SCM 372 QUESTIONS AND ANSWERS
Overview
Define SCM and understand the primary goal of supply chains today. - Answer -
SUPPLY CHAIN MANAGEMENT (SCM) IS THE DESIGN AND MANAGEMENT OF
FLOWS OF PRODUCTS, INFORMATION, AND FUNDS THROUGHOUT THE
SUPPLY CHAIN
Know what supply chain management consists of, i.e., what is it about? - Answer -
Coordinate the movement of goods, services, and funds through the SC
Info Sharing - share forecasts, POS data, planned promo campaigns, and inventory
levels
Collaboration - Jointly plan, operate, and execute business decisions as one entity
Know the overarching goals of SCM - Answer -efficiency and effectiveness in getting
goods from raw materials to the end consumer
Characteristics of a competitive supply chain - Answer -responsiveness, reliability,
relationship management
Be familiar with the concept of flows, i.e., what flows are included and what is the nature
of these flows? - Answer -Products, info, and money
What is the significance of dependency in chains? - Answer -You're depending on
many different entities to perform their duties and get things done on time to satisfy
consumers
Need to have as much cooperation, coordination, and communication as possible
"Supply chains are a strategic choice." What is the meaning of this statement? -
Answer -Supply chains determine your business and competitive strategy
What is the proper level of optimality when considering the elements and components of
a supply chain? - Answer -Proper level of optimality: doesn't matter if you optimize a
level of the SC if you fail to optimize the entire supply chain
Focus on more than just the focal firm, don't sub optimize
Understand the concept of utility? What are the primary types of utility provided by an
efficient and effective supply chain? - Answer -Utility = usefulness
Time and place
,Know the components or functional elements of supply chains. - Answer -suppliers→
manufacturers→ distributors → retailers → customers
Define the systems approach to studying supply chain management. - Answer -
Systems approach: systems that exist within firm, the enterprise and the channel aka
the entire SC. Functional areas- production, finance, HR, marketing
Systems integration: Decision making and activities are coordinated
Communication is effective and constant
Coordination is maximized
Cooperation is achieved
What are the primary concerns or goals of the systems approach? - Answer -Focus on
total cost: want to have a SC that is designed to operate at the lowest possible cost
given a particular level of SC
Take advantage of trade-offs: if trying to create some level of optimality, focus on the
entire SC not just the focal firm
Avoid sub-optimization: overachieving in one area may be detrimental to the SC as a
whole
Know the benefits of an integrated supply chain. - Answer -Collaboration, coordination,
and information sharing
Gets rid of "SILO" mentality
Understand why integration is difficult to achieve. - Answer -Firms revert to a "me first"
attitude - focus on own goals, not channel goals, Not confident that all members would
profit equally- mistrust
Define "functional shiftability." - Answer -functional shiftability: you can shift the function
but you can't eliminate the function
ex. You can't eliminate the middleman if they add value to the SC process
Define the bullwhip effect. What are its primary causes? How does this concept impact
on the efficiency and effectiveness of supply chains? - Answer -Fluctuation and
distortion of information increases as it moves up the supply chain
- Each stage of the chain carries progressively more inventory
- the longer the supply chain, the greater the opportunity for the bullwhip effect
- Sharing POS info with all members of the supply chain can combat it
, List and understand the major constraints of a channel. How might these be overcome
in the short-run; long-run? - Answer --dependent on every intermediary throughout the
channel
-actually choosing the correct channel based on corporate and marketing objectives
-if using a retail channel, you're reliant on them to get consumers into the stores
Be familiar with the concept of integrative management and the current thinking on how
to achieve integration within the supply chain. - Answer -Coordinate/Collaborate with
inter/intra organizational counterparties
Keys:
-use IT as an enabler
-relationship management
-collaborative planning
-sharing of risks and rewards
-win-win strategy
Define 3PL's. What role to they play in supply chain management? What are the
arguments for and against using 3PL's? - Answer -Third Party Logistics is the
companies use of third-party businesses to outsource elements of the company's
distribution and fulfillment services
- integrated service providers-
Arguments against:
Understand the difference between responsive and anticipatory supply chain models. -
Answer -Responsive: reduces the reliance on forecasts- sell first THEN manufacture
THEN deliver (don't state making product until we know what demand is) - more
favorable
Anticipatory: anticipating demand in advance of demand- based on market forecasts-
manufacture THEN sell.
Advantages: shorter lead times because inventory is everywhere
Be familiar with geographic and manufacturing postponement. How do these strategies
improve the efficiency and/or effectiveness of supply chains? - Answer -where
completion of the final product is postponed to the last possible moment till local
demands are known with greater certainty
Hewlett-Packard (HP) was known for this in the production and distribution of their
printers in the European market. The company completed the manufacture of the
product, storing it in a central location, then waited to finalize packaging and specific
country/language labeling till local demand was known. Postponement is an important
strategy for companies to reach diverse geographic areas while still providing
customization.
Overview
Define SCM and understand the primary goal of supply chains today. - Answer -
SUPPLY CHAIN MANAGEMENT (SCM) IS THE DESIGN AND MANAGEMENT OF
FLOWS OF PRODUCTS, INFORMATION, AND FUNDS THROUGHOUT THE
SUPPLY CHAIN
Know what supply chain management consists of, i.e., what is it about? - Answer -
Coordinate the movement of goods, services, and funds through the SC
Info Sharing - share forecasts, POS data, planned promo campaigns, and inventory
levels
Collaboration - Jointly plan, operate, and execute business decisions as one entity
Know the overarching goals of SCM - Answer -efficiency and effectiveness in getting
goods from raw materials to the end consumer
Characteristics of a competitive supply chain - Answer -responsiveness, reliability,
relationship management
Be familiar with the concept of flows, i.e., what flows are included and what is the nature
of these flows? - Answer -Products, info, and money
What is the significance of dependency in chains? - Answer -You're depending on
many different entities to perform their duties and get things done on time to satisfy
consumers
Need to have as much cooperation, coordination, and communication as possible
"Supply chains are a strategic choice." What is the meaning of this statement? -
Answer -Supply chains determine your business and competitive strategy
What is the proper level of optimality when considering the elements and components of
a supply chain? - Answer -Proper level of optimality: doesn't matter if you optimize a
level of the SC if you fail to optimize the entire supply chain
Focus on more than just the focal firm, don't sub optimize
Understand the concept of utility? What are the primary types of utility provided by an
efficient and effective supply chain? - Answer -Utility = usefulness
Time and place
,Know the components or functional elements of supply chains. - Answer -suppliers→
manufacturers→ distributors → retailers → customers
Define the systems approach to studying supply chain management. - Answer -
Systems approach: systems that exist within firm, the enterprise and the channel aka
the entire SC. Functional areas- production, finance, HR, marketing
Systems integration: Decision making and activities are coordinated
Communication is effective and constant
Coordination is maximized
Cooperation is achieved
What are the primary concerns or goals of the systems approach? - Answer -Focus on
total cost: want to have a SC that is designed to operate at the lowest possible cost
given a particular level of SC
Take advantage of trade-offs: if trying to create some level of optimality, focus on the
entire SC not just the focal firm
Avoid sub-optimization: overachieving in one area may be detrimental to the SC as a
whole
Know the benefits of an integrated supply chain. - Answer -Collaboration, coordination,
and information sharing
Gets rid of "SILO" mentality
Understand why integration is difficult to achieve. - Answer -Firms revert to a "me first"
attitude - focus on own goals, not channel goals, Not confident that all members would
profit equally- mistrust
Define "functional shiftability." - Answer -functional shiftability: you can shift the function
but you can't eliminate the function
ex. You can't eliminate the middleman if they add value to the SC process
Define the bullwhip effect. What are its primary causes? How does this concept impact
on the efficiency and effectiveness of supply chains? - Answer -Fluctuation and
distortion of information increases as it moves up the supply chain
- Each stage of the chain carries progressively more inventory
- the longer the supply chain, the greater the opportunity for the bullwhip effect
- Sharing POS info with all members of the supply chain can combat it
, List and understand the major constraints of a channel. How might these be overcome
in the short-run; long-run? - Answer --dependent on every intermediary throughout the
channel
-actually choosing the correct channel based on corporate and marketing objectives
-if using a retail channel, you're reliant on them to get consumers into the stores
Be familiar with the concept of integrative management and the current thinking on how
to achieve integration within the supply chain. - Answer -Coordinate/Collaborate with
inter/intra organizational counterparties
Keys:
-use IT as an enabler
-relationship management
-collaborative planning
-sharing of risks and rewards
-win-win strategy
Define 3PL's. What role to they play in supply chain management? What are the
arguments for and against using 3PL's? - Answer -Third Party Logistics is the
companies use of third-party businesses to outsource elements of the company's
distribution and fulfillment services
- integrated service providers-
Arguments against:
Understand the difference between responsive and anticipatory supply chain models. -
Answer -Responsive: reduces the reliance on forecasts- sell first THEN manufacture
THEN deliver (don't state making product until we know what demand is) - more
favorable
Anticipatory: anticipating demand in advance of demand- based on market forecasts-
manufacture THEN sell.
Advantages: shorter lead times because inventory is everywhere
Be familiar with geographic and manufacturing postponement. How do these strategies
improve the efficiency and/or effectiveness of supply chains? - Answer -where
completion of the final product is postponed to the last possible moment till local
demands are known with greater certainty
Hewlett-Packard (HP) was known for this in the production and distribution of their
printers in the European market. The company completed the manufacture of the
product, storing it in a central location, then waited to finalize packaging and specific
country/language labeling till local demand was known. Postponement is an important
strategy for companies to reach diverse geographic areas while still providing
customization.
