CHAP 1

Q3 Consumers have much more influence in the marketplace today.

What factors have led to this "empowered consumer" situation?
How has this factor changed supply chains in the last 10 to 15
years?

Technology has given consumers the ability to easily log onto internet and
compare prices, quality, and service. Consumers constantly demand
competitive prices, high quality, customization abilities, flexibility, and
responsiveness. Also have an increase in buying power because of higher
income levels. Change from "buyer beware" to "seller beware".
This influence will likely continue due to technologies' exponential growth,
which will possibly hurt supply chains in terms of efficiency.
The impact of the consumer is much more direct for supply chains because
the consumer has placed increased demands at the retail level for an
expanded variety of products and services. Responses to consumer demand
has led to many different variations of the same basic product, stores being
open 24/7,etc., are all extras provided with very low margins on products.
The supply chains have to be performing very efficiently to enable the
retailer and other organizations in the supply chain to make a profit.
Todays consumers are more enlightened, educated, and empowered than
ever before by the information that they have at their disposal from the
Internet and other sources. Their access to supply sources has expanded
dramatically beyond their immediate locale by virtue of catalogs, the
Internet, and other media. They have the opportunity to compare prices,
quality, and service. Consequently, they demand competitive prices, high
quality, tailored/customized products, convenience, flexibility, and
responsiveness. They tend to have a low tolerance level for poor quality in
products and/or services. Consumers also have increased buying power due
to higher income levels. They demand the best quality at the best price and
with the best service. These demands place increased challenges and
pressure on the various supply chains for consumer products. ( page 11)

Q.6 Supply chain managers should be concerned about three flows

in their organizations. What are these three flows, and why are they
important? How are they related to each other?

Answer: The three flows--products and services, information and financials

are very important to the success of supply chain management. Integration
across the boundaries of several organizations in essence means that the
supply chain needs to function similarly to one organization in satisfying the
ultimate customer. Services and products have traditionally been an
important focus as customers expect their orders to be delivered in a timely,
reliable, and damage-free manner; and transportation is critical to this
outcome. The information flow has become an extremely important factor for
success in supply chain management, noting the two way flow. The third flow
is financials or, more specifically, cash, and a major impact of supply chain
compression and faster order cycle times has been faster cash flow. ( page
19)

CHAP 4
What are the basic types of supply chain relationships, and how do
they differ?
Answer: Generally, there are two types of logistics relationships. The first is
what maybe termed vertical relationships; these refer to the traditional
linkages between firms in the supply chain such as retailers, distributors,
manufacturers, and parts and materials suppliers. These firms relate to one
another in the ways that buyers and sellers do in all industries, and
significant attention is directed toward making sure that these relation-ships
help to achieve individual firm and supply chain objectives. Logistics service
providers are involved on a day-to-day basis as they serve their customers in
this traditional, vertical form of relationship. The second type of logistics
relationship is horizontal in nature and includes those business agreements
between firms that have parallel or cooperating positions in the logistics
process. To be precise, a horizontal relationship may be thought of as a
service agreement between two or more independent logistics provider firms
based on trust, cooperation, shared risk, and investments, and following
mutually agreeable goals. Each firm is expected to contribute to the specific
logistics services in which it specializes, and each exercises control of those
tasks while striving to integrate its services with those of the other logistics
providers. Thus, these parties have parallel or equal relationships in the

logistics process and likely need to work together inappropriate and useful
ways to see that the customers logistics objectives are met.(Pages 109-110)
2.How would you distinguish between a vendor, a partner, and a
strategic alliance? What conditions would favor the use of each?
Answer:The range of relationship types extends from that of a vendor to that
of a strategic alliance. In the context of the more traditional vertical
context, a vendor is represented simply by a seller or provider of a product or
service, such that there is little or no integration or collaboration with the
buyer or purchaser. In essence, the relationship with a vendor is
transactional, and parties to a vendor relationship are said to be at arms
length (i.e., at a significant distance). While this form of relationship
suggests a relatively low or nonexistent level of involvement between the
parties, there are certain types of transactions for which this option is
desirable, such as one-time or even multiple purchases of standard products
and/or services.