CSCP (WorldatWork Rewards Certifications) cheat sheet

Strategy hierarchy: corporate strategy sets scope and portfolio, business unit strategy sets competitive priority (cost, delivery, quality, flexibility, innovation), supply chain strategy sets the structural and infrastructural choices that deliver that priority.

Strategic fit test: the supply chain's responsiveness/ efficiency position must match the implied uncertainty of demand it serves; high implied uncertainty calls for responsiveness, low implied uncertainty for efficiency.

Implied demand uncertainty rises with: new-product share, forecast error, product variety, required service level, lead time customers will tolerate being short, and price/demand variability.

Efficiency frontier: a firm is only dominated when another firm delivers higher service at lower total cost; shifts in the frontier come from technology, process, or structural change, not from reallocating existing trade-offs.

Four competitive priorities trade-off map: cost leadership favors scale, utilization, and low variety; differentiation favors variety, speed, and service; responsiveness favors buffer capacity and flexible supply; risk-hedging favors multiple sources and inventory.

SCOR performance attributes: reliability (perfect order fulfillment), responsiveness (order fulfillment cycle time), agility (upside/downside flexibility, risk mitigation), cost (total SC cost), asset management (cash-to-cash cycle, return on fixed assets).

Cash-to-cash cycle = days inventory outstanding + days sales outstanding - days payables outstanding; shortening it releases working capital without changing profit.

Total delivered cost, not unit purchase price, is the correct basis for sourcing and network decisions: include freight, duties, inventory carrying, quality, and risk costs.

Push-pull boundary: push (forecast-driven) stages exploit economies of scale; pull (order-driven) stages exploit demand information; move the boundary downstream as product variety and forecast error increase.

Network design decision sequence: define service requirements and demand zones, generate location and capacity alternatives, evaluate total cost (transportation, facility, inventory, labor, taxes), then test sensitivity to demand and cost assumptions.

Center-of-gravity method minimizes weighted transportation distance: locate at the demand-weighted average of coordinates; use it as a starting point, then adjust for capacity, labor, and land constraints.

Warehouse economics: total logistics cost curve is U-shaped in number of facilities - transport cost falls as facilities increase, facility and inventory cost rise; optimum is where marginal savings equal marginal costs.

Postponement (delayed differentiation) pays when: multiple variants share common subassemblies, holding cost of components is lower than of finished goods, and manufacturing/assembly step can be deferred past the order point.

Risk-pooling benefit grows with the square root of the number of pooled locations: safety stock for n pooled locations is approximately the safety stock of one location times the square root of n, assuming independent demand.

Product compliance obligations typically attach to the economic operator placing goods on the market; EU REACH and RoHS restrict substances, CE marking asserts conformity, and conflict-minerals rules require smelter-level due diligence reporting.

Sustainable design levers: design for disassembly and recyclability, reduce packaging weight and cube, shift to rail/ocean for non-urgent freight, and use scope 1/2/3 emissions accounting to target the largest footprint.

Incoterms allocate cost, risk, and customs responsibility: FCA and FOB transfer risk at origin, CIF and CIP add freight and insurance to a named destination, DAP and DDP place delivery obligations at destination (DDP includes import duty).

Customs and trade compliance: HS classification drives duty rate; valuation method (transaction value first) drives duty base; origin rules (substantial transformation, regional value content) drive preferential tariff eligibility.

Forecast accuracy metrics: MAD = mean absolute deviation; MAPE = mean of |error|/actual; bias = mean of (forecast - actual); tracking signal = running sum of forecast errors / MAD, with control limits typically ±4.

Moving average smooths noise but lags trends; exponential smoothing uses F(t+1) = alpha*D(t) + (1-alpha)*F(t); higher alpha tracks changes faster and amplifies noise.

Holt's method adds a trend component; Holt-Winters adds seasonality; choose the model by out-of-sample error, not by in-sample fit.

Seasonal decomposition: seasonal index = period average / overall average; deseasonalize demand before trend fitting, then reseasonalize the forecast.

Safety stock = z * sigma of demand during lead time; for a 95% cycle service level z is about 1.65, for 99% about 2.33; combine demand and lead-time variability when both are uncertain.

Fill rate and cycle service level differ: cycle service level is the probability of no stockout per replenishment cycle; fill rate is the fraction of demand met from stock and is always higher for the same safety stock.

Newsvold critical ratio: optimal service level = underage cost / (underage cost + overage cost); applies to perishables, fashion, and one-time buys.

EOQ = square root of (2 * annual demand * order cost / annual holding cost per unit); total cost is minimized where ordering cost equals holding cost.

Sales and operations planning reconciles one demand plan with supply, finance, and product plans over a rolling horizon; consensus forecasting combines statistical baseline with sales and customer input, and the plan is frozen at the demand-time fence.

Sourcing portfolio matrix (Kraljic): leverage items (high spend, low risk) - competitive bidding and volume consolidation; strategic items (high spend, high risk) - partnership and joint development; bottleneck items (low spend, high risk) - secure supply and find alternatives; noncritical items (low spend, low risk) - simplify and automate.

Total cost of ownership components: unit price, freight and duties, inspection and quality cost, inventory carrying cost, transaction and admin cost, supplier management cost, and cost of risk/obsolescence.

Make-or-buy analysis compares fully loaded internal cost (including allocated fixed cost that may not be avoidable) against supplier price plus transition, quality, and coordination costs.

Supplier selection scorecard criteria: capability and capacity, quality systems, cost competitiveness, delivery performance, financial health, compliance and ESG, and geographic/risk profile; weight criteria before scoring to avoid post-hoc rationalization.

Supplier segmentation drives governance: strategic suppliers get joint business plans and multi-year agreements; transactional suppliers get catalogs, e-procurement, and purchase cards.

Contract forms: fixed-price shifts cost risk to the supplier (use when specifications are stable); cost-plus shifts risk to the buyer (use under high uncertainty); incentive contracts share risk and reward.

E-procurement levers: e-auctions suit commodity, well-specified, multi-supplier items; catalog/ punch-out ordering suits tail spend; spend analytics and demand aggregation create leverage.

Supplier development is warranted when a supplier is strategically important but capability-constrained; it requires shared targets, on-site support, and measured milestones.

Little's Law: inventory (units) = throughput (units per time) * flow time; use it to link WIP, cycle time, and output in any process.

Capacity: utilization = arrival or load rate / capacity; queue time rises nonlinearly as utilization approaches 1, so planning above roughly 85-90% utilization on variable processes creates long waits.

Manufacturing environments: make-to-stock (forecast-driven, high volume, low variety), assemble-to-order (postponed configuration), make-to-order (order-specific), engineer-to-order (design per order, longest lead time).

Lean tools: value-stream mapping to separate value-added from waste; kanban sizes inventory to consumption; takt time = available production time / customer demand; single-minute exchange of die (SMED) cuts changeover to enable smaller lots.

Theory of Constraints: identify the bottleneck, exploit it (never starve or block it), subordinate other resources to its pace, elevate capacity, then repeat; drum-buffer-rope schedules to the constraint.

Quality: statistical process control uses control limits at ±3 sigma of the process, distinct from specification limits; process capability Cp = (USL - LSL) / 6 sigma and Cpk accounts for centering.

Transportation mode selection: ocean lowest cost per ton-mile but slowest; air fastest and most expensive; rail for heavy bulk over land; truck for flexibility and door-to-door; intermodal combines rail line-haul with truck drayage.

Freight economics: economies of distance (tapering rates), economies of weight (volume discounts), and cube/weight limits; consolidation and milk runs reduce cost per shipment.

Distribution strategies: cross-docking minimizes storage and touches; direct shipping suits high-volume, high-value, or time-critical items; hub-and-spoke balances service with consolidation.

Relationship spectrum: transactional (arm's length, price-driven), cooperative (coordinated planning, shared forecasts), strategic alliance (shared goals, joint investment), vertical integration (ownership). Choose by strategic importance and asset specificity.

Collaborative planning, forecasting, and replenishment (CPFR) cycle: agreement on roles and metrics, joint business plan, joint forecast, order forecast and replenishment, exception management.

Bullwhip effect causes: demand forecast updating (each tier overreacts), order batching, price fluctuation and forward buying, rationing and shortage gaming; mitigations are shared POS data, everyday-low-price pricing, continuous replenishment, and allocation based on past sales.

Risk management cycle: identify, assess likelihood and impact, mitigate (avoid, reduce, transfer, accept), monitor, and learn; maintain a risk register with owners and review cadence.

Risk exposure = probability of event * financial impact; expected loss should be compared against mitigation cost, and low-probability/high-impact events need contingency plans rather than insurance alone.

Supply chain resilience levers: redundancy (buffer stock, dual sourcing, backup sites), flexibility (flexible contracts, postponement, multi-skilled labor), and visibility (track-and-trace, supplier tier mapping, early-warning signals).

Supplier financial distress signals: deteriorating margins, stretched payables, late deliveries, key-person departures, credit-rating downgrades; monitor via financial statements and third-party risk feeds.

Trust and governance in alliances: define exit and dispute clauses, align incentives with shared KPIs, and use scorecards to keep performance visible; information asymmetry erodes collaboration.