Term
| What are the 4 foundations of Supply Chain Management? |
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Definition
Supply Management
Operations
Distribution
Integration of these |
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Term
| Strategic partnerships, Vendor Managed Inventory and Supplier Certification are all examples of... |
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Definition
| the Supply Management foundation of SCM |
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Term
| Demand management, MRP, ERP, Inventory Management, Lean Production and Six Sigma are all examples of... |
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Definition
| the Operations foundation of SCM |
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Term
| Transportation management, CRM, Distribution networks, Global supply chains, and Logistics management are all examples of... |
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Definition
| the Distribution foundation of SCM. |
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Term
| What is the Bullwhip Effect? |
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Definition
| Small changes in customer demand ripple through the supply chain; forecasts and orders become amplified and accumulate. |
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Term
| What are some causes of the Bullwhip Effect? |
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Definition
Order Batching/Safety Stock
End-of-Year Budget Usages
Price Fluctuations/Forward-Buying (stocking up due to sale) |
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Term
| The lengthening of the supply chain has decreased labor and material costs but... |
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Definition
| it increased risk and caused higher security costs. |
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Term
| Ways to minimize the Bullwhip Effect: |
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Definition
Reducing the length of the supply chain
Vendor-Managed Inventory
Make consumer demand available to suppliers
Everyday low pricing/minimizing price DEALS |
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Term
| In order to help reduce the Bullwhip effect, many retailers have adopted _________ ___ _____, which is when... |
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Definition
Everyday low prices
...a consistent price is always offered, instead of running special deals, which in turn cause a spike in demand. |
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Term
| What is Vendor Managed Inventory? |
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Definition
| When a vendor/supplier manages their inventory in YOUR store. They control the reordering, and can be penalized if they do not supply accurate inventory. |
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Term
| Explain the difference between INTERNAL and EXTERNAL supply chains: |
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Definition
INTERNAL: Within your organization
EXTERNAL: Upstream and Downstream suppliers/Distributors |
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Term
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Definition
Supply chains have gotten:
Complex
Longer
Increased partnerships
Faster responsiveness |
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Term
U.S. firms are expanding partnerships by breadth and depth by building facilities in foreign markets.
Explain breadth vs. depth. |
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Definition
Breadth = foreign manufacturing, offices, retail sites, suppliers and customers.
Depth = Multi-tiered suppliers and customers |
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Term
| In order to continuously improve, supply chains must ________, or... |
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Definition
| Benchmark, compete with increasing industry performance levels |
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Term
| "Greening" of supply chains: |
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Definition
| Recycling and conservation are a growing alternative in response to high cost of natural resources |
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Term
| What are 4 ways to reduce supply chain costs? |
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Definition
Reduce:
- Purchasing costs
- Waste
- Excess inventory
- Non-value-added activities
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Term
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Definition
| Purchasing: key business function for acquiring materials, services, and equipment |
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Term
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Definition
| Contracting: term used for the acquisition of services |
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Term
| Define Supply Management: |
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Definition
Supply Management: encompasses ALL acquisition activities;
Identificaiton, acquisition, access, positioning, and management of resources an organization needs in the attainment of its strategic objectives. |
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Term
| What is the role of Purchasing in an organization? |
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Definition
1) Ensure uninterrupted flows of materials at lowest cost
2) Improve quality of the finished goods
3) Optimize customer satisfaction |
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Term
| What is a Purchase Order? |
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Definition
the buyer's offer, becomes a binding contract when accepted by the supplier.
Only a Sales Order when initiated by the supplier. |
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Term
| Why is e-Procurement important? |
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Definition
- Reduces transaction costs
- Reduces headcount
- Automates process
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Term
| Firms subcontract, or outsource some supply, due to... |
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Definition
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Term
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Definition
Cost to MAKE = Cost to BUY
FC + VC(Q) = FC + VC(Q)
Use algebra to solve for Q.
You are indifferent between MAKE v. BUY when demand = Q |
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Term
| What is the foundation of SCM? |
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Definition
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Term
| Many firms are developing long-term alliances with fewer supplier resulting in a... |
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Definition
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Term
| What encompasses Total Cost of Ownership? |
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Definition
Costs:
Unit
Ordering
Logistics
Inventory
Maintenance
etc. |
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Term
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Definition
Performance Measure - Rating - X - Weight = Final Value
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Technology--------------------70 ----X----.10--- = 7.00
Quality--------------------------95----X----.25--- = 23.75
Responsiveness---------------90-----X----.15--- = 13.50
...etc...-------------------- |
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Term
| What is the main key to successful partnerships? |
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Definition
| Performance Metrics! You can't improve what you can't measure! |
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Term
| Explain Third-Party Logistics(3PL): |
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Definition
An external supplier performs all or parts of a company's logistics functions.
(transportation, warehousing, distribution, etc.) |
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Term
| Define Centralized Purchasing: |
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Definition
| One corporate office manages all purchasing |
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Term
| Define Decentralized Purchasing: |
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Definition
| Each individual location makes purchasing decisions |
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Term
T/F
Most companies use a hybrid model of centralized and decentralized purchasing. |
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Definition
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Term
| What is the difference between seasonal demands and trends? |
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Definition
Seasonal demands are the various PEAKS that come throughout the year.
Trends are the LINEAR view of the forecast.
(SLIDE 45) |
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Term
| Forecast error always starts with... |
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Definition
Amount delivered - Forecast
RSFE tells us this. |
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Term
| Very positive RSFE tells us... |
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Definition
| Forecast is too LOW, SHORTAGE |
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Term
| Very negative RSFE tells us... |
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Definition
| Forecast is too HIGH, SURPLUS |
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Term
Running Sum of Forecast Errors (RSFE): shows us how high, or low our forecasting is over a period of time.
An IDEAL forecast would have an RSFE of... |
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Definition
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Term
| Mean Absolute Deviation (MAD): tells us the absolute forecast error over a period of time, but it doesn't tell you how much you are over or under. An ideal MAD is... |
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Definition
| ZERO! and means there is NO forecasting demand. The higher the demand, the poorer the forecasting. |
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Term
| Mean Absolute Percentage Error (MAPE): tells us the true AVERAGE magnitude of the forecase error. An ideal forecast would have a MAPE of... |
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Definition
| ZERO! A lower MAPE is preferred. |
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Term
| Mean Squared Error (MSE): tells us variance, Large forecast errors are heavily penalized |
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Definition
| MSE = Average of the Squared Errors (not including period 1) |
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Term
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Definition
| RSFE = Running total of errors |
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Term
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Definition
| MAD = Average of Absolute Deviations <--(Equals ABS of Forecast - Demand) |
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Term
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Definition
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Term
| Tracking Signal (TS): tells us if forecast is within acceptable control limits. Generally, good TS falls between... |
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Definition
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