Need a Rewrite on week one homework SCM
Each chapter of your textbook has a list of study questions. Check your understanding of the concepts by completing the selected study questions.
· Each question response should be 50-100 words.
· Submit by Sunday, 11:59 p.m., CST.
Homework Assignment Questions
· Chapter 1, Page 23, Questions # 1, 4, 6, 8, 10
· Chapter 2, Page 46, Questions # 1, 2, 5, 6, 10
Globalization and technology developments have led to some significant changes in the global economy. Discuss the importance of such changes to the United States. What is the impact upon supply chains?
Post industrial revolution phase where machines took role of humans in the production process, globalization and technological developments has brought major positive changes in the global economy and all the nations who were early adopters of globalization have the biggest and strongest economies in the world.
The importance of Globalization and Technological developments in the United States is:
USA is a mass producer of most of the goods consumed all over the world, some of the world’s biggest companies are headquartered here.US needs to sell the goods it produces and since the home market is exhausted country needs to tap other feasible markets and thus globalization is necessary. If US do not promote globalization then most of the companies who are producing its products here will be shut.
It is an established fact that in order to become and maintain a strong economy globalization is a key factor, it not only interconnects the businesses across the world but it also connects people, cultures and leads to economic integration. The countries which are involved in business together creates a harmonious relationship and becomes a major political power as well.
Globalization has provided US a competitive advantage over other nations and this can be understood from the fact that when US faced the subprime crisis in 2008-2009 most of the major economies in the world faced its after effects.
Globalization also leads to securing better quality raw materials at competitive prices and US being a mass producer is much dependent upon its supplies.
US has always been a forerunner when it comes to technological advancements and it has become a superpower because of the advancements. Technological developments not only help the economy grow but it also helps in maintaining the strength and integrity of the nation globally.
Technological developments have provided US with discovery and utilization of new ideas; it has helped US secure natural resources all around the world. The technology has helped increase the efficiency in production while reducing the workload and production cost thus making the industries in the US more competitive.
Few of the biggest technologically advanced companies are headquartered in the US and by seeing the position of US in the global economy we can understand the positive impacts it has brought.
The impact of globalization and technological developments on the supply chain:
Globalization has lead US secure natural resources. It has helped US in obtaining raw materials at very competitive cost.
Globalization and Technological developments have brought efficiency in the total supply chain management, the supply chain has become integrated and buyers and suppliers throughout the world are connected. The delays which earlier used to happen in securing supplies have almost become negligible.
Technological developments have made the connectivity easy and effortless; this has resulted in a company selling its products throughout the world.
Globalization though has many positive effects on the supply chains but it has a few demerits also, now most of the raw materials in US are supplied by China and the current situation which is prevailing between the two countries have brought trouble to companies which depended upon Chinese supplies. Both the nations are engaged in a trade war and levying tariffs on each other and it happens in Globalization that companies from one country completely become dependent on another and if the relations between the two nations become sour the businesses suffer.
Describe the three phases of the evolution of the supply chain concept.
The three phases of evolution of the supply chain concept consists of Physical Distribution,purchasing/materials management, and Integrated Logistics. Physical Distribution focuses onthe outbound of a firm’s logistics system. Dealing with transportation, Inventory requirements,warehousing, exterior packaging, and materials handling. Integrated logistics managementadded inbound logistics to the outbound logistics of physical distributions developed in agrowing number of organizations. Due to the increase of international or global sourcing ofmaterials it became clear that coordination between the outbound and inbound logistics systemprovided opportunities for increased efficiency and improved customer service
Supply chains encompass four flows. Describe the four flows, and why are they important? How are they related to each other?
The entire supply chain can be thought of as a combination and interrelation of four types of flow – The product/ service flow, information flow, financial (cash) flow, and the demand flow. All of them are very crucial for an effective supply chain. The product/ service flow is the primary flow in the supply chain. it is the flow of material from the suppliers to the manufacturers and then form the manufacturers to the merchandiser firms (distributors and retailers) and then finally to the end users. The better the product/ service flow, customers are orders are satisfied more accurately, timely, efficiently with all specifications intact including the quality.
The information flow is considered to be in the opposite direction. The market feedback and demand is communicated first to the merchandisers and that information becomes the basis of accurate forecasting at the upstream supply chain. Information flow is also very crucial in that better information can lead to accurate forecasting and reduced inventory level. Due to this, not only that the supply chain becomes efficient and the cost is reduced but also that the customer orders can be fulfilled with a reduced lead time due to inventory level reduction.
The third flow is the financial or more specifically the cash flow. It is also considered backward i.e. from the end users to the suppliers of raw materials. A supply chain also needs to be efficient in terms of cash flow. If the cash flows are faster, the firms will realize the cash earlier leading to a shorter cash-to-cash cycle. The overall value acquired by the firms will be more in that case.
The fourth flow is the demand flow which reflects the growth in technology which provides organizations with the capability to better synchronize supply and demand by detecting and realizing demand “signals” and making appropriate adjustments to inventory replenishment and order fulfillment.
Note that the traditional directions of these flows will get reversed in case of a reverse logistics. In reverse logistics, the product and service flow will be backward, the cash flow will be backward. The information flow, however, will be still backward and not a very significant role in demand flow will be there in this case.
Collaboration is a very critical ingredient for successful supply chains. Why? what types of collaboration are important? What are some of the challenges and issues that need to be addressed?
The supply chain management (SCM) includes all processes that turn the raw materials into final products and is a control of the flow of goods and services. The components of SCM are planning, sourcing, making, delivering, returning, and enabling. This requires the successful streamlining of supply-side business activities to optimise consumer loyalty and achieve a competitive advantage in the marketplace. Suppliers are working to develop and enforce supply chain management which is as effective and economical as possible. The supply chains also include the information systems required to manage these businesses, from manufacturing to product development. Collaboration is the act of some people working together to achieve the same goals. Therefore, the collaboration in the supply chain is a form of interfirm partnerships to gain an advantage, such as cost-sharing, pooling, or risk spreading, specialisation or access to supply chains complementary resources.
The supply chain collaboration is crucial because to compete globally, the company need to have effective source. Any company with significant globalisation aspirations knew that it had to compete globally effectively. With the complexity of rapid expansion of supply chain systems, global expansion of finished product markets and installations worldwide to support these growing markets, it is essential for the optimal performance of supply chains that all parties involved are fully committed to frictionless collaboration with the supply chain.
There are four types of collaboration The first type is “transaction” based collaboration. This type of collaboration focuses on demand and delivery between supply partners. There is low investment in information technology and relationships between the actors involved. The second is “technology” based collaboration. This type of collaboration focuses and relies on information technology with information sharing between partners. The third is a partnership focused on “affinity,” which is based on relationship management. Confidence and dedication are the foundation for such a relationship. The last type of collaboration is “integral”. This type of collaboration is a combination of relations between the actors involved and information technology. It is the most complex type of collaboration. However, the “integral” based collaboration has an advantage over other types of collaboration as it can sustain longer-term relationships and further develop supply chain resilience.
In order to make successful collaboration, there are some issuesneed to address. Once collaboration starts, it can be challenging to communicate accurate information, change business processes and negotiate a shared order and delivery schedule.There is a possibilitythat the partner will share inaccurate information and it will affect the supply chain
Describe the major challenges and issues facing supply chain in the future?
While technologies and other factors have contributed towards the improvement in the supply chain and distribution processes, an entirely new set of challenges and issues will be confronting the supply chains in the future. The complexity of patterns and trends in customer demands have been increasing. Customers today now also have a greater expectation and companies need to fulfill these while staying ahead of the competition. Supply chains now serve many different functions and certain inefficiencies related to the interaction and collaboration between the different functions has also been witnessed. Other supply chain capabilities that would be tested would require improvement include capabilities towards gathering and use of information and supply chain planning, among other areas. Some of the major challenges for the supply chains of the future are given below.
Volatility In Consumer Demand
The demand and consumer demand has witnessed increasing volatility in the past 3 years and the trend is likely to continue in the future. A decrease in consumer spending has affected almost all industries, and across the globe. Global competition is going to be a major concern for the business supply chains in the future. Supply chains also have to meet sustainability and environment concerns while delivering value.
Because of the increasing competition, companies worldwide now try to contain cost while improving aspects like customer satisfaction and efficiency, which is a great challenge. Most of the companies have a goal to reduce their operating cost in the next five years.
Customer Service and Trade-Off Management
The next goal that makes the top-most priority is customer service. Companies would also be required to manage the trade-offs in the functional areas, and which relate to the new challenges. The important trade-offs include balancing of costs while improving customer service, and balancing of production with regards to customer proximity, among other factors.
In spite of all the limelight that the subject of supply chain management has received in recent times, few CEOs and senior managers have found to be directly involved in the management of supply chain activities. Because of the critical nature of the operation, the creation of fully committed processes towards supply chain development, management, and improvement may still be a challenge for the majority of the businesses, and in the future.
Explain the underlying rationale for global trade and explain the difference between comparative and absolute advantage?
1) The fundamental basis for global trade is that nations can appreciate more various and top-notch items if they exchange with each other. Supreme favourable position is the preferred standpoint that a nation may need to item a specific decent at a specific value, which is less expensive than different nations can deliver that good. Relative favourable position is the capacity of a country to represent considerable authority in a specific useful for which they have the least open-door cost, regardless of whether they could create something beyond one great, they deliver the one for which they have the similar preferred standpoint and exchange for the others.
What are the essential factors for economic growth and increased development of global trade flows? Why are they so important in today’s global economy?
2) Essential variables for economic growth and increased development of global trade exchange streams are many. A few illustrations are populace size and urbanization. Populace size can be useful for monetary development, because a bigger populace has a bigger work constrain. In any case, an economy must be sufficiently steady to help such an expansive populace with a specific end goal to be fruitful. Urbanization is another vital factor for worldwide exchange streams—by 2030, more than 60% of the world’s populace will live in urban territories, and there will be a few more megacities, lodging 10 million or more inhabitants. These urban spreads will require a massive measure of assets to get by, significantly more than they could deliver themselves in a manageable way. Innovation will likewise be critical to relieve asset shortage.
what special role do supply chains play in globalization of organizations? What contributions do successful supply chains make to companies?
1. Reach customers around the world.
Globalized Supply chains helps the organization to reach new markets and also helps in staying connected with the customers around the globe.
2. Organization Operates 24*7 hour basis .
Globalized supply chain plays a very important role in globalizing of the organization by operating 24* 7 hour basis in the different countries due to different time zones .
3. New Opportunities.
Globalized supply chain brings new opportunities in the form of new markets as the organizations can supply its products globally anywhere in the world. If the products of the organization is not successful in one market organizatons has a opportunity of trying their products in new markets where they have a chance of being successful.
Below mentioned are the contributions of successful supply chains to companies:
1. Cost Reduction.
Successful supply chains help the company in their cost reduction. As successful supply chains are successful in making accurate demand predictions which helps the company in reducing overhead cost associated with inventory storage and thus ensuring better inventory management.
2. Improved Cash Flow.
Successful supply chain helps in improving cash flow of the companies since it enables the company to take smarter decisions by accurately predicting and responding to market and demand changes and reducing supply chain disruptions by working with reliable suppliers.Due to which it leads to more satisfied customers and ultimatey improves cash flow by getting early paid for products and services.
Successful supply chains helps in shipping optimization. As it helps in identifying the most efficient shipping methods which helps companies to get orders from customers faster along with the maintenance of minimum cost. It also leads to improved customer satisfaction due to the lower cost advantage from optimization is passed to customers also.
What is meant by the current description of the global economy that “time and distance have been compressed”? Do you agree? What has been the impact of this compression?
One can hardly dispute that the exponential rise and evolution of information technology, boundary spanning trade agreements, advances in transportation medium capabilities/capacities (better shipping, better over-ground transportation, access to ports and shipping lanes, etc.), and reduced product life cycles, along with many other factors, have combined to relatively “compress” time and distance when compared to business models of yesteryear. Whereas a customized personal computer may have taken weeks to build and ship in the mid-90s, an accepted standard due to lack of available alternative, can now reach the customer in a matter of days, if not hours. It can be argued supply chains help to establish the limits of what is competitively possible in the market. In other words, the cost and value at the end of the supply chain help determine a firm’s ability to compete in a global marketplace. Good supply chains are business power and good supply chain managers are continually pushing the limits of their supply chains to be viable in both domestic and global markets. Operating globally has become easier to accomplish due to advances in information/communications technology, as noted above, and the continuing improvement of specialists such as UPS, FedEx, DHL, etc., which can provide global supply chain services at a very reasonable cost. A growing number of specialists and continuing improvements in information technology/communications are contributing to the flattening of the world. Obviously, large global companies are also contributing to this phenomenon. It is safe to conclude supply chains and supply chain management play an important role in the global economy and have helped to push the growth and success of companies that do “supply chaining” very well. Reduced order cycle time, for example, has become an important part of supply chain management since it can lead to lower inventory levels for customers, improved cash flow, lower current assets and accounts receivable. Conversely, the increased length and complexity of the supply chain make it more difficult to achieve shorter lead times. Global supply chains impact all with lower prices, increased array of products, and convenience (read 24/7, one-stop shopping, etc.), but are not without challenges.
What is the role of ports for global commerce and why is that roe important? Is our current port infrastructure sufficient?
Ports play major role in the global commerce of the country as major imports and exports are done from the port. It is the source of transport for many countries . Heavy material cannot be taken in and out of the country without these ports. The ports are also major part of the economy of the country and employement source. Many people work here and extract their living. The ports of the country are well developed and have every latest technology incorporated and are considered one of the best . However they need to be updated and maintained inorder to continue the effciency.