Page 178 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Unit 8: Supply Chain Management

 There are three types of vendor relationships which are Transactional, Collaborative, and Notes
Alliance.

 The collaboration and coordination costs of the supply chain increase with the speed of
change in the marketplace.
 A learning curve is a line displaying the relationship between unit production time and
cumulative number of units produced.
 The learning curve will vary on different programs.

8.7 Keywords

Learning Curve: It is a line displaying the relationship between unit production time and
cumulative number of units produced.
Supply Chain: It consists of organizations that are connected through three key flows across
their boundaries—flow of information, product/materials, and funds between the different
stages.
‘Supply Chain Management: It relates to the entirety of integration-oriented skills required for
providing competitive advantage to the organization, skills that are the basis for successful
supply chains.

Unit Cost Model: The model which is expressed in terms of the specific cost of producing the
‘x’th unit.
Value: It is the ratio of the function and cost which reflects what the product, service or system
accomplishes and at what cost.

8.8 Review Questions

1. Explain the concept of supply chain. What is its scope? Explain what you understand by the
term ‘supply chain integration’.

2. Daimler Chrysler and General Motors vigorously compete with each other in many
automobile and truck markets. When Jose Ignacio Lopez was vice-president of purchasing
for GM, he made it very clear that his buyers were not to accept luncheon invitations from
suppliers. Thomas Stalcamp, head of purchasing for Chrysler before the merger with
Daimler, instructed his buyers to take suppliers to lunch. Rationalize these two directives
in light of supply-chain design and management.
3. Can a supply chain be both efficient and responsive? Why or why not?

4. A firm improves its forecast accuracy using better market intelligence? What impact will
this have on supply chain and profitability? Why?
5. What are the relevant questions that management should consider in deciding the make
or buy decisions?
6. How can the performance of supply-chain be measured?
7. What are the different types of buyer-seller relationships? Describe when would you
choose to have a supply alliance and why?
8. How would you decide whether to enter into a partnership or alliance with another firm?
9 Explain the steps in the process of value engineering?

10. What are the assumptions on which theory of learning curve is based?

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