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1

Why Study Operations and Supply Chain Management

- Every organization must make a product or provide a service that someone values

- Most organizations function as a part of larger supply chains

- Organizations must carefully manage their operations and supply chains in order to prosper, and indeed, survive

2

Operations Functions (or Operations)

Collection of people, technology, and systems within an organization that has primary responsibility for providing the organization's products or services

3

Supply Chain


- A network for manufacturers and service providers that work together to create products or services needed by end users. These manufacturers and service providers are linked together through physical flows, information flows, and monetary flows.

- Primary focus on physical goods- conversion, storage, and movement of materials and products

4

Operations Management

The planning, scheduling, and control of the activities that transform inputs into finished goods and services

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Transformation Process

Takes a set of inputs and transform them in some way to create outputs (goods or services)

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Transformation Process Steps

Inputs -> this processes-> outputs

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Transformation Process Inputs

- Materials
- Intangible needs
- Information

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Transformation Process Includes

- Manufacturing Operations
- Service Options

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Transformation Process Outputs Includes

- Tangible goods
- Fulfilled needs
- Satisfied customers

10

Upstream


Activities or firms that are positioned earlier in the supply chain relative to some other activity of form of interest.

Ex: corn harvesting takes place upstream of cereal processing, and cereal processing takes place upstream of cereal packaging

11

Downstream

Activities or firms that are positioned later in the supply chain relative to some other activity or firm of interest

Ex: sewing a shirt takes place downstream of weaving the fabric, and weaving the fabric takes place downstream of harvesting cotton

12

First- Tier Supplier

A supplier that provides products or services directly to a firm

13

Second- Tier Supplier

A supplier that provides products or services to a firm's first-tier supplier

14

Supply Chain Operations Reference Model (SCORR)

A framework developed and supported by the Supply Chain Council that seeks to provide standard descriptions of the processes, relationships, and metrics that define supply chain management

15

SCOR Areas

- Planning activities
- Sourcing activities
- Make or production activities
- Delivery actives
- Return Activities

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SCOR Area Planning Activities

Seek to balance demand requirements against resources and communicate these plans to the various participants

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SCOR Area Sourcing Actives

Include identifying, developing, and contracting with suppliers and scheduling the delivery of incoming goods and services

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SCOR Area Make or Production Activities

Cover the actual production of goods and services

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SCOR Area Delivery Activities

Include everything from entering customer orders and determining delivery dates to storing and moving goods to their final destination

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SCOR Area Return Activities

Activities necessary to return and process defective or excess products or materials

21

Trends in Supply Chain

- Electronic commerce
- Increase competition and globalization
- Relationship management

22

Trends in Supply Chain- Electronic Commerce

Use of computer and telecommunication technologies to conduct business via electronic transfer of data and documents

23

Trends in Supply Chain- Increased Competition and Globalization

- Rate of change in markets, products and technology increases
- Managers make decisions on shorter notice and with less information
- Customers are demanding delivery quicker

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Trends in Supply Chain- Relationship Management

Manage relationship with upstream suppliers and downstream suppliers

25

Structural Element

Includes tangible resources, such as buildings, equipment, and computer systems

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Major Decisions Addressed by a Strategy

- Structural element
- Infrastructural element

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Infrastructural Element

Includes policies, people, decision rules, and organizational structure choices made by a firm.

28

Strategy

A mechanism by which a business coordinates its decisions regarding structural and infrastructural elements

29

Missions Statement

- A statement that explains why an organization exists
- Describes what is important to the organization, called its core values, and identifies the organization's domain

30

Business Strategy

Strategy that identifies a firm's targeted customers and sets a time frames and performance objectives for a business