GMS 804 CRIB Sheet PDF

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Chapter 1: Intro to SCM: SC & SCM: Three primary flows of SCM are Products (↑ number & acceptance of customer returns has created an area of SCM is Reverse logistics and Natural mov of product is from Supplier. Information (reduced uncertainty & inv level), Funds (transf in both directions). SC stages: Upstream (info coming toward company) player: Suppliers. Downstream (info being shared with other people) player: Customer. These 2 streams provide convenient point of reference. 2nd tier customer of manuf: Retailer. Driving growth of SCM: Customer sophistication.VC: SC under financial pressure that don’t add value to SC & they are quickly eliminated. Here SC compete with one another. SCM Activities: Coordin (mov of goods, services and funds), Info sharing, Collab (Most advanced acti, imp for business decisions from product D&P to implementing business strategy). Info flow through SC: Improved coordin & collab b/w SC partners, Reduction in amount of inv across SC, Reduction of bullwhip effect, Compression of SC from time standpoint. Customer Focus: Final Customer is driving force of SC. Service SC: tend to be shorter than manuf SC. More like hubs. Don’t have inv as buffer. Tend to focus on interaction b/w customer & provider & interac is high. They can observe behaviour of the customers and impact delivery of service in aspects such as quality, timeliness, accuracy, etc. Inaccurate info moving from retailer back through SC: Bullwhip Effect. SCM vs. Logistics: Diff b/w logistics & SCM: SCM takes more strategic & managerial focus, it is focusing on relationship & processes across firm, it has more use & Logistics is tactical and involves moving & positioning inventory throughout SCM. Example of intra-org integration: Marketing sharing promotion plans with operations, Operations info logistics of production plans. Characteristics of Comp SC: Responsiveness: ability to move quickly to meet customer demands, also called Agility which comes from shorter SC that are much more Demand-driven to what customer demands, ex: Zara. Half-empty Truck: Problems: Transp cost will go up & maximizing resources will become difficult & production cost may go up. Benefits: Ensuring quality, Reducing transp cost, more control, saving time, creates brand image. Reliability: Uncertainty is main reason why companies carry safety stock resulting in higher costs, such as uncertainty about future demands. Best way to reduce uncertainty is by Inc reliability. Visibility improves reliability in SC. Coordination & sharing of real-time data & info through IT has permitted visibility to all entities which has improved visibility & SC reliability. CSC visibility inc SC reliability through shared understanding of real-time demand data by all SC partners. Relationship Management: Practice of single-sourcing is widespread because of quality of component materials. Maintaining long-term relationships can improve quality, design, and responsiveness while reducing costs. Ex: Toyota and Honda have developed collaborative RS with their suppliers. Challenges to developing systems thinking viewpoint in org include: Competing goals & incentives, Segmented org structure, Lack of info sharing, Siloed decision making. Efforts to improve SC security present new challenges to firms: Regulation/compliance req, Inc transp time & costs. Trends in SCM: Key trends are: Sustainability & RM.Sustainable initiatives can be beneficial to firms: Enhance supplier relationships/supply availability, Create efficiencies & cost savings. Globalization: Companies have benefited from product sources and Consumers have benefited from greater product choices, higher quality & lower cost. Challenges: Distance Factor: Reliability & Efficiency. Greater customer affluence inc importance of SCM because customers wanted fewer product choices. Outsourcing: When firm is focusing on its core competencies, better than competitors. Postponement: is effective strategy for some firms because it allows local product customization. Products are finalized when the demand is known. Example of end-to-end SC flow of product: explain sequential flow that includes core stages of SC: Suppliers, distributors, producers, retailers, & customers. Concept of value chain & why it is imp: firm’s comp adv is derived from each activity that firm performs, & these activities must provide value to end customer and/or to firm, typically through great service. If it doesn’t meet the criteria then it should be improved. Accelerated flow of funds throughout SC improve profitability: Customer orders are fulfilled more quickly, firms are able to invoice customers & receive payment sooner than firm is req to pay its suppliers, resulting +ve cash flow. Role of customer > in service industry: because they interact with the provider directly. Chapter 3: Network & System Design: Business Process: Org & SC viewed as collection of process rather than components. SC can be viewed as system of processes that Cuts across org to deliver value. Key element that support SC strategy SC network design. Customer Serv Process:set of activities designed to create an output for the customer, such as, billing & invoicing, handling product returns, providing real-time info on promised shipping dates, product availability, etc. Managing process across SC: Transactional: focuses on efficiency which can be achieved through network redesign, IT & redundancy. RS view: process management seeks to enable/enhance coordination b/w supply chain partners. If fulfillment rate changes, you still work with supplier because he/she is reliable. Theory of Constraints: Constraint is anything that prevents system from being able to achieve its goal. It can be: equip: limited amount that can be produced; people: lack of skills; facilities: limited space to store. “Exploiting the constraint” means find ways to best utilize constraint. Premise behind TOC is that every system has 1 or more constraints that prevent it from achieving greater output than constrained process. One must find a way to inc capacity of constraint in order to inc output of process, & ultimately SC. Output: weakest # - Bottleneck- Max # of units system can produce. Losing 1 hr: Total Units - (Units/24); Losing 12 hrs: (Units/24) x 12. Always start with internal capacity cuz you have already made an investment, no need to use 3PL. Constraint Steps: Identify, Exploit, Subordinate other processes, Elevate, Return to step 1 when constraint changes, Engage in cont improv. Variation: is challenge cuz it adds Complexity and Uncertainty to process. One approach to help manage variation is inc process flexibility. Create buffer around bottleneck (placed before/behind constraint). One ex of strategy to manage inc variation is Inv buffers.Capacity Implications: refers to max amount of output that can be achieved. Two measures: Capacity available under normal conditions is Effective Capacity =

Actual Output x 100%. Temporary measures Design Capacity= Effective Capacity Actual Output x 100%. Integ of SC processes: Stage 1: Complete functional Design Capacity independence within org, also called “silo” mentality. Focuses on maxi production & promotion of products Stage 2: Internal functional cooperation & coordination. Stage 3: linkages across all SC partners/org. This req sig org change & restructuring. Evolve in response to comp pressures & threats. Vertical Integ Vs. Coordination: Firm ownership of upstream supplier. Coordination becomes easier. Ex: HR, records archiving, management of maintenance, repair, MRP inv items. Outsourcing is imp strategic decision as it req coordinating processes b/w multiple entities. SCNetwork: Key aspects: Physical Structure: three elements: # of companies, structural dimensions, # of process links. Go with shorter SC cuz you need to get product faster. Management. Designing Segmented Structures: Designing comp SCN is inc. challenging because of inc complexity & product proliferation. Fast-moving items: basic necessities. Slow moving items: purchased once in a while. Strategy for managing inc SC complexity is called Segmentation. High-volume, low variability demand business req which type of SC structure Cost-efficient. IT SC: Enables communication and processing data b/w 2 firms. Most imp benefits of integrated IT systems is improved visibility across SC. ERP Utilizes database to each department. Modules that are offered as part of ERP system include Manuf, finance, HR, SCM. Configuration: 1.Fully

identify most effective mkt segments. Evolution of Mkting: Production Concept: Products sold easily & challenge to sell to a price > cost, focused on products that could be made most efficiently as offering low-cost products. Selling concept emerged cuz of inc compe in mktplace. Marketing concept focuses on relationship w customer. Two Eras: Creating successful & multiple exchanges w customers is Transactional Mkting focuses on max short-term transactions. Relational Mkting focues on long-term RS, more effective to retain customers than to attract new ones. Impact on SC: Company supply chain contributes to its success cuz it can provide more value to customer than competing SC. 4 Categories: MM that relates to quality & packaging is Product. Place category in MM relates to Market coverage. Promotion inc visibility & desirability. Customer: Imp factor that contributed to empowering customer is Internet. Customer can be at any level of SC. Types of Customer RS: Standardized customer strategy focuses on minimal product customization (EOS). Customized: Adv derived from Mkt Segmentation & TM & diff versions of products are produced. When meeting specific customer needs Niche market. VOC: Company capture customer needs & preferences by Customer voice. CRM can be effective cuz it captures detailed customer info, Customizes communications, Aids market seg, added to larger ERP. VOC Process: 1. Divide customers into mkt segments. 2. Conduct mkt research. 3.Translating data about customer needs & preferences into technical specifications Quality function deployment. Measuring Customer Serv,: Viewing CS as activity relates to meeting basic customer needs. Viewing CS as philosophy might include utilizing quality management practices. CS strategy impacts SC on 4 primary dimensions: comm, conv, depe, time. CS dimension of time is enabled by effective logistics. Effective IT systems enable which customer service dimension: communication. Dist. Channels: Direct: selling directly to customer. Indirect: selling through wholesalers & retailers. Direct-tocustomer strategy used by Dell. Procter and Gamble selling Tide to customer at Walmart. Designing DC: Factor that influences company’s DCS market coverage obj & product characteristics. Factors: In terms of Market coverage, Selective D should be used for products with high value, exclusive branding. Intensive D: product in many outlets, Make sure Demand is high. Product Characteristics: High-value: S or L SC, teach customer about product. Highly tech: better for DC. Highly perishable: products delivered faster to mkt due to short LC. Want to reach customers fast. Customer Serv obj: Cost imp. Use Large SC. Short SC help us with time. Logistics: Segment of logistics channel warehouses. E-commerce:Impacted DC in variety of ways including cost structures, customer service req, shipping quantities, asset utilization. Not good option for companies to charge standard shipping fees .Implications on firm & its customers if marketing function is NOT well integrated into firm’s SCM strategies & processes: consumer preferences; its linkage to operations to ensure product production; to suppliers that provide parts to build the product; to logistics that delivers products to meet customer expectations; to finance that must provide funding. If this coordination does not occur or is ineffective, customers may be unsatisfied, the firm could lose sales/revenue, costs may increase due to obsolete inventory, delays, etc.4 categories/Ps of marketing & how each category directly relates to SCM: Product: product characteristics, packaging, quality – relates to supplier standards and logistics/packaging; Price: pricing strategy developed for a product – relates to SCM costs; Place: having product where and when needed – relates to distribution channels, logistics, inventory, transportation; Promotion: increasing product visibility and desirability – relates to production, demand planning, sourcing to ensure product availability. Evolution of customer-driven SCM :Factors such as the Internet, globalization, global competition have made customers powerful in defining product, service, and price, resulting in a proliferation of product and value choices. Effective supply chain management is critical to competing in this environment and meeting a complex and diverse mix of product and service requirements.

customized: expensive & can delay the system. Advantage: capture way org works. 2. Off-shelf modules: changes in process of org. 3. Mix of Cust & Stand. ERP can’t be implemented at once. Chapter 4 : Marketing: Mkting Func: concerned with downstream part (Customer) of SC. It plays vital role in driving actions of company’s SC because it defines how to create customer value.Looks at entire mkt as having same characteristics: Mass marketing- reduces costs through EOS but may miss large segments of mkt. TM recognizes customer diversity and challenge is to

Chapter 8: Forecasting & Demand: Forecasting vs Planning: Forecasting is process of predicting future events and Planning is selecting actions in anticipation of forecast. Aggregate forecasts more accurate. Future resource needs factors: Impact on new tech & Comp actions. Forecasting impacts operations function in Inventory level. Planning Decisions: 1. Scheduling existing resource: How to best utilize resources, eg labour, facilities, capital. 2. Determining future resource needs: What resources we need, eg new equip, expand to new location etc. 3. Acquiring new resources: Plan must be made well in advance, to acquire new resources & capabilities put in place well ahead of time. Demand Management: process of influencing demand, such as promotional campaigns, advertisements, offering incentives to sales staff & personnel, cutting prices. Forecasting Example: Crime: Gained interest. Climate: Effects of climate change. It impact plans made by policy makers, how money & resources are allocated to mitigate catastrophic risk. Health: Projecting demographic changes, health resources needed, impact of diseases. Political: Resources req to run political campaign. Tourism: Large size of hospitality industry like hotels, cruises, resorts. Example Marriot Hotels. Impact on Org: Mkting: estimates, future trends, changes in consumer preferences. Operations: capacity planning, scheduling, inventory levels. Sourcing: purchasing decisions, supplier selection. Finance: capital investment needs. Impact on SC: Looking at the demand of their immediate buyer not final customer. Demand distortion: Bullwhip Effect or Forrester Effect. Outcome of SCP creating Independent forecasts could be Bullwhip effect. Ways to mitigate Bullwhip effect: Data Sharing & Collaborative forecasting. Collaboration b/w suppliers & manufacturers, all entities responding to same level of demand. Principles of Forecasting: Forecasts critical to predicting future events, but are rarely Perfect. Forecasts more accurate for Short time horizons & groups. Shorter time horizon, lower degree of uncertainty. Steps in Forecasting Process; Step 1. Decide what to forecast, Step 2. Analyze appropriate data, identify the patterns. Common Patterns: Level/Horizontal, Trend, Seasonality, Cycles. Major difference b/w seasonality & cycle is that cycles do not have predictable or repeating length or magnitude. Ex of Data Patterns must be considered when forecasting include Horizontal & Cycle. Horizontal data pattern commonly seen as utilized for commodity products. Type of data pattern emerges in times of economic fluctuations Cycle. Step 3. Select Forecasting Model: test them on horizontal data to see which one is most accurate. Step 4 & 5: Generate forecast, Monitor forecast accuracy. Types of Forecasting: Qualitative: example Market research. Qualitative based on mathematical modeling. Adv of Quantitative forecasting methods: Objectivity. Ex of Quantitative forecasting models: Time series: data points of variable being forecast. Can have the advantage of simplicity. Casual: Variable being forecast is related to other variables. Sophisticated & costly forecasting models would be most appropriate for Smartphones. Time series Models: Mean, Moving Averages, Weighted Moving Averages, Exponential Smoothing, Trend Adjusted Exponential Smoothing. Mean & moving average forecasting models are best for Mature products. Delphi analysis measures relationship b/w two or more variables on forecast. Two measures of forecast accuracy: Mean absolute deviation & Mean square error. Joint forecasting b/w SCP is: Collaborative planning, forecasting and replenishment. Benefits of joint

Chapter 5: OM: OM responsible for producing products in cost-effective & efficient way. It plays vital role in company’s SC because it produces product or serv. Global Compe & SCM factors helped create greater & critical focus on OM function. Example of OM decision would be where to locate a factory & How to schedule workers. Transformational Role: converts inputs into finished goods.example: how specific inputs to a product (ie: chapter examples such as denim into jeans; plastic into toys; patients into healthy individuals) are transformed into a desired finished product. Manuf & Serv Op: Consumer who purchases Dell computer would be a customer of Manuf Op. The Intangible nature of serv makes product design more complex. Evolution of Op Fun.: Three stages of evolution: the production and “back office” role in the 1950s; the quality/competitive focus in response to global competition in the 1980s; currently globalization and SCM making OM crucial to competitiveness and the coordination of SCM partners and the gaining cost and value benefits. Product D: specifying exact features of product. Designing Serv: high degree of customer interaction. 3 elements to design: Physical element of serv, Psychological benefits, Sensual elements. Product D Process: 1. Idea Development: may include early supplier involvement (ESI), Marketing, suppliers, customers define new ideas. 2. Product Screening: likelihood of success. ideas are evaluated both from the customer and operations perspectives. 3. Preliminary Design & Testing: engineers translate general specifications into specific technical specifications. 4. Final Design: specific instructions are created to manufacture the product including materials, equipment, quality, etc. Break-even analysis:evaluates success of product at Screening stage. Break-even Point: quantity that needs to be sold to cover costs. Formula: F/(SP - VC). Profit = R - C. Factors Impacting Product D Decisions: 1.Design for manuf.: guidelines focus on Simplification (reducing # of parts of product) & Standardization (use of common & interchangable parts). 2. Product Life Cycle: Understanding at evolution of product, from intro to maturity. Introduce new version of product at start of decline stage. 3. Concurrent Engineering: all functions work together simultaneously. 4.Remanufacturing: environmental & economical benefits, PC is low. Uses components of old products in production of new ones. Process D: involves developing production process that can create exact product. Product & process design together can impact quality, cost, Customer satisfaction. 2 categories: Intermittent: focuses providing product customization. Produce large variety of product in low vol. Slow process, moving product from one place to another. Divided into Project P should be used when producing to very specific customer needs. Batch P produce small quantities of products in groups based on particular specifications or customers. Repetitive: Features of repetitive process Long throughput time. Used to produce standardized products in high volume (well-established mkts, more capital). Tend to produce products in later stages of life cycle. Divided into Line & Cont P. Facility Layout: 1. Fixed: Location of product is fixed, you bring resources to the locati...