2. Introduction
• oversight of materials, information, and finances as they move
in a process from supplier to manufacturer to wholesaler to
retailer to consumer
• Supply chain activities cover everything from product
development, sourcing, production, and logistics, as well as
the information systems needed to coordinate these activities.
• There are two types of flows:
• Physical flows
• Information flows
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5. Other definitions..
• The design and management of seamless, value-
added process across organizational boundaries to
meet the real needs of the end customer -- Institute
for Supply Management
• Managing supply and demand, sourcing raw
materials and parts, manufacturing and assembly,
warehousing and inventory tracking, order entry
and order management, distribution across all
channels, and delivery to the customer -- The
Supply Chain Council
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6. Objectives
Supply chain management is concerned with the efficient
integration of suppliers, factories, warehouses and stores so
that merchandise is produced and distributed:
• In the right quantities
• To the right locations
• At the right time
In order to
• Minimize total system cost
• Satisfy customer service requirements
• face global competition
• Improve standardization
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9. Supply chain strategy
• Decides how to structure the supply chain over the next
several years
• Chain configuration,
• Resource allocated and
• Process at each stage should perform
Decisions include
• Location and capacities of production and
warehousing facilities,
• The products to be manufactured or stored at various
locations,
• The method of transportation to be made available
along different shipping legs, and
• The type of information system to be utilized
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10. Supply chain planning
• Under the given configuration decisions are made which has
impact on a time frame of quarter to a year
• Starts with a forecast the coming year or a comparable time
frame
• Planning decisions include
– which market will be supplied from which locations,
– The subcontracting for manufacturing,
– The inventory policies to be followed, and
– The timing and size of marketing promotions
• Companies in the planning phase try to incorporate any
flexibility built into the supply chain in the design phase and
exploit it to optimize performance
• Configuration is fixed and policies are defined
• Objective is to handle incoming customer orders in the best
possible manner
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11. Supply chain operation
• Decisions are taken regarding individual customer
order and the time frame is week or days
• Configuration is fixed and policies are defined
• Objective is to handle incoming customer orders in
the best possible manner
• Decisions related with:
-individual orders
-Shipment
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12. Process View of a Supply
Chain
Cycle View
• Processes in a supply chain are divided into a series of cycles, each
performed at the interfaces between two successive supply chain
stages
• Each cycle occurs at the interface between two successive stages
• Customer order cycle (customer-retailer)
• Replenishment cycle (retailer-distributor)
• Manufacturing cycle (distributor-manufacturer)
• Procurement cycle (manufacturer-supplier)
• Cycle view clearly defines processes involved and the owners of
each process. Specifies the roles and responsibilities of each
member and the desired outcome of each process.
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14. Push/Pull View of Supply
Chains
• Processes in a supply chain are divided into two
categories depending on whether they are
executed in response to a customer order (pull) or
in anticipation of a customer order (push).
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15. • Supply chain processes fall into one of two categories
depending on the timing of their execution relative to
customer demand
• Pull: execution is initiated in response to a customer
order (reactive)
• Push: execution is initiated in anticipation of customer
orders (speculative)
• Push/pull boundary separates push processes from pull
processes
• Useful in considering strategic decisions relating to
supply chain design – more global view of how supply
chain processes relate to customer orders
• Can combine the push/pull and cycle views
• The relative proportion of push and pull processes can
have an impact on supply chain performance.
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16. The importance of a
supply chain flows
i. Boost Customer Service
ii. Reduce Operating Costs
∙ Decreases Purchasing Cost
∙ Decreases Production Cost
∙ Decreases Total Supply Chain Cost
iii. Improve Financial Position
∙ Increases Profit Leverage
∙ Decreases Fixed Assets
∙ Increases Cash Flow
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17. Societal Roles of Supply
chain flows
i. Ensure Human Survival
∙ SCM Helps Sustains Human Life
∙ SCM Improves Human Healthcare
∙ SCM Protects Humans from Climate Extremes
ii. Protect Cultural Freedom and Development
∙ Defending Human Freedom
∙ Protects Delivery of Necessities
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18. iii. Improve Quality of Life
∙ Foundation for Economic Growth
∙ Improves Standard of Living
∙ Job Creation
∙ Opportunity to Decrease Pollution
∙ Opportunity to Decrease Energy Use
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19. Pitfalls Of Supply Chain
Management
• Inventory – too much or too little
• No Plan B
• No transparency
• No traceability
• Focusing only on the big stuff
• Managing too many partners
• Ignoring the warning signs
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