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MKT 386-Chapter 11: Supply Chain Management

Terms in this set (10)

Define supply chain management (SCM)
Supply chain management links a manufacturer's operations with those of all of its strategic supplies and its key intermediaries and customers to enhance efficiency and effectiveness

-reduces costs and boosts revenue
Goals associated with SCM
1. Waste reduction

2. Time compression

3. Flexible response (meeting customer's unique requirements in cost-effective manner)

4. Unit cost reduction
How SCM influences financial performance
-Creates a responsive supply chain to meet customer requirements and deliver on promises (helps company win new customers and win more business from existing customers)

-Integrates processes from procurement and manufacturing to logistics (lowers costs across the entire enterprise, advancing profitability)
Technology drivers of SCM
1. Powerful information systems

2. Internet technology

3. Supply chain software

examples: blockchain, AI/machine learning
How to manage risk in the supply chain; action steps
1. Analyze and monitor risk exposure

2. Diversify supply sources

3. Re-evaluate "make vs. buy" decisions

4. Build stronger supplier relationships

5. Share real-time info with supply chain partners

6. Perform regular stress tests of the supply chain
Difference between SCM and Logistics
- Supply Chain Management - focuses on the integration of ALL BUSINESS PROCESSES that add value for customer

-Logistics - designing and managing necessary activities center around TRANSPORTATION, INVENTORY, WAREHOUSING, AND COMMUNICATIONS
JIT (Just-in-time) systems
-used to drastically reduce the number of suppliers a manufacturer uses

-an inventory principle under which suppliers carefully coordinate delivers with the manufacturer's production schedule - often delivering products just hours before they are used

-eliminates waste of all kinds from the production process by requiring the delivery of the specified product at the precise time and in the exact quantity needed.
Total cost approach
all pieces of logistics system are in some way inter-connected in some way to maximize the efficiency in the overall system
Activity based costing
precisely measure the costs of performing specific activities and then trace those costs to the products, customers, and channels that consumed the activity
Total cost of ownership
determines the total cost of acquiring and using an item from a particular supplier
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