding services that make a difference to customers
Trust-based PartnershipCommitment to cooperative relationship is: (hi/lo)Commitment to competitive pricing is: (hi/lo)
Trust-based PartnershipCommitment to a ____ relationship is: hiCommitment to ____ pricing is: lo
Contract Manufacturing
used as key outsourcing strategy; a firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly and packaging, and works under contract for end users. (example-Flextronics working for Microsoft)
Toyota Production System
(TPS) exemplary of excellence in automobile manufacturing, at forefront of firms developing lean systems for manufacturing. One of most admired lean manufacturing systems ever. Through continuous improvement, build a learning organization over 50 years. Require constant improvements to increase efficiency and reduce waste. Stimulates employees to experiment to find better ways of doing jobs. All operations are “experiments” teaches problem solving. Four principals- all work completely specified as to content sequence timing and outcome; every customer-supplier connection must be direct; pathway for every service and product simple and direct; any improvement to the system must be in accordance with scientific method, under guidance of a teacher at lowest possible organizational level and then hypothesis tested under many conditions. Employees actually doing work are involved in making improvements. Managers are advised to only coach.
Consolidation Watehousing
a form of warehousing that pulls together shipments from a number of sources (often plants) in the same geographical area and combines them into large and more economical shipping loads.
Preproduction Services
focus on gaining a customer and increasing both efficiency and responsiveness of the supply chain. (Customer benefit package design and configuration, corporate partnerships, customer financing, technical support, purchasing, customer order entry, software and hardware licensing and promotion/advertising)
Inventory Reduction Tactics
primary lever to reduce cycle inventory is to reduce the lot size, but need to make other changes too. If changes occur two secondary levers can be used: streamline methods for placing orders and making setups to reduce ordering and setupcosts and increase repeatability to eliminate need for changeovers (repeatability). Also safety stock inventory (improve forecasts, cut lead times of items to decrease demand uncertainties, reduce supply uncertainties, rely more on equipment and labor buffers), anticipation inventory (add new products, provide off-season promotional campaigns, offer seasonal pricing plans) and pipeline inventory (find more responsive suppliers and new carriers for shipments or improve materials handling, decrease Q, lot size).
Flexible Flow Layout
a layout that organizes resources (employees and equipment) by function rather than by service or product. Used when operation must intermittently serve many different customer types or manufacture many different products or parts. Where job content requires a good deal of technical knowledge and higher equipment utilization. Most difficult is what to put in centers
Types of Forecasting
Judgment methods- a type of qualitative method that translates the opinions of managers, expert opinions, consumer surveys, and salesforce estimates into quantitative estimatesCausal methods- a type of quantitative method that uses historical data on independent variables, such as promotional campaigns, economic conditions and competitors’ actions, to predict demand.Time-series analysis- a statistical approach that relies heavily on historical demand data to project the future size of demand and recognizes trends and seasonal patterns.
PEMI Model
• Plan- what needs to get done? Goals? How? When? Why.Execute- Put plan into action. Day-to-day managementMeasure- Identify what’s good/bad. Why is it so?Improve- How can we meet tomorrow’s needs.
CRM systems
a business strategy designed to learn more about customers’ wants, needs, and behaviors in order to build customer relationships and loyalty and ultimately enhance revenues and profits.
Finite Pool of Customers
Few potential customers. Every customer in the store significantly decreases the chance of another customer arriving. o Ex: retail store that sells jumbo jet airplanes
Priority Discipline Rule
- 1st come 1st served (Burger King)- Earliest due date or shortest processing time (Homework)- Reservations or appointments possible (Restaurants)- Emergency situations (Emergency rules)- Preemptive discipline- special rules (VIP lines, frequent fliers)
Managing Counter Trade Arrangements
International or domestic trade where goods are exchanged for goods as payment
Make quality everyone’s responsibility:
Buyers and sellers must assume ownership for total quality across the supply chain.Making quality each participant’s responsibility is essential for total supply chain quality.
Define Power
____ is the ability to influence other people or organizations
Define Bill of Lading
Basic document utilized in purchasing transport services
Bullwhip Effect
very high and very low supply levels despite fairly constant demand levels. Some of its causes- poor forecasting, poor analysis, poor communication, order batching- trying to place large orders, price fluctuations, rationing, shortage gaming. Can be minimized through sharing sales and other information with suppliers. Also, communication and everyday low prices minimize bullwhip effect.variations in demand cause problems with capacity planning, inventory control, and workforce and production scheduling and ultimately result in lower levels of customer service and higher total supply chain costs. Bullwhip effect increases costs and reduces service to the customer.
Placement of inventories
Inventory can be held at raw materials, work-in-process and finished good levels. A special item is made to order or bought to order a standard is an item that is made to stock, or ordered to stock.
Prevention Costs, Appraisal Costs, Internal Failure Costs, External Failure Costs
• Prevention Costs- costs associated with preventing defects before they happen• Appraisal costs- costs incurred when the firm assesses the performance level of its processes.• Internal Failure costs- costs resulting from defects that are discovered during the production of a service or product. • External Failure costs- costs that arise when a defect is discovered after the customer receives the service or product.• Provide definitions for each of the 4 COQ and identify examples of each. Internal Failure Costs- problems addressed before reaching customer, not ideal but at least customer not affected, examples- defects: items beyond repair, those that can be repaired, wasted work, time, material, scrap. External Failure Costs- Worst case scenario- highest potential for losses, costs associated with “repairing” damage caused from delivering substandard items or services, all other costs resulting from sale, examples- returns, loss of business, loss of goodwill, warranties, fines and penalties. Appraisal Costs- before you fix problem you need to identify root of causes. Examples- system/process inspections, inspectors and consultants, system interruptions. Prevention Costs- attempts to eliminate quality related problems, costs related to reducing potential for quality problems, examples- design efforts, human resource efforts, materials related efforts, machines, etc.
Why are some American companies considering importing products via Mexican ports? What are some challenges of using a Mexican port strategy?
Shipping Alternative- Mexican Ports- LA/ Long Beach port congestiono Operate at roughly 130% utilizationo Constant delays, excessive labor and fuel fees- Lazaro Cardenas porto Affordable and dependable workforce- strikes are rareo US Government working to facilitate “no-hassle” imports via Mexican bordero NAFTA- Super railway (Mexico/US/Canada)- Port of Guaymaso Located on east side of Gulf of Californiao 250 miles south of AZ Border (1-10)
Robert Kahn's Theories
Formula for higher sales per square foot: sales per square foot = f(number of customers) x (length of time they spend in the store)- Retailers should concentrate on the time customers spend browsing and experiencing the store, not how much merchandise they are exposed to. - Kahn outlined 4 things that Wal-Mart should do:1. Ensure that in every aisle, a customer with a cart can comfortably pass another customer with a cart without having to ask that customer to move.2. Make the restrooms the best in town so that a customer will never leave the store and rush home to use the bathroom. 3. Put at least one bench in each store, in the alcove at the front. 4. In all large stores, install a coffee stand catty-corner from the snack bar so that customers can recharge themselves in order to spend more time and money shopping.
Supplier’s ability to affect buyer’s total quality.
Certain suppliers will provide items that are critical to a firms success. Those suppliers must be handled differently
Total quality management of suppliers
working with suppliers to initiate quality processes and procedures to attain zero defect quality while endorsing continuous improvement.
Describe the difference between Consortium and Independent Exchanges
____ exchanges: companies have the same needs; ____ exchanges: companies approach it individually
Define Maximal Covering
___ seeks to find the maximum number of demands that can be covered in a specified distance by a given number of facilities
Nike’s goals for 2020
Eliminate concept of waste in product designs, eliminate all substances known to be harmful to human health or health of natural systems, close the loop and take full responsibility for products at all stages of product and process lifecycle up until the end and develop financial structures that promote greater product stewardship in design, engineering and manufacturing and create new financial models to reflect full cost of doing business.
Effective cycle time
how long it takes the slowest station to complete their job. You are only as strong as your weakest link!
Value (customer perspective)
what do I get divided by the price
Defect Categories and Examples
Critical Defect (one that judgment and experience indicate will surely result in hazardous or unsafe conditions for individuals using or experiencing the good or service, exp- meat not cooked properly), Major Defect (one that is not critical but likely to materially reduce the usability of the good or service for intended purpose (delivering the wrong meal to the wrong customer), Minor Defect (one that is not likely to materially reduce the usability of the good or service for its intended purpose, exp- a pizza that is poorly sliced)
Check sheets, Flow Charts, Pareto Charts/Analysis
Flow charts/process maps- identify problems, improve designs (Visio) important for developing quality, Pareto charts- like histogram, categorize data (non-numerical, qualitative data ranges instead)
Results of Port Delays
Example: California ports of LA and Long Beach handle over 40 percent of imports into the United States. Although the two California ports process thousands of containers per day, infrastructure deficiencies and increasing demand combine to result in long delays, which translate into longer transit times and higher costs for US importers.
Process Integration at ViewSonic Case
Adopted the General Integration Suite (GIS) from Sterling Commerce which helps keep the global business-to-business integration intact. The key feature of GIS is the centralized partner-management capabilities which deliver a single interface for ViewSonic employees to monitor business processes and navigate reports and statistics in her-real time. It also offers insight as to where and how processes can be improved. The tight integration of the company allows ViewSonic to offer customers, the global network of distributors and retailers, maximum flexibility when they place, check, or change orders. The highly integrated supply chain allows near real-time purchase order modification, shipment notification, and electronic invoicing.
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.
Purchasing Position within the Organizational Structure: Factors include:
history type of industry, value of goods and services: other factors include philosophy of founder, type of material purchased, and ability to influence performance.
What are some Internal Factors of risk?
Manufacturing risks, Business risks, Planning and controlling risks, Mitigation and contingency risks are ____ of risk
What are the 5 Facilitators?
The 5 ____ are:1) Location2) National culture3) Alignment4) Prior history5) Shared endorser/competitor
Issues SCM can help in developing countries
corruption, black market, counterfeit drugs, drugs going to US market, procurement (purchasing drugs at low prices), distribution (lack of infrastructure), lack of supply chain consistency. SCM can teach practices, procurement and distribution expertise, infrastructure development, security expertise.
Primary considerations that should go into designing a good process and key steps in building a good process
Primary considerations that should go into designing a good process- value- defined by the customer, corporate considerations, operational concerns, additional stakeholders-bigger picture.Key Steps in building a good process- planning- define process objectives, scope- define process requirements and boundaries, block diagram of system, define the service, consider process metrics. Design the process and Evaluation and testing.
Jobs Difficult to Off Shore
Many jobs in the services sector cannot be seperated from their place of consumption. Personal contact is vital at the downstream end of virtually all value chains. Doctors, dentists, lawyers, and accountants are examples. In addition, companies like Harley Davidson won’t offshore because a big part of their selling point is the fact that they make everything in the United States.
What is the value of uniform workstation loads?
For manufacturing processes, uniform loads can be achieved by assembling the same type and number of units each day, thus creating a uniform daily demand at all workstations. Efficiencies can be realized when the load on the firm’s resources can be managed.
Determine Method of Supplier Evaluation and Selection
(Once the pool is reduced you must decide how to evaluate remaining suppliers.)Review supplier provided information:RFP’sDetailed cost breakdown information.Supplier visitsUse of Preferred suppliersExternal or Third-party informationCross-functional teams often evaluate suppliers directly through on-site visitsPossible areas to evaluate during a supplier visit--Cost structureDelivery performance Quality systems and performanceManagement capabilityWorkforce capabilitySupplier agility and flexibilitySupplier’s supply chain management capabilitiesProcess and technological capabilityEnvironmental complianceFinancial capability and stabilityInformation systems capabilityProduction scheduling and control systemsLonger-term relationship potentialCapacity
Explain the High/Lowball Tactic
The ____ tactic is when you offer way below the asking price; the ____ tactic is when you ask for way above the price
What is the MSU Sustainability Initiative
The ____ is focused on multi-faceted, interdepartmental sustainability, moving beyond just green
Herman Miller- The “Greenhouse” features, benefits
The Greenhouse is a 295000 sq ft factory and office building near its headquarters, provides and urbane, pleasant environment for all employees, fresh air and sunlight, easy access between admin and manuf. staff, wetlands and swales that purify storm water run-off and provide habitat for local birds, flowers and grasses. Measured increase in productivity, job satisfaction and positive social and ecological impacts.
What are some of the keys to successful benchmarking?
Identify process, identify leader(s), contact leaders or plan internally, analyze, act and follow-up.•What are the diff types of benchmarking/examples? Competitive- comparing to those in your industry, Functional- different industry, similar, exp- airlines going to Nascar to improve filling up processes, Internal Benchmarking- share info, like GE business groups compete throughout organization.
What is the value of close customer ties?
Close cooperation between companies and their suppliers should be a win-win for both parties. Better communication of component requirements, for example, enables more efficient inventory planning and delivery scheduling by suppliers, thereby improving supplier profit margins. Customers can then negotiate lower component prices. When a lean system is implemented, it is important to make sure the suppliers are in close proximity in order to promote strong partnerships and better synchronize product flows.
Discuss the eight principles of total quality management
Define quality in terms of customers and their reqiurements.persue quality at the sourcestress objective rather then subjective analysisempasize prevention rather then detection of defectsfocus on process rather then outputstrive on process rather then outputstrive for zero defects establish continueous improvement as a way of lifemake quality everyones responsibility
What are the 6 Sins of Greenwashing?
The 6 ____ of Greenwashing are:1) Fibbing2) Unsubstantiated claims3) Irrelevance4) Hidden trade-off5) Vagueness6) Relativism
What are 3 Examples of External Integration?
3 Examples of ____ Integration are:1) Suppliers2) Distributors3) Consumers
Primary steps in BPI- know in detail
Step one- desired state, step two- present state, step 3- gap analysis, step 4- develop project scope, step 5- collection and analysis, step 6- develop solutions and recommendations, step 7- develop an implementation plan
What does the Y-axis represent in a Reverse Auction?
The ____-axis in a Reverse Auction represents the dollar amount that the supplier is willing to charge the buyer for the RFQ
When is the Honesty and Openness Tactic effective?
The ____ tactic is only effective when your counterpart uses it as well, else you might get taken advantage of
What are the Ramifications of the Bio-Terrorism Act of 2002?
The Ramifications of the ____ Act of 2002 is that firms engaged in food processing must be able to trace raw material and finished goods one tier up and one tier down the supply chain
What is the value of small lot sizes?
Small lots have the advantage of reducing the average level of inventory relative to large lots. Small lots pass through the system faster than large lots since they do not keep materials waiting. In addition, if any defective items are discovered, large lots cause longer delays because the entire lot must be examined. Small lots help achieve a uniform workload on the system and prevent overproduction. Disadvantage of small lots: increased setup frequency.
What are the benefits for the Suppliers in a Reverse Auction?
The benefits for the ____ in a Reverse Auction are:1) Finding out where they stand based on competitors2) Gaining market insight
What are the 3 Steps to Managing Disruptions?
The 3 Steps to Managing ____ are:1) Discovery (find it asap)2) Recovery (get back to initial state (put out fire))3) Redesign (eg....move away from hurricanes)
1. Identify and define the steps in the purchasing strategy development process
1 Define business unit requirements - 2. Define the strategic importance of the purchase requirement - 4 quadrants transaction/price, bottleneck/problem, leverage and stratigic.3. Determine business and purchase requirements and conduct market research -asses what is being spent, what will be needed4. Set goals and gap analysis5. Develope sourcing strategy and objectives6. Execute the strategy7. Monitor results and review performance
What are the 6 Myths of Being Green?
The 6 Myths of ____ are:1) Buying and being green always cost more2) Buying and being green comes with a loss of quality3) You need to be perfect4) You need to be a "green expert" to buy green5) Green issues are "too big" for one person to have an impact6) You need to do "all or nothing"
What are the 3 pieces of necessary data for the Center-of-Gravity method?
The 3 pieces of necessary data for the ____ method are:1) Weighting (usually volume or population)2) Location name3) Grid location
What are the benefits for the Buyer in a Reverse Auction?
The benefits for the ____ in a Reverse Auction are: 1) Lower cost2) Find the true market price3) quicker negotiations
What are the 7 Areas in which we are Vulnerable to Terrorist Threats?
The 7 Areas in which we are ____ to Terrorist Threats are:1) Governance2) Telecommunications3) Transportation4) Water supplies5) Food processing6) Food production7) Food distribution
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