Chapter 3 Supply Management: An Organization Spanning Activity
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1. As a philosophy, SM spans functional boundaries and company borders. .....: .....
2. Two sources of materials are internal production and external sources, where external sources are increasingly being used over internal production. .....: .....
3. In assuming greater strategic responsibility, the activities of supply managers increasingly span organizational boundaries. .....: .....
4. Efforts to improve do not cease at an organization's internal functions, but should span over the supply chain as well. .....: .....
5. In non-manufacturing organizations, supply management often must lead the
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28. A common conflict of interest between supply management and accounts payable is the delivery schedule of suppliers. .....: .....
29. Supply management is responsible for putting pressure on marketing to share forecasts so that supply management can update manufacturing schedules at the firm's suppliers when sales forecasts change. .....: .....
30. Supply management in manufacturing organizations is responsible for a small percentage of a firm's financial resources. .....: .....
31. The flow of communications between marketing, operations, material control and supply management should be greatest at the end of a product's life cycle. .....: .....
32. An independent estimate is usually not cost beneficial information for a supply manager to obtain in analyzing the potential purchase of a major item of capital equipment. .....: .....
Multiple Choice Questions
33. The best way to insure interface with key business functions is: A) Policy Statements B) Directives from upper management C) Cross functional teams D) Use of meetings E) Monthly conferences
34. The effect of different materials on productivity and cost is often the result of: A) Using less costly materials B) Using the latest hi tech materials C) Using computer run machines D) Using more costly
The main elements of a supply chain include purchasing, operations, distribution, and integration. The supply chain begins with purchasing. Purchasing managers or buyers are typically responsible for determining which products their company will sell, sourcing product suppliers and vendors, and procuring products from vendors at prices and terms that meets profitability goals.
Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.
Reorders are placed at the time of review (T), and the safety stock that must be reordered is:
For instance, the linkage between the Riordian Electric fan development management process and the Supply Chain Management process is bi-directional: on one side, the product development process feeds the Supply Chain Management process with the electric fans introduction plans and engineering change notices on bill of materials and routings, while in return the Supply Chain Management process provides the product development process with the supply chain constraints that need to be considered when scheduling the development of fans, in order to make sure that these products will hit the market at the right time. It will provide the Riordan Manufacturing an edge in the market over other rival companies. (Chase, 2006).
In the San Diego distribution center (DC) information flow example, dealers not being notified automatically of order status would be classified as
Supply chains are an integral part of global quality and cost management initiative, because a typical company’s supply chain cost can represent more than 50% of assets and more than 80% of revenues. (Ball, 2010), in other word, the ABC, Inc should reduce the inventory of chain supply to reduce the cost. In order to do that the Board of Directors of ABC Inc. has to expresses reconsiderations for management across business functions in supply chain management. Managing the flow of raw materials, supplies as well as finished products are equally important as the management
In the past, companies focused primarily on manufacturing and quality improvements within their four walls; now their efforts extend beyond those walls to influence the entire supply chain including customers, customers’ customers, suppliers, and
Some of these problems in the supply chain often go unnoticed as the number of links between supply network members. Supplier Ethics Management is the “management of suppliers and supply relationships with strategies, programs, and metrics that better align supplier business conduct with purchaser standards, with the goal of reducing the purchaser’s overall risk of corporate integrity failure in the supply chain.“ (www.s-ox.com)
6. Supply management plays a major role in improving the “bottom line” by driving sales up and
Supply chain is a major part of a business. It is a huge network which involves suppliers, customers, retailers, distributors and transporters. Supply chain is all about getting right goods at right place at a right price and at a right time .Time plays a very important role in any business .Time is money .Suppliers and customers are the two major participant’s .Demand and supply plays a very important role for a company’s profitability. Every company looks for profitability .In order to gain a competitive advantage over another company costs must be lowered throughout the chain by driving out unnecessary expenses and they also should take
Fulfillment, Production and Warehouse management processes are concerned with goods movement that triggers goods issue that will be further discussed.
recommendations for a change of supply chain strategy by supporting the arguments with relevant theories and models and how Crocs Inc. can regain its competitive advantage.
The successive study reveals that the senior management believes that the vast accounts affect the increment of commitment to enhanced supply chain efficiency. The administration has indicated significant customer improvements through maintenance and increase in the sales volume the company generates from the critical accounts. The company research suggests that formulation of a supply chain that involves collaboration with its large customers is now a competitive necessity. In many situations, strong retailers demand the latter and at times can dictate relationship arrangement. The company, therefore, has to ensure significant consideration to create unique supply chain, several powerful customers. It would be wise for Westminster to establish leadership positions within
The coordination between the supplies and the customers demand is an important aspect in the success of any supply chain. Poor coordination may result in poor supply chain and high cost. One of the example of this is the videocassette retailer. New arrive movies has high demand in the first weeks of the release. After a while this demand start to decrees. These retailers face the problem in the first weeks because the demand is high but it will shortly decline. At that time supplier sold videocassette to retailer for 65$ and the retailer rent it for 3$ so they hit break even after 22 rentals. For that reason retailer cannot order enough videocassette to meet initial demand or they will lose money. To overcome this problem retailer has to come with a way to meet the initial demand without losing money. Blockbuster and supplier reach a deal that will benefit both of them. The supplier agreed to sell the videocassette for less than the production cost in exchange for a portion of the rental income. In this deal blockbuster got the videocassette from the supplier for only 8$ and the breakeven dropped to 6 rentals from 22 rentals. That allow blockbuster to meet initial demand and to share the revenue with the supplier. This case inspired Martin Lariviere and Gérard Cachon to write their article “Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations,” In their article showed that revenue sharing contracts is not only limited to videocassette
Supply change management (SCM) is active in many organizations today. The purpose of SCM is to maximize the company value in order maintain a competitive advantage in the market place. As an Operational Managers (OM) it is essential to oversee the supply chain within an organization. The OM responsibility is to manage the supply chain flow, and to ensure the supply chain has a quality design in order to reduce cost and drive efficiency. (Reid & Sanders, 2010) An organization supply chain includes activities such as product development, sourcing, productions, logistics, material, and other information systems needed to coordinate the movement of goods from suppliers to manufactures, and to final customers.