Supply Chain Management Midterm Study Guide PDF

**Midterm Study Guide: Supply Chain Management (Chapters 1-8)** **Chapter 1: Understanding the Supply Chain** - **Key Concepts:** - Definition of a supply chain: Involves all parties in fulfilling a customer request (manufacturers, suppliers, transporters, retailers, etc.)...

**Midterm Study Guide: Supply Chain Management (Chapters 1-8)** **Chapter 1: Understanding the Supply Chain** - **Key Concepts:** - Definition of a supply chain: Involves all parties in fulfilling a customer request (manufacturers, suppliers, transporters, retailers, etc.). - Three main flows: Information, product, funds. - Supply chain surplus: Customer value - Supply chain costs. - **Decision Phases:** - **Strategic:** Long-term decisions like facility locations. - **Planning:** Mid-term decisions like inventory policies. - **Operational:** Short-term decisions like order processing. - **Views of Supply Chains:** - **Cycle View:** Divided into cycles (customer order, replenishment, manufacturing, procurement). - **Push/Pull View:** Processes categorized by whether they anticipate or react to customer demand. **Chapter 2: Achieving Strategic Fit** - **Strategic Fit:** - Aligning supply chain capabilities with product and market characteristics. - Key levers: Responsiveness vs. efficiency. - Strategies for managing uncertainty in supply chains. **Chapter 3: Supply Chain Drivers and Metrics** - **Key Drivers:** - Facilities, inventory, transportation, information, sourcing, pricing. - **Performance Metrics:** - Financial (profitability, revenue, costs). - Operational (cycle times, fill rates, inventory turnover). **Chapter 4: Designing Distribution Networks** - **Network Design Factors:** - Customer service levels, costs, product variety, and responsiveness. - **Omni-Channel Retailing:** - Integrating online and offline channels. - Case Study: Blue Nile and Diamond Retailing. **Chapter 5: Network Design in the Supply Chain** - **Network Decisions:** - Facility location and capacity planning. - Demand allocation and transportation strategies. - **Frameworks and Models:** - Regional network configuration, site selection, and plant location optimization. **Chapter 6: Designing Global Supply Chain Networks** - **Globalization Impacts:** - Risk management, decision trees, offshoring vs. onshoring. - **Flexibility in Uncertain Markets:** - Case Study: Nokia\'s supply chain adaptations. **Chapter 7: Demand Forecasting in a Supply Chain** - **Forecasting Methods:** - Qualitative (e.g., market surveys). - Quantitative (e.g., time-series analysis). - **Key Metrics:** - Forecast accuracy, error measurement (MAD, MAPE). **Chapter 8: Aggregate Planning in a Supply Chain** - **Aggregate Planning:** - Balancing supply and demand over the medium term. - Trade-offs: Inventory levels, workforce, production rates. - **Linear Programming Models:** - Optimizing production plans in Excel. **Case Studies and Exercises** - Review the mini-cases from each chapter to understand real-world applications and key insights. **Tips for Preparation** 1\. Understand the relationships between strategic, planning, and operational decisions. Explanation: Strategic decisions are long-term and focus on the overall design of the supply chain. These include decisions like where to locate facilities, whether to outsource production, and how to structure the supply chain network. Planning decisions are medium-term, typically involving resource allocation for the next quarter or year. These decisions focus on demand forecasting, inventory policies, and production schedules. Operational decisions are short-term, addressing day-to-day activities like fulfilling orders, scheduling shipments, and handling customer returns. Example: Strategic: Apple decides to establish manufacturing plants in Asia to leverage low labor costs and proximity to suppliers. Planning: Apple forecasts increased demand for iPhones during the holiday season and plans production levels accordingly. Operational: Apple prioritizes fulfilling online orders for iPhones received during Black Friday sales. 2\. Practice numerical examples, especially forecasting models and aggregate planning techniques. Explanation: Numerical problems often appear on exams because they test your ability to apply theoretical concepts to real-world scenarios. Forecasting methods, such as time-series analysis or regression models, require you to calculate demand predictions. Aggregate planning problems involve optimizing production and inventory levels using linear programming or heuristics. Example: Forecasting: Use historical sales data for a company to predict future demand using a simple moving average or exponential smoothing. For instance, if you know monthly sales for the past six months, calculate a three-month moving average to forecast the next month. Aggregate Planning: A manufacturer has limited workforce and machinery. Develop a production schedule to meet demand while minimizing costs. For instance, a furniture company might use Excel to determine the optimal number of chairs to produce monthly. 3\. Relate theoretical concepts to case studies provided in the chapters. Explanation: Case studies show how companies successfully or unsuccessfully applied supply chain principles. They help contextualize abstract concepts in real-life business decisions. Example: Zara: The case highlights how Zara uses a responsive supply chain to rapidly introduce new fashion products. Study how its strategy contrasts with traditional apparel companies that rely on low-cost, long-lead-time manufacturing in Asia. Amazon: Explore how Amazon integrates warehousing, inventory management, and last-mile delivery to maintain high customer service levels despite significant cost challenges. 4\. Focus on key relationships and trade-offs in supply chain drivers. Explanation: Supply chain performance depends on balancing key trade-offs such as responsiveness vs. efficiency, cost vs. service level, and inventory levels vs. production flexibility. Example: Trade-Off in Inventory: A company that keeps high inventory levels can quickly respond to customer demand but incurs higher storage costs. Conversely, a just-in-time (JIT) system reduces inventory costs but risks stockouts during demand surges. Facility Location Trade-Off: Centralizing facilities reduces operating costs but increases transportation times and costs. Decentralizing facilities increases responsiveness to regional markets but adds to overhead costs. 5\. Practice interpreting and creating visual tools like supply chain maps, push/pull boundaries, and performance metrics graphs. Explanation: Visual tools help you organize and analyze complex information. Supply chain maps, for instance, clarify the flow of materials, funds, and information. Example: Supply Chain Map: Map the supply chain for a product like a smartphone, showing flows from raw material suppliers (metals for batteries) to manufacturers, distributors, and retailers. Push/Pull Boundary: Draw a diagram for a make-to-stock system (e.g., L.L. Bean) versus a make-to-order system (e.g., Dell) to identify which processes are speculative (push) and which are reactive (pull). 6\. Utilize Excel models for hands-on learning. Explanation: Many supply chain decisions, such as inventory optimization and forecasting, rely on data modeling in Excel. Practicing with these tools builds confidence in your ability to perform analytics. Example: Create an Excel spreadsheet to calculate Economic Order Quantity (EOQ), using parameters like demand rate, ordering cost, and holding cost. This practice reinforces the concept of balancing order frequency and inventory levels to minimize costs. 7\. Develop critical thinking and problem-solving skills. Explanation: Beyond memorizing facts, focus on why certain strategies succeed or fail. Evaluate decisions based on the supply chain surplus (customer value minus supply chain cost). Example: Analyze why Gateway's retail strategy failed (lack of inventory in stores reduced customer satisfaction) while Apple's succeeded (strategic inventory management provided instant gratification to customers). 8\. Connect supply chain management to broader business objectives. Explanation: Understand how supply chain decisions impact profitability, customer satisfaction, and competitive advantage. Example: Walmart's focus on low-cost operations supports its strategy of providing "everyday low prices," achieved through efficient supply chain design and collaboration with suppliers.