7 Supply Chain Management

Question 1

What is a supply chain?

Answer 1

A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system.

Question 2

What are the levels of suppliers and what kind of relationship do you want to have with each?

Answer 2

Tier 1: Direct supplier and want to maintain a strong relationship
Tier 2: Suppliers supplier and want some knowledge but far less of a relationship that tier 1
Tier 3: Tier 2’s supplier and no need to have a relationship

Question 3

Why would it be advantageous for a company to go global for suppliers and facilities?

Answer 3

Reduced labour cost

Question 4

How is supplier location changing in the fashion industry?

Answer 4

More companies are starting to reshore mainly because of the shorten lead times

Question 4

What question does vertical integration answer?

Answer 4

If the company should make or buy

Question 5

Slide 8
Reasons to outsource

Question 6

What ‘type’ of products should a company not outsource?

Answer 6

Critical parts, which are parts that are vital to a product and/or what makes it unique
eg. Tesla should produce their batteries

Question 7

What has Arc’Teryx done in the way of vertical integration?

Answer 7

Arc’ONE which is a manufacturing facility in Vancouver. The facility focuses on Proprietary designs & new products and makes up 10% of manufacturing for the company

Question 8

Why is procurement (purchasing) so important for a business?

Answer 8

Because it is often the biggest expense and minor reductions can have a substantial impact

Question 9

How do companies pick suppliers and give examples?

Answer 9

Based on many criteria and putting a weight on how important each criterion is. Some criteria are Company, service, product, and sustainability

Question 10

What is vendor development?

Answer 10

Improving supplier operations / efficiency will improve the entire supply chain’s performance
- Some companies offer “free consulting” to their vendors to help accomplish cost reductions, improved quality, fast & consistent delivery, etc

Question 11

What are types of purchasing? (3)

Answer 11

1. Centralized Purchasing
2. Stockless Purchasing
3. Blanket Purchase Orders (POs)

Question 12

Slide 16

Question 13

Slide 17
Benefits and challenges of VMI

Question 14

Why is better to have fewer suppliers (to an extent)?

Answer 14

Because when you work with fewer suppliers you become a larger customer which gives more leverage, Suppliers are more willing to make accommodations and more likely to deliver on time

Question 15

What are the three parts to logistics and explain and give an example of each?

Answer 15

1. Time utility (When): provides goods to customers when wanted, not when produced. E.g. Storage, warehousing
2. Place utility (Where): provide goods where they are needed, not where they are produced. E.g. Transportation
3. Form utility (What): physical/chemical change in goods and/or packaging. E.g. Assembly, Manufacturing

Question 16

Slide 20

Question 16

What are four logistic costs to consider? (4)

Answer 16

Transportation (air, rail, ship, truck, etc.)
Inventory (holding costs)
Packing (materials required – boxes, Styrofoam, etc.)
Damage (in-transit, in-storage)

Question 17

Slide 23
Transportation Modes

Question 18

What are the shipment strategies? (3)

Answer 18

1. Consolidation: Have a distribution centre to consolidate large shipments and reship to retail locations
2. Cross-Docking: see slide 25
3. Drop shipping: A retailer can order from a supplier who ship it directly to the customer

Question 19

What are the most common logistic management strategies and what is an example?

Answer 19

Postponement: Intentionally “delay” supply chain activities
HP is a strong example they get the generic printer from the supplier and put in the right power cord and manual for each country after the fact and can adjust for changing demand in different countries

Question 20

What are the types of postponement and give an example? (4)

Answer 20

Postponement of place utility (eg. Holding more stock at distribution centre)
Postponement of form utility (eg. HP example)
Postponement of labelling (eg. soup cans)
Postponement of the package (eg. batteries)

Question 21

**Slide 32
third party logistics

Question 22

What product characteristics fit with what type of supply chain?

Answer 22

‘Functional’ products (predictable demand) should have a ‘physically efficient’ supply chain
‘innovative’ product (unpredictable demand) should have a ‘market-responsive’ supply chain

Question 23

What are some distinct differences between a humanitarian supply chain compared to a commercial one? (6)

Answer 23

1. Cost is not as critical as speed
2. High inventory levels
3. Perishable items expire -> replaced
4. Many stakeholders to coordinate with
5. High visibility of performance
6. Job satisfaction

Question 23

What is the reverse supply chain?

Answer 23

Refers to the series of activities required to retrieve a product from a customer and either dispose or reuse it
- Used products (recycling) goods
- New products (returns)

Question 24

What’s a circular economy?

Answer 24

When manufacturers design a product to be more easily recyclable and minimize waste

Question 25

What’s an example of a company that implemented the reverse supply chain? (2)

Answer 25

1. Xenox leases a large number of printers that are designed in a way that is easy for employees to break down and all printers are built on a single platform which saves hundreds of millions every year, so when the printer is returned the frame and other parts can be reused
2. City of Calgary Recycling facility

Question 26

What are the product design considerations for OSCM? (7)

Answer 26

1. Design for Manufacturability
2. Shipping and Handling Considerations
3. Eco-Design strategy
4. Modular Design Flexibility
5. Design to “Target Cost”
6. Compress the Design Process (Concurrent Engineering)
7. Formalize for Production (BOM & Routing)

Question 27

Slides 41-44

Question 28

How has Arc’Teryrx implemented eco-design into their products?

Answer 28

ReBird: Gear Repair
ReGear: Buyback program and they refurbish the product and resell

Question 29

Slides 46-49

Question 30

What is the difference between Bill of Materials (BOM) and Routing

Answer 30

BOM: What items to order/pick up
Routing: How to make it

Question 31

What are the new technologies of OSCM?

Answer 31

1. Radio Frequency IDentification (RFID) (Slide 51)
2. 3D Printing (Slide 52)
3. Blockchain (Slide 53-55)