Intro

Question 1

Two objectives of SCM

Answer 1

Cost optimisation

Service level optimisation

Question 2

Components in definition of SCM

Answer 2

1. Network
2. Information flow
3. Coordination
4. Avoid conflicting objectives
5. Balance cost and service
6. Long-term relationship

Question 3

Development chain

Answer 3

Plan/Design, Source, Produce

Question 4

Supply chain

Answer 4

Supply, Produce, Distribute, Sell

Question 5

Network coordination

Answer 5

Coordination = integration

Information sharing and cooperation

Question 6

Fisher’s strategies

Answer 6

Responsive or Efficient supply chain, decided before global optimisation

Question 7

Fisher nature of demand

Answer 7

Functional - everyday products, stable predictable demand, long life cycle, low profit margins
Innovative - unpredictable demand, high profit margins, short life cycle

Question 8

Two distinct functions of a SC (Fisher)

Answer 8

Physical function - focus efficient

Market mediation - focus responsive

Question 9

Local optimisation

Answer 9

Only costs and gains of each individual party considered

Question 10

Global optimisation

Answer 10

Close cooperation takes place between different parties in SC

Question 11

Characteristics:

1. Strategic
2. Tactical
3. Operational

Answer 11

1. Long-term: Often longer than a year. ex. where to build production facility
2. Tactical: Shorter term less than a year. ex. choosing supplier of packaging
3. Operational: Day-to-day decision making. ex. planning route of truck

Question 12

Challenges in implementing global optimisation

Answer 12

Complex network - players in SC have often conflicting goals

Dynamic system - changes over time

Question 13

Push strategy

Answer 13

Based on long-term predictions. “Pushing” products to the market can lead to shortages or obsolescence.
Takes long to reach to market changes
Goal: minimise costs

Question 14

Pull strategy

Answer 14

Production driven by specific customer orders and makes no use of predictions. Fast information flow mechanisms.
Key to share demand data to supplier
Goal: maximise service level

Question 15

“Forwards” in SC

Answer 15

Car manufacturers –> Garage owners

Question 16

“Backwards” in SC

Answer 16

Car manufacturers –> Suppliers

Question 17

When to use push strategy

Answer 17

Stable demand. Large benefits from economies of scale. Long production lead times

Question 18

When to use pull strategy

Answer 18

Uncertain demand. Low impact of economies of scale. Short lead time

Question 19

Push-pull strategy

Answer 19

Long lead time
Demand uncertainty high
e.g. General Motors

Question 20

Continuous replenishment

Answer 20

Low demand uncertainty, short lead time

One Fanta bought, one Fanta added to order list

Question 21

Inventory positioning

Answer 21

High demand uncertainty, long lead time

Place warehouses and distribution centres strategically

Question 22

Bullwhip effect

Answer 22

Every player in the SC makes use of safety margins based on demand predictions by previous player in the chain.
More prominent in push strategy

Question 23

Physical function (Fisher)

Answer 23

Transforming taw materials into parts, components and finished goods and transporting them.

Question 24

Market mediation function (Fisher)

Answer 24

Function of ensuring that the variety of products that reach the market satisfy what the customers want.

Question 25

Accurate response (Fisher)

Answer 25

Accurate forecasting certain aspects of demand and setting up flexible production processes for the uncertain aspects of demand.

Question 26

Points successful BTO systems incorporate (Holweg & Pill)

Answer 26

``` Process flexibility Perpetual sales data through SC Product flexibility Volume flexibility e.g. Nike ID ```

Question 27

Making transition to BTO system

Answer 27

1. Offer BTO services for existing products 2. Introduce BTO services for new products 3. Combine BTO with forecasting