Supply Chain Management Terms

How can customers be made to benefit from the supply chain?

By integrating the elements of quality, improved process and service delivery, incorporating best practice in product and service delivery, accelerating innovation by capturing and integrating new ideas, improving supply chain activities creating visibility and collaboration, growing better customer relations, carrying out a gap analysis and bridging on product and service delivery, and benchmarking activities.

What is the approach for measuring supply chain performance?

By determining product and service quality in terms of the mean time between failures, the accuracy with which products are delivered, and warranty claims. Others include quality of services offered in terms of call-out time, customer service or query response time with the appropriate information, after sells services, and performance measures against agreed delivery time and accounting manager relationships.

What costs are incurred in the holding of inventory

They include the unit cost of inventory for the procurement of a single item of a product, ordering cost which is incurred at the time an order is placed in the acquisition of inventories, carrying cost incurred for keeping an organization’s inventory level as required, stock-out costs which results from a disruption in supplies. With an overall effect on customer satisfaction and may and may adversely affect goodwill.

What is your explanation on vendor managed inventory?

The supplier takes the responsibility of managing inventory levels and generates orders for the customer. Accurate and meaningful data is used for calculating order quantities. It is an error-free method which comes with benefits that include reduced logistics, transportation expenses, reduced administrative costs, higher sales, and better forecasts in inventory management. An example is the Ford motor company.

How is the supply chain of a product modeled from the first tier to the consumer or customer?

The chain consists of different suppliers who are rivals of the Ford Company. The company identifies sub-Tier suppliers as a source of raw materials that have also integrated environmental factors and proceeds to First-Tier suppliers for its motor vehicle assembly components. A worthy competitor includes Toyota in the supply chain. The company’s distribution channels are global giving it a competitive edge.