1
Q
What are results of a well-designed SCM system?
A
- competitiveness of all actors involved are improved
- costs and processing times are reduced
- quality, flexibility and reliability of delivery is improved
2
Q
What is SCM?
A
the coordination and optimization of value and supply chains
3
Q
What does SCM refer to in the broader sense (inter-organizational/external supply chain)?
A
the cross-company, vertical cooperation of legally independent companies in a value chain
4
Q
What does SCM refer to in the narrower sense (intra-organizational/internal supply chain)?
A
the networked processes of service production and utilization within the boundaries of a legally independent company, usually dispersed internationally across many locations
5
Q
What is logistics within a supply chain?
A
the primary means of product, information, and service flow
6
Q
Talking about the direction of the flow of products, information and services, towards what direction does downstream and upstream flows progress?
A
downstream: in the direction of the customers
upstream: in the direction of the suppliers
7
Q
What does the VRIO mosaic abbreviate in the context of the VRIO concept?
A
Value
Rarity
Imitability
Organization
8
Q
What does OEM stand for in the context of the automotive industry?
A
original equipment manufacturer
(a company that produces parts and equipment that may be marketed by another company)
9
Q
With what can we replace the traditional SCM perspective, which focused on individual companies and their products?
A
the value chain architecture, which shows how labor is divided in an industry as well as how the relevant value-added activities are coordinated
10
Q
What can be typical issues with the current value proposition according to the value chain architecture?
A
value destroyed, value missed, opportunities for new value creation
11
Q
Cooperation is said to exist when the activities of at least two legally independent companies…
A
…limit their economic independence by coordinating to create a competitive advantage.
12
Q
What have Amazon and 7-11 Japan built their success on?
A
the superior design, planning, and automation of segments of their supply chain
(e. g. the delivery of products to end consumers)
13
Q
What are examples of metrics of cooperation?
A
- area
- capacities
- commitment intensity (verbal agreement, majority equity participation)
- competencies (complementary, redundant)
- coordination (explicit, implicit)
- degree of integration (autonomy, organizational integration)
- direction (horizontal, vertical)
- duration (short-term, long-term)
- number of partners involved
- range of decision-making
- spatial dimension (locally-focused, global)
- structure
14
Q
What coordination forms do we distinguish based on the number of partners involved?
A
bilateral, trilateral, multilateral
15
Q
What are the main categories the goals of cooperative company activities fall into?
A
- costs
- market
- resources
- risk
- system competence
- time
16
Q
According to Otto (2002), what are the three supply-chain categories, in order of increasing scope and managerial demands?
A
- SC as a value-creation process
- SC as a group of companies
- SC as an extended inter-company organization
intra-firm processes → inter-firm constellations → networked orgs
Supply chain as a value-creation process — a process view focused on coordinating value-adding activities across functions (close to Porter’s value chain).
Supply chain as a group of companies — an institutional view where cooperating firms form a network (alliances, JV’s, consortia) around shared orders/division of labor.
Supply chain as an extended inter-company organization — the “extended enterprise” view where competing units are whole value chains/networks, not single firms.
17
Q
In the context of what it is very popular to view the SC as a value-creation process?
A
corporate management
18
Q
What does a potential profit margin result from in the view of SC as a value-creation process?
A
the difference between the costs of the value activities and the market value of their performance
19
Q
What are the 5 primary activities according to Porter (1985)?
A
inbound logistics, operations, outbound logistics, marketing and sales, service
20
Q
What does the term “depth of value creation” refer to in the context of SC as a value-creation process?
A
to the question of which of the main and supporting activities will be performed by the company itself or by independent third parties
21
Q
What does the term “silo mentality” refer to in the context of SC as a value-creation process?
A
strong department-centered thinking and acting
22
Q
What problems do restrictions of willingness to cooperate cause in the context of SC as a value-creation process?
A
- control problems
- coordination problems
- functional isolation
- information filtering
23
Q
What does the term “chimney effect” refer to?
A
cross-functional, horizontal processes coordinated centrally by management
24
Q
What is lead time?
A
the latency between the initiation and completion of a process
25
What does SoS stand for in the context of SC as a value-creation process?
system of systems
| (model)
26
What does CIP stand for in the context of SC as a value-creation process?
continuous improvement process
## Footnote
a systematic approach to enhancing efficiency, quality, and value across the SC
27
What are service processes in SCM?
**supporting processes** that are only indirectly related to the production of goods and services
28
What are 3 examples of control processes in the context of SC as a value-creation process?
- controlling
- leadership
- strategic planning
29
What are the three process layers of the SOS reference model for the supply chain as a value-creation system?
**Steering** (management processes) — planning, performance management & control, resource allocation, HR governance
**Operations** (core value-creating processes) — procurement, innovation, marketing & sales, order fulfillment, customer service
**Service** (support processes) — logistics, IT, HR administration, accounting & finance
30
What goals can we achieve with putting the high-level process architecture of a company on a graph in the context of SC as a value-creation process?
- capture value-creation processes
- identify external customer-supplier links
- identify internal customer-supplier links to draft performance agreements
- enable a systematic understanding of a company's business model
- outline interdependencies between value-added processes
31
What forms the basis of any process optimization of an internal supply chain in the context of SC as a value-creation process?
decomposition procedures
| (techniques of process structuring or process decomposition)
32
What are examples of process optimization benchmarks in SCM?
- process time
- process cost
- process quality
- process flexibility
33
What are 3 forms of process coupling in the context of external, cross-company supply chains?
- **vertical** coupling (of sequential value creation activities)
- **horizontal** coupling (of similar value-added activities)
- **lateral** coupling (without a factual logical connetion)
34
What are feasible reasons for collaboration among a group of companies?
- common customer order exists
- division of labor is specified between the actors involved
- integration of companies into a vertically-aligned network already taken place
35
What is a value chain among a group of cooperating companies embedded in?
an even more complex network
36
What does THS stand for in the context of SCM?
Transport/Handling/Storage
37
What are typical entities of a value chain model, where stages of the value chain are represented with THS processes between them?
extractor of raw materials, manufacturer, wholesaler, retailer, customer
38
What does the term "strategic alliance" refer to?
a formalized, long-term relationship w/ 1 or more companies
39
What is the term "joint venture" typically used to describe?
horizontal (usually cross-border) cooperation between 2 or more companies to achieve the prescribed cooperation goals
40
What is the cooperation variant called "network" centered around?
trust
41
Why is trust needed as a regulatory mechanism in the case of the network-based cooperation?
to reduce the uncertainty of future actions
42
What does the term "autonomy of action" refer to in the context of the network-based cooperation?
the ability (or agency) a company has to make their own decisions
43
What are the core paradoxes (tensions) in network-based cooperation models?
**Autonomy** vs. **interdependence** — each actor preserves self-governance yet depends on partners for value creation
**Flexibility** (market-like adaptability) vs. **stability** (hierarchy-like continuity of relationships)
**Cooperation** vs. **competition** — partners collaborate on shared goals but compete for individual advantage (coopetition)
**Specialization** vs. **integration** — actors deepen their core competencies yet integrate resources across network
Individual **maneuverability** vs. collective **coordination** — each actor's room to act is constrained by network-level governance demands
44
According to the typology of Sydow (1999), what are the 2 dimensions of the network construct in the external supply chain?
- dynamic qualities (stability, number of actors)
- form of governance (hierarchical, heterarchical)
45
What types of networks exist, according to Sydow (1999) based on the form of governance and the dynamic qualities?
- project networks
- regional networks
- strategic networks
- virtual networks
46
What are strategic networks characterized by according to the taxonomy of Sydow (1999)?
- a (relatively) **fixed** group of companies
- **long-term** cooperation
- 1 or more **focal** actors
- hierarchical-**pyramidal** structure
47
What are regional networks characterized by according to the taxonomy of Sydow (1999)?
- concentration of **SMEs** that desire economies of scale and more constant capacity utilization
- **polycentrism**
- organization is borne on an **equal footing** by all
48
What are project networks characterized by according to the taxonomy of Sydow (1999)?
- dominated by a **focal company**
- **dynamic spectrum** of actors involved
- higher possibility of opportunistic maneuvers
- limited in time
- strong, hierarchical coordination
49
According to Otto, what are used increasingly as a reference point for competitive processes in the context of SC as an extended extra-organizational organization?
value chains or value networks
50
Give an example for an argument in favor of the SC as an extended extra-organizational organization?
the increased desire of consumers for individualization
->
complexity in product and program spectrum unmanageable w/ traditional approach
->
reliable and flexible actors needed across the entire value chain
51
Give a couple of example processes SCs comprise?
- **flows** of goods, information, and services
- comprehensive **planning and control** of value-added processes
52
On the perception continuum of what constitutes a supply chain, what does the "minimum expression" and the "maximum expression" considers?
minimum expression: only logistics and the flow of goods
maximum expression: cross-company integration of all core processes
53
What does the Linkage/Logistics School focus on?
- the **logistical challenges** when thinking of supply chains
- **optimizing the interfaces** between chain members (e. g. to reduce inventories)
54
What school does the Integration (or Process) School elevate?
the Linkage/Logistics School
55
The basis of the Functional Chain Awareness School is the existence of a chain of different … (sub-)areas (for example, the provision of raw materials, manufacturing and distribution) between the … and a ….
The basis of the Functional Chain Awareness School is the existence of a chain of different **functional** (sub-)areas (for example, the provision of raw materials, manufacturing and distribution) between the **delivery point** and a **receiving point**.
56
What does the bullwhip effect describe?
coordination and communication problems in multi-level supply chains
57
What did Forrester determine when describing the bullwhip effect?
Even the **small**est **change** in the purchasing patterns of end customers at one end of the SC led to a **rough overreaction** to the changes.
58
Order fluctuations intensify in which direction of the SC?
upstream
59
According to Cannella and Ciancimino, what are the reasons for the bullwhip effect, i. e. what are the five broad mechanisms that create—or at least amplify—demand oscillations as orders move upstream?
- local processing of demand information
- order-bundling
- price fluctuations and quantity digression effects
- quantity allocation and bottleneck poker
- subjective misperception of information
60
What does highly fluctuating demand result in?
1. **Operational turbulence**
Discontinuous material flows → start-stop production and transport.
2. **Cost penalties**
Higher transport cost per unit (low fills, costly expedites).
More overtime and change-over cost in factories.
3. **Time penalties**
Longer and more variable lead times.
4. **Resource inefficiencies**
Oscillating capacity utilisation.
Rising buffer inventories.
61
SCM is not a concept rooted in business theory. Instead, it is born of what?
business practice
62
What are the 3 theoretical concepts the New Institutional Economics developed, according to Klein (1999)?
- principal-agent theory
- property rights theory
- transaction cost theory
63
What behavioural assumptions apply following the premise of methodological individuaism according to the New Institutional Economics?
utility maximization oriented towards self-interest, limited level of information and thus rationality
64
Give examples for factor specificity.
- specificity of **human capital** (e. g. specialized R'n'D people)
- **location** specificity (e. g,. locally bound resources)
- **order-related** specificity (e. g. capacity to certain customers)
- specificity of **physical capital** (e. g. customized parts)
65
What are important determinants of transaction costs?
- factor specificity
- transaction frequency
- uncertainty
66
In the market–hierarchy paradigm, what governance forms are used to coordinate transactions—and how does the extended view refine the basic dichotomy?
Basic (dichotomy):
Market coordination (price mechanism dominates).
Hierarchy coordination (internal authority/instructions dominate).
Extended view:
Adds hybrid governance forms between market and hierarchy that combine elements of both and are typically most efficient (lowest transaction costs) at medium levels of asset specificity/uncertainty/complexity.
## Footnote
Market = “prices decide”, Hierarchy = “boss decides”, Hybrid = “contracts + collaboration decide (mostly)”
67
In the extreme form of market-based organization, what dominates the coordination logic?
price mechanisms
68
What level of specificity, uncertainty and complexity does the hybrid coordination model yield?
medium
| (to have the lowest transaction costs)
69
What is the cause of the assumed conflict between principal and agent in the principal-agent theory?
an asymmetrical distribution of risk, information and interest
70
In the information asymmetry type called hidden intention, what is the principal uncertain about?
the behavoural characteristics of the agent
71
In the information asymmetry type called
**hidden action**, what is the principal uncertain about?
the specific nature of the agent's behaviour
72
What types of agency costs are there?
monitoring and control costs, bonding costs, opportunity costs (= residual loss)
73
What does game theory model as game situations?
social interactions
74
What does it make easier to analyze that game theory emphasizes the strategic elements of how individual actors make decisions?
strategic decision-making processes/situations
75
What types of matrices are involved in the analysis of the prisoners' dilemma?
event matrix and payoff/payout matrix
76
What do p/r/s/t abbreviate in the payoff/payout matrix in the case of the prisoners' dilemma?
punishment, reward, sucker's payoff, temptation
77
In a one-off match situation, what strategy is rational for the players of the prisoners' dilemma to pursue?
defect
78
What rules did Robert Axelrod develop for game theory to reach the best results?
1. Be nice.
2. Be provocable. (if your opponent defects, you should defect the next turn, if your opponent cooperates, you should cooperate)
3. Don't be envious.
4. Don't be too clever.
79
How does Harland (1996) define the network in the context of network theory?
a type of relationship between a defined group of people, objects, or events
80
What are the 4 partial networks in the network approach?
- data network
- goods network
- institutional network
- social network
81
What do the partial networks embody according to the network theory?
quasi-independent SCM objects
82
According to network theory, what do the nodes and edges represent in the **goods** **network**?
nodes: value-creation activities
edges: transfer mechanisms
## Footnote
Nodes represent value-creation activities or entities (e.g. production, processing, distribution points). Edges represent the transfer mechanisms that connect them (e.g. logistics flows, transactions, contractual links).
83
What are the nodes and edges in the data network according to network theory?
nodes: information processing systems (people or machines)
edges: communication channels for data exchange
84
In the institutional partial network (network theory in SCM), what are the nodes and what are the edges?
Nodes: the cooperation partners (the firms/organizations involved)
Edges: the formal institutional links between them—especially contracts and equity investments/ownership stakes
85
What is the main reason the data network is included as one of the 4 main partial networks in network theory?
Information is needed to make decisions cooperatively.
86
In finance, a real option provides the holder the right, but not the obligation to do what?
purchase an object
| (e. g. shares, currencies)
87
Using what kind of models is it possible to **assess** the **financial** **value** of real options in a cooperation?
financial mathematical models
88
According to the resource dependence approach, companies can be interpreted as what?
systems of resource acceptance processes and resource supply processes
89
What are the 3 main factors characterizing the insecurity regarding the availability of resources in the resource dependence approach?
1. the extent of the resource concentration
2. the scarcity of resources
3. the intensity and no. of connections needed to mobilize the resources
90
When is there reason for companies to cooperate according to the resource dependence approach?
When they are dependent on each other, or when they share certain resources.
91
SCM is a critical success factor in today's field of competition, particularly due to what characteristic of the global market?
volatility
| (frequent, unpredictable changes)
92
In the context of SCM, what kind of managers does a company want to employ?
Managers who are **able to**:
- **consider the effects** of their decisions on the network
- **supervise** the entire value chain and act in a **process-oriented** manner
- **understand** how to create a **win-win** relationship from opposing interests.
93
What are the primary components of inventory holding costs that SCM can quickly reduce?
Capital costs — tied-up working capital (opportunity cost of money sitting in stock)
Storage costs — warehousing, handling, insurance premiums
Risk costs — obsolescence, depreciation, shrinkage, damage
94
What do we refer to with the term *system costs* in SCM?
costs of planning, managing, and controlling the material flows along the supply chain
95
Who are at the center of the value-added network?
the end users
96
What do we want to ensure when we are looking to realize flexibility advantages through SCM?
that the network can react quickly to dynamic challanges w/o disrupting the cross-company processes
97
According to Otto and Kotzab (2003), what are the 6 most important dimensions/perspectives acting as reference points for SCM?
- logistics
- marketing
- operations research
- organization
- strategy
- systems dynamics
98
In Otto & Kotzab (2003), from the system dynamics perspective, what are the main coordination problems in a supply chain?
Lack of chain-wide **inventory visibility** (missing stock information across partners)
**Order variability** amplification due to order batching/bundling across planning cycles
**Process**/capacity **misalignment** from unsynchronized production planning, leading to bottlenecks or idle time
99
What does the marketing perspective focus on in Otto & Kotzab's model?
- procurement marketing (upstream)
- distribution of goods to the end customer (downstream)
100
In Otto & Kotzab’s model, what is SCM’s core task from the logistics (process-flow) perspective?
To streamline and integrate cross-company processes and their interfaces/handovers into a more efficient end-to-end flow—while managing a smooth transition to the improved process.
101
According to Otto & Kotzab’s organization perspective in the six perspectives of SCM, SCM is best understood as what?
a form of **relationship management**
## Footnote
i. e. establishing the right strength of ties and governance structures (trust, controls, safeguards against opportunism) to enable efficient cross-company collaboration
102
What are the core tasks of SCM considered particularly problem-relevant per the strategy perspective in Otto & Kotzab's model?
- **positioning** of the company **within the SC** based on the expected profitability of the chain links
- **quick integration of other companies into the SC** to meet customer reqs
- **vertical** range of **manufacturing**
103
The focus of the perspective strategy is the … of the supply chain as a … bundle of … and profits.
The focus of the perspective strategy is the **interpretation** of the supply chain as a **heterogeneous** bundle of **competencies** and profits.
104
In the problem spectrum of SCM, what elements are close to the IT dimension?
- advanced planning
- collaborative supply chain management (**CSCM**)
- computer integrated-manufacturing (**CIM**)
- constraint-based planning (**CBP**)
- decision support system (**DSS**)
- electronic data interchange (**EDI**)
- enterprise resource planning (**EDR**)
- eXtensible Markup Language (**XML**)
- extranets
- supply chain event management (**SCEM**)
- WebEDI
105
In the age of digitization, what has become one of the most important part of functional SCM?
IT
106
What do the information flows generated by the IT function in SCM help to avoid?
They mitigate the bullwhip effect and other destabilizing supply-chain dynamics.
| (order/inventory oscillations and variability amplification)
## Footnote
Accurate, timely, shared data (e. g. POS sales, inventory/lead times, forecasts) dampen variability, reduce phase delays, and improve coordination—thereby cutting stockouts/overstocks and smoothing replenishment.
107
What is the main focus of IT-based SCM?
data-driven integration across partners to synchronize decisions and flows end-to-end
108
What do ERP II systems add as a new functionality when compared with traditional ERP systems?
support for cross-company processes
109
What does APS stand for in SCM
advanced planning and scheduling
110
How are APS systems usually implemented?
as supplementary add-ons to existing ERP systems
111
In Corsten & Gabriel’s (2004) industry-oriented supply chain typology, what two dimensions are used to classify supply chains into four types (and thus discuss typical SCM coordination challenges)?
- **demand behaviour/type** (dynamic/volatile vs. stable/predictable demand)
- **product structure** (physically assembled vs. chemically or biologically manufactured)
112
What type of demands are listed in the typology of Corsten and Gabriel (2004)?
dynamic and stable
113
What SC category is common when the product structure is chemical-biological and the demand is stable?
connected supply chain
| (chemical-pharma industry)
114
What SC category is common when the product structure is chemical-biological and the demand is dynamic?
fast supply chain
| (consumer goods)
115
What SC category is common when the product structure is physically assembled and the demand is dynamic?
agile/modular/movable supply chain
116
What SC category is common when the product structure is physically assembled and the demand is stable?
**lean** supply chain
117
In what field is the discipline of logistics rooted?
military
## Footnote
(the planning, provision, and deployment of resources to support the armed forces)
118
Who was the first to attempt to establish a theory of operational logistics?
Oskar Morgenstern
| (1955)
119
What are the 4 development stages of logistics?
1. material-and-goods-flow-related service function (THS)
2. flow-related coordination function
3. intra-company flow orientation
4. cross-company flow orientation (SCM)
120
What is the focus of the 3rd development stage of logistics (intra-company flow orientation)?
smooth information
## Footnote
Its focus is on smooth information flows inside the company, i.e. reducing information deficits at the interfaces of internal process chains through improved IT support and coordination.
121
Global sourcing, flexible overseas production, and distribution in international markets require what kind of logistical alignment?
They require **network-oriented** logistics alignment—i.e., coordinating and optimizing logistics across the entire global corporate network, not as isolated local functions.
122
What are the 3 types of logistics systems based on the development of the concept of logistics?
macrologistics
metalogistics
micrologistics
123
What are subtypes of micrologistics?
- **corporate** logistics
- hospital logistics
- **military** logistics
- logistics of other forms of organization
124
What are the main functional sub-areas of corporate logistics?
1. procurement logistics (inbound supply of materials/services into the firm)
2. production logistics (planning/control of in-plant material + information flows to support production)
3. distribution logistics (outbound storage/transport flows from end of production to the customer)
4. disposal/reverse/circular logistics (collection/return of residuals/returns for recycling or disposal)
125
What did former supply-oriented logistics turn into because of new obligations, such as waste avoidance and recycling?
**circular** logistics
126
How do firms resolve interface problems between functions in corporate logistics?
By managing logistics end-to-end as a cross-functional process: establish cross-functional planning and control (e. g. integrated planning), assign clear process ownership, align shared KPIs across departments, and ensure consistent information flow (often supported by integrated systems/process frameworks).
## Footnote
Use process-oriented, cross-functional coordination (planning + controlling) instead of silo optimization.
127
What kind of perspective does the 4th stage of the evolution of logistics postulate?
a cross-company perspective of flow-oriented thinking in logistical categories
128
What are the most important development stages of SCM according to Baumgarten?
1) Internal functional integration →
2) Partner information exchange →
3) Collaborative value-added network (near real-time info)
4) End-to-end synchronization via digitization (data streaming realm)
129
When it comes to transport and …, the goal is to coordinate all activities for the benefit of the … of materials and … — from the end of … to the moment the goods are handed over to the ….
storage, flow, information, production, customer
130
What are the main problems cooperation agreements are fraught with?
- **ambiguous** relationships (caused by heterogeneous motive structures)
- **deficits in** the **management** of inter-organizational relationships (often where cooperation skills are lacking)
- **hyperfocus** on the details
- **neglect** of the social dimension
- **simultaneity** of cooperation and competition
131
Through only what is it possible to have cooperation without trust?
fear tactics
| (making threats)
132
When is trust explicitly necessary?
When we want to:
- address conflicts
- compensate for a lack of formalized contracts
- foster a culture of cooperation
- increase flexibility
- limit the effects of the cooperating partners' business conduct
- promote an open exchange of information
- reduce complexity
133
What are the 5 phases of cooperation management per the life cycle model?
1. Initiation
2. Partner search and partner choice
3. Foundation and conception
4. Networking of the process
5. Control and maturation
134
In the cooperation life-cycle model, what is the main focus of the initiation phase?
Analyze the potential partner(s)’ starting situation (market/resources and key cooperation-quality factors) and define **shared** cooperation **goals**—creating the baseline and criteria that guide systematic partner identification/selection in the next phase.
| Initiation = baseline + shared goals.
135
What do the scope of the agreements developed during phase 3 (foundation & conception) of the life cycle model of cooperation management encompass?
- common goals
- contributions
- distribution of profits
- measures for avoiding and managing conflicts
- organization, information & communication structures
- property rights & exit clauses
- schedule and duration of steps
136
What kind of approaches are required by SCM for the decision-making processes?
holistic, structured and systematic
## Footnote
Id e. end-to-end, cross-company views (holistic); use of clear process frameworks and reference models (structured); and methodical, data-driven procedures that capture interdependencies and balance detail vs. abstraction (systematic).
137
What do management concepts do, according to the terminology of Seghezzi (1997)?
They provide a framework for orientation and give the management general ideas to facilitate decision-making.
138
What do management models consist of, according to the terminology of Seghezzi (1997)?
generic tools and concepts that allow management to bring the ideas of the concept into practice
139
What is a company's management system, according to the terminology of Seghezzi (1997)?
the application of management models and general guidance from a management concept in the context of a specific company
140
Give examples for types of management systems.
- **environmental** management systems
- **information** management systems
- knowledge management systems
- **quality** management systems
- **risk** management systems
- **safety** management systems
141
In the conceptual framework proposed by the St. Gallen management model, what planning types are distinguished?
normative, operational and strategic planning
142
What aspects of a business does management need to take into account to have optimal decisions and the optimization of corporate processes?
all and also their interconnections
143
What are the 3 logistical drivers in the SCM model of Chopra and Meindl?
1. storage and production **facilities** + their capacities and locations
2. **inventories** of raw materials, semi-finished goods and finished goods
3. **transportation**, including modes, routes and legs (útszakasz, menet, forduló)
144
What are the 3 cross-functional drivers in the SCM model of Chopra and Meindl?
1. **analysis, data** and **info** on capacities, costs and inventories
2. **deciding** on which organization does which activity (management, production, storage, transport)
3. **pricing** of products and services of the SC
145
What kind of approach is needed in SCM given that decision in a SC can rarely be reduced to isolated cause-and-effect relationships?
a systemic approach
146
What are components of the SC decision-making framework proposed by Chopra and Meindl?
* corporate strategy
* cross-functional drivers: information, pricing, sources
* efficiency-responsiveness trade-off
* logistical drivers: facilities, inventory, transportation
* SC strategy
147
Please list three fundamental requirements management systems have to meet.
- **abstract** enough and not too close to the details of corporate reality
- **consistent** with corporate structures and processes
- **generic** enough to be used in any company
- **robust** enough with respect to changes in the business world
148
What is SCC an abbreviation of?
Supply Chain Council
| (nonprofit)
149
What does SCOR stand for?
supply chain operation reference
## Footnote
(model that provides companies with a standardized framework to analyze, describe, measure and optimize their SC)
150
What are the key benefits of using SCOR?
- holistic view
- standardized nomenclature
- standardized performance measurement
151
What are the 6 primary management processes (the basic building blocks) of the SCOR model?
1. Plan
2. Source
3. Make
4. Deliver
5. Return
6. Enable
152
What is the SCOR term for organizing performance metrics across levels in a hierarchy?
metric **decomposition**
| Level II and III metrics “drill down” from Level I KPIs
## Footnote
This metric decomposition is also described as “performance diagnosis” or “(metrics) root cause analysis” because lower-level metrics help explain gaps in higher-level KPIs.
153
What are the SCOR levels?
1. **top** level (management processes)
2. **configuration** level (process categories)
3. **composition** level (process elements)
4. **implementation** level
154
Based on what does SCOR provide a toolset to produce SC models?
generic principles
155
What are top-level KPIs diagnostics for in the SCOR model?
the overall health of the SC
156
What are 3 important SCOR performance attributes of the segment 'interaction with customers' according to the SCOR model?
agility, reliability, responsiveness
157
What are the metrics defined for SCOR level I (top) related to asset management efficiency?
- cash-to-cash cycle time
- return on fixed assets
- return on working capital
158
What process categories are the plan processes divided into on level II (configuration level) in the SCOR model?
- planning of **SC**
- planning of **Source** processes
- planning of **Make** processes
- planning of **Deliver** processes
- planning of **Return** processes
159
What are 3 main make process categories in the SCOR model?
- make-to-stock
- make-to-order
- engineer-to-order
160
What subprocesses do enable processes have in the SCOR model?
1. Assess **performance**
2. **Establish** and **manage** **rules**
3. Manage **capital** assets
4. Manage **data**
5. Manage **inventory**
6. Manage regulatory **compliance**
7. Manage SC **configuration**
8. Manage **transportation**
9. Process-specific elements
161
How are management processes (Level 1) and process categories (Level 2) codified in the SCOR model?
Level 1: lowercase "s" + capital letter (e.g. sP, sM, sD)
Level 2: Level 1 code + integer (e.g. sD1, sP3)
162
What 3 process types exist in the SCOR model related to the 6 primary management processes?
1. **Planning**
2. **Execution**
3. Enabling
163
What other terms are used for metrics decomposition in the SCOR model?
performance diagnosis/root cause analysis
164
How to analyze the identifier 'sM1.4' in the context of the symbol system of the Association for SCM?
s = SCOR
M = Make
1 = Make category 1 = make-to-stock
.4 = process step 4 = Package
165
Provide a process decomposition for Make category 1 (make-to-stock).
sM1.1: Schedule production activities
sM1.2: Issue material
sM1.3: Produce and test
sM1.4: Package
sM1.5: Stage product
sM1.6: Release product to deliver
sM1.7: Waste disposal
166
Provide a process decomposition for Make category 2 (make-to-order).
sM2.1: **Schedule** production activities
sM2.2: **Issue** source/in-process product
sM2.3: **Produce** and test
sM2.4: **Package**
sM2.5: **Stage** finished product
sM2.6: **Release** finished product to deliver
sM2.7: Waste **disposal**
167
What performance metrics correspond to agility and assets?
agility: N/A
assets: capacity utilization
168
What performance metrics correspond to reliability and responsiveness?
reliability: schedule achievement
responsiveness: speed of reaction (issuing the schedule instruction and completing the work captures how fast the system can respond to new orders, changeovers, rush jobs, etc)
169
What do we have on level IV (implementation level) in the SCOR model?
nothing
## Footnote
(steps are too industry-, even company-specific to fit into a reference model)
170
In what way is the SCOR model agnostic?
company- and industry-agnostic
171
What critiques can we cite in relation to the SCOR model?
- It **neglects** the **socio-economic background** in which companies operate.
- Its **definition** of best practices **implies** that **copying** a successful company's methods **will** **lead** **to** comparable **success**.
- It does **not** take full consideration of cultural and social **norms**, **values** and **traditions**.
172
The SCM task model structures planning tasks within a SC and puts them in a hierarchy according to what?
the planning horizon
173
What decision types do we have in the SCM task model?
strategic, tactical, operational
174
What are the 3 main levels of SCM in the SCM task model?
1. SC design
2. SC planning
3. SC execution
175
What other levels can be added to SC design, SC planning and SC execution in the SCM task model?
controlling, network information management
176
In the SCM Task Model pyramid, along which dimension are tasks arranged hierarchically?
Along the planning horizon:
| with information/controlling supporting all levels
## Footnote
* Strategic supply chain design (long-term) at the top →
* Supply chain planning (mid/short-term) in the middle →
* Supply chain execution (operational) at the base
177
What does management required to do when taking on the strategic responsibility to determine the company's SC design?
define the overall scope and structure of the SC in a way that best suits the overall business strategy
178
What should be addressed in the process of SC design according to the SCM task model?
- **vertical integration** of the SC as a whole
- vertical integration among SC partners
- **horizontal size** of SC **tiers**
179
What is a focal company according to the SCM task model?
the leading organization in a SC
| (often the founder of the SC)
180
According to the SCM task model, what kind of decision is it when companies need to figure out on a strategic level which stages of production they want to run in-house and which ones will they expect from their suppliers?
make-or-buy
181
Which economist systematized transaction cost economics (TCE) as a theory of governance?
Oliver E. Williamson
182
Which production-cost and transaction-cost factors (TCE/Williamson) influence a make-or-buy (vertical integration) decision?
- **continuity** (frequency & long-term recurrence of the need): how ongoing/repeated the purchases/relationship will be (one-off vs “we’ll need this every week for 5 years”)
- **knowledge** required to make or use a product
- uncertainty of demand: volatile demand raises coordination and contracting effort
- unit production cost (in-house vs supplier price, incl. “pure technical” cost)
183
What scenarios can we mention when a hybrid of make and buy should be used?
- own production is steady, but demand suddenly spikes up
- in the process of sunsetting a product, buying can be cheaper than own capacity utilization after a while as demand drops
- demand increases gradually, but company cannot produce more due to regulatory or specialization reasons
184
What are the dimensions of the make-or-buy portfolio according to Williamson (1985)?
- product(ion) process **complexity**
- suppliers' **expertise** regarding product(ion processes)
185
What are the five strategic positions in the make-or-buy portfolio (adapted from Williamson's TCE framework)?
MAKE — produce internally (high asset specificity, strategic core)
BUY — source from market (low specificity, commodity)
Cooperate — hybrid governance via strategic alliance or technological co-operation
Objective: MAKE — currently bought, but transitioning toward in-house (increasing strategic relevance)
Objective: BUY — currently made, but transitioning toward outsourcing (decreasing specificity)
## Footnote
The three stable positions (Make, Buy, Cooperate) reflect Williamson's market–hybrid–hierarchy triad. The two transitional positions (Objective: Make/Buy) add a dynamic layer, capturing that sourcing strategy isn't static — components migrate across the portfolio as technology matures, markets develop, or strategic priorities shift.
186
By what megatrend end-consumer markets have been shaken up in the past decades?
product individualization
187
In which year did Henry Ford announce the Model T?
1908
| The Model T was publicly introduced on October 1, 1908.
188
In what colours did Henry Ford provide the Model T?
black
189
What was more important 100 years ago as a trend in the dilemma between price vs. customization?
100 years ago: price
now: customization
190
What are characteristics of consumers of the digital age per Correia (2016)?
- assuming of different consumer identities per brand they interact with
- inclination to spontaneous purchases
- integration of shopping into other daily activities
- less concern for privacy and PI
- quick switching between brands
- transfer of high service expectation from one type of product or service to another
191
What is the pivotal goal conflict of SCM per Correia (2016)?
Balancing the trade-off between **cost**, **quality**, and **time**.
| SCM’s Iron Triangle
## Footnote
Focusing on one dimension too aggressively often compromises the others. This balance is essential to meeting customer expectations while maintaining competitiveness.
192
Why do distributors purchase larger quantities of products?
to achieve a lower per-unit price
193
In the context off SCM, what kind of risks holding stocks incur?
Goods may perish or become obsolete.
194
Why do distributors buy from different producers?
to create an assortment of complementary products
195
What are the most basic services provided by logistics service providers?
THS
196
In the context of logistics service providers, what does the acronym “CEP” refer to?
| (hint: think DHL/UPS/FedEx)
Courier, Express and Parcel
## Footnote
the logistics subsector covering time-critical courier and express services and standard parcel delivery
197
What was the average annual growth of the CEP market in Germany between 2000 and 2019?
4.1%
198
From and in the direction of what kind of shipments does the growth of e-commerce tilts CEP markets?
from B2B to B2C
199
Do time-sensitive or time-insensitive shipments dominate the CEP market?
time-insensitive or standard shipments
200
What are the 5 types of logistics service providers appearing through the evolution of logistics?
1PL: in-house logistics division, no separate logistics company
2PL: transport, transshipment and storage outsourced
3PL: 2PL + contract w/ custom reqs (home delivery, installation, customs brokerage etc.)
4PL/lead logistics provider: SCM as a service offered by an external company who contracts with several 3PL providers
5PL: focusing on possible savings across multiple clients (supply network)
201
Typical 3PL services can be categorized into services intensive from what perspective?
asset, IT
202
Why do 4PL providers contract 3PL providers?
Because 3PL providers have the assets and services required to physically run a SC.
203
What main categories suppliers fall into?
OEMs, ODMs and OBMs
204
What do OEMs focus on?
the production of parts per the specs of the customer
205
What do ODM and OBM abbreviate?
– original design manufacturer
– original brand manufactorer (the whole shenanigans, like Commodore)
206
In terms of their primary selling relationship (immediate customer, not the ultimate end-user), what is the typical market orientation of OEM, ODM, and OBM companies?
OEM (Original Equipment Manufacturer): Primarily B2B — supplies components/modules to another firm that owns the final product/brand; may also sell B2C in the aftermarket (spares/repairs).
ODM (Original Design Manufacturer): B2B — designs and manufactures unbranded/white-label or private-label goods for brand owners/retailers.
OBM (Original Brand Manufacturer): Market-facing brand — sells B2C (direct to end-customers) and often B2B through retailers/distributors; owns design, manufacturing (to varying degrees), brand, and distribution.
207
What are the four supplier types classified by the complexity of input they provide?
- parts
- component
- module
- system (first-tier)
| in ascending order of integration
## Footnote
Each level integrates elements from the level(s) below (e.g. parts make up components, components are assembled into modules, modules combine into complete systems delivered to the OEM).
208
In a tiered supply-chain structure, what tier is the focal company assigned?
0
| its direct suppliers are Tier 1, their suppliers are Tier 2, etc.
209
What do tier-1 suppliers supply?
systems and modules
210
What are tier-1, -2, -3 and -4 suppliers supply to an OEM in car manufacturing?
Tier 1 (system/module → OEM): infotainment system, drivetrain, seat assembly
Tier 2 (component → Tier 1): brake caliper, fuel pump, wiring harness
Tier 3 (part → Tier 2): fastener, lamp, seal, connector
Tier 4 (raw material → Tier 3): steel, rubber, glass
211
What are common internal conflict areas (goal conflicts) in a company’s supply chain?
Sales/marketing vs operations (production/logistics): revenue & service promises vs capacity, cost, and feasibility.
Corporate/HQ vs regions or business units: standardization, shared KPIs, and global optimization vs local autonomy and customer/market specifics.
Process/**market** view **vs** **functional**/business reporting lines: e.g., metrics and accountability organized “by business unit” while performance requirements are “by customer/channel,” creating internal misalignment.
212
What areas are under SCM in a traditional, functional org structure?
* customer call-offs
* material input purchase
* production planning
* storage
213
What are the 4 types of business process links proposed by Lambert et al. (1998)?
- **managed** process links
- **monitored** process links
- **non-member** process links
- **unmanaged** process links
214
What does the push principle rely on?
centralized planning and coordination of the material flow
215
What is the pull principle based on?
Actual customer demand—downstream consumption (orders) triggers replenishment/production upstream (e.g., via Kanban signals).
216
Which do SCMs have to use, the push or the pull principle?
an expedient combination of both
217
To which parts do we apply the push principle in the automotive industry?
all parts until semi-finished product parts
218
What does OPP stand for in SCM?
order penetration point = decoupling point
219
What does MTS abbreviate in production?
make-to-stock
220
What is MTS production based on?
projections, demand forecasts
221
What does make-and-ship-to-stock add to MTS?
it preemptively distributes goods for which an order is likely to be made toward various stock locations close to potential customers
222
Give an example for assemble-to-order (ATO) production.
Schenker
223
Give an example for make-to-order (MTO) production.
aircraft manufacturers
224
Give an example for engineer-to-order (ETO) production.
Vanderlande, a Dutch baggage handling systems manufacturer working for airports
225
What does APS abbreviate in SCM?
advanced planning and scheduling (systems)
226
What concrete type of planning issues do APS systems (try to) solve?
- contracting
- demand planning
- distribution planning
- master planning
- material reqs planning
- personnel planning
227
Coordination can be understood in a business context as the glue holding orgs in a SC together, and also as … helping their cogwheels to run smoothly.
the grease
228
In business, the concept of coordination can be understood as the process of … influence and control between elements of a system trying to optimize the system.
mutual
229
When do we talk about vertical collaboration?
if a company is collaborating with companies that either supply it with inputs or purchase its outputs
230
When do we talk about horizontal collaboration?
if competitors collaborate
| (e. g. Radeberger & Veltins)
231
When do we talk about lateral collaboration?
if the collaborating entities are completely different
| (w/ respect to the SC)
232
What are the 3 main forms of external collaboration in terms of the relationship between participating organizations?
horizontal, lateral, vertical
233
What are the 2 main approaches of collaboration with respect to the direction of coordinating activities?
feedback, feed forward
234
If Kirsten ordered cardboard boxes for Monday, and they arrived on Tuesday, what does the feedback motivate her to note?
that the lead time of the supplier is 1 day longer than announced
235
What does decision-making and control rely on in coordination through centralization?
a clear-cut corporate hierarchy
236
What does decentralized (market-based) coordination rely on?
It relies on independent decision-making by each actor, with coordination emerging mainly through the price mechanism.
237
What are the 2 extreme forms of collaboration between which most SC collaborative structures can be placed?
military-like command structures and the anarchy of free markets
238
Among what kind of entities does the corporate governance structure specify the distribution of rights and responsibilities and lay down the rules and procedures for decision-making?
the company’s key governance participants
## Footnote
- **board** of directors
- executive **management**
- **shareholders** (owners)
- other stakeholders (e.g., employees, creditors, suppliers, customers)
239
For the focal company, what kind of problem is choosing the governance structure and coordination mechanisms?
a strategic decision and optimization problem
240
When do we speak of an integrated company?
When previously independent firms merge into a single entity through vertical integration (combining successive stages of the supply chain, e.g. a manufacturer acquiring its supplier) or horizontal integration (combining firms at the same stage, e.g. two competing retailers merging).
241
In a cooperative supply chain structure, which elements are especially important for coordination between partners?
- commonly agreed rules, incentives and sanctions
- joint case-by-case **decision-making**
- jointly defined common goals
- negotiation between partners
- shared corporate culture
242
What are the 2 main type of transaction costs with respect to the temporal dimension, according to Williamson (1985)?
ex ante & ex post transaction costs
243
Which three high-level factors determine the scope and importance of the coordination problem in supply chain management?
Environmental dynamism (volatility & predictability): how strongly and how fast external conditions change, and how predictable they are
Information availability (visibility): whether decision-makers have sufficient, timely information to coordinate effectively
System complexity (diversity, heterogeneity, interdependence): how many factors/actors exist, how different they are, and how tightly they affect each other
## Footnote
These map cleanly to time-varying uncertainty (dynamics), data quality/latency & sharing (information), and network/graph complexity (complexity).
244
In SCM, what are the main levers to reduce the need for coordination across the network?
Two complementary levers:
1. **Reconfigure** the **network** to cut coordination links:
– Vertical integration of suppliers/service providers/customers
– Supplier-base rationalization (greater focus on procurement)
– Streamlined distribution (fewer echelons/intermediaries)
2. **Add** organizational **slack** to decouple and buffer:
– Higher safety stocks, spare capacity/equipment, and broader staff skills to buy time and flexibility.
245
Why would a focal company need to develop closer contractual ties with its module supplier after cutting ties with other suppliers?
to secure continuous supply
246
What is organizational slack?
excess resources that could help alleviate goal conflicts, provide a safety buffer for dire situations, and facilitate decision-making
247
What are the more centralized and the more decentralized structures called in cooperation management?
hierarchical & heterarchical
248
Which form of SCM is characterized by a focal firm that centrally orchestrates and controls the supply chain’s structure and key processes?
hierarchical SCM with centralized governance by the focal firm
249
What does CPFR stand for in coordination management?
collaborative planning, forecasting & replenishment
250
In CPFR, when companies at different supply-chain tiers deliberately share POS data, forecasts, inventories, and plans, what outcomes are they aiming for?
| Think: one demand signal → one plan (share POS!).
They aim to (1) create a single, more reliable demand signal and a consensus plan—reducing planning uncertainty and forecast error—and (2) synchronize production and replenishment to curb the bullwhip effect, lower safety stocks and expedites, and raise service levels.
## Footnote
CPFR uses exception reports to reconcile forecast mismatches before converting to orders
251
What does the effectiveness of management instructions from the focal company within a SC rely on?
the assumption that the recipient has an economic interest in remaining in the SC
252
What does EDI stand for in SCM?
electronic data interchange
253
What do plans set in a hierarchical SC?
goals + objective and rule-based **incentives** for meeting & exceeding a goal
254
What are highly fungible commodities?
könnyen helyettesíthető dolgok, javak
255
In supply-chain relationships, which two relationship dimensions most directly drive dynamic shifts in governance (e. g. from cooperative/self-coordinated to more centralized control) and therefore reshape how the supply-chain contract is organized?
- Mutual **trust** (low ↔ high)
- Relative **bargaining** **power** between partners (power balance vs. dominance)
256
Please name the three coordination instruments of hierarchical organizations.
management instructions, guidelines and plans
257
What does QCMS stand for in the context of SCM?
Quality Control Management System
258
What is a delivery point per the Functional Chain Awareness School?
The origin of a logistics segment. It could be a supplier’s gate, an internal warehouse, or a retailer’s DC — anywhere the goods are handed over for transport.
259
What is a receiving point per the Functional Chain Awareness School?
The destination of a logistics segment. It might be an internal function, a tier-1 customer, or the ultimate consumer.
260
gross markup
nyers haszonkulcs
| Assume that C = Cost and P = Profit.
## Footnote
C = 100 €
P = 150 €:
Profit per unit = P − C = 150 − 100 = 50 €
1) Markup (margen sobre coste / recargo)
Markup = (P − C) / C = 50 / 100 = 0.50 = 50%
2) Gross margin (margen bruto)
Gross margin = (P − C) / P = 50 / 150 = 0.3333… = 33.33%
