Q: Can a small business like a local sandwich or bicycle shop benefit from Supply Chain Management?

How?
A: Supply Chain Management: The planning and management of all activities involved in sourcing and
procurement, conversion, and all logistics management activities. Yes, any organization can implement at least
some of the important concepts. A good place to start is the rationalization or reduction of the supply base.
Small businesses might also want to concentrate on customers as a starting point.

Q: Do you think supply chain management is simply best trend in management thinking, and will die out
in few years? Why and why not?
A: This answer will vary because it was not specifically discussed, however, considering that the ideas of
SCM have been around for many, many years makes one think that the practice is here to stay.

Q: Why dont firms just buy out their suppliers and industrial customers, forming conglomerates, instead
of practicing supply chain management?
A: This is theold wayto control the supply chain. This is probably not a good idea any longer, since it
detracts and takes time away from what the firm does best. Since competition is continually increasing, this
would be an unwise strategy, unless it was the ONLY way to assure a continued source of supply for instance.

Q: What is the difference between and MRP system and an ERP system?
A: MRP systems are the older materials management system software applications, and are used for
essentially basic assembly and purchase decisions. ERP systems came about a number of years later and tied
all of a companys geographically distant units together by having one central database to track system
inventories.

Q: What are the four foundation elements of supply chain management? Describe some activities within
each element,
A: Purchasingsupplier assessment, supply base reduction, supplier management.
OPERATIONS FORECASTING, JIT, QUALITY, INVENTORY MANAGEMENT, INFORMATION SYSTEM DESIGN.
DISTRIBUTION DELIVERY NETWORK, TRANSPORTATION MODE, WAREHOUSING, CUSTOMER SERVICE.
INTEGRATION INTERNAL AND EXTERNAL PROCESS INTEGRATION, PERFORMANCE MEASUREMENT.

Q: What does the term third-tier supplier mean? What about third-tier customer?
A: First-tier suppliers are the focal firms direct suppliers. 2nd-tier suppliers are the focal firms suppliers
direct suppliers. 3rd-tier suppliers are the focal firms suppliers suppliers suppliers. Company A sells wood to
Company B. Company B sells furniture to Company C. Company C sells the furniture to Wal-Mart. Company A
is Wal-Marts 3rd-tier supplier. Similarly, the focal firms customers customers customers are their 3rd-tier
customers. The focal firm just refers to the firm in question, or in the topic of discussion.

Q: Why are transportation and warehousing important issues in supply chain management? Briefly
explain with example.
A: The systemic impact of transportation-related figures clearly demonstrates that transportation is
much more than just the financial drain associated with trucks, pallets, and warehouses. transportation
provides an organization with the opportunity to continuously create operational efficiency and improve the
bottom line ultimately unlocking previously untapped value for shareholders.
Warehouses provide a economies of scale through efficient operations, storage capacity and a central
location. Economic benefits are realized, for example, through consolidation and accumulation operations.
Consolidation operations cut outbound delivery costs for both the business and its customers.
Q: Why firms are migrating from legacy MRP systems to integrated ERP systems? Briefly explain.
A: Materials Requirement Planning (MRP) systems- first choice in the U.S. for planning & managing
purchasing, production, & inventories. This uses information from bills of material, master production
schedules, & inventories to compute planned order releases of dependent demand items, Links the internal
operations of an organization, such as purchasing, production, inventory control & material planning. Does
not, however, provide production or capabilities analysis, nor does it probe the impact of changes in
production levels on financial results. Enterprise resource planning (ERP) systems were made to replace
legacy MRP systems & coordinate information requirements for purchasing, planning, scheduling &
distribution in a complex global environment. ERP utilizes a centralized & shared database system to tie the
entire organization together in which information is entered once at the source & made available to all users.
The emergence & growth of supply chain management, e-commerce, & global operations have created the
need to exchange information directly with suppliers, customers, & foreign branches of organizations.
Benefits of ERP Systems:
ERP can improve quality and efficiency of the business. By keeping a company's internal business
processes running smoothly, ERP can lead to better outputs that may benefit the company, such as in
customer service and manufacturing.
ERP supports upper level management by providing information for decision making.
ERP creates a more agile company that adapts better to change. It also makes a company more flexible
and less rigidly structured so organization components operate more cohesively, enhancing the
businessinternally and externally

Q: Why do many ERP Systems fail? Briefly explain with example.

A: Some firms only implement modules deemed absolutely critical- Additional modules are added in a
second phase. Many implementations have failed due to:
Lack of top management commitment
Inaccurate & unrealistic inputs
Lack of adequate resources
Lack of proper training
Lack of communication
Incompatible system environment

Q: How does integrated ERP system work? Briefly explain.

A:
ERP consists of many modules that are linked together to access & share the same database.

Q: Explain when you would want to use a continuous review or periodic review inventory system.
A: Tracking inventory is an essential part of business operations for any company that sells tangible goods.
Periodic and continuous reviews are two common methods used to track inventory for accounting and ordering
purposes.
Periodic inventory review involves counting and documenting inventory at specified times. For example, a
retail store operating under a periodic review policy might count inventory at the end of each month.
Continuous inventory review, also known as perpetual review, involves a system that tracks each item and
updates inventory counts each time an item is removed from inventory. For example, a retailer may use bar
code scanners to record customer purchases and update inventory counts every time a cashier scans a product
code.

Q: How is the EMQ model related to the EOQ model? Briefly explain with example.
A: Economic order quantity (EOQ) is the order quantity of inventory that minimizes the total cost of
inventory management.Two most important categories of inventory costs are ordering costs and carrying costs.
Ordering costs are costs that are incurred on obtaining additional inventories. They include costs incurred on
communicating the order, transportation cost, etc. Carrying costs represent the costs incurred on holding
inventory in hand. They include the opportunity cost of money held up in inventories, storage costs, spoilage
costs, etc. We need to minimize the total inventory costs and EOQ model helps us just do that. Total inventory
costs = Ordering costs + Holding costs

Q: Do you think RFID can be used to manage inventory? Argue your answer.
A: Usually considered as a complex and knowledge intensive process, management of supply chain can
benefit significantly from the implementation of RFID technology. RFID technology is not just a replacement
for barcodes. RFID ensures that the right goods are available in the right place with no discrepancies and zero
errors. It makes the supply chain considerably more precise and improves the efficiency and reliability of the
entire chain. As real-time information is made available also administration and planning processes can be
significantly improved. RFID in manufacturing processes means:
less manual work
less costs
improved visibility
improved planning
RFID in warehouse processes offers:
visibility of accurate real-time information
fast locating of products
possibility to record losses
ability to plan product locations strategically

Q: How does strategic sourcing plans are developed and implemented? Briefly explain.

A: Strategic Sourcing is the process of developing channels of supply at the lowest total cost, not just the
lowest purchase price. It expands upon traditional purchasing activities to embrace all activities within the
procurement cycle, from specification to receipt and payment of goods and services. The sourcing plan is the
result of all planning efforts on strategic sourcing. Into this planning all sourcing events are organized and
detailed with all tactical and operational information such as, the sourcing team responsible for each event,
when is supposed to begin and end each RFX step, the requirement, specifications of all services or materials
and negotiations/cost goals. The objective of the sourcing plan is to manage time and quality of all sourcing
events in the strategic sourcing program.The strategic sourcing process was defined by:
 Data collection and spend analysis
Market Research
The RFx process (also known as go-to-market)
Negotiations
Contracting
Implementation and continuous improvement.

Q: Describe purchasing role in managing key supplier relationships with example.

A: Purchasing- Obtaining merchandise, capital equipment; raw materials, services, or maintenance,
repair, and operating (MRO) supplies in exchange for money or its equivalent. The primary goals of purchasing
are:
1. Ensure uninterrupted flows of raw materials at the lowest total cost,
2. Improve quality of the finished goods produced, and
3. Optimize customer satisfaction.
Purchasing contributes to these objectives by:
Actively seeking better materials and reliable suppliers,
Work closely with strategic suppliers to improve quality materials, and
Involving suppliers and purchasing personnel in new product design and development efforts.

Q: How do you use third party supply chain management service? Briefly explain.
A: Third party logistics services is probably a combination of those two notions, as third party logistics
providers are businesses that provide one or many of the following third party logistics services.
Transportation or Freight Management (including technology, freight accounting, and services around claims)
would fit in these types of services.
Public/Contract Warehousing
Distribution Management
Freight Consolidation