Supply Chain Management and Globalization Flashcards
What is the fundamental force shaping modern Supply Chain Management (SCM)?
Globalization is the fundamental force shaping modern SCM.
How is globalization defined in the context of firms aiming to maximize profit?
Globalization is defined as firms attempting to maximize profit in an imperfect world, meaning companies operate under uncertainty, unequal resources, political instability, and uneven development.
Why does globalization drive SCM?
Globalization drives SCM because companies no longer operate locally; sourcing, production, and distribution now happen across borders, enabled by efficient logistics systems that facilitate competitive international trade.
What advantages do firms gain from globalization in SCM?
Firms take advantage of low labor costs in some regions, specialized knowledge and resources globally, and international collaboration between suppliers, manufacturers, and distributors.
What are the dual effects of globalization on supply chains?
Globalization increases efficiency and value creation but also exposes supply chains to higher risk and uncertainty, making SCM a strategic rather than operational function.
What do upstream processes in SCM concern?
Upstream processes concern suppliers and sourcing, focusing on inputs and capabilities. Suppliers must possess knowledge, capability, and capacity to deliver.
What are key components included in upstream processes?
Key components include raw materials, components, and supplier qualification.
What do downstream processes in SCM concern?
Downstream processes concern distribution and customer delivery, focusing on making products available, reliable, and accessible to end customers.
What are key components included in downstream processes?
Key components include distribution, warehousing, transportation, and retailers and final consumers.
What are the major drivers of supply chain evolution?
The major drivers are Globalization, Technological advancement, Organizational consolidation, Empowered consumers, and Government responsibility.
How does technological advancement influence supply chains?
Technological advancement enables digital logistic systems, real-time data sharing, and improved coordination across supply chain patterns.
What impact has organizational consolidation had on supply chains?
Organizational consolidation has led to power shifts within the supply chain, encouraging collaboration, strategic alliances, and network-based competition rather than isolated firm-level competition.
What are the demands of empowered consumers in relation to supply chains?
Empowered consumers demand transparency, faster delivery, and stronger environmental and social responsibility from companies.
How does government responsibility affect supply chain design and operations?
Government responsibility affects supply chain design and operations by introducing policies, regulations, and sustainability requirements.
What is a VUCA environment in the context of global conditions?
A VUCA environment refers to global conditions characterized by volatility, uncertainty, complexity, and ambiguity.
What are some emerging trends in response to supply chain drivers?
Emerging trends include unified strategies, new products designed with global sourcing in mind, technology development supporting integrated operations, adapted marketing strategies, manufacturing sustainability, and supply chain flows managed through partnerships with logistics providers.
What is the goal of manufacturing sustainability?
The goal of manufacturing sustainability is for firms to reduce environmental impacts while still delivering value to customers worldwide.
What are the four pillars of sustainability that sustainable supply chains aim to address?
The four pillars are People (reducing poverty, hunger, ensuring equality and healthy work conditions), Planet (protecting it by reducing environmental degradation and preserving resources), Prosperity (long-term economic growth, technological progress, improved quality of life), and Peace (fostering stable societies and reducing violence).
What is the primary focus of 'money value' in business?
Money value focuses primarily on short-term financial performance, cost reduction, and shareholder returns, potentially neglecting employee well-being, environmental sustainability, and long-term resilience.
What does 'real value' refer to in a business context?
Real value refers to sustainable profitability that satisfies deeper human needs by providing meaning, identity, and a higher quality of life for stakeholders, while also renewing the health of the planet.
How does logistics contribute to creating real value?
Logistics creates real value by generating form (through design and production support), place (through effective distribution), time (through planning and scheduling), quantity (through demand-driven systems), service (through customer support), and price (through efficient procurement and transportation) utility.
What is the strategic definition of logistics?
Logistics is the strategic management of procurement, movement, and storage/distribution of materials, components, and finished goods to fulfill customer orders cost-effectively while supporting long-term profitability.
What role does logistics play as a link between producers and consumers?
Logistics is the strategic link between producers and consumers that creates customer value through time, place, quantity, service, and cost efficiency, while enabling global trade, resilience, and sustainability.
How is 'real value' assessed compared to 'money value'?
While money value is assessed through measures like total cost of ownership, real value is reflected in practices such as green management, intelligent systems, and sustainable decision-making.