Module2

Question 1

What is Strategic Fit?

Answer 1

• Strategic fit means aligning competitive strategy with supply chain capabilities
• Ensures all supply chain activities support customer priorities

Question 2

What is the role of a Value Chain?

Answer 2

• A chain of key functions: product development, purchasing, operations, distribution, marketing
• Support functions (IT, HR, finance) enable these key functions

Question 3

Define Competitive Strategy

Answer 3

• Specifies the set of customer needs a firm seeks to satisfy
• Guides products and services offered

Question 4

Define Product Development Strategy

Answer 4

• Determines the portfolio of new products
• Guides innovation and product design

Question 5

Define Marketing and Sales Strategy

Answer 5

• Specifies market segmentation
• Involves product positioning, pricing, and promotion

Question 6

Define Supply Chain Strategy

Answer 6

• Determines nature of material purchasing, supply/transportation, production, and distribution
• Must align with competitive strategy to achieve strategic fit

Question 7

What is Demand Uncertainty?

Answer 7

• Demand uncertainty: unpredictability of customer demand
• Implied demand uncertainty: uncertainty given the attributes customers want and the portion of demand the supply chain must handle

Question 8

What is Supply Uncertainty?

Answer 8

• Reflects how capable supply sources are
• Increases with frequent breakdowns, unpredictable yields, poor quality, or inflexible capacity

Question 9

Compare Functional vs Innovative products

Answer 9

• Functional: predictable demand, low margins, long life cycles
• Innovative: unpredictable demand, high margins, short life cycles

Question 10

Define Supply Chain Responsiveness

Answer 10

Ability to:

• Respond to wide quantity ranges
• Meet short lead times
• Handle product variety
• Build innovative products
• Provide high service level

Question 11

What is the Cost-Responsiveness Frontier?

Answer 11

• Representation of trade-off between efficiency (low cost) and responsiveness (flexibility)
• Firms aim to be on the efficient frontier to optimize both

Question 12

How to achieve Strategic Fit?

Answer 12

1. Understand supply and demand uncertainty
2. Understand the supply chain’s capabilities
3. Align capabilities to customer needs

Question 13

What is the consequence of Misfit?

Answer 13

• Failure to align supply chain capabilities with competitive strategy
• Leads to lower performance and potential loss

Question 14

What is Scope of Strategic Fit?

Answer 14

• The functions and stages within a supply chain that develop an integrated strategy
• Ranges from intraoperational to intercompany scopes

Question 15

List 4 expanding Strategic Scopes

Answer 15

• Intracompany intraoperational scope
• Intracompany intrafunctional scope
• Intracompany interfunctional scope
• Intercompany interfunctional scope

Question 16

Describe Intracompany Intraoperational scope

Answer 16

• Focus on one operation within a single function
• Each operation optimizes its own performance independently

Question 17

Describe Intracompany Intrafunctional scope

Answer 17

• Includes all operations within a function
• Aims to maximize performance for that function (not entire firm)

Question 18

Describe Intracompany Interfunctional scope

Answer 18

• All functional strategies within a company support each other
• Maximizes firm performance, but not total supply chain profits

Question 19

Describe Intercompany Interfunctional scope

Answer 19

• All stages coordinate strategy across all functions
• Goal: maximize overall supply chain performance and profit

Question 20

Name the 3 Logistical Drivers

Answer 20

1. Facilities
2. Inventory
3. Transportation

Question 21

Name the 3 Cross-functional Drivers

Answer 21

1. Information
2. Sourcing (Purchasing)
3. Pricing

Question 22

What is the role of Facilities?

Answer 22

• The where of the supply chain
• Can be manufacturing or storage (warehousing)
• Important for long-term decisions

Question 23

Explain Cross-docking

Answer 23

• Inbound goods are unloaded, sorted, and loaded to outbound trucks without storage
• Benefits:
  
  • Faster delivery
  • Less warehouse space needed
  • Lower costs

Question 24

What is the role of Inventory?

Answer 24

• Buffers mismatches between supply and demand
• Affects flow time and throughput
• Includes raw materials, WIP, finished goods

Question 25

List **Types of Inventory**

Answer 25

- **Cycle** inventory (depends on lot size) - **Safety** inventory (to handle unpredictability) - **Seasonal** inventory (for predictable demand fluctuation)

Question 26

What is the role of **Transportation**?

Answer 26

- Moves product **between stages** of the supply chain - Enables **disintegration** for economies of scale/scope - Medium-term impact on **cost** and **responsiveness**

Question 27

What is the role of **Information**?

Answer 27

- Connects stages of the supply chain - Enables **coordination**, **forecasting**, and **scheduling** - Can reduce need for **trade-offs** by improving both **efficiency** and **responsiveness**

Question 28

What is the role of **Sourcing (Purchasing)**?

Answer 28

- Decides **where** to buy goods/services - Determines **vertical integration**, **supplier selection**, and **contracts** - Affects total **supply chain profitability**

Question 29

What is the role of **Pricing**?

Answer 29

- Defines **how much** customers pay - Can match **supply** and **demand** or target **segments** - Impacts overall **profit**