CLTD Module 1. SECTION B
Supply chain management - answer The design, planning, execution, control, and
monitoring of supply chain activities with the objective of creating net value, building a
competitive infrastructure, leveraging worldwide logistics, synchronizing supply with
demand, and measuring performance globally.
(Suppliers+Logistics+Customers)
Leveraging logistics - answer take advantage of you and your suppliers' and your
customers' networks rather than duplicating efforts
Competitive advantage in logistics - answer mastery of fundamentals of perfect order
fulfillment at low enough cost and high inventory turnover
Logistics in 1960 - answer each aspect are their own fragmented silo
logistics in 1980 - answer inbound and outbound integration
logistics in 1990 - answer total logistics integration
logistics in 2000s - answer creation of 'Supply chain management"
Bulk of logistics work classified as - answertactical
How difference in perspective of SCM+Log. changed view of inventory - answer-used to
be seen as buffer between SC links
-Now, sees inv as last resort with more focus to improve info systems and create
stability with supply and transportation
-Seen as decoupling point all along SC
Integration Stage 1: Baseline - answerinternal functional silos hinder internal integration
Inventory buffers internal handoffs
External relationships are transaction oriented
Logistics seen as cost center
Integration Stage 2: Functional Integration - answerMaterials management, mfg,
distribution integrate
Buffer inventories still exist between, before,and after
Each area takes on efficiency and decision making seperately
Integration Stage 3: Internal Integration - answerInternal log. fully integrated, all buffer
inv. eliminated, other than raw materials+finished goods
Internal teams collaborate on decisons+improv.
, Integration Stage 4: External Integration - answerInv. minimized throughout SC,
replaced with information and relationships
Demand generation and fulfillment are integrated
channel master - answerorg. who drives the decisions for the SC
Usually who has most power in market, or most at risk
Reactive vs Proactive SC - answerReactive if other org. is channel master
Proactive if your org is channel master
comparative advantage - answerthe ability to produce a good at a lower opportunity
cost than another producer
Low logistics costs relative to GDP - answermake continued reductions in aggregate
inventory levels through lean, just-in-time, and info. systems
Economic impact of Utility - answerhigh fuel prices = unacceptable cost
lower fuel prices= provide same product at a cost that leaves room for profit margin at
price customer is willing to pay
landed costs - answerThe cost of a product plus all costs driven by logistics activities
Longer transportation journey - answermeans greater savings when VC are reduced
Lardner's Law - answerWhen transportation cost is reduced, the area where the
producer can compete is increased in a directly proportional basis.
Time utility perspective - answervalue of logistics increases by increasing inventory
turnover, or time inv. is in the pipeline
100 units/day in 10 day cycle time, how many units for replenishment? - answer1000
units
Two cost savings by reducing cycle time - answerOne-time saving from inventory level
drop, less investment.
Ongoing savings bc inv used in inv carrying costs will be lower
FMCG - answerfast moving consumer goods
Spend less on logistics w/out harming service level - answerthat money can be invested
elsewhere
Result of too low inventory levels - answerlost sales
Supply chain management - answer The design, planning, execution, control, and
monitoring of supply chain activities with the objective of creating net value, building a
competitive infrastructure, leveraging worldwide logistics, synchronizing supply with
demand, and measuring performance globally.
(Suppliers+Logistics+Customers)
Leveraging logistics - answer take advantage of you and your suppliers' and your
customers' networks rather than duplicating efforts
Competitive advantage in logistics - answer mastery of fundamentals of perfect order
fulfillment at low enough cost and high inventory turnover
Logistics in 1960 - answer each aspect are their own fragmented silo
logistics in 1980 - answer inbound and outbound integration
logistics in 1990 - answer total logistics integration
logistics in 2000s - answer creation of 'Supply chain management"
Bulk of logistics work classified as - answertactical
How difference in perspective of SCM+Log. changed view of inventory - answer-used to
be seen as buffer between SC links
-Now, sees inv as last resort with more focus to improve info systems and create
stability with supply and transportation
-Seen as decoupling point all along SC
Integration Stage 1: Baseline - answerinternal functional silos hinder internal integration
Inventory buffers internal handoffs
External relationships are transaction oriented
Logistics seen as cost center
Integration Stage 2: Functional Integration - answerMaterials management, mfg,
distribution integrate
Buffer inventories still exist between, before,and after
Each area takes on efficiency and decision making seperately
Integration Stage 3: Internal Integration - answerInternal log. fully integrated, all buffer
inv. eliminated, other than raw materials+finished goods
Internal teams collaborate on decisons+improv.
, Integration Stage 4: External Integration - answerInv. minimized throughout SC,
replaced with information and relationships
Demand generation and fulfillment are integrated
channel master - answerorg. who drives the decisions for the SC
Usually who has most power in market, or most at risk
Reactive vs Proactive SC - answerReactive if other org. is channel master
Proactive if your org is channel master
comparative advantage - answerthe ability to produce a good at a lower opportunity
cost than another producer
Low logistics costs relative to GDP - answermake continued reductions in aggregate
inventory levels through lean, just-in-time, and info. systems
Economic impact of Utility - answerhigh fuel prices = unacceptable cost
lower fuel prices= provide same product at a cost that leaves room for profit margin at
price customer is willing to pay
landed costs - answerThe cost of a product plus all costs driven by logistics activities
Longer transportation journey - answermeans greater savings when VC are reduced
Lardner's Law - answerWhen transportation cost is reduced, the area where the
producer can compete is increased in a directly proportional basis.
Time utility perspective - answervalue of logistics increases by increasing inventory
turnover, or time inv. is in the pipeline
100 units/day in 10 day cycle time, how many units for replenishment? - answer1000
units
Two cost savings by reducing cycle time - answerOne-time saving from inventory level
drop, less investment.
Ongoing savings bc inv used in inv carrying costs will be lower
FMCG - answerfast moving consumer goods
Spend less on logistics w/out harming service level - answerthat money can be invested
elsewhere
Result of too low inventory levels - answerlost sales
