Module2.3

Question 1

Facilities: Role in the Supply Chain

Answer 1

Key Points:
- Represents the ‘where’ of the supply chain
- Types:
- Manufacturing facilities: Transform inventory into new states
- Warehouses: Store inventories
- Decisions impact long-term supply chain structure.

Question 2

Components of Facilities Decisions

Answer 2

Key Points:
- Location: Centralisation vs decentralisation
- Capacity: Variable and fixed
- Manufacturing Methodology: Product-focused vs process-focused
- Warehousing Methodology: Cross-docking, AGV, picking techniques, etc.

Question 3

Cross-Docking: Overview

Answer 3

Definition: Goods move directly from inbound to outbound dock.
Benefits:
- Consolidation
- Faster delivery
- Reduced warehouse space
- Optimised inventory control
- Lower costs (transportation and labour).

Question 4

Facilities: Role in Competitive Strategy

Answer 4

Trade-Off: Responsiveness vs Efficiency
- For Responsiveness:
- Many small facilities
- Decentralisation
- For Efficiency:
- Few large facilities
- Centralisation (economies of scale).

Question 5

Inventory: Role in the Supply Chain

Answer 5

Key Points:
- Exists due to supply-demand mismatch
- Types:
- Raw materials, WIP, finished goods
- Influences:
- Material flow time
- Throughput rate.

Question 6

Components of Inventory Decisions

Answer 6

Key Types:
- Cycle Inventory: Used to meet demand between shipments
- Safety Inventory: Buffer for unexpected demand
- Seasonal Inventory: Built for predictable demand variability.

Question 7

Transportation: Role in the Supply Chain

Answer 7

Definition: ‘How’ the product moves within the supply chain
Purpose:
- Connects supply chain stages
- Supports disintegration (economies of scale/scope).
Time Frame: Medium-term impact.

Question 8

Information: Role in the Supply Chain

Answer 8

Key Points:
- Enables coordination and connectivity
- Supports:
- Production scheduling
- Inventory levels
- Essential for daily operations across stages.

Question 9

Sourcing (Purchasing): Overview

Answer 9

Definition: Business processes for purchasing goods/services
Key Decisions:
- Vertical integration (outsourcing)
- Sourcing strategy (single/multiple suppliers)
- Supplier portfolio and contracts.

Question 10

Pricing: Role in the Supply Chain

Answer 10

Definition: Determines charges to customers
Uses:
- Coordinate supply-demand
- Differentiate customer segments
Strategies: Optimal pricing to adjust demand.