Question 1 (Marks: 20)
Read the questions below and select the correct answer. There is only one correct answer for each
of the questions. You can write down the question number and the correct alphabet.
Q.1.1 Select the business function that has a short-term transactional approach to buying standard and frequently used products with a strategic focus.
A. Supply chain management
E. None of the above. (2)
Q.1.2 Purchasing and procurement are terms that can be used interchangeably, however, there are noticeable differences between these two terms. Select the statement that best describes procurement.
A. A central focus on sourcing materials.
B. A strategic function with a holistic perspective.
C. Procurement can be described as a range of activities that are centred around satisfying the organisation’s need for goods and services that are needed for the transformation process for their strategic products.
D. The management of an organisation’s resources in a deliberate manner to ensure sustainability.
E. Procurement can be regarded as a detailed process in which a company reviews
suppliers with the intention of analysing sourcing opportunities. (2)
Q.1.3 In the 1980s, Michael Porter popularised the concept of a value chain. The value chain differentiated between two sets of activities: Primary and secondary activities. Select the activities that can be categorised as primary activities.
III. Inbound logistics.
IV. Outbound logistics. (2)
V. Customer service.
A. I, II, III
B. II, III, IV, V
C. III, IV, V
D. I, II, V
E. All of the above.
F. None of the above.
Q.1.4 The purchasing and supply function is crucial to the success of an organisation for many reasons. Which of the following is NOT a reason for their importance?
A. The technological revolution has decreased the life span of products.
B. There has been a consistent rise in inventory costs.
C. The advancement of information technology.
E. Change to tax reforms that hinder the development of international relationships. (2)
Q.1.5 Supply chain management can sometimes be regarded as a fairly new function within businesses. There are key characteristics that one can use to explain supply chain management. Select the statement that does NOT highlight a characteristic of supply chain management (SCM).
A. SCM is a function that can exist in isolation due to the nature of its activities.
B. SCM is characterised by information sharing.
C. SCM is focused on the management of a network of organisations.
D. SCM follows a philosophical approach in which business is conducted with the intent of sharing risks, rewards, and benefits across the supply chain.
E. SCM follows an integrated tiered approach that draws together multiple layers
of an organisation with the intention of emphasising teamwork. (2)
Q.1.6 The selection of suppliers can be argued as one of the most crucial steps in the purchasing and supply management process. Bidding and negotiation take place and usually includes senior management feedback. There are a range of tools that are available which can assist with the communication to potential suppliers. Select the tool/s that can be used for this specific purpose.
A. Request for information. Request for quotation.
B. Request for proposal.
C. Request for bid.
D. All the above.
E. None of the above. (2)
Q.1.7 Companies may engage in supply market research which is filtered into a portfolio analysis matrix which will then divide the total spending across four categories based on risk and supply. Critical products can be described as products that have:
A. High risk and complexity and a high level of spending.
B. High risk and complexity and a low level of spending.
C. Low risk and complexity and a high level of spending.
D. Low risk and complexity and a low level of spending.
E. None of the above. (2)
Q.1.8 Supplier relationship management is a new dimension to the management of external partnerships. The development of a buyer-supplier relationship is strategic in nature and it varies based on the different suppliers. There are essentially three classes of buyer-supplier relationships. Select the correct option pertaining to the three classes of relationships.
A. Transactional, collaborative and alliance.
B. Strategic alliances, joint ventures and exporting.
C. Strategic alliances, joint ventures, and alliances.
D. All the above.
E. None of the above. (2)
Q.1.9 Ethics within an organisation is gaining momentum and will need to be carefully monitored in the purchasing and supply management function. The King Report has served as a guiding document in outlining key requirements. Select the option that does NOT form part of the agenda in enforcing ethics.
A. A corporate culture in support of evidence needs to be encouraged by the board of directors.
B. An assurance statement can be developed to measure the company’s ethical performance.
C. Lower-level management should be the driving force of ethics.
D. Leadership must be effective and based on a strong ethical foundation.
E. None of the above. (2)
Q.1.10 The International Organizations of Standards (ISO) is generally seen as the most comprehensive quality management system in the 21st century. The ISO has developed a set of guiding principles that serve to assist companies in implementing their quality management systems. Select the principles that have been outlined by ISO.
I. Take time to understand the current customers as well as the future customers.
II. Commit to a quality approach.
III. Seek to implement continual improvement for the organisation as a whole.
IV. Create mutually beneficial relationships with external suppliers thus fostering long lasting relationships.
A. I, II,
B. I, II, III
C. I, IV
D. All of the above.
E. None of the above. (2)
Question 2 (Marks: 10)
State whether the following statements are True or False.
Q.2.1 Companies justify the holding of inventory to mitigate against supply risks. (2)
Q.2.2 Production, maintenance, processing, packaging materials, and final products can be regarded as categories of inventory. (2)
Q.2.3 Carrying costs must be managed well as part of efficient and effective inventory management. (2)
Q.2.4 A company should not rely on ethical codes of conduct as this is NOT the most effective measure to prevent unethical behaviour. (2)
Q.2.5 It is expected that companies work with international suppliers as opposed to local suppliers. (2)
Question 3 (Marks: 20)
Q.3.1 Consider this scenario: You are completing an internship at a supply chain organisation. Your supervisor has been tasked with creating a report on outsourcing the construction of a new division of your current building. In preparation for this report, you have been asked
to gather information about this concept.
Q.3.1.1 Tabulate at least five advantages and disadvantages of outsourcing. (10)
Q.3.1.2 You are faced with three possible suppliers – local, national or international. Which supplier would you propose to use? Justify your choice by explaining at least two key points.
– You are required to explain your preferred supplier.
– Provide a justification that is supported by theory and related to the scenario. (10)
Question 4 (Marks: 20)
Q.4.1 Going green is not a trend. As organisations embark on their green sustainability drive, the
supply chain fraternity is embarking on “green procurement”.
Q.4.1.1 In your role as a supply chain practitioner, you have been requested to provide a concise summary of green supply chain management and the various ways in which the purchasing function can positively contribute to
the organisation’s environmental footprint. (5)
Q.4.1.2 Conduct additional research on an organisation that engages in green
procurement and provide a summary of them and their activities (at least two activities should be outlined). (10)
Q.4.1.3 From the activities that your chosen organisation engages in, do you think
there are any additional practices they can engage in? Provide at least two examples to support your stance. (5)
Question 5 (Marks: 30)
Read the following case study and answer the questions that follow.
Gillette’s Total Quality Management System Case Study
Gillette began its global operations in 1905 when it opened a manufacturing plant in Germany. This global strategy and success saw the firm extending its operation to Latin America. Argentina was a potential market after tariffs and business policies were revised. Having operated under unfavourable regime, the firm perceived future competition and decided to create competitive advantages.
Due to the great success of Gillette’s TQM system, this research was commenced to do a case study on “quality at Gillette Argentina”. The paper begins by evaluating the ways in which the firm got its employees to take on the new TQM system. It proceeds to discuss the importance of getting the teams involved in TQM process as well as identifying the ways in which the teams improved the process.
The paper also explains the meaning of the phrase “Beyond the hanging fruits, the most important outcome of this effort was a different way of working with sales” and highlights how Gillette changed the way it looks at its customers. Finally, there is a description of the working culture before and after the implementation of TQM as well as the economic benefits of the system.
Gillette gets employees to take on the new system.
In a firm where decision making is solely the responsibility of leaders such that the employees have to act as the subjects to them, it is likely that the employees would not readily accept the adoption of total quality management.
This means that the employees would rarely have accepted an initiative that their leaders did not support appropriately. The consulting firm played a central role in preaching the benefits of TQM to the leaders. Indeed, the firm reinforced the idea Rotundo had already started to instil in
Argentina. Organizational Dynamics Inc. developed the quality initiative and recommended the creation of a quality structure.
Secondly, Gillette offered training to the employees as a way of preparing them for TQM system. One of the landmark training was FADE that prepared employee for quality action teams. The specialized training involved four phases of problem solving: focus, analyse, develop and execute. The focus phase was concerned with the development of a problem statement; the analyse phase dealt with the use of data to understand the magnitude of the problem; the develop phase involved the determination of a solution and implementation plan; and the execute phase was about implementing the plan and measuring its impact. In addition to FADE training, the employees received training in seven basic quality tools as well as brainstorming, force field analysis and cost benefit analysis.
Furthermore, training was extended to management and leadership levels. The Argentine directors, managers and other officials were trained by ODI as trainers of the rest of the organization. The teams were allocated facilitators who received training on leadership development. Team leaders were trained in areas relating to group dynamics, effective meetings, leadership skills and group conflicts (Donnellon & Engelkemeyer, 1999). As a matter of fact, training was the backbone of the TQM process. Most of the members who got training became experts in their respective areas and eventually steered the process towards success.
Another way that Gillette used to prepared employees for the TQM process was through workshops. Through the leadership of Walker, workshops were conducted with all employees to inform them about the changes that would take place. The staff got information about the new working style and culture to be attained through TQM.
Team sponsors were identified, and their roles explained to the staff. They were to support the teams in any way needed including helping them to attain their objectives with recognition of their empowerment. Other workshops that Walker would offer involved problem-solving and statistical analysis, and at the same time inspiring everyone. This is because TQM requires them to take elevated roles, become self-dependent and consider themselves as the owners of the firm. It is apparent that Gillette had earlier managed its activities in a manner that left the managerial roles such as decision making and steering initiatives exclusively to the leaders. Therefore, the effort to
adopt TQM compelled leaders to take measures that would prepare the employees better for the change. These measures involved several initiatives especially triggered by several key figures in the firm.
The very first initiative Gillette took was to hire the Organizational Dynamics Inc (ODI) as a consulting and training firm. The firm became the key source of information and motivation for the Gillette Latin America management. It can be argued that the source of a successful organizational change begins with leaders who in turn transfer it to employees.
Finally, Gillette endeavoured to meet the challenges of quality that the employees faced. Initially, Rotundo responded quickly to the employee complaints about the contract approach by delegating responsibility to investigate them to Victor Walker. The newly hired quality manager emerged to be a successful preparer of the team members and organizer of TQM process.
Through his stewardship, teams were guided in their TQM process by sponsors and ODI methodology. In addition, a steering committee was formed in an effort to respond to quality challenges.
The council systematically supported the employees towards TQM process and formed the backbone in the creation of a new working culture. Through such support, the employees were assured of the leaders’ commitment to the process and ultimately embarked on the mission whole-heartedly.
Q.5.1 The case study highlights the successful implementation of the TQM approach.
You are required to conduct additional research, and in your own words explain any three TQM principles that Gillette subscribes to which contributed to the TQM approach. You can use citations from the case study, but they will need to be paraphrased. (15)
Q.5.2 The case study focuses on the benefits that one can obtain by employing a TQM approach, in your understanding of supply chain management. According to the case study, identify any two challenges associated with TQM and in your own words, explain what that could mean for Gillette. (10)
Q.5.3 In your studies, you would have encountered the term Quality Management and the two overarching requirements that an organisation will need to meet to have a fully implemented quality management system. State whether Gillette meets these two requirements and justify your answer. (5)
Answers to Above Questions on Logistics and Supply Chain Management
Answer 1: The business function that has a short-term transactional approach to buying standard and frequently used products with a strategic focus is purchasing.
Get completed answers on the questions above on logistics and supply chain from the management experts of Student Life Saviour South Africa.
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