Question

Question 1: What are the phases of decisions in Supply Chain? Write down three examples of each phase? (1 point)

Question 2: What are the macro processes in Supply Chain and what the differences between each of them? (2 points)

Question 3: Why do companies need to achieve a strategic fit? List the steps required to achieve the strategic fit and what does each step means? (3 points)

Question 4: Considering the product life cycle, how would the stage of the product impact the type of supply chain? Support your answer with examples. (2 points)

Question 5: Managing Supply Chain can be difficult due to many challenges, write down three major challenges with an example for each challenge? (3 points)

Answer 1

(1) Decision phases can be defined as the different stages involved in supply chain management for taking an action or decision related to some product or services. Successful supply chain management requires decisions on the flow of information, product, and funds that fall into three decision phases.

(a) Supply chain strategy or design:

In this supply chain decision phase, a company decides how to design the supply chain over the next several years.

Moreover, there are some strategic decisions that a company should decide.

• In-house vs. outsource – managing order, subcontracting
• Location &capacities – production cost plus warehouse
• Transportation networking

(b) Supply chain planning

Time is considered in a quarter to a year. Therefore, the previous phase determined the phase is fixed. This phase establishes constraints within the organization.

• Demand forecasting
• Procurement planning and control
• Production planning and control

(c) Supply chain operations:

In this phase, companies make decisions on managing individual customer orders. Here, the supply chain configuration is considered fixed. And planning policies are already defined.

• Inventory management
• Transportation management
• Customer order processing

(2) The three main categories of macro processes into which all SC activities and processes can be separated; they focus on downstream, internal, or upstream:

Supplier relationship management (SRM)	Internal supply chain management (ISCM)	Customer relationship management (CRM)
The processes that take place between an enterprise and its customers	Includes all processes involved in planning for and fulfilling a customer order.	Those processes focused on the interaction between the enterprise and suppliers
upstream in the supply chain	It  fulfils this customer demand by turning inputs into outputs with the objective of being cost efficient.	downstream in the supply chain
Key processes: Design Collaboration Source Negotiate Buy Supply Collaboration	Key processes: Strategic Planning Demand Planning Supply Planning Fulfillment Field Service	Key processes: Marketing Selling Order management Call/Service center

(3) A company needs to take some steps to achieve a strategic fit between the supply chain and competitive strategies. These strategies may be implicated or explicated or one or more customer segments. So that the company can satisfy these segments.The three major steps to achieving strategic fit

(a) Understanding the customer and supply chain uncertainty : a company must understand the customer needs for each targeted segment and the uncertainty the supply chain faces in satisfying these needs.These needs help the company define the desired cost and service requirements. The supply chain uncertainty helps the company identify the extent of disruption and delay the supply chain must be prepared for.

(b) Understanding the supply chain capabilities. There are many types of supply chains, each of which is designed to perform different tasks well. A company must understand what its supply chain is designed to do well.

(c) Achieving strategic fit. If a mismatch exists between what the supply chain does particularly well and the desired customer needs, the company will either need to restructure the supply chain to support the competitive strategy or alter its strategy.

(4) Product life cycle and supply chain strategy are closely linked in that the supply chain strategy (stock placement, safety stock, forecasting method etc.) is based on the PLC stage of the product.

New Product Stage:

This stage is characterized by lack of intrinsic data to predict quantity and location of demand. High stock availabiltiy often makes or breaks a new product launch. Additionally, you might be dealing with a newer supplier and the synergy between your supply chains may be non existant.

Growth Stage:

This stage is characterized by aggressive growth in sales. There is some intrinsic data to go by but there is still some uncertainty in demand.

It is critical to expand the stocking foot print as dictated by growing sales. Higher safety stock may still be necessary along with a highly reactive forecast. Expedited shipments will reduce slightly as the stocking foot print has expanded.

Mature Stage:

The initial storm of growth is now behind you. This stage is the calm after the storm. This by far is the easiest stage from a supply chain manager’s perspective, you have a pretty good understanding of where the demand is coming from and how much. You have adjusted the stocking foot print to minimize the cost to serve. Safety stock levels are much lower owing to lower demand uncertainty. Forecasts are more accurate. This is the phase to maximize profits.

(5) Challenges of supply chain

(a) Quality Customer Service - The supply chain management is centralized on the needs of the customers. It is about giving the right quantity and the right quality of the product for the right amount of money. All this, in perfect timing and setting.

(b) Cost Control - Rising energy/fuel and freight costs, a greater number of global customers, new technology, increasing labor rates, new regulations, and rising commodity prices mean that operating costs are under extreme pressure.

(c) Risk Management - Changes in the market, like new product launches, global sourcing, political agendas, credit availability, and consumer demand, can give rise to major issues, and these changes can come from almost any direction.

(d) Supplier relationship - By creating a mutually sound and harmonious relationship with your partners or suppliers, you will be able to provide your customers with products of high standards in a timely manner. This also allows you to create opportunities for improvement in terms of performance.