Page 96 - DMGT525_MATERIALS_MANAGEMENT

Unit 6: Supply Chain Management

Competitive Cost: Competitive cost a cost lower than that offered by the competitors, or a price Notes
made more attractive because of added incentives.
Customer Value: Quantification of the perceived value of the product or service from a customer’s
view is known as customer value.
Just-in-time: Just-in-time denotes a manufacturing system in which materials or components
are delivered immediately before they are required in order to minimize inventory costs.
Logistics: Handling an operation that involves providing labor and materials be supplied as
needed is referred to as logistics.

Manufacturing Resource Planning: MRP is a computer-based system for the planning and
allocation of work among employees.
Reengineering: Reengineering is a fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in performance.
Sales and Operations Planning: Sales and operations planning is a formal planning process
used to determine the sales and operations strategy that best meets all aspects of the enterprise’s
objectives.
Salvage Value: Salvage value the amount that can probably be obtained from a damaged item or
for the components of the item.
Segmentation: Segmentation is dividing customers into groups, each with common demographic
attributes.
Stock Keeping Units: A number given to each item (by category and brand) stocked in a retail
outlet for inventory and tracking purposes is known as stock keeping units.

Supply Chain: The network created amongst different companies producing, handling and/or
distributing a specific product is known as supply chain.
Total Quality Management: TQM is a system of management based on the principle that every
staff member must be committed to maintaining high standards of work in every aspect of a
company’s operations.

6.6 Review Questions

1. Define supply chain management.
2. Describe the evolution of supply chain management.
3. Explain supply chain management and the various processes it is involved in.
4. Why do you think is there a need for supply chain in today’s scenario?

5. Mention the five areas in which an organization needs to take decisions in case of supply
chain.
6. Differentiate between internal supply chain & external supply chain.

7. Mention the seven principles of supply chain.
8. Why is segmentation necessary for fulfilling their needs profitably? Explain with the help
of examples.

9. How does forecasting help in efficient implementation of supply chain?
10. Why is the performance evaluation of the supply chain necessary and important? Explain.

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