UT Knoxville BUAD 331 - Final Exam Study Guide (6 pages)

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Final Exam Study Guide

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Final Exam Study Guide


Study Guide
University of Tennessee
Buad 331 - CBM I: Supply Chain Mgt
CBM I: Supply Chain Mgt Documents
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BUAD 331 Chapter 8 and 10 When we increase the complexity in our supply chain we increase risk supply chain complexity and risk Complexity doesn t mean complicated but rather describes a condition of interconnectedness and interdependency across a network Managing Supply Chain Complexity Network Complexity the more nodes and links that exist in a network then clearly the more complex it becomes The potential for unexpected disruptions to the supply chain is clearly heightened by these extended networks Process Complexity Lengthy processes containing many different activities will not only create extended lead times but are also more prone to variability in performance We are designing more products and having new designs meaning we need more process to the supply chain to take this into account The more steps in a process and the more hands off that exist the greater the likelihood that there will be frequent discrepancies between planned and actual outcomes Range Complexity The rate of introduction of new products or services new pack sizes or variants and brand extensions seems to outpace the rate at which existing products or services are being eliminated This impacts forecast accuracy We want things more customized Product Complexity Product complexity can arise because the number of components or subassemblies is high or because there is little commonality across the Bills of Materials for different products If components or materials are specified which happen to have lengthy replenishment lead times then the ability to respond rapidly to changes in demand for the product will be impeded Customer Complexity too many non standard service options or customized solutions Every customer wants something different in a timely manner Supplier Complexity Increases the amount of relationships needing to be made and managed Supply things in a timely manner and have variety Organizational Complexity Inwardly looking with a focus on efficiency rather than customer facing with focus on effectiveness Over time the functions have a tendency to become silos with their own agendas and they can lose sight of the fundamental purpose of the business i e to win and keep profitable customers Information Complexity The volume of data that flows in all directions is immense and not always accurate and can be prone to misinterpretation Information complexity in a supply chain is directly or indirectly influenced by the other seven complexities An antidote to information complexity is reducing the other seven complexities as well as creating greater visibility The cost of complexity in the supply chain is the Pareto Law 80 20 rule Mastering complexity Because the supply chain complexity is such a major source of total end to end pipeline costs as well as being a significant inhibitor of responsiveness it is essential that complexity reduction become priority Understand the sources of complexity undertake Pareto 80 20 analysis Focus on the long tail Which elements of complexity add value and which do not Seek to eliminate nonvalue adding complexity Boeing 787 Global Supply Chain They have engineering culture and to be in charge you have to be an engineering major Had to configure their supply chain a different way to make this certain plane To sell the plane in other countries each country wanted a certain amount of product to be made in home countries Boeing had to adapt SC to that SC has huge amount of complexity What of US firms do you think have a SC risk management strategy Less than 20 and number is decreasing If we ask where companies need to fix their SC s they often say risk If you don t have a plan to reinsure shareholders after a disaster then you re screwed Types of SC risk Supply o How vulnerable is the business to disruptions in the supply Risk may be higher due to global sourcing reliance on key suppliers poor supply management etc Demand o How volatile is demand Does the bullwhip effect cause demand amplification Are there parallel interactions where the demand for another product affects the demand for ours Process o How resilient are our processes Do we understand the sources of variability in those processes e g manufacturing Where are the bottlenecks How much additional capacity is available if required Control o How likely are disturbances and distortions to be caused by our own internal control systems For example order quantities batch sizes and safety stock policies can distort real demand Our own decision rules and policies can chaos type effects Environmental o Where across the supply chain as a whole are we vulnerable to external forces While the type and timings of extreme external events may not be forecastable their impacts need to be assessed Mitigate through Redundancy Inventory and capacity Multiple facilities suppliers Pooled demand Manage through Resilience Postponement Lean processes speed and reliability Improve visibility Leverage supplier relationships Control complexity and variability Managing Supply Chain Risk 1 Supply Chain re Engineering Understand the SC Improve SC Identify critical paths links and nodes Manage critical paths Improve network visibility Establish a SC continuity team Work with suppliers and customers to improve SC risk management procedures 2 Supply Chain Collaboration Collaboration planning SC intelligence 3 Agility Visibility Velocity and Acceleration 4 Creating a Supply Chain Risk Management Culture Establish SC continuity teams Board led responsibility and leadership Factor risk considerations into decision making These 4 steps create the resilient supply chains Chapters 11 and 12 Traditional view of competition Individual business compete as stand alone entities New Paradigm of Competition Supply chains compete with one another Supplier Collaboration How do we work together Preferred customers invest where it makes sense better relationships Look at Major Business Transformations slide it summarizes old to new paradigm Recipe for Competitive Advantage Concept based continual learning in addition to experience Internal and external relationships Information visibility to maximize communication and effectiveness Integrate demand and supply as tightly as possible Goal Quickly respond to market changes effectively and efficiently producing what your customers want then they want it Information silos ARE barriers to SC improvement Vertically functionally focused anticipatory Horizontal output focused agile and lean Activity based costing

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