52 Questions
What was the scenario in supply chain management until the 1960s?
Activities were independent from each other
What is the primary purpose of inbound logistics?
To receive, store, and disseminate inputs to the production process
What is the category of support activities that involves managing staff and talents?
HRM - Human Resource Management
What is the main difference between supply chain and value chain?
Supply chain is a subset of the value chain
What is the term for all processes associated with transferring finished products from operations to customers?
Outbound Logistics
What is the category of primary activities that includes machining, assembly, and packaging?
Operations
What is the term for everything done to either improve or maintain a sold product?
Services
What is the primary purpose of the value chain?
To create value for customers
What is the category of support activities that involves purchasing and sourcing inputs?
Procurement/Sourcing
What is the term for the chain of events that follows value creation?
Value Chain
What is the primary focus of logistics management?
Managing the efficient flow of goods, services, and related information
What is the primary purpose of supply chain management?
To improve the long-term performance of individual companies and the supply chain as a whole
What percentage of companies focus on integration with their first-tier suppliers?
34%
What are the different levels of suppliers in a supply chain?
Tier 1, Tier 2, and Tier 3
What is the definition of supply chain?
All processes involved in making raw material into a product, and the transportation of said product into the hands of a customer
What is the vision of supply chain management that few companies succeed at?
Collaboration from suppliers’ suppliers to customers’ customers
What is the primary goal of value chain management?
To improve the value proposition to the next customer and ultimately the end consumer
What is the primary advantage of optimizing logistics according to the text?
Offering higher value at a lower cost
What is the main principle of IKEA's inventory management strategy?
Ensuring that inventory covers demand through Min/Max setting system
What is the term used to describe the strategy of minimizing touchpoints in IKEA's warehouse operations?
Cost-per-touch inventory strategy
What is the main benefit of strong internal linkages in the value chain, according to the text?
Increasing competitiveness and margins
What is the primary focus of IKEA's operations?
Retail and warehouse processes combined
What is the primary objective of logistics management?
To plan, implement and control the flow of goods, services and related information
What is the supply chain?
A network of suppliers, manufacturers, distributors, and transportation providers
What is supply chain management?
The systematic coordination of business functions within and across companies
What is the focus of 47% of companies?
Working within their own four walls
What is the vision of supply chain management that few companies achieve?
Collaboration from suppliers' suppliers to customers' customers
What is the primary goal of managing a supply chain?
To improve long-term performance of individual companies and the supply chain
What percentage of companies focus on integration with key customers?
11%
What are the 8 key sub-processes of supply chain management?
Includes all of the above
What is the role of tier 3 suppliers in the supply chain?
They provide supplies to tier 2 suppliers
What is the definition of supply chain according to the text?
The group of manufacturers, suppliers, distributors, retailers, and logistics providers
What is the ultimate goal of improving logistics according to the text?
to provide better service at a lower cost
What is the focus of the 'three Cs' in competitive advantage?
Customer, Competition, Company
What is the result of optimizing logistics according to the text?
better service at a lower cost
What is the strategy used by IKEA to minimize costs in their warehouse operations?
Cost-per-touch inventory strategy
What is the benefit of strong internal linkages in the value chain?
thicker margins
What is the primary activity that involves managing inventory and storing products?
Inbound logistics
What is the goal of value chain management according to the text?
to improve the value proposition to the end customer
What is the result of developing closer relationships with suppliers according to the text?
improved value proposition
What is the focus of IKEA's retail and warehouse processes?
combined retail and warehouse processes
What is the term for the strategy of minimizing touchpoints in IKEA's warehouse operations?
Minimizing touchpoints strategy
What is the main reason for the separation of activities before the 1960s in supply chain management?
Independence of each activity
What is the main challenge in modern supply chain management context?
System complexity
What is the primary focus of primary activities in the value chain?
Transforming inputs into final products
What is the main difference between inbound and outbound logistics?
Inbound focuses on receiving inputs, outbound on delivering products
What is the main purpose of human resource management in the value chain?
Sourcing and maintaining staff and talent
What is the primary goal of the value chain?
Creating value for customers
What is the main difference between supply chain and value chain?
Supply chain is a subset of the value chain, focusing on physical transformation and handling of products
What is the primary purpose of marketing and sales in the value chain?
Advertising and promoting products
What is the main benefit of primary activities in the value chain?
Creating value for customers
What is the main purpose of technology development in the value chain?
Improving processes and systems
Study Notes
Logistics Management
- Logistics management plans, implements, and controls the efficient flow and storage of goods, services, and related information between the point of origin and the point of consumption to meet customers' requirements.
Supply Chain
- A supply chain is all processes involved in making raw material into a product, and the transportation of said product into the hands of a customer.
- It involves different levels of suppliers and customers, including tier 1, tier 2, and tier 3 suppliers and customers.
Supply Chain Management
- Supply chain management is the systematic, strategic coordination of traditional business functions and tactics across these business functions within a company and across businesses within the supply chain.
- It aims to improve the long-term performance of individual companies and the supply chain as a whole.
- There are 8 key sub-processes for SCM: customer relationship management, customer service management, demand management, order fulfillment, manufacturing flow management, supplier relationship management, product development and commercialization, and returns management.
Evolution of Supply Chain Management
- Until the 1960s, all activities under SCM were independent from each other.
- From 1960 to 2000, processes were merged into three overarching activities: purchasing/materials management, logistics, and physical distribution.
- From 2000 to present, all processes fall under SCM.
Challenges and Opportunities in Modern Supply Chain Management
- System complexity, lead time, transport, tracking, packaging, 3D printing, footprint, energy, and security are challenges in modern supply chain management.
Supply Chain vs Value Chain
- A supply chain is a subset of the value chain.
- A supply chain consists of 3 or more organizations linked directly by one or more upstream or downstream flows of products, services, finances, and information.
- A value chain consists of activities that create value, divided into primary and support activities.
Value Chain
- Primary activities are related to the physical transformation and handling of final products, including inbound logistics, operations, outbound logistics, marketing and sales, and services.
- Support activities support primary activities, including procurement, technology development, HR management, and infrastructure management.
Michael Porter's Value Chain
- Primary activities are divided into 5 categories: inbound logistics, operations, outbound logistics, marketing and sales, and services.
- Inbound logistics involves receiving, storing, and disseminating inputs to production.
- Operations transform inputs into final products.
- Outbound logistics transfer finished products to customers.
- Marketing and sales involve advertising, promotion, and distribution.
- Services involve installation, repair, and maintenance.
Value Chain Management
- Value chain management involves improving the value proposition to the next customer, and ultimately, the end consumer.
- All stakeholders in the value chain are challenged and incentivized to improve its value proposition.
Case Study - IKEA's Value Chain
- IKEA's primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and services.
- Inbound logistics involves in-store logistics management and inventory management.
- Operations involve retail and warehouse processes, cost-per-touch inventory strategy, and minimizing touchpoints.
- Outbound logistics involve presenting products in showrooms and allowing customers to pick desired products.
- Marketing and sales involve distribution channel strategy and developing customer relations.
- Services involve installation, repair, and maintenance.
Test your knowledge of logistics management, including the supply chain and value chain. Learn about the flow of goods, services, and information from origin to consumption. Covers key concepts and processes in logistics.
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