Question and Answer
Chapter 4
Niccole Hyatt, PhD
Chapter overview
This chapter describes the elements of the supply chain and its management. The bullwhip effect is discussed.
The various decisions in supply chain management are discussed and evaluated. These include outsourcing, purchasing, use of technology, warehousing, and vertical integration.
Finally, the performance measures and trends in supply chain management are described.
objectives
Describe basic supply chains and supply chain management.
Explain issues affecting supply chain management.
Explain the role of purchasing.
Illustrate how sourcing decisions are made.
Describe the role of warehousing.
Describe how supply chain management is implemented.
What are the types of e-commerce?
E-commerce, or using the Internet and Web to transact business, can be characterized by noting what entities are involved.
Business-to-business (B2B) concerns businesses working together to allow one to receive inputs from another. B2B can be said to have started in the 1970’s with automated order entry systems that used telephone connections. In the late 1970s, electronic data interchange (EDI) provided standards for the computer-to-computer exchange of information such as invoices and purchase orders.
Business to consumer (B2C) is a retail activity. Here companies use electronic means to deliver goods and services to consumers.
What revenue models are used in e-commerce?
Operators of e-commerce web sites can support their activities using one or more of several revenue models.
A site that attracts users and then displays advertisements from other businesses is using the advertising revenue model. A site that charges a fixed periodic fee for access to its content is using a subscription revenue model. Some sites charge a fee for a completed transaction, such as a stock trade. This is the transaction fee model.
Companies that earn directly from what customers buy use the sales revenue model. Finally, a site may earn its revenue by referring visitors to other sites. This is the affiliate revenue model.
How does the supply chain work?
I recently bought sodas in cans. The cans are produced by obtaining the raw materials from mines, followed by processing in a plant.
The cans are filled with the liquid at the bottling companies. They are then placed in a warehouse.
From there, they are shipped to the retailers who sell them to customers.
Then, I can enjoy my soda!
Service and manufacturing supply chains
Service supply chains typically do not include external suppliers. In addition, the tier one supplier is a company that produces the final packaged product.
Manufacturing supply chains typically include a greater variety of links in the chain in terms of the types of companies. Manufacturers have external suppliers in different tiers, as well as processing operations.
What affects global supply chains?
Global supply chains face several challenges. The members of the supply chain can be dispersed around the world. This can increase shipping time and pipeline inventory.
Longer delivery times can make forecasting less accurate.
All the partners in the supply chain will not use the same currency. Currency fluctuations can change prices between contract and delivery.
Different countries will have varying levels of infrastructure development. This can impact transportation, the availability of trained workers, communications, and manufacturing operations. Firms may need to provide many market specific variants and versions of their products to meet local tastes, conditions, and regulations. This is referred to as product proliferation.
Partnering Advantages and disadvantages
Partnering is the development of a close relationship with a supplier based on trust, shared information, and vision.
The advantages are the ability to reduce costs, and improvement in quality and planning.
The disadvantages are the violation of trust that can cause problems and the inability to quickly change suppliers if problems arise. Recall the Ford/Firestone quality fiasco that is currently being litigated. The presumption of trust may have caused the delay in detecting quality problems.
How is rfid used?
RFID uses unpowered microchips to transmit encoded information through antennae. RFID tags may be attached to cases, pallets, or containers.
They can eliminate the need to unpack, count, or scan contents in order to keep track of material movements and inventory levels.
Questions?
Niccole Hyatt, PhD