CSCP Module 1 Book 1
Supply chain - answer-a supply chain is a "global" network used to deliver products and services from
raw materials to end customers through an engineered flow of information, physical distribution, and
cash.
Three main types of supply chain strategies - answer-stable, reactive and efficient reactive
Stable supply chain strategy - answer-1. With a significant history of stability between demand and
supply.
2. That are focused on execution, efficiencies, and cost performance.
3. That use simple connectivity technologies and have little need for real-time information.
Reactive supply chain strategy - answer-1. The chain acts to fulfill demand from trade partners' sales and
marketing strategies.
2. The chain is perceived as a cost center by all involved.
3. The chain needs minimal connectivity technologies and capital assets to respond to demand.
4. Ensuring the throughput at any cost is the chain's primary goal.
Efficient reactive - answer-1. Supports competitive positioning by serving as an efficient, low-cost, and
integrated unit.
2. Focuses efficiency and cost management on the total delivered cost of finished goods.
3. Places greater importance on connectivity technology and new equipment to automate functions to
reduce labor costs and improve capacity and throughput.
Supply chain operations reference (scor) model - answer-the scor model is a process reference model
developed and endorsed by a nonprofit corporation, the supply chain council (scc), as the cross-industry
standard diagnostic tool for supply chain management.
Main focus of scor model - answer-plan, source, make, deliver, return and enable
Scor version 11.0 apply to the following activities - answer-1. All customer interactions from order entry
through paid invoice.
2. All product transactions (defined as physical materials and services), including equipment, spare parts,
bulk product, and software, among others.
3. All market interactions from understanding aggregate demand through order fulfillment.
Vertical integration - answer-vertical integration or vertical supply chain management, refers to the
practice of bringing the supply chain inside one organization
Reasons for relying on a lateral supply chain - answer-1. To achieve economies of scale and scope.
2. To improve business focus and expertise.
3. To leverage communication and production.
,Stages of supply chain management evolution - answer-stage 1-multiple dysfunction.
Stage 2-semifunctional enterprise
Stage 3-integrated enterprise
Stage 4-extended enterprise
Supply chain management - answer-the design, planning, execution, control, and monitoring of supply
chain activities with the objective of creating net value, building a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply with demand, and measuring performance globally
Value chain - answer-the value chain is made up of the functions within a company that add value to the
goods or services that the organization sells to customers and for which it receives payment
Value stream - answer-the processes of creating, producing, and delivering a good or service to the
market
Value stream mapping - answer-drawing the current production process/flow and then attempting to
draw the most effective production process/flow
Five primary objectives that supply chain management can help a company or organization accomplish -
answer-1. Add value for customers and stakeholders.
2. Improve customer service
3. Effectively use systemwide resources
4. Efficiently use systemwide resources
5. Leverage partner strengths.
Supply chain management benefits - answer-improved market knowledge.
The three vs--increased velocity, increased visibility, and reduced variability in the flows of goods and
services, funds, and information.
Integrated operations.
Improved management of risk.
Increased sustainability.
Visibility - answer-the ability to view important information throughout a facility or supply chain no
matter where in the facility or supply chain the information is located
Velocity - answer-a term used to indicate the speed of all transactions, collectively, within a supply chain
community
Variability - answer-the natural tendency of the results of all business activities to fluctuate above and
below an average value
Variety - answer-the mix of products and services in a portfolio that must alter to meet changes in
customer demand
Volume - answer-the amount of product being produced in a given time
Supply chain risk - answer-decisions and activities that have outcomes that could negatively affect
information or goods within a supply chain
, Risk management - answer-the process of identifying risk, analyzing exposures to risk, and determining
how to best handle those exposures.
Risk response plan - answer-document defining known risks, including description, cause, likelihood,
costs, and proposed responses that also identifies the current status of each risk
Risk response planning - answer-process of developing a plan to avoid risks and to mitigate the effect of
those that cannot be avoided
Cash-to-cash cycle time - answer-an indicator of how efficiently a company manages its assets to
improve the speed or turnover of each flows
Spend management - answer-manage purchases of goods and services in a supply chain, including
outsourcing and procurement activities
Standard cost - answer-the target costs of an operation, process, or product, including direct material,
direct labor, and overhead charges
Standard cost accounting system - answer-a cost accounting system that uses cost units determined
before production for estimating the cost of an order or product
Cost of goods sold (cogs) - answer-an accounting classification useful for determining the amount of
direct materials, direct labor, and allocated overhead associated with the products sold during a given
period of time
Current price - answer-the price currently being paid as opposed to stand cost
Usage variance - answer-deviation of the actual consumption of materials as compared to the standard
Cost variance - answer-in cost accounting, the difference between what has been budgeted for an
activity and what it actually costs
Balance sheet - answer-a financial statement showing the resources owned, the debts owed, and the
owners' share of a company at a given point in time
Income statement - answer-a financial statement showing the net income over a given period of time
Statement of cash flows (funds flow statement) - answer-a financial statement showing the flow of cash
and its timing into and out of an organization or project over a given period of time
Accounts receivable - answer-the value of goods shipped or services rendered to a customer on which
payment has not yet been received and usually includes an allowance for bad debts
Accounts payable - answer-the value of goods and services acquired for which payment has not yet
been made
Working capital - answer-the current assets of a firm minus its current liabilities
