Chapter 9/10 – Logistics Management/Supply Chain Management

What is the role and purpose of warehousing in modern supply chains?
The basic functions of warehousing include movement, storage, and information transfer
Supply Chain Management
is the coordination of activities related to procuring materials and services, transforming them into intermediate goods and final products, and delivering them through a distribution system.
What are the objectives of supply chain management?
is to build a chain of suppliers that focuses on maximizing value to the ultimate customer. The supply-chain function’s role is to help identify the products and services that can best be obtained externally; develop, evaluate, and determine the best supplier, price, and delivery for them.
What is the objective of logistics management?
Obtain efficient operations through the integration of all material acquisition, movement, and storage activities
How do we distinguish between the types of risk in the supply chain?
Supplier failure to deliver
Supplier failure quality
Logistics delays or damage
Information loss or distortion
Natural catastrophes
Theft, vandalism and terrorism
What is vertical integration? Give examples of backward and forward integration.
Developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor
Backward integration: Purchase of suppliers
Forward integration: a form of vertical integration whereby activities are expanded to include control of the direct distribution of its products
What are three basic approaches to negotiations?
Cost-based price model (Supplier open its books to the purchaser, Based on time and materials or on a fixed cost)
Market-based price model (Based on published, auction, or indexed prices)
Competitive bidding (Common policy for many purchases)
What is the difference between postponement and channel assembly?
There are differences between post. and channel assembly. Post. implies that the final product is not assembled until it is shipped, usually with some modular features such as the power system for a printer. However, channel assemly actually moves assembly if a PC to the wholesale level where parts are received and assembly takes place. They are related but different.
What is CPFR?
CPFR, which stand for collaborative planning, forecasting, and replenishment, is another effort to manage/coordinate inventory with members of the supply chain to improve efficiency
What is the value of online auctions in e-commerce?
lower entry barriers for buyers and seller, increasing the number of people in the market, typically reducing cost.
What are blanket orders? How do they differ from invoiceless purchasing?
contract between a vendor and a purchasing organization where the two parties agree on terms whereby the purchasing organization can issue purchase orders for the vendor to fulfill. Issues like price, shipping and minimum order amount are covered in the contract, so both sides know what needs to happen when the purchasing organization needs to buy something under the contract.
Blanket orders can be invoiceless and invoiceless purchasing can be part of the blanket order, but they can also be done separately
What can purchasing do to implement just-in-time deliveries?
ensure that the supplier is capable of delivering quality products on time, provide production schedules for their supplies, examine its layout to ensure that deliveries can move quickly to where are needed, and train and empower employees to evaluate quality as the product is poruduced
What is e-procurement?
Electronic purchasing – i.e, the use of the Internet to buys or sell goods
What is SCOR, and what purpose does it serve?
The supply Chain Council had developed a model, the Supply Chain Operations
Reference model, that ist en effort to identify the best practices, and metrics in the supply chain
Explain function movement within a warehouse
While movement within a warehouse is minimal in terms of distance, it is significant when examined in light of the activities of receiving, transfer, order picking/selection, cross-docking, and shipping. Each element incurs costs. When performed inefficiently, profit margins of the firm can be eroded and
customer service levels can decline.
Explain function storage
maintaining products in inventory prior to their sale or use. It involves physically maintaining one or more items in a designated facility or area. Storage may be temporary or semi-permanent.
Explain function information transfer
occurs simultaneously with the movement and storage functions. Timely and accurate information is always needed by management as they attempt to administer the warehousing activity. Information on inventory levels, throughput/turnover levels, stock keeping locations, number and status of inbound and outbound shipments, customer data, facility space utilization, and personnel, are required.