INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

Prelim Reviewer

Flows in a supply chain

What is knowledge?

A collection of data is not

information
A collection of information is not
knowledge
A collection of knowledge is not
wisdom
A collection of wisdom is not truth

What is a Supply Chain?

A supply chain consists of the flow of
products and services from/to:
1. Raw materials manufacturers
2. Intermediate products
manufacturers
3. End Product manufacturers
4. Wholesalers and distributors
5. Retailers
6. End Customers
Connected by agents, transportation
and storage activitIes and integrated
through sharing information, planning
and processing activitIes.
A. TYPICAL SUPPLY CHAIN

B. TYPICAL SUPPLY CHAIN FOR MANUFACTURER

C. TYPICAL SUPPLY CHAIN FOR A SERVICE

What is Supply Chain Management?
Definition
1. The design and management of seamless, value-added process across
organizational boundaries to meet the real needs of the end customer
2. Managing supply and demand, sourcing raw materials, and parts,
manufacturing and assembly, warehousing and inventory tracking, order
entry and order management distribution across all channels, and delivery
to the customer

What is the Goal of Supply Management?

Supply chain management is concerned with the efficient integration of suppliers,
factories, warehouses and stores so that merchandise is produced and
distributed
- In the right qualities
- To the right location
- At the right time
In order to
- Minimize total system cost
- Satisfy customer service requirements

Importance of Supply Chain Management

First have discovered value enhancing and long term benefits. Who benefits the mosts?

Firms with:
- Large inventories
- Large number of suppliers
- Complex products
- Customers with lard purchasing budgets

Benefits:
- Lover purchasing/inventory costs,
- Higher quality/customer service

Firms practicing Supply Chain Management:

- Start with key suppliers
- Move on to other suppliers, customers, and shippers
- Integrate second tier suppliers and customers (second tier refers to the
customer’s customers and the supplier’s suppliers)