Supply Chain Management & Strategy Flashcards

What is the primary goal of supply chain management?

Answer: To optimize flow across the supply chain

Supply chain management aims to efficiently integrate and coordinate all activities involved in moving products and services from raw materials to the end consumer. The primary goal is to optimize the entire flow of goods, information, and finances across the network. This optimization leads to reduced costs, improved efficiency, enhanced customer satisfaction, and a more competitive advantage.

Which strategy helps reduce supply chain risk?

Answer: Supplier diversification

Supplier diversification involves sourcing components or services from multiple vendors rather than relying on a single supplier. This strategy significantly reduces supply chain risk by mitigating the impact of potential disruptions, such as a single supplier's financial instability, production issues, or natural disaster. By spreading risk across several suppliers, a company enhances its resilience and ensures continuity of supply.

What does 'just-in-time' inventory mean?

Answer: Receiving goods as needed

Just-in-time (JIT) inventory is a lean manufacturing strategy where materials and products are received from suppliers only when they are needed in the production process or for customer delivery. This approach minimizes inventory holding costs, reduces waste, and improves efficiency by avoiding excess stock. JIT relies on precise forecasting and strong, reliable supplier relationships to ensure timely deliveries.

Which metric measures supply chain efficiency?

Answer: Order fulfillment cycle time

Order fulfillment cycle time measures the total time from when a customer places an order until they receive the product. This metric is a key indicator of supply chain efficiency because it encompasses various stages, including order processing, inventory management, warehousing, and transportation. A shorter cycle time generally signifies a more efficient, responsive, and customer-centric supply chain operation.

What is the role of logistics in supply chain?

Answer: Handling transportation and warehousing

Logistics is a crucial component of supply chain management that specifically focuses on the efficient flow and storage of goods. Its role encompasses managing the transportation of products from origin to destination, as well as overseeing warehousing, inventory control, and order fulfillment. Effective logistics ensures products reach customers in a timely, cost-effective, and undamaged manner.

What is a key benefit of supply chain integration?

Answer: Better coordination

Supply chain integration involves connecting and synchronizing processes, systems, and information across all partners in the supply chain, from suppliers to customers. A key benefit is significantly improved coordination among these entities. This leads to smoother operations, reduced redundancies, faster decision-making, and a more responsive and efficient overall supply chain.

Which technology improves supply chain visibility?

Answer: RFID technology

RFID (Radio-Frequency Identification) technology uses electromagnetic fields to automatically identify and track tags attached to objects. In a supply chain, RFID tags can be placed on products, pallets, or containers, providing real-time visibility into their location and movement throughout the network. This enhances tracking accuracy, reduces manual scanning, and improves overall supply chain transparency and efficiency.

What is demand forecasting?

Answer: Predicting customer demand

Demand forecasting is the process of estimating future customer demand for a product or service. It uses historical data, market trends, economic indicators, and other relevant factors to make informed predictions. Accurate demand forecasting is crucial for effective inventory management, production planning, resource allocation, and overall strategic decision-making within the supply chain.

Why is sustainability important in supply chains?

Answer: To reduce environmental impact

Sustainability in supply chains focuses on minimizing negative environmental, social, and economic impacts throughout the entire product lifecycle. This includes reducing waste, conserving resources, lowering carbon emissions, and promoting ethical labor practices. Embracing sustainability helps companies meet regulatory requirements, enhance brand reputation, and contribute to a healthier planet and more responsible business practices.