Title Final LT POM-share ✅

TA Mai Tuyền CHAPTER 11 Question 1: What is Supply Chain Management (SCM)? What is its strategic role in business? Supply Chain Management (SCM) is the coordination, integration, and optimization of all activities involved in the flow of goods, services, information, and finances from raw material suppliers to the final customer. The supply chain includes every step that adds value to the product or service—procurement, production, inventory, transportation, distribution, and customer service. SCM is not just an operational process—it is a strategic tool that enables companies to strengthen their competitive advantage by: ● Reducing operational costs through inventory and logistics optimization ● Enhancing customer satisfaction by ensuring on-time delivery and consistent product quality ● Speeding up market responsiveness, which is crucial in fast-moving industries ● Increasing flexibility, helping firms adapt to demand fluctuations or supply disruptions 🔹 Example 1: Amazon – The company treats SCM as a core strategic asset. It has heavily invested in intelligent fulfillment centers, demand forecasting algorithms, and autonomous delivery systems. This allows Amazon to provide one-day or same-day delivery, creating a superior customer experience and reinforcing customer loyalty. 🔹 Example 2: Zara (Inditex Group) – Known for its fast fashion supply chain, Zara manages every part of the value chain from design to distribution. Its factories are located close to its headquarters in Spain, enabling the company to respond to new fashion trends in about two weeks—far faster than competitors. This results in a significant competitive edge and lower inventory waste. These two examples clearly demonstrate that SCM is not merely about saving costs but acts as a strategic lever. For Amazon, it's about service excellence and delivery speed; for Zara, it's about agility and inventory control. Both use SCM to directly align operations with business strategy. Question 2: What is the difference between “Make-or-Buy” and “Outsourcing”? When should each strategy be used? The “Make-or-Buy” decision is a fundamental strategic choice in supply chain management. It involves evaluating whether a company should produce a product/component/service Mai Tuyền: TA BRM, POM (Pro Oper Mana), Log BA, Quality mana Thesis, UWE Top Up, Data_SmartPLS_SPSS
TA Mai Tuyền internally (“make”) or purchase it from an external supplier (“buy”). This decision influences cost structure, control over quality, delivery reliability, and intellectual property. Outsourcing, on the other hand, is a broader concept where an entire function, process, or set of tasks is transferred to an external organization, often for strategic reasons. While "buy" typically refers to procurement of specific materials or parts, "outsourcing" may include comprehensive activities such as logistics, IT services, customer support, or even manufacturing. When to "Make": ● When the activity is core to the company’s competitive advantage ● When strict quality control or intellectual property protection is required ● When the company has available capacity, technology, or labor When to "Buy" or "Outsource": ● When the activity is non-core or not within the company’s expertise ● To reduce costs by leveraging specialized suppliers or economies of scale ● To increase flexibility, scalability, and focus on core competencies Example 1: Apple Inc. Apple represents a hybrid case of both make and buy decisions. The company designs its proprietary M-series processors (ex: M1, M2), making this a “make” decision even though the physical chip fabrication is done by TSMC (outsourced manufacturing). Apple also buys displays, batteries, and other components from suppliers like Samsung or Sony. Apple chooses to “make” critical components that define performance and user experience, such as its chips, to protect intellectual property and ensure optimization with software. Meanwhile, “buying” displays and sensors allows Apple to benefit from the expertise and R&D investment of specialized suppliers. This combination helps Apple maintain control over innovation while managing costs. Example 2: A mid-sized restaurant chain A growing restaurant brand may choose to make its signature sauces in-house to maintain unique taste and branding. However, it may buy or outsource the baking of bread or delivery logistics to third parties. The sauce is core to the brand’s identity and customer satisfaction, making internal production strategic. However, baking bread or managing deliveries is less differentiating and more Mai Tuyền: TA BRM, POM (Pro Oper Mana), Log BA, Quality mana Thesis, UWE Top Up, Data_SmartPLS_SPSS
TA Mai Tuyền cost-effective when handled by specialized external providers, allowing the restaurant to focus on food innovation and customer service. Conclusion: While the “make-or-buy” decision typically focuses on whether to internally produce a specific item, outsourcing involves broader strategic delegation of entire functions or processes. Both require careful cost-benefit analysis, including consideration of quality, control, risk, and strategic importance. A well-balanced make-buy/outsourcing strategy can enhance supply chain efficiency, reduce overhead, and strengthen a firm’s competitive positioning. Question 3: What are the six sourcing strategies in supply chain management? What are the advantages and disadvantages of each? In supply chain management, sourcing strategy refers to how a firm selects and manages its suppliers. Choosing the right sourcing strategy is essential because it directly affects cost, quality, innovation, and the resilience of the supply chain. Heizer and Render (2014) describe six main sourcing strategies, each with unique advantages and drawbacks depending on the business context: 1. Many Suppliers Strategy In this traditional approach, the buyer purchases a product or component from multiple competing suppliers. The focus is on price-based competition. ● Advantages: ○ Encourages competitive pricing ○ Reduces dependency on a single supplier ○ Increases flexibility and capacity during demand surges ● Disadvantages: ○ Lower supplier loyalty ○ Difficult to achieve long-term quality improvements ○ Higher administrative overhead Example 1: Large automotive companies like General Motors use many suppliers for commodity parts like bolts or nuts, which helps drive down costs. This approach ensures price competitiveness but may hinder collaborative innovation due to transactional relationships. Example 2: Retailers may source the same product from different manufacturers to ensure supply continuity during peak seasons. While effective in balancing supply risk, quality consistency can be an issue. 2. Few Suppliers Strategy Mai Tuyền: TA BRM, POM (Pro Oper Mana), Log BA, Quality mana Thesis, UWE Top Up, Data_SmartPLS_SPSS