The document discusses pull and push supply chain models. A pull supply chain, also called built-to-order, manufactures products based on specific customer requests to minimize inventory carrying. A push supply chain, also called built-to-stock, manufactures products based on anticipated demand which can lead to higher inventory costs. The document provides examples of industries that typically use each model and their key characteristics.
Developed by Porter to get a bird's eye view of an organization's operation.
A value chain is a chain of activities for a firm operating in a specific industry.
Reveals opportunities to add value by improving cost, responsiveness to customers, efficiency, quality, reliability and integrity.
These is a formal B-school presentation presented on the topics show. It was given as the best .ppt on given topic .
for the college SITM, Pune
Do check it and feedback if any doubts.
Developed by Porter to get a bird's eye view of an organization's operation.
A value chain is a chain of activities for a firm operating in a specific industry.
Reveals opportunities to add value by improving cost, responsiveness to customers, efficiency, quality, reliability and integrity.
These is a formal B-school presentation presented on the topics show. It was given as the best .ppt on given topic .
for the college SITM, Pune
Do check it and feedback if any doubts.
It deals with every basic entity in an array of Supply Chain Web/Network which gives a detailed explanation that will help a candidate or a learner to understand the concept of Supply Chain Management.
How could the linkage between upstream and downstream value chain activities...musadoto
The firm's margin or profit then depends on its effectiveness in performing these activities
efficiently, so that the amount that the customer is willing to pay for the products exceeds the
cost of the activities in the value chain. It is in these activities that a firm has the opportunity to
generate superior value. A competitive advantage may be achieved by reconfiguring the value
chain to provide lower cost or better differentiation.
The value chain model is a useful analysis tool for defining a firm's core competencies and the activities in which it can pursue a competitive advantage in terms of Cost advantage(by better understanding costs and squeezing them out of the value-adding activities) and Differentiation( by focusing on those activities associated with core competencies and capabilities in order to perform them better than do competitors
,
,
,
Supply chain definition
The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.”
“A supply chain is the alignment of firms that bring products or services to market.”
“A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves.”
“A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.”
“Supply chain management is the coordination of production, inventory, location, and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served.”
There is a difference between the concept of supply chain management and the traditional concept of logistics. Logistics typically refers to activities that occur within the boundaries of a single organization and supply chains refer to networks of companies that work together and coordinate their actions to deliver a product to market. Also traditional logistics focuses its attention on activities such as procurement, distribution, maintenance, and inventory management. Supply chain management acknowledges all of traditional logistics and also includes activities such as marketing, new product development, finance, and customer service. Supply chain management views the supply chain and the organizations in it as a single entity. It brings a systems approach to understanding and managing the different activities needed to coordinate the flow of products and services to best serve the ultimate customer.
Different supply chain requirements often have conflicting needs. For instance, the requirement of maintaining high levels of customer service calls for maintaining high levels of inventory, but then the requirement to operate efficiently calls for reducing inventory levels. It is only when these requirements are seen together as parts of a larger picture that ways can be found to effectively balance their different demands.
Effective supply chain management requires simultaneous improvements in both customer service levels and the internal operating efficiencies of the companies in the supply chain. There is a basic pattern to the practice of supply chain management. Each supply chain has its own unique set of market demands and operating challenges and yet the issues remain essentially the same in every case. Companies in any supply chain must make decisions indivi
Vskills certified logistics and supply chain management reading materialVskills
The Vskills Certification Logistics and Supply chain management sample material covers the following concepts.
I. Introduction to Logistics
I.1 Interface between Logistics Manufacturing
I.2 Logistics: Manufacturing issues in Customer Service.
I.3 Production scheduling
I.4 Interface between Logistics Marketing
http://www.vskills.in/certification/Logistics-and-Supply-Chain-Management/Certified-Logistics-and-Supply-Chain-Professional
Volume 5 (19) Issue 2 2014 21 New Approaches to S.docxlillie234567
Volume 5 (19) Issue 2 2014
21
New Approaches to Supply Chain Management Concept.
Logistics Integration of "Hub and Spoke" Model
Gheorghe MINCULETE
Polixenia OLAR
“Carol I” National Defense University, Romania
[email protected]
Abstract
In the current modern trade, the integration of economic affairs from design to
completion is an important priority, which determines all economic options of companies
to focus on satisfying the needs of consumers and users to their loyalty.
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a
customer’s request. The supply chain not only includes the manufacturer and suppliers,
but also transporters, warehouses, retailers, and customers themselves.
Within each organization, such as a manufacturer, the supply chain includes all
functions involved in receiving and filling a customer’s request. These functions include,
but are not limited to, new product development, marketing, operations, distribution,
finance, and customer service.
This article stresses the essential aspects of supply chain management in modern
economics affairs, which are integrating under the functional aspect of the "hub and
spoke" model.
Keywords: supply chain management, hub and spoke model, hub and spoke
system, hub and spoke network, e-commerce
JEL Classification: L11, L22
1. Introduction
The management of the supply-delivery chain aims to intensify the processes that
take place from the level of the suppliers of raw materials to that of the end customers. The
aim is to increase the added value and to improve the use of resources and the efficiency of
costs by bringing the required product at the indicated time and place with minimum
manipulations and without delays.
A supply chain means a flow of goods, services, money and information through
different situations (Tan, 2001). These units are legally independent companies, factories
or offices far from each other, geographically speaking, or organizational entities that have
the autonomy to take decisions regarding the information systems.
The concept of management of the supply-delivery chain is closely connected to
Michael Porter's idea (1985), which expresses it as a chain of values based on the
processual vision on organizations. According to this idea, an organization can be seen as a
Valahian Journal of Economic Studies
22
subsystem composed of sub-systems, each of them with inputs, transformation
(conversion) processes and outputs.
Having in mind the logistic field, the management of the supply-delivery chain is
very important, because it covers the aspects that study the flows of materials and
information, the acquisitions and sales from an operative point of view, such as the
transports, orders and packing, but also aspects of a strategic nature, such as the
competition. Although there is a large number of definitions on the management of the
supply chain, th.
Volume 5 (19) Issue 2 2014 21 New Approaches to S.docxjessiehampson
Volume 5 (19) Issue 2 2014
21
New Approaches to Supply Chain Management Concept.
Logistics Integration of "Hub and Spoke" Model
Gheorghe MINCULETE
Polixenia OLAR
“Carol I” National Defense University, Romania
[email protected]
Abstract
In the current modern trade, the integration of economic affairs from design to
completion is an important priority, which determines all economic options of companies
to focus on satisfying the needs of consumers and users to their loyalty.
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a
customer’s request. The supply chain not only includes the manufacturer and suppliers,
but also transporters, warehouses, retailers, and customers themselves.
Within each organization, such as a manufacturer, the supply chain includes all
functions involved in receiving and filling a customer’s request. These functions include,
but are not limited to, new product development, marketing, operations, distribution,
finance, and customer service.
This article stresses the essential aspects of supply chain management in modern
economics affairs, which are integrating under the functional aspect of the "hub and
spoke" model.
Keywords: supply chain management, hub and spoke model, hub and spoke
system, hub and spoke network, e-commerce
JEL Classification: L11, L22
1. Introduction
The management of the supply-delivery chain aims to intensify the processes that
take place from the level of the suppliers of raw materials to that of the end customers. The
aim is to increase the added value and to improve the use of resources and the efficiency of
costs by bringing the required product at the indicated time and place with minimum
manipulations and without delays.
A supply chain means a flow of goods, services, money and information through
different situations (Tan, 2001). These units are legally independent companies, factories
or offices far from each other, geographically speaking, or organizational entities that have
the autonomy to take decisions regarding the information systems.
The concept of management of the supply-delivery chain is closely connected to
Michael Porter's idea (1985), which expresses it as a chain of values based on the
processual vision on organizations. According to this idea, an organization can be seen as a
Valahian Journal of Economic Studies
22
subsystem composed of sub-systems, each of them with inputs, transformation
(conversion) processes and outputs.
Having in mind the logistic field, the management of the supply-delivery chain is
very important, because it covers the aspects that study the flows of materials and
information, the acquisitions and sales from an operative point of view, such as the
transports, orders and packing, but also aspects of a strategic nature, such as the
competition. Although there is a large number of definitions on the management of the
supply chain, th ...
Putting the SPARK into Virtual Training.pptxCynthia Clay
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Recruiting in the Digital Age: A Social Media MasterclassLuanWise
In this masterclass, presented at the Global HR Summit on 5th June 2024, Luan Wise explored the essential features of social media platforms that support talent acquisition, including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok.
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Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
Event Report - SAP Sapphire 2024 Orlando - lots of innovation and old challengesHolger Mueller
Holger Mueller of Constellation Research shares his key takeaways from SAP's Sapphire confernece, held in Orlando, June 3rd till 5th 2024, in the Orange Convention Center.
1. EXPLAIN PUSH-PULL VIEW OF SUPPLY CHAIN PROCESS
Supply chain processes fall into one of two categories depending on the timing of their
execution relative to customer demand. All the industries fall under Pull or Push supply chain.
We have also seen hybrid new model called “Pull and Push” supply chain. Whatever is the
industry, as long as you make supply chain efficient using either pull techniques or push
techniques or both, that is what matters to the business.
What is Pull Supply Chain?
Under pull supply chain, products are manufactured or procured based on specific customer
requests. We also know it as “Built to Order” or “Configured to Order” model. We often see this
model operating in IT/High Tech Industries, where customization is the competitive advantage.
Briefly, we have seen this model in automotive industry and it is being used in high end luxury
market segment. The objective of this model is to minimize the Inventory carrying and optimize
supply. Pull model is as a response to growing uncertainty in demand and short product cycle.
Some of the characteristics of this model include:
1. Volatile demand situation;
2. High rate of Customization;
3. Minimal Inventory Carrying;
4. Highly dynamic and effective distribution network.
What is Push Supply Chain?
Under Push model, products are manufactured or procured based on anticipated customer
orders (speculative). This model is also known as Built to Inventory or Built to Sock. The name
itself reveals its functionality. Products are manufactured in anticipation of customer needs.
Even though direct to store or cross docks are implemented, overall retail supply chain is based
on push model. Some of the big names in the retail industry are trying to adopt the hybrid
model which is a combination of pull and push.
Some of the key challenges and characteristics could include:
1. High inventory costs,
2. Challenging working capital requirements due to low inventory turns;
3. Huge warehousing and distribution costs;
4. Inability to meet dynamic market conditions and
5. Seasonal demand and off the shelf product.
2. WHAT IS VALUE CHAIN AND WHY IS IT RELEVANT TO A FIRM TODAY?
The idea of a value chain was first suggested byMichael Porter (1985) to depict how
customervalue accumulates along a chain of activitiesthat lead to an end product or
service.Porter describes the value chain as the internalprocesses or activities a company
perform “todesign, produce, market, deliver and support itsproduct.” He further states
that “a firm’s valuechain and the way it performs individual activitiesare a reflection of
its history, its strategy, itsapproach to implementing its strategy, and theunderlying
economics of the activities themselves.”
Porter describes two major categories of business activities: primary activities and
supportactivities.
Primary activities are directly involved in transforming inputs into outputs and in
deliveryand after-sales support. These are generally alsothe line activities of the
organization. Theyinclude:
●inbound logistics—material handling and warehousing;
●operations—transforming inputs into the finalproduct;
●outbound logistics—order processing and distribution;
●marketing and sales—communication, pricingand channel management; and
●service—installation, repair and parts.
Support activities support primary activities andother support activities. They are
handled by theorganization’s staff functions and include:
●Procurement—purchasing of raw materials,supplies and other consumable items as
wellas assets;
●Technology development—know-how, proceduresand technological inputs needed in
every valuechain activity;
●Human resource management—selection,promotion and placement; appraisal;
rewards;management development; and labor/employeerelations; and
●Firm infrastructure—general management,planning, finance, accounting, legal,
government affairs and quality management
3. How it is relevant to firm?
“The value chain disaggregates a firm into its strategically relevant activities in order to
understand the behavior of costs and the existing and potential sources of differentiation. A
firm gains competitive advantage by performing these strategically important activities more
cheaply or better than its competitors” (Porter, 1985). Further, Porter claims that the value
chain is embedded in the value system consisting of several value chains:
The supplier value chain is responsible to create and deliver the inputs that are used within the
firm value chain; hence suppliers may have an influence on the firm´s performance.
The channel value chains describes that a product passes through a channel on its way to the
customer that may affect the buyer´s behavior.
The buyer value chain defines the role of the company and the product that are determined by
a buyer´s needs.
Porter emphasis that in order to do the value chain, it is important not only to understand the
firms value chain but also how the firms value chain fits and is embedded into the whole value
system. This is how competitive advantage is gained and sustained.
Most corporations define their mission as one of creating products or services. For these
organizations,the products or services generated are more important than any single step
within their value chain. In contrast,other companies are acutely aware of the strategic
importance of individual activities within their value chain. They thrive by concentrating on the
particular activities that allow them to capture maximum value for their customers and
themselves.
These firms use the value chain approach to better understand which segments,distribution
channels,price points,product differentiation, selling propositions and value chain
configurations will yield them the greatest competitive advantage.
The way that the value chain approach helps organizations assess competitive advantage is
through the following types of analysis:
Internal cost analysis—to determine the sources of profitability and the relative cost
positions of internal value-creating processes;
Internal differentiation analysis—to understand the sources of differentiation
(including the cost) within internal value-creating processes; and
Vertical linkage analysis—to understand the relationships and associated costs among
external suppliers and customers in order to maximize the value delivered to customers
and to minimize cost.
4. These types of analysis are not mutually exclusive. Rather,firms begin by focusing on their
internal operations and gradually widen their focus to consider their competitive position
within their industry.
WHAT IS ICD? WHAT ARE THE ADVANTAGE TO THE TRADE?
Inland Container Depots, otherwise known as ICDs, are dry ports equipped for handling and
temporary storage of containerized cargo as well as empties. This means that hinterland
customers can receive port services more conveniently closer to their premises
A common user facility with public authority status equipped with fixed installations and
offering services for handling and temporary storage of import/export laden and empty
containers carried under customs control and with Customs and other agencies competent to
clear goods for home use, warehousing, temporary admissions, re-export, temporary storage
for onward transit and outright export. Transshipment of cargo can also take place from such
stations.
FUNCTIONs OF ICDs/CFSs
The primary functions of ICD are as under:
a. Receipt and dispatch/delivery of cargo.
b. Stuffing and stripping of containers.
c. Transit operations by rail/road to and from serving ports.
d. Customs clearance.
e. Consolidation and desegregation of LCL cargo.
f. Temporary storage of cargo and containers.
g. Reworking of containers.
h. Maintenance and repair of container units.
The main benefits from ICDs:-
Concentration points for long distance cargoes and its unitization.
Service as a transit facility.
Customs clearance facility available near the centers of production and
consumption
Reduced level of demurrage and pilferage.
No Customs required at gateway ports.
Issuance of through bill of lading by shipping lines, hereby resuming full
liability of shipments.
Reduced overall level of empty container movement.
Competitive transport cost.
Reduced inventory cost.
5. Increased trade flows.
DISCUSS THE CURRENT FINANCIAL CRISIS OF AIR CARGO TRANSPORTATION
BRIEFLY DISCUSS THE DIFFERENT COST AN ORGANIZATION INCURS WHILE
MAINTAINIG INVENTORY
Inventory is a physical resource that a firm holds in stock with the intent of selling it or
transforming it into a more valuable state
Raw Materials
Works-in-Process
Finished Goods
Maintenance, Repair and Operating (MRO)
Why company hold inventory?
Improve customer service
Economies of purchasing
Economies of production
Transportation savings
Hedge against future
Unplanned shocks (labor strikes, natural disasters, surges in demand, etc.)
To maintain independence of supply chain
In order to control inventories appropriately, one has to consider all cost elements that are
associated with the inventories. There are four such cost elements, which do affect cost of
inventory.
Unit cost: it is usually the purchase price of the item under consideration. If unit cost is
related with the purchase quantity, it is called as discount price.
Procurement costs: This includes the cost of order preparation, tender placement, cost
of postages, telephone costs, receiving costs, set up cost etc.
6. Carrying costs: This represents the cost of maintaining inventories in the plant. It
includes the cost of insurance, security, warehouse rent, taxes, interest on capital
engaged, spoilage, breakage etc.
Stockout costs: This represents the cost of loss of demand due to shortage in supplies.
This includes cost of loss of profit, loss of customer, loss of goodwill, penalty etc.