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BCOR 360 Exam 1
Terms in this set (52)
Supply Chain Management
The active management of supply chain activities and relationships in order to maximize customer value and achieve a sustainable competitive advantage.
A network of manufacturers and service providers that work together to create products or services needed by end users. These manufacturers are linked together through physical flows, information flows, and monetary flows.
Supply Chain Operations Reference (SCOR) Model
PLAN: Activities which seek to balance demand requirements against resources and communicate these plans to the various participants
BUY/SOURCE: Activities which include identifying, developing, coordinating suppliers and the delivery of incoming goods and services
MAKE: Activities designed to produce an actual good or service
DELIVER: Activities which store and transport goods to a new destination
RETURN: Activities for returning and processing defective or excess products and materials (often called "Reverse Logistics")
The organization with which one identifies when discussing Supply Chain Management
Activities or firms positioned earlier in the Supply Chain (prior to the Focal Firm)
Activities or firms positioned later in the Supply Chain (after the Focal Firm)
1st Tier Supply
Direct supply to the Focal Firm
2nd Tier Supply
Direct supplier to the 1st Tier Supplier
The use of computer and telecommunications technologies to conduct business via electronic transfer of data and documents.
Increasing competition and globalization
Customer demands are changing and new competitors are entering the markets.
Organizations must manage the relationships with their upstream suppliers as well as their downstream customers.
Coordinated Decision Making
Systems approach to management that considers the total impact of functional and channel partner decisions of the final customer.
Large capital investments that are difficult to reverse. Includes tangible resources such as buildings, equipment, and computer systems.
The policies, people, decision rules, and organizational structure choices made by a firm. These affect the culture and operation of the business.
A statement that explains why an organization exists. It describes what is important to the organization, called its core values, and identifies the organization's domain.
Identifies a firm's targeted customers, how the firm will compete, and sets time frames and performance objectives for the business.
A plan of action that translates a business strategy into functional (e.g., supply chain, marketing, human resources, finance, etc.) responses supporting the business strategy.
An organizational strength or ability developed over a long period of time, that customers value and competitors find difficult or impossible to copy. Objective of strategy is to develop core competencies.
Operations and Supply Chain Strategy
A functional strategy that indicates how structural and infrastructural elements with the operations and supply chain areas will be acquired and developed to support the overall business strategy.
Structural Decision Categories
Infrastructural Decision Categories
Planning and Control
Business Processes and Quality Management
Product and Service Development
Four Major Performance Dimensions
A performance dimension highly valued by customers that differentiates a company's products and services from its competitors. It tends to drive market share within a targeted market segment.
A performance dimension on which customers expect a minimum level of performance.
Stages of Alignment Between Supply Chain and Operations Strategies
Stage 1 - Internally neutral: not linked to business strategy
Stage 2 - Externally neutral: follow industry practice
Stage 3 - Internally supportive: SC strategy aligned with business strategy
Stage 4 - Externally supportive: develop/exploit SC core competencies
Customer Value Index
A measure that uses performance and importance scores for the various performance dimensions for a product or a service to calculate a score that indicates the overall value of an item or service to a customer.
An estimate of the future level of some variable.
Promotions and sales
Cash flow projections, profits
User base size, technology development
Considering Overall Market Demand and Firm-Level Demand
Predict material availability based upon suppliers, trends, risk
Forward buying, futures contracts, buying frequency
Inflation rates, borrowing rates
Laws of Forecasting
Law 1: Forecasts are almost always wrong (but still useful)
Law 2: Short term forecasts tend to be more accurate than longer term forecasts.
Law 3: Forecasts for Groups (categories) of Products or Services tend to be more accurate than forecasts for specific products or services.
Law 4: Forecasts are not a substitute for Calculated Values. Only use forecasting when a more reliable method is not available.
Steps in Forecasting
1.Determine how the forecast will be used
2.Select the values to forecast
3.Determine the planning time horizon of the forecast
4.Select potential forecasting model(s)
5.Gather historical data from which to forecast
6.Calculate forecasts using forecasting model(s)
7.Evaluate forecast accuracy & choose a forecasting model
8.Make future predictions based upon the forecasting model.
Long Range Forecast (Asset Acquisition)
Yearly planning bucket
3-10 years planning horizon
New product planning, facility construction, technology
Medium Range Forecast (Asset Utilization)
Monthly/Quarterly planning bucket
3 months to 2 years planning horizon
Seasonal production, inventory, employment, budgeting
Short Range Forecast (Asset Execution)
Weekly/Monthly planning bucket
1-26 week planning horizon
Job scheduling, worker assignments, inventory stocking
Subjective - Opinion Based
Used when there is limited quantitative data available.
Used when the relationship between the past and the future is uncertain.
New or trendy products
Involves intuition, experience
e.g., forecasting sales of a new product
Objective - Calculation Based
Used when quantitative historical data is available.
Used when the relationship between the past and the future is predictable.
Existing or stable products
Involves mathematical techniques
e.g., forecasting sales of products within a stable market
Level or Constant - Average value is relatively constant over time.
Trend - Long-term movement up or down in a time series.
Seasonality - A repeated pattern of spikes or drops associated with certain times of the year.
Cyclical - Long-term cycles of demand - often over several years.
For instance: Product Life Cycles, Presidential Election impact on markets
Randomness - Unpredictable movement from one time period to the next. This component often serves to hide the underlying demand pattern. Random variation is what makes forecasts especially difficult.
Times Series Models
Demand follows a trend and/or pattern over time.
Last Period or Naïve Forecast
Weighted Moving Average
Adjusted Exponential Smoothing*
Demand is predicted by observing environmental factors such as economic indicators
Quantitative Time Series Forecasting Models
A set of periodic observations arranged in chronological order
A "period" is the regular frequency with which measurements are plotted.
The past is a good predictor of the future
The underlying demand pattern may change over time
Structured questionnaires or market research panels
Panel Consensus Forecasting
Experts meet together to develop forecasts
Experts develop forecasts separately & then revise
Life Cycle Analogy Method
Modeling growth and decline based upon similar products
Build up Forecasts
Market Segment experts develop forecasts that are added together
Collaborative Planning, Forecasting, and Replenishment (CPFR)
A set of business processes, backed up by information technology, in which supply chain partners agree to mutual business objectives and measures, develop joint sales and operational plans, and collaborate to generate and update sales forecasts and replenishment plans.
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