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WK #1 (SC): Supply Chain Management Definitions |
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Supply Chain: In-house and supplier inventories, people and manufacturing capacity,
and logistics resources available at any given time to meet customer
demand for Company’s goods/services.
Supply Chain Management: Decisions that impact the supply chain structure, cost, and ability to respond to
customer demand:
- Vendor selection, sourcing, and supply agreements,
- Capacity decisions,
- Make/buy and outsourcing decisions,
- Inventory planning strategies, and
- Engineering and design of product lines.
The Supply Chain Cost Structure: The Supply Chain total cost is made of
a variety of elements that are typically broken up into Labor, Material
and Overhead. However, there is a great deal of overlap and
complexity in the cost structure which can be categorized as:
- Internal: Products, Plant, Equipment, People, Systems, Inventory, Capacity
- External: Suppliers, Material, Systems, Capacity
- Logistics: Transportation Cost, Lead-time.
Outsourcing: Make/buy decision to procure a
product or process from an outside supplier. Decision can be made
when developing a new product, or it may involve an item/process that
was previously manufactured/processed in-house.
In-Sourcing: The opposite of outsourcing.
Re-Sourcing: The process used to continually review the
supplier(s) value proposition, with an objective to improve cost, lead
time, quality, or inventory exposure.
Shelter Outsourcing: Offshore CEM provides US Manufacturer
with space and utilities, hires labor, and provides all necessary HR,
administrative and import/export services, and bills US company for
labor and other expenses. US Company consigns materials,
equipment, and components to Shelter.
Turnkey Outsourcing: This is the same as shelter subcontracting, except
that the offshore CEM assumes responsibility for all manufacturing and
material procurement and planning, and charges a per piece amount on
delivery FOB Client destination.
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Knowledge Base 
