Supply Chain
What is the supply chain?
The stages from production → distribution → customer.
What is Just-in-Time (JIT)?
Stock delivered only when needed.
Difference between work in progress goods and finished goods
Work-in-progress (WIP): Semi-finished goods not yet ready for sale
Finished goods:Completed products ready for customers
What is the formula for calculating labour productivity?
total output/# of workers
What is Supply Chain Management (SCM)?
The management of coordinating and controlling supply chain activities.
What is Just-in-Case (JIC)?
Holding large buffer stock to avoid shortages.
What is buffer stock?
the lowest level of stock held to deal with unexpected demand/delay.
What is the formula for calculating productivity rate?
Total output/total input
What are supplier networks and transportation networks?
Two key networks businesses must decide on in SCM.
What is less working capital tied up?
One advantage of JIT related to cash flow.
What do larger stock orders benefit from?
Purchasing economies of scale
Name one of the Es why productivity matters (4)
Economies of Scale: Higher productivity lowers average costs.
Earnings: Higher profits and potentially higher wages.
Efficiency (competitiveness): Firms can compete more efficiently, including internationally.
Evolution (growth): Productivity improvements drive business growth.
What is the increased interdependence/disruptions spreading quickly?
One major risk of global supply chains.
What is inflexibility?
One disadvantage of JIT during sudden demand increases.
Name a disadvantage of stockpiling (too much stock)
technology, entrepreneurship, innovation, rivalry, skills/experience
What is reducing waste / preventing stockouts / lowering inefficiencies?
One reason SCM improves profitability.
What is Just-in-Case (bulk buying)?
Which system benefits more from economies of scale?
What is lead time?
Lead time: Time between placing an order and receiving delivery
What is the definition of operational productivity?
PRODUCTIVITY measures how efficiently resources (inputs) are used to produce output
Inputs include: Labour, capital, land