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Supply Chain > Revision > Flashcards

Revision Flashcards

1
Q

What are the 4Vs and why they matter? Illustrate your answer with your own example(s).

A

4 Vs determine the way a process and operation are managed.

  • –Volume
  • –Variety
  • –Variation
  • –Visibility

McD ?

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2
Q

Why is a supply chain named so?

What is supply chain management and what flows is it concerned with?

Illustrate the answer with your own examples.

A

Value chain:

Sequence of value-adding activities

• Manufactured goods:Buy->make/store->move->sell

Supply chain:

The system of suppliers, manufacturers, transportation, distributors, and vendors that exists to transform raw materials to final products and supply those products to customers

Concerned with: Three flows
–Goods
–Information
–Cash

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3
Q

Explain the following concepts: (a) lead-time (b) inventory, and (c) service level. Explain how these concepts are interlinked

A

Lead-time:

A lead time is the time between the initiation and execution of a process.

types: Delivery LT and information LT

Inventory:

The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business’s assets that are ready or will be ready for sale

role: Fulfilment, Manufacturing capacity smoothing , Meet promotion requirements

benefits and costs: (of to little and too much)

Service Level:

The percentage of orders or total demand, if partial orders are acceptable to customer that must be fulfilled during a replenishment cycle (time bucket)

  • Discuss high allways good? (draw SL diagram)
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4
Q

Explain the concept of 3PL. What are the benefits and risks of getting into such partnerships?

A
  • What is 3PL?
    • Outside firms perform logistics functions
    • Long term commitments and multiple functions
  • What are the advantages of 3PL?
    • Focus on core strengths
    • Provides technological flexibility
    • Provides flexibility in
      • geography
      • workforce size
      • additional services
      • resource flexibility
  • However,
    • Loss of control, 3PL employees may interact with customers
    • Sharing of confidential info
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5
Q

Describe four types of retailer-supplier partnerships. Use the relevant case(s) to illustrate your answer

A
  • 4 different types (3PL is not RSP)
    • Quick response
    • Continuous replenishment
    • Advanced continuous replenishment
    • Vendor managed inventory
  • Important points
    • Who makes order-related decisions
    • Who owns inventory?
  • Two cases we did
    • Barilla (a manufacturer and a distributor),
    • VMI (KM and their relationship with Costco)
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6
Q

The benefits and risks of partnerships in supply chain. Use the relevant case(s) to illustrate your answer

A
  • Benefits (at different levels)
    • Suppliers: access to real data => better forecasting => better production and inventory management
    • Customers: better price, lower stockout, reduced workload
    • Consumers: better price, lower stockout
  • Risks
    • Shared information
    • Expensive to run
    • Increased cost to suppliers initially
    • If the supplier is incompetent, it will get worse
    • Pushing inventory to retailers by suppliers
    • Investment burden can be passed over to the supplier
  • Two cases we did
    • Barilla
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7
Q

How should a company decide to buy or make it?

A
  • This framework is for both products and components and more general
  • Reasons for outsourcing (think of Toyota: engine vs. carradio)
    • Dependency on capacity
    • Dependency on knowledge
  • Product architecture
    • Modular: Modular design, or “modularity in design”, is a design approach that subdivides a system into smaller parts called modules or skids, that can be independently created and then used in different systems (music system)
    • Integral (engine)
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8
Q

How should a company decide to buy or make themselves?

A

I am expecting to see the 2nd framework, which is for components. Some examples are welcome!

  • Five criteria
    • Customer Importance: Impact on customers experience and/or choice
    • Component clockspeed: Speed of related technology change
    • Competitive position: Can you make it cheaper and/or better?
    • Capable suppliers: how many?
    • Architecture: modular or integral?
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9
Q

When a company buys a product/component from an outside supplier, how the company should manage procurement?

A
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10
Q

What is pricing strategy? Illustrate it with your own example(s).

A
  • Revenue management
    • Exclusive resort with C=400 identical rooms
    • Three –tier pricing can increase the revenue significantly
    • Pricing strategy
      • Revenue maximization
      • Controlling demand uncertainty
    • Effective pricing strategy requires effective barriers (think of flighttickets).
  • Dynamic pricing ( an end of the season sale by the retailer)
    • No differentiation
    • The main purposes 1) revenue maximisation (examples?) and for improving SC efficiency
  • Mail-in-Rebates
    • Pricing strategy for manufactures
    • An effort to increase sales
    • Why?
  • Your own examples are welcome
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11
Q

What known-unknwon risks does a company face when it decides to expand its supply chain internationally? Use your own examples to illustrate the answer.

A
  1. Exchange rate uncertainties
  2. Operating exposure
  3. Substantial geographic distances
  4. Added forecasting difficulties
  5. Infrastructural Inadequacies
  6. Cultural difference
  7. Political instability
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12
Q

What is operating exposure?

A
  • Operating exposure
    • Results of exchange rate uncertainties
    • Changes a firm’s competitive position and future cash flows
    • Regional operations become relatively more or less expensive
    • Factors affect the impact of operating exposure
      • Customer reactions
      • Competitor reactions
      • Supplier reactions
      • Government reaction
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13
Q

Discuss different ways of dealing with unknown-unknown supply chain risks. Use the examples of 1) Nokia and Ericsson, and 2) Toyota and Aisin Seiki to illustrate your answer

A
  • Invest in redundancy capacity
    • Simple but expensive
  • Efficient sensing and responding system
    • Nokia and Ericsson
  • Adaptive supply chain community
    • Toyota and Aisin
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14
Q

What is “design for manufacturing and logistics” (DFML)? What aspects of supply chain are you trying to control?

A
  • Economic Transportation and Storage
    • Supply Chain Cost
      • Transportation
      • Inventory
    • Better utilization of retail space
  • Concurrent/ Parallel Processing (the printer example)
    • Mainly to reduce LT by modifying manufacturing process (cost)
    • For those in the early stage of product life cycle, when the time required to reach market is critical
    • Also it enables a company to reduce 1) inventory level and 2) forecast error
    • May require re-modification of components
  • Standardisation
    • Process and part
    • Cost and demand uncertainties
    • The role of modularity in process and products => which standardisation?
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15
Q

What is postponement? What are the tradeoffs of doing it?

A
  • Process Standardization
    • Standardizing as much of the process as possible, making a generic or family product
    • Delaying differentiation
    • Called “Delayed differentiation”
  • Tradeoffs
    • Enables the use of aggregate forecasts
    • Enables the delay of detailed forecasts
    • Reduces scrapped or obsolete inventory, increases service levels
    • May require new processes or product design with associated costs
  • Cases
    • HP
    • Altera
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16
Q

How are the concepts of modularity and standardisation are connected?

A
  • Postponement is possible when there is high modularity in
    • Product
      • Modular Product
        • Can be made by appropriately combining the different modules
        • It entails providing customers a number of options for each module
    • Process
      • Modular Process:
        • Each product undergo a discrete set of operations making it possible to store inventory in semi-finished form
        • Products differ from each other in terms of the subset of operations that are performed on them
  • We choose a type of standardisation based on the level of modularity in product and process
    • Part standardisation: product modularity (yes) and process modularity (no) (–> maximise component commonality across products)
    • Process standardisation: product modularity (yes) and process modularity (yes) (–> delay customization as much as possible)
17
Q

Discuss the benefit(s) and dis-advantage(s) of push strategy and pull strategy

A
  • Push strategy (based on long-term forecast)
    • Economies of scale
      • Bulk buying
      • Bulk manufacturing
      • Better utilization of transportation
    • Inability to meet changing demand patterns
      • Obsolescence
      • Bullwhip effect
  • Pull strategy (responding to actual demand)
    • Responsiveness
      • Quick to respond to demand changes
    • Less inventory
    • Less bullwhip effect
18
Q

What is a push-pull strategy? Can a company have different push-pull strategies for different products?

A
  • Push-Pull strategy (Combination of push and pull)
    • Initial portion (usually) of the supply chain is replenished based on long-term forecasts
    • Final supply chain stages based on actual customer demand.
  • Yes, it depends on
    • Demand uncertainty
    • Importance of economies of scale
      • Higher demand uncertainty suggests push
      • Higher importance of economies of scale suggests push
      • High uncertainty/ EOS not important such as the computer industry implies pull
      • Low uncertainty/ EOS important such as groceries implies push
19
Q

What are the benefits of a push-pull strategy? Illustrate your answer with the case of Altera or HP Network Printer

A
  • Altera is moving from a push-based supply chain strategy to push-pull or pull strategies
    • How? For mainstream chips
      • Altera builds main stream products to stock (Push) but in die bank. Once orders are confirmed, the subcontractor to test, package and ship (Pull)
    • To reduce inventories
    • To be better able to match demand and supply => avoid the risk of obsolete inventories
  • HP
    • How? Universal power supply
    • Aggregated forecast => easier
    • Less safety stock
    • Transshipment became possible
20
Q

What is the economic order quantity?

A
  • Total inventory cost has two components
    • Order cost
    • Holding cost
  • EOQ = quantity of order, the sum of (order cost ) and (holding cost) per unit of time is minimum
  • •You should be able to show how we can derive EOQ formula
  • ​
21
Q

Explain Min-Max inventory model with fixed leadtime

A
    • Continuous review model
  • Assumptions
    • Random demand
    • LT
  • Decision on
    • When: re-order point
    • How much: order up to level
22
Q

Imagine you make your living by selling newspapers. How should you determine the optimal order quantity?

A
    • Assumptions
      • You have only one chance to order newspaper (unlike the two other models).
      • If you cannot sell them on the day, the left over papers have very little salvage value
  • Steps for determining optimal order quantity:
    • Based on the past data, you forecast the demand for tomorrow
      • You use probabilistic demand forecast for tomorrow
    • You find out
      • Marginal profit of selling a newspaper for the day
      • Marginal cost of not selling a newspaper for the day
    • If
      • MC > MP: order less than the forecasted demand
      • MC < MP: order more than the forecasted demand (very unlikely to happen for newsvendors)
23
Q

What are the causes of bullwhip effect? How we can cope with bullwhip effect? Illustrate your answer with Barilla case

A
  • Causes
    • Demand forecast => (S,s or Min-Max inventory policy)
    • Lead-time
    • Batch-ordering
    • Price fluctuation => promotion
    • Inflated order => shortage
  • How to cope with it?
    • Reducing uncertainty (centralized information system)
    • Reducing variability (no promotion)
    • LT reduction
    • Strategic partnership (Barilla SpA, JITD)

Supply Chain (14 decks)

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