Supply Chain Management

Topics: Supply chain management, Supply chain, Inventory Pages: 9 (1622 words) Published: June 1, 2011
Supply Chain Management

1- What are the major drivers of supply chain performance?
Drivers of Supply Chain Performance
1. Facilities
a. places where inventory is stored, assembled, or fabricated b. production sites and storage sites
2. Inventory
a. raw materials, Work-in-process (WIP) inventory, finished goods within a supply chain b. inventory policies
3. Transportation
a. moving inventory from point to point in a supply chain
b. combinations of transportation modes and routes
4. Information
a. data and analysis regarding inventory, transportation, facilities throughout the supply chain b. potentially the biggest driver of supply chain performance 5. Sourcing
functions a firm performs and functions that are outsourced
6. Pricing
Price associated with goods and services provided by a firm to the supply chain

2- What is the role of each driver in creating strategic fit between supply chain strategy and competitive strategy (or between implied demand uncertainty and supply chain responsiveness)?

(1) Facilities
• Role in the supply chain
• Role in the competitive strategy

Components of Facilities Decisions
• Location
• Capacity (flexibility versus efficiency)

(2) Inventory
Inventory: Role in the Supply Chain
• Inventory exists because of a mismatch between supply and demand • Source of cost and influence on responsiveness
Inventory: Role in Competitive Strategy
If cost is more important, inventory can be reduced to make the firm more efficient Components of Inventory Decisions
• Cycle inventory
• Safety inventory
(3) Transportation
Transportation: Role in the Supply Chain
Moves the product between stages in the supply chain
Transportation: Role in the Competitive Strategy
Can also consider both inventory and transportation to find the right balance Components of Transportation Decisions
• Mode of transportation:
• Route and network selection
(4) Information
Information: Role in the Supply Chain
The connection between the various stages in the supply chain – allows coordination between stages Information: Role in the Competitive Strategy
Allows supply chain to become more efficient and more responsive at the same time (reduces the need for a trade-off)

(5) Sourcing

Sourcing: Role in the Supply Chain
Set of business processes required to purchase goods and services in a supply chain Sourcing: Role in the Competitive Strategy
In-house vs. outsource decisions- improving efficiency and responsiveness Components of Sourcing Decisions
Supplier evaluation and selection
(6) Pricing
Sourcing: Role in the Competitive Strategy
Firms can utilize optimal pricing strategies to improve efficiency and responsiveness Components of Pricing Decisions
Pricing and economies of scale

3- What are the major obstacles to achieving strategic fit?

Obstacles to Achieving Strategic Fit
SC is big:
Variety of products/services
Dealing with Multiple Owners / Local Optimization
• Information Coordination
Instability and Randomness:
Increasing product variety
Common problems
Poor inventory status information
Information delays, dated information, incompatible info. systems Spoilage: active ingredients in the products are losing their properties Poor delivery status information
Poor IT design
Security problems: too much or too little

4- Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm.

5- Identify the three key supply chain decision phases and explain the significance of each one.

Decision Phases of a Supply Chain
(1) Supply Chain Strategy or Design
Decisions about the structure of the supply chain and what processes each stage will perform * Strategic supply chain decisions
* Locations and capacities of facilities
* Modes of transportation
* Information systems...
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