ScM Reviewer Midterm PDF

**EuP** **(Energy-using-Products)** - Products must meet strict **energy efficiency (ELECTRICITY)** standards - **WEEE (Waste Electrical and Electronic Equipment)** Directive to ensure proper disposal and recycling of end-of-life products. **EDP ( Environmental Design of Products )**...

**EuP** **(Energy-using-Products)** - Products must meet strict **energy efficiency (ELECTRICITY)** standards - **WEEE (Waste Electrical and Electronic Equipment)** Directive to ensure proper disposal and recycling of end-of-life products. **EDP ( Environmental Design of Products )** - a broad concept that **focuses on designing products** with minimal environmental impact throughout their life cycle. - it involves the **integration** of environmental considerations into product design, manufacturing, and use, **aiming to reduce resource consumption, waste, and emissions** while enhancing sustainability. **DRIVERS OF GSCM** 1\. Government Regulations 2\. Certification of Supplier Environmental Management System 3\. Environmental Collaboration with Suppliers 4\. Collaboration with Customer 5\. ISO: 14001 Certification 6\. Customer Pressure/Requirement 7\. Social Responsibility/Ethics 8\. Business Benefits 9\. Employee Pressure/Morale 10\. Export and Sales to Foreign Customers 11\. Competition (marketing, product differentiation, brand reputation) 12\. Sustainability of Resources 13\. Lowered Costs / Return on Investment 14\. Organizational Factors (commitment, awareness, experience) **LIFE CYCLE ASSESSMENT (LCA)** - **Evaluate** **the environmental impact of a product** at every stage of its life cycle to make informed decisions about materials, energy use, and waste management **MODULAR PRODUCT DESIGN (MPD)** - **allowing individual components to be** **replaced or upgraded,** extending the overall life of the product and reducing waste **DESIGN FOR RECYCLING AND REUSE** - ensuring that products can be **disassembled** easily for parts to be reused or recycled **CIRCULAR ECONOMY** - principles like **remanufacturing, reuse, and recycling**, EDP seeks to reduce waste and maintain the value of products and materials within the economic system **Environmentally Preferable Purchasing (EPP)** - a **procurement strategy** aimed at buying products and services that have a lesser impact on the environment and human health compared to traditional alternatives. **Environmental Management System (EMS)** "The part of the overall management system that includes organizational structure, planning activities, responsibilities, practices, procedures, processes and resources for developing, implementing achieving and reviewing the environmental policy." -**ISO14001** **ISO 14001 GUIDELINES** **14006 -** Environmental Management Systems **(guidelines for incorporating eco-design).\ ** **MODELS AND FRAMEWORKS** **Code of Environmental Management Principles** - **a set of principles - not a standard -** that will help an organization improve its environmental performance and level of environmental protection **Basic Elements** 1. **Environmental Policy** 2. **Planning** 3. **Implementation and Operation** 4. **Checking and Corrective Action** 5. **Management Review** **Eco-Management and Audit Scheme (EMAS)** - a **European Union regulation designed** to help organizations assess, report, and improve their environmental performance - **It\'s similar to ISO 14001** but goes a step further by requiring organizations to publish an annual **Environmental Statement** that includes their environmental policy, objectives, and performance **EXAMPLES OF EMS IN PRACTICE** **Toyota** - **Toyota Environmental Challenge 2050**, that aims to achieve a sustainable society by reducing the environmental impact of its operations and products. - It involves ambitious goals such as achieving **zero carbon emissions by 2050.** **Walmart** - implemented an EMS to manage its environmental impact, especially regarding energy consumption waste management, and sustainable sourcing. - committed **to reducing its greenhouse gas emissions** and has been actively working on **improving the sustainability of its supply chain** **Unilever** - operates under a Sustainable Living Plan, which integrates environmental management into every aspect of its business - the company's EMS includes **reducing greenhouse gas emissions, water use, and waste** - uses the Natural Step Framework to guide its sustainability strategy **British Petroleum (BP)** - integrates environmental management into its exploration and production processes - the system ensures compliance with environmental regulations, **reduces environmental impact, and improves environmental performance across its global operations** - aligned with ISO 14001 and includes measures such as spill response preparedness and emission reductions. **San Miguel Corporation** - **Waste Reduction and Recycling -** a focus on recycling and reducing solid waste. Its packaging division also focuses on minimizing plastic waste and promoting sustainable packaging. - **Pollution Prevention -** invested in pollution control technologies to manage air and water emissions, ensuring compliance with environmental standards set by the government **\ \ Nestlé Philippines** - **Water Stewardship -** reduced water usage per ton of product and undertaken initiatives to recycle and reuse water within its operations - **Sustainability Programs -** developed various projects like the **Nestlé Likas Yaman Program,** which **promotes environmental education, waste reduction, and community engagement in environmental initiatives** **Energy Development Corporation** leading geothermal energy producer in the Philippines. - **Biodiversity Management -** focused on biodiversity conservation, including the **protection of forests and wildlife habitats near its geothermal sites.** The BINHI Program aims to **reforest degraded forestlands with native tree species.** - **Emission Control** - **monitors and controls emissions** from its power plants, ensuring compliance with environmental regulations. **Philippine Airlines** - **Fuel Efficiency and Emission Reduction -** adopted the Fuel Efficiency Program to reduce emissions by optimizing flight routes, reducing aircraft weight, and improving engine efficiency. The airline also monitors and reports greenhouse gas emissions in line with International Civil Aviation Organization (ICAO) environmental standards. **WEEK 9 -- INBOUND LOGISTICS** **Inbound Logistics** - **Comprises all activities that secure the supply for manufacturing and assembly or sales.** - **Refers to anything that is coming inside a company** **EX: Furniture Manufacturer** - **Arrival or raw materials or semi-finished products such as wood, paint, nuts, screws, bolts etc.** **EX: Amazon Fulfillment Centre** - **Manage receiving, quality check, storage etc. of finished goods** **Activities:** 1. **Includes receiving of raw material or supplies form a supplier to an inbound warehouse** 2. **Focuses on supply** 3. **The flow of material is from suppliers, manufacturers or distributors to a retailer, brand or BPL Provider.** 4. **Activities involved are material sourcing material management and warehouse receiving** 5. **Involves interaction between supplier and the company** **\ \ \ \ \ International Purchasing and Global Outsourcing** **The role of inbound logistics in global supply chain management:** 1. **Multi-Modal Transporation (Shipping, Air Freight)** 2. **Customs Clearance** 3. **Compliance with internation trade regulation** **International Purchasing** - **Refers to procuring goods and services from suppliers outside one's domestic market** **Key Reasons:** - **Cost reduction, quality improvement, and access to specific resources or technology** **Steps in International Purchasing:** 1. **Identifying potential suppliers** 2. **Negotiating terms (price, quantity, delivery terms)** 3. **Managing currency exchange rates and payment methods** 4. **Ensuring compliance with import/export regulations** **Steps in Global Outsourcing:** 1. **Identifying potential suppliers** 2. **Negotiating terms (price, quantity, delivery terms)** 3. **Managing currency exchange rates and payment methods** 4. **Ensuring compliance with import/export regulations** **\ \ \ ** **Global Outsourcing** **CHALLENGES** - **Managing cross-border communication and cultural differences** - **Ensuring quality control** - **Dealing with political, legal and economic risks** **Opportunities** - **Scalability and flexibility** - **Faster time to market** - **Competitive advantage through strategic partnerships** **WEEK 10-11** **STRATEGIC INVENTORY** **Definition and Functions of Inventory** - **Inventory refers to the stock of goods, raw materials, or components that a company holds at various stages of production or distribution in a supply chain. Effective inventory management ensures that goods are available to meet customer demand while minimizing costs. Inventory plays a crucial role in balancing supply and demand, enabling organizations to maintain the smooth flow of operations.** **Functions of Inventory:** **1. Buffer or Safety Stock** - **inventory acts as a cushion to absorb variability in supply and demand, protecting the company from uncertainties like demand surges or supply delays** **2. Decoupling Inventory** - **used to separate or decouple different processes within the production chain to ensure that the failure of one process doesn't halt the entire production system** **3. Anticipation Inventory** - **stock built up in advance of expected increases in demand, such as seasonality, promotions, or market trends** **4. Cycle Stock** - **inventory held to meet regular production and sales cycles** **5. Transit or Pipeline Inventory** - **goods that are in transit between two locations in the supply chain (e.g., from supplier to manufacturer, or warehouse to customer)** **6. Speculative Inventory** - **inventory purchased or produced to take advantage of potential price increases or shortages in the future** **Effective inventory management requires understanding of the various costs associated with inventory, as each type affects overall profitability. These costs fall into four primary categories:** **1. Holding Costs (Carrying Costs)** **These are the costs incurred for storing and maintaining inventory over a period of time. Holding costs typically include:** - **storage costs (rent, utilities, security, and space for warehousing)** - **capital costs (the opportunity cost of tying up capital in inventory that could be used elsewhere)** - **insurance (costs to insure the inventory against theft, damage, or loss)** - **obsolescence and depreciation (costs related to products becoming outdated or losing value over time)** - **spoilage and shrinkage (costs associated with products that deteriorate or are lost due to mishandling or theft)** **2. Ordering Costs** **Ordering costs are those associated with placing and receiving inventory orders, and they are generally considered fixed per order.** - **administrative costs(time and labor spent on preparing purchase orders, communicating with suppliers, and processing payments)** - **shipping and handling costs (transportation fees and the physical handling of materials)** **3. Stockout Costs** **Stockout costs arise when inventory is insufficient to meet demand.** - **lost sales (missed revenue from customers turning to competitors)** - **backordering costs (costs associated with placing delayed orders and expediting shipping)** - **customer dissatisfaction (the potential long-term loss of customer loyalty due to delays or stockouts)** **4. Setup Costs** **Setup costs occur when production processes need to be adjusted to switch between producing different products. These costs include the time and labor required to reconfigure machinery, perform maintenance, or adjust production schedules.** **Inventory Models** **To manage inventory efficiently, companies employ various models to determine optimal order quantities, reorder points, and inventory levels. The most common inventory models include:** 1. **Economic Order Quantity (EOQ)** - **The EOQ model calculates the optimal order quantity that minimizes total inventory costs, which include ordering and holding costs** - **The EOQ model assumes constant demand, constant lead time, and no stockouts** A black and white math equation Description automatically generated with medium confidence **Example:** **ABC Manufacturing uses 10,000 units of a particular raw material annually. The company incurs an order cost of \$50 per order and a holding cost of \$2 per unit per year. The supplier takes 5 days to deliver an order, and the company operates 250 days a year. Calculate the EOQ.**  **2. Just-In-Time (JIT) Inventory** - **The JIT model focuses on reducing inventory to the absolute minimum by ordering goods only when they are needed for production or sale. This approach requires highly efficient supply chain coordination, as any delay can lead to stockouts.** **3. ABC Analysis** - **ABC analysis divides inventory into three categories based on their importance. The purpose of ABC analysis is to allocate resources more efficiently by focusing on items that significantly impact overall profitability.** - **A items are high-value items with low sales volume** - **B items are moderate-value items with moderate sales volume** - **C items are low-value items with high sales volume.** **4. Materials Requirements Planning (MRP)** - **MRP is a computer-based system that helps companies plan inventory levels and production schedules based on forecasts of customer demand. MRP considers factors such as lead time, production cycles, and the availability of raw materials.** **5. Continuous Review Model (Q System)** - **In the continuous review model, inventory levels are monitored consistently, and a reorder is triggered when the stock level reaches a pre-defined reorder point. This method ensures that the company always has enough inventory to meet demand.** **6. Periodic Review Model (P System)** - **In the periodic review model, inventory is reviewed at fixed intervals (e.g., weekly or monthly). Orders are placed to replenish stock to a predetermined level. Unlike the continuous review model, stock levels are only checked periodically, which may lead to slightly higher safety stocks.** **Short-Term Discounting** - **It refers to temporary price reductions or sales promotions used by suppliers to stimulate demand, clear excess inventory, or incentivize bulk purchases. From an inventory management perspective, short-term discounting can offer both opportunities and challenges.** A list of sales and discounts Description automatically generated with medium confidence **Strategies for Managing Discounted Inventory** **1. Demand forecasting** - **accurately predicting future demand ensures that the company takes advantage of discounts without overcommiting resources to excess inventory** **2. Lead time considerations** - **understanding lead times and coordinating discount purchases can help balance the benefits of discounted prices with inventory holding costs** **3. Stock rotation policies** - **implementing first-in, first-out (FIFO) inventory practices ensures that older inventory is sold before newer items, reducing the risk of obsolescence** **Recent Software for Inventory Management** **In modern supply chains, software solutions play a critical role in managing inventory efficiently. These tools help businesses track stock levels, optimize order quantities, manage reordering processes, and forecast demand**  A close-up of a list of products Description automatically generated  A close-up of a document Description automatically generated