Supply chain management involves coordinating all activities involved in sourcing and delivering products, from raw materials to customers. The goal is to match supply and demand profitably by achieving the right product, price, place, promotion, quantity and time for both suppliers and customers. Effective supply chain management can lower costs, increase productivity and profits through improved forecasting, purchasing, inventory management, and information sharing across the entire chain. Current trends include expanding globally, reducing environmental impact, and decreasing supply chain costs through outsourcing, technology, and continuous improvement.

1. SUPPLY CHAIN MANAGEMENT
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2. Supply Chain Management - Meaning
 All facilities, functions, activities, associated with flow
and transformation of goods and services from raw
materials to customer, as well as the associated
information flows
 An integrated group of processes to “source,” “make,”
and “deliver” products

3. What is Supply Chain Management?
- A supply chain consists of
Supplier
Manufacturer
Distributor
Retailer
Upstream
Customer
Downstream
- aims to Match Supply and Demand,
profitably for products and services
SUPPLY SIDE
DEMAND SIDE
- achieves
The right
Product
+ + +
The right
The right
The right
Price
Store
Quantity
+
The right
+
Customer
The right
Time
=
Higher
Profits

4. Origins of Supply Chain Management
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5. Supply Chain facilities
•Warehouses
•Factories
•Processing Centers
•Distribution Centers
•Retail Outlets
•Offices

6. Supply Chain functions & activities
•Forecasting
•Purchasing
•Inventory Management
•Information Management
•Quality assurance
•Scheduling
•Production & Delivery
•Customer Service

7. Need for Supply Chain Management

8. Impact of both areas on each other

9. Need for Supply Chain Management
•Match Demand
•Improve Operations
• Increasing transportation cost
• Competitive pressures
• Increasing globalization
• Managing Inventories
• Increasing importance of e-commerce
• Complexity of supply chains

10. Benefits of Supply Chain Management
• Lower inventories
• Higher productivity
• Higher profitability
• Shorter lead times
•Greater customer loyalty by delivering on time

11. Challenges of Supply Chain Management
Difficulty in integration
•Getting top managements on board
•Dealing with trade-offs
•Small businesses
•Variability & Uncertainty
•Long lead times
•

12. Current Trends in Supply Chain Management
•Outsourcing of manufacturing is a major trend
•Outsourcing of the logistics function
•Moving towards more web based transactions
systems
•Improving the information flows along the entire
chain

13. Current Trends in Supply Chain Management
Expanding the Supply Chain
 The expansion involves:
 breadth- foreign manufacturing, office & retail sites, foreign
suppliers & customers
 depth- second and third tier suppliers & customers

14. Current Trends in Supply Chain Management
The Greening of Supply Chains
- Producing, packaging, moving, storing, delivering and
other supply chain activities can be harmful to the
environment
 Supply chains will work harder to reduce
environmental degradation
 Large majority (75%) of U.S. consumers influenced by
a firm’s environmental friendliness reputation
 Recycling and conservation are a growing alternative
in response to high cost of natural resources
14

15. Current Trends in Supply Chain Management
Reducing Supply Chain Costs
 Cost reduction achieved through:
 Reduced purchasing costs
 Reducing waste
 Reducing excess inventory, and
 Reducing non-value added activities
 Continuous Improvement through
 Benchmarking- improve over competitors’
performance
 Trial & error
 Increased knowledge of supply chain processes