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

a digital twin is a virtual representation of a real-world object or system. These virtual models are used to digitally represent performance, identify inefficiencies, and design solutions to improve their physical counterparts. A digital twin is a digital model designed to accurately reflect a physical object. The object being studied—for example, a wind turbine—is outfitted with various sensors related to vital areas of functionality. These sensors produce data about different aspects of the physical object’s performance, such as energy output, temperature, weather conditions and more. This data is then relayed to a processing system and applied to the digital copy. Once informed with such data, the virtual model can be used to run simulations, study performance issues and generate possible improvements, all with the goal of generating valuable insights—which can then be applied back to the original physical object. A digital twin is a digital representation of a real-world entity or system. The implementation of a digital twin is an encapsulated software object or model that mirrors a unique physical object, process, organization, person or other abstraction.

According to the ASCM, one of the challenges of the product life cycle is the shrinking time span between the introduction and decline stages, due to the rapid changes in technology, customer preferences, and competition 1 . To cope with this challenge, the ASCM recommends that companies adopt a strategy of accelerating the speed to market, which means reducing the time it takes to develop, launch, and deliver new products to customers 1 . By doing so, companies can gain a competitive advantage, increase customer satisfaction, and capture more market share before the product becomes obsolete 1 . Some of the ways to accelerate the speed to market are:

Implementing agile and lean product development methods 1

Collaborating with suppliers, customers, and other stakeholders in the product design and launch process 1

Using digital technologies and platforms to enable faster and more efficient product testing, validation, and feedback 1

Optimizing the supply chain network and logistics to ensure timely and reliable product delivery 1

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). 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 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 modes 1 . 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 system 1 . 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 TCO 1 .

Porter’s Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry’s weaknesses and strengths 1 . The five forces are: competition in the industry, potential of new entrants, power of suppliers, power of customers, and threat of substitute products 1 . The company has used this tool to assess the attractiveness and profitability of the airline industry by evaluating the intensity of each force.

According to the ASCM site, the goal of the CTSC certification is to help supply chain professionals develop the skills and knowledge to lead a successful digital transformation that creates value and competitive advantage. The certification covers topics such as digital strategy, business model innovation, customer-centricity, and integrated capabilities. Therefore, option B best reflects the main goal of pursuing a digital supply chain transformation. 1 2

According to the ASCM CTSC Exam Content Manual, when designing a new demand-driven supply chain, technologies should be evaluated after the supply chain is designed. This is because the supply chain design should be based on the customer needs, the business strategy, and the supply chain capabilities, not on the available technologies 1 . The technologies should be selected to support and enable the supply chain processes, not to dictate or constrain them 1 . Evaluating technologies after the supply chain is designed can help to avoid unnecessary costs, complexity, and risks, and to ensure alignment and integration across the supply chain network 1 .

1 : ASCM CTSC Exam Content Manual, page 8.

According to the ASCM CTSC Exam Content Manual, ecological, ethical, and economic are the three major categories of practices that an organization should evaluate as it transforms its processes to be more sustainable. These categories are also known as the triple bottom line of sustainability, which measures the social, environmental, and financial impacts of an organization’s activities 1 . Ecological practices refer to the environmental aspects of sustainability, such as reducing greenhouse gas emissions, waste, and resource consumption, and enhancing biodiversity and ecosystem services 1 2 . Ethical practices refer to the social aspects of sustainability, such as respecting human rights, labor standards, and diversity, and promoting health, safety, and well-being of employees and communities 1 3 . Economic practices refer to the financial aspects of sustainability, such as creating value for stakeholders, ensuring fair and transparent transactions, and investing in innovation and development 1 4 .

1 : ASCM CTSC Exam Content Manual, page 9. 2 : Environmental Sustainability: Definition and Importance - Investopedia 3 : Social Sustainability: Definition, Importance, and Examples - Investopedia 4 : Economic Sustainability: Definition, Importance, and Examples - Investopedia

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 environment 1 2 . A flat structure also reduces bureaucracy, hierarchy, and overhead costs, and empowers the employees to take more ownership and initiative in their work 1 2 . 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 culture 1 2 .

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 loops 2 3 .

1 : ASCM CTSC Exam Content Manual, page 7. 2 : From risk management to strategic resilience | McKinsey 3 : Risk Management Magazine - Dealing with Disruption

According to the CTSC Enterprise and Supply Chain Management (ESCM) manual, perfect order fulfillment is a key performance indicator (KPI) that measures the percentage of orders that meet all the criteria for a perfect order, such as delivery time, quantity, quality, documentation, and invoice 1 . To calculate the perfect order fulfillment, we need to multiply the percentage of orders that meet each criterion, and then divide by 100 1 . In this case, the percentage of orders that meet each criterion are:

Delivery time: 94/200 = 47%

Quantity: 100/200 = 50%

Quality: (200-34)/200 = 83%

Documentation and invoice: 48/200 = 24%

Therefore, the perfect order fulfillment is:

47% x 50% x 83% x 24% / 100 = 4.7% x 24% = 1.13%

To express this as a percentage, we need to multiply by 100, so the final answer is:

1.13% x 100 = 113%

Therefore, the perfect order fulfillment for a total of 200 orders is 113%.

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

Ac-cording to the CTSC Exam Content Manual, d eveloping a supply chain leadership mindset involves creating a culture of innovation, learning, and collaboration across the organization. A supply chain leader should encourage cross-team collaboration to leverage the diverse skills, perspectives, and experiences of different stakeholders, and to foster trust, communication, and alignment of goals and objectives. Cross-team collaboration can help the organization to identify and solve problems, generate and implement new ideas, and improve performance and customer satisfaction.

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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 cyberattacks 1 3 . 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 mitigation 1 3 . VAR can also help to link supply chain risk management with corporate financial performance and strategy 1 4 .

According to the CTSC Enterprise and Supply Chain Management (ESCM) manual, human capital and talent is one of the most critical non-technological factors to execute a digital supply chain transformation 1 . Human capital and talent refers to the skills, knowledge, abilities, and attitudes of the people who work in the supply chain, as well as the processes and practices to attract, develop, and retain them 1 . A successful digital supply chain transformation requires a workforce that is capable of using and adapting to digital technologies, such as cloud computing, artificial intelligence, big data, and robotics 1 . It also requires a culture that fosters innovation, collaboration, and continuous learning 1 . Therefore, human capital and talent is essential for enabling and sustaining a digital supply chain transformation 1 .

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

According to the ASCM, a RACI analysis is a tool that clarifies the roles and responsibilities of different stakeholders in a business process or activity 1 . RACI is an acronym for Responsible, Accountable, Consulted, and Informed, which are the four types of participation that a stakeholder can have in a task 2 . A RACI analysis can help identify the gaps and overlaps in the assignment of tasks, and ensure that everyone knows what they are expected to do and who they need to communicate with 1 . In the case of the company that receives customer complaints, a RACI analysis can help them understand why their inquiries are being forwarded multiple times to different departments, and who is the right person or department to resolve them. A RACI analysis can also help them improve their customer service process and avoid confusion and frustration among customers and employees 1 . Therefore, performing a RACI analysis is the most appropriate activity to identify the gap.

According to the ASCM CTSC Exam Content Manual, a business issue repository is a tool that helps an organization to study its strategic environment for establishing the scope of its supply chain transformation project. A business issue repository is defined as "a collection of business issues that are identified and prioritized by the organization’s leadership team and other key stakeholders" 1 . A business issue repository helps to align the supply chain transformation objectives with the organization’s vision, mission, and strategy, and to identify the gaps and opportunities for improvement in the current supply chain performance 1 . A business issue repository also helps to communicate the rationale and benefits of the transformation to the internal and external stakeholders, and to monitor and measure the progress and outcomes of the transformation 1 .

1 : ASCM CTSC Exam Content Manual, page 14.

According to the ASCM CTSC Exam Content Manual, developing an organizational mapping is one of the steps in transforming management. An organizational mapping is defined as "a tool that helps to identify the current and future state of the organization’s structure, roles, responsibilities, and reporting relationships" 1 . An organizational mapping can help to ensure alignment and consistency across different regions, functions, and processes, and to identify and resolve any gaps or conflicts that may arise during the transformation. By omitting this step, the company failed to recognize and address the difference in the product hierarchy among the regions, which could lead to problems in data integration, reporting, and analysis in the new ERP system.

According to the CTSC Exam Content Manual 1 , one of the key enablers of digital supply chain transformation is “people and culture”. This includes developing the skills and capabilities of the workforce, aligning the organizational structure and culture with the transformation vision and goals, and fostering a collaborative and innovative environment. Therefore, employee talent development and organizational alignment are critical factors for high performance of digital supply chains, aside from investments in appropriate digital technologies. Option A, C and D are examples of metrics that can be used to measure digital supply chain performance, but they are not factors that enable or enhance it.

According to the CTSC Enterprise and Supply Chain Management (ESCM) manual, the capacity indicator is a KPI that measures the available time against total time minus dwell time 1 . Dwell time is the time that a process or resource is idle or waiting 1 . The capacity indicator shows how much of the total time is actually used for productive activities 1 . A higher capacity indicator means a higher utilization of the process and resources 1 .

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

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 manual 1 , the first step in performing a root cause analysis using the SCOR model involves linking processes to metric hierarchy, which means mapping the SCOR processes to the SCOR metrics and identifying the relevant performance attributes and levels. This step helps to establish the scope and boundaries of the analysis and to align the processes with the strategic objectives of the organization.

 Designing the supply chain to enable the overall business strategy can also mean viewing the organization’s supply chain as a strategic asset, because this implies that the supply chain is not just a cost center, but a source of competitive advantage and value creation for the organization and its customers. A strategic asset is something that is rare, valuable, difficult to imitate, and hard to substitute, and that contributes to the organization’s performance and goals. By viewing the supply chain as a strategic asset, the organization can leverage its supply chain capabilities to differentiate itself from competitors, meet customer needs and expectations, and achieve operational excellence and innovation.

the SCOR level 1 metrics for the performance attribute of Cost are total supply chain management and cost of goods sold (COGS). Cost is defined as "the costs associated with operating the supply chain, including labor, material, and transportation" 2 . Total supply chain management cost (TSCM/CO.1.1) is "the sum of the costs associated with the SCOR Level 2 processes to Plan, Source, Deliver, and Return" 2 . Cost of goods sold (COGS/CO.1.2) is "the direct costs attributable to the production of the goods sold by a company" 3 . These metrics measure the financial efficiency and effectiveness of the supply chain processes and activities 1 4 .

1 : Supply Chain Operations Reference Model Revision 11 4 : SCOR Metrics - scpiteam.com 2 : CLL037 DoD Supply Chain Fundamentals - Defense Acquisition University 3 : Cost of Goods Sold – COGS Definition - Investopedia

According to the CTSC Exam Content Manual, one of the ways to accelerate the change and track the progress of a new technology implementation is to create visibility 1 . Creating visibility means sharing the information and data about the change process, such as the objectives, benefits, milestones, challenges, and results, with the relevant stakeholders, such as the employees, managers, customers, and suppliers 1 . Creating visibility can help to increase the awareness, understanding, and acceptance of the change, as well as to identify and address the issues and risks that may arise during the change 1 . Creating visibility can also help to monitor and evaluate the performance and impact of the new technology, and to provide feedback and recognition to the change agents and participants 1 . The other options are not the best ways to accelerate the change and track the progress of a new technology implementation, as they are more related to other aspects of the supply chain or the change management. Utilizing a push-pull system is a way to balance the demand and supply in the supply chain, but it does not directly affect the speed or the measurement of the change 2 . Adopting define-test-deploy is a way to implement a new technology in a phased manner, but it does not necessarily accelerate the change or track the progress, unless it is combined with other methods, such as agile or lean 3 . Identifying current performance drivers is a way to understand the factors that influence the supply chain performance, but it does not help to implement a new technology, unless it is followed by a gap analysis and a solution design.

According to the ASCM CTSC Exam Content Manual, one of the key steps in forming teams for a digital supply chain transformation is to “create cross-functional teams that include members from different departments and levels of the organization, as well as external partners, to foster collaboration and innovation” (p. 16). This helps to ensure that the teams have diverse perspectives, skills, and knowledge to address the challenges and opportunities of the digital transformation.

According to the CTSC Exam Content Manual 1 , corporate strategy is the highest level of strategy in the strategy hierarchy. It involves defining the overall purpose, scope, and direction of the organization, as well as allocating resources and setting performance goals for the entire organization. Corporate strategy also harmonizes plans to improve competencies of an organization as a whole, such as innovation, sustainability, digital transformation, and social responsibility. Option A, business strategy, is the level of strategy that focuses on how a business unit or division competes in a specific market or industry. Option C, functional area strategy, is the level of strategy that focuses on how a functional department or team supports the business strategy and the corporate strategy. Option D, operating strategy, is the level of strategy that focuses on how the daily operations and processes are executed and optimized.

According to the CTSC exam content manual 1 , the strategic background is one of the items needed to define the scope of the supply chain transformation project, along with the internal and external profile of the organization. The strategic background includes the vision, mission, values, goals, and objectives of the organization, as well as the drivers and enablers of the transformation.

According to the ASCM CTSC Exam Content Manual, the two approaches for applying selected supply chain processes across the organization, and determining the degree to which processes are consistent across the businesses, product lines, and geographic locations are standardization and harmonization 1 . Standardization is defined as "the process of ensuring that all processes are executed in the same way, using the same inputs and outputs, and producing the same results" 1 . Harmonization is defined as "the process of ensuring that all processes are aligned and integrated across the organization, and that they support the organization’s strategy, goals, and objectives" 1 . Both approaches aim to improve the efficiency, effectiveness, and agility of the supply chain, and to reduce the complexity, variability, and duplication of processes 1 .

1 : ASCM CTSC Exam Content Manual, page 8.

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 turns 1 .

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 expectations 1 . 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 chain 1 . Therefore, Level 2 metrics are the most suitable for establishing KPIs.

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According to the ASCM CTSC Exam Content Manual, one of the best practices for communicating a supply chain transformation is to "use a variety of communication channels and methods to reach different audiences and reinforce key messages" 1 . This includes holding breakout group sessions with each group involving employees from different departments, as this can help to explain the specifics of the transformation, address any concerns or questions, and foster collaboration and buy-in across the organization 2 3 . Distributing one common document by company email, requiring the topic be covered in each department’s monthly meeting, or conducting a one-time, all-company meeting with presentations by leadership may not be sufficient or effective to communicate the details and benefits of the transformation, as they may not cater to the different needs and preferences of the stakeholders, or allow for sufficient feedback and engagement 2 3 .

1 : ASCM CTSC Exam Content Manual, page 14. 2 : Supply Chain Communication: 4 Effective Strategies for Better Supplier … 3 : 10 Best Practices For Improving Supply Chain Management - IIENSTITU

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 outcomes 1 . 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 workforce 2 . 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 training 3 . 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.

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 service 1 . 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 referrals 1 . 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 not 1 . 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 customers 1 . Therefore, awareness is the most likely outcome of enhancing the connected customer capability.

According to the ASCM CTSC Exam Content Manual, one of the factors that influences the risk exposure of a supply chain segment is the availability of alternative sources of supply (p. 20). If there is only one available supplier for an important product, the supply chain segment is more vulnerable to disruptions and uncertainties, such as supplier failure, quality issues, price fluctuations, or geopolitical events. Therefore, this product category should have the most complete and thorough risk mitigation plans, which may include strategies such as developing backup suppliers, increasing inventory buffers, diversifying sourcing locations, or implementing contractual agreements.

Before the firm can negotiate or discuss data exchanges with the retailers, it should first review its own data needs and potential trading options. This means that the firm should identify what kind of retail sales data it requires, how frequently, and for what purpose. It should also assess the value and quality of the data, and the costs and benefits of obtaining it. Moreover, the firm should explore what kind of data it can offer in return to the retailers, and how it can create a mutually beneficial data exchange relationship. By reviewing its data needs and potential trading options, the firm can prepare a clear and realistic data exchange proposal that can facilitate the subsequent negotiation or discussion process.

1 : Data Processing Agreements: Coordination, Drafting, and Negotiation

According to the CTSC Exam Content Manual, a good supply chain strategy should be tailored to the right level of complexity, which means balancing the trade-offs between efficiency and responsiveness, standardization and customization, centralization and decentralization, and integration and differentiation 1 . A good supply chain strategy should also align with the business strategy, customer expectations, and market conditions 1 . The other options are not necessarily wrong, but they are not the main criteria for a good supply chain strategy.

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 sales 2 3 .

1 : ASCM CTSC Exam Content Manual, page 8. 2 : Six steps to successful supply chain collaboration | McKinsey 3 : Supply Chain Collaboration: Meaning, Importance, Features & Impact | GEP Blog