Supply chain management

• who are suppliers?


  those responsible for providing resources to businesses

  all businesses receive supplies from another business

  most businesses will work with a lot of supplier
• what is the supply chain?


  all of the resource providers throughout every stage of operations
• what is inventory?


  number of goods held in stock including raw materials, work in progress and finished goods
• what is flexibility?


  ability to respond to change

  meet sudden increase or decrease in demand
• what is mass customisation?


  a trend in increased flexibility is the ability of firms to use mass customisation. its the ability to tailor goods made in bulk to meet the requirements of individual consumers
• what are the benefits of mass customisation?


  people can have unique goods which will meet the needs of customers so you can charge a higher value

  can be a businesses USP
• what are the problems of mass customisation?


  cant mass produce so you can take advantage of economies of scale, so unit costs will be higher

  hard to budget for
• what is speed of response?


  meet customers needs within a set time period e.g. delivery times

  ability to make changes to products to reflect changing consumer tastes

  only be achievable if inventory levels are low and suppliers can change order sizes and components quickly
• what is dependability?


  a business operating a just in time system will be reliant on suppliers to deliver the right quantity and quality on time to ensure supply meets demand
• what is managing supply to match demand?


  to meet operational objectives and achieve customer satisfaction its important to match supply to demand

  can be difficult if demand fluctuates e.g. seasonality

  can be difficult if there are potential threats to the ability to supply e.g. industrial action
• what is outsourcing?


  practice of the services of other organisations to complete all or parts of the manufacturing process
• what are the strengths of outsourcing ?

  • provides flexibility in supply
  • can increase capacity without high capital expenditure
  • can buy in experts
• what are the weaknesses of outsourcing?

  • quality must be maintained
  • sub contractor will also want to be making a profit
• what are temporary employees?


  contracted to work for a business for a specific period of time .e.g three moths
• what are part time employees?


  contracted to work ess hours than a full time employee e.g. 3 days a week
• what are the benefits of temporary and part time employees?

  • flexible workforce
  • better able to match supply to demand
• what are the problems of temporary and part time employees?

  • recruitment and training costs may be high and not seen as value for money when employees are only with the business for a short period of time
  • may lack commitment
• what is a zero hour contract?


  employer doesn't guarantee a minimum number of hours to work to an employee. employee is only paid for the hours they work
• what are the benefits of zero hour contracts?

  • flexibility for the employer
  • beneficial for students so they can work and study at the same time
  • flexibility for the employee
• what are drawbacks of job security?

  • less job security
  • lack of work commitment
  • lack of employee engagement, low morale could lead to higher about turnover which costs the business more
• what is producing to order?

  • supply is only triggered by specific demand e.g. as an order is received the goods are produced to match the order
  • requires high levels of flexibility
  • cash isn't tied up in holding inventory
• what are the advantages of producing to order?

  • less waste
  • improved quality
  • lower costs
• what are the disadvantages of producing to order?

  • supply chain disruptions
  • cant take advantage of economies of scale\