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Chapter 1

Terms in this set (13)

Globalization and technology developments have led to what some individuals have described as a "flat world." What is the significance of the flat world concept? What is the impact of the flat world on supply chains?
In his best selling book, The World Is Flat, Thomas Friedman, a staff writer for The New York Times, discusses 10 major forces that have helped to "flatten" the world from an economic perspective. One of the 10 forces is what he describes as supply chaining, a method of collaborating among businesses to manage the flow of goods, information, and cash to deliver "value" for the consumer. This type of collaboration has stretched vertically and horizontally on a global basis to become a cornerstone of competitive strategy for successful organizations in today's global marketplace. (Page 1)
The consolidation that has developed at the retail end of many supply chains has been described as the Wal-Mart effect. Why? What is the significance of retail consolidation for supply chains?
A key element in Wal-Mart's ability to discount brand name products was an understanding of the criticality of efficiency in its logistics and supply chain system from purchasing through delivery to its stores and a continual focus on improving its supply chain processes. (Page 6)
Consumers have much more influence in the marketplace today. What factors have led to this "empowered consumer" situation? How has this factor changed supply chains in the last 10 to 15 years?
Technology has given consumers the ability to easily log onto internet and compare prices, quality, and service. Consumers constantly demand competitive prices, high quality, customization abilities, flexibility, and responsiveness. Also have an increase in buying power because of higher income levels. Change from "buyer beware" to "seller beware".
This influence will likely continue due to technologies' exponential growth, which will possibly hurt supply chains in terms of efficiency.
Why should CEOs, COOs, CFOs, and CMOs be concerned about supply chain management in their organizations? How can effective supply chain management improve the financial viability of their companies?
The textbook explains that CEOs, COOs, CFOs, and CMOs should be concerned about supply chain management for several reasons, but explains it in two different studies. The first study explains efficiency in supply chains with usage of examples of ECR implementation in "dry grocery chain" (Figure 1.5). This study helps you understand the a supply chain in grocery business versus one company. The second figure focuses primarily on total supply chain management cost and comparisons (Figure 1.6). It also explains the relationships of the supply chain (Figure 1.7) and how an enterprise should implement a "coordinated, two-way flow of goods and services, information, cash, and demand" through usage of the supply chain. At the end of the day, this helps a company improve their financial viability to its maximum potential. ALSO, stores being open 24/7. Many variations of the same product.
Supply Chain managers should be concerned about four (4) flows in their organizations. List these four flows and briefly describe each one
Product flow - physical movement of goods and materials
Information flow - Enabling physical flow of products, decision making, supply chain collaborations
Cash flow - Management of working capital
Demand flow - Detect and understand demand signals, synchronize demand vs. supply
Why is information so important in supply chains? What is the role of technology and information management?
Information is important to supply chains because it can help them run more efficiently and effectively. Colloboration and gaining info from each other.++++ HORIZONTALLY AND VERTICALLY
Technology has allowed consumers and organizations to connect 24/7. Many companies "data mine" to uncover demand-related information to improve forecasting.
What is logistics, and why is it important?
Logistics is a part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, service, and related information from point of use or consumption in order to meet customer requirements.
How does logistics add value in the economy? How does logistics add value for organizations?
The five principles that add value to economic utility for products or service are as follows:
i. Form - refers to value added to goods through a manufacturing, production, or assembling process
ii. Time - by having it at a demand point at a specific time
iii. Place - moving goods from production surplus points to points where demands exist
iv. Quantity - how much you should have for customers
v. Possession - the effort through direct and indirect contact with the customer to increase the desire to possess a good or to benefit from service
Logistics adds values to organizations with functions such as marketing, manufacturing or operations, finance and accounting, and others.
What is the relationship between logistics and supply chain management?
Logistics is an integration of the logistics systems in all organizations in the supply chain. It helps control the transportation from point A to point B. Supply chain is complete management of the process of delivering from point A to point B. This includes, but is not limited to, warehousing, distribution, and inventory.
List the four (4) major subdivisions of logistics.
Materials management vs. Physical distribution
Cost centers
Nodes versus links
Logistics channels
What product characteristics affect logistics costs? Why do the characteristics effect costs?
A number of product-related factors affect the cost and importance of logistics. Among the more significant of these are dollar value, density, susceptibility to damage, and the need for special handling. (Pages 55-57)
What special role do networks play in supply chains? What are some of the challenges for efficient and effective networks?
Networks allow collaboration between participants which helps achieve optimization. A challenge for supply chains is the prevention of suboptimization. In today's environment, global supply chains compete against global supply chains, which mean that the cost and value at the very end of the supply chain are what is important. If a competing supply chain is offering a comparable product at a lower cost and higher value, it does not matter if a company is effective and efficient but in the middle of an-other supply chain. (Page 23 -25)
Five major external forces drive change in our economic and political landscape.
Which are: Globalization, Technology, Organizational consolidation and power shifts, the empowered consumer and Government policy and regulation.
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