Factors Affecting

the Performance
of Supply Chain
Management
A) Logistical Factors:-
2. Facilities
3. Inventory
4. Transportation

B) Cross-functional Factors:-
7. Information
8. Sourcing
9. pricing
It is actual physical location in Supply
Chain Network where product is stored,
assembled or fabricated.
Facilities are a key factors of SC
performance in terms of responsiveness
and efficiency.
Two major facilities :-
a) production sites
b) storage sites
Role
Location
Capacity
Capacity
Utilization
Theoretical flow
Actual avg. flow
Flow time efficiency
Product variety
Inventory exists in SC because of
mismatch between supply and demand.
An important role that inventory plays in
SC is to increase amount of demand that
can be satisfied by having the product
ready and available when the customer
wants it.
Another significant role that inventory
plays is to reduce cost by exploiting
economics of scale that may exist during
production and distribution.
To have
more responsiveness-more inventory
Cycle inventory
Safety inventory
Seasonal inventory
Level of product availability
It moves product between different
stages in SC.
Modes of transportation
Road
Air
Water
Rail
Pipelines
Faster transportation allows a SC to
be more responsive but reduces its
efficiency.
Design of Transportation Network:-
Collection of transportation modes,
locations and routes along which
product can be shipped.
Choice of Transportation Mode:- It is the
manner in which a product is moved
from one location in the SC network to
another.
 Information serves as the connection
between various stages of SC, allowing
them to co-ordinate and maximize total
SC profitability.
Information is also crucial to the daily
operations of each stage in a SC.
For instance,
Prod. Scheduling syst. uses info. on
demand to create a schedule to
produce a right product in an efficient
manner.
Warehouse mgt syst uses info to
create visibility of inventory.
Push Versus Pull
Coordination and Information Sharing
Forecasting and Aggregate Planning
Enabling technologies
 It is the set of business processes
required to purchase goods and
services.
Managers must first decide which
tasks will be outsourced and those
that will be performed within the
firm.
Components of Sourcing
Decisions:-
In-House or Outsource
Supplier Selection
It is the process by which a firm
decides how much to charge
customers for its goods and services.
Pricing affects the customer
segments that choose to buy the
product , as well as the customers
satisfactions.
Pricing is one of the most significant
factors that affect the level and type
of demand that the SC will face.
Pricing and Economies of scale
Everyday Low Pricing v/s High-Low
Pricing
Fixed Price v/s Menu Pricing