2.3.4

Effective Supply Chains

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Effective Supply Chain Management

Working with suppliers to make sure that key processes are running efficiently and cost effectively is important for a business.

Long-term relations

Long-term relations

  • Building long-term relationships with suppliers can help to lower costs even more in the future.
    • BMW Mini use Continental tyres when they build new Mini cars. These tyres are transported between Continental and BMW car production plants using logistics companies like Plant Wackersdorf.
JIT production

JIT production

  • A JIT (just in time) method of distribution can be used by the businesses to make sure the supply chain is efficient and reliable.
Supplies at best price and quality

Supplies at best price and quality

  • Having a well organised supply chain has important repercussions for the price and the quality of a final product.
  • Price and quality are the two main ways that businesses compete with each other.
Reduce waste

Reduce waste

  • Cutting any waste and unnecessary costs to create a streamlined process.
  • This can help to reduce costs and as a result, increase profits.

Choosing Suppliers

Lots of factors affect a business' choice of suppliers:

Cost

Cost

  • Firms usually decide which suppliers they want to work with based on the prices that they are offered.
  • A firm like Aldi or Primark, which competes based on charging lower prices to consumers, will put lower average costs for supplies as their top priority.
Quality

Quality

  • Quality is another key area where firms compete.
  • This is more important for firms like Waitrose, who pride themselves on delivering high quality products.
Reliability

Reliability

  • If a supplier is unreliable it can lead to regular breakdowns in the supply chain.
  • Products need to be delivered on time (for example Continental’s tyre deliveries to BMW Mini) and they need to come from a reliable supplier and through a reliable distributor.
Ethical and environmental considerations

Ethical and environmental considerations

  • There can often be a trade-off between costs and whether a product or service is made ethically and in an environmentally friendly way.
  • Some firms will place this as a high priority. Firms that advertise themselves as environmentally friendly and ethical, like the Body Shop, will find this is even more important.
Jump to other topics
1

Investigating Small Business

1.1

Enterprise & Entrepreneurship

1.1.1The Dynamic Nature of Businesses1.1.2Risk & Reward1.1.3The Role of Business Enterprise1.1.4The Role of Business Enterprise 21.1.5The Role of the Entrepreneur1.1.6End of Topic Test - Dynamic Nature of Business1.1.7Grade 9 - Dynamic Nature of Business
1.2

Spotting a Business Opportunity

1.2.1Customer Needs1.2.2Market Research1.2.3Market Segmentation1.2.4The Competitive Environment1.2.5Primary & Secondary Market Research1.2.6End of Topic Test - Business Opportunities1.2.7Application Questions - Business Opportunities1.2.8Exam-Style Questions - Market Segmentation1.2.9Diagnostic Misconceptions - Competition
1.3

Putting a Business Idea into Practice

1.3.1Business Aims1.3.2Business Objectives1.3.3Business Revenues & Costs1.3.4Costs - Calculations1.3.5Revenue - Calculations1.3.6Business Profits & Break-Even Analysis1.3.7Profits & Losses - Calculations1.3.8Interest - Calculations1.3.9Cash & Cash Flow1.3.10Cash & Cash Flow 21.3.11Cash Flow - Calculations1.3.12Sources of Business Finance1.3.13End of Topic Test - Business in Practice1.3.14Grade 9 - Business in Practice1.3.15Exam-Style Questions - Business in Practice1.3.16Diagnostic Misconceptions - Profit1.3.17Diagnostic Misconceptions - Company vs Business1.3.18Diagnostic Misconceptions - Economies of Scale1.3.19Diagnostic Misconceptions - Cash Flow1.3.20Diagnostic Misconceptions - Break-even1.3.21Diagnostic Misconceptions - Fixed Costs
1.4

Making the Business Effective

1.4.1The Options for Start-Up & Small Businesses1.4.2Limited Liability1.4.3Franchising & Not-For-Profits1.4.4Business Location1.4.5The Marketing Mix1.4.6Business Plans1.4.7End of Topic Test - Effective Business1.4.8Application Questions - Effective Business1.4.9Exam-Style Questions - Business Plans
1.5

Business Stakeholders

1.5.1Business Stakeholders1.5.2Technology & Business1.5.3Legislation & Business1.5.4Legislation & Business 21.5.5The Economy & Business1.5.6External Influences1.5.7End of Topic Test - Business Stakeholders1.5.8Grade 9 - Business Stakeholders1.5.9Diagnostic Misconceptions - Recessions
2

Building a Business

2.1

Growing the Business

2.1.1Business Growth2.1.2Finance2.1.3Changes in Business Aims & Globalisation2.1.4Ethics & Business2.1.5The Environment & Business2.1.6End of Topic Test - Growing a Business2.1.7Application Questions - Growing a Business2.1.8Exam-Style Questions - Business Growth
2.2

Making Marketing Decisions

2.2.1Product2.2.2Product Life Cycle2.2.3Price2.2.4Pricing Methods2.2.5End of Topic Test - Product & Price2.2.6Grade 9 - Product & Price2.2.7Promotion & Advertising2.2.8PR & Sales Promotions2.2.9Sponsorship & Product Placement2.2.10Promotional Mix2.2.11End of Topic Test - Promotion2.2.12Application Questions - Promotion2.2.13Exam-Style Questions - Promotional Mix2.2.14Place & Wholesalers2.2.15Direct to Consumer2.2.16E-commerce & M-commerce2.2.17Diagnostic Misconceptions - Decreasing Price2.2.18Diagnostic Misconceptions - Advertise vs Promote2.2.19Diagnostic Misconceptions - Social Media
2.3

Making Operational Decisions

2.3.1Job Production2.3.2Batch & Flow Production2.3.3Working with Suppliers2.3.4Effective Supply Chains2.3.5Just In Time & Just In Case2.3.6Managing Quality2.3.7Total Quality Management2.3.8The Sales Process2.3.9End of Topic Test - Operational Decisions2.3.10Grade 9 - Operational Decisions2.3.11Exam-Style Questions - Managing Stock2.3.12Diagnostic Misconceptions - JIT vs JIC
2.4

Making Financial Decisions

2.4.1Gross Profit & Net Profit - Definitions2.4.2Gross Profit - Calculations2.4.3Net Profit - Calculations2.4.4Rate of Return2.4.5Rate of Return - Calculations2.4.6Research & Financial Data2.4.7Marketing Data2.4.8Percentage Change - Calculations
2.5

Making Human Resource Decisions

2.5.1Organisational Structures2.5.2Organisational Structures 22.5.3Recruitment2.5.4Effective Recruitment2.5.5Training a Workforce2.5.6Motivating a Workforce2.5.7End of Topic Tests - Human Resources2.5.8Application Questions - Human Resources2.5.9Exam-Style Questions - Human Resources2.5.10Diagnostic Misconceptions - Owners vs Shareholders2.5.11Diagnostic Misconceptions - Internal Recruitment2.5.12Diagnostic Misconceptions - Employee Motivation

Practice questions on Effective Supply Chains

Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.

  1. 1
    Why should businesses try to build long-term relationships with suppliers?Multiple choice
  2. 2
    What method of distribution can be used by a businesses to make sure their supply chain is as cost efficient as possible?Multiple choice
  3. 3
    Why should businesses work with suppliers to build efficient supply chains?True / false
  4. 4
    To which business is the quality of suppliers' raw materials likely to be more important to?Multiple choice
  5. 5
    What are the factors that affect a business' choice of suppliers?Fill in the list
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Working with Suppliers

Just In Time & Just In Case