Supply Chain Management - Important Questions & Answers

1. State the meaning of Supply Chain Management.

Supply Chain Management (SCM) is the coordination and management of all activities involved in sourcing,

procurement, conversion, and logistics. It also includes coordination and collaboration with channel partners

like suppliers, intermediaries, third-party service providers, and customers.

2. Write notes on supply chain as profession.

SCM as a profession involves strategic planning, procurement, logistics, and managing supplier and

customer relationships. Professionals ensure efficient and cost-effective movement of goods and services

and are key to a company's success.

3. What are the decision phases in its operation?

The phases include:

1. Supply Chain Strategy/Design

2. Supply Chain Planning

3. Supply Chain Operation

4. Define distribution channel and its types.

A distribution channel is the path through which goods/services flow from producers to consumers. Types:

1. Direct (manufacturer to customer)

2. Indirect (via intermediaries like wholesalers, retailers)

5. What do you mean by strategic fit?

Strategic fit means aligning a company's competitive strategy with its supply chain strategy to achieve

organizational goals effectively and efficiently.

6. What is the role of demand forecasting in supply chain management?

It helps predict future customer demand to optimize inventory levels, production, procurement, and

distribution, minimizing costs and improving service.

7. What are the characteristics of forecasting?

1. Based on historical data

2. Involves assumptions

3. Inherent uncertainty

4. Horizon specific

5. Time-series or causal

8. Write five reasons for the choice of distribution channels.

1. Market coverage

2. Customer convenience

3. Cost efficiency

4. Expertise of intermediaries

5. Speed of delivery

9. Define Supply Chain Management and its decision phases.

SCM manages the flow of goods, data, and finances. Phases:

1. Strategy/design

2. Planning

3. Operations

10. Explain the drivers of supply chain performance.

Drivers include:

1. Facilities

2. Inventory

3. Transportation

4. Information

5. Sourcing

6. Pricing

11. What is the role of demand forecasting in supply chain management?

Forecasting helps align supply with future customer demand, aiding in inventory planning, production

scheduling, and minimizing waste.

12. What is meant by planning and managing inventories in a supply chain?

It involves determining what inventory to hold, how much, and where, to balance customer service with cost

efficiency.

13. Discuss the role of procurement in a supply chain.

Procurement ensures the right materials/services are sourced at the right price, quality, and time, essential

for smooth supply chain functioning.

14. Explain the role of transportation in SCM.

Transportation moves products across the supply chain, affects delivery speed, costs, and service quality.

15. What is benchmarking and list out its types.

Benchmarking is comparing business processes/performance with best practices. Types:

1. Internal

2. Competitive

3. Functional

4. Generic

16. What are the obstacles in co-ordination?

1. Lack of information sharing

2. Misaligned incentives

3. Bullwhip effect

4. Poor communication

5. Complexity in processes

1. Classify the supply chain processes in a firm.

1. Customer Relationship Management (CRM)

2. Customer Service Management (CSM)

3. Demand Management

4. Order Fulfillment

5. Manufacturing Flow Management

6. Supplier Relationship Management (SRM)

7. Product Development and Commercialization

8. Returns Management

2. Explain the role and importance of distribution in a supply chain.

Distribution bridges the gap between producers and consumers, ensures timely delivery, reduces

transportation costs, improves customer service, supports inventory management, and adds value through

additional services.

3. Discuss the trends in supply chain management.

Trends include digitization, sustainability, blockchain, agile/lean methods, e-commerce focus, resilience

post-COVID-19, cloud software, and global sourcing.

4. What are the challenges faced by supply chain companies?

Challenges include demand fluctuations, supplier issues, rising costs, global disruptions, compliance issues,

cybersecurity threats, and poor coordination.

5. Write a detailed note on Just In Time (JIT) operations.

JIT minimizes inventory by receiving goods only when needed. Benefits: cost reduction, less waste, improved

efficiency. Challenges: needs reliable suppliers and accurate forecasts.

6. Write a note on predictive variability in inventory forecasting.

It refers to uncertainty in demand/supply predictions. Managed using real-time data, forecasting tools, buffer

stock, and trend analysis.

7. Define forecasting and mention its types. Explain the steps in reducing forecast error.

Forecasting predicts future demand. Types: qualitative (opinions) and quantitative (data-driven). To reduce

error: use accurate data, right models, real-time adjustments, partner collaboration, regular updates.

8. Explain the inventory management concept in detail.

Inventory management covers EOQ, ROP, ABC analysis, safety stock, and JIT. Goals: meet demand, reduce

cost, improve cash flow.

9. Explain the drivers of supply chain performance.

Drivers: Facilities, Inventory, Transportation, Information, Sourcing, Pricing.

10. Write about uncertain demand and safety stock.

Uncertainty in demand is offset by holding safety stock, calculated using variability and lead time to avoid

stockouts.

11. Discuss the trends in strategic sourcing.

Trends include digital tools, global-local sourcing, supplier collaboration, sustainability, analytics, and risk

management.

12. What is the effect of lack of coordination? Discuss the measures adopted for the

betterment of the function.

Effects: bullwhip effect, inventory issues, inefficiency. Measures: info sharing, joint planning, tech integration,

KPIs, trust.

13. Explain the efforts taken to control stock in the operation of supply chain.

Efforts: ABC classification, forecasting, reorder systems, EOQ, JIT, VMI, audits, tech usage.

14. Write about the linkage between CRM and SCM.

CRM provides customer data that aids SCM in forecasting and delivery. Integration improves

responsiveness, satisfaction, and service quality.

15. Elucidate the supply chain performance measures for Agile supply chains.

Measures: lead time, order fulfillment, flexibility, inventory turnover, forecast accuracy, customer satisfaction,

responsiveness, cost metrics.