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Logistics 1

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Logistics 1

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Documentos Sense
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wa he importance of an efficient supply chain This unit explains why an efficient supply chain is important for the success and profitability of a company. Discuss these questions. How would you define a supply chain? ‘What makes @ supply chain efficient? ‘What problems can be caused when a supply chain does not work efficiently? How would you define vertically integrated production? What do you understand by tier-one suppliers? And what are tiertwo, tiethree or tier four suppliers? HY Understanding the main points Read the article on the opposite page and answer these questions. ‘What kinds of company already have efficient supply chains? Why is having an effective supply chain so important, especially in this period of globalisation? What can be the result of supply-chain problems? Which industry sectors have less-developed supply chains? ‘When does the supply chain become especially critical for manufacturers? Why s supply-chain management so Important tothe aerospace industry? Bh Understanding details Read the article again and answer these questions 1 Whyisan efficient supply chain prize worth working for? 2 Whyisit difficult for consumer goods and retailing companies to make improvements to their supply chains? Give tvro examples of what can result from mistakes in the supply chain of retailing companies. Who does Hewlett-Packard’s supply chain expert need to communicate with in its supply chain? ‘What do sunplv-chain managers increasingly need from thelr supply chains? What two examples are given of unexpected problems that can affect a supply chain? ‘Why is improving the supply chain such a challenge for the aerospace and defence industries? ‘What is the cost of a large modem aircraft? ‘Why isthe cost of failure in the supply chain so high forthe aerospace industry? UNIT 1+» THE IMPORTANCE OF AN EFFICIENT SUPPLY CHAIN Control of the’ supply chain turns critical of sthat is happening in their supply chains and fasier access to more acoai- ‘rte data, This means that if there is an unexpected event, such as storms affecting shipping ov a production shortfall, companies can divert stocks cor bring in alternative suppliers. ‘Com- Danies are not just asking suppliers Iwhy there is a problem with an order says Sanjiv Sidu, President of 12, a Vendor of management software for supply chains. “They are asking: “When did you frst know, and why dl you surprise me?” In seotors such a retail, supply-chain problems Fea to ‘Stock-outs’ or empty shelves, which send customers else Where. In heavy or complex manufac- turing, supply-chain problems can lead to cancelled orders running into bile lions of dollars, or severe penalties for Fate delivery. ‘As manufacturers move away from vertically integrated production, where all seps of the production process are ‘ontrelled in-house, the supply chain suddenly becomes critical. "In aero- space atid defence, we are 10 years by Stephen Pritchard of indeed shelves of lst seasons 7% behind the hitech or even automotive ‘mobile phones in the weeks before sectors, an how we improve the per- 'A An efficient supply chain isa prize 2 Christmas, But the sapply chain isnow formance of oar supply chain is quite & ‘worth working for. According to the --movinguptheagendainsiower moving _ challenge, explains Bill Black, Chief consultancy firm Accenture, ‘supply __ sectors. such as heavy manufacturing. Quality Ole at aerospace manulfac- chain leadership" can increase aC Effective supply-chain manage. turer EADS, “The cost of running our ‘company's market value by between 7 ment isthe only Way to make efficient supply-chain logisties is minor, set and 26 per cent above the industry 2 use of global sourcing strategies, and against the $100m cost of an aircraft. average. But forabusiness,evencom- especially the huge manufacturing _ But the costof failure is enormous.” for that prize demands 2 capacity of China and south-east Asia. ‘About 80 per cent of the cost of an Significant investment in escurces. {Although globalisation has reduced 8 aireraft is accounted for by suppliers ve sectors suchas consumer goods and production coss m a wide range of and partners,” says Black, making ‘etiling, established compenieshave 35 Sectors the wendto source components EADS “a co-ordinator of complex already achieved the easiest sapply- of even finished goods from China _producs'. need t0 know ifan event chain efficiencies. Making further and elsewhace has made the supply- __Canaffectour master schedule, and that improvements is much more dificult. chain manager's task far harder. ‘Our % means het need toknow whats hap- B Nonetheless, an eilicieat supply intemal systemshendle more than 700 pening, not just chain isamusi fora widening range of = suppliers," says Christian Verstracte, suppliers, but with fiecshree, -foar or businesses. Fashion, hi-ech and aro- worldwide supply-chain expert at __-fvesuppiers as well” cery retailers realised carly on the _Hewlet-Packard. ‘We have tobe abl Importance arensuring the ign sicck 0 exeMange messages not Just With 2) reached therightstoreattheright time, them, but wih their suppliers. Noone wantsa warehouse full ofsum- DSupply-chain managers in many imerdressesatthe beginningof autumn, sectors are looking for greater visibility a LIMITA ++ THE IMPORTANCE OF AN EFFICIENT SUPPLY CHAIN EY Word search Find words or phrases in the article which it these meanings. 1 companies which set products tothe public (paragraph 8) ro10.|/2S 2 goods or products which are stored and waiting to be sold (paragraph B) “100 3. another name for a shop (paragraph 8) <9" 4 aplace to store goods (paragraph 8) Yio? | 0448 5 tobuy or get materials, components, etc. (paragraph ©) 6 7 8 WE eee wlven not enough goods are produced by a manufacturer (paragraph D) s send to. different destination (paragraph 0) /\ yor é «company that sells to another company (paragraph 0) V2." 9 when shops have empty shelves (paragraph E) > on 10 financial punishments (paragraph E : 411. direct supplies to a customer (paragraph 6) 22 supplies to the suppliers of a company’s cect supplies, suppliers to those suppliers, etc. (pafagiaph 6) ies Tl words often confused 1 Lookat the use of efficient and effective in this sentence and choose the best definition (a or b) for each word. Effective supply-chain management is the only way to make efficient use of global sourcing strategies. )_ when something works well, especially n terms of time and costs 'b) when something works well and produces a good result " 2 Complete these sentences with either efficient or effective. 1. To remain competitive, companies need to have highly.<.supply chains 2. Companies that manage their core processes ina more costs... way than thelr competitors will sain the advantage in the marketplace. 3 Suppliers and customers need to have... ommunication systems in order to share information about production needs. 4 Awell-un supply chain can make a company moré..., leading to significantly reduced production costs, L Word partnerships ‘Match these words to make noun-noun partnerships from the article. 1 production 4) value 2 manufacturing <8) goods 3 market >< 9) capacity 4 industry———__>—) costs o 5 production < +) average 6 consumer 1) shortfall UNIT 4. >> THE IMPORTANCE OF AN EFFICIENT SUPPLY CHAIN [DL verbs and prepositions Complete these sentences using the prepositions in the box. against. away for for for for from i int ‘An efficent supply chain isa prize worth working’... It needs a lot of resources to compete “|. the prize of an efficient supply chain, The importance of the supply chain is moving /4/? the agenda. Supply-chain managers are looking: .faster access to information. Invrases of production shortfalls, companies may need to brine. /./), alternative suppliers. {nthe retail sector, supply-chain problems can lezd .”... empty shelves. The cost of cancelled orders can rup }3: billions of dollars. ‘Manufacturers are moving’! ‘WVertically integrated production, } The costs of running supply chains in the aerospace industry are small when set cost ofbullding an aircraft Fi 10 About 80 per cent ofthe cost ofan aircrafts accounted. bby suppliers and partners. Vocabulary development ‘Match these words and phrases (2-)) with the verbs + prepositions in Exercise D that they can replace (1-10). @) resuttin b) takenup 80) © trying hard to get @) use / work with + ©) leaving | changing rom * A) tryto win’ ) compared with fh) want i) amount to" 5 j) becoming more important on ° eno 11 Based on the information inthe article and your own experience, explain why an efficient supply chain is essentia forall kinds of businesses, Give examples. 2. Whyis effective supply-chain management so important for European companies ‘which Source components trom China ang other paris of Asia? 3 Why does the supply chain become critical when manufacturers move away from vertically integrated production? 4 The main reason for a global sourcing strategy is cost reduction, What are some of the hidden costs of this strategy? RE" rit 2 OTT rem dite) Laem eg t- exact 19 This unit describes how Procter & Gamble is using its supply chain not only to improve profits but also to increase sales growth. Eee Discuss these questions, 1. Inwhat weys do you think a company producing consumer ptoducts can use its supply chain to Increase sales growth? 2 What are the benefits to retailers if their suppliers have efficient supply chains? 3 How can deliveries to the distribution centre of 2 retailer be made more efficient? Understanding the main points Read the article on the opposite page and choose the statement that expresses the ideas in the article ‘most accurately. 41. Suppliers need to reduce their supply-chain costs because of increased transport costs, 2 By reducing supply-chain costs, Procter & Gamble (PG) is achieving higher profits. 3. PRGis using its supply chain to increase sales growth, Understanding details Read the article again and answer these questions, 1. What is Keith Harrison's job, and when did he start it? 2 How big is P&G's supply chain? 3. What pressure are retailers and suppliers under? 4 What is one thing that P&G is trying to do with its supply chain? 5 What else is P&G trying to do with its supply chain? 6 How does supply-chain management usually operate in a company? 7 How can a suppliers effective supply chain help retailers? 8 What does P&G want from its customers if it improves its supply-chain performance ‘and reduces their out-of-stocks and inventory levels? 9 How important a customer is Wal-Mart for P&G? 10 What kind of co-operation do Wal-Mart and P&G have? 11 Is P&G the only company to have access to Wal-Mart's Retail 12 What 's special about P&G's Missour factory? UNIT2 + USING THE SUPPLY CHAIN TO INCREASE SALES Adding value with the a chain by Jonathan Birehall A. Asthemanagerin chars ofthe world’s farges supply chain, Keith Hemrison believes te time has come to gve the business of logistics more credit. + The Heal af Global Deve Supply Procter de Gamble believes the search fora competitive edge wll focus more ‘on supply-chain efficiency as retailers: and suppliers atte boge increases ‘im raw material and energy costs. “Today you have road congestion, you have freight costs, driver shortages, capacity ees, Working copa isat premium. Competition among retailers and vendors i higher. AMV oF this is patting pressare on having 3 sore elicient supply chain, This i ‘more critical than thas been before. Since his appointment in 2001, 10 Mr Hamson fas beens the forefront of efforts to drive costs from P&G's Supply chain. Helping the eompeny testis long-term sales and earings growth target, in spite of sursing 2s lnput costs, Bute says P&G has also teen joking increasingly overthe pst three years at ways 10 turn improve- 50 eustomer’s inventories, 1 Want more deliveries oma storo‘by-store basis for ments inthe supply chain into top-line than. just the "supplies of the year” _a single test product. Rather than ‘sles growth. “We'retrying tomakethe award.” he says. "How do we get > shipping the required volume toa cis- 2» sopply chain into a growth engine for that value that We've created at least tnbutionenze, where itis then divided the company,’ he says. “Aol of the partially reinvested in growing our up for each store the shipments are i Sloe gh ee neers t6 a) ee te cae ened Beret reactive, or passive, cost control. But___better features, moce display, better right store. When the goods arrive at ‘wethinkthere’salso an opportunity foc shelving?” ‘© the Wal-Maa distsbution centr, they ss usaboto use the supply chaintocreate “Asan exampleofthe patemtialbene- are moved direcly from P&G's truck top-line growthas well ashotiom-line fis, Mr Harrison gives the example tothe appropriate Wal-Mart truck, with performance. © of pil project wth Wal Martin the no tine in storage, itis assembled for € “An effective supply chain helps US, whose worldwide stores account __a store, and itis just losing through manufacturers by reducing reiler’s fer 15 percent of B&G'soveal sales. as the system says Me Hiariso. © ‘outot-stocks', which in tim prevents ‘The two established a cooperative G Kevin O' Marah, logistics consult- lost sales, Those sales also benefit the relationship inthe late 1980s, starting ant at AMR Research, belives P&G is reuiler, while efficient delivery of 65 with Wal-Mlar's decision to allow the fist consumer goods company to produeis to meet demand can also” P&G and other suppliers access the use the Retail Link data inthis Way, reduce the costs of holding inventory customer sales data collected by its 4s tothe retailer. Reial Link computersystem, D P&G istalingretilestnatitshould F Over the past 12 months, a P&G be rewarded forthe benefits is supply > factory ia Missouri as been using ive [ chain delivers. “If [do something sales data from stores not 0 forecast ‘with my supply chain to reduce my demand but to schedule replenishment is UNIT2. +» USING THE SUPPLY CHAIN TO INCREASE SALES ore Word search Find words or phrases in the article which fit these meanings. something that gives a company an advantage over others (paragraph A) Fight against (paragraph 4) extremely valuable and rare, which a lot of people want (paragraph A) inthe leading position (paragraph 8) rapidly increasing (paragraph 8) the way goods are arranged ina store so they are easily seen by customers (paragraph D) a test done on a small scale to see how something works (aeragraph E) Information about sales, which is current or n realtime (paragraph F) replacement of what has been used or sold (paragraph F) 10 put together in 2 certain way (paragraph F) Cet ovewen i Sentence completion Use the words and phrases in the box to complete the sentences. ight costs growth targets salesdata vendors fentory replenishment deliveries capital 1. To keep costs down, itis important for retailers to keep their.......levels as lows possible. 2 IFretailers carry too much stock, they will use a lot of their : 3 Amore cost-effective way to operate is to schedule... .......on a just-in-time basis. 4 If suppliers have live access to a customer's . they can prepare deliveries specially for each store. 5 Suppliors are alse known as... 6 Delivering goods by truck now takes longer in many countries due to increased 7 With rising ol prices... .-are also going up. & Atraditional aim of supply-chain managers is. - keeping costs down, 9 PAG Is using ts supply chain to meet sales Word families Complete the chart, ' shipment investment { replenishment : [ storage fe competition manufacturer 2 UNIT2.*> USING THE SUPPLY CHAIN TO INCREASE SALES Understanding expressions ‘Choose the best explanation foreach phrase From the article. 1 capacity issues: (line 13) €)_ problems about the company’s expertise ) problems about production volumes 2 ‘input costs.’ (line 25) @) costs of materials purchased by a company 1H) coste of manpower employed by a company “= top-line sales growth.’ (ines 28-29) @) increased sales turnover 'b) better sales of the most profitable products 4 ‘

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