Term
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Definition
“Doing things right”
Doing something at the lowest possible cost |
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Definition
“Doing the right thing”
Doing the right things to create the most value for your customer |
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Definition
“Doing new things customers like”
The attractiveness of a product relative to its cost |
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Term
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Definition
Tangible
Less interaction with customers
Often homogeneous
Not perishable – can be inventoried |
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Term
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Definition
Intangible
Interaction with customer required
Inherently heterogeneous
Perishable/time dependent
Defined and evaluated as a package of features |
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Term
| 3 Pillars of sustainability |
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Definition
| Economy, society, environment |
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Term
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Definition
| Social Responsibility , Economic Prosperity, Environmental Stewardship |
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Term
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Definition
a. design quality
b. process quality
2. delivery speed,
3. delivery reliability,
4. coping with change in demand, handling effectively
flexibility and new product introduction |
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Term
| KPI (Key Performance Indicators) |
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Definition
Decide what perameters for performance are critical - focus on that.
STRADDLING – occurs when a firm seeks to match what a competitor is doing by adding new feature, services, or technologies to existing activities. It comes at a trade-off cost. |
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Term
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Definition
| – criterion differentiates the products/services of one firm from another. |
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Term
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Definition
| – a screening criterion that permits a firm’s products to even be considered as possible candidates for purchase. |
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Term
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Definition
a measure of how well resources are being used.
is RELATIVE – needs to be compared to something else
Similar operations
Industry data (different stores in a franchise) |
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Term
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Definition
The development and management of supplier relationships to acquire goods and services in a way that aids in the immediate needs of a business.
Firm is no longer constrained to what is owns
Needs to make the most of availabilities – insourced and outsourced |
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Term
| TYPES of purchasing processes |
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Definition
| Spot, Vender managed inventory, Electronic catalog, Request for bid and reverse auctions, RFP, and strategic reliance |
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Term
| Sourcing / Purchasing Design Matrix |
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Definition
contract - Trans cost, specificity
S-L H-L then H corner Low top |
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Term
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Definition
| Variability magnification as we move from the customer to the producer in the supply chain. |
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Term
| A small change in consumer demand |
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Definition
| creates surges and shortages in the supply chain – these become more dramatic and variable as we move up the chain. The line needs to be smooth |
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Term
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Definition
| Wholesaler > Manufacturer > Supplier |
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Term
| Uncertainty Framework – categorizes products as |
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Definition
| Primarily functional, Primarily innovative |
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Term
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Definition
| - staples people buy in a wide range of outlets. |
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Term
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Definition
| – fashion – products (clothes/electronics) that have a life cycle of a few months. |
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Term
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Definition
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Term
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Definition
In the past, sourcing was another name for purchasing.
As a result of globalization, sourcing implies a more complex process suitable for products that are strategically important |
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Term
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Definition
| inventory is replaced frequently, as part of an ongoing process |
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Term
High
(Evolving Process)
Low (Functional Products) |
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Definition
Hydroelectric power, some food products
Risk-Hedging supply chain |
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Term
Low
(Stable Process)
Low (Functional Products) |
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Definition
Grocery, basic apparel, food, oil, and gas
Efficient supply chain |
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Term
High (Innovative Products)
Low
(Stable Process) |
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Definition
Fashion apparel, computers, popular music
Responsive supply chain |
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Term
High
(Evolving Process)
High (Innovative Products) |
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Definition
Telecom, High-end computers, semiconductor
Agile supply chain |
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Term
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Definition
| utilize strategies aimed at creating the highest cost efficiency |
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Term
| Risk-hedging supply chains |
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Definition
| utilize strategies aimed at pooling and sharing resources in a supply chain to share risk. |
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Term
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Definition
Fast and flexible to changing needs (examples: build-to-order and mass customiztion (effectively postponing the task of differentiating a product for a specific customer until the latest possible point in the supply network)
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Term
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Definition
utilize strategies aimed at being responsive and flexible to customer needs.
– combine hedged and responsive. Change fast on front end – pool inventory to avoid disruptions.
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Term
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Definition
affects financial results.
assess how a company uses items that are purchased internally.
important to reduce waste.
business imperative. |
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Term
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Definition
| moving some of a firm’s internal activities and decision responsibility to outside providers Allows a company to create a competitive advantage while reducing cost An entire function may be_____ with the rest kept in-house |
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Term
| Total cost of ownership (TCO): |
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Definition
an estimate of the cost of an item that includes all the costs related to the procurement and use of an item, including any related costs in disposing of the item
Can be applied to internal costs or more broadly to costs throughout the supply chain |
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Term
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Definition
| Acquisition, ownership, post ownership costs |
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Term
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Definition
| the art and science of obtaining, producing, and distributing material and product in the proper place and in the proper quantities. |
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Term
| Third-party logistics company (3PL) |
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Definition
| an outside company used to manage all or part of another company’s logistics functions |
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Term
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Definition
| the norm, few companies use only one method of transport, comprehensive info systems |
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Term
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Definition
| large shipments are broken down into small shipments for local delivery in an area. • Minimizes inventory in the warehouse |
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Term
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Definition
| the sole purpose of the warehouse is sorting goods to consolidation areas, where each area is designed for shipment to a specific location |
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Term
| Factors in facility location |
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Definition
| Proximity to customers. Business climate. Total costs Infrastructure. Quality of labor. Suppliers (proximity). Other facilities. Free trade zones. Political risk. Environmental regulation. Host community. and Compet Advantage |
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Term
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Definition
• Most widely used
• List of factors is developed
• Range of possible points assigned to each factor
• Each site is rated against each factor
• The sums of assigned points for each site are computed
• The site with the most points is selected |
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Term
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Definition
• Used for locating single facilities that considers existing facilities, the distances between them, and the volumes of goods to be shipped between them
Assumes inbound and outbound transportation costs are equal
Does not include special shipping costs for less than a full load
• This methodology involves formulas used to compute the coordinates of the two-dimensional point that meets the distance and volume criteria stated above |
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Term
| Linear Programming – Transportation Method |
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Definition
| • Seeks to minimize costs of shipping n units to m destinations or its seeks to maximize profit of shipping n units to m destinations |
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