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95 Cards in this Set
- Front
- Back
Upstream |
inputs that feed into operations |
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Downstream |
firms that receive the outputs produced |
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First tier supplier |
direct supply |
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Second tier supplier |
supply the first tier supplier |
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First tier customer |
downstream firms |
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Second tier customer |
receive input from first tier customer |
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Supply chain is not |
linear it is strategic |
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modern focus of supply chain management |
systematic integration |
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Level 1 SCOR Model |
Plan, Source, Make, Deliver, and Return |
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Three foundational functions in SCM |
Sourcing, Operations, and Logistics |
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Sourcing |
deals with quality, price, and delivery timing of incoming material to an organization, evaluating, certifying, developing, and managing relationships with suppliers |
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Operations |
deals with demand management, lean systems, six sigma, and quality management, production technology and planning |
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Logistics |
deals with choice of transportation modes, warehouse management, inventory positioning, and distribution network design |
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Bullwhip effect |
unexpected distortion in the supply chain due to repetitive variation in demand |
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Bullwhip effect magnifies |
upstream |
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4 major causes of bullwhip effect |
Price fluctuations Order Batching Shortage Gaming Forecast inaccuracies |
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Bullwhip countermeasures |
Everyday low prices Frequent ordering Forecast on sale history Information sharing |
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Purchasing activities |
-strategic function focused on value creation -Evolved from purely clerical function |
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Capacity Planning |
Work with accounting and finance for capital investments |
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Works with marketing and engineering to identify and qualify suppliers of goods and services as well as manage on-going supplier relationships |
Purchasing |
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Works with marketing to manage the movement of goods throughout the supply chain |
Logistics |
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Translates the business strategy into specific actions and coordinates with other areas |
Functional Strategy |
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Mechanism for coordinating and guiding decisions regarding the elements of business - identifies core competencies and targeted customers, sets time frames |
Business Strategy |
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Profit Margin |
Earnings / Sales |
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ROA |
Earnings / Total Assets |
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Decrease in COGS |
Increase in pretax profit |
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Decrease in Merchandising inventory |
Decrease in Total Assets |
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based on current profit margin, Dulaney, would have to generate __________ $'s in additional sales in order to have the same effect EQUATION |
(New pretax profit - Old pretax profit) / Old Profit Margin |
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Administrative costs for purchasing costs at $30 per unit, over 36 months, and 1 million units of demand EQUATION |
(30 x 36) / 1,000,000 |
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Savings per unit |
Total cost per unit of insourcing - outsourcing |
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Inputs |
-Materials
-Intangible needs -Information |
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Outputs |
-Tangible goods -Fulfilled needs -Satisfied customers |
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Operations Management |
Planning, Scheduling, and control of activities that transform inputs into finished goods and services |
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Network of manufacturers and service providers that work together to create products or services for end users |
Supply Chain |
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Active management of supply chain activities and relationships in order to maximize customer value and achieve a sustainable competitive advantage |
Supply chain management |
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SCOR Model |
seeks to provide standard descriptions of the processes, relationships, and metrics that define supply chain management
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5 broad areas of SCOR |
Planning, Sourcing, Make, Delivery, Returns |
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Seek to balance demand requirements against resources and communicate these plans |
Planning |
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Identifying, developing, and contracting with suppliers and scheduling the delivery of incoming goods and services |
Sourcing |
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Make |
actual production of a good or service |
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3 major developments that brought SCM to the forefront |
-Electronic Commerce -Increasing Competition and globalization -Relationship management |
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Electronic Commerce |
The use of computer and telecommunications technologies to conduct business via electronic transfer of data and documents |
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SCM professional society |
APICS |
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identifies global sources of materials, selects suppliers, arranges contracts, and manages ongoing relationships
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Sourcing managers |
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Acquires knowledge in a specific market in which the organization purchases significant quantities of materials and services. Helps formulate long term commodity strategies and manage long term relationships with selected suppliers |
Commodity manager |
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Measures supplier performance, identifies suppliers requiring improvement, and facilitates efforts to improve suppliers' processes |
Supplier development manager |
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Works closely with manufacturing, marketing, and purchasing to create timely, cost-effective import/export supply chains |
International logistics manager |
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Design and implement the transformation processes that best meets the needs of the customer |
Process selection |
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Forecasting |
Develop the planning numbers needed for effective decision making |
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Capacity Planning |
Establish strategic capacity levels and tactical capacity levels |
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Inventory management |
Manage the amount and placement of inventory within the company and the supply chain |
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Schedule and manage the flow of work through an organization and the supply chain; match customer demand to supply chain activities |
Planning and Control |
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Identify and qualify suppliers of goods and services; manage the ongoing buyer-supplier relationships |
Purchasing |
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Manage the movement of physical goods throughout the supply chain |
Logistics |
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Structural elements |
buildings, equipment, IT, etc. |
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Infrastructural elements |
People, policies, etc. |
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Mission statement |
Reason for existence, core values, and domain |
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organizational strength, developed over a long period that customers find valuable and competitors find difficult or even impossible to copy |
Core competencies |
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Strategy that translates a business strategy into specific actions for functional areas |
Functional strategy |
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Subdimension of quality that addresses the basic operating characteristics of a product or service |
Performance quality |
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Performance dimension that considers how quickly operations and supply chains can respond to the unique needs of customers |
Flexibility |
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mix flexibility |
ability to produce a wide range of products or services |
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Changeover flexibility |
ability to provide a new product with minimal delay |
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Volume flexibility |
ability to produce whatever volume the customer needs |
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Internally neutral alignment STAGE 1 |
minimize any negative potential in the operations and supply chain areas |
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Externally neutral alignment STAGE 2 |
what works for competitors will work for the company |
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Internally supportive alignment STAGE 3 |
management recognizes that the operations and supply chain structural and infrastructural elements must be aligned with the business strategy |
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Externally supportive alignment STAGE 4 |
the business strategy actively seeks to exploit the core competencies found within these areas |
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When much of a firm's revenue is spent on materials and service. SCM represents a major opportunity to increase profitability. |
Profit Leverage Effect |
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Balance sheet item that shows the amount a company paid for the inventory it has on hand at a particular point in time |
merchandise inventory |
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application of quantitative techniques to purchasing data in an effort to better understand spending patterns and identify opportunities for improvement |
spend analysis |
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Profiles the major forces and trends that are impacting an industry, including pricing, competition, regulatory forces, substitutions, technology changes, and supply/ demand trends |
industry analysis |
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Internal customers purchase directly from nonqualified suppliers |
maverick spending |
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structured approach used by decision makers to develop a sourcing strategy for a product or service, based on the value potential and the relative complexity or risk represented by a sourcing opportunity |
portfolio analysis |
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"Routine" quadrant |
readily available and represent a relatively small portion of a firm's purchasing expenditures |
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"Routine" actions |
automating purchasing reducing the # of suppliers Electronic data interchange |
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"Leverage" quadrant |
standardized and readily available and represents a significant portion to spend |
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"Leverage" quadrant focuses on |
leveraging the firm's spending levels to get the most favorable terms |
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"Bottleneck" quadrant |
have unique or complex requirements that can be met only by a few potential suppliers |
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Primary goal of sourcing |
supply continuity |
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"Critical" Quadrant |
Complex or unique requirements coupled with a limited supply base |
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difference in "Critical" from "Bottleneck" |
Items can represent a substantial level of expenditure for the sourcing firm |
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uses a single supplier for one particular part or service and another supplier with the same capabilities for a different part |
Cross sourcing |
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two suppliers are used for the same product or service |
Dual sourcing |
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Inquiry to a potential supplier about that supplier's products or services for potential use in the business |
RFI (Request for Information) |
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formal request for the suppliers to prepare bids, based on the terms and conditions set by the buyer |
RFQ (Request for Quotation) |
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description method used when a product or service is proprietory |
Description by brand |
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Description method used when an organization needs to provide very detailed descriptions |
Description by specification |
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Description by performance characteristics |
description method that focuses attention on the outcomes the customer wants rather than on the precise configuration |
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E auctions and reverse auctions |
potential qualified suppliers place bids on a website at a designated time
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Negotation is a more costly, |
interactive approach |
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Procure-to-Pay Cycle |
set of activities required to first identify a need, assign a supplier, approve the specification, acknowledge receipt, and submit payment to the supplier |
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Five main steps of Procure-to-Pay cycle |
-Ordering -Follow up and expediting -Receipt and inspection -Settlement and payment -Records maintenance |
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Document that authorizes a supplier to deliver a product or service and often includes key terms and conditions |
PO (Purchase Order) |
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Terms and conditions for a purchased service that indicate what services will be performed and how the service provider will be evaluated |
Statement of work, Scope of work |