Basic Supply Chain Management

Question 1

Def. Supply Chain Management + which types of flows are apparent?

Answer 1

Supply chain management is the management of flows
between and among supply chain stages to maximize
total supply chain profitability.

Types:

• money
• information
• goods/services

Question 2

Explain Fisher’s model for Supply Chain
Strategies

Answer 2

-compares functional and innovative productes with efficient and responsive supply chain

• -> efficient SC and functional products match (demand is certain, SC can be improved to costs)
• -> responsive SC and innovative products match (demand is uncertain, reduces time to adapt)

Question 3

Difference between Functional/Innovative Products + Example

Answer 3

• functional products –> demand certain + long production life cylce (soap, toilet paper)
• innovative product –> demand uncertain + short plc (fashion goods, because of trends)

Question 4

Explain Efficient and Responsive Supply Chain

Answer 4

Efficient: aims to reduce costs throught planning of the system

Responsive: aims to reduce time to adapt to specific requirements

Question 5

How did Lee (2002) extend Fishers model? + shows the types and examples

Answer 5

• Lee says that there is no focus on supply uncertainty (just demand)
• -> adds supply uncertainties (weather, crisis)

Rish hedging –> vanilla
Agile Supply Chain –> semiconductors

Question 6

What is a Push-Pull Supply Chain?

Answer 6

Push: production to stock (low uncertainty)

Pull: only produce when customers stars order (high uncertainty)

Question 7

What is the bullwhip effect?

Answer 7

more flucatuation in the upstream of the SC

–> the variability is increases upstream the SC

“what u see ist not what they face”

Question 8

What are the cause for the bullwhip effect?

Answer 8

• price flucatuation (promotions sales and discounts lead retailers to stock up and order more)
• Volume and Transportations Discounts (full trucks are good –> retailer order more)
• inflates orders (adden)
• demand forecest: hard to forecast how much lower parts of the SC demand
• Long lead times: small changes in demand, changes safety stock and reorder a lot

Question 9

Definition of Supply Chain Visibility and why is it important?

Answer 9

The Visibility that the focal company has on its Supply Chain
is defined as “its ability to access the significant information
owned by its Supply Chain partners.”

–> In crisis problems in SC have to be seen, thus Visibility is required

Question 10

What are the types of SC visibility?

Answer 10

• one direction visibility (SC partners –> focal company)
• two directions visibilty (both ways)
• direct visibilty (only flow directly to a FC can be seen, not between SC partners)

Question 11

What are the Supply Chain Innovations in terms of Inventory Management?

Answer 11

• Material Requirements Planning (MRP)
• Kanban
• Economic Order Quantity
• Distribution Requirements Planning (DRP)

Question 12

What is an example for SC perfomance metrics?

Answer 12

• Service: Service relates to the ability to anticipate, capture,
and fulfill customer demand with personalized products and
on-time delivery
• Assets: involve anything with commercial value, primarily
inventory and cash
• Speed: includes metrics which are time-related—they track
responsiveness and velocity of execution

Question 13

Name the 3 pillars of Design for Logistics and SC

Answer 13

-Economic packaging and transportation – 3 Principles

1. Design products that can be efficiently packed and stored;
2. Design packaging so that products can be consolidated at
   cross docking points;
3. Design products to efficiently utilize retail space.

• Concurrent and parallel processing (processes in SC should be parallel = A+B –> C)
• Management of Variety (over time more products are published, but not all create the same profit. ABC-rule)

Question 14

What is a closed loop supply chain?

Answer 14

Closed-loop supply chains are chains where direct and
reverse flows form “loops” wherein used materials return to
previous points in the chain for reuse, reprocessing, or for new
use

Question 15

What is Supply Chain resilience and how can it be improved

Answer 15

-Ability how fast to get the SC back to the state that is what before a disruption

–> improvement with redundancy and flexibilty

Redundancy:

1. building up extra stocks or capacities in case of disruption
2. only benefits when disruption occures, otherwise just extra costs
3. investements are insurance premium

Flexibility:

1. using capabilites to adapt two changes quickly (one plant that can produce more products)
2. creates competitvie advantage
3. investment can be justifed with normal business results

Question 16

What are the rules for SC Operations?

Answer 16

1. Different channels may require different supply chain strategies.
2. Aggregate forecasts are always more accurate than individual forecasts
3. The appropriate supply chain strategy—push, pull, or push-pull— is driven by demand uncertainty and economies of scale.
4. IT investments need to be accompanied by similar and considerable investments in the appropriate business processes.
   (IT only works good, when processes are good)
5. A long chain is preferred when designing the manufacturing network for flexibility
   (Plant A helps, when Plant B does not work)

(physical –> retail, online –> amazon with push/pull)

Question 17

What are the Drivers of Supply Chain Innovation? (first examples)

Answer 17

• business ecosystems (amazon)
• population growth and demographics (more older people and increasing life expctancy –> new healthcare logistics)
• new customer (sustainable, online buying, organic products)
• urbanization (more people in cities, drones, hyperloop)
• mobility (infrastructure reached its limits –> rail and road + new fuel sources)

Question 18

What are the drivers of Supply Chain? (2)

Answer 18

• Digital culture
• Ubiquitous Intelligence (new technoligies)
• Resource Scarcity and Energy shifts (finite amount of recourses, increasing packaging –> slower ship speeds)
• climate change (more crisis –> disruption in the SC)

Question 19

Name an example for a field where a push strategy is better and where a pull strategy is better.

Answer 19

Push: Material Research Planners, cause of forecasting and expectation

Pull: Kanban (one leaves store, one more is produced)