Supply Chain

Management
Introductio
n
TIP FTP UB
2015

What is a supply
chain?

A supply chain consists of all parties involved,

directly or indirectly, in fulfilling a customer
request
A supply chain is dynamic and involves the
constant flow of information, product, and
funds between different stages
A supply chain stages include:

Customers
Retailers
Wholesalers/distributors
Manufacturers
Component/raw material suppliers

Supply Chain
Stages
VISA

Material Flow
Credit Flow

Suppli
er
Suppli
er

Manufacturi
ng

Schedul
es

Retaile
r

Consum
er

Wholesal
Retaile
Ordeer
Cas r
Flo
Flo
r
h
w
w

Flows in a Supply
Chain

Ex. : Stages of SCM at

Detergent
P&Gs
Product
Timbe
Compan
r
y

Custom
er

Departme
nt Stor
e

Pape
Manufactur
r
er
Third
Party
D
C

Chemic
Manufactur
al
er

Packagin
Corporatio
g
n
P&
Manufactur
G
er

Plastic
Produc
er

What is a supply chain?

(cont.)

Planning, organizing,

directing, & controlling flows

of materials
Begins with raw materials
Continues through internal operations
Ends with distribution of finished goods

Involves everyone in supply-

chain
Example: Your suppliers supplier

Objective: Maximize value &

Whysupply
chain?
Local market, local supply vs. global market,

global
sourcing.
Global competition.
Shorter product life.
Higher customer expectation
Rate of change in technology
Information & communication systems
Variety of transportation modes

All these factors lead to an increase in challeges

to reduce costs & Supply Chain Management
provides the opportunity.

Past paradigm of
SCM

New paradigm of
SCM

Decision phases
in asupply
chain

Supply chain strategy or design long

term decision
Decide what the chains configuration
How resources will be allocated
What processes each stage will perform
Strategic decisions
The location & capacities of
production & warehouse
Modes of transportation
Type of information system

Supply
Planning
Chainand
:
Supply
chain planning quarter to a
Operation
year

Forecast for coming year

Which market will be supplied from which
location
Subcontracting or manufacturing
Inventory policies
Timing and size of marketing
Promotion

Supply chain operation short term

decision
Allocate inventory or production to individual
orders
Date of order to be filled

Process view of a supply

Cycle view
chain
The processes in SC are divided into a series of cycle,
each performed at the interface between two
successive stages of a SC

Push/pull view
The processes in SC are divided into two categories:
Pull process:
Initiated by customer orders reactive process
Customer demand is known

Push process:
Initiated and performed in anticipation of customer orders

speculative process
Operate in an uncertain environment customer

Cycle view of SC
processes

Customer

C
u
s
t
o
m
e
r
O
r
d
e
r
C
y

Sub-processes in each SC process

cycle
Supplier
stage
markets
product

Buyer return
reserve flows to
supplier/third
party

Buyer
stage
places
order

Supplier
stage
receives
supply

Supplier
stage

Supplier
stage

Push/pull view of SC
Example for make to stock environment
processes
Customer
PUL
PROCESSE
L
S
Customer
arrive
order
s
PUS
PROCESSE
H
S

Customer Order
Cycle

Replenishment
Cycle &
Manufacturing
Cycle

Clothes
Company

Manufactur
er

Procurement Cycle
Supplier

Push/pull view of SC
Example for make to order environment
processes
Customer
PUL
PROCESSE
L
S

Customer Order
Manufacturing
&
Cycle

Customer
arrive
order
s
PUS
PROCESSE
H
S

DELL
Company

Procurement
Cycle
Suppli
er

Supply chain macro

processesin a
firm
Suppli
er
Supplier
Relationship
Management
(SRM)

Sourc
Negotiat
e
Bu
e
Design
y
Supply
Collaboration
Collaboration

Fir
m
Internal
Chain
Supply
Management
(ISCM
)

Strategic
Demand
planning
Supply
planning
Fulfillme
planning
nt
Field
service

Custom
er
Custom
Relationshi
er
Management
p
(CRM)

Mark
Pric
et
Sel
e
lCall
Order
centre
management

Supply chain decision making

framework
Competiti
ve
Strategy
Strateg
ic
Fit
Efficienc
y

Facilitie
s

Supply
Chain
Strategy
Supply Chain
Structure
Inv &
trans.

Sourcing&Prici
ng

Driver
s

Responsivene
ss

Info
system