Certified Supply Chain Professional (CSCP) Practice Exam

What is the primary goal of the three V's?

1. Reduce all forms of communication

2. Increase visibility and velocity while minimizing variability

3. Eliminate excess inventory

4. Focus solely on cost reduction

The correct answer is: Increase visibility and velocity while minimizing variability

The primary goal of the three V's—visibility, velocity, and variability—is to create a more efficient and effective supply chain. Increasing visibility allows all stakeholders to have real-time access to information about inventory levels, order status, and supply chain processes. This transparency leads to better decision-making and coordination among partners. Velocity refers to the speed at which products move through the supply chain. By improving velocity, organizations can respond more quickly to customer demands and market changes, which is crucial in today’s fast-paced business environment. Minimizing variability is essential for maintaining consistency and reliability within the supply chain. Variability can lead to unpredictability in supply and demand, which can disrupt operations and affect customer satisfaction. By managing and reducing variability, businesses can create a smoother flow of goods and services. This holistic approach aligns with modern supply chain strategies that prioritize efficiency and customer-centricity rather than merely eliminating excess inventory, focusing solely on cost reduction, or reducing forms of communication. Each of those approaches may address specific issues but does not encompass the broader goals achieved by the three V's.