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Final

RMG 434 Final: RMG434 summary notes

7 Pages
40 Views
Fall 2016

Department
Retail Management
Course Code
RMG 434
Professor
Janice Rudkowski
Study Guide
Final

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Chapter 1:
Supply chain: consists of all parties involved (directly or indirectly) in fulfilling a customer request;
includes manufacturer, suppliers, transporters, warehouses, retailers, customers
Objective of every supply chain should be to maximize the overall value generated. The value (i.e. supply
chain surplus) a supply chain generates is the difference between what the value of the final product is
to the ustoe ad the osts the etie suppl hai ius i fillig ustoe’s euest suppl hain
surplus = customer value supply chain cost)
The value of the final product to the customer can be estimated by the maximum amount the customer
is willing to pay for it.
Difference between value of the product and the price = consumer surplus
Difference between revenue generated from the customer and the overall cost across the supply chain =
supply chain profitability
Supply chain success should be measured in terms of supply chain surplus and not in terms of the profits
at an individual stage focus on profitability at individual stages may lead to a reduction in overall
supply chain surplus
Effective supply chain management involves the management of supply chain assets and product,
information and fund flows to grow the total supply chain surplus
Retailing in U.S. = largely consolidated; large chains buy consumer goods from most manufactures;
providers retailers sufficient scale that the introduction of intermediary distributors does little to reduce
costs; opposite for India many small retail outlets; limits the amount of inventory they can hold =
require frequent replenishment; requires manufacturer to bring full truckloads of product close to the
aket ad the distiute loall usig ilk us usig salle ehiles i ode to edue osts)
The importance of supply chain decisions: supply chain design, planning and operation decisions play a
significant role in the success or failure of a firm. To stay competitive, supply chains must adapt to
changing technology and customer expectations.
Decisions Phases in a Supply Chain:
1) Supply chain strategy or design phase: company decides how to structure the supply chain over the
next several years. Deides hai’s ofiguatio, ho esoues ill e alloated, hat poesses eah
stage will perform.
-decide whether to outsource or perform in-house, locations, capacities, products to be manufactured
or stored at various locations, transportation modes, info systems to be used, etc.
2) Supply chain planning phase: time frame = quarter to a year. Goal of planning = maximize supply
chain surplus that can be generated over the planning horizon
-includes generating a forecast, deciding which markets will be supplied from which locations, inventory
policies, timing/size of marketing and pricing promotions
find more resources at oneclass.com
find more resources at oneclass.com
3) Supply chain operation phase: time frame = weekly or daily; companies make decisions regarding
individual customer orders; handle incoming customer orders in the best possible manner; firms allocate
inventory or production to individual orders, set delivery schedules of trucks, etc. (i.e. operational
decisions)
Process Views of a Supply Chain
Supply Chain: sequence of processes and flows that take place within and between different stages and
combine to fill a customer need for a product. 5 stages: supplier manufacturer distributor
retailer customer
-2 ways to view the processes performed in a supply chain:
1) Cycle View: processes in a supply chain are divided into a series of cycles, each performed at the
interface between two successive stages of the supply chain
2) Push/pull View: processes in a supply chain are divided into 2 categories depending on whether they
are executed in response to a customer order or in anticipation of customer orders; Pull processes =
initiated by a customer order; Pull processes = initiated and performed in anticipation of customer
orders
Cycle View: 4 process cycles which occur between the 5 stages of the supply chain (mentioned above):
Each of the 4 process cycles from the above diagram have 6 subprocesses:
Supplier stage markets product buyer stage places order supplier stage receives order supplier
stage supplies order buyer stage receives supply buyer returns reverse flows to supplier or 3rd
party
find more resources at oneclass.com
find more resources at oneclass.com

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Description
find more resources at oneclass.com Chapter 1: Supply chain: consists of all parties involved (directly or indirectly) in fulfilling a customer request; includes manufacturer, suppliers, transporters, warehouses, retailers, customers Objective of every supply chain should be to maximize the overall value generated. The value (i.e. supply chain surplus) a supply chain generates is the difference between what the value of the final product is to the ▯usto▯e▯ a▯d the ▯osts the e▯ti▯e suppl▯ ▯hai▯ i▯▯u▯s i▯ filli▯g ▯usto▯e▯’s ▯e▯uest ▯suppl▯ ▯hain surplus = customer value – supply chain cost) The value of the final product to the customer can be estimated by the maximum amount the customer is willing to pay for it. Difference between value of the product and the price = consumer surplus Difference between revenue generated from the customer and the overall cost across the supply chain = supply chain profitability Supply chain success should be measured in terms of supply chain surplus and not in terms of the profits at an individual stage – focus on profitability at individual stages may lead to a reduction in overall supply chain surplus Effective supply chain management involves the management of supply chain assets and product, information and fund flows to grow the total supply chain surplus Retailing in U.S. = largely consolidated; large chains buy consumer goods from most manufactures; providers retailers sufficient scale that the introduction of intermediary distributors does little to reduce costs; opposite for India – many small retail outlets; limits the amount of inventory they can hold = require frequent replenishment; requires manufacturer to bring full truckloads of product close to the ▯a▯ket a▯d the▯ dist▯i▯ute lo▯all▯ usi▯g ▯▯ilk ▯u▯s▯ usi▯g s▯alle▯ ▯ehi▯les ▯i▯ o▯de▯ to ▯edu▯e ▯osts) The importance of supply chain decisions: supply chain design, planning and operation decisions play a significant role in the success or failure of a firm. To stay competitive, supply chains must adapt to changing technology and customer expectations. Decisions Phases in a Supply Chain: 1) Supply chain strategy or design phase: company decides how to structure the supply chain over the next several years. De▯ides ▯hai▯’s ▯o▯figu▯atio▯, ho▯ ▯esou▯▯es ▯ill ▯e allo▯ated, ▯hat p▯o▯esses ea▯h stage will perform. -decide whether to outsource or perform in-house, locations, capacities, products to be manufactured or stored at various locations, transportation modes, info systems to be used, etc. 2) Supply chain planning phase: time frame = quarter to a year. Goal of planning = maximize supply chain surplus that can be generated over the planning horizon -includes generating a forecast, deciding which markets will be supplied from which locations, inventory policies, timing/size of marketing and pricing promotions find more resources at oneclass.com find more resources at oneclass.com 3) Supply chain operation phase: time frame = weekly or daily; companies make decisions regarding individual customer orders; handle incoming customer orders in the best possible manner; firms allocate inventory or production to individual orders, set delivery schedules of trucks, etc. (i.e. operational decisions) Process Views of a Supply Chain Supply Chain: sequence of processes and flows that take place within and between different stages and combine to fill a customer need for a product. 5 stages: supplier  manufacturer  distributor  retailer  customer -2 ways to view the processes performed in a supply chain: 1) Cycle View: processes in a supply chain are divided into a series of cycles, each performed at the interface between two successive stages of the supply chain 2) Push/pull View: processes in a supply chain are divided into 2 categories depending on whether they are executed in response to a customer order or in anticipation of customer orders; Pull processes = initiated by a customer order; Pull processes = initiated and performed in anticipation of customer orders Cycle View: 4 process cycles which occur between the 5 stages of the supply chain (mentioned above): Each of the 4 process cycles from the above diagram have 6 subprocesses: Supplier stage markets product  buyer stage places order  supplier stage receives order  supplier rd stage supplies order  buyer stage receives supply  buyer returns reverse flows to supplier or 3 party find more resources at oneclass.com find more resources at oneclass.com Push/Pull View of Supply Chain Processes: p.10 of the textbook CHAPTER 2: Supply Chain Performance – Achieving Strategic Fit and Scope Competitive and Supply Chain Strategies: Competitive strategy: defines set of customer needs that a company seeks to satisfy through its products and services; defined based on customer priorities – product cost, delivery time, variety and quality Value chain for a Typical Organization: New Product Development: creates specifications for the product  Marketing & Sales: generate demand by publicizing the customer priorities; brings customer input back to new product development  Operations: transforms inputs to outputs to create products according to new product specifications  Distribution: takes product to the customer or brings customer to the product  Service: responds to customer requests during or after the sale *HR, finance, accounting, IT support/facilitate the above process Product Development Strategy: specifies the portfolio of new products that a company will try to develop; dictates whether the development effort will be made internally or outsourced Marketing and Sales Strategy: specifies how the market will be segmented and how it will be positioned, priced and promoted Supply Chain Strategy: determines nature of procurement of raw materials, transportation of materials to and from the company, manufacture of the product or operation to provide the service and distribution of product to the customer and follow-up services; specify if it will be in-house or outsourced -includes design decisions regarding inventory, transportation, operating facilities and information flows Achieving a Strategic Fit: require that competitive strategy and supply chain strategy be aligned For a company to achieve strategic fit, it must do the following: 1) competitive strategy and all functional strategies must fit together to form a coordinated overall st▯ateg▯ a▯d suppo▯t ea▯h othe▯ to a▯hie▯e a fi▯▯’s ▯o▯petiti▯e st▯ateg▯ goal 2) different functions in a company must appropriately structure their processes and resources to be able to execute these strategies successfully 3) design of the overall supply chain and role of each stage must be aligned to support supply chain strategy
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