This document provides an overview of supply chain management (SCM). It defines SCM and key related terms. It discusses the historical evolution of SCM from early automotive supply chains to more integrated modern models. It also describes important SCM concepts like integration, relationships, decisions, and processes. Effective SCM requires internal and external integration across the supply chain network as well as coordinated planning, sourcing, production, and delivery. Public sector procurement differs from private sector SCM in its focus on transparency, fairness, and cost control.

1. Chapter 1:
Introduction
to supply
chain
management

2. LEARNING OUTCOMES
After you have studied this chapter, you should be able to
• understand the concept of supply chain management (SCM)
• define key terminologies associated with SCM
• discuss the historical development of SCM
• describe the enablers and drivers of SCM
• understand public procurement and SCM practices.

3. INTRODUCTION
 SCM AS A SOURCE OF COMPETITIVE
ADVANTAGE
 SCM BEING VITAL TO ORGANIZATIONAL
SUCCESS

4. 1.1 UNDERSTANDING THE
CONCEPT OF SCM
Definition of a supply chain and SCM
Consistencies in the different definitions (internal and
external coordination and integration, operational
efficiencies, value-added, quality materials, products,
customer service and information sharing)

5. Figure 1.1 Framework for a generic supply chain
Source: Adapted from Wisner, Tan & Leong (2008: 7)

6. Objectives of SCM:
Create value for customers
Provide a competitive advantage and improved
profitability for supply chain firms
Determine the dimensions of value that may be
important to customers
Develop mechanisms whereby competitive
advantage and improved profitability can be
achieved
UNDERSTANDING THE CONCEPT OF SCM

7. 1.2 KEY TERMINOLOGIES
ASSOCIATED WITH SCM
• Value chain
• Purchasing
• Procurement
• Supply management
• Strategic sourcing
• Public procurement
• Logistics management

8. 1.3 EVOLUTIONAL
DEVELOPMENTS OF
SCM

9. The first revolution (1910–1920): the Ford
supply chain
The second revolution (1960–1970): the
Toyota supply chain
The third revolution (1995–2000): the Dell
supply chain
EVOLUTIONAL DEVELOPMENTS OF SCM

10. 1.4 IMPLEMENTING
EFFECTIVE SCM
Supply chain integration (SCI):
Internal SCI
External SCI

11. Figure 1.2 Internal and external supply chain integration
Source: Childerhouse, Deakins, Böhme, Towill, Disney & Banomyong (2011: 533)
IMPLEMENTING EFFECTIVE SCM

12. Stages of development in SCI:
 Internally focused (or baseline) organization
 Functional integration
 Internal integration
 External integration
IMPLEMENTING EFFECTIVE SCM

13. Figure 1.3 Developmental stages towards an integrated supply chain
Source: Adapted from Christopher (2005: 19)
IMPLEMENTING EFFECTIVE SCM

14. Supply chain relationships
Links in supply chain relationships
Figure 1.4 The three core supply chain relationship links
Source: Adapted from Lambert (2006: 27)
IMPLEMENTING EFFECTIVE SCM

15. Figure 1.5 Relationship intensity spectrum
Source: Adapted from Fawcett, Ellram & Ogden (2007: 347)
IMPLEMENTING EFFECTIVE SCM

16. Trust in supply chain relationships
Power in supply chain relationships
IMPLEMENTING EFFECTIVE SCM

17. Decision areas in SCM
Supply chain key decision drivers
Figure 1.6 Key decision drivers of SCM
Sources: Hugos (2011: 6); Chopra & Meindl (2013: 53)
IMPLEMENTING EFFECTIVE SCM

18. Phases in supply chain decisions
Figure 1.7 The phases of supply chain decisions
Source: Adapted from Chopra & Meindl (2013: 18)
IMPLEMENTING EFFECTIVE SCM

19. Supply chain processes
Types of SCM processes
• The Global Supply Chain Forum (GSCF) supply chain
processes
– Three elements:
» Supply chain network structure
» SCM components
» SCM processes
IMPLEMENTING EFFECTIVE SCM

20. • The supply chain operation reference (SCOR) model
– Five process categories
» Plan
» Source
» Make
» Deliver
» Return
IMPLEMENTING EFFECTIVE SCM

21. Figure 1.8 SCOR model linkages
Source: Adapted from Lockamy III & McCormack (2004: 1194)
IMPLEMENTING EFFECTIVE SCM

22. Table 1.1 Essential characteristics of the supply chain framework
Source: Adapted from Kuik et al. (2011: 989)
IMPLEMENTING EFFECTIVE SCM

23. 1.5 PUBLIC PROCUREMENT
AND SCM
Overview and importance of procurement in
the public sector

24. Differences between procurement and SCM
practices in the public and private sectors
PUBLIC PROCUREMENT AND SCM

25. Table 1.2 Public versus private sector supply chains
PUBLIC PROCUREMENT AND SCM