Basic Concepts and definitions

Value Chain and Supply Chain

Flow of Goods and Products
Flow of Information
¨  Going deeper into more concepts of Supply
Chain Management through the concept of
Porter’s Value Chain and Value System

¨  Clarifying the term of SCM

¨  identifying the main objective of SCM

¨  The importance of Data and Information

¨  “the internal supply chain that integrates business functions
involved in the flow of materials and information from
inbound to outbound ends of the business”
¨  “the management of dyadic or two party relationships with
immediate suppliers”
¨  “the management of a chain of businesses including a
supplier, a supplier’s suppliers, a customer and a customer’s
customer, and so on”
¨  “the management of a network of interconnected businesses
involved in the ultimate provision of product and service
packages required by end customers”
(Harland, 1996, p. S64)
¨  “Every firm is a collection of activities that are performed
to design, produce, market, deliver, and support its
product. All these activities can be represented using a
value chain” (Porter, 1985, p. 36)
  “Differences among competitor value chains are a key
source of competitive advantage” (Porter, 1985, p. 36)
  “Value activities are the physically and technologically
distinct activities a firm performs” (Porter, 1985, p. 38)
  “Every value activity employs purchased inputs, human
resources (labor and management), and some form of
technology to perform its function” (Porter, 1985, p. 38)
  “Value activities are therefore the discrete building
blocks” (Porter, 1985, p. 38)
  Primary and Support Activities (Porter, 1985)
   “Supply chain management (SCM) is the management of
the relationships and flows between the ‘string’ of operations
and processes that produce value in the form of products
and services to the ultimate consumer” (Slack et al., 2009, p.
209)

¨  “The supply chain concept applies to the internal

relationships between processes as well as the external
relationships between operations” (Slack et al., 2009, p. 209)

¨  Internal supply chain vs. external supply chain

¨  Supply chain vs. supply network

¨  Satisfy the end customers?

¨  Decrease the total cost?

¨  Make the business run smoothly?

¨  Form net value?

¨  Connect the suppliers to the customers

quickly?
¨  “The objective of supply chain is to meet the
requirements of end customers by supplying
appropriate products and services when they are
needed at a competitive cost” (Slack et al., 2009, p. 217)

¨  “Supply chain management (SCM) focuses on

integrating and managing the flow of goods and
services and information through the supply chain in
order to make it responsive to customer needs while
lowering total costs” (Russell and Taylor, 2011, p. 421)
¨  Quality of services and products

¨  Speed: reaching customers, feedback

¨  Dependability: uncertainty, operations

dependability, on-time delivery of orders

¨  Flexibility: supply chain agility

¨  Cost: supply chain cost itself

(Slack et al., 2009)

¨  Data about customer needs and requirements

¨  Every orders

¨  Information about the market

¨  Types of payment

¨  Goods and products can potentially be

provided for the market (Slack et al., 2009)
http://www.youtube.com/watch?v=SUe-tSabKag
¨  HARLAND, C. M. 1996. Supply chain management:
relationships, chains and networks. British Journal of
management, 7, S63-S80.
¨  PORTER, M. E. 1985. Competitive advantage: Creating and
sustaining superior performance, New York, The Free Press.
¨  SLACK, N., CHAMBERS, S., JOHNSTON, R. & BETTS, A.
2009. Operations and process management: principles and
practice for strategic impact. 2nd ed. Essex, Pearson
Education.