27 Questions
What is the primary objective of supply chain management according to the APICS Dictionary?
Creating net value and building a competitive infrastructure
How does the APICS Dictionary define a supply chain?
A global network for delivering products and services through an engineered flow of information, physical distribution, and cash
What characterizes the supply chains that interest the course according to the text?
They are decidedly global in scope
What is essential for companies to guarantee in their supply chains according to the text?
A steady flow of supply at an acceptable cost
According to the APICS Dictionary, what does supply chain management involve?
Design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value
What does the engineered flow within a supply chain comprise according to the APICS Dictionary?
An engineered flow of information, physical distribution, and cash
What can companies improve by employing the right supply chain structure according to the text?
Operating efficiency
What is the favored approach to managing complex supply chains according to the text?
Lateral integration
What is the primary reason for relying on a lateral supply chain according to the text?
To achieve economies of scale and scope
What is keiretsu according to the APICS Dictionary, 16th edition?
A cooperative relationship among companies in Japan
What do many Japanese companies favor as an intermediate form of integration according to the text?
'Keiretsu'
Why do many clothing companies in Europe work through Dutch logistics centers according to the text?
To take advantage of Holland’s central location and specialized capabilities
What has replaced vertical integration as the favored approach to managing complex supply chains according to the text?
'Lateral integration'
What are the four basic flows that connect the supply chain entities?
Information, product, cash, and reverse product flows
What does the cash-to-cash cycle time measure in a supply chain?
The efficiency of the flow of funds
What is the main focus of supply chain management according to the text?
Creating net value
What is the direction of the flow of money in a supply chain according to the text?
Upstream from customer to producer and supplier
What does improving the flow of funds within a supply chain lead to according to the text?
Better customer-supplier relationships and more prompt payments
What does the cash-to-cash cycle time measure in a supply chain according to the text?
The time taken for a company to convert investments into cash receipts
What characterizes global supply chains according to the text?
They can be more complex than traditional supply chains involving multiple entities across different countries.
What does a supply chain involve?
Extraction of materials, transformation into a product, and selling to end customers
What is a key challenge in managing global supply chains?
Balancing competing interests and complex group dynamics
What does vertical integration provide?
Control and addressing supply risks
What is the role of Gartner in the context of supply chains?
Conducting an annual survey to identify top 25 supply chain leaders
Why do companies generally pursue lateral integration?
To reduce risk by specializing in core competencies
What are the various flows involved in supply chains?
Material, funds, information in both directions
What is one reason corporations turn to outsourcing in their supply chains?
To address elements of the supply chain judged least effective
Study Notes
Supply Chain Management and Integration
- Supply chains are typically organized by a strong company, such as a manufacturer or retailer, which manages value-creating activities for stakeholders.
- Balancing competing interests is crucial in managing supply chains, especially in global supply chains with complex group dynamics.
- A supply chain involves everyone and everything required to extract materials, transform them into a product, and sell the product to a user.
- Supply chains include entities like raw material extractors, service and component suppliers, manufacturers, distributors, and end customers.
- Supply chain structures vary based on demand history, business focus, connectivity needs, and technology.
- Supply chains involve various processes like marketing data gathering, distribution, payment, and order fulfillment, cutting across entities.
- They also encompass various flows, including materials, funds, and information, in both directions.
- Gartner conducts an annual survey to identify the top 25 supply chain leaders, reflecting the importance of supply chain expertise in today's business world.
- Companies generally pursue vertical integration (bringing the supply chain inside one organization) or lateral integration (outsourcing aspects of the supply chain).
- Vertical integration provides control and can address supply risks, illustrated by examples such as McDonald's and Ikea.
- Lateral integration allows organizations to specialize in core competencies and rely on other specialists for the rest of the supply chain, reducing risk.
- It is challenging to be fully integrated end to end, leading many corporations to turn to outsourcing for the elements of the supply chain in which they judge themselves to be least effective.
Test your knowledge on the organization and value creation in supply chains, as defined by the APICS Dictionary, 16th edition. Explore how stakeholders are impacted and the generation of value for consumers and investors.
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