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Chapter 3 Discussion Questions: Chapter 3: Supply Chain Drivers and Metrics

The document discusses supply chain drivers and metrics from Chapter 3 of the textbook "Supply Chain Management". It provides sample discussion questions and answers that address how inventory can increase a grocery retailer's supply chain responsiveness, the pros and cons of outsourcing manufacturing, and whether a brick-and-mortar or online retailer typically has a higher asset turnover ratio. The answers examine factors like inventory levels, sourcing decisions, availability, and how the overall integrated supply chain impacts key metrics.

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Shahrukh khan
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291 views2 pages

Chapter 3 Discussion Questions: Chapter 3: Supply Chain Drivers and Metrics

The document discusses supply chain drivers and metrics from Chapter 3 of the textbook "Supply Chain Management". It provides sample discussion questions and answers that address how inventory can increase a grocery retailer's supply chain responsiveness, the pros and cons of outsourcing manufacturing, and whether a brick-and-mortar or online retailer typically has a higher asset turnover ratio. The answers examine factors like inventory levels, sourcing decisions, availability, and how the overall integrated supply chain impacts key metrics.

Uploaded by

Shahrukh khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter 3: Supply Chain Drivers and Metrics Supply Chain Management, 6/e

Chapter  3 Discussion  Questions  

1. How could a grocery retailer use inventory to increase the responsiveness of the
company’s supply chain?

The logistical driver of inventory encompasses all raw materials, work in process, and
finished goods within a supply chain. A grocery store can be more responsive in the
eyes of its customers if it offers a broader variety of SKUs and/or maintains a greater
quantity of each SKU. A greater quantity of each SKU is problematic for highly
perishable items like produce, meat, fish, etc. For these items, a grocery store supply
chain should be set up to permit frequent orders so that freshness is ensured and a
stockout situation won’t exist for a significant length of time. A grocery store supply
chain should use historical demand patterns for seasonal items to relieve stress on all
members and provide customers with product during peak demand periods.

5. Motorola has gone from manufacturing all its cell phones in-house to almost
completely outsourcing the manufacturing. What are the pros and cons of the
two approaches?

Sourcing is the set of business processes required to purchase foods and services.
These decisions are crucial because they affect the level of efficiency and
responsiveness that Motorola can achieve. The Motorola production system for their
line of pagers was hailed as a breakthrough in mass customization, so it was
somewhat surprising when Motorola outsourced cell phones. Sourcing decisions
should be made based on the total supply chain surplus; if a third party can help the
chain achieve greater surplus, then the function is a prime candidate for outsourcing.
Motorola was willing to give up some control and possibly some of its design talent
and assembly expertise because it felt that the supplier could provide product of an
appropriate level of quality with the responsiveness necessary. Products and services
that are outsourced are rarely brought back in-house and should never be tied too
closely to the outsourcing party’s core competency.

10. Would you expect a brick-and-mortar retailer or an online retailer to have a


higher asset turnover? Which supply chain drivers impact asset turnover?

Although the initial response of most students will be an online retailer, we must
remind them that they need to look at the overall supply chain drivers and metrics that
affect asset turnover. They will confuse choice with availability when comparing a
brick-and-mortar retailer to an online retailer. Although true that an online retailer
can appear to have more choices for the shopper, the availability of those choices still
comes down to how much physical inventory do they really have in stock. Remind
them of experiences they have had with ordering online to only receive an out-of-
stock message when actually adding the item to their “shopping cart”. Most studies

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Chapter 3: Supply Chain Drivers and Metrics Supply Chain Management, 6/e

have shown, that an online retailer, on average has a slightly higher asset turnover,
this advantage shrinks when it comes to availability and response time.

A supply chain is an integrated entity that is a result of its facilities, inventory,


transportation, information, sourcing, and pricing and how these items function
together, all of these drivers impact asset turnover. The degree to which they impact
asset turnover relies in the overall strategy of the company in relationship to its
customers, suppliers and financial ownership.

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