LSCM Unit 1 QB

QUESTION BANK FOR LOGISTICS & SUPPLY CHAIN MANAGEMENT

UNIT 1
Q (1) What is a supply chain? Discuss the objectives of a supply chain. What is Supply Chain Management?
Supply Chain: A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. Definitions: (1) A supply chain is a net work of supplier, manufacturing, assembly, distribution and logistics facilities that perform the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these products to customers. (1) A supply chain is a collection of interdependent steps that, when followed, accomplish a certain objective, such as meeting customer requirements. (2) A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains arise in both manufacturing and service organizations.

A supply chain is dynamic and involves the constant flow of information, production and funds between different stages. Each stage of the supply chain performs different processes and interacts with other stages of the supply chain.

. Objective and profitability of a Supply Chain

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The objective of every supply chain is to maximize the overall value generated. The value a supply chain generates is the difference between what the final product is worth to the customer and the effort the supply chain expends in filling the customers request. Supply chain profitability is the total profit to be shared across all supply chain stages. The higher the supply chain profitability, the more successful the supply chain.

Supply Chain Management Definitions: (1) Supply chain management involves the management of flows between and among stages in a supply chain to maximize total profitability (2) Supply Chain management is the systematic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purpose of improving the long-term performance of the individual companies and the supply chain as a whole. (3) Supply Chain management is a systems approach to managing the entire flow of information, materials and services from raw materials suppliers through factories and warehouses to the end customer. (4) Supply Chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (5) Supply Chain Management is the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally

Q (2) Explain the evolution of Supply Chain Management Q (3) Describe the features of Supply Chain Management Q (4) Explain in detail the objectives of Logistics Management Q (5) Describe the components of Logistics Management
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Q (6) Explain the functions of Logistics Management

Answers: Already given in the material for I mid Exam (My notes)

Q (7) Explain the process views of a supply chain

Process View of Supply Chain
A supply chain is a sequence of processes and flows that take place within and between different stages and combine to fill a customer need for a product. Two ways to view the processes performed in a supply chain are Cycle view and Push/pull view

Cycle view Defines the processes involved and the owners of each process. Processes in a supply chain are divided into a series of cycles. Cycles are performed at the interface between two successive stages of a supply chain. Supply chain process can be broken down into the following four process cycles Customer order cycle Replenishment cycle Manufacturing cycle Procurement cycle Each cycle occurs at the interface between two successive stages of the supply chain. A cycle view of the supply chain is very useful when considering operational decisions It clearly specifies the roles and responsibilities of each member of the supply chain It helps the designer to consider the infrastructure required to support the processes

Customer Order Cycle

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Replenishment Cycle

Manufacturing Cycle

Procurement Cycle Push/Pull View Categorizes processes in a supply chain based on whether they are initiated in response to a customer order (pull) or in anticipation of a customer order (push). Categorization is based on the timing of process execution relative to end customer demand At the time of execution of a pull process, customer demand is known with certainty. In case of a push process at the time of execution of a process, demand is not known and must be forecasted. Pull process reactive process Push process speculative process Push/pull boundary in a supply chain separates push process from pull process. The push/pull process view is very useful when considering strategic decisions relating to supply chain. It forces more global consideration of supply chain processes as they relate to a customer order

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Q(8) Discuss the Supply Chain Management (SCM) Framework SCM Framework: A framework to understand the various issues involved in SCM is provided by the
pyramid structure for the SCM model. The pyramid allows issues to be analyzed on four levels:

(1) Strategic:
On the strategic level, it is important to know how SCM can contribute to the enterprises basic value proposition to the customers. Important questions that are addressed at this level include: What are the basic and distinctive service needs of the customers? What can SCM do to meet these needs? Can the SCM capabilities be used to provide unique services to the customers? etc.

(2) Structural : After the strategic issues are dealt with, the next level question(s) that should be asked are:
Should the organization market directly or should it use distributors or other intermediaries to reach the customers? What should the SCM network look like? What products should be sourced from which manufacturing locations? How many warehouses should the company have and where should they be located? What is the mission of each facility (full stocking, fast moving items only, cross-docking) etc.

(3) Functional: This is the level where operational details are decided upon.
Functional excellence requires that the optimal operating practices for transportation management, warehouse operations, and materials management (which includes forecasting, inventory management, production scheduling, and purchasing) are designed. These strategies should keep in view the trade-offs that may need to be made for the overall efficiency of the system. Achieving functional excellence also entails development of a processoriented viewpoint on replenishment and order fulfillment so that all activities involved in these functions can be well integrated.

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(4) Implementation: Without successful implementation, the development of SCM strategies and plans is
meaningless. Of particular importance are the organizational and information systems issues. Organizational issues center on the overall structure, individual roles and responsibilities, and measurement systems needed to build an integrated operation. Information systems are enablers for supply chain management operations and therefore must be carefully designed to support the SCM strategy. Supply chain managers must consider their information needs relative to decision support tools, application softwares, data capture, and the systems overall structure. It is important to note that the decisions made within the SCM strategy pyramid are interdependent. That is, it must be understood what capabilities and limitations affect the functional and implementation decisions and consider those factors while developing a supply chain management strategy and structure.