Exam 1 Flashcards
(31 cards)
Supply Chain
- organizations, people, activities, info and resources involved in moving a product or service from the origins of supply all the way to the point of final consumption
Supply Chain Management
systematic coordination of traditional business functions within a certain organization and across organizations in the supply chain for the purpose of improving the long-term performance of individual enterprises and the system as a whole
4 types of economic utility
- what customers’ needs are and what they are willing to exchange to fill the need
- form
- time
- place
Form
-design of the product itself
-obtained by transforming a customers needs into products or services
Place
-obtained through the process of making a good or service more easily obtainable to potential customers
Time
-created by providing easy availability of a good or service at the time when customers need or want it
Traditional Framework of integrated supply chain operations
-shows how integration should occur between the demand creation side of a business and the supply chain demand fulfillment side
-lots of energy and initiatives to bring both sides together
-Sale and operation planning (S&OP)
Demand Side of integrated internal operations
-activities involved with understand customers, who there are, and what they are willing to exchange
-market and sales
-own actual sales and forecast of what _____ will look like in the future
Supply side of integrated internal operations
-dedicated to fulfilling demand once it’s created
-parts that have to go out and procure raw materials, convert them into a product and get it to the customer
Supply Chain Operations Reference Model (SCOR)
-Plan, source, make, deliver, and return
-clear framework for understanding the steps that SC needed to take in order to fulfill demand for downstream customers in a minimus total cost framework
Function of the SCOR model
-horizontal handoffs between functions and organizations, focused on the different processes and activities within each functional area
-could use to see what company was doing good on and what they needed to improve
Steps of SCOR Model
- planning across purchasing, manufacturing and logistics to determine the types and volume of inputs required over the next planning period, why level of manufacturing to meet planned output, capacity in logistics to deliver on expected demand
- detailed different processes and activities within source, make, deliver required to deliver on each area
Customer Segmentation
- SC managers must look for differences in their customer base across form, time and place value requirements
-some don’t want to pay for high levels of all types of value
-some find great value in top levels of service and will pay for it
How customers are segmented
-identify which customers fit into which category, then design the supply chain to provide that value, balancing th required value with the cost of providing it
cost/benefit of supply chain customer value
understand the cost/benefit tradeoffs of different levels of value provision for meeting the desired value at appropriate price for different customer segments
Total cost of ownership
-method for quantifying the costs for every activity along the supply stream, including acquisition, transportation, storage and selling of goods
-cost to buy something plus the cost to operate it over its useful life
Asset turnover
- tells us how productive the firm’s assets are at generating revenue
Return on assets (ROA)
-financial metric that captures the financial outcome of revenue, costs, and asset utilization
-measures ability to turn assets into profit
Profit margin
-tells us how well firm controls cost
ROA formula
net income/total assets
Asset turnover formula
net sales / average total assets
Earnings before interest, taxes, depreciation, and amortization (EBITDA) formula
earnings before taxes and interest + depreciation expense + amortization expense
The Perfect Order
-notion that supply chain has an impact on revenue
-combo of all the different elements that an order must possess in order to be considered perfect
-order is not perfect unless every element of the order score card is performed correctly
perfect order calculation
-mutual agreement between customer and provider as to what items constitute a perfect order
-70 perfect out of 100 = 70%
