Supply Chain
term that describes how different organizations are linked together to effectively and efficiently manage the demand of end customer
supply chain management
a total systems approach to efficiently manage the entire flow of materials, finance, information and services within the supply chain to meet needs of the end customer
value chain
a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market
business strategy
a long term plan of action designed to achieve a particular goal or set of objectives
contingency theory
theory that recognizes the need for managers to consider the relationship between a changing environment
porters 5 forces
Threat of new, Bargaining power of buyers, Threat of substitute, bargaining power of suppliers, rivalry
industrial organization theory
theory that claims that the market forces (porters 5) should drive decision making
resource based theory
theory that emphasizes management of internal sources to establish a unique skill set which will be difficult for the competitors to imitate
4 decision areas of strategy
Environment, Resources, Objectives, Feedback
False, The SC strategist asks: “What is the overall supply chain’s value proposition?” and “How does our company uniquely help the chain deliver on its value proposition?”
A valid supply chain business model must answer the two questions: “What is our business?” and “How can we do it better than anyone else?”
5 areas of value creation
Cost, Quality, Delivery, Flexibility, Innovation
3 types of customer satisfaction
Customer service, Customer satisfaction, Customer Success
customer service
traditionally focuses on internal serve levels and goals:
percent defective/on time
Customer satisfaction
strategy that requires direct input or feedback from their customers, from surveys, focus groups
Allows managers to align measures and allocate appropriate resources
Customer success
strategy that use supply chain knowledge to help customer become more competitive
customer centric fulfillment strategy
not all customers are the same, not all customers require the same level of service
3 types of analysis
Customer analysis, Supply Chain analysis, Competency analysis
customer analysis
analysis that identifies customer needs and segmenting the customers. Helps to fulfill needs of separate groups
Supply Chain Analysis
analysis that identifies end customer needs and capabilities that must be in place to meet those needs.
Capabilities that first tier customers need to satisfy downstream customers
competency analysis
analysis of something that company does so well as to provide a competitive advantage
1) What are we known for that makes us uniquely good
2) What do we do better than anyone else
3 customer relationships
customers of choice, Highly Valued, Transaction
True Core competencies are usually a small part of many people’s jobs, not a large part of a few.
T/F core competencies are almost always cross-functional.
Customer satisfaction cycle
1) Get into the mind of the customer
2) Conceptualize and develop a product
3) Verify Financial Viability
4) Invent in future customer pleasing products
intels 8 risk factors
design, cost, manufacturability, quality, legal issues, supply base, supply availability, environmental
early supplier innovation
key element of product innovation strategies, accounts for one third of reduction in labor hours
strategic thinking and reporting areas
Target, Team, Activity coordination, value and features, process, Manufacturing roadmap, Suppliers, Risks, Launch, Communication
role of finance
Performance measures for NPD, Profitability, Cash Flow, Economic value added
Economic Value added
considers how much money the company makes from operations after taxes less the cost of capital for the money tied up to make a profit
False – The demand chain is a term used by customer-focused marketers for the supply chain.
T/F The demand chain is the collection of customers and end users that consume a good or service.
core competency
set of activities, processes, skills or advantages that distinguishes a company from its competitors
identifying core competency
does the identified skill set contribute significantly to what customers perceiver as value added
-is the skill set difficult for other company to replicate or imitate
-are we particularly good at the skill set
-is the skill set broad enough
the process of moving an aspect of production, service, or any business function from within an organization to an outside supplier
4 types of outsourcing
Third party Logistics – some combination of logistics
– Contract Manufacturing – 3rd makes some component
-business process outsourcing – outsourcing accounting
-offshoring – different country
strategic risk
long term irreversible risk of outsourcing, risk based on a loss of knowledge related to core activities
tactical risk
short term risk of outsourcing based on the use of supplier for capacity, not knowledge
outsourcing process
1) establish the outsourcing mission
2) conduct an outsourcing analysis
3) establish and manage relationship
outsourcing relationship
arms length
-niche provider
-hybrid service
-full service
arms length outsourcing
best suited for routine purchase of goods
-suppliers are not differentiated
-supply market is very competitive
niche provider outsourcing
outsourcing where providers are generally specialized, providing very specific
-non-recurring purchases
hybrid service outsourcing
outsourcing that provide items of moderate importance that are someway integrated into company’s operations
-high degree of reliance
full service outsourcing
outsourcing that provides strategic items and processes that are entrenched into the firms own processes
-custom solutions
-significant presence
4 functions in organization
purchasing, production, logistics, marketing
any group of interacting, interrelated, or interdependent parts that form a complex and unified whole with specific objective
systems thinking
a holistic process of considering both the immediate local outcomes and the longer system wide ramifications of the decisions
functional thinking
decisions are made to achieve the local, functional optimum without regard to impact on the remainder of the company
components of systems thinking
requires a Holistic view, information availability, cross functional teams, performance measurement, systems analysis
systems analysis
components include: establish the core goal
define system boundaries, determine interrelationships, Determine information requirements, perform trade off analysis, consider system constraints
businessprocess reengineering
the radical redesign of business processes using systems thinking and information technology to achieve dramatic improvements in productivity and the performance