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WRITE SHORT NOTES
Supply chain
A supply chain is a network created amongst different companies producing, handling and/or
distributing a specific product. Specifically, the supply chain encompasses the steps it takes to
get a good or service from the supplier to the customer. Supply chain activities transform
natural resources, raw materials and components into a finished product that is delivered to
the end customer.
Supply Chain Management
Supply chain management (SCM) is the management of the flow of goods. It includes the
movement and storage of raw materials, work-in-process inventory, and finished goods from
point of origin to point of consumption. Supply chain management has been defined as the
"design, planning, execution, control, and monitoring of supply chain activities with the
objective of creating net value, building a competitive infrastructure, leveraging worldwide
logistics, synchronizing supply with demand and measuring performance globally."
Supply chain management is a crucial process for many companies, and many companies strive
to have the most optimized supply chain because it usually translates to lower costs for the
company.
Logistics
Logistics is the overall management of the way resources are obtained, stored and moved to
the locations where they are required. Logistics management entails identifying potential
suppliers and distributors; evaluating how accessible and effective they are and establishing
relationships and signing contracts with the companies who offer the best combination of price
and service. A company might also choose to handle its own logistics if it is cost-effective to do
so. The simplest definition of logistics is the flow of funds, goods, and information between
source and consumer.
The term originated in a military context, referring to how personnel acquire, transport and
store supplies and equipment. In the business community, the term refers to how resources are
acquired, transported and stored along the supply chain.
Outsourcing
Outsourcing is when a company contracts with an outside provider for services or other
business processes, rather than employing staff to do these services in-house. These services
may be provided on-site or off-site. Typically outsourcing is done with an eye toward efficiency
and cost-saving for the company.
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Bullwhip Effect
The bullwhip effect is an observed phenomenon in forecast-driven distribution channels. It
refers to a trend of larger and larger swings in inventory in response to changes in customer
demand, as one looks at firms further back in the supply chain for a product. The concept first
appeared in Jay Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester
effect. Since the oscillating demand magnification upstream of a supply chain is reminiscent of
a cracking whip, it became known as the bullwhip effect.
Traffic Management
Overseeing the shipment of incoming and outgoing goods comes under the heading of traffic
management. This function handles schedules and decisions on shipping method and times,
taking into account costs of various alternatives, government regulations, the needs of the
organization relative to quantities and timing, and external factors such as potential shipping
delays or disruptions (e.g. highway construction, truckers strikes). Computer tracking of
shipments often helps to maintain knowledge of the current status of shipments as well as to
provide other up-to-date information on costs and schedules.
DRP
Distribution requirements planning (DRP) is a system for inventory management and
distribution planning. It is especially useful in multiechelon warehousing systems (factory and
regional warehouses). It extends the concepts of material requirements planning (MRP) to
multiechelon warehouse inventories, starting with demand at the end of a channel and working
back through the warehouse system to obtain time-phased replenishment schedules for
moving inventories through the warehouse network. In effect, management uses DRP to plan
and coordinate transportation, warehousing, workers, equipment, and financial flows.
3-PL
A third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides
service to its customers of outsourced (or "third party") logistics services for part, or all of their
supply chain management functions. Third party logistics providers typically specialize in
integrated operation, warehousing and transportation services that can be scaled and
customized to customers' needs based on market conditions and the demands and delivery
service requirements for their products and materials. Often, these services go beyond logistics
and included value-added services related to the production or procurement of goods, i.e.,
services that integrate parts of the supply chain. Then the provider is called third-party supply
chain management provider (3PSCM) or supply chain management service provider (SCMSP).
Third Party Logistics System is a process which targets a particular Function in the management.
It may be like warehousing, transportation, raw material provider, etc.

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Reverse Logistics
Reverse logistics stands for all operations related to the reuse of products and materials. It is
"the process of planning, implementing, and controlling the efficient, cost effective flow of raw
materials, in-process inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing value or proper disposal.
More precisely, reverse logistics is the process of moving goods from their typical final
destination for the purpose of capturing value, or proper disposal. Remanufacturing and
refurbishing activities also may be included in the definition of reverse logistics."[1] The reverse
logistics process includes the management and the sale of surplus as well as returned
equipment and machines from the hardware leasing business. Normally, logistics deal with
events that bring the product towards the customer. In the case of reverse logistics, the
resource goes at least one step back in the supply chain. For instance, goods move from the
customer to the distributor or to the manufacturer. When a manufacturer's product normally
moves through the supply chain network, it is to reach the distributor or customer. Any process
or management after the sale of the product involves reverse logistics. If the product is
defective, the customer would return the product. The manufacturing firm would then have to
organize shipping of the defective product, testing the product, dismantling, repairing, recycling
or disposing the product. The product would travel in reverse through the supply chain network
in order to retain any use from the defective product. The logistics for such matters is reverse
logistics.
Gate Keeping
Gatekeeping oversees the acceptance of returned goods with the intent of reducing the cost of
returns by screening returns at the point of entry into the system and refusing to accept goods
that should not be returned or goods that are returned to the wrong destination. Effective
gatekeeping enables organizations to control the rate of returns without negatively impacting
customer service.
Avoidance
Avoidance refers to finding way to minimize the number of items that are returned. It can
involve product design and quality assurance. It may also involve monitoring forecasts during
promotional programs to avoid overestimating demand to minimize returns of unsold product.
Supply Chain Visibility
Supply chain visibility means that a major trading partner can connect to any part of its supply
chain to access data in real time on inventory levels, shipment status, and similar key
information. This requires data sharing.
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Event Management
Event management is the application of project management to the creation and development
of festivals, events and conferences. Event management involves studying the intricacies of the
brand, identifying the target audience, devising the event concept, planning the logistics and
coordinating the technical aspects before actually launching the event. Post-event analysis and
ensuring a return on investment have become significant drivers for the event industry. The
recent growth of festivals and events as an industry around the world means that the
management can no longer be ad hoc. Events and festivals, such as the Asian Games, have a
large impact on their communities and, in some cases, the whole country. The industry now
includes events of all sizes from the Olympics down to a breakfast meeting for ten business
people. Many industries, charitable organizations, and interest groups will hold events of some
size in order to market themselves, build business relationships, raise money or celebrate.
Fill Rate
Performance metrics are necessary to confirm that the supply chain is functioning as expected,
or that there are problems that must be addressed. There are a variety of measures that can be
used, that relate to such things as late deliveries, inventory turnover, response time, quality
issues, and so on. In the retail sector, the fill rate (the percentage of demand filled from stock
on hand) is often very important.
RFID
Radio-frequency identification (RFID) is the wireless non-contact use of radio-frequency
electromagnetic fields to transfer data, for the purposes of automatically identifying and
tracking tags attached to objects. The tags contain electronically stored information. Some tags
are powered by and read at short ranges (a few meters) via magnetic fields (electromagnetic
induction). Others use a local power source such as a battery, or else have no battery but
collect energy from the interrogating EM field, and then act as a passive transponder to emit
microwaves or UHF radio waves (i.e., electromagnetic radiation at high frequencies). Battery
powered tags may operate at hundreds of meters. Unlike a bar code, the tag does not
necessarily need to be within line of sight of the reader, and may be embedded in the tracked
object. RFID tags are used in many industries. An RFID tag attached to an automobile during
production can be used to track its progress through the assembly line. Pharmaceuticals can be
tracked through warehouses. Livestock and pets may have tags injected, allowing positive
identification of the animal. Since RFID tags can be attached to cash, clothing, everyday
possessions, or even implanted within people, the possibility of reading personally-linked
information without consent has raised serious privacy concerns.
Bar Code
A graphical representation of a product's identifying information formed by a two-dimensional
pattern of black and white shapes. Barcodes are able to be read by optical devices, such as a
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barcode reader or scanner, and are most commonly composed of parallel black and white lines.
Barcodes are used to automate the transfer of product information, such as price, from the
product to an electronic system, such as a cash register.
CPFR
Is a concept that aims to enhance supply chain integration by supporting and assisting joint
practices? CPFR seeks cooperative management of inventory through joint visibility and
replenishment of products throughout the supply chain. Information shared between suppliers
and retailers aids in planning and satisfying customer demands through a supportive system of
shared information. This allows for continuous updating of inventory and upcoming
requirements, making the end-to-end supply chain process more efficient.
Cross Docking
Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer
truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail
cars, with little or no storage in between. This may be done to change type of conveyance, to
sort material intended for different destinations, or to combine material from different origins
into transport vehicles (or containers) with the same, or similar destination.
Delayed Differentiation
Delayed differentiation or Postponement is a concept in supply chain management where the
manufacturing process starts by making a generic or family product that is later differentiated
into a specific end-product. This is a widely used method, especially in industries with high
demand uncertainty, and can be effectively used to address the final demand even if forecasts
cannot be improved.
Disintermediation
Elimination of financial intermediaries (banks, brokers, finance houses) between the suppliers
of funds (savers/investors) and the users of funds (borrowers/investees). Disintermediation
occurs when inflation rates are high but bank interest rates are stagnant (usually due to
government control), and the bank depositors can get better returns by investing in mutual
funds or in securities. When interest rates start to rise, the investors turn again into depositors
and reinter mediation occurs.
Keiretsu
Grouping of large Japanese financial and industrial corporations through historical associations
and cross-shareholdings. In a keiretsu each firm maintains its operational independence while
retaining very close commercial relationships with other firms in the group. Horizontal keiretsu
(such as Mitsubishi Corp. and Sumitomo Corp.) involve firms in different industries whereas
vertical keiretsu (such as Toyota Corp. and Sony Corp.) involve firms upstream and downstream
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of a manufacturing process. Keiretsu is Japanese for a headless combine and used to be written
as zaibatsu.
Virtual Companies
A virtual business employs electronic means to transact business as opposed to a traditional
brick and mortar business that relies on face-to-face transactions with physical documents and
physical currency or credit.
VMI
A technique used by customers in which manufacturers receive sales data in order to forecast
consumer demand more accurately. The vendor uses the sales information to maintain the
proper level of inventory for each product that is stocked.
Drop Shipping
An arrangement between a business and the manufacturer or distributor of a product the
business wishes to sell in which the manufacturer or distributor--and not the business--ships
the product to the business's customers.
Pass Through Facility
A security representing pooled debt obligations that passes income from debtor to its
shareholders. The most common type is the mortgage-backed certificate.
Channel Assembly
A sales channel initiative aimed at offloading much of the system assembly task from the initial
manufacturers to an intermediate dealer or distributor. The reseller or distributor then
assembles the system to the buyer's specifications.
Offshoring
The practice of basing some of a companys processes or services overseas, for reasons such as
lower labor costs or more favorable economic conditions in that other country.