Lecture 1 Flashcards
(19 cards)
What is supply chain:
Is the serie of activities and organizations that materials, both tangibles and unangibles - move through on their journey from initial suppliers to costumers
What is included in supply chain?
manufactures, suppliers, transportation, warehouse, retails and costumers.
What moviments are included in supply chain?
Includes movement of products from suppliers to manufacturers to distributors and information, funds, and products in both directions
What is the Typical supply chain stages?
Typical supply chain stages: customers, retailers, wholesalers, distributors, manufacturers, suppliers
What is The Objective of a Supply Chain ?
Maximize net value generated
Supply Chain Surplus = Customer Value − Supply Chain Cost
What is the Supply chain profitability ?
Supply chain profitability is total profit to be shared across all stages of the supply chain
What is the main only source of revenue?
Customer the only source of revenue
What is the mains sources of costs in SCM?
Sources of cost include flows of information, products, or funds between stages of the supply chain
What is Effective supply chain management?
Effective supply chain management involves the management of supply chain assets and product, information, and fund flows to grow the total supply chain surplus
Whate are Decision Phases in a Supply Chain?
1)Supply chain strategy or design
How to structure the supply chain over the next several years
2)Supply chain planning
Decisions over the next quarter or year
3)Supply chain operation
Daily or weekly operational decisions
What is Supply Chain Strategy or Design (1 phase of decisions in SCM)?
“Decisions about the configuration of the supply chain, allocation of resources, and what processes each stage will perform”
Strategic supply chain decisions
Outsource supply chain functions
Locations and capacities of facilities
Products to be made or stored at various locations
Modes of transportation
Information systems
Supply chain design must support strategic objectives
Supply chain design decisions are long-term and expensive to reverse – must take into account market uncertainty
What is Supply Chain Planning (2nd phase of decisions in SCM)
Definition of a set of policies that govern short-term operations
Fixed by the supply configuration from strategic phase
Goal is to maximize supply chain surplus given established constraints
Starts with a forecast of demand in the coming year
Planning decisions:
Which markets will be supplied from which locations
Planned buildup of inventories
Subcontracting
Inventory policies
Timing and size of market promotions
Must consider demand uncertainty, exchange rates, competition over the time horizon in planning decisions
What is Supply Chain Operation (3rd phase of decisions in SCM)
Time horizon is weekly or daily
Decisions regarding individual customer orders
Supply chain configuration is fixed and planning policies are defined
Goal is to handle incoming customer orders as effectively as possible
Allocate orders to inventory or production, set order due dates, generate pick lists at a warehouse, allocate an order to a particular shipment, set delivery schedules, place replenishment orders
Much less uncertainty (short time horizon)
What are Process Views of a Supply Chain?
Cycle view, Push/pull view
what are the 3 Supply Chain Macro Processes?
Customer Relationship Management (C R M).
Internal Supply Chain Management (I S C M).
Supplier Relationship Management (S R M):
Summary of Learning Objective 1
Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm.
Goal of a supply chain to grow supply chain surplus.
Supply chain surplus - difference between value generated for customer and total cost incurred across all stages of SC.
Supply chain decisions have big impact on success or failure of firms - they significantly influence revenue generated and cost incurred.
Successful supply chains manage flows of product, information, and funds to provide high level of product availability to customer while keeping costs low.
Summary of Learning Objective 2:
Define the three key supply chain decision phases and explain the significance of each one
Supply chain decisions may be characterized as strategic (design), planning, or operational, depending on the time horizon over which they apply. Strategic decisions relate to supply chain configuration. These decisions have a long-term impact that lasts for several years. Strategic decisions define the constraints for planning decisions, and planning decisions define the constraints for operational decisions. Planning decisions cover a period of a few months to a year and include decisions regarding production plans, subcontracting, and promotions over that period. Operational decisions span from minutes to days and include sequencing production and filling specific orders.
Summary of Learning Objective 3 :
Describe the cycle and push/pull views along with the macro processes of a supply chain.
The cycle view divides processes into cycles, each performed at the interface between two successive stages of a supply chain. Each cycle starts with an order placed by one stage of the supply chain and ends when the order is received from the supplier stage. A push/pull view of a supply chain characterizes processes based on their timing relative to that of a customer order. Pull processes are performed in response to a customer order, whereas push processes are performed in anticipation of customer orders.
All supply chain processes within a firm can be classified into three macro processes: C R M, I S C M, and S R M. The C R M macro process consists of all processes at the interface between the firm and the customer that work to generate, receive, and track customer orders. The I S C M macro process consists of all supply chain processes that are internal to the firm and work to plan for and fulfill customer orders. The S R M macro process consists of all supply chain processes at the inter- face between the firm and its suppliers that work to evaluate and select suppliers and then source goods and services from them. Integration among the three macro processes is crucial for successful supply chain management.
Summary of Learning Objective 4:
Identify important issues and decisions to be addressed in a supply chain
At a strategic level, a supply chain designer must decide whether to build a responsive supply chain like Zara or focus on lower costs. A decision must be made on the location and capacity of each facility and whether it will be dedicated or flexible in terms of the products it produces and markets it serves. The designer must decide whether products will be sold directly to customers, through distributors like Grainger, or through brick-and-mortar retailers like Macy’s. If opting for omni-channel retail, the designer must decide which facilities will fulfill different customer orders.
The planner must then decide on the production levels at each production site and inventory levels at each D C and retail store. As customer orders arrive, the operations manager must decide how each order will be fulfilled given the available inventory and production schedule. The goal when making all these decisions is to maximize the supply chain surplus.
