By the end of this presentation you should be able to:
Describe the Historical background behind the concept of the supply chain.
Understand the Importance of the supply chain.
Define supply chain management.
List supply chain types.
Describe the objectives of the supply chain.
Analyze supply chain components.
Mention supply chain activities.
Understand how to implement supply chain into action.
Discuss technical challenges associated with supply chain management.
Relate the role of E- Business applications on the supply chain.
management(SCM) appeared as a hot
topic during the pervious years, especially
during the decade of 90’s , which was
characterized by the shift of power from
the manufacturer towards the customer,
using friendly technology, and shifting the
process of making profit from outside the
organization to the inside environment.
After the Second world war ,production exceeded demand .
The war emphasized the importance of reaching the right
product ,at the right time and at the right amount and
This supply chain was referred to as “The Logistics
History shows that logistic capabilities have helped countries
win wars, The case of the USA and allies winning the gulf war
was due to the effective logistics, on the
other hand the defeat of Napoleon in Russia
Was due to poor logistics.
Every organization and firm started to
understand the importance of logistic
management, but the focus was always on
the outbound activities, not inbound
, because they believed that profit will come
from outside only.
Before Globalization and
Changing in government policy
After Globalization and Changing
in government policy
The manufacturers were the
kings(they controlled everything
and the customer had to accept
and take what they offered)
The Customer is the king, he can
demand new things and gets what
he really wants.
Bad relationship between the
suppliers and manufacturers
Good relationship between the
suppliers and manufacturers
Departments of the organization
functioned in isolation
Departments of the organization
started to cooperate with each
“The element of strategic purchasing as a vital component in the
corporate planning process is aimed at gaining competitive
advantage .slowly but surely the importance of strategic supply
management is coming out of its closet”
It determines the competitiveness of the
organization in the market.
It determines its profitability.
For winning the end user,companies need to take every part
of its supply chain together,
“the competition is now between supply chains”
A supply chain includes all the processes
that add customer-desired value to
material and bring it to the customers. This
value gets added at various stages of the
journey that materials takes till it reaches
the customer. Supply chain encompasses
all these value adding stages.
“SCM aims to increase sales, reduce costs, and make
full use of assets by streamlining the interaction and
communication of all participants along the supply
chain, SCM solutions use networking technology to
link suppliers, distributors, and business partners to
better satisfy the end customer, while feeding real
time data about the customer demand into the
partners’ production and distribution process”
Very basic type, found in small scale
industries, loosely organized , not enough
cooperation between units of the
This supply chain is more advanced than
the previous one, more organized, better
relations with suppliers, some amount of
information flowing, but there is no other
supply chain initiative appearing.
This type of food chain exists in food
This type is the most common type , here
the organization has implemented ERP
(Enterprise resource planning),they are
well-organized from the inside, but not
connected to the suppliers or distributors
In their fold.
This type of supply chain is internally optimized , and extend
well beyond the company boundaries, but the problem is
that this type only concentrate on partial integration.
This type is very common, especially in the automotive sector.
This type of supply chain is company
centric not customer centric, it brings all
partners together, it can achieve a
considerable speed to market, but it is not
because of total optimization.
This type of supply chain let the logistic
partner take care of everything (inbound,
outbound logistics relationship, information
This type is very rare and can be found in
some of the export houses.
Focus on Other Business Aspects
Potential for Setbacks
Minimize Overall Costs
Meet Customer Demand
This type of supply chains focuses its energy
on production by optimizing the capacity
Law value items are made and sold
through various channels, marketing and
distribution are not issues.
Known as cash to cash cycle it focuses on
the financial goal by doing these steps:
1-Reducing the inventory and increasing
2-Speed the invoicing process, reduce
billing errors, speed response to overdue
This type of supply chain is triggered when
a customer places an order.
It is highly flexible
Example: computer hardware sector.
This is the ultimate integration that is aimed
at total optimization , it addresses theses
Waster disposal, improving productivity
Not very common.
Value is added to the basic material
procured from the first tier of suppliers
and pass them on the next nodes, and
The key aspects to success in supply chain management
Are :speed and coordenation, and realizing customer
needs and satisfaction, keeping the cost down and
keeping the quality up
The most important objective is
unification of all functions and activities
that are required .
The principal objectives are:
To reduce the physical supply chain.
To define supply chain responsibilities to
a specific core service competency.
To decrease the time and cost of getting
end user customer products in volume to
•Is the key to CSM
•Getting the right
information at the
right time to the
•Flawless , efficient
•Both in and out
customer on time
• Balance between over stocking and under stocking
• The faster the better
Plan: Evolve a strategy, evolve metrics for
Source: Choose the right supplier , control
inventory, ensure smooth information flow.
Make :Converting raw to finished product,
Deliver: all the steps to reach customers.
Return: Handling exceptions and errors .
Crafting project vision.
The focus should be on the project vision all
across departments , it will lead to success.
Managing organizational change.
The organization has to change and form a
Single entity ,rearrangement of relations from
inside and outside.
Choosing the right implementation
Gradual change VS dramatic big bang
Managing technical challenges.
Technology architecture: should be
addressed according to the needs of
the business , as well as system response
Interfacing multiple system: interfacing
multiple systems is a challenge, a strong
communication system is very important
Data accuracy and integrity:
highlighting key data requirements early,
to ensure data validation.
It is the latest generation of the supply
Characterized by the combination
between the internet and the supply chain.
Dynamic chain based on the ERP .
E-business applications effectively provide
an information system that effectively links
multiple companies in a chain The
information hub would be a web site
connected to different chains.
B2B or B2C
E-commerce tasks are:
Executing orders by customers,
Communication between the members of the
Electronic order tracking
Remote sensing testing and diagnosis of
problems in various parts of the supply chain.
Recording useful performance data about the
It is a process by which a manufacturer
procures products from suppliers.
Dynamic markets link manufacturers and
suppliers , buyers and sellers into virtual
dynamic markets like: Ariba, free
Electronic market place example:
chaconnes, (software needed)
Theses softwares include data storage,
marketplace management and
E- business thrive on effective collaboration
between its employees , suppliers, franchises
,distributers ,dealers , stakeholders, and
customers, by implementing group decision
making in a cost effective way.
E –collaboration allows companies to share
information, collaborative planning, reduce
inventory cost and raise customer service level.
E- collaboration help in managing the product
life cycle, exchanging information with
customers, which made the supply chain
operations more efficient.