Supply Chain

• What does procurement involve?

  Obtaining goods and services externally
• What is the definition of a supply chain?

  Processes involved in producing and distributing products
• What is a warehouse?

  A place for storing resources or products
• Why does supply matter to businesses?

  • Customer satisfaction: Timely stock delivery
  • Costs: Efficient suppliers reduce business costs
  • Quality: Good suppliers enhance reputation
  • Reliability: Quick delivery reduces stockholding costs
• What problems can suppliers cause for businesses?

  Late deliveries, high prices, poor quality
• What factors should businesses consider when choosing suppliers?

  • Cost
  • Quality
  • Product range
  • Speed of delivery
  • Flexibility
  • Reliability
  • Reputation
  • Payment terms
  • Contract terms
  • Supplier behavior
• What does logistics involve?

  Management of goods movement
• What is stock?

  Raw materials or unsold products
• What are the flows of materials in logistics?

  1. Into business: Delivery from suppliers
  2. Within business: Raw materials to finished products
  3. Out of business: Distribution to customers
• Why is holding stock important?

  • Keeps production ongoing
  • Meets customer demand
• What are the two stock control methods?

  1. Just-in-Case: Holds stock for delays
  2. Just-in-Time: Minimizes stock, produces on order
• What are the advantages of Just-in-Case stock control?

  • Stock usually available
  • Bulk purchases reduce costs
  • Quality checks possible
  • Correct environment for stock
• What are the disadvantages of Just-in-Case stock control?

  • Expensive warehousing
  • Risk of stock damage
  • Labour costs for storage
  • Materials may deteriorate
• What is computerized stock control?

  Automated ordering when stock is low
• What is buffer stock?

  Stock held between minimum and zero levels
• What is lead time?

  Time from order placement to delivery
• What factors influence how to store and distribute supplies?

  • Frequency and size of deliveries
  • Storage requirements
  • Flow of materials
  • Distribution of finished goods
• How do different functional areas of a business relate to supply chain management?

  • Marketing: Pricing and product features
  • Operations: Quality and delivery frequency
  • Finance: Costs and payment terms
• How do suppliers affect unit costs?

  • Component prices affect product costs
  • Discounts for bulk purchases
  • Payment terms avoid bank charges
• How do suppliers influence reputation and customer satisfaction?

  • Quality of raw materials
  • Timely delivery
  • Flexibility and speed
• What impacts can selecting the right supplier have on a business?

  • Costs
  • Quality of goods
  • Customer satisfaction
  • Sales and profits
• How do supply decisions impact stakeholders?

  • Owners: Affects sales and profits
  • Local community: Job creation and pollution
  • Suppliers: Sales and profit fluctuations
  • Government: Infrastructure pressure