Principles of Supply Chain Management, 3ed
Wisner, Leong, Tan 2012
Chapter Review 1-3
Chapter One: Introduction To Supply Chain Management
A Supply Chain is the steps necessary for a manufacturer to procure materials, build a product, and transport the product to consumers. The consumers buy the products based on a combination of cost, quality, availability, maintainability and reputation factors. They hope these products will live up to their needs and expectations. An example of a supply chain that I was involved in while serving in the Air Force would be when I worked in the Supply Squadron. One of our customers, the jet engine maintenance shop, would need a part to repair and F101 engine for use on a B1B bomber aircraft. They would place the order through us. We would place the order with one of our depots that manage the assets. The depots would then place an order with the manufacturer of the asset. The manufacturer of the asset would be our second-tier supplier. The depots would be our first-tier supplier. The jet engine maintenance shop would be our first-tier customer, and the flight line mechanics would be our second-tier customer that needed the engine to install on the aircraft. The end product consumers would be the recipients of the mission to be accomplished by the aircraft crew. The three definitions of supply chain management in the text are all stated differently but pretty much mean the same thing; planning and managing the processes of procuring assets, converting assets into products, and delivering them to a customer. Of course there is much more detail involved getting from one end of the chain to the other and back again when necessary. There are four foundation elements of supply chain management. The supply elements are all about the purchasing and strategic concepts of supply management. The operations elements consist of several internal operations that oversee the assembling of parts into a finished product that meets all specifications and customer requirements. The logistics elements deal with the storing of the completed product and transporting it to the customer. The integration elements deal with the process integration of all the processes among the focal firm and their partners. Through the use of lean and Six Sigma methodology, improvements in the supply chain processes can be made and costs lowered. As the conditions change around the world, supply chain management will continue to change with it. Questions
1. What is a company that is hired to manage all of a firm’s logistics and supply chain management called?
Answer: Fourth-Party Logistics Provider or 4PL (Page 10)
2. What is meant by perfect order fulfillment?
Answer: Orders that arrive on time, complete and damage free. (Page 20) 3. What is right-shoring?
Answer: The combination of on-shore, near-shore and far-shore operations into a single, flexible, low-cost approach to supply chain management. (Page 23) 4. What are Reverse Logistics Activities?
Answer: When customers return products, get warranty repairs or recycle items. 5. What is the radical rethinking and redesigning of business processes to reduce waste and increase performance?
Answer: Business Process Reengineering or BPR. (Page 14)
Chapter Two: Purchasing Management
The goal of Supply Management in an organization is to ensure a continual flow of raw materials at the lowest cost possible. Another goal is to improve the quality of the finished goods produced as well as increase customer satisfaction. By obtaining these goals supply management has proven to be a key strategic business process and not just another supporting function of the business. Done well a company can give itself an edge over other companies that are not meeting these goals. Using smarter purchasing is another way for a company to increase profitability. Cutting costs and boosting sales...