POB Supply chain operations

POB Supply chain operations

Supply Chain Operations

• The supply chain operations refers to the management of the flow of goods and services. The entire chain is called the supply chain.

Advantages of Supply Chain Operations

• People are able to enjoy a better quality of life if an efficient transport and logistics hub exist. A country or company is able to deliver better products more speedily than others.

• An efficient supply chain creates wealth. For example, a good supply chain involves better port facilities, better airports, better integration of the various modes of transport etc.

• Supply chain management and logistics provides many new and innovative job opportunities such as: logistics planners, freight forwarders, telemarketing etc.

Disadvantages of Supply Chain Operations

• Globalisation

• Counterfeiting 

• Product complexity 

• Regulatory complexity 

• Management blunders 

• Natural disasters 

• Political instability 

Multiple Choice

Management blunders refers to the making of laws that restrict distribution.

• TRUE

• FALSE

Multiple Choice

An effective supply chain will allow goods to be delivered in a timely manner.

• TRUE

• FALSE

Multiple Choice

The more complex a product is, the easier it is to distribute.

• TRUE

• FALSE

Competitive Advantage

• Logistics aims to meet the continuous demands of customers at the lowest cost possible. Effectively managing the flow of materials, products and information from the supplier to the customer is all part of the logistics system.

• Competitive advantage refers to the conditions or circumstances that put a business in a more favourable or superior position, in comparison with its competitors. It can gain this advantage through differentiation and cost advantage.

  
  

• 
  

Logistics and Competitiveness

With this in mind, logistics can give a business an edge over its competitors in two ways:

The advantage of providing value is achieved by ensuring products are transmitted faster or to schedule and providing efficient assembly of component parts into end products effectively. Doing this is recognizing customer value.

2. Providing a cost advantage through partnering effectively with suppliers and business customers to make activities and processes more efficient, thus resulting in the ability to put products on the market on time, in the best condition and at a competitive price.

Types of competitive advantage

• Cost leadership - is establishing a competitive advantage by having the lowest cost of operation in the industry.

• Product differentiation – the marketing

  of generally similar products with minor variations that are used by consumers when making a choice.

• Distribution differentiation - Differentiated distribution means that your distinct benefits extend to your methods of getting goodsto customers.

Types of competitive advantage (cont'd)

• Promotion differentiation

• Brand differentiation

• Price differentiation

Multiple Choice

Cost advantage can be achieved through partnering with other companies

• True

• False

Multiple Choice

Price differentiation refers to differ advertising techniques for different countries.

• True

• False

Multiple Choice

The marketing

of generally similar products with minor variations that are used by consumers when making a choice.

• Price Differentiation

• Cost Leadership

• Promotion Differentiation

• Product Differentiation

Multiple Choice

Distribution differentiation refers to having the lowest he lowest cost of operation in the industry.

• True

• False

Comparative cost advantage

• Comparative cost advantage refers to being able to produce a commodity at a lesser cost than other businesses.

• Logistics can contribute to achieving this aim, particularly through outsourcing.

• 
  

What is outsourcing?

• Outsourcing (sometimes referred to as contracting out) refers to accessing goods or services by contract from an outside supplier. It is used to reduce costs or improve efficiency by relocating tasks, operations, jobs or processes to an external contracted party for a significant period of time. 

Benefits of outsourcing

• It can free up cash flow, personnel and time resources for the company.

• It can result in cost savings due to lower labour costs.

• It enables the company to focus on its ‘core’

  business competencies

• It tends to be directed to organisations who are specialists in the required services.

Parties to outsourcing

• First-party logistics (1PL)

• Second-party logistics (2PL) 

• Third-party logistics (3PL) 

• Fourth-party logistics (4PL) 

Watch the video to get an understanding of each party involved in logistics

• https://www.youtube.com/watch?v=R06wFtyb8wc&t=71s

Multiple Choice

First party logistics involve firms that provide consultancy services.

• True

• False

Multiple Choice

A company has a comparative advantage when they can produce their costs cheaper than their competition.

• True

• False

Multiple Choice

A truck company which transports goods from one company to another is an example of 2nd party logistics

• True

• False

Multiple Choice

Third party logistics firms perform logistics on behalf of another company (1PL).

• True

• False