Chapter Review 1-3 Principles of Supply Chain Management

Chapter dealvass 1-3 Principles of t eithery Chain Management, 3ed Wisner, Leong, Tan 2012 Chapter Review 1-3 Chapter unriv on the wholeed Introduction To depict Chain Management A Supply Chain is the steps demand for a manufacturer to procure materials, build a output, and transport the harvesting to consumers. The consumers buy the products based on a combination of cost, tonicity, availability, maintainability and reputation factors. They foretaste these products pull up s checks live up to their needs and expectations. An example of a generate chain that I was involved in while serving in the Air Force would be when I worked in the Supply Squadron.One of our nodes, the fountain engine maintenance shop, would need a part to compensate and F101 engine for use on a B1B bomber aircraft. They would bit the dress through us. We would place the order with one of our depots that manage the assets. The depots would then place an order with the manufacturer of the asset. T he manufacturer of the asset would be our second-tier provider. The depots would be our first-tier provider. The jet engine maintenance shop would be our first-tier client, and the flight line chemical mechanism would be our second-tier customer that needed the engine to inst all(prenominal) on the aircraft.The sack product consumers would be the recipients of the mission to be accomplished by the aircraft crew. The deuce-ace definitions of egress chain way in the text argon all stated polarly but pretty much mean the aforesaid(prenominal) thing planning and managing the processes of procuring assets, converting assets into products, and delivering them to a customer. Of course there is much more detail involved getting from one end of the chain to the some other(prenominal) and back again when necessary. There ar four foundation elements of supply chain management. The supply elements ar all about the purchasing and strategical c at oncepts of supply management.Th e trading operations elements consist of several innate operations that administer the assembling of parts into a finished product that meets all specifications and customer requirements. The logistics elements deal with the storing of the completed product and transporting it to the customer. The consolidation elements deal with the process integration of all the processes among the focal trustworthy and their partners. Through the use of lean and six-spot Sigma methodology, emendments in the supply chain processes screw be made and cost lowered. As the conditions change around the world, supply chain management will continue to change with it.Questions 1. What is a company that is hired to manage all of a households logistics and supply chain management called? dish out Fourth-Party Logistics Provider or 4PL (Page 10) 2. What is meant by perfect order fulfillment? event Orders that arrive on magazine, complete and damage free. (Page 20) 3. What is right-shoring? conseq uence The combination of on-shore, near-shore and far-shore operations into a champion, flexible, low-cost approach to supply chain management. (Page 23) 4. What are arise Logistics Activities? resultant When customers return products, get warranty repairs or recycle items. . What is the entire rethinking and redesigning of business processes to reduce waste and increase mathematical process? Answer line of work Process Reengineering or BPR. (Page 14) Chapter Two Purchasing Management The goal of Supply Management in an organization is to ensure a continual electric current of raw materials at the lowest cost possible. Another goal is to remediate the quality of the finished goods produced as well as increase customer satisfaction. By obtaining these goals supply management has proven to be a delineate strategic business process and not just another living function of the business.Done well a company bum entrust itself an edge over other companies that are not meeting th ese goals. utilize smarter purchasing is another way of life for a company to increase profitability. berth costs and boosting sales are not the only way to improve profits. For instance, if a firm reduces its purchase spend on materials through a more effective purchasing strategy they will increase their return on assets. This is as well as likely to lower raw material entry and total assets. E-Procurement brought many benefits to companies. It has proven to be a time recoverer and cost effective.It is more accurate as the information is only entered once instead of twice. Before the users had to enter the information and the buyer had to reenter the information creating another error point in the process. E-procurement is more flexible as it can be used without the restrictions of location or time of day. Status of orders can be looked at without having to check paper trails. There are different reasons wherefore a firm may use a single supplier instead of favoring multiple suppliers. Using a single supplier gives a firm the chance to build a stronger relationship with the supplier. be would be lower due to larger purchases keeping the cost per building block down and merchant marine would be cheaper as the firm can take advantage of full truckloads. Single sourcing would also make sense if the firms requirements are too small. It would not be worthwhile to fraction the order among multiple suppliers. There is a disadvantage with sole sourcing as well. If the purchase was for a proprietary product or process and the supplier holds the patents to them, the firm has no choice but to buy from them. Multiple sourcing is good for many reasons.If the demand is greater than the capacity of a single supplier, having more than one supplier would service to keep up with the demand. It gives firms options in part of interruptions that allow affected any given supplier. Competition is created among the suppliers in ground of price and quality. You would h ave more sources of information about the market conditions, product developments and new technologies. Questions 1. What are the primary goals of purchasing? Answer To ensure unceasing flow of raw materials at the lowest total cost, to improve quality of the finished product and to maximize customer satisfaction. (Page 40) 2.The list of suppliers that a firm uses to acquire materials, services, supplies and equipment is called what? Answer The supply base or supplier base. (Page 57) 3. What are the six advantages of centralization? Answer Concentrated volume, avoid duplication, specialization, lower transportation costs, no competition within units and common supply base. (Page 62) 4. What is the difference between direct and indirect offset? Answer Direct offset usually involves co-production, or a joint venture and exchange of related goods or services whereas indirect offset involves exchange of goods or services orthogonal to the initial purchase. Page 65) 5. What are the 3 basic types of bid bonds? Answer Surety bonds, performance bonds and payment bonds. (Page 67) Chapter Three Creating and Managing Supplier Relationships To have a successful supplier league you must understand the key factors for develop them. You must be able to build trust at all levels of management and trust is very crucial to the success. The partnership should have put one across and in return agreeable shared vision and objectives. When both parties involved have the same goal in mind and have equal decision-making control, the partnership has a higher chance of succeeding.Interpersonal relationships are important as well. It is not just companies talking, it is people talking to people. It is people who make up the companies and are representing them. The companies must be able to manage the change that comes with a new partnership. Communicating information to the people affected by the change. This internal communication is very important so employees can understand why the partnership was formed. Developing performance metrics are a way to evaluate how well suppliers are doing. Information gathered can help improve the entire supply chain.Organizations can identify suppliers that have majestic performance and recognize them as such. It can also show where benefits are needed. The data used is based on a set of mutually agreed performance measures. This will provide information for continuous improvement that can result in eliminating mistakes and will lead to ensuring that products are evermore meeting customer requirements. A supplier certification program is a way for organizations to identify suppliers who are the most committed to maintaining a partnership and who have the best capabilities.The results of a supplier certification are world able to reduce the supplier base, build long-term relationships, reduce time spent on incoming inspections, improving delivery, recognizing excellence, developing a shipment to continuous improvemen t and improving overall performance. Supplier recognition programs are another way to nurture a healthy supplier relationship. An demonstrate program is a good way to promote excellent supplier performance. This allows the award winner to serve as a role manakin for the other suppliers. The other suppliers will want to do better and also be recognized.Supplier relationship management involves streamlining the processes and communication between the buyer and seller using software applications to manage the processes more efficiently and effectively. Questions 1. What are the seven steps in the approach to supplier development? Answer Identify critical goods and services, identify critical suppliers not meeting performance requirements, form a cross-functional supplier development team, meet with top management of suppliers, rank supplier development shake offs, define the details of the buyer-supplier agreement, and monitor project status and modify strategies. (Pages 89-90) 2.Wh at are the two types of SRM? Answer Transactional and analytic. (Page 94) 3. What are the three major cost categories? Answer Pre-transaction, transaction and post-transaction. (Page 81) 4. Why is a supplier evaluation and certification process important? Answer So organizations can identify their best and most reliable suppliers. (Page 82) 5. What are the benefits of investing in an environmental management system based on ISO4000 standards? Answer rock-bottom energy and other resource consumption, decreased environmental liability and risk, minify waste and pollution and improved community goodwill. (Page 89)