Supply Chain Management

Question 1

What is the definition of Supply Chains?

Answer 1

A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system. It spans procurement, internal transformation, and distribution.

Question 2

What is Vertical Integration?

Answer 2

The proportion of the supply chain that the company owns. Also termed “make or buy.” This is when an organization owns a supplier or distributor to control it’s supply chain.

Question 3

Why would an organization not want to “outsource”? (do things themselves instead)

Answer 3

“Control” (strategic process, intellectual property, “messy” coordination, etc.)

Question 4

What is an example of Vertical Integration?

Answer 4

Tesla’s battery supply chain. They built their own battery factory to drive down their costs and further control their supply chain.

Question 5

What is Procurement?

Answer 5

Purchasing. Buying services or materials we elect not to develop internally.

Question 6

What are the 3 types of purchasing?

Answer 6

1. Centralized purchasing = single purchasing location
2. Stockless Purchasing = supplier delivers to production
3. Blanket Purchase Orders (POs) = long term purchase commitment

Question 7

What is the concept of “Purchasing Units” used by Arcteryx?

Answer 7

They use a purchasing unit system where their contract specifies an order of 50,000 garment units, where procurement then selects the mix of units down the line. Ex) Shirt = 0.1 units, Jacket = 1 unit, etc.

Question 8

What is Vendor Managed Inventory (VMI)?

Answer 8

This is when vendors manage the customer’s inventory of the products they supply (ordering, stocking shelves, etc.)

Question 9

What are the benefits to the customer that uses Vendor Managed Inventory?

Answer 9

Less administration (ordering) costs
Less chance of stockouts

Question 10

What are the downfalls to the customer that uses Vendor Managed Inventory?

Answer 10

Trusting the vendor
Potential staff layoffs

Question 11

What are the benefits to the manufacturer that uses Vendor Managed Inventory?

Answer 11

Knowledge of demand
Potentially more sales (due to less stockouts)

Question 12

What are the downfalls to the manufacturer that uses Vendor Managed Inventory?

Answer 12

Increased staffing and use of technologies (vehicles, remote technology, etc.)

Question 13

What is Supplier Consolidation?

Answer 13

Working closer with fewer suppliers. This entails strenghtening the relationship of the supplier you work with to reap the benefits in supply chain.

Question 14

What is time utility?

Answer 14

WHEN: provides goods to customers when wanted, not when produced. Ex) Winter Coats

Question 15

What is place utility?

Answer 15

WHERE: provide goods where they are needed, not where they are produced. Ex) Coffee at Coffee Shops

Question 16

What is form utility?

Answer 16

WHAT: physical/chemical change in goods and/or packaging. Ex) Colour addition to toys

Question 17

What are the benefits of intermodal shipping containers?

Answer 17

Convenient (Less handling)
Extensive network
Optimal cost
Increased security

Question 18

What is Shipping Consolidation?

Answer 18

Strengthening distribution by having all suppliers deliver to one warehouse, to then ship to retail locations

Question 19

What is cross-docking?

Answer 19

In shipping consolidation, when we ship to one warehouse, we then immediately ship to retail locations rather than storing the product.
Cross docking = receiving AND shipping all at once

Question 20

What is drop shipping?

Answer 20

When an order of a product goes directly from a supplier to the customer, rather than the supplier to the retailer to the customer. Here, the retailer never touches the products.

Question 21

Describe Postponement of Place Utility.

Answer 21

This refers to delaying the distribution of a product until the last possible moment, keeping inventory at one warehouse then shipping to retail locations based on demand.

Question 22

Describe Postponement of Form Utility.

Answer 22

This refers to delaying the assembly of a product until the last possible moment, keeping the product and adding specific components based on demand. Ex) Colour Addition on Toys

Question 23

Describe Labeling Postponement.

Answer 23

When products are completed with the exception of labeling, which is applicable when a manufacturer produces a generic product that is sold under multiple labels. Ex) Labeling Cans in International Markets

Question 24

Describe Packaging Postponement.

Answer 24

When products are completed but stored in bulk without packaging. Ex) Batteries

Question 25

Explain “Physically Efficient” Supply Chain Process.

Answer 25

Supply predictable demand efficiently at the lowest possible cost. (Focus on low cost and quality)

Question 26

Explain “Market-Responsive” Supply Chain Process.

Answer 26

Respond quickly to unpredictable demand, minimize stockouts &, markdowns. (Focus on speed, flexibility, and quality)

Question 27

Explain Humanitarian Supply Chains.

Answer 27

Mobilizing people, resources, skills and knowledge to help vulnerable people affected by disaster.

Question 28

Name the differences in Humanitarian Supply Chains.

Answer 28

1. Cost not as critical as speed
2. High inventory levels
3. Perishable items expire
4. Many stakeholders to coordinate with
5. High visibility of performance

Question 29

What is a reverse supply chain?

Answer 29

The process or activities associated with retrieving a product from a customer to dispose or reuse it.

Question 30

Explain Radio Frequency IDentification (RFID)

Answer 30

An inexpensive “chip tag” attached to items that stores information and enables live tracking.

Question 31

What are the benefits to RFID in Supply Chain?

Answer 31

Improved inventory visibility and accuracy (customer service)
Ability to stock a wider variety of products (low admin per item)

Question 32

Explain 3D Printing

Answer 32

Uses additive manufacturing processes to build 3D objects ‘layer upon layer’

Question 33

What are the benefits of 3D Printing in Supply Chain?

Answer 33

Reduces lead time (batch manufacturing & transportation)
Reduces transportation costs and carbon footprint (print near use)

Question 34

Explain Blockchain

Answer 34

Provides all partners in a transaction with a secure, distributed ledger that allows them to see the same information at the same time

Question 35

What is the benefit of Blockchain in Supply Chain?

Answer 35

Can significantly increase transparency from product origin, through the shipping process, and to customer delivery.

Question 36

What is Modular Design Flexibility?

Answer 36

The creation of products (goods and services) from some combination of basic, pre-existing subsystems (or modules). ex) Security Camera

Question 37

What is the Bill of Material?

Answer 37

Outlines the components required for a product.

Question 38

What is Routing?

Answer 38

Outlines the process/steps needed to produce a product.

Question 39

What is a Work Breakdown Structure?

Answer 39

Outlines the list of tasks to finish a project.

Question 40

What are the main priorities of Just-In-Time Inventory?

Answer 40

1. Reduce Waste***
2. Reduce Inventory*