review questions
6
1.Describe supply chains and explain why “supply network” may be a more accurate term.
The term supply chain is commonly used to refer to a collection of companies and processes involved in moving a product from the suppliers of raw materials, to the suppliers of intermediate components, to final production, and, ultimately, to the customer. Companies often procure specific raw materials and components from many different “upstream” suppliers. These suppliers, in turn, work with their own suppliers to obtain raw materials and components; their suppliers work with additional suppliers, and so forth. The further out in the supply chain one looks, the more suppliers are involved. As a result, the term “chain” becomes somewhat of a misnomer since it implies one-to-one relationships facilitating a chain of events flowing from the first supplier to the second to the third and so on. The flow of materials from suppliers to customers can thus be more accurately described as a supply network because of the various interrelated parties involved in moving raw materials, to intermediate components, and, finally, to the end product within the production process.
2.What are two process innovations enabled by effective collaboration within supply networks?
Collaboration within supply networks has enabled process innovations such as just-in-time manufacturing and vendor-managed inventory. Just in time is a method to optimize ordering quantities such that parts or raw material arrive just when they are needed for production. Vendor-managed inventory (VMI) is a business model in which the suppliers to a manufacturer (or retailer) manage the manufacturer’s (or retailer’s) inventory levels based on preestablished service levels.
3.Explain how effectively managing the supply chain can help an organization be a responsible social citizen.
Information systems focusing on improving supply chains have two main objectives: to accelerate product development and innovation and to reduce costs. These systems, called supply chain management (SCM), improve the coordination of suppliers, product or service production, and distribution. Effectively managing the supply chains has become tremendously important for aspects related to corporate social responsibility. Specifically, transparency and accountability within the supply chain can help organizations save costs and/or create a good image. Two related issues are product recalls and sustainable business practices.
4.How does SCP differ from SCE?
Supply chain planning (SCP) involves the development of various resource plans to support the efficient and effective production of goods and services. SCP modules generally support four key processes: demand planning and forecasting, distribution planning, production scheduling, and inventory and safety stock planning. Supply chain execution (SCE) is the execution of SCP. Essentially, SCE puts the SCM planning into motion and reflects the processes involved in improving the collaboration of all members of the supply chain—suppliers, producers, distributors, and customers. SCE involves the management of three key elements of the supply chain: product flow, information flow, and financial flow.