Lecture Notes Flashcards
(89 cards)
1
Q
what is a supply chain and management?
A
supply chain is the entire process of making and selling products starting from goods and services that are complete.
Supply chain management is the handling of the entire production flow of goods or services.
2
Q
what is data
A
facts and statistics usually numeric that is collected through observation or surveys. In a more technical sense, data are a set of values of qualitative or quantitative variables about one or more persons or objects
3
Q
what are the 3 flows of a supply chain
A
material, information and financial flows through suppliers -> manufacturer -> distributor -> consumer
4
Q
what is efficient management of supply chain?
A
- improve supply chain quality: continuously find issues and improve
- reduce costs and increase profits: identifying areas where there is a possible way to reduce costs or to increase profits
- enhance supply chain efficiency: making data driven decisions
5
Q
what are examples of using analytics
A
- finding and resolving duplicated orders and deliveries
- extracting correlations between differnt paramters and variables
- forecasting demadn and predicting possible demand changes
- identifying optimal levels of inventories
- predicting the sale of different stores/branches and prepping for it
- analysing the performance of different suppliers from different aspects
- evaluating customer reviews and finding ways to improve their experience
- optimising transportation schedules
6
Q
what is supply chain management?
A
- planning
- sourcing
- manufacturing
- delivering
- returning
7
Q
what are types of integration
A
- forward integration - buying distribution centres to sell directly to customers
- backwards integration - is when a company buys another company that supplies the products or services needed for production.
- horizontal integration - a company purchases and owns another business operating at the same level of the value chain within the same industry
- vertical integration - both ways
8
Q
what are the merits of horizontal integration
A
- growth and revenue
- market expansion
- competition reduction
examples: jbhifi owned the good guys, facebook owned instagram
9
Q
what are the risks of horizontal integration?
A
- regulatory scrutiny: this is to prevent mergers to create monopolies
- reduced flexibility: more personnel, processes and layers of bureacracy can hinder agility
- potential value destruction of the purchase
examples: google bought motorola being divested - loss in profit
microsoft and nokia being divested
ebay and skype
10
Q
what are the merits of vertical integration?
A
- production becomes more secured
- the profit of an entity in the chained is now owned
- you are now more in control of the quality
11
Q
what are the risks of vertical integration?
A
- it can increase your costs as you might not be able to manage well
- less flexibility to market changes - never think of, unless you are sure your product will not majorly change for the long term
examples:
apple - unique software and processes which is why they are close to the suppliers
zara - using their own suppliers and has direct contact with their customers to get feedback
tesla - produces their own batteries however they become outdated easily
netflix - produce their own movies
12
Q
what are customer involvement benefits?
A
- assembly related costs
- transportation related costs
- storage and warehousing related costs
- some customers feel proud, more satisfied and consider higher value to a product they partially created
13
Q
what is the seven muda (waste)
A
- inventory
- waiting
- defects
- overproduction
- motion
- transportation
- over-processing
14
Q
what is JIT?
A
just in time
- keep minimum stock and link all processes
- delivery right when the customer needs it
- build the right amount at the right moment
15
Q
what is lean production?
A
an adoption of jit, more attention is paid to removing all non added value components (waste)
16
Q
what is agile production
A
based on JIT, where more focus on meeting customer requirements which can be subject to changes. so it is often used in software developments and project management.
17
Q
what is a bill of material?
A
A bill of materials (BOM) is an extensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product or service.
18
Q
what is outsourcing
A
hiring an organisation/person to do something for you that is currrently being performed by an organisation. Today the world is outsourced, every company does something for another
19
Q
what is a master production schedule?
A
demand forecasts + customer orders
A master production schedule is a plan for individual commodities to be produced in each time period such as production, staffing, inventory, etc. It is usually linked to manufacturing where the plan indicates when and how much of each product will be demanded.
20
Q
what is enterprise resourse planning?
A
your demand predicting models can be linked to this. Also, your order release cells can be directly linked to your suppliers in order to send information to your suppliers instantly. So you do not have to order, they receive heads-up automatically once the predicte demand changes.
updated related information can also be sent out automatically to accounting, finance and other parts of your business and also your suppliers and distributers where needed
21
Q
what is mass production?
A
manufacturing identical products on a large scale
eg smartphones, TVS, cars, fridges, appliances
22
Q
what is customisation
A
luxury brands allow you to place a customised order where specifications can be changed. eg, handmade and artefact products.
23
Q
what is logistics?
A
the part of supply chain management that deals with the efficient forward and reverse flow of goods, services and related information from the point of origin to the point of consumption according to the needs of customers
24
Q
what are the 7 Rs of logistics?
A
- right product
- right customer
- right time
- right place
- right condition
- right quantity
- right cost
25
military and humanitarian logistics
military: integrated support to meet the desire capability of forces
humanitarian: collaboration between representatives and governors to alleviate the suffering of people in distasters
26
what is full or less than full container loads?
the term FCL is used in transport to refer to full container loads while the term LCL is used to refer to less than full container loads. When carriers have a consignment that will not fill an entire loading unit they will sometimes try to build a consolidated shipment to make up a FCL
27
what is last mile logistics/delivery
the most challenging and costly part of delivery from the first distribution center to the customer - labelled last mile delivery
risks: unpredictable traffic, road closures, weather conditions, customer isn't there to receive
inefficiency and environmental impact: drivers make short stops, one parcel at a time contrasts the large scale transportation methods
customer-facing role: drivers are the only customer facing humans in the supply chain esp in e-commerce
28
what are food miles?
the dstance food is transported from the time of its making until it reaches the consumer. It is the one factors used when testing the environmental impact of food, such as the carbon footprint of the food. Environmentally speaking, it is good to consume local and seasonal food to avoid negative impact of food transport
29
what are closed loop reverse logistics
origins (sources) and destinatios (sinks) coincide so that flows cycle in the system. companies adopting this system collect their used products and refurbish and resell, remanufacture them or they recycle them
30
what is open loop reverse logistics?
companies using this system may take responsibility for collecting and finding markets for their products but do not use the recovered materials for themselves
31
why strategic alliances?
1. increased performance: by working togerther, organisation ehance their supply chain performance
2. risk sharing: alliances allow for shared risks and rewards
3. resource sharing: partners can pool resoures like products, distribution channels, manufacturing capabilities and knowledge
4. cost reduction: better coordination and trust lead to lower costs across supply chain stages
examples, third party logistics and fourth party logistics
32
what is third party logistics
3pl is when some logistics processes are outsourced to a third party business ( including inventory management, warehousing, fulfillment)
examples: transportation, warehousing, inventory mgmt, picl and pack, light manufacturing, customs clearance, managing reverse logistics
downside: less control, potential customer loss if improperly managed.
challenges: costs, confidentiality, performance matrics
33
what is fourth party logistics
4pl happens where the entire logitstics function of an organisation is outsourves to a logistics service provider
unlike 3pl providers, who typically handle specific logistics functions, 4pl take on a broader role.
34
what does warehousing facilitate?
1. storage and inventory management: a secure sapace for storing goods, raw materials, finished products
2. value-added services: labelling, kitting and assembly
3. consoliation: multiple smaller shipments can be combined into larger ones to reduce transport costs
4. cross-docking: where goods move directly from inbound to outbound trucks without storage, furthur streamlines logistics
5. distribution: can be positioned across regions create an efficient distribution network
35
what is ABC analysis?
a: expensive inventory, accurate control required
b: moderate value inventory, moderate control required
c: low cost inventory, minimum control required
36
how is ABC analysis used?
most firms have too many inventory items to manage. they use this tool to seperate out the most important items so that more attention can be focused on these items.
based on the principle that out of the myriad of items an inventory manager needs to handle, there are only afew that acccount for most of the inventory expenses
37
what are inventory production principles?
**pool inventory **
- demand for different locations is combined or in delayed product differentiation where demand for different products is combined
- using common components where demands for different components are combined
**reduced variation**
- reason for holding safety stock is variation
- variation of lead time, demand, supply and quality all contribute to safety stock
**reduce lead time**
- lead time affects the inventory held.
- eg, reorder point formular shows that ROP can be reduced if the lead time can be reduced.
**just-in-time inventory philosophy**
- JIT is as much a philosophy as it is a technique
38
what are AGVs?
an automated guided vehicle is a portable robot that follows markers or wires in the floor, or uses vision, sensors, magnets or lasers for navigation
companies that use it: amazon, coca-cola, bmw,
39
minimising human effort and intervention
MHE - materials handling equipment: AGVS, cranes, forklifts, reach trucks pallet trucks, conveyors
the goal is to completely remove human from the material handling process due to: labour costs, mistakes, required space, faciliities, safety
40
how is pallet storage used?
dense storage systems, items are the same
FIFO
LIFO
individual access systems
41
how is non-pallet storage used?
goods may be stored in cartons or plastic tote bins.
advantage of some of these storag systems is that the product can be delivered and displayed in a shop without being removed from the storage device
42
how are dense storage systems used?
- items are the same
- FIFO: products have limited shelf life, inventory turnover high such as food or perishable goods, rapidly changing product line
- LIFO: goods costs tends to rise over time, such as manufacturing or industries heavily affected byy inflation
43
what is AS/RS?
automated storage
retrieval systems
high volumes and high variety in high densities
44
what is inventory management
- materials that a firm holds in order to satisfy customer demand
- when raw materials are processed, but are not yet completely finished, they are called work in progress
- inventory costs money that could be invested elsehwere
45
what are sustainability concerns assosicated with carrying inventories?
- change of customer tastes and preferences
- power and resources used to carry inventories
46
what are the costs of holding inventory?
- storage
- insurance
- tax
- maintenance
- obsolenscence
- opportunity costs
47
what is the main objective of suply chain?
maximise profit
47
what are production costs for inventory
- fixed cost
- variable cost
48
what is safety stock?
the amount of inventory stocked to cope with uncertainty in case of unforeseen events
examples;
- late deliveries from your suppliers or transportation problems
- higher consumption of inentory than the forecast
- poor quality of some inventories
- production probelms which may waste some inventories
- transportation problems
root reason for safety stock:
- variation of demand
- variation of lead time
- variation of production
49
how to reduce safety stock?
- inventory centralisation, eg automative industries
- delayed product differentiation -> principle of postponement. eg customising language and countries of smart TVs can be delayed. producing sofas can have based assembled to allow upholstery to be customised
- increasing part commonality eg all mobile phones sold in the EU have to have USB C charging port
- decreasing transit inventory -> reduce lead time wherever possible, or negotiate with your suppliers on setting urgent delivery option at some reasonable extra costs
50
what is safety stock formula?
(maximum daily sales x maximum days of lead time ) - (average daily sales x average days of lead time)
51
what is the reorder point inventory control system
when an order is issued at the reorder point, it is gradually depleted to the safety stock over the lead time
ROP - D x L +SS
52
what is outsourcing?
hiring an organisation or person to do something for you that is currently performed by your organisation.
- today the world is outsourced. every company does something for another
refers to a company or individual delegating tasks to a third party for them to complete on behalf of the company
53
what are reasons for outsourcing?
- leaving the job to the experts
- saving time
- cutting costs
-
54
what is globalisation
the interconnectedness of economics, cultures, and societies worldwide. it involves the integration of markets, trade and communication from one country to another.
allows accessing global outsourcing options. it enables companies to outsource parts of their productions. they may reduce their total production cost by accessing eg wider knowledge and cheaper specialied resources/labour. this also facilitates reaching cusotmers
55
what is the world trade organisation?
they have encourages international business, foreign investment, and economic cooperation.
has structured agreemetns signed by diff countries to reduce barriers to trade such as tariffs.
these agreements facilitate the movement of goods, services and capital across borders. This creates lots of job opportunitites and potential significant growth for the economy.
56
what are the criticisms of the agreements of the WTO and globalisation?
unequal distribution of benefits among member countries.
developed nations often have a greater capacity to take advantage of trade opportunities
it can destroy many local businesses and industries not only in the developing countries but even in AUS
57
what is offshoring?
- taking a part of your organisation operations abroad is called offshoring.
why:
- labour markets
- sales markets
- tax and regulations
in offshoring, usually those are your employees and you have full control over quality and other concerns - unlike outsourcing
58
what is reshoring and near shoring
reshoring: moving back to the original companys country
nearshoring: moving closer to the original companys country
reasons:
- tax and regulations
- proximity to market
- delivery cost and time
- becoming more in control of quality.
- advanced technology
examples:
- boeing nearhsored suppliers from france to mexico
- NCR ATM producers reshored from india to columbus due to technology
59
what are contract elements
- quantity/volume
- price/discounts
- lead time
- quality
- returns
60
how to establish long term relationships with suppliers
- long term relationship builds trust
- it faciliates information sharing
- allows you to reduce inventory
- enables collaborastion on cost reduction and getting better rates
- facilitates collaboration on continous quality improvement
61
what is regression
investigates the relationship between a dependant (target) variable and indenpendant variables (predictor
62
what is linear regression
- establishes relationship between dependant variable y and one or more indpendant variables x using best fit straight line
- y = a * x +b. a = intercept, b= slope, e= error term
- enables determining future values. the equation can be found to predict the value of the target variable based on the independant variables.
63
what is r squared?
r squared values determines the proportion of variance in the dependant variables that can be explained by the independant variable. it can range from 0 to 1 and are commonly stated as percentages from 0% to 100%
64
the importance of monitoring supply chain performance?
- cost reduction: by identifying areas of waste and inefficiency, organisations can reduce costs.
- customer satisfaction: ensuring availability of inventory, on time delivery, and product quality
- risk mitigation: measuring performance helps identify and mitigate risks
- supplier relationships: effective performance measurement enhancees communication and collaboration with suppliers and enhances the chance of establishing long term relationships with them.
65
what are KPIs
key performance indicators are essential for both supply chains and service chains
examples in service chains:
- response time
- delivery time
- customer complaint rates
examples in supply chains:
- order fulfilement cycle time: the time from order placement to delivery
- inventory turnover: how quickly inventory is sold or used
- supplier performance: metrics related to supplier reliability, quality and lead times
- supply chain cost: total cost of supply chain operations
66
what is perfect order measurement
- the percentage of orders that arrive complete on time damage free and with correct invoice
- POM = %complete x %on time x %damage free x %correctly invoices.
67
what is inventory turnover
- indivates how efficiently inventory is managed
- IT = cost of goods sold/average inventory.
68
what is the transition to service economies?
- industrial revolution encourages countries to shift from agricultural to manufacturing. people moved off the land into the mass production systems. This period can be termed as post-agricultural.
- second half of 20th century, there is a transition from manufacturing to services. this post-manufacturing world has emerged from the demand for value added services.
69
what is servitisation by manufacturers?
manufacturers not are just delivering tangible, physical products but also offering services which enhance their value proposition and of course add to profitability.
- manufacturers offer financial packages to go with their products as well as extended warranties, repair services, remote performance monitoring of the product and so forth.
70
service chain examples
- in manufacturing industry, supply chain is based on human intergration instead of raw materials, warehouses, logistics.
- univeristy provides education through education, teaching admin and IT service providers. they involve other services such as cleaning.
- service providers such as consulting, travel agencies, cleaning service companies and others have their own chains of suppliers
71
what is service level agreement
a service level agreement outlines your expectations from the service provider.
examples:
call centre/it, an SLA includes:
- availbility time
- response time
- resolution time
logistics and transportation services:
- delivery time
- allowed damage rate
- penalty rates
72
what are characteristics of dashboards?
- customisable
- interactive
- real time monitoring
- all of the data in one place
- get everyone on the same page
- capable of gaining focus
73
what is pipeline transport?
advantages:
- quiet efficiency
- small on going cost
74
optimisation in transportation
plan transportation routes for logistic companies to, for example, set the optimal sequence of pickups and drop off sequences
set the optimal scheduling for the public transport i.e bus schedules
schedule flights and their destination sequences
and generally in transportation modelling
75
what is objective function?
we usually try to maxmise our benefits or earning and minimise our costs
76
what are bounds/constraints
budget limits, production limits and similar limitations
77
optimisation in practise
supply chain optimisaiton is the process of adjusting your supply chain to operate at peak performance. this means ensuring the optimal placement of inventory and minimising operating costs
can use optimisation to prescribe
eg how many differnt items to produce to maximise profit, or how to arrange the supply chain componentst to minimsie costs.
78
why is AI used
- reduces human error or bias
- saves time spent on making decisions
79
what is a simulation?
A simulation is a model that mimics the operation of an
existing or proposed system, providing evidence for
decision-making by being able to test different scenarios
or process changes. This can be coupled with virtual
reality technologies for a more immersive experience
Simulation is useful for
assessing how a logistics
system performs over time.
For example, you may have a
network of trucks making
regular deliveries, a simulation
will illustrate to what extent
uncertainty about irregular
and/or random events may
affect your schedule integrity.
Examples of activities that are
80
what is demand variability and supplier performance
**demand variability **- demand for products for services that can be unpredictable and may vary over time. Businesses need to understand the level of demand variability and use this information to set inventory levels and safety stock levels
**supplier performance**: supply chain disruptions can also be caused by isses with suppliers. For example, if a supplier experiences a manufacturing delay, this can impact the ability of the business to receive products they need. Understanding supplier performance and having backup suppliers can help mitigate these risks
81
what is transportation and financial (logistics and finance)
transportation: disruptions can occur due to variety of factors such as weather, accidents or labour strikes. these disruptions can impact delivery of products or raw materials, which can impact inventory levels and customer service levels
financial: financial positions of suppliers and customers can result in supply chain disruptions. insolvency
82
what is continous simulation models
continous simulation is another approach to modelling inventory systems that can be used to account for stochastic demand, lead times and supply chain disruptions. Unlike discrete event simulation which models sytems as a series of events that occur at specific points in time, continous simulation models the joint distribution of the uncertainties in a supply chain
83
what are simulation tools?
what simulation does is repeating operations over a selected period of time. in excel, you can use the what if analysis and formulate things. it can repeat them for as many times as you like and you will see results, but there are many specifically tailored simulation tools that can consider many factors
84
tools used in SCM
1. global network optimisation: a popular optimisation and also a simulation tool in logistics and SCM
2. anylogistix: " "
85
why is reverse logistics used?
To achieve economic growth for the
current generation without
depleting resources for future
generations.
One method for achieving
sustainable growth is to increase the
amount of product materials
recovered from the world's waste
stream by using reverse logistics.
Another impacting factor is the
public/consumer demand
86
what are recovery options in reverse logistics
reuse, remanufacturing, recycling, resouce reduction
87
what does the success of recycling depend on
* Cost effectiveness
* Whether there is a market for the recycled
materials
* Consumer participation
* Regulatory support (e.g. increased landfill
cost and recycling incentives, e.g. tax relief)
* The quality of the recycled materials.
* Innovation and technology
88
examples of multi criteria decision making problems in supply chains
1. Supplier selection decisions (criteria: e.g. price, quality, delivery, sustainability …)
2. Warehouse location decisions (e.g. proximity to market, labour, land size, proximity to customers, rent, risk, facilities, …)
3. Manufacturing decisions (e.g. production cost, potential market, available resources including labour
to support, …)
