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Flashcards by Jonas Klint Westermann, updated more than 1 year ago
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Created by Jonas Klint Westermann
over 7 years ago
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| Question | Answer |
| Explain the three different supply chain relationships - e.g. direct SC. | Direct SC: Suppliers --> Organization --> Customer Extended SC: Supplier's supplier --> Supplier --> Organization --> Customer --> Customer's customer Ultimate supplier: Includes more linkages, e.g. vertical too with third party logistics supplier, financial provider, market research firm, etc. |
| Explain the three SCM views and how they relate to "broadness" and "deepness" | - Strategic management (long term decisions, e.g. outsourcing) (deep) - Tactical management (mid-term decisions, e.g. inventory policies) - Operational management (short-term decisions, e.g. truck loading) (shallow) All of them are broad enough to extend across all business functions. |
| Discuss the three categories of SCM definitions | - SCM as a management philosophy (i.e. supply chain orientation. Firms compete as supply chains rather than autonomous entities) - SCM as an implementation of a management philosophy (linking relevant processes and eliminating redundant) - SCM as a set of management processes (function orientated organization with specialized divisions take care of their respective parts) |
| Explain the bullwhip effect. | Looking at businesses further back in the supply chain, inventory swings in larger and larger "waves" in response to customer demand (the handle of the whip), with the largest "wave" of the whip hitting the supplier of raw materials. Since this is the case, suppliers of raw materials see the greatest demand variation in response to changing customer orders or demand. |
| Outline different cost implications of the bullwhip effect | RCOTS - Manufacturer incurs excess raw material costs due to unplanned purchases - Additional manufacturing expenses due to excess capacity - Inefficient utilization and overtime - Inefficient scheduling of transportation --> Additional expenses - Premium shipping rates |
| Explain causes of the bullwhip effect. | (RPOD) - Rationing game: Strategic ordering behavior of buyers when a shortage is anticipated (i.e. retailers buy more than needed) - Price variations (i.e. buy more when price is low) - Order batching (fix order cost is not zero) - Demand signal processes (demand non-stationary and past information is used) |
| Explain postponement | Postpones the latest decisions that are closest to the customers. Commitment to the product of its final form is delayed as much as possible, i.e. white t-shirt with a name on. Will be white as long as possible and print only added at the very end |
| What are the enablers for postponement? | (ICP) - Initial steps in process are standardized across product line - Process resequencing - Component standardization |
| What is the risk pooling effect? | Producing standardized products and then customize them at the locations. Allows for standardized products to be shipped around thus reducing risk. |
| What is a vanilla box? | A vanilla box is defined as a semi-finished product that can serve more than one final product |
| Name different distribution techniques/set-ups | - Manufacturing storage with direct shipping - Manufacturing storage with in-transit merge network - Distributor storage with carrier delivery - Distributor storage with last-mile delivery - Manufacturer or distributor storage with customer pick-up. - Retail storage with customer pick-up. |
| Explain the square root law, and name its assumptions. | (ESD) Safety stocks can be reduced by the square root of the number of distribution centers. - Each DC serves exclusive market area - All DC maintains the same level of safety stock protection. - Demands at each DC is not correlated (questionable, as consumers will get cheaper products from other DCs if possible) |
| Name the different order-picking systems. | - Person-to-goods ('pick by voice or pick by light) - Goods-to-person (machines bring it) |
| Explain the economic order quantity, and assumptions. | (DOLP-IDB) Concept which determines the optimal order quantity on the basis of ordering and carrying costs C = ( [Q/2] * H ) + ( [D/Q] * A ) C = Costs per time unit H = Cost of having inventory per unit A = Ordering/set-up costs D = Demand per time unit Q = Batch quantity Assumptions: - Demand for product is constant - Ordering/set-up costs are constant - Lead time is constant - Price per unit is constant - Inventory holding cost is based on average inventory - All demands for product will be satisfied. - No back orders allowed. |
| Explain the safety stock formula and its assumptions. | (DN) |
| Name collaborative logistics processes and information systems. | - Kanban - Just-in-time - Vendor-managed inventory - Electronic data interchange - ERP |
| What is the strategic fit? | When both competitive strategy and supply chain strategies of a company have aligned goals. |
| Explain Fischer's model. | 1st dimension: Functional vs innovative products (functional = low demand uncertainty. Innovative = high demand uncertainty) 2nd dimension: Efficient vs responsive supply chain strategy (efficient = supply predictable demand efficiently at lowest cost possible. Reponsive = Respond quickly to unpredicable demands to minize stock-outs, obsolete inventory, etc) |
| Explain Lee's model. | Extends the demand part of Fischer's model to include a supply dimension. 1st dimension: Supply uncertainty of function products (e.g. some food products) or innovative products (e.g. telecom, semi conductor) 2nd dimension (strategies): - Functional product, high supply uncertainty --> risk hedging. - Innovative product, high supply uncertainty --> agility |
| Explain leagility models. | Combination of 'lean' and 'agile' 1st leagility strategy: Pareto curve approach (use lean methods for volume product lines, agile methods for less predictable product lines) 2nd leagility strategy: The decoupling point approach. Split the part of the supply chain geared towards directly satisfying customer orders (pull processes) from the part of the supply chain based on planning (push processes). Aim to be lean up to the customer decoupling point. 3rd leagility strategy: Separation of base (predictable) and surge (unpredictable) demands. Use lean for base demands, agile for surge demands. |
| Name the three SC processes. | - Management processes (processes governing core processes, e.g. establishing direction for company) - Core processes (processes enabling goods to reach external customers. Processes allowing company to reach its goals) - Support processes (processes needed in order for core processes to work). |
| What steps are there in business process re-engineering? What can be used in business process design? | 1: Develop business vision and process objectives 2: Identify processes to be redesigned 3: Understand and measure existing processes 4: Identify IT levers 5: Design and build prototype of the processes. Use business process model and notation (BPMN) which gives cross-functional end-to-end perspective. |
| Sustainability issues in supply chains. Name examples in textile, food, electronics. | Textile: 2013 Rana Plaza collapse, 1100 workers die (are consumers willing to pay extra) Food: Peak phosphorus in the future. Horse meat scandal in 2013. Electronics: Production of e.g. computers have several issues across supply chain and consumption. |
| What is the triple bottom line? Explain different perspectives/logics on SC sustainability. | Ecological sustainability Economic sustainability Social sustainability Instrumental logic: How can the supply chain benefit from addressing environmental or social issues? (economic performance main goal) Ecologically dominant logic: How can the supply chain be sustainable? |
| Name the SC trends and their consequences. | (CLEOC) - The trend towards reducing costs --> globalization, increasingly complex SC - The trend towards JIT and lean --> Efficiency rather than effectiveness - The trend towards economies of scale --> centralized distribution and manufacturing, thus less flexibility, greater risk if center burns down. - The trend towards outsourcing of non-core activities --> Loss of control - The trend towards consolidation of suppliers --> potential for supply failure. |
| What does a profile of a supply chain disruption look like? | |
| Explain the multidimensionality of supply chain risk. | |
| Issues with supply chain risk management? | - Risks vs costs (negative relationship) - Risk vs time (uncertain relationship. Create buffers and delays, but quicker response if incident) - Risk vs quality (positive relationship. Higher quality leads to lower risk) |
| Name the different risk categories. | - Disruption - Delay in material flow - Distortion (strays from forecasted values) |
| Explain the different risk assessment methods. Outline their relationship. | - Time to recovery (TTR): The time it would take for a particular facility to be restored to full functionality after disruption - Time to survive (TTS): The maximum duration that the SC can match supply with demand after disruption of a facility. If TTR is shorter than TTS, everything is fine. If TTS is shorter than TTR, there is a potential problem. |
| What is supply chain risk resilience? Name the two strategies in SC resilience. | The capacity to survive, adapt, and grow in the face of turbulent change. - Robustness: ability of a supply chain to resist change without adapting its initial stable configuration (proactive). Agility: “ability of a supply chain to rapidly respond to change by adapting its initial stable configuration (reactive).” |
| Name some of the most important factors when choosing distribution centers. | - Proximity to markets - Transport costs - Real estate costs - Proximity to customers/suppliers - Labor availability - Road access |
| Why hold inventory? | - Economies of scale, i.e. cheaper to buy more at once due to transportation costs, price reductions - Balancing supply/demand, i.e. seasonal demand/supply (winter stuff produced in winter too) - Protection from uncertainties, e.g. stock-outs. |
| Name the different types of inventory. | (CISSSD) - Cycle stock, i.e. 'refill' of inventory sold or used in production - In-transit inventory - Safety/buffer stock, i.e. excess of cycle stock due to uncertainty - Speculative stock, i.e. stock used for reasons other than cycle, e.g. to receive volume discount - Seasonal stock, i.e. accumulation of stock before seasonal period - Dead stock, e.g. obsolete items. |
| Explain the continuous review inventory control system. | |
| Explain the periodic review inventory control system. | |
| What is the ABC-XYZ analysis? | - Items with high value of demand (10% of items) and high regularity of demand should use JIT - Items with low value of demand and low regularity of demand should use monthly delivery and hold on stock. |
| How do you measure inventory turnover? | Annual sales volume at cost / average inventory (High = inventory moves through operations quickly) |
| How do you calculate the fill rate? | 1 - [ annual backorders / annual demand ] |
| What is OTIF and how do you measure it? | OTIF is the number of units delivered on time, in full. OTIF = Number of deliveries OTIF / Number of deliveries |
| If we assume for the behavior of supply chain members that they lack full rationality and are prone to misperceptions, the bullwhip effect should be mitigated by modifying what? | Individual education. |
| The vanilla box approach turns out to be extremely powerful under what? | High variance and negative correlation among product demands. |
| What is market mediation costs? | Costs that arise when supply exceeds or falls short of demand |
| The most appropriate strategy to deal with the risk that an earthquake could destroy your main distribution center in a region that is extremely rarely affected by earthquakes is to what? | Transfer the risk. |
| A contingent business interruption insurance covers what? | The damage or cause of the problem when it is somewhere other than the business that has taken out the insurance |
| Explain risk management according to risk probability and impact. | - High probability, low impact = Risk reduction - Low probability, low impact = Risk taking - Medium impact, low probability = Risk sharing - High probability, high impact = Risk avoidance - Low probability, high impact = Risk transfer |
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