Suggested Answers:

1. Supply chains involve the flow of materials, data, and money. The journey that a product travels, starting with raw material suppliers, to manufacturers or assemblers, then distributors and retail sales shelves, and ultimately to customers is its supply chain. Supply chain starts with the acquisition of raw materials or the procurement (purchase) of products and proceeds through manufacture, transport, and delivery—and the disposal or recycling of products.

2. The supply chain is like a pipeline composed of multiple suppliers, distributors, manufacturers, retailers, and logistics providers that:

purchase (procurement) raw materials or products

transform materials (i.e., manufacture, service) into intermediate or finished products

transport and deliver finished products to retailers or customers, and

dispose or recycle product

3. Supply chains involve the flow of materials, data, and money. Descriptions of these three main flows are:

Material or product flow: This is the movement of materials and goods from a supplier to its consumer. For example, Ford supplies dealerships that, in turn, sell to end-users. Products that are returned make up what is called the reverse supply chain because goods are moving in the reverse direction.

Information flow: This is the movement of detailed data among members of the supply chain, for example, order information, customer information, order fulfillment, delivery status, and proof-of-delivery confirmation. Most information flows are done electronically, although paper invoices or receipts are still common for non-commercial customers.

Financial flow: This is the transfer of payments and financial arrangements, for example, billing payment schedules, credit terms, and payment via electronic funds transfer (EFT). EFT provides for electronic payments and collections. It is safe, secure, efficient, and less expensive than paper check payments and collections.

4. Supply chain management (SCM) is the efficient management of the flows of material, data, and payments along the companies in the supply chain, from suppliers to consumers. SCM systems are configured to achieve the following business goals:

To reduce uncertainty and variability in order to improve the accuracy of forecasting

To increase control over the processes in order to achieve optimal inventory levels, cycle time, and customer service.

5. Step 1: Make sure the customer will pay. Depending on the payment method and prior arrangements with the customer, verify that the customer can and will pay, and agrees to the payment terms. This activity is done by the finance department for B2B sales or an external company, such as PayPal or a credit card issuer such as Visa for B2C sales. Any holdup in payment may cause a shipment to be delayed, resulting in a loss of goodwill or a customer. In B2C, the customers usually pay by credit card, but with major credit card data theft at Target and other retailers, the buyer may be using a stolen card.

Step 2: Check in-stock availability and reorder as necessary. As soon as an order is received, the stock is checked to determine the availability of the product or materials. If there is not enough stock, the ordering system places an order, typically automatically using EDI (electronic data interchange). To perform these operations, the ordering system needs to interface with the inventory system.

Step 3: Arrange shipments. When the product is available, shipment to the customer is arranged (otherwise, go to Step 5). Products can be digital or physical. If the item is physical and available, packaging and shipment arrangements are made. Both the packaging/shipping department and internal shippers or outside transporters may be involved. Digital items are usually available because their “inventory” is not depleted. However, a digital product, such as software, may be under revision, and thus unavailable for delivery at certain times. In either case, information needs to flow among several partners.

Step 4: Insurance. The contents of a shipment may need to be insured. Both the finance department and an insurance company could be involved, and again, information needs to be exchanged with the customer and insurance agent.

Step 5: Replenishment. Customized orders will always trigger a need for some manufacturing or assembly operation. Similarly, if standard items are out of stock, they need to be produced or procured. Production is done in-house or outsourced.

Step 6: In-house production. In-house production needs to be planned and actual production needs to be scheduled. Production planning involves people, materials, components, machines, financial resources, and possibly suppliers and subcontractors. In the case of assembly and/or manufacturing, several plant services may be needed, including collaboration with business partners. Production facilities may be located in a different country than the company’s headquarters or retailers. This may further complicate the flow of information.

Step 7: Use suppliers. A manufacturer may opt to buy products or subassemblies from suppliers. Similarly, if the seller is a retailer, such as in the case of Amazon. com or Walmart.com, the retailer must purchase products from its manufacturers. In this case, appropriate receiving and quality assurance of incoming materials and products must take place.

Once production (Step 6) or purchasing from suppliers (Step 7) is completed, shipments to the customers (Step 3) are arranged.

Step 8: Contacts with customers. Sales representatives keep in contact with customers, especially in B2B, starting with the notification of orders received and ending with notification of a shipment or change in delivery date. These contacts are frequently generated automatically.

Step 9: Returns. In some cases, customers want to exchange or return items. The movement of returns from customers back to vendors is reverse logistics. Such returns can be a major problem, especially when they occur in large volumes.

6. Logistics entails all the processes and information needed to move products from origin to destination efficiently. The order fulfillment process is part of logistics.

7. The top two strategic priorities of executives are supply chain analytics and multichannel fulfillment.

8. The two major barriers preventing innovation in the supply chain are a talent shortage and a continuing focus on cost reduction.

9. The top innovative digital technologies impacting SCM are: Robotics and automation, Inventory and Network Optimization Tools, Sensors and automatic identification, Predictive Analytics,

Wearables and mobile technology, Driverless vehicles and drones, Cloud computing and storage, 3D printing

72

Digital Dashboards Review

How do business dashboards differ from other types of visual reports?

Dashboards are often mistakenly thought of as reports consisting of various gauges, charts, and dials

But the purpose of business dashboards is much more specific and directed

The purpose of dashboards is to give users a clear view of the current state of KPIs, real time alerts, and other metrics about operations

Having real time, or near real time, data is essential to keep users aware of any meaningful changes in the metrics as they occur and to provide information for making decisions in real time

73

Copyright ©2018 John Wiley & Sons, Inc.