Study Guide BA 331 Exam 1Ch1The Supply Chain and Competitive Advantage Old Paradigm- Assumed problems of Scarcity, Limited Technology, and Adversarial relationshipsResulted in uncertainty and inaccuracies in processes leading topoor service and high inventoryFocused on Strong Brands, Large advertising budgets, and aggressive selling Examples- Ford, Procter and Gamble New Paradigm- Sought to gain Competitive Advantage by providing better service and availability to picky customers Resulted in the integration of demand and supply facing processes, internally through Logistics and externally through Supply Chain Management (SCM) Focused on winning business through capabilities and competencies, managing core processes better than competition, and moving product faster through commoditization of products and industries Enabled by- Responsiveness, reliability, visibility, resilience, flexibility, and relationships Examples- Wal-Mart, Toyota, McDonalds, Dell Logistics deals with Logistics management, Supply Chain Management, Value Chain, and inbound and outbound logistics Competitive Advantage= Product excellence X Process Excellence Supply Chain Management- delivering maximum to the end-customer while simultaneously increasing quality, productivity, and Operational excellence Supply Chain Management is used to create competitive advantage by differentiating from the competition through better service and do it at a lower cost Gaining Competitive Advantage through Supply Chain Management Goal to increase your Value advantage, Productivity advantage, or if capable both Commodity Market- Low value and productivity Service Leader- High customer value for a superior service but at a higher cost due to lower productivity advantage Example- Verizon offering many cell phones and better coverage but at a higher cost then competitors Cost Leader- utilizes capacity well and thus can offer products at a lower cost at the expense of customer service Example- Wal-Mart with everyday low prices but near impossible to find an employee tohelp you Cost and Service Leader- excelling in both areas and delivering a Superior Customer Value Evolution of Supply Chain Management The Great Divide- Conflict between Manufacturing and Marketing Integration Bridging this gap makes businesses ultimately more Successful Manufacturing Integration- focuses on product, efficiency measured, economies of scale and scope Marketing Integration- focuses on customer, satisfaction measured, relevance Companies often have too much inventory because they can’t coordinate the communication across the SC to get the customers wants when they want them Logistics Management- process of strategically managing the procurement, movement and storage of materials, parts and finished inventory and related information flows through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost-efficient fulfillment of orders Goal to maximize profits through cutting cost Supply Chain Management- goal to deliver superior customer satisfaction at the least possible cost to the supply Chain SCM- many players within the supply chain with one firm not expected to do everything Inbound Logistics- coordination of purchases, inbound trans., raw materials, component parts, WIP inventory and production scheduling Outbound Logistics- distribution function, outbound trans., coordinate forecasting, finished goods inv., customer service Porter’s Value Chain: Primary Activities- Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, Service Support Activities- Firm Infrastructure, Human Resource Management, Technology Development, procurement Actions, sources, and service are what creates the value that gives you competitive advantage 4 R’s that help you gain competitive advantage Responsiveness- to customer wants Reliability- doing it the same every time Resilience- ability to solve problems Relationships – to customers Responsiveness and Reliability are affected by the decisions you make in supply chain Need to develop operations that can respond to customer demand quickly Order decoupling point- point that customer order penetrates in the supply chain process Dell Supply Chain planning Steps Supply chain management coordinates info, materials, and logistics to support customer requirements Supply constraints are continuously communicated to sales and managed at point of sale Focus on continuity of supply and direct vendor relationships ensure material availability Aimed to create visibility in the Supply chain to show where they need to spend time on relationshipsChapter 2 Logistics and Customer Value Logistics affects customer value through customer service and Availability of product SCM role in the marketing mix- provide customers with products they want, when they want them, in right condition and price Problem with marketing is that it focuses on attracting new customers instead of keeping existing ones Logistics and Supply chain are what keeps customers Customer Value= Perception of benefits/Total cost of Ownership Everything is lost if you do not have the product on the shelf when the customer comes Customer Service= process for providing significant value-added benefits to the supply chain in a cost-effective way. Or how you provide value The Customer experience- when you buy a product you buy what comes with it example package, service Perfect Order Concept- getting everything right in respect to the customer experience Company ZARA- example about not making anything till you know its popular and being responsive, flexible, built on relationships with customers Shrinking service Window- customers demanding higher level of service Traditional Marketing- focuses on revenue at any cost SCM- focuses on oriented organization is profit or lifetime value of customer to the organization Market Driven Supply chains segment customers based upon service requirements and profitability to the firm Relationship between Revenue and Service- providing no or low service will cause you to have low revenue cause no one will buy your product, providing too high of a service will cause you to be unprofitable because you have too many service expenses Goal: Find a sweet spot
View Full Document
Unlocking...