Term
| How have the desires of customers shifted in the 21st century? |
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Definition
| The desire of customers have shifted from passive acceptance to active involvement in the design and delivery of specific products and services. |
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Term
| Why do many business practices from the 20th century remain even today? |
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Definition
| Such long-standing business practices remained in place and unchallenged because no clearly superior alternative existed. |
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Term
| What has become the expectation for customer orders and service? |
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Definition
Customer orders- perfect orders (delivering the desired assortment and quantity of products to the right location on, damage-free, and correctly invoiced)
Service- six-sigma (managerial commitment to zero defect) |
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Term
| What is the definition of supply chain management? |
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Definition
| Firms collaborating to leverage strategic positioning and to improve operating efficiency. |
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Term
| What is the definition of logistics management? |
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Definition
| The work required to move and geographically position inventory |
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Term
| How does logistics fit within the supply chain management concept? |
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Definition
| Logistics is a subset of and occurs within the broader framework of a supply chain. Logistics is the process that creates value by timing and positioning inventory. It is a combination of a firm’s order management, inventory, transportation, warehousing, materials handling, and packaging as integrated throughout a facility network. Serves to link and synchronize the overall supply chain as a continuous process and is essential for effective supply chain connectivity. |
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Term
What are the 3 values created by supply chain management?
Which value does logistics provide? |
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Definition
1. Economic value
2. Market value
3. Relevancy.
Relevancy? |
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Term
A) What is the purpose of an integrated supply chain?
B) What do firms hope to gain from it? |
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Definition
A) Create a multi-firm collaboration within a framework of key resource flows and constraints.
B) Supply chain structure and strategy results from efforts to operationally align an enterprise with customers as well as the supporting distributive and supplier networks to gain competitive advantage. |
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Term
| What are the five critical flows and how do they add value? |
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Definition
1. Information
2. Product
3. Service
4. Financial
5. Knowledge |
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Term
| What are the five overarching enablers of a supply chain? |
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Definition
1. Information technology
2. Integrative management and supply chain process
3. Responsiveness
4. Financial sophistication
5. Globalization |
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Term
A) What has traditionally been the focus of achieving best practice?
B) Why is this concept flawed?
C) Why does it not contribute to the lowest total cost? |
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Definition
A) Managerial attention on functional specialization.
B) The fundamental challenge of integrated management is to redirect traditional emphasis on functionality in an effort to focus on process achievement.
C) Functions performed best in class do not necessarily combine or aggregate to achieve lowest total cost or highly effective processes. |
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Term
| What is enterprise extension and how is it different than vertical integration? |
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Definition
Collaborative behavior between firms that integrate processes will maximize customer impact, reduce overall risk, and greatly improve efficiency.
Vertical integration is purchasing suppliers...rarely successful. |
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Term
| What is the information sharing paradigm? |
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Definition
| The widespread belief that achieving a high degree of cooperative behavior requires that supply chain participants voluntarily share operating information and jointly plan strategies. |
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Term
| What is the process specialization paradigm? |
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Definition
| A commitment to focusing collaborative arrangements on planning joint operations with a goal of eliminating nonproductive or non-value-adding redundancy by firms in a supply chain. |
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Term
| What is an integrated service provider? |
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Definition
| A firm that markets a range of logistics services that include all work necessary to accommodate customers, ranging from order entry to product delivery. (ex. UPS and Nike) |
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Term
| What is the value proposition of fore-hire transportation? |
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Definition
| Carrier’s capability to provide shared transportation services for multiple shippers (this is based on specialization, efficiency, and scale economies). |
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Term
| What is the value proposition of fore-hire warehousing? |
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Definition
| Two significant benefits are gained when shippers use public warehouses: (1) elimination of capital investment in warehouse buildings and (2) the ability to consolidate small shipments for combined delivery with products of other firms that use the same public warehouse. |
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Term
| What is the difference between an asset-based and non-asset-based carrier? |
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Definition
| Asset-based (third-party) firms own and operate transportation equipment and warehousing buildings whereas nonasset service (fourth-party) firms specialize in providing comprehensive information services that facilitate supply chain arrangements. |
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Term
A) What is the difference between the anticipatory and responsive business models?
B) Why are responsive business models sometimes difficult to implement? |
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Definition
A) In an anticipatory business model, almost all of the essential work has been traditionally performed in anticipation of future requirements (forecasting). This business model is highly risky. Responsive business models, on the other hand, waits to perform essential work until that sale has been made. (See Figures 1.2 and 1.3 on pg. 12-13)
B) All members of the supply chain must synchronize their operations. The speed necessary to complete orders on time. |
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Term
| What is the general concept of postponement? |
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Definition
| reduce the anticipatory risk of supply chain performance. |
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Term
| What is manufacturing or form postponement? |
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Definition
| Products are manufactured one order at a time with no preparatory work or component procurement until exact customer specifications are fully known and purchase confirmation is received. |
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Term
| What is geographic or logistics postponement? |
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Definition
| Building and stocking a full-inventory at one or a limited number of strategic locations. Forward deployment of inventory is postponed until customer orders are received. |
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Term
| What is the cash-to-cash conversion cycle and why is it important to minimize it? |
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Definition
| The time required to convert raw material or inventory purchases into sales revenue. It is important to minimize it because a goal of supply chain design is to reduce and control order receipt-to-delivery time in an effort to accelerate inventory turns. |
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Term
| What is dwell-time and why is important to minimize it? |
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Definition
| The ratio of time that an asset sits idle to the time required to satisfy its designated supply chain mission. A collateral benefit of reducing dwell time and the associated logistics cost is the ability to reduce investment in inventory and related assets. |
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Term
| What are the four significant differences between domestic and international logistics? |
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Definition
1. Distance
2. Documentation (laws and regulations)
3. Diversity (work practices and local government)
4. Demand |
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Term
| (Quiz 1): 1. What is the definition of a perfect order? (pg 3) |
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Definition
A. Delivering the right product damage free and correctly invoiced
B. Delivering the right product to the right location on time
C. Delivering the right product with all metrics, from order entry to
delivery, at 100%
D. Answers A and B (CORRECT) |
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Term
| Quiz 1) 2. Supply Chain Management is defined as (pg 4): |
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Definition
A. Firms collaborating to leverage strategic positioning and to improve operating efficiency (CORRECT)
B. Managing a company’s supply chain department
C. Using technology to integrate with both suppliers and customers
D. Managing the work require to move and strategically position
inventory |
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Term
| Quiz 1) 3. Having the right assortment of products for the right price to create a unique product bundle for the customer is (pg 5) |
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Definition
A. Economic value
B. Market value (CORRECT)
C. Relevancy value
D. Convenience value |
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Term
4. In order to achieve lowest total cost, each business function
must (pg 8) |
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Definition
A. be willing to increase costs for the overall benefit of the company (CORRECT)
B. strive for the lowest possible cost within its own function
C. Achieve maximum efficiencies
D. Both A and C |
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Term
5. Vertical integration and supply chain extension are essentially
the same concept (pg 9) |
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Definition
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Term
Quiz 1) 6. A focus on forecasts and pushing product to the customer is
a(n) _______ business model (pg 12) |
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Definition
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Term
| Quiz 2) 1. The more responsive the supply chain, the greater the importance of (pg 27) |
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Definition
| B. accurate and timely customer information |
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Term
| Quiz 2) 2. What are the three logistics functions that do not operate independently but play an integral part in other functions (pg 29) |
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Definition
| A. warehousing, materials handling, and packaging |
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Term
| Quiz 2) 3. Once a facility network has been designed, it is more or less static and does not need to be changed. (pg 31) |
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Definition
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Term
Quiz 2) 4. Ideally, in a responsive system, inventory is not deployed until
(pg 34) |
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Definition
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Term
| Quiz 2) 5. As a general rule, the larger a shipment and the _______ the lower is the cost per unit (pg 35) |
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Definition
| A. longer the distance traveled |
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Term
| Quiz 2) 6. The term “master facility” is often used to describe: (pg 39) |
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Definition
A. The source of money for college students
B. A facility that is dedicated to servicing a manufacturing facility
C. An inventory replenishment source for smaller facilities (CORRECT)
D. The oldest or original facility in a network |
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Term
| What are the expectations of customers regarding logistics, especially in highly developed nations? |
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Definition
| For highly developed countries: They expect product delivery will be performed as promised. Namely: Timely, error-free logistics every time they order, even during the busiest periods. They have little to no tolerance for failure |
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Term
| What areas are managed under logistics? |
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Definition
| Order processing, inventory, transportation, and the combination of warehousing, material handling, and packing. |
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Term
| What is the goal of logistics? |
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Definition
| Supporting procurement, manufacturing, and customer accommodation supply chain operational requirements. |
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Term
| Why are firms excited about logistics within their organization? |
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Definition
| Coming to the understanding that select firms use logistical competency to help achieve competitive advantage. |
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Term
| What are the three areas of service benefits? |
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Definition
-Availability- Traditionally, having more on hand is needed to achieve higher availability but IT has made companies more flexible so they do not need more capacity.
-Operational Performance: Speed, Consistency, Flexibility. Concerned with how a firm handles all aspects of customer requirements, including service failure.
-Service reliability: This involves the quality attribute of logistics, logistics helps to fulfill this through accurate measurement of availability and operational performance |
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Term
| What has been the prevailing managerial practice regarding cost minimization? |
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Definition
| Focus on achieving lowest cost for each individual function of logistics with little or no attention to integrated total cost trade-offs. they would focus on minimizing functional costs. |
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Term
| How does the traditional cost perspective differ from the total cost concept? |
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Definition
| Development of the total cost concept opened the door to examine how functional costs interrelate and impact each other. They study how cutting cost in one area may raise costs in another area by more than the initial savings. |
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Term
| What continues to serve as a barrier to the total cost concept? |
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Definition
| The implementation of effective logistical processes is the main challenge while long standing accounting practices are the barriers to fully implementing total cost of logistical solutions. |
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Term
| What is the logistics value proposition? |
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Definition
| Matching operating competency and commitment to key customer expectations and requirements |
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Term
| What constitutes the appropriate logistics strategy? |
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Definition
Very seldom will wither the lowest total cost or the highest attainable customer service constitute the appropriate logistics strategy. Likewise, the desired combination will be different for different customers. A well designed logistical effort must provide high customer impact while controlling operational variance and minimizing inventory commitment. Most of all it must have relevancy to specific customers.
a sound strategy requires a capability to estimate operating cost required to achieve alternative service levels. |
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Term
| What are the three main areas of logistics? |
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Definition
1. order processing - handling customer requirements and using the information to exchange with trading partners. it is fundamental in that info is generated here for the logistics operations.
2. Inventory - enables a firm to achieve desired customer service with the minimum inventory commitment. Helps the firm in meeting customer requirements while maintaining relatively low inventory .
3. Transportation - the operational area of logistics that moves and positions inventory. |
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Term
| What are the three functional areas that are integral to logistics operations? What does it mean for them to not have an independent status? |
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Definition
1.Warehousing
2. Materials Handling
3. Packaging
These functional areas are there to assist and facilitate the purposes of the 3 main areas of logistics. |
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Term
| How does facility network design impact customer service? |
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Definition
| The network design must be placed so that it can more easily service the most demanding areas/prime markets. |
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Term
| Why must the network design be continually analyzed and changed? |
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Definition
| The importance of continuously modifying the facility network design to accommodate change in demand and supply infrastructure can’t be overemphasized. Product assortments, customers, suppliers, and manufacturing requirements are constantly changing in a dynamic competitive environment. The selection of a superior locational network can provide a significant step toward achieving competitive advantage. |
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Term
| What are the two main flows in logistical operations? |
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Definition
1) Inventory: From the initial purchase of material or component, the logistics process adds value by moving inventory when and where needed.
2) Information- Information flow identifies specific locations within the logistical system that have requirements. Information also integrates the three operating areas. Within individual logistics areas, different movements requirements exist with respect to the size of order, availability of inventory, and urgency. The primary objective of information flow is to reconcile these differentials to improve overall supply chain performance. |
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Term
What are the six objectives of logistical integration?
How do they contribute to the logistics value proposition?
Why is the importance of each relative to the firm’s strategy? |
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Definition
1. Responsiveness- firm’s ability to satisfy customer requirements in a timely manner
2. Variance Reduction- the elimination of system disruptions; all operating areas are susceptible to variance
3. Inventory Reduction- an integrated logistics system must control asset commitment (the financial value of deployed inventory) and turn velocity
4. Shipment Consolidation- achieve this in an effort to reduce transportation cost; The LARGER a shipment and the LONGER the distance it is transported, the LOWER the COST/UNIT
5. Quality- Total Quality Management (TQM)- objective is continuous quality improvement
6. Life Cycle Support- aftermarket services, guarantees, etc.
i. Requires cradle-to-cradle logistics- this goes beyond reverse logistics and recycling to include aftermarket service, product recall, and product disposal |
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Term
| What is an echelon structure? |
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Definition
| having an echelon structure means that the flow of products typically proceeds through a common arrangement of firms and facilities as it moves from origin to final destination. Supplier - distributor - manufacturer - wholesaler - retailer - customer |
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Term
| What is a direct structure? |
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Definition
| the opposite of echelon where the product goes directly to the customer or from a limited number of steps to limit inventory. Logistic executives often prefer this method because it reduces anticipatory inventory and intermediate product handling. |
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Term
| What is a combined echelon direct structure? |
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Definition
| a structure where the benefits of both structures are used. For fast moving products it would use forwards warehouses (echelon structure) while other more costly, riskier items are stocked at a central location for direct shipment. |
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Term
| What is the importance of flexibility? |
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Definition
| to respond to emergencies. Using a flexible operation is typically based on the importance of a specific customer or the critical nature of the product being ordered. |
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Term
| What are five ways a company can be flexible? |
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Definition
1) the delivery site is serviced by two different logistics points (warehouse or distribution center) so that the the company can use either point to diminish inventory or respond to mass orders
2) Using an alternative channel arrangement
3)Selective inventory stocking strategy, using master facilities to distribute and support smaller ones.
4) Cross decks (multiple companies use the same facility to quickly go and and then out) and service suppliers
5) Integrated service providers, to consolidate products for delivery. |
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Term
| What is a performance cycle? |
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Definition
| represents the element of work needed to complete the logistics related to customer accommodation, manufacturing, or procurement |
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Term
| What are the three aspects involved in a performance cycle? |
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Definition
1) customer accommodation
2) manufacturing
3) procurement |
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Term
| What is the input to a performance cycles? |
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Definition
| demand, typically an order that specifies requirements for a product of material. |
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Term
| What is the output to a performance cycle? |
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Definition
| is the level of performance expected from the combined logistics operations |
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Term
| Why is it important to understand performance cycle uncertainty? |
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Definition
because with how the performance cycle is set up will randomly introduce operational variance.
The message is, that each performance cycle needs to be individually designed and operationally managed. |
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Term
| What are the 2 benefits of a public warehouse? (pg. 10) |
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Definition
-Elimination of capital investment in warehouse buildings.
-Ability to consolidate small shipments for combined delivery with products of other firms that use the same public warehouse. |
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Term
| What is the key to quality logistics, or service reliability? (pg. 25) |
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Definition
| Accurate measurement of availability and operational performance. |
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Term
| What is the objective of an inventory strategy? (pg. 27) |
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Definition
| Achieve desired customer service with the minimum inventory commitment. |
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Term
| How does material handling contribute to product damage? (pg. 30) |
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Definition
| When it is performed in an inferior manner. The more a material is handles the more likely it is it gets damaged |
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Term
| What is the purpose of safety stock? (pg. 41) |
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Definition
| To protect against variance in demand or operational lead time. |
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