Learning Objectives

Understanding Supply Chain

Describe Define
Supply chain and Objectives and
define supply elements of
management supply chain
management.

Learn Describe
Local, regional a brief history
and global supply and current trends
chain in supply chain
management management.
activities.
Supply Chain

Consumer Purchase Information

Product
ProductFlow
Flow
Customer Service
Purchasing
Logistics Operations
Demand and Replenishment
A generic Supply Chain

Reversed Logistics

electrical wire, fabrics,

plumbing items, nuts finished products
and bolts, molded
plastic components,
processed foods

assemble finished finished products

sheet steel, aluminum, products
copper, lumber and
inspected foodstuffs
Service Providers

￭A number of other companies are also indirectly

involved in most supply chains, and they play a
very important role in the eventual delivery of end
products to customers

￭ example: trucking and airfreight shipping

companies, information system providers, public
warehousing firms, freight forwarders, agents and
consultants
Supply Chain

Supply chain is a sequence of (decision making and

execution) processes and (material, information and
money) flows that aim to meet final customer
requirements and take place within and between
different supply chain stages.

The supply chain not only includes the manufacturer

and its suppliers, but also (depending on the
￭logistics flows) transporters, warehouses, retailers,
and consumers themselves
 The goal of
Supply Chain….
to link the market place, distribution
network, manufacturing and procurement
in a way that delivers high customer
service level at the lowest cost.
Supply Chain Management

￭The Council of Supply Chain Management Professionals

(CSCMP) defines supply chain management as:

“The planning and management of all activities involved in

sourcing and procurement, conversion and all logistics
management activities. Importantly, it also includes
coordination and collaboration with channel partners, which
can be suppliers, intermediaries, third-party service providers
and customers.

Supply chain management is the management of a network of

interconnected businesses involved in the ultimate provision of
product and service packages required by end customers
(Harland, 1996).”
“At P&G, we decided to stop
being so company-centric,
and start being customer-
centric and demand-driven.
We found when you do that,
some amazing things happen
- Ralph Drayer
Importance of Supply Chain Management

 To compete in the global market and networked

economy.
 Inter-organizational supply network can be
acknowledged as a new form of organization.

 Can mean lower purchasing and inventory carrying

costs, better product quality and higher levels of
customer service—all leading to more sales.
The Origins of Supply Chain Management
The Origins of Supply Chain Management
The Origins of Supply Chain Management
The Origins of Supply Chain Management
Elements of Supply Chain Management

Supply Chain Management Important Issues

Elements
Supply supply base reduction, supplier
alliances,
SRM, global sourcing, ethical
and sustainable sourcing
Operations demand management, CPFR,
inventory management, MRP, ERP,
lean systems, Six Sigma quality
Logistics logistics management, CRM, network
design, global supply chains,
sustainability, service response
Logistics

Integration barriers to integration, risk and

security management, performance
measurement, green supply chains
Supply Management

￭Supply Management encompasses the

planning and management of all
activities involved in sourcing and
procurement, demand and
replenishment and all logistics
management activities including
customer service.
Supply Management

￭Importantly, it also includes coordination and

collaboration with channel partners, which can be
suppliers, intermediaries, third-party service
providers, and customers.

￭The goal of Supply Management is to link the

elements of supply chain to include the distribution
network, the manufacturing process and the
procurement activity to deliver high customer
service at the most cost efficient manner.
Plant Management

￭To manufacture quality products at the lowest

imaginable controllable cost, in order to deliver
volume targets

￭This includes the management of all the activities

in the plant to convert raw and packaging
materials to finished goods ensuring the highest
levels of productivity are met, whilst maintaining
world-class Environment, Safety and Health
standards
Supply Management
+
Plant Management
(Conversion)
=
Internal Functions
that Drive the
Supply Chain
Current Trends in Supply Chain Management

 Expanding (and Contracting) the Supply

Chain

 Increasing Supply Chain Responsiveness

 The Greening of Supply Chains

 Reducing Supply Chain Costs

Functional scope for Supply
Management is based on four pillars.
DEMAND AND REPLENISHMENT

Logistics
Operations

Customer Demand
Services Forecasting
Supply
Management
Demand and Inventory
Replenishment Management

Purchasing Replenishment
LOGISTICS OPERATIONS

Warehousing

Handling and
Storage
Logistics
Operations
Inventory
management
Customer
Service
Supply Transportation
Management and Delivery
Demand and
Replenishment

Purchasing
CUSTOMER SERVICE

Logistics
Order Taking
Operations

Customer
Order Entry
Service
Supply
Management
Demand and Order
Replenishment Processing

Purchasing
PROCUREMENT

Logistics
Operations

Customer
Service
Supply
Management
Demand and Supplier
Replenishment Selection

Negotiation
Purchasing
and Bidding

Contract
Administration
Management Responsibility

Customer Demand and

Service Replenishment

Logistics
Purchasing
Operations
Supply
Management
Management Responsibility

Performance
Measurement Management
Alignment

System
Capability

Series 1 Series 2 Series 3

Thanks!
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