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  • what are the four primary functions of distribution?

    accumulation, sortation, allocation, and assortment

    What is a type of distribution trade-off?

    cost of distribution centers and inventory vs. cost of transportation

    what are some of the network design issues?

    inventory postioning, number of facilities, and facility ownership

    what are the four critical issues to network design?

    compatability, configuration, coordination, and control

    What is continuity/contigency planning?

    methodology used to create a plan and processes to ensure essential activities continue during and after a disaster

    what are the stuctural and cultural barriers?

    impedes system's thinking

    what are the factors driving change?:

    change in corporate ownership, cost pressures, competitive capabilities, and corporate organizational change

    what are some pitfalls to avoid in network design?

    short-term horizon, too little and too much information, thinking is two dimensions and using published costs

    the seven rights of purchasing, which is of singular importance?

    the right supplier

    what is the strategic role of supply chain management?

    purchasers must develop qualified suppliers and work closely with other departmetns at the lowest administrative cost

    what is the weighted factor model?

    an effective tool when trying to decide between a number of candidates when choosing a supplier

    what are the sources of information for supplier identification?

    current suppliers, buyer's previous experience, purchasing database, internal contacts, and purchasing consortiums

    what are closed loop supply chains?

    SC's designed and managed to explicitly consider both forward and reverse flows activities in a supply chain

    what is the precent of sales lossed due to returens?

    3-5 percent

    what is estimation?

    the major challenge of the total cost of the return flow process

    What does not have an impact on inventory?

    Coporate governance

    What influences seasonal stocks?

    weather, transportation, seasonality

    while goods are in motion, what are the inventory costs associated with them?

    in transit stocks

    during a backorder, a customer might purchase another product


    what are the potential consequences of a stock out?

    backorder, customer may purchase

    What are transportation, distance, documents, diversity, culture, and demanding customers?

    problems associated with global logistics

    What are port selection, modal selection, carrier selection, location of decision making authority?

    some configuration issues in transportation

    what are waterand air shipment?

    major modes of international transportation

    what is the main advantage of international air transport?

    faster transit times

    what promotes competition in supply chain?

    transportation efficiency

    what are balancing supply and demand, protecting against uncertainty, allowing quantity purchase discounts?

    the role of distribution in supply chain management

    What are distribution tradeoffs?

    inventory vs. cost of transportation

    what is involved in network design?

    inventory postioning, number of facilities, and facility ownership

    what are compatibility, configuration, coordingation, and control?

    4C's of network, fith C is contingency

    mithodology used to create a plan?


    what are structural and cultural barriers?

    impede systems' thinking

    what are the factors driving change?

    change in corportate ownership, cost of pressures,competitive capabilities, corporate orgnaizational change

    what are the pitfalls to avoid in netork design?

    short term horizon, too little or too much info, thinking in two dimensions, using published costs

    of the 7 rights of purchasing, which is most important?

    right supplier

    what is the strategic role of supply chain management?

    purchaser must develop qualified suppliers to work closely with other departments at the lowest administrative cost

    what is an effective tool when tyring to choose between a number of candidates for a supplier?

    the weighted factor model

    what are the sources of information for supplier identification?

    current suppliers, buyers previous experience, purchasing database, internal contracts, puchasing consortiums

    what are closed loop design chain?

    supply chains designed to examine both open and closed activities of the supply chain

    what is the precent of lost sales due to returns?


    what are the considerations of reverse logisitcs?

    gatekeeping, reducing cycle time, return centers, outsourcing your retrurns

    what is supply chain sustainability?

    assessing the impact of product design, manufacturing cost associated shipping raw materials impact on the environment

    what are the three phases of disaster management cycle?

    mitigation and preparedness, response, and recovery

    what are the characterisitcs of relief change?

    multiple, global, dynamic, and temporary

    what are the stakeholders in emergency relief?

    government, NGOs, corportate businesses, and donors

    what are the three big flatteners of globalization?

    the infromation/experience revolution, logistics capabilities, and government intervention

    what is one of the new global rules?

    must have a presence in the home market of rivals

    what is the strategic scanning process?

    scanning new competitive rules, strategic adaptation, having the right infrastructure to support that strategy

    what is the indispensable supply chain manager?

    person in the middle

    what are the forces driving change?

    globalization, technology, organizational consolidation, government regulation, empowered consumer

    Supply chain management

    the integration of business processes from end user through original suppliers that provide products, services, and information that adds value


    puts money in the supply chain


    disadvantage of working in a team

    what are the 2 core qualities of successful teams

    team composition and team chemistry

    understand who the indispensible supply chain manager is

    in one who is whole brained; one who uses his left brain and right
    left: logical, sequential, rational, analytical, objective, looks at parts
    right: random, intuitive, holistic, synthesizing, subjective, looks at wholes

    what are the characteristics of an indispensible supply chain manager?

    anxious and curious engagement
    institutional knowledge
    futurist vision
    take good risks
    persuasive communication
    coach to make others better
    people who have analytical skills, communication, and like people

    what does supply chain mangement means?

    collaboraton is the art and science of building a team that consists of the right componaies and the right relationships
    -a collaborative process and project management to meet the real needs of the end customer profitably

    why do we work in teams?

    -teams are the mechanism to design and execute SC strategy
    - teaming reduces friction, shifting thinking from silo to holistic
    -teams are used to make complex, difficult decisions
    -teams are responsiible for difficult implementation initiatives
    -teams will provide the foundation of organizational design; yet teams are not always the better way

    upside of teams

    -bring diverse set of talent and expertise together
    -enhanced communication and cooperation
    -more rapid and more thorough decision execution

    what are the factors of more rapid and more thorough decision execution

    -decision ownership leads to rapid buy-in and implementation
    -leveraged diversity brings new and creative options to light
    -organizational understanding is developed and shared across boundaries
    -faster task completion as "turf" issues are mitigated
    more effective problem solving emerges via brainstorming

    downside to teams

    -never-ending debate
    -social loafing
    -peer pressure

    never-ending debate

    no consensus, avoid tough decisions, wasted resources


    tendency to go along to get along

    social loafing

    lack of accountability leads to "free riders" and frustration

    peer pressure

    supporting a team despite one's beliefs creates dissonance

    when is teaming appropriate

    -a well-defined goal is clearly articulated and communicated
    -a variety of expertise and experience is needed
    -time commitment
    -get the best people with the right knowledge and experience
    -leader who has the skills and clout needed to guide the team
    -team composition accounts for diverse personalities and working style


    -add more value by working on the team
    -their other responsibilities can be effectively performed by others

    two core themes of teams

    -team composition
    -team chemistry

    eagle pros

    -great vision
    -plenty of ideas
    -stong wills

    eagle cons

    -big egos
    -lack of follow through

    beavers pros

    -does meticulous work

    bever cons

    -never finish research
    -needs more information

    bloodhound pros

    -when they catch the scent on the trail, you can't stop them until they have caught their prey

    bloohound cons

    -tough to get moving, may not be enough time to get things done

    major drivers in our economy in the global marketplace

    -power shift from suppliers to large retailers

    power shift from suppliers to large retailers

    80%/20% rule; cost reduction


    transportation, finance, communications, technology


    information age, my time, my place place ideal

    what forces are driving change?

    -organizational consolidation
    -government regulation
    - combined=the empowered customer

    understand the rationale for the development of supply chain management in leading organizations

    -scanning: events, trends, implications, inflection points
    -new competitive rules
    -strategic adaptations
    -do we have the right infrastructure in place to support the strategy


    the process of planning, implementing, and controlling the effecient, effective flow of storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements

    supply chain management

    the integration of business processes from end user through original suppliers that provide products, services, and information that add value for customers

    what are the challengens facing organizations developing and implementing supply chain strategies?

    -where does SCM fit?
    -how do you handle all of SCM?

    Issues group 1

    -supply chain networks
    -inventory deployment

    issues group 2

    -organization relationships
    -technology/ information


    management of materials in motion and at rest


    getting the right product, to the right customer, in the right quantity, in the right condition, at the right place, at the right time, and at the right cost


    providing time and place utility/value of materials and products in support of functional management organization objectives

    functional management

    activities converned with supporting the internal customer(manaufacturing) with materials and the external customer (retail stores) with product

    business logistics

    that part of supply chain process that plans, implements, and controls the efficient, effective flow and stroage of goods, service, and related information from point of use or consumption in order to meet customer requirements

    military logistics

    the design and integration of all aspects of support for the operational capability of the military forces and their equipment to ensure readiness, reliability, and efficiency

    event logistics

    the network of activities, facilities, and personnel required to organiz, schule, and deploy the reources for an event to take place and to efficiently withdraw after the event

    what are the value-added roles of logistics?

    -marketing: possession utility
    -logistics: place/time utility and quantity logistics
    -production: form utility

    what are the logisitcs activities?

    -industrial packaging
    -warehousing and storage
    -demand forecasting
    -materials handling
    -customer service
    -inventory control
    -order fulfillment
    -facility location
    -production planning/scheduling
    -return goods handling

    logistics costs as a % of GDP

    in 2006 around 10%

    macro level value-added

    macro inventory as a % of GDP was about 14.5%
    total logisitcs cost around 1.3 trillion

    micro dimension

    exames the relaitonships between logisitcs and other functional areas in an organization: marketing, manufacturing/operations, finance, accounting

    understand the relationship between logisitics and other important functional areas in an organization, including manufacturing, marketing, and finance

    logisitics systems can be viewed or approached in several different ways for analysis pursposes, including materials management vs physical distribution, cost centers, nodes vs links and channels. All four approaches are viable for different pursposes
    -logisitcs systems are frequently analyzed from a systems approach which emphasizes total cost and tradeoffs when changes are proposed. Either short or long-run perspective can be used
    -the cost of logisitics systems can be affected by a number of major factors, including competition in the market, the spatial realtionship of nodes, and product characteristics


    fixed spatial points where goods stop for storage and processing


    represent the transportation network and connect the nodes in the logistics system


    both parties in the vendor relationship are said to be at arms length


    the relationship suggested by a strategic alliance is one in which two or more business organizations cooperate and willingly modify their business objectives and proctices to help achieve long-term goals and objectives


    represents an alternative that may imply even greater involvement than the partnership or strategic alliance
    strategic alliance

    what role does trust play?

    can make or break your business

    understand the importance of "collaborative" supply chain relationships

    -collaboration occurs when companies work together for mutual benefti
    -collaboration goes well beyond vague expressions of partnership and aligned interests
    -companies leverage each other on an operational basis and creates a synergistic business envirnoment in which the sum of the parts is greater than the whole

    what is the process model forming logistics relationships?

    -perform strategic assessment
    -decision to form relationship
    -evaluate alternatives
    -selct partners
    -structure operating model
    -implementation and continous imporvement

    how do you perform a strategic assessment?

    -overall business goals and objectives
    -needs assessments
    -identification of analysis of strategic factors and trends
    -profile of current logisitics network
    -benchmark values for logisitics costs
    -identification of "gaps" between current and desired measures of logisitcs performance

    vertical integration

    tranditional linkages between firms in the supply chain

    horizontal inegration

    includes those business agreements between firms that have "parallel" or cooperating positions in the logistics process


    -an external supplier that performs all or part of a company's logistics functions
    -among these multiple logistics activities are included, those that are included are "integrated" or managed together, and they provide solutions to logistics/supply chain problems

    Types of 3PLs

    -transportation based
    -warehous/distribution based
    -forwarder based
    -financial based
    -information based

    likely future directions for outsourced logistics services

    -techonology evaluation
    -implemenatation plan
    -avoid customization

    Negotiating barriers to collaboration

    -senior management
    -taking down silos
    -supply chain continuity

    selecting trading partners

    -trading partner assessment
    -third party assessment

    Today's SC measurement system must

    -provide better understanding
    -motivate collaborative behavior
    -drive world class results
    if you can not measure it, you do not understand it, therefore you cannot manage it


    is the key to understanding and to behavoir and results

    characteristics of good performance measures

    -aligned with the organization's goals
    -customer oriented
    -easy, simple, and understandable
    -meaningful to workers, managers, and customers
    -communicated to all relevant individuals
    -integrated across appropriate functions or departments
    -promote cooperative behavior both horizontally and vertically
    -timely and easy to collect data
    -tactical and strategic
    -drives appropriate behavior-learning and impovement

    inventory days of supply

    total inventory in the supply chain relationship-incoming, plant, and field- expressed as calendar day of supply based on recent actual daily cost of sales

    inventory dwell time

    the ratio of days inventory sits idle to days inventory is moving

    total order fulfillment cycle time

    measures days required for each
    -order authorization to entry
    -entry to release
    -release to shippable
    -shippable to customer receipt
    -receipt to customer acceptance

    SC response time

    theoretical time expressed in calendar days, to recognize a major shift in demand, internalize the change, re-plan, and increase production by 20%
    = forecast cycle+re-plan cycle+time to increase production

    cash to cash cycle time

    average time to convert a dollar spent to acquire raw materials into a dollar collected for a finished product
    = inventory days of supply + days sales outstanding - days payable outstanding

    supplier scorecards

    -communicatie expectations
    -evaluate performance
    -drive constant improvement


    -extends beyond metrics to processes
    -includes withing and outside industry comparisons
    -impacts performance

    understand the overall importance of information to scm and the role it plays in the sc

    - substitutes for inventroy leads to a lean sc
    -takes time out leads to an agile sc
    -drives process re-engineering leads to customer centric sc
    -enables collaboration leads to a learning sc

    describe and differentiate between the primary types of sc solutions and their capabilities

    -acquire and install the latest and greatest technology: outcome- exceeds budget, fails to deliver, easilty copied
    -seek appropriate solution to a specific problem

    how does a firm's willingness and capability play into information sharing?

    company wants: quickly and inexpensively to share accurate, relevant information with SC decision makers

    requirements of a firm's willingness and capability to play into information sharing

    -the ability to collect, store, and disseminate by investing in software which leads to great progress
    -the willingness to share by investing in cuclture which leasds to a mostly clueless state if let go
    -technical ability to connect vs willingness to share


    a compnay's cultural predisposition to share all useful decision making information


    a company's ability to use technology to collect, analyze, and disseminate decision making information

    sharing capability matrix: quadrant 1

    -transaction focus
    low willingness and low connectivity

    sharing capability matrix: quadrant 2

    -technology focus
    low willingness and high connectivity- apple

    sharing capability matrix: quadrant 3

    -relationship focus
    high willingness and low connectivity

    sharing capability matrix: quadrant 4

    -capability focus
    high willingness and high connectivity

    critical issues in technology selection and implementation processes

    -view technology as an enabler
    -avoid technology detours
    -drive process and relationship innovation
    -keep eye on capabilities/technology map
    -take a step by step approach
    -stay balanced over the long run

    common MFG databases

    24 hour design day


    manage day to day; relationship managment; efficient info- sharing

    web links/retail link

    share real time information; reduce SC uncertainty

    dependent demand

    directly influenced by demand for the primary item

    independent demand

    demand for the the primary item

    demand management

    the ability of firms throughout the SC to collaborate on activies related to the flow of product, services, information, and capital

    what happens when supply and demand are misaligned?

    - true end customer demand
    -production cannot meet initial projected demand, resulting in real shortages
    -channel partners over-order in an attempt to meet demand and stock their shelves
    -as supply catches up with demand, orders are canceled or returned
    -financial and production planning are not aligned with real demand; therefore production continues
    -as demand declines, all parties attempt to dreain inventory to prevent write- down
    aka the bullwhip affect

    actual demand

    = forecast +error


    = actual demand - forecast

    moving average

    forcast(t)= (1/n)* (Y(t-1)+Y(t-2)......

    exponential smothing

    forecast= a(last period demand) + (1-a)(last forecast)
    forecast= last period forecast- a(last period forecast error)

    what is a forecast error?

    acutual demand-forecast

    what makes a good forecast

    -as accurate as possible
    -obtained using forecasting methods which are: appropriate, easy to use, understandable, communicable


    the process by which managemnt proactively communicates, coordinates, integrates and provides direction for planning the volume, rate and mix of projected demand and supply


    collaborative planning, forecasting, and replenishment
    - global industry- wide process for trading partners to increase forecasting effectivenss through using joint business planning and process and common interface. This will result in more efficient inventories and less out of stock. This drives more sales for both the retailer and manufacturer

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