supply chain management

1. Lecture 4th 1/3/24
CHAPTER3:
Introduction to
supply chain
management
By
Prof Abdul Rasheed

2. CHAPTER 3:Introduction to supply
chain management
 Meaning:
 Supply chain management encompasses the
planning and management of all activities
involved in sourcing and procurement,
conversion, and all logistics management
activities.
 POSDCORB in activities
of logistics. Abdul Rasheed

3. Evolution of supply chain management:

4. Flows in SCM

5. 3 Flows in SCM
 Product flow:
The movement of goods from a supplier to a
customer.
 Information flow:
It involves transmitting orders and updating the
status of delivery.
 Financial flow:
It consist of credit terms, payment schedules,
discount information etc.

6. SCM – Process

7. SCM – Performance Measures
 Supply chain performance measure can be defined
as an approach to judge the performance of supply
chain system. Supply chain performance measures
can broadly be classified into two categories:
 Qualitative measures: For example,, customer
satisfaction and product quality.
 Quantitative measures: For example, order-to-
delivery lead time, supply chain response time,
flexibility, resource utilization, delivery performance,
Financial measures

8. Objectives of supply chain
management
 To reduce cost
 Inventory
 Warehousing
 Transportation
 Shorter lead time
 Enhancing customer service
 Maximize over all profitability
 Minimizing variance
 Ensuring on-time delivery
 Flexibility
 Better product reliability.

9. Logistics Supply Chain
1.the branch of military science and
operations dealing with the
procurement, supply, and
maintenance of equipment, with the
movement, evacuation, and
hospitalization of personnel, with the
provision of facilities and services, and
with related matters
the planning, implementation, and
coordination
of the details of a business or other
operation.
2. process:
 Inbound and Outbound
Transportation
 Warehousing
 Reverse Logistics (Returns)
 Protective Packaging
 Fulfillment.
1. a channel of distribution beginning
with the supplier of materials or
components, extending through a
manufacturing process to the
distributor and retailer, and ultimately
to the consumer.
2.Process:
 Procurement
 Supply Planning
 Demand Planning
 Enterprise Resource Planning
 Inventory Management
 Manufacturing
 Logistics
 Optimization

10. 3.Purpose:
The purpose of logistics is to provide just-
in-time delivery for the primary sake
of customer satisfaction.
4.Two flows
Product flow
Information flow
5.The focus of logistics management is
upon the management of resources within
the organization.
6. it’s a narrower concept
3. purpose:
The goal of supply chain management is
supply chain optimization for the sake
of competitive advantage, as in the most
efficient and cost-effective methods for
those working within a supply chain.
4. Three flows
Product flow
Information flow
Financial flow
5.The focus of SCM is upon the
management of relationships(outside the
organization) in order to achieve a more
profitable outcome.
6. It’s a broader concept

11. Functions of supply chain management
 Defining business boundaries and relationships
 Managing demand and supply
 Logistics
 Purchasing
 Selling
 Manufacturing
 Product design

12. Bullwhip effect

13. Bullwhip effect

14. Causes of bullwhip effect
 Lack of communication
 Lack of coordination
 Demand forecast inaccuracies
 Free return policy
 Delay in flow of information

15. Results /impact of bullwhip effect
 It increases manufacturing cost
 It increases inventory cost
 Warehousing cost
 Increases lead time
 Negative effect on performance and customer
satisfaction

16. Remedies/ solution of bullwhip
effect
 Know your customers
 Proper forecast
 Better flow of information
 No/strict free return policy
 Reducing lead .time

17. 3c’s in SCM

18. Value chain in SCM (Michel
Porter’s)

19. Expected questions for
examination on chapter 3rd
1) Differentiate between logistics and SCM.
2) What are the functions of SCM.
3) What are the objectives of SCM.
4) What is bullwhip effect explain its causes
and remedies.

20. Lecture 10th 7/5/23
CHAPTER4:
Integrated supply
chain
management
By
Prof Abdul Rasheed

21. integrated supply chain management
 An integrated supply chain is a network of suppliers,
manufacturers, and distributors that coordinate with
each other to carry out the goods warehousing and
distribution processes as effectively as possible.
 Supply chain integration can be defined as a close
calibration and collaboration within a supply chain,
mostly with the application of shared management
information systems. A supply chain is made from all
parties that participate in the completion of a purchase,
like the resources, raw materials, manufacturing of the
product, shipping of completed products and facilitating
services

23.  Triple A by Lee
 Being cost effective is not enough amongst competitive; actual
winners of the supply chain context are companies that are agile
(responding to short-time changes, contingency plans), adaptable
(responding to long-term changes, social/political/environmental
and tracking customer demand in long-term) and aligned (having
similar motivations and incentives in the industry)
 4R by Christopher (2001)
• Responsiveness (ability to meet customer demands by
responding to changes in the market) Agile/Adaptability
• Resilience (ability to cope with unexpected disturbances) Agile
• Reliability (quality of being reliable, dependable or trustworthy,
increasing standardization and decreasing process variability
generally contributes to reliability)
 Adaptability/Aligned
• Relationships (ability to manage relationships- every business is
built on relationships)
 Aligned

24. SCM

27. What does a SC Manager’s Job Consist of?
• Mitigate risks
• Supply monitory
• Scheduling
• Supplier selection
• Storage/inventory/logistics
• New ways of adapting into market
• Information flow and material management

28. Push-Me-Pull-You
PUSH & PULL System

29. Push Planning and Control
In a push-based supply chain, the goods are pushed with the help of a medium, from the
source point, e.g., the production site, to the retailer, e.g., the destination site. The production
level is set in accordance with the previous ordering patterns by the manufacturer.
▪ Centralized operation planning and control based on
forecast
▪ Different parts of production produce against the
forecast
▪ Strategies
o Production decisions based on long-term forecast
o Ordering decisions based on inventory & forecasts
o Problems with push strategies
▪ Inability to meet changing demand patterns
▪ Obsolescence
▪ Bullwhip effect:
• Excessive inventory
• Excessive production variability
• Poor service levels

30. Pull Planning and Control
▪ Produce exactly that what is demanded by order, no forecasting
▪ This manner “pulls” through the entire supply chain (bullwhip effect?)
▪ Characteristics of Just-in-Time (JIT)
o Reacts to demand
o Best for simple products and routings
o Requires level scheduling
o No inventory, must have quick reaction times
▪ Strategies
o Production demand driven
▪ Production and distribution coordinated with true customer demand
▪ Firms respond to specific orders
o Pull strategies result in
▪ Decreased inventory levels at retailers and manufacturers
▪ Decreased system variability
▪ Reduced production lead times
▪ Better responsiveness to changing markets
o But…
▪ Harder to leverage economies of scale
▪ Doesn’t work in all cases, especially when lead times are long
The pull-based supply chain is based on demand-driven techniques; the procurement, production and distribution
are demand-driven rather than predicting. This system doesn’t always follow the make-to-order production.

31. Differences in Push and Pull System
 The major differences between push and pull view in supply chain are as follows:
 In the push system, the implementation begins in anticipation of customer order whereas in the
pull system, the implementation starts as a result of customer’s order
 In the push system, there is an uncertainty in demand whereas in pull system, the demand
remains certain
 The push system is a speculative process whereas the pull system is a reactive process.
 The level of complexity is high in the push system whereas it is low in the pull system.
 The push based system concentrates on resources allocation whereas the pull system stresses
on responsiveness.
 The push system has a long lead time whereas the pull system has a short lead time.
 The push system assists in supply chain planning whereas the pull system facilitates in order
completion.
 To conclude, the push based supply chain integrations works with an objective of minimizing the
cost whereas the pull based supply chain integration works with an objective to maximize the
services it provides.

32. Choosing between Push and Pull
Supply Pipeline Performance – P Time > D Time

33. Uncertainty Framework
 Demand Uncertainty-
 [1] functional products, something customers want as soon
as possible and in a relatively cost efficient manner – steady
demands (eg. oil and gas)
 [2] innovative products, such as iPhone and other
fashionable products – unsteady demands Supply
Uncertainty- (eg. energy, such as renewable energy like
wind and solar are usually only possibly during the day,
therefore it is uncertain how the supply can be managed)

35. The usefulness of this framework-
 4 different quadrants, can come up with different
supply chain strategies for each one
• [1] go for efficient strategy
• [2] go for responsive strategy
• [3] go for risk-hedging strategy (eg. build system
with different suppliers)
• [4] go for an agile strategy (eg. be responsive and
react on the supply and demand side of
uncertainties)

36. Decoupling Point – The Push-Pull Boundary
Using a strategic inventory

37.  Push works well for downstream strategies- efficiency
during producing components Pull works well for demands-
very responsive and reactive
 Strategic inventory = decoupling point = when you separate
supply from demand in order to have a buffering area
 Framework allows strategic inventory at different points
within the supply chain

39. Push or Pull depends on where you locate the decoupling point within the
supply chain: