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8/16/2019 Question on l&Scm (Camad)
1/20
1. Write down the process for calculation of customer profitability Analysis and
Direct Product Profitability.
The significance of these costs that occur as a result of servicing customers can
be profound in terms of how logistics strategies should be developed.
Customer profitability analysis will often reveal a proportion of customers who
make a negative contribution. The reason for this is very simply
that the costs of servicing a customer can vary considerably – even between two
customers who may make equivalent purchases from us.
10
8/16/2019 Question on l&Scm (Camad)
2/20
The idea behind DPP is that in many transactions the customer will incur costs
other than the immediate purchase price of the product. ften this is termed the
total cost of ownership. !ometimes these costs will be hidden and often they can
be substantial – certainly big enough to reduce or even eliminate net profit on a
particular item.
". Define shareholders values and explain its drivers.
The five basic drivers of enhanced shareholder value are shown in #igure. They
are revenue growth$ operating cost reduction$ fi%ed capital efficiency$ working
capital efficiency and ta% minimi&ation. 'll five of these drivers are directly and
indirectly affected by logistics management and supply chain strategy.
10
8/16/2019 Question on l&Scm (Camad)
3/20
Define concept of marketing logistic and explain how firm can achieve
competitive advantages. 10
(arket logistics involves planning$ implementing$ and controlling the physical
flows of materials and final goods from points of origin to points of use to meet
customer requirements at a profit.
)otler identified four ma*or decisions in market logistics 1. rder processes +
,ow should orders be handled- ". arehousing + here stocks should be
located- /. 0nventory + ,ow much stocks should be held- . Transportation +
,ow should goods be transported-
8/16/2019 Question on l&Scm (Camad)
4/20
hen a firm sustains profits that e%ceed the average for its industry$ the firm is
said to possess a competitive advantage over its rivals. The goal of much of
business strategy is to achieve a sustainable competitive advantage.
(ichael Porter identified two basic types of competitive advantage2
• cost advantage
• differentiation advantage
/. a. Define supply chain management. xplain in detail seven principles of
supply chain management.
10
8/16/2019 Question on l&Scm (Camad)
5/20
' system whose constituent parts include material suppliers$ production facilities$
distribution services and customer linked together by feed forward flow of
materials and feedback flow of information.
!" #$% P&'()'P*+ ,- +)
1. /roup customer by needs 3ffective !C( groups customers by distinct
service needs and tailors services to these particular segments.. )ustomie the logistics network 4eed to focus on the service requirement
and profit potential
2. *isten to signals of market demand 3 plan accordingly 4eed to monitor
the entire !C to detect early warning signals of changing customer demands
and needs.
4. Differentiate the product closer to the customer 'llows supply chains to
respond quickly and cost effectively to changes in customer needs.
5. +trategically manage the sources of supply ork closely with suppliers
to reduce the cost in in situation for all involved.
6. Develop a supply chain wide technology strategy 3mploy 0T to support
multiple levels of decision making. 0t should also afford a clear view and
ability to measure the flow of products$ services and information.
$. Adopt channel spanning performance measures 3%cellent supply chain
performance measurement systems do more than *ust monitor internal
functions. They apply performance criteria to every link in the supply chain –
criteria that embrace both service and financial metrics
b. Define 7'!. xplain the operation of kanban philosophy. 10
50T can be defined as an integrated set of activities designed to achieve high+
volume production using minimal inventories 6raw materials$ work in process$and finished goods7. 50T also involves the elimination of waste in production
effort. 50T also involves the timing of production resources 6i.e.$ parts arrive at
the ne%t
There are two types of )anban cards2
– a conveyance card 6C+)anban7
8/16/2019 Question on l&Scm (Camad)
6/20
– a production card 6P+)anban7 !ignals come in many forms other than cards$
including2
– an empty crate
– an empty designated location on the floor
"ow 8anban ,perates hen a worker at downstream ork Center 8"
needs a container of parts$ she does the following2
– !he takes the C+)anban from the container she *ust emptied
– !he finds a full container of the needed part in storage – !he places the C+)anban in the full container and removes the P+)anban
from the full container and places it on a post at ork Center 81
– !he takes the full container of parts with its C+)anban back to ork Center
8"
. What is benchmarking9 "ighlight its advantages in context of (epal. Andexplain benchmarking the logistics process.
9:enchmarking is the process of measuring an organi&ation:s internal processes
then identifying$ understanding$ and adapting outstanding practices from other
organi&ations considered to be best+in+class. 0t an ngoing process of measuring
products$ services$ practices ; processes against the best that can be identified in
10
8/16/2019 Question on l&Scm (Camad)
7/20
order to2
< =earn about ; improve best practice.
< 'chieve realistic targets.
< 0ntegrate improvements into your strategy.
< >se best practice as inspiration for innovation.< ?e e%ternally focused.
< ?e purposeful about improvement.
< (easure improvement.
@. *ogistic performance indicators
This comprehensive recommendation defines A indicators 63D0 Precision B
Delivery 'ccuracy B endor (anaged 0nventory B (aterial ,andling ;
0dentification B Production Disruptions B !upplier Communication ;Cooperation7 as well as their ratings.
#ive of these indicators are used by at least " companies who participated in the
work group2
• 3D063lectronic Data 0nterchange7 precision2 P!'$ enault
• Delivery 'ccuracy2 P!'$ 4issan$ enault
• (aterial ,andling ; 0dentification2 ?osch$ !4P$ 4issan$ enault
• Production disruptions2 4issan$ enault
• !upplier Communication ; Cooperation2 ?osch$ 4issan
;endor anaged 'nventory
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8/16/2019 Question on l&Scm (Camad)
8/20
endor (anaged 0nventory or (0 is a process where the vendor creates orders
for their customers based on demand information that they receive from the
customer. The vendor and customer are bound by an agreement which determines
inventory levels$ fill rates and costs.
This arrangement can improve supply chain performance but reducing
inventories and eliminating stock+out situations.
ne of the benefits of (0 is that the vendor is responsible for supplying the
customer when the items are needed. This removes the need for the customer to
have significant safety stock. =ower inventories for the customer can lead to
significant cost savings. The purpose of 50T chain is to reduce inventory at all
places in the supply chain. 0nventory is considered a waste because inventory is
created by using materials$ machines and efforts of persons. 'll of these resources
which have already been used up and that portion of it which is not consumed
and send up the value chain cause a drag on the system. ,owever inventories are
inevitable because uncertainties e%ist at every stage$ making it necessary to
provide a buffer so that demands do not go unfilled. The challenge is to keep it to
the minimum.
8/16/2019 Question on l&Scm (Camad)
9/20
1. a. "ow is competitive advantage achieved through the effective logistics
management9
(arket logistics involves planning$ implementing$ and controlling the physical
flows of materials and final goods from points of origin to points of use to meet
customer requirements at a profit.
)otler identified four ma*or decisions in market logistics 1. rder processes +,ow should orders be handled- ". arehousing + here stocks should be
located- /. 0nventory + ,ow much stocks should be held- . Transportation +
,ow should goods be transported-
hen a firm sustains profits that e%ceed the average for its industry$ the firm is
said to possess a competitive advantage over its rivals. The goal of much of
business strategy is to achieve a sustainable competitive advantage.
(ichael Porter identified two basic types of competitive advantage2
• cost advantage
• differentiation advantage
10
8/16/2019 Question on l&Scm (Camad)
10/20
". a. 's it possible to apply 7'! logistics in current (epalese business
environment9
50T can be defined as an integrated set of activities designed to achieve high+
volume production using minimal inventories 6raw materials$ work in process$
and finished goods7. 50T also involves the elimination of waste in production
effort. 50T also involves the timing of production resources 6i.e.$ parts arrive at the
ne%t.
Advantages of 7'!
– 0ncreases Productivity – educes perating costs
– 0mproves performance the throughput
– 0mproves quality
– 0mproves deliveries
– 0ncrease #le%ibility and innovativeness
10
10
8/16/2019 Question on l&Scm (Camad)
11/20
b. xplain the linkage between logistic and supply chain management
=ogistics management is term used to describe the planning$ implementation$ and
movement of goods$ services and related information from the point of origin to
the point of consumption. 0ncreasingly$ in the modern business environment
logistics management involves supply chain management 6!C(7$ for the purpose
of this paper we shall attempt to demonstrate the concept of supply chain and
competitive performance and how it relates to logistics.
8/16/2019 Question on l&Scm (Camad)
12/20
/. a. Define service standard and its characteristics. 's it necessary to provide
standard service9 Why9 +upport this statement.
' service standard is a public commitment to a measurable level of performance
that clients can e%pect under normal circumstances.
+ervice standards serve two key purposes<
• To provide staff with performance targets 69Phone must be answered within
three rings97E and
• To inform clients what to e%pect 69aiting time is less than 1F minutes97
)haracteristics of a /ood +ervice +tandard
• &elevant to the client2 !ervice standards are consistent with client priorities
and address aspects of the service they value most within available resource
allocations.
• :ased on consultation< !ervice standards are developed in consultationwith clients$ managers$ staff$ and other partners in service delivery to ensure
that they are meaningful and match the organi&ation:s mandate.
• easurable< !ervice standards are quantifiable and linked to monitoring
activities.
• )onsistent across government< !ervice standards should be consistent
throughout federal organi&ations providing similar services. ,aving similar
service standards across government for similar services helps both clients
and government. Clients will find it easier to deal with different organi&ations$
and the organi&ations themselves will find it easier to share best practices and
adopt common approaches.
• Ambitious but realistic< !ervice standards are realistic$ based on analysis
and consistent with ob*ectives$ yet sufficiently challenging to service
providers.
• ndorsed by management< !ervice standards are understood and endorsed
by senior management.
b. What is benchmarking9 Why organiations need to perform
benchmarking9 xplain its logistic process
9:enchmarking is the process of measuring an organi&ation:s internal processes
then identifying$ understanding$ and adapting outstanding practices from other
organi&ations considered to be best+in+class. 0t an ngoing process of measuring
products$ services$ practices ; processes against the best that can be identified in
10
8/16/2019 Question on l&Scm (Camad)
13/20
order to2
< =earn about ; improve best practice.
< 'chieve realistic targets.
< 0ntegrate improvements into your strategy.
< >se best practice as inspiration for innovation.< ?e e%ternally focused.
< ?e purposeful about improvement.
< (easure improvement.
. a
@. rite short notes on6 Any two72
a. *ead time gap
The problem was that often it would be the GwrongH inventory2 for e%ample$ si&es$
colors or styles that were not those actually demanded. ,ighlights the problems
of the lead+time gap which in the fashion industry was traditionally measured in
months rather than weeks
10
8/16/2019 Question on l&Scm (Camad)
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!ime :ased )ompetition
The term time=based competition came into use with its appearance in a 1IJJ
,arvard ?usiness eview article entitled 9Time+The 4e%t !ource of Competitive'dvantage9 by Keorge !talk$ 5r. 0t was further defined in a series of articles and
books written by consultants from the ?oston Consulting Kroup.
Time+based competition is a broad+based competitive strategy which emphasi&es
time as the ma*or factor for achieving and maintaining a sustainable competitive
advantage. 0t seeks to compress the time required to propose$ develop$
manufacture$ market and deliver its products.
8/16/2019 Question on l&Scm (Camad)
15/20
xplain logistic performance indicators. What are some of the indicators
that company has identified key indicator of their companies9
This comprehensive recommendation defines A indicators 63D0 Precision B
Delivery 'ccuracy B endor (anaged 0nventory B (aterial ,andling ;
0dentification B Production Disruptions B !upplier Communication ;Cooperation7 as well as their ratings.
#ive of these indicators are used by at least " companies who participated in the
work group2
• 3D063lectronic Data 0nterchange7 precision2 P!'$ enault
• Delivery 'ccuracy2 P!'$ 4issan$ enault
• (aterial ,andling ; 0dentification2 ?osch$ !4P$ 4issan$ enault
• Production disruptions2 4issan$ enault
• !upplier Communication ; Cooperation2 ?osch$ 4issan
8/16/2019 Question on l&Scm (Camad)
16/20
1. >+upply chain becoming value chain.? 7ustify this statement.
The idea of the value chain is based on the process view of organi&ations$ the idea
of seeing a manufacturing 6or service7 organi&ation as a system$ made up of subsystems each with inputs$ transformation processes and outputs. 0nputs$
transformation processes$ and outputs involve the acquisition and consumption of
resources + money$ labor$ materials$ equipment$ buildings$ land$ administration
and management.
10
". a. Define logistic information system in detail. What does the role of
information plays in an organiation9
The outputs of a logistics information system include2 !ummary reports of cost
or performance statistics$• !tatus reports of inventories or order progress$•
3%ception reports that compare desired performance• with actual performance$
and eports that initiate action. utput can also be in the• form of documents
such as transportation bills of lading and freight bills. 0t is the management of the flow of information$ including customer orders$ billing$ inventory levels$
and customer data.
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8/16/2019 Question on l&Scm (Camad)
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b. What are the production strategies for @uick response9
Luick esponse (anufacturing 6L(7 is a companywide strategy to cut leadtimes in all phases of manufacturing and office operations. 0t can bring your
products to the market more quickly and help you compete in a rapidly changing
manufacturing arena. 0t will increase profitability by reducing cost$ enhance
delivery performance and improve quality.
• The 'lignment of rgani&ational 'ctivity to Demand
• =inkages between Demand and !upply
• Demand relationship
/. a. xplain the operation of kanban regarding as 7apanese Philosophy.
There are two types of )anban cards2
– a conveyance card 6C+)anban7
– a production card 6P+)anban7 !ignals come in many forms other than cards$
including2
– an empty crate
– an empty designated location on the floor
"ow 8anban ,perates hen a worker at downstream ork Center 8"
needs a container of parts$ she does the following2
– !he takes the C+)anban from the container she *ust emptied
– !he finds a full container of the needed part in storage
– !he places the C+)anban in the full container and removes the P+)anban
from the full container and places it on a post at ork Center 81
– !he takes the full container of parts with its C+)anban back to ork Center
8"
10
10
8/16/2019 Question on l&Scm (Camad)
18/20
Differentiate innovation and benchmarking.
. What is 7'!9 xplain seven wastes to be eliminated by 7'!.
50T can be defined as an integrated set of activities designed to achieve high+
volume production using minimal inventories 6raw materials$ work in process$
and finished goods7. 50T also involves the elimination of waste in production
10
8/16/2019 Question on l&Scm (Camad)
19/20
effort. 50T also involves the timing of production resources 6i.e.$ parts arrive at the
ne%t.
Advantages of 7'!
– 0ncreases Productivity
– educes perating costs
– 0mproves performance the throughput
– 0mproves quality
– 0mproves deliveries – 0ncrease #le%ibility and innovativeness
+even Wastes to be eliminated according to 7'! are
!'W,,DB
8/16/2019 Question on l&Scm (Camad)
20/20
0n cost+volume+profit 6breakeven7 analysis$ the total cost• curve is composed of
total fi%ed and variable costs per unit multiplied by the number of units provided.
?reakeven quantity occurs where the total cost curve and total sales revenue
curve intersect. !ee2 break+even chart$ break+even point. 0n inventory theory$ the
total cost curve for an inventory• item is the sum of the costs of acquiring and
carrying the item. 0n supply chain management$ the total cost of ownership• of
the supply delivery system is the sum of all the costs associated with every
activity of the supply stream. The main insight that TC offers to the supply
chain manager is the understanding that the acquisition cost is often a very small
portion of the total cost of ownership.