supply chain management

1. 16-1 Supply Chain Management
Dr. Ziaul Haq Adnan
Supply Chain Management

2. 16-2 Supply Chain Management
3 Entities
1. Raw Materials, Finished Products
2. Suppliers, Customers
3. Flow of goods (services), information, funds
Basic Supply Chain

3. 16-3 Supply Chain Management
Basic Supply Chain
(for Manufacturing Industry)
The Basic Supply Chain (Chopra and Meindl, 2001)

4. 16-4 Supply Chain Management
Basic Supply Chain
(for Service Industry)
Supplier Service Provider Customer
Raw
Materials
Finished
Products
Consumer

5. SCM Applications
• Manufacturing Industries
• Vegetable SC
• Poultry SC
• Fishing SC
• RMG SC
• Textile SC
• Apparel SC
• Pharmaceuticals SC
• Stationery SC
5
• Service Industries
• Education SC
• Hospital SC
• Tourism SC
• Banking SC
• Insurance SC

6. Supply chain management (SCM) is needed for various reasons
(Stevenson, 2002)
• Improving operations
• Better outsourcing
• Increasing profits
• Enhancing customer satisfaction
• Generating quality outcomes
• Tackling competitive pressures
• Increasing globalization
• Increasing importance of E-commerce
• Growing complexity of supply chains
6
Necessity of SCM

7. 16-7 Supply Chain Management
Supply Chain Management
Supply Chain Management: The sequence of
organizations - their facilities, functions, and
activities - that are involved in producing and
delivering a product or service.

8. 16-8 Supply Chain Management
 Warehouses
 Factories
 Processing centers
 Distribution centers
 Retail outlets
 Offices
Facilities

9. 16-9 Supply Chain Management
Functions and Activities
 Forecasting
 Purchasing
 Inventory management
 Information management
 Quality assurance
 Scheduling
 Production and delivery
 Customer service

10. 16-10 Supply Chain Management
Decision Phases of a Supply Chain
 Strategy or Design
 Planning
 Operation
Strategy
Planning
Operation
Level-One
Level-Two
Level-Three

11. 16-11 Supply Chain Management
Level One
Supply Chain Strategy or Design
 Structure of the supply chain
 Strategic supply chain decisions
 Locations and capacities of facilities- Whether my facilities in
city or outside the city.
 Products to be made or stored at various locations-Either I am
opening stores in various places or one big store
 Modes of transportation- what is the modes of the transportation.
 Information systems- how much I am investing
 Supply chain design must support strategic objectives
 SC design decisions are long-term and expensive to reverse

12. 16-12 Supply Chain Management
Level Two
Supply Chain Planning
 A set of policies that govern short-term operations
 Fixed by the SC design (strategy)
 Starts with a forecast of demand for the coming year

13. 16-13 Supply Chain Management
Level Two
Supply Chain Planning
 Planning decisions:
 Which markets will be supplied from which
locations
 Planned buildup of inventories
 Subcontracting, backup locations
 Inventory policies
 Timing and size of market promotions
 Must consider demand uncertainty, exchange
rates, competition over the time horizon

14. 16-14 Supply Chain Management
Level Three
Supply Chain Operation
 Time horizon is weekly or daily
 Decisions about individual customer orders
 Configuration is fixed and operating policies are
determined
 Goal is to implement the operating policies as
effectively as possible
 Allocate orders to inventory or production, set order
due dates, generate pick lists at a warehouse,
allocate an order to a particular shipment, set
delivery schedules, place replenishment orders
 Much less uncertainty (short time horizon)

15. 16-15 Supply Chain Management
3-15
A Framework for Structuring Drivers
Competitive Strategy
Supply Chain
Strategy
Efficiency Responsiveness
Facilities Inventory Transportation
Information
Supply chain structure
Cross Functional Drivers
Sourcing Pricing
Logistical Drivers

16. 16-16 Supply Chain Management
3-16
Drivers of Supply Chain Performance
 Facilities
 places where inventory is stored, assembled, or fabricated
 production sites and storage sites
 Inventory
 raw materials, WIP, finished goods within a supply chain
 inventory policies
 Transportation
 moving inventory from point to point in a supply chain
 combinations of transportation modes and routes
 Information
 data and analysis regarding inventory, transportation, facilities throughout the supply
chain
 potentially the biggest driver of supply chain performance
 Sourcing
 functions a firm performs and functions that are outsourced
 Pricing
 Price associated with goods and services provided by a firm to the supply chain

17. 16-17 Supply Chain Management
Evolutionary Timeline of SCM
(Habib and Jungthirapanich, 2009)
O’Brien and Kenneth (1996) : Education, but there was no model.
Lau (2007): Education, but case study on City University of Hong Kong
Habib (2009): Integrated Tertiary Educational Supply Chain Management (ITESCM)