CTSC Certified in Transformation for Supply Chain (CTSC) Questions and Answers

According to the ASCM, the Connected Customer Capability allows companies to augment traditional transactional interactions to achieve effective and integrated customer engagement throughout the customer, product and service life cycles, from acquisition to service1.One of the benefits of this capability is to increase the awareness of the customers about the company’s products, services, and value proposition, as well as to generate more leads and referrals1.Awareness is the first stage of the customer journey, where the customer becomes aware of the company and its offerings, and decides whether to engage with the company or not1.By improving the connected customer capability, a company can use various channels and technologies to reach out to potential customers, provide relevant and personalized information, and create a positive impression that attracts and retains customers1. Therefore, awareness is the most likely outcome of enhancing the connected customer capability.

According to the ASCM SCOR Digital Standard, the SCOR model uses the term optimized to indicate the highest level of performance for a given metric. Optimized metrics are those that are prioritized by the organization and have a target performance level that is based on the best-in-class benchmark or the desired competitive advantage. The SCOR model defines six levels of performance for each metric: inferior, poor, nominal, competitive, advantage, and optimized (p.17)1. The other options are not used in the SCOR model to prioritize metrics and estimate target performance level.

It is part of the ISO 14000 family of standards that are developed by ISO Technical Committee ISO/TC 207 and its various subcommittees, and that cover different aspects of environmental management2.

Supply chain risk management

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the purpose of using value at risk (VAR) in supply chain risk management is to establish a common language to quantify supply chain risk in terms of currency.VAR is defined as "a statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame"2.VAR can help to estimate the potential loss that a supply chain may face due to various sources of disruption, such as demand fluctuations, supplier failures, natural disasters, or cyberattacks13.By expressing supply chain risk in monetary terms, VAR can help to communicate the risk exposure to different stakeholders, compare the risk profiles of different supply chain scenarios, and allocate resources for risk mitigation13.VAR can also help to link supply chain risk management with corporate financial performance and strategy14.

According to the ASCM, the SCOR model provides a framework for measuring the performance of the supply chain across five core processes: Plan, Source, Make, Deliver, and Return. The model defines three levels of metrics: Level 1, Level 2, and Level 3. Level 1 metrics are strategic metrics that reflect the overall performance of the supply chain, such as customer satisfaction, total cost, and return on assets. Level 2 metrics are diagnostic metrics that measure the performance of each core process, such as reliability, responsiveness, agility, cost, and asset management.Level 3 metrics are operational metrics that measure the performance of specific activities within each core process, such as order fulfillment cycle time, production yield, and inventory turns1.

The ASCM recommends that organizations use Level 2 metrics as their KPIs, because they provide a balanced view of the supply chain performance across the five core processes and the attributes of reliability, responsiveness, agility, cost, and asset management.Level 2 metrics also enable benchmarking and best practice identification, as well as alignment with the customer and stakeholder expectations1.Level 1 metrics are too high-level and may not reflect the specific performance of each core process, while Level 3 metrics are too detailed and may not capture the overall performance of the supply chain1. Therefore, Level 2 metrics are the most suitable for establishing KPIs.

a flat structure is the most appropriate organizational structure for a small start-up company.A flat structure is defined as "a type of organizational structure that has few or no levels of middle management between the employees and the executives"1.A flat structure allows for more direct communication, collaboration, and decision-making among the employees and the leaders, which can enhance innovation, agility, and responsiveness in a start-up environment12.A flat structure also reduces bureaucracy, hierarchy, and overhead costs, and empowers the employees to take more ownership and initiative in their work12.A flat structure is suitable for a small start-up company that has a simple and flexible business model, a lean and cross-functional team, and a customer-centric and value-driven culture12.

According to the CTSC Exam Content Manual, one of the steps in the digital supply chain transformation process is to identify and prioritize the strategic assets of the organization, which are the resources and capabilities that provide a competitive advantage and enable value creation1.One of the strategic assets that leadership should have its team of stakeholders prioritize is the internal and external data sources making up the supply chain, as data is the foundation of digital transformation and the key to unlocking insights, innovation, and efficiency2.Data sources can include operational data, customer data, supplier data, market data, and environmental data, among others2. The other options are not necessarily strategic assets, as they may not provide a distinctive edge or value proposition for the organization.Hardware and machinery, truck fleet and warehouses, and free cash flow are examples of tangible assets that can be easily replicated or substituted by competitors3.

According to the CTSC Exam Content Manual1, the optimize digital discipline focuses on using data and analytics to improve operational efficiency and effectiveness, such as predictive maintenance, asset utilization, and resource allocation. Responsive demand-supply matching (RDSM) is a capability that falls under the optimize discipline, as it aims to balance supply and demand in real time using data-driven insights and actions. Extending RDSM to include predictive maintenance of delivery trucks would indicate additional focus on the optimize discipline, as it would help reduce downtime, costs, and risks associated with truck breakdowns.

1: https://www.ascm.org/ctsc-ecm/

responsive supply-demand matching (RDSM) is the ability to sense demand exceptions, target revenue opportunities and resolve supply challenges through planning of constrained resources and allocation of supply across the network to best meet demand according to the business strategy1.One of the benefits of RDSM is to improve the customer service level by fulfilling the demand on time and in full1.Therefore, one of the supply chain metrics that should be included on the RDSM dashboard is on-time, in-full, which measures the percentage of orders that are delivered to the customers within the agreed time window and with the correct quantity and quality2.

The other options are not suitable for the RDSM dashboard, as they are not directly related to the RDSM objectives or outcomes.Inventory quality ratio is a metric that measures the percentage of inventory that is in good condition and can be sold to the customers3.This metric is more relevant for the inventory optimization phase of the digital transformation, which aims to reduce the inventory costs and risks4.Customer backorder rate is a metric that measures the percentage of orders that are not fulfilled on time due to the lack of inventory5.This metric is more relevant for the demand sensingand shaping phase of the digital transformation, which aims to improve the demand forecasting accuracy and responsiveness6. Sell-through rate is a metric that measures the percentage of inventory that is sold within a given period of time. This metric is more relevant for the omni-channel fulfillment phase of the digital transformation, which aims to optimize the order fulfillment across different channels and locations.

According to the CTSC Enterprise and Supply Chain Management (ESCM) manual, effective collaborative relationships with supply chain partners are more likely to be forged when a team buys into three areas: accountability, business alignment, and vision statement1.Accountability means that each partner is responsible for delivering on their commitments and adhering to the agreed-upon rules and standards1.Business alignment means that each partner aligns their objectives, strategies, and processes with the overall goals of the supply chain network1.Vision statement means that each partner shares a common vision of the desired future state of the supply chain and how to achieve it1.

1: https://www.ascm.org/ctsc-ecm/

An external motivator for executing a supply chain transformation is a factor that originates outside the organization and influences its decision to change its supply chain strategy, processes, or capabilities. Examples of external motivators include customer demands, market opportunities, competitive pressures, regulatory requirements, and environmental concerns1. In this case, the national customer’s request to sell to its international subsidiaries is an external motivator because it comes from a keystakeholder in the supply chain and requires the company to adapt to new markets, regulations, and logistics.

According to the CTSC Exam Content Manual, one of the key steps in the project selection process is to create a portfolio of projects that aligns with the organization’sstrategic objectives and balances the available resources. Selecting projects based on stand-alone benefits would ignore the interdependencies and trade-offs among different projects and lead to inefficiencies resulting from a lack of holistic visibility.

According to the CTSC Exam Content Manual, one of the ways to reduce the costs of poor quality in the supply base is to establish education and quality training for the suppliers, as this can help them improve their quality performance, reduce defects, and prevent problems1.Education and quality training can also enhance the collaboration and communication between the buyers and the suppliers, and foster a culture of continuous improvement2. The other options are not the best approach to reduce the costs of poor quality in the supply base, as they are more reactive than proactive, and they do not address the root causes of the poor quality.Conducting supplier appraisals, tracking costs of returns, and inspecting all received products are examples of appraisal costs, which are part of the costs of poor quality, not the solution3.

According to the CTSC Learning System, one of the factors that affects the distribution costs is the cost of implementing the new materials flow network, which includes the costs of designing, building, and operating the network of warehouses, distribution centers, and transportation modes1.The cost of implementing the new materials flow network can be significant and should be included in the calculation of the total cost of ownership (TCO) of the distribution system1.The other factors listed in the question are not directly related to the distribution costs, but rather to the inventory costs, which are a separate component of the TCO1.

According to the ASCM CTSC Exam Content Manual, building resilience is one of the organizational competencies for risk management and disruption response.It is defined as "the ability to recover quickly from difficulties and adapt to changing conditions"1. Building resilience can help a company with a global presence to cope with the uncertainties and complexities of operating in emerging markets, where risks and disruptions may be more frequent and severe.Some of the elements of building resilience include developing a risk-aware culture, implementing agile processes, fostering collaboration and innovation, and enhancing learning and feedback loops23.

1: ASCM CTSC Exam Content Manual, page 7.2:From risk management to strategic resilience | McKinsey3:Risk Management Magazine - Dealing with Disruption

According to the CTSC Exam Content Manual1, the Measure phase of the Six Sigma DMAIC methodology involves collecting data on current performance and issues. The Measure phase aims to establish a baseline for the process and quantify the gap between the current state and the desired state. The Measure phase also involves validating the measurement system, defining the process metrics, and calculating the process capability and sigma level. Option A, Control, is the phase that involves implementing and sustaining the improvements. Option B, Improve, is the phase that involves identifying and testing the solutions. Option C, Analyze, is the phase that involves analyzing the data and identifying the root causes.

According to the ASCM, one of the key steps in supply chain transformation is to define the organizational roles and responsibilities for each supply chain activity, and to ensure that they are aligned with the business strategy and customer expectations1.The ASCM also suggests that the supply chain activities can be grouped into three main categories: sales, operations, and logistics2.These categories reflect the core functions of the supply chain, from planning and executing the demand and supply, to delivering the products and services to the customers2. Therefore, organizational roles and responsibilities should focus on these three areas to clarify who is responsible and accountable for each supply chain activity after the transformation initiative is complete. Some examples of the roles and responsibilities in each area are:

• Sales: Responsible for generating and managing the customer demand, forecasting the sales volume, and ensuring customer satisfaction and loyalty.Examples of roles are sales manager, account manager, customer service representative, and demand planner2.
• Operations: Responsible for producing and sourcing the products and services, managing the inventory and quality, and optimizing the cost and efficiency.Examples of roles are operations manager, production manager, procurement manager, and quality manager2.
• Logistics: Responsible for transporting and distributing the products and services, coordinating with the suppliers and carriers, and ensuring the delivery speed andreliability.Examples of roles are logistics manager, warehouse manager, transportation manager, and distribution manager2.

Order fulfillment

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According to the ASCM CTSC Exam Content Manual, an order line is defined as "a commitment on a sales order that always references a product and promise delivery date.An order line may also reference a quantity, a price, and a customer location."1This definition is consistent with the concept of perfect order fulfillment, which measures how well a company delivers its orders according to the customer’s specifications and expectations.

1: ASCM CTSC Exam Content Manual, page 10.

According to the CTSC Exam Content Manual1, best-in-class companies consistently and significantly do better than their competitors because they utilize benchmark supply chain metrics to gauge performance. Benchmarking is the process of comparing one’s own performance with that of other organizations or industry standards, and identifying the best practices and gaps for improvement. Benchmarking helps best-in-class companies to set realistic and achievable goals, monitor progress, and drive continuous improvement.

1: https://www.ascm.org/ctsc-ecm/

According to the CTSC exam content manual1, the most important driver to determine a metrics tracking cycle is the change frequency, which is the rate at which the metric value changes over time. The change frequency affects how often the metric should be measured and reported, as well as the level of detail and aggregation required. A metric with a high change frequency should be tracked more frequently and with more granularity than a metric with a low change frequency.

According to the ASCM CTSC Exam Content Manual, CPFR is a collaboration mechanism that involves the establishment of long-term relationships with partners to improve the overall efficiency and effectiveness of the supply chain.CPFR is defined as "a business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand"1.CPFR enables partners to share information, align plans, and synchronize activities across the supply chain, resulting in reduced inventories, improved service levels, and increased sales23.

1: ASCM CTSC Exam Content Manual, page 8.2:Six steps to successful supply chain collaboration | McKinsey3:Supply Chain Collaboration: Meaning, Importance, Features & Impact | GEP Blog

According to the CTSC Exam Content Manual1, one of the characteristics of digital supply chain integration is that it “enables end-to-end visibility, collaboration, and optimization across the supply chain network”. This means that digital supply chain integration aims to achieve efficiency and effectiveness across all the processes involved in planning, sourcing, transforming, and fulfilling products, rather than focusing on each process in isolation. Therefore, the best approach to support a digital supply chain for an apparel company is to emphasize integrated efficiency goals across all four processes, as this would enable the company to optimize its resources, reduce costs, improve quality, and meet customer expectations. Option A, C and D are examples of approaches that do not support digital supply chain integration, as they either focus on standalone goals for each process or prioritize revenue over efficiency.

Sustainability

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one of the components of the Enterprise Standards for Sustainability is ethics. Ethics refers to the principles and values that guide the behavior and decisions of an organization and its stakeholders. Ethics is important for fostering mutually beneficial relationships with stakeholders, as it involves respecting human rights, ensuring fair trade, preventing corruption, and promoting transparency and accountability. Therefore, a firm seeking to use the pillars of sustainability should consider ecology, economics, and ethics. Option A, leadership, is not a pillar of sustainability, but rather a skill or quality that can help achieve sustainability. Option C, risk, is not a pillar of sustainability, but rather a factor that can affect or be affected by sustainability. Option D, culture, is not a pillar of sustainability, but rather an aspect of social sustainability that relates to the beliefs, norms, and values of a society.

According to the CTSC Exam Content Manual, avoidance cost is one of the metrics used to measure the value created by the procurement function1.Avoidance cost is defined as the value created by reducing or eliminating cost increases sought by suppliers over and above prevailing baseline cost1.Avoidance cost is also known as cost avoidance, which is a proactive measure to prevent unnecessary expenses or losses2.Avoidance cost is different from cost savings, which is the value created by reducing the actual cost paid to suppliers below the prevailing baseline cost1.Cost savings is also known as hard cost savings, which is actualized, quantifiable and verifiable3.

According to the CTSC Ex-am Content Manual1,the initial steps in the workflow for developing supply chain performance objectives and aligning the performance drivers to the strategic plan are: conducting a strategic supply chain analysis, performing benchmarking, and gathering insights. These steps help to identify the current state of the supply chain, the gaps and opportunities for improvement, and the best practices and benchmarks from the industry and competitors. They also help to align the supply chain objectives with the business strategy and the customer needs.

1: https://www.ascm.org/ctsc-ecm/

voice of the customer (VOC) is the process of gathering and implementing information about your customers’ expectations, needs and hopes2.Businesses use VOC programs to efficiently collect detailed market research about their customers and to improve their products or services based on the customer feedback2. This is an example of the successful use of VOC, as the company distributed surveys to understand what customers wanted, added online status information capability to their website to meet the customer demand, and sent a customer satisfaction survey to measure the impact of the improvement. This addition helped increase their customer base and repeat business, which shows the value of listening to the voice of the customer.

1:Voice of the Customer: Definition, Benefits and How-To Guide | Indeed.com2:What is the Voice of the Customer (VoC)? - Qualtrics

According to the CTSC Exam Content Manual, an agile chain is a supply chain model that can handle high demand during peak season and quickly adjust to a lean period with low demand1.An agile chain is characterized by high responsiveness, flexibility, and adaptability to changing customer needs and market conditions1.An agile chain can also cope with high levels of uncertainty and variability in demand and supply1. The other options are not the best supply chain model for this scenario, as they have different characteristics and trade-offs.A custom-configured chain is a supply chain model that delivers customized products or services to customers through modularization and postponement strategies1.A custom-configured chain is suitable for high variety and low volume markets, but it may not be able to handle high demand peaks efficiently2.An efficient chain is a supply chain model that focuses on minimizing costs and maximizing asset utilization through economies of scale and scope1.An efficient chain is suitable for low variety and high volume markets, but it may not be able to adjust quickly to demand fluctuations or customer preferences2.A flexible chain is a supply chain model that can handle moderate changes in demand and supply by adjusting production capacity and inventory levels1.A flexible chain is suitable for medium variety and medium volume markets, but it may not be able to handle extreme demand peaks or lean periods without compromising service levels or costs2.

quality function deployment (QFD) is a concurrent engineering technique that helps ensure efficient production process to meet customer requirements.QFD is defined as "a method to transform user demands into design quality, to deploy the functions forming quality, and to deploy methods for achieving the design quality into subsystems and component parts, and ultimately to specific elements of the manufacturing process"2.QFD uses a matrix called the House of Quality to translate customer needs into technical specifications, prioritize design features, and identify potential trade-offs3.QFD helps to reduce development time and cost, improve product quality and performance, and enhance customer satisfaction4.

1:Concurrent Engineering - Product Development - Grist Project Management2:Quality Function Deployment (QFD) and House of Quality - ASQ3:Quality FunctionDeployment (QFD) - What is Six Sigma4:Quality Function Deployment (QFD) - an overview | ScienceDirect Topics

According to the CTSC Exam Content Manual, one of the steps that should be completed before determining training needs is to assess key performance indicators (KPIs)1.KPIs are the metrics that measure the performance and progress of the supply chain transformation objectives and outcomes1.Assessing KPIs can help to identify the gaps and opportunities for improvement in the supply chain processes, functions, and roles, and to determine the training needs and priorities for the workforce2. The other options are not the steps that should be completed before determining training needs, as they are more related to the implementation and evaluation of the training plan.Developing an action plan is a step that follows the determination of training needs, as it outlines the specific actions, resources, and timelines for delivering the training3. Developing a training plan is a step that involves designing the training content, methods, and materials based on the training needs and objectives. Assessing performance management is a step that involves monitoring and reviewing the performance of the trainees and the training program, and providing feedback and recognition.

Supply chain

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Total cost to serve is a supply chain metric that measures the total end-to-end supply chain cost of fulfilling an order for a specific customer or segment1.It includes all the costs incurred from sourcing, manufacturing, warehousing, transportation, and delivery of the product or service2.Total cost to serve helps to identify the profitability and value of different customers or segments, and to optimize the supply chain processes and resources accordingly3.

1:Top Supply Chain Metrics & KPIs Benchmarking | Gartner2:Top 25 Supply Chain Metrics & KPIs For Your Dashboards - datapine3:A Comprehensive Guide to Supply Chain Metrics & KPIs

According to the CTSC Enterprise and Supply Chain Management (ESCM) manual, a thread diagram is a process view of the geographic map that illustrates the material flow, material strategy, and the planning process relationship1.A thread diagram shows the sequence of activities and decisions that are involved in transforming raw materials intofinished products and delivering them to customers1.It also shows the locations of the facilities, the transportation modes, the inventory policies, and the planning horizons1.A thread diagram helps to identify the key drivers and constraints of the supply chain performance, and to evaluate the trade-offs and synergies among different supply chain components1.

1: https://www.ascm.org/ctsc-ecm/

According to the ASCM CTSC Exam Content Manual, one of the first steps in developing a transformational supply chain strategy is to “determine the current and future needs and expectations of the customers, and align the supply chain strategy with the business strategy and customer value proposition” (p. 16) 1. This helps to ensure that the supply chain transformation is customer-centric and focused on delivering value to the end users. The other options are also important, but they should be done after the initial determination of the customers’ needs.

According to the ASCM CTSC Exam Content Manual, the formula for raw material inventory days of supply is the value of raw materials inventory divided by the “value of transfers divided by 365 days” 1. The value of transfers is the same as the cost of goods sold, which is the total cost of producing and delivering the prod-ucts to the customers 2. Therefore, the formula can be simplified as the value of raw materials divided by the cost of goods sold per day, which is the same as option A. The other options are incorrect because they either use the wrong numerator or denominator, or invert the ratio.

1:12:2

the perfect order fulfillment is a percentage that measures how many orders meet all the criteria for a perfect order, such as delivery location, product condition, documentation, etc. The formula for calculating the perfect order fulfillment is to multiply the individual performance metrics for each criterion and then multiply by 100. However, the question asks for the formula to calculate the perfect order rate, which is a slightly different metric that measures how many order lines (or items) meet all the criteria for a perfect order. The formula for calculating the perfect order rate is to divide the total number of perfect order lines by the total number of order lines and then multiply by 100.

According to the CTSC Exam Content Manual1, one of the key capabilities for supply chain resilience is agility, which is the ability to respond quickly and effectively to unanticipated disruptions. Agility enables supply chain professionals to adapt to changing customer needs, market conditions, and operational challenges. Another keycapability for supply chain resilience is velocity, which is the speed at which products and information flow through the supply chain. Velocity enables supply chain professionals to reduce lead times, improve service levels, and increase customer satisfaction. Therefore, increasing levels of agility and velocity is a measure that should be adopted for supply chains to become more resilient to unanticipated disruptions. Option A, implementing internal standards of risk awareness and response, is a measure that can help mitigate the impact of disruptions, but it does not necessarily increase the resilience of the supply chain. Option B, ensuring that there is clear responsibility for identifying risk, is a measure that can help prevent or reduce the likelihood of disruptions, but it does not necessarily increase the resilience of the supply chain. Option C, decreasing inventory levels to the minimum level possible, is a measure that can reduce costs and waste, but it can also increase the vulnerability of the supply chain to disruptions.

According to the CTSC Exam Content Manual1, the external boundary conditions that impact an organization’s core strategic vision include market size, customer requirements, legal and regulatory landscape, and competitive situation. These are the factors that define the external environment in which the organization operates and competes. They influence the organization’s strategic choices and capabilities.

1: https://www.ascm.org/ctsc-ecm/