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Instructions
This assignment allows you to benefit from the one-to-one
teaching model at NCU while simultaneously collaborating with
peers by submitting a well-supported perspective to the NCU
Commons.
Begin by participating in one of the psychological research
studies provided from the links in this week’s resources. The
first resource includes a link to historical and landmark research
studies in the field of psychology. The second includes current
studies that are being conducted within the field of social
psychology. The third and final link is to a listing of the top 10
psychology experiments in a wide variety of areas within the
field of psychology.
After selecting a study and participating in it, see if you can
discuss how this study meets the criteria for the scientific
method. What were the key ingredients?
In your Commons post, include a description of what the
word pseudoscience means, and provide an example of this type
of finding from a research study within the field of psychology
or another related field. Briefly detail why this study does not
meet the criteria for science and what steps were overlooked,
along with some discussion regarding why the results are not
readily accepted within the larger scientific community. Where
is the flaw in the method, logic, or conclusions of the study?
What, if anything, could you do to remedy this – for example,
how might you make the method more scientific and/or provide
conclusions that are more logical and scientific?
To submit your work to your professor, copy the Commons post
that you provided, and then paste this into a Word document,
save it, and upload your work for submission to the Dropbox.
Length: 2-3 pages with references included at the bottom
References: Include a minimum of 2 scholarly resources in your
answer.
The completed assignment should address all of the assignment
requirements, exhibit evidence of concept knowledge, and
demonstrate thoughtful consideration of the content presented in
the course. The writing should integrate scholarly resources,
reflect academic expectations and current APA standards, and
adhere to Northcentral University's Academic Integrity Policy.
Supply Chain Management
Chapter 15
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
You should be able to:
LO 15.1 Explain the terms supply chain and logistics
LO 15.2 Name the key aspects of supply chain management
LO 15.3 List, and briefly explain, current trends in supply
chain management
LO 15.4 Outline the benefits and risks related to outsourcing
LO 15.5 Explain what the main supply chain risks are, and
what businesses can do to minimize those risks
LO 15.6 Describe some of the complexities related to global
supply chains
LO 15.7 Briefly describe the ethical issues in supply chains
and the key steps companies can take to avoid ethical problems
LO 15.8 Describe the three concerns of small businesses
related to the supply chain and suggest ways to manage those
concerns
LO 15.9 List several strategic, tactical, and operational
responsibilities related to managing the supply chain
LO 15.10 Discuss procurement in terms of the purchasing
interfaces, the purchasing cycle, ethics, and centralized versus
decentralized decision making
LO 15.11 Briefly describe the key aspects of supplier
management
LO 15.12 Discuss the logistics aspects of supply chain
management, including RFID technology
LO 15.13 Discuss the issues involved in managing returns
LO 15.14 Describe some of the challenges in creating an
effective supply chain and some of the trade-offs involved
Chapter 15: Learning Objectives
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Supply chain:
The sequence of organizations — their facilities, functions, and
activities — that are involved in producing and delivering a
product or service
Logistics:
The part of a supply chain involved with the forward and
reverse flow of goods, services, cash, and information
Supply Chain
LO 15.1
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Typical Supply Chains
LO 15.1
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
The sequence of the supply chain begins with basic suppliers
and extends all the way to the final customer
Warehouses
Factories
Processing centers
Distribution centers
Retail outlets
Offices
Facilities
LO 15.1
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Supply chain functions and activities
Forecasting
Purchasing
Inventory management
Information management
Quality assurance
Scheduling
Production and delivery
Customer service
Functions and Activities
LO 15.1
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Supply Chain Management (SCM)
The strategic coordination of business functions within a
business organization and throughout its supply chain for the
purpose of integrating supply and demand management
Supply Chain Management
LO 15.2
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
SCM managers
People at various levels of the organization who are responsible
for managing supply and demand both within and across
business organizations
Involved with planning and coordinating activities
Sourcing and procurement of materials and services
Transformation activities
Logistics
SCM Managers
LO 15.2
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
The goal of SCM is to match supply to demand as effectively
and efficiently as possible
Key issues:
Determining appropriate levels of outsourcing
Managing procurement
Managing suppliers
Managing customer relationships
Being able to quickly identify problems and respond to them
Key Aspects of SCM
LO 15.2
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Three types of flow management
Product and service flow
Involves movement of goods and services from suppliers to
customers as well as handling customer service needs and
product returns
Information flow
Involves sharing forecasts and sales data, transmitting orders,
tracking shipments, and updating order status
Financial flow
involves credit terms, payments, and consignment and titl e
ownership arrangements
Flow Management
LO 15.2
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Trends affecting supply chain design and management:
Measuring supply chain ROI
“Greening” the supply chain
Re-evaluating outsourcing
Integrating IT
Adopting lean principles
Managing risks
Trends in SCM
LO 15.3
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Benefits:
Lower prices may result from lower labor costs
The ability of the organization to focus on its core strengths
Permits the conversion of some fixed costs to variable costs
It can free up capital to address other needs
Some risks can be shifted to the supplier
The ability to take advantage of a supplier’s expertise
Makes it easier to expand outside of the home country
Risks
Inflexibility due to longer lead times
Increased transportation costs
Language and cultural differences
Loss of jobs
Loss of control
Lower productivity
Loss of business knowledge
Knowledge transfer and intellectual property concerns
Increased effort required to manage the supply chain
Benefits & Risks of Outsourcing
LO 15.4
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Supply chain risks
Supply chain disruption
Natural disasters
Supplier problems
Quality issues
Another form of disruption that may disrupt supplies and lead to
product recalls, liability claims, and negative publicity
Loss of control of sensitive information
If suppliers divulge sensitive information to competitors, it can
weaken a firm’s competitive position
Supply Chain Risks
LO 15.5
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Risk management
Involves identifying risks, assessing their likelihood of
occurring and their potential impact and then developing
strategies for addressing those risks
Strategies for addressing risk include:
Risk avoidance
Risk reduction
Risk sharing
Key elements of successful risk management include:
Know your suppliers
Provide supply chain visibility
Develop event-response capability
Risk Management
LO 15.5
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Global supply chains
Product design often uses inputs from around the world
Some manufacturing and service activities are outsourced to
countries where labor and/or materials costs are lower
Products are sold globally
Complexities
Language and cultural differences
Currency fluctuations
Political instability
Increasing transportation costs and lead times
Increased need for trust amongst supply chain partners
Global Supply Chains
LO 15.6
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Examples:
Bribing government or company officials to secure permits or
favorable status
“Exporting smokestacks” to developing countries
Claiming a “green” supply chain when the level of “green” is
only minimal
Ignoring health, safety, and environmental standards
Violating basic worker rights
Mislabeling the country of origin
Selling products abroad that are banned at home
Dealing with ethical issues:
Develop an ethical supply chain code of behavior
Monitor supply chain activities
Choose suppliers that have a reputation for good ethical
behavior
Incorporate compliance with labor standards in supplier
contracts
Address any ethical problems that arise swiftly
SCM Ethical Issues
LO 15.7
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Three small business SCM concerns:
Inventory management
Carry extra inventory as a way to avoid shortages due to supply
chain interruption
Have backups for delivery from suppliers and to customers
Reducing risks
Use only reliable suppliers
Determine which suppliers are critical and get to know them and
any challenges they have
Measure supplier performance
Recognize warning signs of supplier issues
Have plans in place to manage supply chain problems
International trade
Work with someone who has expertise to help oversee foreign
suppliers
Set expectations for demand and timing
Do not rely on a single supplier
Build goodwill to help in negotiations and resolving any
problem that arise
Consider using domestic suppliers if the risks of working with
foreign suppliers are prohibitive
Small Business Concerns
LO 15.8
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Management Responsibilities
Aspects of management responsibility:
Legal
Being knowledgeable about laws and regulations of the
countries where supply chains exist
Obeying laws and operating to conform to regulations
Economic
Supplying products and services to meet demand as effici ently
as possible
Ethical
Conducting business in ways that are consistent with the moral
standards of society
LO 15.9
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Management Responsibility: Strategic
Certain strategic responsibilities have a major impact on the
success of both supply chain management and the business
itself:
Supply chain strategy alignment
Network configuration
Information technology
Products and services
Capacity planning
Strategic partnerships
Distribution strategy
Uncertainty and risk reduction
LO 15.9
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Tactical
Forecasting
Sourcing
Operations planning
Managing inventory
Transportation planning
Collaborating
Scheduling
Receiving
Transforming
Order fulfilling
Managing inventory
Shipping
Information sharing
Controlling
Management Responsibility:
Tactical and Operational
Operational
LO 15.9
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
The purchasing department is responsible for obtaining the
materials, parts, and supplies and services needed to produce a
product or provide a service.
The goal of procurement
Develop and implement purchasing plans for products and
services that support operations strategies
Procurement
LO 15.10
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Purchasing Interfaces
LO 15.10
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Duties of Purchasing
Identifying sources of supply
Negotiating contracts
Maintaining a database of suppliers
Obtaining goods and services
Managing suppliers
LO 15.10
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
The main steps:
Purchasing receives the requisition
Purchasing selects a supplier
Purchasing places the order with a vendor
Monitoring orders
Receiving orders
The Purchasing Cycle
LO 15.10
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Supplier Management
Choosing suppliers
Supplier audits
Supplier certification
Supplier relationship management
Supplier partnerships
CPFR (collaborative planning, forecasting, and replenishment)
Strategic partnering
LO 15.11
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Vendor Analysis, Supplier Audits,
and Supplier Certification
Vendor analysis
Evaluating the sources of supply in terms of price, quality,
reputation, and service
Supplier audit
A means of keeping current on suppliers’ production (or
service) capabilities, quality and delivery problems and
resolutions, and performance on other criteria
Supplier certification
Involves a detailed examination of a supplier’s policies and
capabilities
The process verifies the supplier meets or exceeds the
requirements of a buyer
LO 15.11
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Type of relationship is often governed by the duration of the
trading relationship
Short-term
Oftentimes involves competitive bidding
Minimal interaction
Medium-term
Often involves an ongoing relationship
Long-term
Often involves greater cooperation that evolves into a
partnership
Supplier Relationship Management
LO 15.11
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Strategic Partnering
Two or more business organizations that have complementary
products or services join so that each may realize a strategic
benefit
Example:
When a supplier agrees to hold inventory for a customer in
return for a long-term commitment
The customer’s inventory holding cost is reduced and the
supplier is relieved of the costs that would be needed to
continually find new customers
LO 15.11
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Contrasting Supplier Relationships
LO 15.11AspectAdversaryPartnerNumber of suppliersMany;
play one off against the othersOne or a fewLength of
relationshipMay be briefLong-termLow priceMajor
considerationModerately importantReliabilityMay not be
highHighOpennessLowHighQualityMay be unreliable; buyer
inspectsAt the source; vendor certifiedVolume of businessMay
be low due to many suppliersHighFlexibilityRelatively
lowRelatively highLocationWidely dispersedNearness is
important for short lead times and quick service
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Logistics
Logistics
Refers to the movement of materials, services, cash, and
information in a supply chain
Movements within a facility
Incoming shipments
Outgoing shipments
LO 15.12
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Movement Within a Facility
LO 15.12
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Traffic management
Overseeing the shipment of incoming and outgoing goods
Handles schedules and decisions on shipping method and times,
taking into account:
Costs of shipping alternatives
Government regulations
Needs of the organization
Shipping delays or disruptions
Incoming and Outgoing Shipments
LO 15.12
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Radio frequency identification (RFID)
A technology that uses radio waves to identify objects, such as
goods in supply chains
Similar to barcodes but
Are able to convey much more information
Do not require line-of-sight for reading
Do not need to be read one at a time
Has the ability to:
Increase supply chain visibility
Improve inventory management
Improve quality control
Enhance relationships with suppliers and customers
Tracking Goods: RFID
LO 15.12
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
3-PL
Third-party logistics (3-PL)
The outsourcing of logistics management
Includes
Warehousing and distribution
Potential benefits include taking advantage of:
The specialists’ knowledge
Their well-developed information system
Their ability to obtain more favorable shipping rates
LO 15.12
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Reverse logistics
The process of transporting returned items
Products are returned to companies or third party handlers for a
variety of reasons and in a variety of conditions
Elements of return management
Gatekeeping
Screening returned goods to prevent incorrect acceptance of
goods
Avoidance
Finding ways to minimize the number of items that are returned
Managing Returns
LO 15.13
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
It begins with strategic sourcing
Analyzing the procurement process to lower costs by reducing
waste and non-value-added activities, increase profits, reduce
risks, and improve supplier performance
There must be
Trust
Effective communication
Information velocity
Supply chain visibility
Event management capability
Performance metrics
Creating an Effective Supply Chain
LO 15.14
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Challenges
Barriers to integration of organizations
Getting top management on board
Dealing with trade-offs
Small businesses
Variability and uncertainty
Response time
LO 15.14
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Lot-size-inventory trade-off
Large lot sizes yield benefits in terms of quantity discounts and
lower annual setup costs, but it increases the amount of safety
stock (and inventory carrying costs) carried by suppliers
Inventory-transportation cost trade-off
Suppliers prefer to ship full truckloads instead of partial loads
to spread shipping costs over as many units as possible. This
leads to greater holding costs for customers
Cross-docking
A technique whereby goods arriving at a warehouse from a
supplier are unloaded from the suppliers truck and loaded onto
outbound truck, thereby avoiding warehouse storage
Trade-Offs
LO 15.14
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Lead time-transportation costs trade-off
Suppliers like to ship in full loads, but waiting for sufficient
orders and/or production to achieve a full load may increase
lead time
Product variety-inventory trade-off
Greater product variety usually means smaller lot sizes and
higher setup costs, as well as higher transportation and
inventory management costs
Delayed differentiation
Production of standard components and subassemblies which
are held until late in the process to add differentiating features
Trade-Offs (cont.)
LO 15.14
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Cost-customer service trade-off
Producing and shipping in large lots reduces costs, but increases
lead time
Disintermediation
Reducing one or more steps in a supply chain by cutting out one
or more intermediaries
Trade-Offs (cont.)
LO 15.14
Copyright ©2018 McGraw-Hill Higher Education. All rights
reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education
15-‹#›
Module 11: Critical Thinking Assignment
Supply Chain Management (100 points)
Visit the websites of three Middle Eastern companies like Al
Baik, Almarai, and Emirates Airlines or any others of your
choosing. Identify information on the companies’ supply chain
management activities.
Address the following requirements:
· Identify your selected companies in no more than three
paragraphs.
· In the remaining pages, break down information you find on
purchasing issues, supplier issues, logistics, information
systems, quality, and customer service to compare and contrast
the supply chains of your selected companies.
· In your final one or two paragraphs, suggest improvements for
each company based on your comparison to the other two.
Directions:
· Your essay is required to be four to five pages in length,
which does not include the title page and reference pages, which
are never a part of the content minimum requirements.
· Support your submission with course material concepts,
principles, and theories from the textbook and at least three
scholarly, peer-reviewed journal articles.Use the Saudi Digital
Library to find your resources.
· Use Saudi Electronic University academic writing standards
and follow APA style guidelines.
· It is strongly encouraged that you submit all assignments into
Turnitin prior to submitting them to your instructor for grading.
If you are unsure how to submit an assignment into the
Originality Check tool, review the Turnitin – Student Guide for
step-by-step instructions.

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Hide Folder InformationThis assignment will be submitted to

  • 1. Hide Folder Information This assignment will be submitted to Turnitin®. Instructions This assignment allows you to benefit from the one-to-one teaching model at NCU while simultaneously collaborating with peers by submitting a well-supported perspective to the NCU Commons. Begin by participating in one of the psychological research studies provided from the links in this week’s resources. The first resource includes a link to historical and landmark research studies in the field of psychology. The second includes current studies that are being conducted within the field of social psychology. The third and final link is to a listing of the top 10 psychology experiments in a wide variety of areas within the field of psychology. After selecting a study and participating in it, see if you can discuss how this study meets the criteria for the scientific method. What were the key ingredients? In your Commons post, include a description of what the word pseudoscience means, and provide an example of this type of finding from a research study within the field of psychology or another related field. Briefly detail why this study does not meet the criteria for science and what steps were overlooked, along with some discussion regarding why the results are not readily accepted within the larger scientific community. Where is the flaw in the method, logic, or conclusions of the study? What, if anything, could you do to remedy this – for example, how might you make the method more scientific and/or provide conclusions that are more logical and scientific? To submit your work to your professor, copy the Commons post that you provided, and then paste this into a Word document,
  • 2. save it, and upload your work for submission to the Dropbox. Length: 2-3 pages with references included at the bottom References: Include a minimum of 2 scholarly resources in your answer. The completed assignment should address all of the assignment requirements, exhibit evidence of concept knowledge, and demonstrate thoughtful consideration of the content presented in the course. The writing should integrate scholarly resources, reflect academic expectations and current APA standards, and adhere to Northcentral University's Academic Integrity Policy. Supply Chain Management Chapter 15 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› You should be able to: LO 15.1 Explain the terms supply chain and logistics LO 15.2 Name the key aspects of supply chain management LO 15.3 List, and briefly explain, current trends in supply chain management LO 15.4 Outline the benefits and risks related to outsourcing LO 15.5 Explain what the main supply chain risks are, and
  • 3. what businesses can do to minimize those risks LO 15.6 Describe some of the complexities related to global supply chains LO 15.7 Briefly describe the ethical issues in supply chains and the key steps companies can take to avoid ethical problems LO 15.8 Describe the three concerns of small businesses related to the supply chain and suggest ways to manage those concerns LO 15.9 List several strategic, tactical, and operational responsibilities related to managing the supply chain LO 15.10 Discuss procurement in terms of the purchasing interfaces, the purchasing cycle, ethics, and centralized versus decentralized decision making LO 15.11 Briefly describe the key aspects of supplier management LO 15.12 Discuss the logistics aspects of supply chain management, including RFID technology LO 15.13 Discuss the issues involved in managing returns LO 15.14 Describe some of the challenges in creating an effective supply chain and some of the trade-offs involved Chapter 15: Learning Objectives Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Supply chain: The sequence of organizations — their facilities, functions, and activities — that are involved in producing and delivering a product or service
  • 4. Logistics: The part of a supply chain involved with the forward and reverse flow of goods, services, cash, and information Supply Chain LO 15.1 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Typical Supply Chains LO 15.1 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› The sequence of the supply chain begins with basic suppliers and extends all the way to the final customer Warehouses Factories Processing centers Distribution centers Retail outlets Offices
  • 5. Facilities LO 15.1 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Supply chain functions and activities Forecasting Purchasing Inventory management Information management Quality assurance Scheduling Production and delivery Customer service Functions and Activities LO 15.1 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Supply Chain Management (SCM) The strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management
  • 6. Supply Chain Management LO 15.2 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› SCM managers People at various levels of the organization who are responsible for managing supply and demand both within and across business organizations Involved with planning and coordinating activities Sourcing and procurement of materials and services Transformation activities Logistics SCM Managers LO 15.2 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› The goal of SCM is to match supply to demand as effectively and efficiently as possible Key issues: Determining appropriate levels of outsourcing Managing procurement Managing suppliers
  • 7. Managing customer relationships Being able to quickly identify problems and respond to them Key Aspects of SCM LO 15.2 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Three types of flow management Product and service flow Involves movement of goods and services from suppliers to customers as well as handling customer service needs and product returns Information flow Involves sharing forecasts and sales data, transmitting orders, tracking shipments, and updating order status Financial flow involves credit terms, payments, and consignment and titl e ownership arrangements Flow Management LO 15.2 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#›
  • 8. Trends affecting supply chain design and management: Measuring supply chain ROI “Greening” the supply chain Re-evaluating outsourcing Integrating IT Adopting lean principles Managing risks Trends in SCM LO 15.3 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Benefits: Lower prices may result from lower labor costs The ability of the organization to focus on its core strengths Permits the conversion of some fixed costs to variable costs It can free up capital to address other needs Some risks can be shifted to the supplier The ability to take advantage of a supplier’s expertise Makes it easier to expand outside of the home country Risks Inflexibility due to longer lead times Increased transportation costs Language and cultural differences Loss of jobs Loss of control Lower productivity Loss of business knowledge Knowledge transfer and intellectual property concerns Increased effort required to manage the supply chain
  • 9. Benefits & Risks of Outsourcing LO 15.4 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Supply chain risks Supply chain disruption Natural disasters Supplier problems Quality issues Another form of disruption that may disrupt supplies and lead to product recalls, liability claims, and negative publicity Loss of control of sensitive information If suppliers divulge sensitive information to competitors, it can weaken a firm’s competitive position Supply Chain Risks LO 15.5 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Risk management Involves identifying risks, assessing their likelihood of occurring and their potential impact and then developing
  • 10. strategies for addressing those risks Strategies for addressing risk include: Risk avoidance Risk reduction Risk sharing Key elements of successful risk management include: Know your suppliers Provide supply chain visibility Develop event-response capability Risk Management LO 15.5 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Global supply chains Product design often uses inputs from around the world Some manufacturing and service activities are outsourced to countries where labor and/or materials costs are lower Products are sold globally Complexities Language and cultural differences Currency fluctuations Political instability Increasing transportation costs and lead times Increased need for trust amongst supply chain partners Global Supply Chains LO 15.6 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education
  • 11. 15-‹#› Examples: Bribing government or company officials to secure permits or favorable status “Exporting smokestacks” to developing countries Claiming a “green” supply chain when the level of “green” is only minimal Ignoring health, safety, and environmental standards Violating basic worker rights Mislabeling the country of origin Selling products abroad that are banned at home Dealing with ethical issues: Develop an ethical supply chain code of behavior Monitor supply chain activities Choose suppliers that have a reputation for good ethical behavior Incorporate compliance with labor standards in supplier contracts Address any ethical problems that arise swiftly SCM Ethical Issues LO 15.7 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#›
  • 12. Three small business SCM concerns: Inventory management Carry extra inventory as a way to avoid shortages due to supply chain interruption Have backups for delivery from suppliers and to customers Reducing risks Use only reliable suppliers Determine which suppliers are critical and get to know them and any challenges they have Measure supplier performance Recognize warning signs of supplier issues Have plans in place to manage supply chain problems International trade Work with someone who has expertise to help oversee foreign suppliers Set expectations for demand and timing Do not rely on a single supplier Build goodwill to help in negotiations and resolving any problem that arise Consider using domestic suppliers if the risks of working with foreign suppliers are prohibitive Small Business Concerns LO 15.8 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Management Responsibilities Aspects of management responsibility: Legal
  • 13. Being knowledgeable about laws and regulations of the countries where supply chains exist Obeying laws and operating to conform to regulations Economic Supplying products and services to meet demand as effici ently as possible Ethical Conducting business in ways that are consistent with the moral standards of society LO 15.9 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Management Responsibility: Strategic Certain strategic responsibilities have a major impact on the success of both supply chain management and the business itself: Supply chain strategy alignment Network configuration Information technology Products and services Capacity planning Strategic partnerships Distribution strategy Uncertainty and risk reduction LO 15.9 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education
  • 14. 15-‹#› Tactical Forecasting Sourcing Operations planning Managing inventory Transportation planning Collaborating Scheduling Receiving Transforming Order fulfilling Managing inventory Shipping Information sharing Controlling Management Responsibility: Tactical and Operational Operational LO 15.9 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› The purchasing department is responsible for obtaining the materials, parts, and supplies and services needed to produce a
  • 15. product or provide a service. The goal of procurement Develop and implement purchasing plans for products and services that support operations strategies Procurement LO 15.10 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Purchasing Interfaces LO 15.10 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Duties of Purchasing Identifying sources of supply Negotiating contracts Maintaining a database of suppliers Obtaining goods and services Managing suppliers LO 15.10 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior
  • 16. written consent of McGraw-Hill Education 15-‹#› The main steps: Purchasing receives the requisition Purchasing selects a supplier Purchasing places the order with a vendor Monitoring orders Receiving orders The Purchasing Cycle LO 15.10 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Supplier Management Choosing suppliers Supplier audits Supplier certification Supplier relationship management Supplier partnerships CPFR (collaborative planning, forecasting, and replenishment) Strategic partnering LO 15.11 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education
  • 17. 15-‹#› Vendor Analysis, Supplier Audits, and Supplier Certification Vendor analysis Evaluating the sources of supply in terms of price, quality, reputation, and service Supplier audit A means of keeping current on suppliers’ production (or service) capabilities, quality and delivery problems and resolutions, and performance on other criteria Supplier certification Involves a detailed examination of a supplier’s policies and capabilities The process verifies the supplier meets or exceeds the requirements of a buyer LO 15.11 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Type of relationship is often governed by the duration of the trading relationship Short-term Oftentimes involves competitive bidding Minimal interaction
  • 18. Medium-term Often involves an ongoing relationship Long-term Often involves greater cooperation that evolves into a partnership Supplier Relationship Management LO 15.11 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Strategic Partnering Two or more business organizations that have complementary products or services join so that each may realize a strategic benefit Example: When a supplier agrees to hold inventory for a customer in return for a long-term commitment The customer’s inventory holding cost is reduced and the supplier is relieved of the costs that would be needed to continually find new customers LO 15.11 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#›
  • 19. Contrasting Supplier Relationships LO 15.11AspectAdversaryPartnerNumber of suppliersMany; play one off against the othersOne or a fewLength of relationshipMay be briefLong-termLow priceMajor considerationModerately importantReliabilityMay not be highHighOpennessLowHighQualityMay be unreliable; buyer inspectsAt the source; vendor certifiedVolume of businessMay be low due to many suppliersHighFlexibilityRelatively lowRelatively highLocationWidely dispersedNearness is important for short lead times and quick service Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Logistics Logistics Refers to the movement of materials, services, cash, and information in a supply chain Movements within a facility Incoming shipments Outgoing shipments LO 15.12 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#›
  • 20. Movement Within a Facility LO 15.12 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Traffic management Overseeing the shipment of incoming and outgoing goods Handles schedules and decisions on shipping method and times, taking into account: Costs of shipping alternatives Government regulations Needs of the organization Shipping delays or disruptions Incoming and Outgoing Shipments LO 15.12 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Radio frequency identification (RFID) A technology that uses radio waves to identify objects, such as goods in supply chains Similar to barcodes but
  • 21. Are able to convey much more information Do not require line-of-sight for reading Do not need to be read one at a time Has the ability to: Increase supply chain visibility Improve inventory management Improve quality control Enhance relationships with suppliers and customers Tracking Goods: RFID LO 15.12 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› 3-PL Third-party logistics (3-PL) The outsourcing of logistics management Includes Warehousing and distribution Potential benefits include taking advantage of: The specialists’ knowledge Their well-developed information system Their ability to obtain more favorable shipping rates LO 15.12 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#›
  • 22. Reverse logistics The process of transporting returned items Products are returned to companies or third party handlers for a variety of reasons and in a variety of conditions Elements of return management Gatekeeping Screening returned goods to prevent incorrect acceptance of goods Avoidance Finding ways to minimize the number of items that are returned Managing Returns LO 15.13 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› It begins with strategic sourcing Analyzing the procurement process to lower costs by reducing waste and non-value-added activities, increase profits, reduce risks, and improve supplier performance There must be Trust Effective communication Information velocity Supply chain visibility Event management capability Performance metrics Creating an Effective Supply Chain
  • 23. LO 15.14 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Challenges Barriers to integration of organizations Getting top management on board Dealing with trade-offs Small businesses Variability and uncertainty Response time LO 15.14 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Lot-size-inventory trade-off Large lot sizes yield benefits in terms of quantity discounts and lower annual setup costs, but it increases the amount of safety stock (and inventory carrying costs) carried by suppliers Inventory-transportation cost trade-off Suppliers prefer to ship full truckloads instead of partial loads to spread shipping costs over as many units as possible. This leads to greater holding costs for customers
  • 24. Cross-docking A technique whereby goods arriving at a warehouse from a supplier are unloaded from the suppliers truck and loaded onto outbound truck, thereby avoiding warehouse storage Trade-Offs LO 15.14 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Lead time-transportation costs trade-off Suppliers like to ship in full loads, but waiting for sufficient orders and/or production to achieve a full load may increase lead time Product variety-inventory trade-off Greater product variety usually means smaller lot sizes and higher setup costs, as well as higher transportation and inventory management costs Delayed differentiation Production of standard components and subassemblies which are held until late in the process to add differentiating features Trade-Offs (cont.) LO 15.14 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#›
  • 25. Cost-customer service trade-off Producing and shipping in large lots reduces costs, but increases lead time Disintermediation Reducing one or more steps in a supply chain by cutting out one or more intermediaries Trade-Offs (cont.) LO 15.14 Copyright ©2018 McGraw-Hill Higher Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education 15-‹#› Module 11: Critical Thinking Assignment Supply Chain Management (100 points) Visit the websites of three Middle Eastern companies like Al Baik, Almarai, and Emirates Airlines or any others of your choosing. Identify information on the companies’ supply chain management activities. Address the following requirements: · Identify your selected companies in no more than three paragraphs. · In the remaining pages, break down information you find on purchasing issues, supplier issues, logistics, information systems, quality, and customer service to compare and contrast the supply chains of your selected companies. · In your final one or two paragraphs, suggest improvements for each company based on your comparison to the other two.
  • 26. Directions: · Your essay is required to be four to five pages in length, which does not include the title page and reference pages, which are never a part of the content minimum requirements. · Support your submission with course material concepts, principles, and theories from the textbook and at least three scholarly, peer-reviewed journal articles.Use the Saudi Digital Library to find your resources. · Use Saudi Electronic University academic writing standards and follow APA style guidelines. · It is strongly encouraged that you submit all assignments into Turnitin prior to submitting them to your instructor for grading. If you are unsure how to submit an assignment into the Originality Check tool, review the Turnitin – Student Guide for step-by-step instructions.