Supply chain management and enterprise resource planning

Question 1

What is Supply chain management?

Answer 1

Supply chain management is the management of the interconnection of organisations that relate to each other through upstream and downstream linkages between the processes that produce value to the ultimate consumer in the form of products and services’.

SCM is concerned with managing the flow of materials and information between a string of operations, that form the strands or ‘chains’ of a supply network.

• a holistic approach

Question 2

what are the implications of external and internal supply chains?

Answer 2

The supply chain concept applies to the internal relationships between processes as well as the external relationships between operations.

Question 3

what are the implications of tangible and intangible supply chains?

Answer 3

The supply chain concept applies to non-physical flows (universities, consultants ,counselling) between operations and processes as well as physical flows

Question 4

Why is it important to consider the whole supply chain?

Answer 4

• it helps an understanding of competitiveness
• it helps to identify the significant links in the network
• it helps focus on long term issues

Question 5

How can the shape of the supply chain be changed?

Answer 5

1. Disintermediation (cutting out the middle men)
   ex; Dell, airlines, hotels
2. Co-opetition (cooperation between competitors)
   Ex; restaurants, art gallery’s, theaters

Question 6

What is the importance of the five performance objectives in satisfying the customers requirements?

Answer 6

quality: Only by every stage taking some responsibility for its own and its suppliers’ performance, can a supply chain achieve high end customer quality.

Speed:

• how fast customers can be served( achieved by over-stocking)
• The time taken for goods and services to move through the chain ( reduces inventory related costs)

Dependability:
- guarantee ‘on-time’ delivery by keeping excessive resources, such as inventory, within the chain, reduces uncertainty within the chain

Flexibility:

• chain’s ability to cope with changes and disturbances.(agility)
• focusing on the end customer and ensuring fast throughput and responsiveness to customer needs.

Costs:
- costs incurred within each operation, and the supply chain as a whole incurs additional costs that derive from each operation in a chain doing business with each other.

Question 7

What are the factors for rating alternative suppliers- short term ability to supply?

Answer 7

Short term ability to supply:

• range of products or services
• quality of products or services
• responsiveness
• dependability of supply
• delivery and volume flexibility
• total cost of being supplied
• ability to supply in the required quantity

Question 8

What are the factors for rating alternative suppliers- Long term ability to supply?

Answer 8

• ease of doing business
• willingness to share risk
• long term commitment to supply
• ability to transfer knowledge as well as products and services
• technical capability
• operations capability
• financial capability
• managerial capability

Question 9

What is multi-sourcing?

Answer 9

The purchase of individual items used to create a product from different, multiple providers in order to keep production on track in the event of a failure to produce at one particular source. This reduces production risk in the event that the supply chain has a problem.

Question 10

What are the advantages and disadvantages of multi-sourcing?

Answer 10

Advantages:

• Purchaser can drive price down by competitive tendering
• can switch source in case of supply failure
• wide sources of knowledge and expertise

Disadvantages:

• difficult to encourage commitment by supplier
• less easy to develop effective SQA
• more effort needed to communicate
• suppliers less likely to invest in new processes
• more difficult to obtain scale economies

Question 11

What are the advantages and disadvantages of single sourcing?

Answer 11

Advantages:

• potentially better quality because more SQA possibilities
• strong relationships which are more durable
• greater dependancy encourages commitment and effort
• better communication
• easier to co-operate on new product/service development
• more scale economies
• higher confidentiality

disadvantages:
- more vulnerable to disruption if a failure to supply occurs
- individual supplier more affected by volume fluctuations
- supplier might exert upward pressure on prices if no alternative supplier is available

Question 12

What are Business to business relationships in supply chains? (B2B)

Answer 12

Are by far the most common in a supply chain context. These relationships involve businesses trading products (or components) and services with each other, possibly using some of the e-procurement exchange networks

Question 13

What are Business to Consumer relationships in supply chains? (B2C)

Answer 13

are the end of the supply chain where businesses sell products and services to final consumers. This could include both ‘bricks-and- mortar’ retailers and online retailers.

Question 14

What are Consumer to business relationships in supply chains? (C2B)

Answer 14

involve consumers informing businesses of their opinions, ideas, or needs, or in some other way creating value to the business. It includes consumers posting their needs on the internet (sometimes stating the price they are willing to pay) and companies then decide whether to offer also includes crowdsourcing

Question 15

What are Customer to customer business relationships in supply chains? (C2C)

Answer 15

consumers post items or services for sale to other consumers, and/or bid to purchase them.

Question 16

Whatever arrangement with its suppliers a firm chooses to take, it can be described by the balance of what two factors?

Answer 16

contracts and relationships

Question 17

What is a traditional market supply relationship?

Answer 17

• based on relatively short term agreements

- agreement is likely to be detailed in a formal contract (written usually)

Question 18

What is partnership supply arrangements?

Answer 18

• emphasis predominantly on relationships
• long term, usually exclusive
• trust based and broad agreements

Question 19

what are the advantages and disadvantages with market supply relationships?

Answer 19

advantages:
- maintain competition between alternative suppliers
- flexibility in case demand changes
- supplier can gain natural economies of scale
.- innovations can be exploited
- help operations focus on their core activities

disadvantages:

• supply uncertainties
• time and effort in choosing who to buy from
• strategic risks

Question 20

What are the factors which influence partnership supply arrangements?

Answer 20

• share success (work jointly together towards it)
• long term expectations
• multiple points of contact
• joint learning
• few relationships on the side (openness)
• joint-coordination of activities
• info transparency
• joint problem solving
• trust

Question 21

What is CRM? (customer relationship management)

Answer 21

Analysing data to understand customers. It is a method of learning more about customers’ needs and behaviours in order to develop stronger relationships with them, whilst maximising profitability.

Question 22

CRM helps to sell products and services more effectively and increase revenues by…

Answer 22

● providing services and products that are exactly what your customers want;
● retaining existing customers and discovering new ones
● offering better customer service
● cross-selling products more effectively.

Question 23

what can you explain by the sentence “Functional’ products require lean supply chain management: ‘innovative’ products require agile supply chain management” ?

Answer 23

Marshall Fisher argues that:

• Functional products are predictable few changes, low variety, price stable, long lead times and low margins.
• therefore, lean supply chain management would be more suitable: low cost, high utilisation, minimum inventory and low cost suppliers.
• innovative products are unpredictable, many changes, high variety, high margins, price markdown and short lead times
• therefore an agile supply chain would be appropriate as it is: low throughput times, low utilisation, deployed inventory and flexible suppliers.

Question 24

What is the bullwhip effect?

Answer 24

used to describe how a small disturbance at the downstream end of a supply chain causes increasingly large disturbances, errors, inaccuracies and volatility as it works its way upstream.

Question 25

What are the causes of the bullwhip effect?

Answer 25

an understandable desire by the different links in the supply chain to manage their production rates and inventory levels sensibly

Question 26

What does the bullwhip effect look in the typical supply chain?

Answer 26

Has relatively small fluctuations in the market causing increasing volatility further back in the chain.

Question 27

What is the SCOR model?

Answer 27

The Supply Chain Operations Reference Model (SCOR) is a broad, but highly structured and systematic, framework to supply chain improvement that has been developed by the Supply Chain Council (SCC),

Question 28

What three well-known individual techniques that are turned into an integrated approach does the SCOR model use?

Answer 28

● business process modelling;
● benchmarking performance;
● best practice analysis.

Question 29

What is ERP/MRP?

Answer 29

It is a process that helps companies make volume and timing calculations. the organisations “central nervous system”

Question 30

What are the benefits of ERP?

Answer 30

• Visibility of what is happening in all parts of the business
• makes all part of the business more efficient
• better sense of control
• far more sophisticated communication with customers, suppliers, and other
  business partners, often giving more accurate and timely information.
• It is capable of integrating whole supply chains, including suppliers’ suppliers and customers’ customers.

Question 31

What are the steps of the development of the ERP?

Answer 31

1. MRP (materials requirements planning)
2. Manufacturing resources planning MRP II
3. Enterprise resource planning ERP
4. collaborative commerce

Question 32

what elements make up the MRP?

Answer 32

• customer orders
• bill of materials
• purchase orders
• material plans
• master production schedule
• forecast demand
• inventory records
• work orders

Question 33

What are the steps in the MRP?

Answer 33

1. Explore the master production schedule
2. Identify what parts and assemblies are required.
3. Check whether the required parts and assemblies are available
4. For every part (or assembly) that is required, but not available, identify when work needs to be started for it so it is available by its due date
5. Generate the production and purchase orders.
6. Repeat the process for the next level of the bill of materials.

Question 34

What is OPT?

Answer 34

OPT is a computer-based technique and tool which helps to schedule production systems to the pace dictated by the most heavily loaded resources – that is, bottlenecks

By identifying the location of constraints, working to remove them, then looking for the next constraint, an operation is always focusing on the part that critically determines the pace of output