This presentation includes notes collected from various sources from internet during my study journey with regard to the topic Supply Chain Management

1. In Supply chain management
• The physical material moves in the direction of the end of chain
• Flow of cash backwards through the chain
• Exchange of information moves in both the direction
The sequence of a typical manufacturing supply chain is :
• Supplier–Storage-manufacturing–storage–distributor–retailer–customer
The purpose of supply chain management is : integrating supply and demand management
Due to small change in customer demands, inventory oscillations become progressively larger
looking through the supply chain. This is known as : Bullwhip effect
VMI stands for : Vendor managed inventory
Major decision areas in supply chain management are : location, production, distribution,
inventory
Distribution requirement planning is a system for
• Inventory management
• Distribution planning

2. Reverse logistics is required because
• Goods are defective
• Goods are unsold
• The customers simply change their minds
Logistic network which moves materials from suppliers to manufacturing unit is classified as
inbound distribution
Process of managing upstream and downstream of final goods, flow of raw materials and
information about resellers and final consumers is classified as :Supply chain management
Logistic network through which unwanted or excess products by resellers or consumers is
classified as : reverse distribution
Logistic network which moves finished product from company to resellers and then to end users
is classified as : outbound distribution
Logistic network which moves materials from suppliers to manufacturing unit is classified as
inbound distribution.
Process which involves controlling, implementing and planning materials and final goods to meet
final customer at high profits is classified as : Physical Distribution

3. • Cost driver analysis relates to what processes, activities, and decisions actually create costs in your
supply chain.
• In the 1980s, Toyota and Honda outcompeted American carmakers because they relied on suppliers
for approximately 80 percent of a car’s value.
• "Quality is defined by the customer" is : A user-based definition of quality
• According to the manufacturing-based definition of quality : quality is the degree to which a
specific product conforms to standards
• The supply chain concept originated in what discipline : marketing
• Zero defects in manufacturing is : the goal of TQM
• A Supply Chain encompasses all activities associated with the flow and transformation of goods
from the raw material stage, through to the end user, as well as the associated information flows.
• The following are some typical question dealt with by an operations managers?
• How much capacity will be needed in the months ahead?
• What is a satisfactory location for a new facility?
• How to motivate employees?

4. • Customer power - not key attributes of supply chain management?. However inventory control ,
leveraging technology are key attributes of SCM.
• Positive, long-term relationships between supply chain participants refer to: supply chain management
• Ex of pure good : Soap
• Not an Ex of pure good : Fast food, Attending a play, Vehicle repair.
• Lean principles include reducing waste.
• Cooperative supply chain relationships developed to enhance the overall business performance of both
parties is a definition of: dovetailing.
• Process improvement technique that sorts the "vital few" from the "trivial many" is : Yamaguchi
analysis
• A fishbone diagram is also known as a : poka-yoke diagram
• Following functions which is not a core function of an organisation? : The Product/Service Dev.
Function
• Perfect Order => Simultaneous achievement of relevant customer metrics.

5. • Total Quality Management emphasizes : A commitment to quality that goes beyond internal company issues to
suppliers and customers.
• Ex of costs associated with quality :
• Prevention costs
• Appraisal costs
• Internal failures
• An important feature of supply chain management is its application of electronic commerce technology that
allows companies to share and operate systems for: Order processing, transportation scheduling, and
inventory management.
• Lean production involves : Elimination of all types of waste
• Maintenance costs do not decrease as a result of better quality except however customer dissatisfaction costs,
scrap costs warranty and service costs decrease as a result of better quality except .
• Inspection, scrap, and repair are examples of : external costs
• Ex of direct responsibility of operations management :
• Designing the operation's products, services and processes
• Developing an operations strategy for the operations
• Planning and controlling the operation
• Determining the exact mix of products and services that the customers will want is not a direct
responsibility of operations management .

6. • A successful TQM program incorporates the following :
• continuous improvement
• employment involvement
• benchmarking
• A successful TQM program does not incorporate : centralized decision making authority
• Some key feature of Operations Management:
• Operations is the part of an organisation which creates wealth through the management of the
transformation process
• World class Operations can give an organisation competitive advantage
• Most new technology is implemented in Operations areas
• "Kaizen" is a Japanese term meaning : continuous improvement.
• Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the : Process Chart
• A quality loss function utilizes the following costs :
• The cost of customer dissatisfaction
• Inspection, warranty, and service costs
• Sales costs
• Costs to society ; However it does not use the cost of scrap and repair.
• Least likely decision to be made by Operations Managers? : Deciding which market areas to manufacture
products for

7. • Pareto charts are used to : organize errors, problems or defects.
• Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through
which a product travels is a : Flow chart
• Secure financial resources not generally be considered an aspect of operations management. Work methods,
Maintain quality , Product or service design considered an aspect of operations management
• A worker operates a shear press. She notices that the metal sheets she is cutting have curled edges. Who
should get the first "shot" at solving the problem? : a member of the Quality Control department.
• Managing cash flows not a key activity of an operations manager.
• A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are
primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness,
and the dealer's honesty. The dealership should be especially concerned with which dimensions of service
quality? : Communication, Responsiveness, and Reliability.
• When suppliers, distributors, and customers partner with each other to improve the performance of the entire
system, they are participating in a Channel Of Distribution
• A company's channel decisions directly affect every customer's choices.
• To reduce inventory management costs, many companies use a system called just-in-time logistics , which
involves carrying only small inventories of parts or merchandise, often only enough for a few days of operation.

8. • A Supply Chain includes the chain of entities involved in the planning, procurement, production
and Distribution of products and services.
• In a SC, Material flows in one direction while Information from in both direction Process.
• Companies manage their supply chains through the Internet.
• Julie Newmar recognizes that her company needs to provide better customer service and trim
distribution costs through teamwork, both inside the company and among all the marketing
channel organizations. Julie will begin the practice of horizontal marketing system
management .
• There are four generic processes involved in any SCM-Planning for operations, Sourcing decisions,
Manufacturing related activities and Distribution.
• Today, a growing number of firms now outsource some or all of their logistics to cross-functional
teams intermediaries.
• Most operations produce a mixture of both products and services. Which of the following
businesses are closest to producing “pure” services? Counsellor/Therapist
• If a sample of parts is measured and the mean of the measurements is outside the control limits
the process is : out of control and the process should be investigated for assignable
variation.

9. • A quality circle holds a brainstorming session and attempts to identify the factors responsible for
flaws in a product. Which tool do you suggest they use to organize their findings? Pareto chart.
• When a sample measurement falls inside the control limits, it means that : each unit
manufactured is good enough to sell
• If two potential suppliers can deliver a part with the same quality and prices, the selection should
be based on: The capabilities and flexibilities of the firms.
• Just-in-time/SCM purchasing requires the following condition: Cooperation between purchasing
and suppliers
• The amount of inventory kept at each stock point in a warehouse network is usually based on:
Trade-offs between warehousing, inventory, and transportation costs
• Control charts:
 Values above the upper and lower control limits indicate points out of adjustment.
 Control charts are built so that new data can be quickly compared to past performance data.
 Control charts graphically present data.
• The goal of inspection is to : correct system deficiencies.

10. • Typical inspection point example :
• during the production process
• before the product is shipped to the customer
• at the supplier's plant while the supplier is producing
• after a costly process
• Upon receipt of goods from your supplier is not a Typical inspection point.
• What name is often given to the Japanese “total approach‟ to removing anything that does not
add value to the final product : Lean production processes .
• The most common form of quality control includes: Inspection
• TQM refers to : Total Quality Management
• Not a typical supply chain member: Producer
• A company's channel decisions directly affect every competitor's actions.

11. • A supply chain is a sequence of firms that perform activities required to create and deliver goods
to consumers
• A supply chain is essentially a sequence of linked suppliers and customers
• From the economic system's point of view, the role of marketing intermediaries is to transform the
assortment of products made by producers into the assortment of products wanted by consumers
Channel members.
• Intermediaries play an important role in matching supply and demand
• A supply chain is a sequence of firms that perform activities required: to create and deliver
goods to consumers
• A supply chain is essentially a sequence of linked: suppliers and customers
• To reduce inventory management costs, many companies use a system called just-in-time
logistics , which involves carrying only small inventories of parts or merchandise, often only
enough for a few days of operation.
• Companies manage their supply chains through information

12. • Today, a growing number of firms now outsource some or all of their logistics to third-party
logistics providers intermediaries
• Supply chain concept originated in what discipline? : logistics
• A restaurant is an example of a : hybrid
• What term describes a vertical expansion of job duties in order to give the worker more
responsibility? : Job enrichment
• What are the two basic types of production systems? : Intermittent and non-intermittent process
• What type of process would a paper mill be most likely to use? : Continuous flow
• What technique deals with the problem of supplying sufficient facilities to production lines or
individuals that require uneven service? Queuing theory
• A manufacturer has been receiving excessive numbers of defective standard machine parts from a
vendor on a regular basis. What is the most effective way to design a formal inspection system for
incoming parts? Statistical quality control

13. • A set of simultaneous equations that has more variables than constraints has : an infinite
number of solutions
• In a PERT/CPM network, computing the critical path requires : assigning the earliest finish
time for an activity as the earliest start time for the next
• At the completion of the forward and backward passes, the slack for an activity is given by the :
difference between early start and early finish

15. • Came last in the development of manufacturing techniques : Interchangeable parts.
• A Supply Chain which includes the Distribution of finished products and services: Outbound
Logistics.
• What name is often given to the Japanese “total quality approach‟ to removing anything that does
not add value to the final product? Lean production processes.
• Today, a growing number of firms now outsource some or all of their logistics to Third Party
Logistics (3PL) Providers intermediaries
• 2 basic types of production systems: Intermittent and non-intermittent (Continuous) process.
• Value is what consumers are prepared to pay
• Efficiency is defined by : Actual output divided by effective capacity.
• A big advantage of a process layout is: Its high equipment utilization
• An implication of low variety : Low unit cost

16. • Operations typically differ in terms of volume of output, variety of output, variation in demand
or the degree of ‘visibility’ (i.e., customer contact) that they give to customers of the delivery
process. Please match the following element with the most appropriate of the above dimensions.
Low unit costs are most closely matched to:- Volume.
• In a process flow chart transportation is depicted by : An arrow
• In a process flow chart storage of information is depicted by : A circle
• A useful process improvement tool to search for the root cause of a problem is the 5 Whys
process.
• A quality criterion which can be measured is called a : Quality variable.
• In a materials processing operation the design capacity is defined as The Theoretical
Maximum Output in A Given Time.
• What additional factor does Overall Equipment Effectiveness take into account which makes it
more meaningful than efficiency or utilization?: Quality.
• Adjusting inputs to an operation so that outputs match demand is known as : A chase demand
strategy.

17. • Having a 'happy hour' in a pub or restaurant is an example of which type of capacity
management: A demand management strategy.
• In the mass production era there were 4 types of operations process; complex project, batch
production, assembly line and Continuous flow process.
• In a materials processing operation, which of the following process type is associated with the
highest volume and lowest variety?: Batch process.
• In a materials processing operation, which process is associated with the highest variety?:
Project.
• A sequence of business and information links is called a : Supply chain
• Supply chains link operators to suppliers in Vertical Layer.
• Activities which are undertaken before the final operation are termed Upstream activities.
• In the automotive supply chain information flows in which direction? : Both towards the end
user and the supplier
• How do automotive companies mainly sell their new products? : Through retail distributers.

18. • Selecting suppliers and purchasing items is called Procurement.
• The main benefit to an operation of having multiple sourcing is Continuity of supply.
• Advantage of single sourcing: Lower administration cost.
• When an organization owns its suppliers it is known as: Backward vertical integration
• Logistics is the term for which activities such as :
• Procurement of raw materials
• Distribution of goods to customers
• Accounting for raw materials in transit
• Japanese term for waste is Muda
• Japanese term “Muri” : The Overburden
• The Japanese term “Kanban” means Visual Cards (not continuous improvement)
• In the Japanese term “Kaizen”, “Kai” means Change.
• The Japanese term “Jidoka” means Autonomation (not :Automation).

19. • The Japanese term “Mura” means : The Unevenness.
• The Japanese term “Hiejunka” means : Leveling of Production.
• In Visual Management, the Orange Colour marking on the floor indicates Materials for
Inspection.
• In Visual Management, the Green Colour marking on the floor indicates Finished Goods.
• In Visual Management, the Red Colour marking on the floor indicates Materials as Scrap.
• Edward Deming says, Quality is the responsibility of Everyone working for the Organization.
• Quality can be also defined as : Performance/Expectations (P/E).
• Toyota Production System (TPS) developed by Eiji Toyoda & Taiichi Ohno.
• Operation Research, a Multidisciplinary approach was evolved in WWII to 1960’s for Problem
Solving
• Henry Gantt - recognized the value of nonmonetary rewards to motivate workers, and developed
a widely used system for scheduling, called Gantt charts.

20. • The concept of “Interchangeable Parts” was applied by : Eli Whitney.
• In 1776 -Specialization of labor in manufacturing was introduced by : Adam Smith.
• In 1832 -Division of labor by skill; assignment of jobs by skill; basics of time study was
introduced by : Charles Babbage.
• In 1900- Scientific management time study and work study developed; dividing planning and
doing of work was introduced by: F W Taylor.
• Operation is a Transformation process designed to convert input in to a valuable Product or
Service.
• In a Process Strategy,
• High Variety & Low Volume should focus on Processes.
• Low Variety & High Volume should focus on Products.
• Determinants of Process Characteristics
• Volume
• Variety
• Flow

21. • The project process requires a High Degree of Job Customization.
• Similar products or services are manufactured repeatedly using intermittent flow is called
as Batch Production
• Production of Automobiles, Electronic Appliances, Personal Computers & Toys like
products are manufactured using Line Flow
• Vertical integration or outsourcing to manage with Operations & Supply is a decision also
called as Make or Buy Decision
• A Layout designed to Product which is too large to move is example of Fixed Product
Layout.
• A Layout designed to Group similar resources together is example of Process layout
• A Layout designed to produce a specific product, or a small number of products efficiently
is example of Product Layout.
• When Volume of Production is High (Mass Production) then Product Layout is Feasible.
• When Volume of Production is LOW then Process Layout is Feasible

22. • The resources arranged are as Dedicated to each product for smooth component flow in each
job shop.
• Private Sector banks follow Product Layout
• Public Sector banks follow Process layout
• Service blueprint is a Diagram/Design that accurately portrays the service system to provide
better services to people.
• In service blue printing, Line of Interaction is where the customer directly interacts with the
service providers.
• In service blue printing, Line of Internal Interaction is where the service providers interacts
with the service supporters.
• Beyond this line, the customer can not see the activities of service providers :Line of Visibility
• In the first instance, Physical Evidences allows the customer to make a decision on quality of
services as per service blue Print.
• Lean production relies on a specific throughput rate of the whole operation. This is known as
Takt time

23. • Reducing unnecessary motion in operations can significantly improve throughput. Making these
improvements is known as Ergonomics.
• Some principles of Lean Production
• Specify value to the customer
• Identify the value stream
• Strive for perfection
• However Push goods through to completion is not a Lean Production principle.
• One of the tools of lean production is SMED. What does this stand for? : Single Minute
Exchange of Die.
• Lean production primarily delivers cost and Quality to an operation.
• Which of the following is used for identifying the total resources requirement for meeting market
demand : Capacity Planning
• MRP through MPS, ensures availability of required raw materials at the point of utilization. Thus
MRP ensures: Better Customer Services and delivery of value
• The correct sequence of operations in production planning and control is Routing-Scheduling-
Dispatching-Follow up

24. • Loading in operations means : Assigning the work to the facilities.
Dispatching authorizes the start of production operations by..
• Release of materials and components from store to floor
• Release of materials from process to the process
• Issue of drawings instruction sheets
Bills of Materials consists of
a) Part number
b) Part Specification
c) Price of the part
Procurement cycle time is time consumed for
a) Receiving of Raw Materials
b) Inspection of the received Materials
c) Storage of Materials
Master Production Schedule allows
a) Schedule of dispatch of Materials –MRP-I
b) Schedule of sequencing and loading of facilities-MRP-II
c) Capacity Requirement Planning-CRP
• Gantt Chart is mainly useful for the Scheduling

25. • The process of comparing output to the previously decided plans as well set standards is to
determine if corrective actions is needed is called as Production Control
• Master Production Scheduling step achieved after aggregate planning requires Disaggregating
the Aggregate Plan
• Capacity is the ability of the manufacturing organizations to meet the demand of market.
• The MPS is the plan for the production of individual end items per day, per week, per month on
long time horizon.
• A Chase Strategy means producing exactly what is demanded in the market by the customers
at a given time.
• Production Planning is the first step in PPC system.
• The main objective of PPC is to ensure Smooth Flow of Materials.
• In the assemble to order environment, several product options exist (e.g., automobiles) and the
customer is not willing to wait until the product is made. Therefore manufacturers produce and
stock standard component parts.

26. • BoM is also called as part list or building list is the document generated at the design stage.
• Moving from the aggregate plan to a master production schedule requires Disaggregation.
• Identifying the path of how a product is manufactured right from input & raw material into
finished product , this process is known as Routing.
• Which scheduling technique should be employed when due dates are important for a job
order? Backward Scheduling
• A strategy which aims to produce a perfect product which will suit everybody is called
Product orientation ( not Perfection orientation).
• A strategy which aims to produce the maximum amount of goods at the lowest possible price
is called: Production orientation (not Cost orientation).
• A measure of the reserve capacity a process has to handle in unexpected increases in demand
is the: Capacity Cushion.
• Efficiency is given by : Actual output divided by effective capacity

27. • Costs that continue even if no units are produced are called Fixed costs.
• A facility with a design capacity of 1,000 units, an actual average of 800 units, and effective
capacity of 850 units has a utilization of 80%.
• The master production schedule is the schedule of production for what level product/material?
: Level 0
• In a distribution requirements planning environment, forecasted demand at the plant level is
equal to Planned orders in the distribution center level.
• A lot-sizing technique that generates exactly what was required to meet the plan is: Lot-for-
lot.
• The difference between a gross material requirements plan (gross MRP) and a net material
requirements plan (net MRP) is : The net MRP includes consideration of the inventory on
hand, whereas the gross MRP does not.
• If demand of one year is 25000 units, relevant ordering cost for each purchase order is INR 210
and carrying cost of one unit of stock is INR 25 then economic order quantity is 648 Packages.

28. • Activities related to coordinating, controlling and planning activities of flow of inventory are
classified as : Inventory Management.
• Required rate of return is multiplied per unit cost of purchased units for calculating : Relevant
Opportunity Cost Of Capital.
• Costs associated with storage of finished goods such as spoilage, obsolescence and insurance of
goods are classified as Carrying Costs.
• Costs of goods are acquired from suppliers is classified as Purchasing Costs
• If economic order quantity for one time is 15000 packages and demand in units for one year are
15000 units then number of deliveries in a year will be 10.
• Decision model to calculate optimal quantity of inventory to be ordered is called Economic
Order Quantity.
• A regular check on Book entry and physical stocks in hand must be done to to check exact
availability of stocks.
• Inventory carried for the purpose of providing flexibility to each decision-making unit to manage
its operations independently is known as Decoupling inventory.

29. • The inventory which is dependent on alternative modes of transportation is known as Pipeline
inventory
• In an automobile manufacturing facility, the management has brought down the cost of ordering
of automotive components from Rs 500 to Rs 50 through the introduction of electronic ordering.
The annual demand of cars is 15,000 units. Inventory carrying cost of automotive components is
Rs 20 per unit per year. The inventory turnover ratio in both the cases would be 34.64 and
109.48.
• Higher demand uncertainty provides higher savings by pooling which of the following inventory:
Safety inventory
• For inventory control
• EOQ has minimum totals costs per order
• Inventory Carrying cost increases with quantity/order
• Ordering cost decreases with increase in quantity/order
• The time period between placing the order and receiving the placed order is called as Lead Time.
• A firm's inventory turnover (IT) is 5 times on a cost of goods sold (COGS) of $800,000. If the IT is
improved to 8 times while the COGS remains the same, a substantial amount of funds is
released from or additionally invested in inventory. In fact $60,000 is released

30. • If EOQ = 360 units, order costs are $5 per order, and carrying costs are $.20 per unit, what is the
annual usage in units? : 2,592 units.
• Costs of not carrying enough inventory include
• Lost Sales
• Customer Disappointment
• Possible Worker Layoffs
Ref pdf from Pg. 166
• Using the EOQ model, if an item's holding cost increases, its order quantity will decrease: True
• The first activity of purchasing cycle is : Recognizing the need of Procurement.
• MRP is NOT a type of inventory.
• A system that triggers ordering on a uniform time basis is called a Fixed-period Order system.
• Logistic network through which unwanted or excess products by resellers or consumers is
classified as Reverse Distribution

31. • Inspection, scrap, and repair are examples of External Costs.
• The following sequence is correct: Sourcing →Inbound logistics →Conversion into finished
goods →Outbound logistics →Retailing.
• Supply chain is concerned with the : Flow Of Materials In The Forward Direction, Cash In
The Reverse Direction And Information In Both The Directions
• Ford supply chain is characterized by Vertical integration
• Toyota supply chain is characterized by : Long-term relationship with the suppliers.
• Dell supply chain is characterized by : Individual customization
• In the automotive industry, the person who is responsible for translating customer
requirements into actual orders and arranges delivery dates is the car maker: Supply
Chain Manager
• Pricing interacts with a supply chain in many ways. For instance, transportation rate
structures are adjusted by the carrier based on : The Size Of The Shipment

32. • Lead time and order cycle time are the same as Replenishment Time.
• Combining different transportation modes in order to get the best features of each is called :
Intermodal Transportation.
• A warehouse that emphasizes speed and efficient product flow to hold goods for short periods
of time and move them out as soon as possible: is a distribution centre.
• The impact of cost reduction on profits is much larger than the impact of increased Sales.