Supply Chain and Logistics Flashcards
What is the main concern for operations management
Main concern is to maximise the efficiency of the internal processes involved
What is the main concern for supply chain management
Main concern is to manage inter-firm networks to maximise the value to the ultimate customer
What is vertical integration
Merging together of two or more businesses that are at different stages of production
What is outsourcing
The obtainment of goods or services from an external supplier company
Why is outsourcing provider cheaper
Economies of scale, economies of scope, labour costs and licensing costs
What are the pros and cons of outsourcing
Pros: lower labour cost, access to technology, less investment risk
Cons: loss of control over process, limited ability to improve processes, risk of opportunistic behaviour of supplier
Why would you integrate vertically
Lower uncertainty, better coordination, lower transaction costs
What is location
The geographical positioning of an operation relative to the input resources and things which it interacts with
What are factors that affect location
Labour land and energy costs, labour skills, convenience for customers, image
What are the types of distribution strategies
Direct shipping, warehousing, cross-docking and transhipment
What is direct shipping
Shipped straight to companies, mostly for perishable items, high voluem
What is warehousing
Storage until demand, for remote production, variable finished-goods demand, handling errors, inventory costs
What is cross-docking
Items distributed continuously from suppliers through warehouses to customers, requires fast transportation
What is transhipment
Shipment of items between facilities at the same level of supply chain
