Supply Chain Management Questions and Answers

Question 11 Briefly explain Sustainable Supply Chain Management (SSCM)? The strategic, transparent integration and achievement of an organization's environmental, social and economic goals in the systematic coordination of key inter-organizational business processes for improving the long-term economic performance of the individual company and its chains A sustainable supply chain includes everything from: - Extraction of raw materials - Fair wages and labor, who are actually in your supply chain? Make sure there is no use of child labor and that everyone is treated fairly and compensated fair wages and not being abused = ethical labor. - The planet, the environment, that anything your business do, either service or - manufacturing, make sure that nothing harms the environment. It could be changing your car fleet to electrical or hybrid cars. Or make sure the manufacturing doesn’t contribute to pollution problems. That your profit is legal, in other terms, that you are not abusing the society or harming people. If you are running a casino with the majority of customers from poor economic backgrounds and broken economies that are in deep depths, is it fair to keep abusing these people for your own profit? Question 12 Explain the concept of “agility” in supply chain management. The ability/power of a supply chain to move quickly and easily in response to changes in the demand circumstances or state of affairs. For example, the ability of a supply chain to meet the demand of a sudden change in the fashion trend quickly and easily. ….therefore may be defined as the ability of an organization to respond rapidly to changes in demand both in terms of volume and variety. Question 13 Differentiate between forward logistics and reverse logistics Forward logistics can be described as all logistics flowing from upstream downstream (towards the final consumer) Reverse logistics are all logistics of products after the point of sale and moving upstream from the final consumer. Question 14 Explain the terms JIT & VMI and what they stand for? JIT stands for just-in- time, a production strategy that seeks to improve return on investment by reducing inventory and its cost. VMI stands for Vendor Managed Inventory and it is an inventory management approach whereby the supplier is responsible for managing customers inventory. Question 15 What is a Bow Tie relationship? The bow tie relationship represents a transactional approach to relationships where only one point of contact exists between two companies/entities/organizations. THE OPPOSITE to Bow Tie is DIAMOND! Question 16 Outline and explain (briefly) four basic strategies for managing P and D times in supply pipelines. Question 17 Define and explain the Customer Order Decoupling Point The point that separates the decisions of production made under uncertain circumstances from decisions of production made under certain circumstances. Also: the point in the supply chain where the customer is actively involved in the engineering or/and production of the final product. Question 18 How is supply chain management different from logistics? Logistics is that part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, between point of origin and the point of consumption. On the other hand, supply chain management is the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Question 19 Briefly explain the concept of “Supply Chain Visibility”. Supply chain visibility is the ability of a supply chain to track parts, components or products in transit from the manufacturer to their final destination. Question 20 What is the difference between Supply Chain integration and Supply Chain collaboration? Integration is collaborative mode of supply chain operation that links three or more entities in a sort of information highway. Collaboration is any type of common, coordinated effort between two entities within a supply chain to achieve a common goal. Question 21 What is supply chain management, as defined by the course material? Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities coordination and collaboration with channel partners (suppliers, intermediaries, third party service providers, and customers). In essence, SCM integrates supply and demand management within and across countries. Question 22 Briefly outline and explain two challenges to undertaking international logistics and location strategies? Extended lead time of supply 1. Extended and unreliable transit times 2. Multiple consolidation and break points 3. Multiple freight modes and cost options 4. Price and currency fluctuation A location strategy is a plan for obtaining the optimal location for a company by identifying company needs and objectives, and searching for locations with offerings that are compatible with these needs and objectives. Formulating a location strategy typically involves the following factors: 1. Facilities. Facilities planning involves determining what kind of space a company will need given its short-term and long-term goals. 2. Feasibility. Feasibility analysis is an assessment of the different operating costs and other factors associated with different locations. 3. Logistics. Logistics evaluation is the appraisal of the transportation options and costs for the prospective manufacturing and warehousing facilities. 4. Labor. Labor analysis determines whether prospective locations can meet a company's labor needs given its short-term and long-term goals. 5. Community and site. Community and site evaluation involves examining whether a company and a prospective community and site will be compatible in the long-term. 6. Trade zones. Companies may want to consider the benefits offered by free-trade zones, which are closed facilities monitored by customs services where goods can be brought without the usual customs requirements. The United States has about 170 free-trade zones and other countries have them as well. 7. Political risk. Companies considering expanding into other countries must take political risk into consideration when developing a location strategy. Since some countries have unstable political environments, companies must be prepared for upheaval and turmoil if they plan long-term operations in such countries. 8. Governmental regulation. Companies also may face government barriers and heavy restrictions and regulation if they intend to expand into other countries. Therefore, companies must examine governmental—as well as cultural—obstacles in other countries when developing location strategies. 9. Environmental regulation. Companies should consider the various environmental regulations that might affect their operations in different locations. Environmental regulation also may have an impact on the relationship between a company and the community around a prospective location. 10. Incentives. Incentive negotiation is the process by which a company and a community negotiate property and any benefits the company will receive, such as tax breaks. Incentives may place a significant role in a company's selection of a site. What makes a successful strategy? Five principles of strategic positioning, related to logistics strategy, are as follows: - ● A unique value proposition: determining what makes the product/service different from its competitors. - ● A tailored supply chain: governed by consistent order winning and qualifying criteria. - ● Identify the trade-offs: by choosing not just the priorities but also what not to do. A responsive supply chain is not compatible with an efficient supply chain - ● Align logistics processes: so that processes are mutually reinforcing. - ● Continuity: logistics processes are improved continually and consistently over time. Question 23 What is Vendor Managed Inventory (VMI) Why is this concept popular for retailers and suppliers? Question 24 What is reverse logistics, as studied within the course material? Reverse logistics refers to all activity associated with a product/service after the point of sale, the ultimate goal to optimize or make more efficient aftermarket activity, thus saving money and environmental resources. - Reverse Logistics Association …the collection, recycling, remanufacturing, refurbishing, reuse, reselling and disposal of products, and the achievement of materials and resource reduction. 1. What is the SCOR model? And how many levels are possible within this model? Outline and describe the five distinct management processes of the SCOR model. If needed make necessary assumptions and state them in your answer. SUPPLY CHAIN OPERATIONS MODEL SCOR MODEL: The supply chain operations reference model (SCOR) is a management tool used to address, improve, and communicate supply chain management decisions within a company and with suppliers and customers of a company Levels: 1. 2. 3. 4. 5. Plan: This process contains all activities regarding execution of processes such as resource assignment, capacity planning and aggregation of procurement-, production- and distribution requirements. Source: These procurement processes contain purchasing, receipt, assay and the supply of incoming material as well as the related infrastructural arrangements such as supplier choice or the configuration of the supply agreement. Make: All processes that transform goods into their final condition in order to satisfy the market demand. Deliver: Enfolds processes to deliver products to the customers. It usually contains request management the transportation management and the warehouse management. Return: Contains processes to return damaged products from the customers or return excess products. Closely related to the Deliver processes. 2. What is Efficient Consumer Response (ECR)? Outline and explain the different ECR improvement categories that you know, giving examples of each category. Write your answer on a separate paper. Write on one side of the paper only. 3. Describe the service quality gap model, and discuss in detail how the gaps that are present within this model can impact customer satisfaction. The Gap Model of Service Quality (aka the Customer Service Gap Model or the 5 Gap Model) is a framework which can help us to understand customer satisfaction. 4. Outline and discuss four basic strategies for managing P and D times in supply pipelines. By using any of these strategies depending on our production or business, we can move the CODP and reduce lead time for the customer. The difference between P and D time are called LEAD-TIME-GAP. Differences between P-times and D-times are referred to as the lead-time gap. P time is production time P-time is a measure of the total time it takes for a product to go through a pipeline. Thus it includes source, make and deliver lead times: it is not just the time it takes to supply from stock. The measure starts the moment a new order is raised. It includes all the time needed to take a product through all the processes necessary to make and deliver that product including time in storage (work-in-progress or finished inventory). D time is Demand time For example, the time a customer is willing to wait for ‘fast food’ is comparatively short. Assuming you are in a city with plenty of options, once you realise you are hungry, you probably will want to be eating within 10 minutes. This D-time will include the time it takes to walk to the cafeteria/restaurant, wait in a queue, sit at a table and be served. By contrast, as a customer of an up-market restaurant, you may have traveled for an hour, spent 20 minutes in a reception area over an aperitif and studied the menu for 15 minutes, before happily waiting for a further half an hour for the meal to be cooked and served. Ways to reduce P-time. These can be summarised as follows: ●Control by optimising throughput and improving process capability. ●Simplify by untangling process flows and reducing product complexity. ●Compress by straightening process flows and reducing batch sizes. ●Integrate by improving communications and implementing teams. ●Coordinate by adding customer-specific parts as late as possible. ●Automate with robots and IT systems. 5. Outline and discuss four factors that support (underpin) the Just-In-Time principle 6. What factors do you need to consider when deciding where to place inventory? 1. 2. 3. 4. 5. Customer expectation – how long can they wait? Distance and mode of transport Inventory costs Transport costs Volatility of demand 7. Describe the main components of a supply chain, and explain how the structure of the supply chain creates a need for interdependence between different actors in the supply chain. 8. Outline and discuss four operating principles of procurement. 9. What is humanitarian logistics as defined by the course literature? Outline and discuss 4 differences between humanitarian and business supply chains. Humanitarian logistics is critical to saving lives but it is a huge challenge, because it faces extreme conditions and a high level of uncertainty. Frequently, there is little, or no, warning of the impending disaster, nor information about the scale of it. So it is widely accepted that an agile logistics strategy is an appropriate response. Defined as: The process and systems involved in mobilizing people, resources, skills and knowledge to help vulnerable people affected by disaster. Four major differences between humanitarian logistics and a supply chain are: - Unpredictability of demand location, time, type and dimension. - Suddenness of large demand occurrence, short lead time and high variety of goods to supply. - Timeliness of delivery related to the effect on beneficiaries. - Lack of resources (supply, people, technology, transport capacity and money). One of the most fundamental differences could be defined as: - Unlike the private sector where the bottom line [profit] motivates the constant need to measure performance and invest in improving it, the humanitarian sector operates without the market forces of demand and supply regulated through price. Indeed, an important distinction is that in humanitarian logistics the customer is not clear. On the one hand, the ‘donors’ provide the funds and on the other hand, the ‘beneficiaries’ receive the service. Therefore, the business model is different 10.Describe the basic concepts of supply chain management and explain the importance of the supply chain and its value for competitive advantage of the firm. 11.Explain the interdependence between different actors and flows in the supply chain. this