Chapter 1 Flashcards
A competitive environment
●Increasing numbers of world competitors
●sophisticated customer base
>more performance at lower cost
>demand price reduction
●widely available information sources
●balance of power between buyers and suppliers
●greater levels of outsourcing
Factors driving SCM
●Low cost and wide availability of information
●Higher levels of competition in domestic and international market
●Customer expectations and requirements
●Ability of an organisation’s supply chain to identify and mitigate risk
●competition is now between supply chain, companies
Why is Purchasing important
●Increasing value and savings
●Building relationships and driving innovation
●Improving quality and reputation
●Reducing time-to-market
●Managing supplier risk
●Generating economic impact
●Contributing to competitive advantage
Key elements of defining SM
●Strategic Orientation
》actives that have a major long- term impact on firm performance
●Functional Groups
》SM encourages long-term, win-win relationships between buying companies and selected suppliers as opposed to purchasing, which is adversarial
●Process Driven Approach
》work directly with the supplier to provide world-class performance
●Supply Base Management
》describes as a process of identifying, evaluating, selecting, managing, and developing suppliers to realize supply chain improve performance
Supply chain umbrella management activity
》management should align, coordinate, integrate, and synchronize these activities and physical, information, and monetary supply chain management
●Umbrella management activities
(PQOROCOIID)
》purchasing
》quality control
》inventory control
》outbound logistics
》customer service
》inbound logistics
》receiving logistics
》receiving and storing
》operations planning
》order processing
》demand planning
Enablers of Purchasing and SCM
》the four enablers model show that firm’s have certain guiding philosophies and business requirements that are foundation of all SC activities.
●Human resources
》SC professionals who have ability to
•manage critical relationships
•analyse competitive markets
•engage in fact-based decisions making
●Organisational Design
》Organisational design features
•centrally-led supply base
•collection
•cross functional teams to manage supply base process
●Information Technology
》real time system software supporting SC planning to perform
•demand planning
•material replenishment
•reserve auctions
●Measurement
》include SC Measures that
•use data from visible resources
•quantify what creates value
•use goals that change overtime
Capable human resources
》supply chain professionals who have the ability to manage
•supplier relationship management
•total cost analysis
•purchasing strategies
•supplier analysis
•competitive market analysis
•need for close collaboration with suppliers
•need for close internal coordination
Proper Organisational Design
》organisational design refers to the process assessing and selecting structure and formal system of;
●Communication
●division of labor
●co-ordination
●control
●authority
●responsibility
Real time Collaborative Technology Capabilities
》cloud computing - refers to the shared software and storing information, common in (1) sourcing
and procurement (2) demand planning (3) global trade management (GTM) (4) transportation management system
●Supply chain software
》improve forecast accuracy
》optimize
》reduce working capital cost
》shorten cycle time
●Supply chain execution software helps
》management physical flows from downstream so that customers receive the right products at the right
》lean Supply
Right measurements and measurement system
》roadblocks between measurement and improved performance
●too many performance
●debate over the correct metrics
●constantly changing metrics
●old data
》overcoming roadblocks
●know what to measure
●have a process in place to measure it
●have accessibility
Why is measurement important
●support fact based decision-making
●improve future suppliers’ performance
●determine if new initiatives are working
●promote continuous improvement and change
