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Master the CSCP Exam

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This study pack has been prepared to quickly review and learn the CSCP key concepts, formulas and definitions. Because the CSCP exam needs a common understanding of the Supply Chain vocabulary and definitions, this guide helps you to summarize all the must know concepts and formulas. This book is not a guarantee to pass the exam but just the greatest help to go through the thousand pages you usually need to read and learn from the CSCP books.
The formulas and KPIs are also collected through the various modules and chapters and aggregated into one single formula sheet.

This eBook includes 132 pages and contains all the CSCP modules:

  • Module 1: Fundamentals of Supply Chain Management
  • Module 2: Supply Chain Strategy, Design, and Compliance
  • Module 3: Implementation and Operations 

 

Table of contents

Preface
Get ready for the CSCP
Samples CSCP Questions
Formulas sheet
Module 1: Fundamentals of Supply Chain Management
Module 1A: Supply Chain Management Concepts
Module 1B: Supply Chain Alignment with Business Strategy
Module 1C: Supply Chain Design and Improvement
Module 1D: Inventory Management
Module 1E: Logistics Fundamentals
Module 1F: Market Segmentation
Module 1G: Demand Planning
Module 1H: CRM concepts
Module 2: Supply Chain Strategy, Desi8gn, and Compliance
Module 2A: Sustainability
Module 2B: Risk Management
Module 2C: Globalization
Module 2D: Logistics
Module 2E: Managing the Supply Chain
Module 2F: Technology
Module 2G: Influencing and prioritizing demand
Module 2H: CRM
Module 2I: Supplier Relationship Management (SRM)
Module 2J: Inventory Planning and Control
Module 3: Implementation and Operations
Module 3A: Supply Chain Dynamics
Module 3B: Managing Supply from Internal Sources
Module 3C: Managing supply from external sources
Module 3D: Implementation of Demand Plans
Module 3E: Continuous Improvement
Samples concepts you should know after learning
Quick interesting notes from a CSCP reference book
The END…

 

Book preface

This study pack has been prepared to quickly review and learn the CSCP key concepts, formulas and definitions. Because the CSCP exam needs a common understanding of the Supply Chain vocabulary and definitions, this guide helps you to summarize all the must know concepts and formulas. This book is not a guarantee to pass the exam but just the greatest help to go through the thousand pages you usually need to read and learn from the CSCP books. The formulas and KPIs are also collected through the various modules and chapters and aggregated into one single formula sheet.

The Module 1 covers the basic supply chain features: key supply chain processes, functions and integration in any industry context and key methods (alignment, continuous improvement, management techniques, KPIs…) as well as a deep introduction on the CRM (Customer Relationship Management) business process and its related tools.

The module 2 covers the supply chain strategy, design and compliance. It deals on understanding the key elements to design a sustainable supply chain (balancing risk with rewards, tackling internal and external context, IT tools), also placing a growing importance on the supply chain regulations (international & global regulations, industry specific, green supply chain…). CRM and SRM (Supplier Relationship Management) are the two key concepts in working with the external enterprise and should be deeply understood.

The module 3 deals with supply chain implementation and operations. For supply chain experienced people, this chapter is the easiest to go through as it deals with common techniques such as MRP, CRP, MRP-2, Lean Management, Supply Management, S&OP, ATP, and Just-In-Time…

 

 

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  Sample Chapter

Module 1A: Supply Chain Management Concepts

The focus now is on implementing total supply chain solutions that required collaboration from all SC partners in order to respond to global expansions, increased complexity & scope and to greater market volatility.


1) Basic Supply Chain: Network of entities and processes (engineered flow)
a) 3 main entities: Supplier, Producer and Customer – from raw material extraction till selling end item to a user.
b) Structures: Vary based on demand history, business focus and needs for connectivity, technology and equipment. Three main SC strategies: stable – focused on efficiencies and cost performance, reactive – to ensure throughput at any cost and efficient reactive – efficient, low cost and integrated. Be aware that SC cost can be up to 50% company turnover.
c) 4 Flows: Goods & services, information, cash and reverse flow.

2) SCOR Model: Framework to link business processes, metrics, best practices and technology features
a) Plan
b) Source
c) Make
d) Deliver
e) Return

SCOR does not apply to Sales & Marketing, R&D and Product Development processes. SCOR do not address but assumes they exist: Training, Quality, IT, Admin. The SCOR model has applicability in sustainable SCM.

3) Vertical vs. Horizontal integration: Shift from vertical to horizontal (lateral) integration.

• Vertical: A firm controls multiple links in the SC from raw materials to retail sales. Benefits are control, visibility, same management and no competition for supplies.
• Lateral: Coordinated management of separately owned links in the SC: “outsourcing”. Benefits are economies of scale & scope, improved business focus, leveraging competencies. Drawback: Tough to synchronize the network – potential lack of visibility.
• Keiretsu: intermediate form of integration: firms remain independents but share some stock & risks. Work closely such as sole sourcing or financial backing.

The 4 stages of SCM evolution:

• Stage 1: Multiple dysfunction: no plan – impulsively, guesswork forecasting – marketing optimism, high inventories at numerous warehouses, basic MRP.
• Stage2: Semi functional enterprise: functional areas defined but without collaboration. No partnership. Initiatives in silos (purchasing, warehousing, inventory reduction). MRP 2 in place with some cross-functional integration.
• Stage3: Integrated enterprise: Integrated operations. Improvement management of risks. Increase sustainability internal processes integration, cross-functional cooperation, MRP 2, ERP, collaborative design, market segmentation, enhanced warehousing, forecasting, inventory, logistics. Subcontracting with a logistic supplier.
• Stage4: Extended enterprise: Process integration across entities, IT connexion -EDI, extranets/peer-to-peer Collaboration, CPFR, S&OP meetings, Supply chains competition.

4) Supply Chain Management objectives
The SC is about creating net value for customers & stakeholders, balancing varied stakeholder values. To enhance the Customer values: Quality, Affordability, Availability, Service; The Social values: socially desirable goods, avoid negative side effects (reverse SCM); The Financial values: cut cost that impact net profit, investments, gains distribution among all partners; and the Sustainable values (green SC).

a) Improved customer service: Availability (measured by stockout frequency, fill rate and order ship complete), operational performance (flexibility, order cycle time) and customer satisfaction.
b) Efficient use of system wide resources: Efficiency is the standard output compared to actual expected output. Inward-focused, determine how a SC process can be done less expensively, in less time with fewer resources.
c) Effective used of system wide resources: Effectiveness is being outward focused – on the customer ‘needs and wants while still meeting cost objectives.
d) Leverage of partner strengths: partnership is a relationship based on trust, shared risk and rewards aimed at achieving a competitive advantage.

5) Supply Chain Management benefits

a) Improved market knowledge: SC gathers & share data from key partners.
b) Increase velocity: relative speed of all transactions in a SC. Can be enhanced with more rapid transportation, reducing inventory idle time trough JIT, remove non-value added activities…
c) Increase visibility of flows: trough better technology trough partners.
d) Reduced variability of flows: fluctuations above/below an average value. The bullwhip effect is an extreme change in the supply position upstream generated by a small change in demand downstream. Inventory can quickly move from being backordered to being in excess due the serial nature of communications order up the chain with inherent transportation delays. 2 more V: Variety (mix of products) and Volume.
e) Integrated operations: Important as to numerous partnerships with suppliers/customers. RFID is one example.
f) Improved management of risk: Process of identifying risk, analyze exposures to risk, determine how to handle those risks (avoiding, accepting, transferring or mitigating). Include a risk response plan & planning.
g) Increased sustainability: Similar to green. Refer to the need for economic activity to operate within limits imposed by natural resources.

6) Accounting and financial statement basics

a) Flow of funds: Goes upstream: customer -> producer -> supplier. Not linear as upfront payment can occurs before purchase. Critical to improve the flow of funds to reduce cash-to-cash cycle time, improve customer-supplier relationship (lower risk, improve reliability, reduces imbalances between large and small player).
b) Spend management: Manage purchase of goods & services in a SC, including outsourcing and procurement. Consolidation internal demand across business functions to find areas for discounts. Manage the outflow of funds and coordinate with AP.
c) Standard costing: The target cost of an operation, process, or product including direct material, direct labor and overhead charges. Cost = Volume * Rate.
d) Balance sheet: Financial statement showing the resources owned, debt owned and owners ‘share of a company at a time. Assets = Liabilities + Owner ‘Equity. Often called a “snapshot” of the company financial position, because it is a static view of financial value or net worth at a time.
e) Income statement: Cumulative and dynamic (over a period of time). Income equal revenues less expenses.
i) Profit margin = Sales – COGS.
ii) Gross profit margin = Total revenues – COGS.
f) Statement of cash flow: Sum in any time period of all cash receipts, expenses and investments. There are 3 factors that determine cash flows: sales, after-tax operating profit margins, and capital requirements.
i) Net cash flow = Net Income + net change in operating (Inventory + AR - AP) + net change investing + net change in financing.

 

After reading you should be able to answer the following concenpts and easily pass the CSCP exam:

• What are the balanced Scorecard implementation steps?

• What are the ERP implementation caveats and inter-organization integration barriers?
• What is called Variability?
• What is a Strategic Plan?
• Why Hazardous Good documentation used for?
• What is a ROI? What is the cash flow calculation?
• Which KPIs can be used for NPI, Variability and Merchandizing?
• How many levels are in the CPFR?
• What is a value stream map?
• What are the most common transportation methods?
• What are the SRM/CRM strategy implementation steps?
• What is Design for Manufacture (DFM)?
• What types are RFID tags are seen?
• What is the difference between a strategic alliance vs. partnership?
• What are some examples of strategic alliance?
• What is a decoupling point? Why is it strategic?
• What are the Demand planning components
• What is the cycle stock?

 

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