L5M7 Achieving Competitive Advantage Through the Supply Chain (L5M7) Question and Answers

Manufacturing objectivesemphasise efficiency throughlong production runs,stable design, andinventory bufferingto ensure continuity of output.

Short cited term: “manufacturing – long runs and inventory buffer.” (L5M7 Study Guide, p. 36)

TQM objectives focus oncustomer satisfaction, zero defects, and employee engagement, not financial planning.

Short cited extract: “TQM aims: customer focus, zero defects, continuous improvement – not financial planning.” (L5M7 Study Guide, p. 112)

Primary datais information collectedfirst-hand, includingsurveys, interviews, and questionnaires. Sandy’s approach aligns with primary data collection methods.

Short cited extract: “Primary data: original research such as questionnaires and interviews.” (L5M7 Study Guide, p.141)

Understandingorganisational and national culturesupports collaboration, communication, and innovation across the chain. Cultural awareness enables smoother partnerships and shared values.

Short cited extract: “Cultural understanding assists collaboration and trust within supply-chain relationships.” (L5M7 Study Guide, pp. 58–59)

Porter’sFocus Strategyinvolvestargeting a niche marketto meet unique needs better than competitors.

Short cited term: “focus – targeting a narrow market segment” (L5M7 Study Guide, p. 52).

A downstream supplier influencesmost aspects of qualitybutnot customer perception, which is shaped bymarketing and brand functions.

Short cited term: “except customer perception, influenced by marketing” (L5M7 Study Guide, p. 30).

Multi-sourcingmaintainscompetitionand reduces dependency, promoting better pricing and performance from suppliers.

Short cited extract: “Multi-sourcing maintains competitive tension between suppliers.” (L5M7 Study Guide, p. 70)

Offshoring typically seekscost reduction(e.g., labour arbitrage) while maintaining service/output levels; other motives are secondary. Short cited term: “cost reduction/advantages” (L5M7 Study Guide, domain 1.4 discussion).

Fixed pricingmaintains aconstant pricefor a defined period regardless of market changes, providing stability for both buyer and supplier.

Short cited extract: “Fixed pricing – price remains constant for an agreed duration.” (L5M7 Study Guide, p.188)

Single-sourcingbuildsexclusive, strategic relationshipswith one supplier to secure priority service and joint improvement opportunities.

Short cited extract: “Single-sourcing – exclusivity to gain stronger commitment and collaboration.” (L5M7 Study Guide, p. 81)

According toMichael Porter’s Value Chain,primary activitiesincludeinbound logistics, operations, outbound logistics, marketing and sales, and service.Procurement and HRaresupport activities.

Short cited term: “primary activities – logistics, operations, marketing and sales” (L5M7 Study Guide, p. 76).

Risk management seeks toprevent and mitigate major risks, whiletolerating low-impact riskswhen elimination isn’t feasible.

Short cited extract: “Low-level risks can be tolerated if likelihood and impact are minimal.” (L5M7 Study Guide, p.49)

Vertical collaborationoccursbetween different tiers(e.g., buyer–supplier) to coordinate capabilities for customer value. Short cited term: “vertical collaboration … different levels/tiers” (L5M7 Study Guide, p.90).

Whenknowledge is low, members workindependently; highertechnological readinesscreates deliberate and structured IT use.

Short cited term: “low knowledge → independent working; high tech readiness → structured IT use.” (L5M7 Study Guide, p. 51)

According toPorter’s Five Forces, new automated competitors represent athreat of new entrants, introducing innovation and market pressure.

Short cited extract: “New entrants increase competition and threaten existing players.” (L5M7 Study Guide, p.56)

Six Sigma is adata-driven methodologyaimed ateliminating defectsand reducing variation to improve quality and performance. Short cited terms: “data-driven,” “eliminate defects” (L5M7 Study Guide, p.110).

Relationship effectiveness is damaged bymistrustand poorfeedback/communication. Spend level alone is not inherently harmful if expectations are aligned. Short cited terms: “trust,” “communication/feedback” (L5M7 Study Guide, p.93).

TheSCQFintegrates factors that promote long-term excellence across the chain:leadership, stakeholder commitment, sustainability, information management, and continuous improvement. These underpin effective quality and performance.

Short cited term: “key features include sustainability, information and continuous improvement.” (L5M7 Study Guide, p. 34)

Thefive Golden Metricsof supply chain performance are:safety,quality,delivery performance,total cost, andtotal cycle time. They represent universally accepted indicators of operational excellence.

Short cited extract: “Golden Metrics – safety, quality, delivery, total cost, total cycle time.” (L5M7 Study Guide, p.123)

AClient Experience Strategyfocuses on enhancing theend-to-end customer journeyby understanding customer needs, personalising interactions, and incorporating feedback.

Short cited extract: “Customer experience strategy includes listening to feedback and personalising interactions.” (L5M7 Study Guide, p.183)

Defects discoveredbefore dispatchare classified asinternal failures, including rework, scrap, or re-inspection.

Short cited term: “internal failure = defects found before reaching customer.” (L5M7 Study Guide, p. 128)

ThePDCA Cycle—Plan, Do, Check, Act—provides a structured approach tocontinuous quality improvement. It begins with planning, implementing, monitoring, and then acting to refine the process.

Short cited extract: “The PDCA cycle – Plan, Do, Check, Act – underpins continuous improvement.” (L5M7 Study Guide, p.129)

TheModeis the value thatappears most oftenin a dataset, distinguishing it from themean(average) andmedian(middle value).

Short cited term: “mode = most frequent value.” (L5M7 Study Guide, p. 149)