EEC 231

4
COURSE LEARNING OUTCOMES
At the end of the module, you should
be able to:
1. Promote the Louisian core values
in making sound supply chain
management decisions.
2. Discuss fundamentals of supply
chain management as they
pertain to sustainable
relationships among various
industry players
3. Apply supply chain and
distribution management
concepts, principles, processes
SUPPLY CHAIN and strategies in case analysis
MANAGEMENT and practical business decision
making situations
4. Critique supply chain drivers and
supply chain operations
5. Integrate concepts/techniques
learned through application in
the preparation of a
comprehensive distribution plan
6. Evaluate alternative solutions to
supply chain issues, trends, and
transformations related to the
dynamics of the environment

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 No matter how prepared you are, there will always be times when things don’t do to plan. The key is to
prepare as well as you can, but at the same time train yourself to adapt to change and be solution-
focused in the moment.

Once you have momentum, fight to keep it. Fight for it with everything you can because it’s one of the
hardest things to create. When you have it, you can ask for things that you never could have without
it.

– Daniel Flynn

COURSE INTRODUCTION
Enterprising individuals and organizations face the unprecedented challenges of the
current economy. Having the competency to make objective choices, rational decisions
and a resilient attitude are necessary to sustain business operations.
In practice, supply chain managers need to be well-versed in process management
and development to ensure maximum product offerings and optimal shipments that
guarantee business client’s order specifications and customer order requirements.
This course intends to equip you with the necessary competencies of a supply chain
manager to facilitate beneficial interdependencies among diverse industries. You are
expected to be able to examine via observation and synthesis the general concepts of
supply chain management to develop a comprehensive purview of the logistical processes
linking the whole supply chain networks. This will enable you to have an ethical perspective
and attitude towards supply chain decision making with a clear focus on value-laden
relationships while maintaining a balance of responsiveness and efficiency leading to the
development and crafting of strategies that emphasize on the philosophy of sustainable
business enterprises. Given the vital role of supply chain managers, this three-unit course
hopes to nurture your potential in decision making relevant to supply chain management.
Supply chain management course covers a comprehensive study of the concepts,
processes and strategies used in the management of supply chains with particular emphasis
on the interrelationships of logistics among diverse industries vis-à-vis the value laden
relationships among the supply chain participants. Moreover, key strategic business
principles relative to channel management or logistics management will also be covered.
Physical distribution as a functional area within the firm and its interface with channel
intermediaries will be analyzed emphasizing on the inter-organization management of the
relationship of these institutions. Specific topics include the supply chain drivers and supply
chain operations that stresses on the systems-approach to managing the entire information
flows, financial flows and materials and services from raw materials suppliers to the end-users.
Current trends and issues in the global perspective will also be introduced to aid you with
competency in supply chain management decision making in the perspective of a supply
chain manager.

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 MODULE 4. SUPPLY CHAIN DRIVERS (Location)

After the completion of this module you should be able to:

a) Survey existing organization territories
b) Outline feasible location mapping
c) Generate proposal of strategic location sites for identified firms

ENGAGE:
Study location maps and apps. Explore Google maps and Printed maps.

There are various ways to find your way around places. Getting directions can also be done
online and offline. There are also apps to show routes and specific destinations. Say for
example, the Google Maps. It is a web mapping service developed by Google offering
satellite imagery, aerial photography, street maps, 360° interactive panoramic views of
streets, real-time traffic conditions, and route planning for travelling by foot, car, bicycle and
air, or public transportation.

Directions for driving, public transit, walking, or biking are also available. For some, they use
the Waze. It is a GPS navigation software app that works on smartphones and tablet
computers that have GPS support. It provides turn-by-turn navigation information and user-
submitted travel times and route details, while downloading location-dependent
information over a mobile telephone network. Most importantly, there are also printed maps
available in local stores.

Assume that you have subscribed to an internet connection from an internet service
provider. One of the requirements is for you to draw a map for them to locate your specific
area and residence. Draw a map from the central business district to your home.

EXPLORE:
Analyze the relevance of location to define storage capacities and operating
expenses of factories, warehouses and stores.

Supply Chain Driver (Location)

Location refers to the geographical placement of supply chain facilities and the decisions
about activities to be performed in each facility. Determination of the possible paths
available for product flows from source to final consumer must be done in consideration with
cost of facilities and labor, skills available in the workforce, infrastructure conditions, taxes
and tariffs, and proximity to suppliers and customers.

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 Location also addresses where facilities for production and inventory storage should be
located, where are the cost-efficient locations for production, where are the accessible
storage of inventory, and if existing facilities be used or new ones built?

Routing and scheduling. Familiarization of vehicle routing and scheduling can lead to
efficient routes for parcels or shipment deliveries, avoiding traffic congestion, and
unexpected left-hand turns. Going to locations in a logical sequence will enable meeting
deadlines and realizing goals.

Distribution warehouses and centers. A warehouse can be centralized by accumulating and

consolidating products from various points of manufacture within a single firm or from several
firms for combined shipment to common customers. When a facility is responding to regular
weekly or monthly orders, product movement can be done in bulk or small quantities with
the most popular items to the most accessible locations in the warehouse. Travel time can
be reduced by sequencing pick locations.

In location management, the perfect order means perfectly delivered in the customer-
designated time window and to the customer-designated location. The inventory must be
delivered closer to customer locations. The challenge here is to determine the amount and
timing of the deliveries. For example, imported stock keeping units moved through the
warehouse and then to the retail store location can optimize placement of products in a
warehouse and reduce inventory investment in distribution centers.

Location decisions must also consider alignment of the customer response measures and
customer classifications with the supplier performance measures and supplier categories.
The trade off in location decisions involve centralizing activities in fewer locations to gain
economies of scale resulting to efficiency versus to decentralize activities in many locations
close to customers and suppliers in order for operations to be more responsive. For example,
stores having many outlets serving high volume markets exhibit responsiveness. The online
retailers serving large geographical markets from a central location that perform a wide
range of activities pertains to efficiency. Routing and scheduling shipments (orders traveling
together) can reduce fuel, labor, and capital expenditures while enhancing customer
service. Accumulating and consolidating goods from various points of manufacture within a
single or several firms for combined shipment to common customers can make the
arrangement responsive. The arrangement and location of the logistics facilities is called
transportation network.

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 EXPLAIN:
Describe facilities management and sales territories as basis for location
decisions.

The Benguet Agri-Pinoy Trading Center in La Trinidad, Benguet will be managed for the meantime by Benguet
State University while its operation and management manual is still being finalized. The close to P800-million worth
facility is designed to prepare the farmers and other stakeholders ready for global competition. -- Harley
Palangchao. http://baguiomidlandcourier.com.ph/region.asp?mode=%20archives/2017/april/4-2-2017/reg1.txt

The Benguet Agri-Pinoy Trading Center (BAPTC) is seen as a model Agri-Pinoy Trading Center (APTC) out of the
22 across the country. Dr. Violeta Salda, BAPTC Chief of Operations, reported that the total volume of transaction
of vegetables traded was 71,227.22 MT in 2018. “We contribute to the trading system along with other trading
areas, inside and outside CAR, for Benguet produce since 24-25% of the production are traded in BAPTC,” Dr.
Salda highlighted. BAPTC is now being appreciated by vegetable stakeholders because they are being spared
from the usual 2-3 days of queuing, which they have been suffering for the past years.

Farmers also feel that trading at BAPTC is more convenient due to the wider space. Truckers coming from Divisoria,
Balintawak, Tawid-Dagat, and Urdaneta can now avoid delays because simultaneous loading is possible. There
is also more security for farmers with the absence of intruders unlike in private areas. The months of July, August,
November, and December are the peak months of harvests which also correlates to the months with the highest
volume of vegetable transactions at BAPTC as stated in their data. BAPTC has the capability to accommodate
more farmers to trade. “I hope that the income of BAPTC would increase more. This is only the start,” said ASec.
Villacorta keeping in mind the potential of BAPTC.//Ayra Galanza

Also look for the article titled, "BAPTC Approves Resolutions Seen to Enhance the Center’s Operations" published
by DA-CAR RAFIS

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 Location decisions are relevant in crafting marketing strategies, analyzing business costs,
forecasting growth and managing scarce resources. It incorporates long-term commitments
that impact on investments, revenues, operations and supply chains. For manufacturing
firms, location decisions include transportation modes, energy availability, labor and skills,
building and leasing costs. Conversely for service firms, location decisions include revenue,
market demographics, population, customer access, and traffic volume. In general,
location decisions involve costs, investments, revenues, operations and supply chains that
depend on availability of infrastructure, amenities, proximity to raw materials and markets.

In international operations, supply chain managers have to account for:

– Political risks, government rules, attitudes, incentives
– Cultural and economic issues
– Location of markets
– Labor talent, attitudes, productivity, costs
– Availability of supplies, communications, energy
– Exchange rates and currency risks.
– In domestic operations, supply chain managers have to account for:
– Corporate strategy
– Region attractiveness
– Labor availability and costs
– Availability of utilities and costs
– Proximity to raw materials and customers
– Land and construction costs
– Government incentives and fiscal policies
– Environmental regulations

For facilities and location decisions, the following are included:

– Site decision
– Site size and cost
– Proximity to air, rail, highway and waterway systems
– Zoning restrictions
– Proximity of services or supplies needed
– Environmental impact issues
– For distribution location decisions the following may be included:
– Minimizes distribution costs
– Location of markets
– Volume of goods shipped to markets
– Shipping cost

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 ELABORATE:
Construct alternative course of actions for location decisions.

Visualize the map of Baguio City. Imagine that you are going to design a sales territory for
an organization. Start out by meeting revenue goals then gather as much information as
possible about your customers – their locations and resources required to reach them.
Remember to calculate routes and schedules intended to achieve certain sales
performance. You may (a) identify the locations for sales calls or contact-locations of
customers, (b) assign sales persons in designated locations and (c) identify the facilities
available for your sales people. Will you need a warehouse? sales center or distribution site?
wholesale or retail stores?

Source: (http://www.gobaguio.com/maps.html#.XuGZ-s8zbIU)

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 EVALUATE:
Analyze the trade-offs between efficient and responsive locations.

Asking experts on location planning and analysis.

Instruction: Interview an individual engaged in supply chain management OR find

information of a local organization that has good supply chain management practices.
Present a three to five (3-5) minutes audio-visual-recorded report highlighting: How did the
reality of the new normal lifestyle affect their location decisions for their:
a) personnel
b) goods and services
c) sales and performance
d) working with suppliers from overseas firms
e) shipments from warehouse to retail stores
f) making sure that orders are delivered on time to customer expected destinations

Then end your report with your insights on the realistic expectation of the performance of
organizations during a time of crisis? And what could be emerging business opportunities in
location decisions for supply chains.

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