Supply chain structure, bullwhip effect, SCOR model, sourcing and network design.
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- What is a supply chain?
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A network of organizations and activities involved in producing and delivering goods from raw materials through to end customers.- What does a first-tier supplier provide?
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Direct materials and components that go directly into a company's products.- What does a second-tier supplier provide?
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Materials and components that go to first-tier suppliers, not directly to the focal company.- Distinguish upstream and downstream in a supply chain.
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Upstream points toward raw material sources; downstream points toward end customers.- What is the bullwhip effect?
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Progressive amplification of small variations in consumer demand as orders move upstream through the supply chain.- Name three causes of the bullwhip effect.
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Demand forecast updating, order batching, and price promotions or fluctuations.- How does demand forecast updating contribute to the bullwhip effect?
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Each stage forecasts based on orders it receives rather than true demand, creating greater variance at each upstream level.- What is the inventory impact of the bullwhip effect?
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Upstream members carry higher safety stocks to compensate for greater demand variability.- What is order batching?
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Accumulating orders and placing them in batches rather than continuously, which amplifies order size variance upstream.- What strategy most effectively reduces the bullwhip effect?
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Sharing real demand information, such as point-of-sale data, with upstream supply chain partners.- What does SCOR stand for?
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Supply Chain Operations Reference.- Name the five primary processes in the SCOR model.
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Plan, Source, Make, Deliver, and Return.- What is the Plan process in SCOR?
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Demand forecasting, supply planning, and resource management to meet anticipated demand.- What is the Source process in SCOR?
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Procurement of raw materials and services from suppliers.- What is the Make process in SCOR?
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Production and assembly of finished goods.
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