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Page 1: Supply Chain Management

Supply chain management is essentially the optimization of material flows and associated information flows involved with an organisation's operations. To manage these flows, e-business applications are essential to bring such benefits as noted in 'Internet retailing' in 2010 which reported that the average rates of return to a high street retailer could be as high as 10%. What did the same source report as the average rate of return for UK e-commerce sites?

   

15%

  12%

  22%

  18%

Supply chain (SC) management involves the coordination of all supply activities of an organisation from its suppliers to the delivery of products to its customers. There are various features associated with this area of e-commerce and which refers to what is known as efficient consumer response (ECR):

   

Transactions between an organisation and its customers and intermediaries

  The links between an organisation and all partners involved

  Creating and satisfying customer demand by optimizing strategies, promotions and product introductions (Correct Answer)

  None of the above

An organisation's supply chain can be viewed from a system's perspective that starts with the acquisition of resources which are then transformed into products or services. Simply, put the sequence is represented:

   

Inputs - process - outputs

  Process - inputs - outputs

  Sourcing - input - process - outputs

  Inputs - outputs - process

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Logistics is an integral part of supply chain management. Which explanation best represents outbound logistics?

   

The management of resources supplied from an organisation to its customers and intermediaries

  A supply chain that emphasises distribution of a product to passive customers

  An emphasis on using the supply chain to deliver value to customers who are actively involved in product and service specification

  The management of material resources entering an organisation from its suppliers and other partners

The 'value chain' idea is a concept that has been well established for the past three decades and it refers to considering key activities that an organization can conduct to add value for the customer. It traditionally distinguished between primary activities and support activities. Why is this concept regarded as outdated with the development of e-business?

   

There is a clear distinction between primary and support activities

  The concept still holds and does not need revision

  The support activities offer far more than just support

  Support activities have been subsumed under primary activities

A value chain analysis provides an analytical framework for an organisation to examine individual activities and determine value added at each stage. The principles can also be applied to an organisation's external value stream analysis which considers how the whole production and delivery process can be made more efficient. The activities can be categorized into those:

   

All of the below

  Those required for product development or production systems

  That create value as perceived by the customer

  Those that do not add value

Improvements in the value chain can be implemented by following Kjellsdotter and Jonsson's iterative planning cycle. Which of the following does not form part of the cycle?

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Creating a preliminary delivery plan

  Creating a quality control plan

  Creating a preliminary production plan

  Creating a consensus forecast

What does the following definition refer to: an organisation which uses communications technology to allow it to operate without clearly define physical boundaries between different functions?

   

Base-free organisation

  E-organisation

  Virtual organisation

  Cloud organisation

Using digital communication to improve supply chain efficiency is dependent on effective exchange and sharing of information. The challenges of achieving standardized data formats and data exchange have given rise to the study of the optimisation of the:

   

Vertical integration

  Information supply chain

  Information asymmetry

  Virtual integration

The typical benefits of e-supply chain management gained by a B2B company are quite comprehensive. Which of the following is false though?

   

Increased efficiency of individual processes

  Increased costs through outsourcing

  Improved data integration between elements of the supply chain

  Reduced complexity of the supply chain

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What does a company's information system need to deliver to different parties who need to access the supply chain information of an organisation, whether they be employees, suppliers, logistics service providers or customers?

   

Radio-frequency identification of products

  Supply chain visibility

  Password and user name reminders

  None of the above

What was the rationale behind introducing the Global Data Synchronisation Network in 2005?

   

To speed up e-commerce interaction

  To create standards for sharing information about products

  To provide a common pricing structure taking currency fluctuations into account

  To allow trading partners to manage each other's supply chain

To manage e-supply chains effectively, benefits need to be developed into a performance management framework. Sambasivan and colleagues (2009) produced such a framework, identifying categories of measures and provided examples of metrics for each. Which of the following fits this framework?

   

They are all accurate

  Supply chain finance and logistics cost - total, distribution, manufacturing, and inventory costs

  Cost in supply chain - return on investment

  Production level metric - range of products and services, effectiveness of scheduling techniques, capacity utilisation

Key to re-structuring the supply chain is the need to examine the types of relationships between partners such as suppliers and distributors. Researchers have found that low cost is the main driver in managing

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supply partnerships and a restructuring will often require companies to:

   

Develop strong partnership relationships

  Focus on core competencies

  Reduce their number of suppliers

  All of the above

As guidance to managing a global distribution, seven action points have been suggested. Do these include:

   

Let distributors pick you

  Do not waste money, time and energy initially

  Treat local distributors as short-term partners

  They are all incorrect

1. Supply chain management is essentially the optimisation of material flows and associated information flows involved with an organisation's operations. To manage these flows, e-business applications are essential to bring such benefits as noted in 'Internet retailing' in 2010 which reported that the average rates of return to a high street retailer could be as high as 10%. What did the same source report as the average rate of return for UK e-commerce sites?

Your Answer: 12%

Correct Answer:

22%

  More than double the high street return at 22%.

2. Supply chain (SC) management involves the coordination of all supply activities of an organisation from its suppliers to the delivery of products to its customers. There are various features associated with

Page 6: Supply Chain Management

this area of e-commerce and which refers to what is known as efficient consumer response (ECR):

Your Answer:

(blank)

3. An organisation's supply chain can be viewed from a system's perspective that starts with the acquisition of resources which are then transformed into products or services. Simply, put the sequence is represented:

Your Answer: Process - inputs - outputs

Correct Answer:

Inputs - process - outputs

  Inputs - process - outputs is the correct sequence.

4. Logistics is an integral part of supply chain management. Which explanation best represents outbound logistics?

Your Answer:

(blank)

5. The 'value chain' idea is a concept that has been well established for the past three decades and it refers to considering key activities that an organization can conduct to add value for the customer. It traditionally distinguished between primary activities and support activities. Why is this concept regarded as outdated with the development of e-business?

Your Answer: There is a clear distinction between primary and support activities

Correct Answer:

The support activities offer far more than just support

  Also acknowledged by Michael Porter credited with the original concept, it is regarded now that support activities offer far more than just support, and contribute to the primary activities too.

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6. A value chain analysis provides an analytical framework for an organisation to examine individual activities and determine value added at each stage. The principles can also be applied to an organisation's external value stream analysis which considers how the whole production and delivery process can be made more efficient. The activities can be categorized into those:

Your Answer:

(blank)

7. Improvements in the value chain can be implemented by following Kjellsdotter and Jonsson's iterative planning cycle. Which of the following does not form part of the cycle?

Your Answer:

Creating a quality control plan

8. What does the following definition refer to: an organisation which uses communications technology to allow it to operate without clearly define physical boundaries between different functions?

Your Answer:

(blank)

9. Using digital communication to improve supply chain efficiency is dependent on effective exchange and sharing of information. The challenges of achieving standardized data formats and data exchange have given rise to the study of the optimisation of the:

Your Answer: Vertical integration

Correct Answer:

Information supply chain

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  An information supply chain examines the organisation's ability to gain technology driven supply chain management efficiency and effectiveness.

10.

The typical benefits of e-supply chain management gained by a B2B company are quite comprehensive. Which of the following is false though?

Your Answer:

(blank)

11.

What does a company's information system need to deliver to different parties who need to access the supply chain information of an organisation, whether they be employees, suppliers, logistics service providers or customers?

Your Answer: Radio-frequency identification of products

Correct Answer:

Supply chain visibility

  Supply chain visibility relates to being able to access up-to-date accurate and relevant information about supply chain processes by different stakeholders.

12.

What was the rationale behind introducing the Global Data Synchronisation Network in 2005?

Your Answer:

(blank)

13.

To manage e-supply chains effectively, benefits need to be developed into a performance management framework. Sambasivan and colleagues (2009) produced such a framework, identifying categories of measures and provided examples of metrics for each. Which of the following fits this framework?

Your Production level metric - range of products and services,

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Answer: effectiveness of scheduling techniques, capacity utilisation

14.

Key to re-structuring the supply chain is the need to examine the types of relationships between partners such as suppliers and distributors. Researchers have found that low cost is the main driver in managing supply partnerships and a restructuring will often require companies to:

Your Answer: Focus on core competencies

Correct Answer:

All of the above

  While not a one size fits all approach, the three basic assessments of core competencies, suppliers and relationships has been shown to be productive.

15.

As guidance to managing a global distribution, seven action points have been suggested. Do these include:

Your Answer: Let distributors pick you

Correct Answer:

They are all incorrect

  It should not take long to realize that the converse is more applicable for each of these points.

The coordination of all supply activities of an organisation from its

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suppliers and partners to its customers is referred to as: 

  Supply chain network

  Efficient customer response

  Supply and demand coordination

  Supply chain management

There are various strategies used to meet objectives of effective consumer response (ECR).What would be an appropriate strategy to achieve timely, accurate, paperless information flow?

   

Integrate this activity into all supply chain planning

  Efficient replacement

  Revision of organisation processes supported by information systems

  Efficient store assortments

Again looking at ECR, an appropriate strategy to maximize efficiency of promotions is to:

   

Revision of organisation processes supported by information systems

  Integrate this activity into all supply chain planning

  Efficient store assortments

  Efficient replacement

An appropriate strategy to achieve the objective of optimising the productivity of retail space and inventory is:

   

Revision of organization processes supported by information systems

  Integrate this activity into all supply chain planning

  Efficient replacement

  Efficient store assortments

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Transactions between an organisation and its suppliers and intermediaries, equivalent to buy-side e-commerce is known as:

   

Supply streaming

  The downstream supply chain

  The upstream supply chain

  There is no difference to buy-side e-commerce

The downstream supply chain is similar to sell-side and e-commerce and involves:

   

Mainly involved with the procurement of material from suppliers

  Being exclusively outside an organization

  The distribution of products or delivery of services to customers

  None of the above

In considering a simple model of a supply chain, the correct sequence of an organisation's supply chain from a systems perspective is:

   

Acquisition of resources, transformation process, delivery to customers

  Transformation process, delivery to customers, acquisition of resources

  Delivery to customers, acquisition of resources, transformation process

  Transformation process, acquisition of resources, delivery to customers

When a manufacturer develops an innovative product and then identifies a suitable target market and distribution channel. This is an example of:

   

Value stream

  Value chain

  Push model of SCM

  Pull model of SCM

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The value stream is closely related to a traditional value chain. The difference is that it considers different types of tasks that are involved with adding value, plus:

   

How the efficiency of these tasks can be improved

  How each link in the chain can be assessed

  Provides a rationale for additional investment

  All of the above

When performance managing an electronic-supply chain management (e-SCM), measurement frameworks provide categories and examples of metrics. What would Return on Investment be a metric of?

   

Delivery performance

  Profitability

  Supply chain partnership

  Cost in supply chain

Again, with e-SCM performance management, what would be metrics of Costs in Supply Chain?

   

Manufacturing cost

  Total cost

  Inventory cost

  Distribution cost

  All of the above

There are options for restructuring the supply chain. A characteristic of vertical integration is:

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Close relationships with suppliers

  Majority of manufacture is in-house

  Total reliance on linked third parties

  All of the above

A different restructuring of the supply chain to a virtual integration also has certain characteristics, such as:

   

A move to outsourcing

  Total reliance on third parties

  Distant relationships with suppliers

  All of the above

The typical aim of the push to customer approach to supply chain management is:

   

Optimise the production process for cost and efficiency

  To enhance product and service quality.

  To improve costs of distribution

  Reduce wastage

  None of the above

The typical aim of the pull from customer approach to supply chain management is:

   

Optimise the production process for cost and efficiency

  To improve costs of distribution

  Enhance product and service quality

  Promote information sharing between supply chain members

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1. The coordination of all supply activities of an organisation from its suppliers and partners to its customers is referred to as:

Your Answer: Efficient customer response

Correct Answer:

Supply chain management

2. There are various strategies used to meet objectives of effective consumer response (ECR).What would be an appropriate strategy to achieve timely, accurate, paperless information flow?

Your Answer: Efficient replacement

Correct Answer:

Revision of organisation processes supported by information systems

3. Again looking at ECR, an appropriate strategy to maximize efficiency of promotions is to:

Your Answer:

Integrate this activity into all supply chain planning

4. An appropriate strategy to achieve the objective of optimising the productivity of retail space and inventory is:

Your Answer:

(blank)

5. Transactions between an organisation and its suppliers and intermediaries, equivalent to buy-side e-commerce is known as:

Your Answer: The downstream supply chain

Correct Answer:

The upstream supply chain

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6. The downstream supply chain is similar to sell-side and e-commerce and involves:

Your Answer: Being exclusively outside an organization

Correct Answer:

The distribution of products or delivery of services to customers

7. In considering a simple model of a supply chain, the correct sequence of an organisation's supply chain from a systems perspective is:

Your Answer: Delivery to customers, acquisition of resources, transformation process

Correct Answer:

Acquisition of resources, transformation process, delivery to customers

8. When a manufacturer develops an innovative product and then identifies a suitable target market and distribution channel. This is an example of:

Your Answer:

Push model of SCM

9. The value stream is closely related to a traditional value chain. The difference is that it considers different types of tasks that are involved with adding value, plus:

Your Answer: Provides a rationale for additional investment

Correct Answer:

How the efficiency of these tasks can be improved

10.

When performance managing an electronic-supply chain management (e-SCM), measurement frameworks provide categories and examples of metrics. What would

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Return on Investment be a metric of?

Your Answer:

Cost in supply chain

11.

Again, with e-SCM performance management, what would be metrics of Costs in Supply Chain?

Your Answer: Total cost

Correct Answer:

All of the above

12.

There are options for restructuring the supply chain. A characteristic of vertical integration is:

Your Answer: Close relationships with suppliers

Correct Answer:

Majority of manufacture is in-house

13.

A different restructuring of the supply chain to a virtual integration also has certain characteristics, such as:

Your Answer: A move to outsourcing

Correct Answer:

Total reliance on third parties

14.

The typical aim of the push to customer approach to supply chain management is:

Your Answer: To improve costs of distribution

Correct Answer:

Optimise the production process for cost and efficiency

15.

The typical aim of the pull from customer approach to

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supply chain management is:

Your Answer: Optimise the production process for cost and efficiency

Correct Answer:

Enhance product and service quality

supply Chain Management Solved Multiple choice Questions.

1. _______ analysis relates to what processes, activities, and decisions actually create costs in your supply chain. 

A. Cost driver  

B. Value proposition 

C. Cost reduction 

D. Target costing

cost driver analysis considers how processes, activities, and decisions actually create costs in the value chain/supply

chain.

2. In the 1980s, Toyota and Honda outcompeted American carmakers because they relied on suppliers for

approximately _______ percent of a car’s value. 

A. 30 

B. 45 

C. 60 

D. 80

4.The _______ has made it possible for other companies to eliminate intermediaries and sell directly to the end

consumer. 

A. SCM 

B. Internet

C. competition 

D. global sourcing

The World Wide Web has made it possible for each consumer, sans intermediaries, to access the sellers in the

market place directly. If a business has been constrained by its ability to present itself directly in the market place,

there will be growing opportunities to by pass intermediaries and sell directly to the end consumer.

5. Value stream mapping is an application of process mapping, developed to apply _______ principles to process

improvement. 

A. management 

B. lean  

C. supply chain 

D. cycle time

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Value stream mapping has supporting methods that are often used in Lean environments to analyze and design flows

at the system level (across multiple processes).

6. A supply chain is made up of a series of processes that involve an input, a _______, and an output. 

A. shipment 

B. supplier 

C. customer 

D. transformation  

7. _______ is a tool to chart how individual processes are currently being conducted and to help lay out new

improved processes.

A. Process mapping  

B. Pareto charting 

C. Supply chain design 

D. Design chain mapping

8.Identify from the following list a major strategic risk associated with outsourcing. 

A. Outsourcing landed cost is usually higher than insourcing cost. 

B. The supplier is purchased by a competitor.

C. The business loses sight of market trends. 

D. The cost of supplied material is passed on to the customer.

9. _______ is the design of seamless value-added processes across organization boundaries to meet the real needs

of the end customer. 

A. Operations 

B. Supply chain management 

C. Process engineering 

D. Value charting

10. The impact of cost reduction on profits is much larger than the impact of increased 

A. innovation. 

B. production. 

C. information. 

D. sales. 

11. _______ considers how your organization competes and is an essential element of corporate strategy.

A. Value proposition analysis

B. Leadership 

C. A consultant 

D. A competitor

12. “3PL” involves using a supplier to provide _______ services. 

A. marketing 

B. design 

C. logistics 

D. contract manufacturing

Third Party Logistics; using an OUTSOURCED supplier to provide some combination of logistics activities such as

transportation, warehousing, procurement, manufacturing, inventory management, and customer service.

13. The collective learning in the organization, especially how to coordinate diverse production skills and

integrate multiple streams of technologies, is called 

A. innovative constraint. 

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B. second-tier competency. 

C. corporate skill. 

D. core competency. 

Core competencies are the collective learning in organizations, and involve how to coordinate diverse production

skills and integrate multiple streams o

14. Integration of business economics and strategic planning has given rise to a new area of study

called __________.

A. Micro Economics

C. Corporate Economics

B. Macro Economics

D. Managerial Economics

The integration of business economics and strategic planning has given rise to a new area of study called corporate

economics.

Business Economics (for BBA - 1) By TR Jain, OP Khanna Page 11


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