Supply chain management connects the links of sourcing, procurement, conversion, and logistics management. The primary parts of a modern supply chain are procurement, operations, and logistics. Supply chain managers try to get the right products to the right place at the right time while reducing costs, improving quality and speed. They must develop good relationships with suppliers and customers to integrate the purchasing, manufacturing, and logistics functions of an organization. Issues they face include balancing the demands of customers, investors, and suppliers while ensuring ethical, efficient and sustainable supply chain practices.

1. Supply Chain Foundations
Created By: Kelby L. Schwender
Business student, Penn State

2. Bottom Line Insight
“Supply Chain Management is the system that connects and integrates the links of
sourcing, procurement, conversion, and logistics management.”

3. What is Supply Chain
Management (SCM)

4. ● Supply Chains make and delivery things.
● The primary parts of a modern supply chain are: Procurement,
Operations, and Logistics.
○ It is the supply chain manager’s job to write the story of
every product and give it a happy ending.
○ Get the right thing to the right place at the right time.
● Modern Supply Chain Management extends beyond
purchasing, operations, and logistics.
● “You’re part of a chain, a supply chain. So, while making your
link strong is important, the whole chain needs to be strong.
Instead of thinking only about your numbers, think about how
you can improve the numbers of your customers. Think about
how you can help suppliers improve their numbers. Think
about how you can help marketing improve their numbers.”
● Supply Chain Managers try to think of ways to make things
better, make it faster, will less effort, with fewer materials and
less money.
Parts of SCM
1. Purchasing
2. Manufacturing &
Operations
3. Logistics & Transportation
**Packaging & Containerization
Goals of Supply Chain
● Cost
● Quality
● Speed
● Flexibility

5. Purchasing and Supplier
Relationships

6. ● Managing an inventory pipeline is not easy; that’s why the world needs more supply chain
managers.
● Companies and managers must be prepared for change and variability.
● The Supply Chain Manager who is responsible for inventory, needs to make the customer
and the marketing department happy, by always having products in stock.
○ Why don’t companies have tons of inventory? Supply Chain managers also need to
satisfy the boss, by keeping costs low. (Inventory comes with a lot of cost)
● Having the inventory available is what sets you apart from your competitor.
● Choosing a supplier is a huge responsibility.
○ Is their link in your supply chain a strong one or a weak one?
● Though we count on our suppliers to keep us reliable, our suppliers are counting on their
suppliers.
● Develop good buyer and supplier relationships.

7. Manufacturing and
Operations

8. ● Even when you think you know what the customer wants, developing new products can be
very difficult for any company.
● “Think about the performance and aesthetic elements of the product or service. Think about
the design of the item, the parts that go into it, the way the product or service is created, and
the required skill and training of employees. Think about the insane pace at which they
work, how coordination and communication between marketing, design, and supply chain is
the key to a better present and future for the company.”
● Understand how to market and design your product and company to its fullest potential.
● Have a good manage of quality.
● Lower cost is a great motivator to outsource, but not considering all the other factors in
outsourcing might come with an enormous price tag.

9. Logistics

10. ● Each product is different
● Every piece of item around you has its own special story.
● “Think about the packaging, documentation, insurance, modes of transportation,
customs, rules, and regulations. Think about the companies that help plan, ship and
track those items. Now you’re thinking like a logistician.”
● Packing is another stop within the chain, it keeps the products safe.
○ Nowadays, the best companies start their packaging strategies from the
moment the product is designed.
● After packaging comes containerization.
○ These containers that are used today have changed the world. They are faster
and it's a safer trip than available in the 1930s.
● After containerization of the products, the products are then transported and
distributed.
○ This transportation is done by roads, rails, ocean ports, and airports.
● Once the products have been transported, the products are delivered to warehouses
and from there retail stores and then to the consumers.
● “The things we send, the things we need, the things we return, and even us, and the
people we love, are all part of the world of logistics.”
Standardized Container:
8 feet across, 8.5 feet
high, and either 20 or 40
feet in length.

11. Supply Chain Integration

12. ● World-class supply chains create their own type of direction.
● World-class supply chains are a collection of different “instruments” : purchasing, operation
and manufacturing, and logistics.
● Managers must understand what the organization needs. The managers must be attentive,
listening to the needs of the collective.
○ Managers must be courageous enough to take the lead when problems and opportunities arise.
● The best companies and supply chains looks for ways to improve products.
● No one is going to share sales data, deliver bad news, or buy from a company if they don’t
trust you.
○ “The mechanics of cascading injuries and ghe Bullwhip Effect may be difficult, but the remedies are easy. If you
get a small injury, let it heal. If you want to avoid the Bullwhip Effect, develop supply chains that are built on
trust and communication.”
● Supply chain is everywhere, pushing and pulling the things we need in our lives.
● Excess inventory, quality defects, slow and broken processes, lean supply chains clear the
clutter that gets in the way of organizational opportunity.

13. Issues in Supply Chain
Management

14. ● Supply chains don’t find customers and develop products, that’s what marketing and design do; supply chains aren’t what you would call
the brain of the organization.
○ Supply Chains are the muscles and bones of an organization.
● Customers and investors are endlessly demanding more.
○ Customers want lower prices and better products.
○ Investors demand better returns on their investments.
■ This may drive supply chain managers to demand too much from suppliers. Supply Chain managers may even bully their
own suppliers.
● Supply chain managers are challenged to keep workers and customers safe, investors satisfied, and also work with their supply chain
partners to get all of these things done right away.
● “Whether companies do it for the right reasons, or just to avoid negative headlines, developing ethical supply chains is no longer a choice.
It’s a requirement.”
● When supply chain managers fine ways to lower inventory levels, recycle packaging and defective items, reuse boxes and palettes,
decrease retail packaging, use fewer trucks and containers by filling them to capacity, reduce defective and damaged goods, and even shift
toward using renewable energies they aren’t just being green, they’re creating world class supply chains.
● Anything that is wasted may cost people their lives’.
○ Being wasteful and inefficient is not an option, these are the challenges in the emerging field of humanitarian supply chain
management.
● Supply Chains face other challenges that include: finding suppliers, developing relationships, keeping communication open and free,
understanding the available infrastructure, getting the vehicles that are needed to ship items, understand the complicated importing and
exporting rules in associated for each country, etc.