This document provides an overview of supply chains, operations, and projects. Supply chains span multiple organizations to deliver products from suppliers to customers. They can follow a traditional linear model or be closed-loop systems. Operations occur within individual organizations and focus on transforming and adding value through processes. Projects are more specialized and defined events with clear start and end points that are often managed using cross-functional teams. While the module focuses on supply chain management, operations and projects are also important components to understand.

1. Level Two
Supply Chain Management
Supply Chain Management II
Learning ObjectivesTo understand supply chain management
beyond the traditional model.To appreciate the complexity of
meeting customers requirements.
DefinitionThe management of activities that produce materials
and services, transform them into intermediate goods and final
products, and deliver them through a distribution system.
Heizer and Render (2010)
SCM Activities PurchasingDistributionProductionMaterials
managementSupplier managementCustomer management
The Supply Chain

2. Taken from Slack (2010)
Purchasing
The function responsible for buying all the materials needed by
an organisation.
Waters (2008)Procurement is a wider term. Rental, contracting,
legalities etc
PurchasingThe link between the suppliers and the operation.
Need to understand the requirements of processesAnd, the
capability of potential suppliers. Large number of suppliers
used and available ManagingDecisionsImplications of e-
procurement
Purchasing - ExampleTotal Sales - £10,000,000Purchased
services and materials - £7,000,000Salaries -
£2,000,000Overheads - £500,000Profit = £500,000
Purchasing - Example continuedProfits could be doubled to £1
million if any of the following occur:Sales revenues increase by
up to 100%Salaries decrease by 25%Overheads decrease by
100%Purchase costs decrease by 7.1%
Selecting SupplierDifficult decisionsTrade offsScoring and

3. supplier assessmentOne supplier or multiple suppliers?Change
and risk
Supplier ManagementFactors for rating alternative
suppliersShort-term ability to supplyLong-term ability to
supplyRange of products or services providedPotential for
innovation Quality of products or servicesEase of doing
businessResponsivenessWillingness to share riskDependability
of supplyLong-term commitment to supplyDelivery and volume
flexibilityAbility to transfer knowledge as well as products and
servicesTotal cost of being suppliedTechnical capabilityAbility
to supply in the required quantityOperations capability
Financial capability
Managerial capability
Supplier ManagementSuppliers selected based upon trade
offs.Supplier scoring / assessment.One or multiple
suppliers.Meeting business needs.Need to audit.Long term
suppliers and improvements.
DistributionPhysical distribution management, logistics or
distribution.Logistics is the function responsible for all aspects
of of the movement and storage of materials on their journey
from original suppliers through to final customers. (Waters
2008)Aims to obtain efficiency through the integration of all
material acquisition, movement and storage activities. (Heizer
and Render 2010)

4. DistributionDistribution methodsRoadRailSeaAirPipeThird
party logistics providers Information and customer service
implications/expectations e.g. order tracking.
Materials ManagementLimited term - controls the movement of
materials within an organisation. Waters 2008Concerned with
the flow of materials and information through the immediately
supply chainFirst tier supplierManufacturerFirst tier customer
Material ManagementSpecialist software sometimes usedWhat
materials are required?When and where do you need the
materials?How will you use the materials? What do they have to
be combined with?What is done with the materials after use?
Customer Relationship Management
A method of learning more about customers' needs and
behaviours in order to develop stronger relationships with them.
Slack et al 2013Data collected from loyalty cards
Customer Relationship ManagementHelps to sell products and
services more effectively and increase revenues by:Providing
services and products that are exactly what your customers
want. Retaining existing customers and discovering new ones.
Offering better customer service. Cross-selling products more
effectively.

5. Slack 2010
Customer Relationship ManagementWhy is CRM important to
SCM?SCM is about meeting the needs of customers.Allows us
to plan production and demand levels. However, Consider the
effectiveness of meeting customer needs.A tool for increasing
profit and exploiting customers?
Tiers and Integration
Common in more complex supply chains in automotive or
aerospace industries.OEMsTiers - how many stages to or from
the OEM
Supply Chain IntegrationHorizontal Integration - expansion of
the business at the same point in the supply chain.Vertical
Integration - expansion along the supply chain. Can be on the
supply or demand side (up or downstream).Examples of vertical
integration:BP / ShellDell Computers
Vertical (Supply Chain) Integration BenefitsGreater levels of
controlCost benefitsCompetitive advantage
DrawbacksExpensiveDifficult to reverse
To DoReadingRefer to the weekly reading listOnline
activityDetails on moodle

6. Today.....We now:Understand supply chain management beyond
the traditional model.Appreciate the complexity of meeting
customers requirements.
References
Heizer, J., and Render, B. (2010) Operations Management. 10th
edn. Harrow: Pearson
Slack, N., Brandon-Jones, A., and Johnston, R. (2010)
Operations Management. 6th edn. Harrow: Pearson
Slack, N., Brandon-Jones, A., and Johnston, R. (2013)
Operations Management. 7th edn. Harrow: Pearson
Waters, D. (2008). Supply Chain Management: An Introduction
to Logistics. 2nd edn. London: Palgrave
Level Two
Supply Chain Management
Supply Chain Management I
Learning ObjectivesTo understand what is meant by the term
supply chain managementTo understand the traditional supply
chainBe able to apply the traditional supply chain

7. Definitions
No one set definition Often seen as an umbrella termConfusion
with the term ‘logistics’. The term ‘supply chain management’
began to appear in the 1980s.
SCM DefinitionsSlack et al (2013) define a supply chain as a
"strand of linked operations".Cox et al (1995) define supply
chain as the functions within and outside a company that enable
the value chain to make products and provide services to the
customer.Heizer and Render (2010) define SCM as the
"management of activities that produce materials and services,
transform them into intermediate goods and final products, and
deliver them through a distribution system."
Definition Confusion
Supply Chain Management is not just another term for
logistics, purchasing, warehousing, manufacturing et cetera
individually.It is instead about managing all of the activities
required to make raw materials into useable goods or services
required by the end customer.
The Value Chain
The Traditional Supply Chain
Suppliers
Manufacturers
Distributors
Retailers

8. End Customers
Flow of Information
Flow of Goods
Supply Chain ObjectivesWhat are we trying to
achieve?Customer requirementsQualitySpeed
DependabilityFlexibilityCost
The Traditional Supply Chain
Suppliers
Manufacturers
Distributors
Retailers
End Customers
Flow of Information
Flow of Goods
The Traditional Supply ChainConsider the supply chains from
the earlier lecture:
What path do they take along the traditional supply chain?
?
?

9. ChairSuppliersRaw material - Wood -
ForrestManufacturersCraftsmanDistributorsLarge company
considerationsRetailersE.G. IKEAEnd Customer
CarMuch more complex
SuppliersManufacturersDistributorsRetailersEnd Customer
Jaguar Production
http://www.youtube.com/watch?v=1ZS_kmKledQ
Looks Simple?What about everything you did not see?Sub
assembliesDeliveries from various suppliersBack office staff
ensuring invoices and wages are paidTransportation to the
customerCustomers specific requirements being taken and
used.And more!
CommunicationKey to supply chain successWithout some form
of communication how do you know what the customer
wants?Or, when to produce something Or, have materials in
stock?
The Traditional Supply Chain
Suppliers

10. Manufacturers
Distributors
Retailers
End Customers
Flow of Information
Flow of Goods
The Bullwhip Effect
Sometimes referred to as the Forrester EffectSmall disturbances
downstreamBecome larger disturbances, errors, volatility
further up the supply chainUncertainty caused from distorted
information
ExampleYour company has over ordered product x.In order to
reduce the stock levels of x you promote the product and offer
50% off!Sales (demand) goes upYou sell out but the orders keep
comingYou go to your supplier and place a relatively large
order to satisfy customer needsWhat happens next?
Example continuedYour suppliers stocks get very lowThey
become worried and go to their suppliers (the factory) and order
moreIn order to meet the orders the factory has to increase
production (supply).Lots of back orders Orders are finally
fulfilled. Production levels need to change again.

11. Bullwhip Illustration
https://www.youtube.com/watch?v=3dXCaRetzdw
Bullwhip - ProblemsExcess inventoryQuality issuesIncreased
raw material costsOvertime expensesIncreased shipping
costsCustomer service issuesLonger lead timesUnnecessary
capacity adjustments
Bullwhip - CausesUn-forecasted sales promotionSales
incentivesLack of customer confidenceProducts being
returnedShipping incentives
Bullwhip -
Solution
s
Improve communication Improve quality of forecast dataWork
with the supply chainShare information

12. To DoReadingRefer to the weekly reading list on moodleOnline
activity
Today.....We now know:What is meant by the term supply chain
management. What the traditional supply chain is and what it
looks like.How the traditional supply chain is applied real world
examples.
References
Cox, J., Blackstone, J., Spencer, M. (1995) APICS Dictionary.
Virginia: American Production and Inventory Control Society
Heizer, J., and Render, B. (2010) Operations Management. 10th
edn. Harrow: Pearson
Porter, M. (1985) Competitive Advantage. New York: Free
Press
Slack, N., Brandon-Jones, A., and Johnston, R. (2013)
Operations Management. 7th edn. Harrow: Pearson

13. Level Two
Supply Chain Management
Supply Chains, Operations, Projects
Today......
By the end of this session you should:
Have an understanding of the differences between supply
chains, operations, and projects.
Where are you now?
What do you know about supply chains?
Do you know what an operation is?
Do you know what a project is?
Where are you now?
We don’t expect you to have detailed understanding yet.
Important for everyone to follow the weekly reading list.
Supply chains, operations and projects in the news.

14. VW emissions
Horse meat
London 2012
Question……
What have you seen about supply chains in the news recently?
Supply Chain
Slack – strand of linked operations.
Linear traditional model
Closed loop supply chains
Recycling
Focus on delivery
However, need to understand what goes on around the supply
chain.
The Traditional Supply Chain

15. Suppliers
Manufacturers
Distributors
Retailers
End Customers
Flow of Information
Flow of Goods
Closed Loop Supply Chain
Operations
How organisations create and deliver products and services.
Transformation process.
More discrete than a supply chain
Links with marketing and product development.

16. Operations
Operations
Examples:
Subway sandwiches
Assembly of an iPhone
Opening a bank account
Flight
Adding value
Projects
Low volume, high variety
Defined start and end
Deliverables
Milestones
Quality, cost and time

17. Projects
Success:
Clearly defined goals
Competent PM and team
Sufficient resources
Control and troubleshooting mechanisms
Staff continuity
Projects
Examples:
Running a music festival
Develop prototype smart phone
Build a new luxury hotel
Projects – Gantt Charts
Dependencies between tasks
Detail is important
Defined start and end points for every task
Can be translated into critical path analysis
Latest or earliest start and end times

18. Question……
If projects have supply chains; and supply chains have
operations; are all of these things the same?
In Summary
Supply chains can span a wide range of organisations in order to
deliver a product from supplier to customer.
Operations occur within individual organisations and seek to
transform and add value.
Projects are more specialised and defined events. Often using
cross functional teams.
This Module…..
Will focus on supply chain management, however:
Operations and projects are an important part of that.
It is important you understand the difference between the three.

19. To Do
Reading as per the weekly reading schedule.
Access news articles
Online task on moodle from Thursday