What Is a Supply Chain?

The Development Chain

Flow of products and services from: Set of activities and processes associated with
▫ Raw materials manufacturers new product introduction. Includes:
▫ Intermediate products manufacturers • product design phase
▫ End product manufacturers • associated capabilities and knowledge
▫ Wholesalers and distributors and • sourcing decisions
▫ Retailers • production plans
▫ Connected by transportation and
storage activities
▫ Integrated through information,
planning, and integration activities
▫ Cost and service levels

Global Optimization
• Geographically dispersed complex network
• Conflicting objectives of different facilities:
Dynamic system
Variations over time
Matching demand-supply difficult
• Different levels of inventory and backorders
Supply Chain Management • Recent developments have increased risks
▪ a set of approaches utilized to efficiently • Lean production/Off-shoring/Outsourcing
integrate suppliers, manufacturers,
warehouses, and stores, so that Uncertainty and Risk Factors
merchandise is produced and Matching Supply and Demand a Major
distributed at the right quantities, to the Challenge
right locations, and at the right time, in
order to minimize system wide costs
while satisfying service level
requirements.
“Planning without action is futile, action
without planning is fatal.” - Cornelius
Fichtner President, OSP International
LLC

▪ Every facility that impacts costs need to be

considered, such as:
▫ Suppliers’ suppliers
▫ Customers’ customers
▪ Efficiency and cost-effectiveness
throughout the system is required
▫ System level approach
▪ Multiple levels of activities
▫ Strategic – Tactical – Operational
SUPPLIER SELECTION PROCESS Scorecard Ranking
▪ Identify Suitable Suppliers • Tabulate the information you collect and
▪ Scorecard Ranking use the scorecard to rank the potential
▪ Negotiate suppliers.
▪ Create Contract Depending upon the complexity and/or
criticality of the product or service, you may:
Suppliers Characteristics – Select the highest ranking supplier
▪ Cost – Choose more than one for further
▪ Quality qualification
▪ Delivery
▪ Location Negotiate
▪ Capacity ▪ Depending on the critical good or service,
▪ Flexibility you may negotiate with just the top supplier
▪ Lead Time on your scorecard, even if others remain on
▪ Reputation the list of potentials.
▪ Certifications
▪ Collaborations Create Contract
▪ Financial Health ▪ For many transactions, the purchase order
▪ Social Responsibility is the contract. For complex situations, you
▪ Product Development may have a contract and then create a
separate purchase order.
Identify Suitable Suppliers
• Current suppliers
– Starting with suppliers you have
experience with and established
relationships is generally a good idea
• Past suppliers
– Depending upon the reasons why they
are ‘past’ and not ‘current’
• Competitors
– You may be in a position to buy from a
competitor if it is ethical and low-risk
• Industry groups
– many of which are non-profit and maintain
data bases of member companies
• Recommendations and prior business
relationships
– perhaps created while working at other
companies
• Internet
– which offers myriad opportunities to find,
research, and contact potential suppliers

IDENTIFYING POTENTIAL SUPPLIERS

• Directories
• Exhibitions
• Trade press
• Recommendations
• Trade associations
• Business advisors

GETTING THE RIGHT SUPPLIER FOR YOUR

BUSINESS
• Ask around
• Know your needs
• Price isn't everything
• Spend time on research
• Credit check potential suppliers
• Agree on service levels before you start
Recruitment
 According to Edwin Flippo: “Recruitment is
the process of searching the candidates for
employment and stimulating them to apply
for jobs in the organization.”
 Recruitment is the activity that links the
employers and the job seekers.
Recruitment needs
 Are of three types:
 Planned
– arising form changes in organizational
structure, policy of retirement, etc.
 Anticipated
– movement in personnel which an
organization can predict by studying trends
in internal and external environment.
 Unexpected
– resignation, death, accident, illness.
The 7 C's: How to Find and Hire Great
Employees
1. Competent
Does the potential employee have the
necessary skills, experiences and education
to successfully complete the tasks you need
performed?
2. Capable
means the employee has potential for
growth and the ability and willingness to take
on more responsibility.
3. Compatible
A critical component to also remember is the
person’s willingness and ability to be
harmonious with you, his or her boss. If the
new employee can’t, there will be problems.
4. Commitment
Is the candidate serious about working for
the long term? Or is he or she just passing
through, always looking for something
better? A history of past jobs and time spent
at each provides clear insight on the matter.
5. Character
Does the person have values that align with
yours? Are they honest; do they tell the truth
and keep promises? Are they above
reproach? Are they selfless and a team
player?
6. Culture
based on certain values, expectations,
policies and procedures that influence the
behavior of a leader and employees.
7. Compensation
As the employer, be sure the person hired
agrees to a market-based compensation
package and is satisfied with what is offered.
Kinds of Sources
 Internal Sources – Refers to recruitment
that takes place from within the organization.
It includes:
a) Transfers & Promotions:
Transfer implies shifting of an employee
from one job to another without any shift in
change of responsibilities.
b) Retired and retrenched employees who
want to return to the company may be
hired.
c) Dependents and relatives of deceased
and disabled employees.
Merits
 Moral and motivation of employees
improves.
 Promotes loyalty and commitment amongst
employees due to sense of job security and
advancements.
 Chances of proper selection is high.
 Present employees familiar with
organization surroundings.
 Time and expenditure for recruitment
reduced.
Demerits
 Fail to bring fresh blood into organizations.
 Promotion based on seniority.
 Choice in selection is restricted.
 All vacancies cannot be filled from within
organizations.
 Not available to newly established
enterprise.
External Sources – It refers to recruitment that
lies outside the organization(s). These includes:
a) Educational Institutions:
Various companies visit many colleges
which have made arrangements for
campus interviews and recruit
candidates.
b) Recruiting Agencies:
These are basically various private
consultancy firms which recruit
candidates on behalf of the client
companies.
c) Employment Exchanges
These exchanges provide information
about job vacancies to jobseekers.
These can be private and also
government exchanges.
d) Casual Callers
Many candidates visit the company by
themselves and give interviews. The
companies may not need them presently
but can call them anytime in future when
there are vacancies.
e) Labor Contractors
Manual workers recruit through
contractors who maintain close relations
with such labors. Basically seen in
construction jobs
f) Gate Recruitment
In this method, a notice on the notice
board or on the factory gate regarding the
jobs available, such that the applicant
 sees it and apply for the job directly. This
method is also called direct
recruitment.
g) Recommendations
Employees recruited through
recommendations by trade unions,
reliable loyal employees, or business
advisors.
h) Press Advertising
Advertisements in newspapers and
journals. Has wide reach. This method
can be used for technical, clerical and
managerial jobs.

Merits
 People having requisite skill, education and
straining can be recruited.
 Best selection made irrespective of cast,
creed, religion, or sex.
 Helps to bring new blood.
 Expertise and experience from other
organization can be bought.
 “never dries up”. Applicable to new firms as
well.

Demerits
 Time consuming and expensive
 Employees unfamiliar with organization and
its orientation.
 If higher level jobs are filled from eternal
sources, motivation and loyalty of existing
staff is affected.