Lecture 8: Supply Chain Systems Flashcards Preview

3P4 HUGO > Lecture 8: Supply Chain Systems > Flashcards

Flashcards in Lecture 8: Supply Chain Systems Deck (11):

What are the objectives for supply chain operations?


Speed: service time

Dependability: ability to deliver goods on time and in full




What is the difference between functional products and innovative products?

Functional: predictable demand, few changes, low variety, low margin, long lead times


Innovative: unpredictable demand, many changes, high variety, high margin, short lead times


What is the difference between a LEAN and AGILE supply chain?

Lean supply chains: best in high volume, low variety and predictable environments


Agile supply chains: less predictable environments where the demand for variety is high - volume, mix, product



Lean ideas maximise profits through cost reduction while agility maximises profit through providing exactly what the customer requires.


What are the differences in focus, partnerships, key measure, profit margin, forecasting, purchasing policy and logistics planning in LEAN and AGILE supply chains?


  • Focus eliminate waste 
  • Partnerships: long term and stable
  • Output measure such as productivity and cost
  • Profit margin is low
  • Forecasting is algorithmic
  • Purchasing policy is to buy
  • Logistics planning is stable


  • Focus is on customers/markets
  • Partnerships are fluid
  • Measure capabilities and focus on customer satisfaction
  • High profit margin
  • Forecasting is consultative
  • Purchasing policy is to assign capacity
  • Logistics planning is an instantaneous response


What are hybrid strategies?

Hybrid strategies enable the upstream part of the chain to be cost effective and the downstream part to achieve high service levels.



  • Pareto 80:20: lean for volume lines
  • Surge/base demand separation: agile principles for surge
  • De-coupling point: lean up to a point and agile beyond it


What are the secrets of Japanese success?

  • Long-term collaborative relationship
  • Dual sourcing: volumes adjusted to performance
  • Continuous improvement
  • Operations and logistics: JIT


What are the ways to create closer, more informed and effective relationships between customer and supplier


  • Supplier Relationship Management
    • Commodity, performance, development supplier or partner
  • Vendor Managed Inventory: supplier manages inventory at customer site, takes financial responsibility
  • Collaborative Planning Forecasting Replenishment
    • Combines the intelligence of partners across the supply chain in planning and fulfilling demand
    • Info sharing, coordinated production planning, joint forecasting, coordinated shipments, coordinated promotions


What are the pros and cons of collaboration?


  • Efficiency
  • Reduced variability
  • Reduced contract costs
  • Mutual learning
  • Greater stability
  • Greater visibility for supplier


  • Cost of communication
  • Risk of opportunism
  • Reduced flexibility in supplier selection
  • Information leaks


What are the different levels and communication methods in SC partners?

Information services at BUSINESS LEVEL

Electronic data interchange at ORDER LEVEL



Explain the different supply chain information systems.

SRM: supplier relationship mgmt.

These applications focus on relationship between supplier and manufacturer adn procurement process that takes place between them.


MRP: these systems produce schedules for what to make, where and when to make and how to make it taking into account availability, capacity and other objectives.


MES - Manufacturing execution systems


Inventory planning systems: observe demand patterns, take inputs on forecasting and produce recommended stocking policy


WMS - Warehouse Management systems: Execute inventory planning commands and run day to day operations of warehouse


Transportation Execution


Demand planning and revenue mgmt.


Customer relationship management