Copyright © 2016 Pearson Education, Inc.

1
Muhammad Faisal
Notable quotes
“If your supply chain runs without many problems you either have a
great supply chain or running very fat.”

“Supply chains are everywhere. From the biggest company in the world
to running your household. We all have supply chain experience even if
we don’t know it.”

“Competition is becoming less between individual companies, and more

between the supply chains they are part of.”

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Given how quickly and continuously everything is changing these days,

It is essential to understand
analytically the functioning of
supply chains and to be able to
know what strategies will produce
the best results.
This requires greater attention to creating supply chain solutions that are effective and efficient.

Competition is no longer between

companies –
it’s between Their supply chains.
Growth is our mantra as an
organization. We know that

if you’re not growing, you’re

dying.

So we have to make sure that in the

supply chain organization, we’re
positioning our self for that growth.
Introduction
• Linear & Circular economy

• What is Supply Chain Management?

• Definitions and objectives of supply chain

• Basic Flows in Supply Chain

• Rights of Supply Chain Management

• Basic supply chain concepts and terminologies

• Supply chain decisions and cycle view

• Push & Pull view/ Push and pull boundary

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Linear Economy
• Linear economy, sometimes referred to as the take-make-waste economy, is a
system where resources are extracted to make products that eventually end up as
waste and are thrown away.
• Products and materials are generally not used to their full potential in a linear
economy and, as the name suggests, always move in one direction – from raw
material to waste.
• It is a polluting system that degrades natural systems and is the driver of global
challenges, including climate change and biodiversity loss
• The way our economy functions is destroying the natural capital on which it
depends. This is seen in the soils that are being degraded, the ocean that is being
polluted, the biodiversity that is being lost, the freshwater that is drying up, and
the forests that are being felled.

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Circular Economy
• The circular economy is a systems solution
framework that tackles global challenges like
climate change, biodiversity loss, waste, and
pollution
• The circular economy is based on three
principles, driven by design:
• Eliminate waste and pollution
• Circulate products and materials (at their
highest value)
• Regenerate Nature
• https://ellenmacarthurfoundation.org/circula
r-economy-diagram

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Here are three everyday objects. Take a minute to ask yourself:

• What are they made from?

• How are they made?
• How is money made from them?
• Where will these products be in 25 year’s time?

We are all part of a Supply Chain in everything we buy 8

 A Basic Chain Structure - Channel

Supplier Manufacturer Distributor Retailers Customer

Chain’s Strength
Strong, well-structured supply chains are critical to sustain competitive
advantage.
Supply
Strength of Supply Chain

A chain is only as good as its weakest link

Recall that saying? The saying applies to the principles of building a
competitive infrastructure
Distribution Supply Chain

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Assemblers Supply Chain

https://pama.org.pk/wp-content/uploads/2022/04/AIDEP-2021-26.pdf
Detergent supply chain
Supply Chain for
Milk Products
https://www.ocac.org.pk/oil-industry-statistics/
What is a Supply Chain?
If you asked three persons in different businesses to define the term supply chain, you would
probably receive three different definitions

– For some, the phrase supply chain conjures thoughts of purchasing, procurement, and
other activities needed to acquire raw materials and components for production

– For others, supply chain means warehousing and distribution, transportation and
retail channels

– For still others, supply chain refers to sources of capital or human resources.
Definition
The Council of Supply Chain Management Professionals (CSCMP)
“The planning and management of all activities involved in sourcing
and procurement, conversion and all logistics management
activities. Importantly, it also includes coordination and
collaboration with channel partners, which can be suppliers,
intermediaries, third-party service providers and customers.”

The Institute for Supply Management (ISM)

“The design and management of seamless, value-added processes
across organizational boundaries to meet the real needs of the end
customer.”
Supply Chain Network
• Every product that reaches an
end user represents the
cumulative effort of multiple
organizations.

• These organizations are referred

to collectively as the supply
chain

• A supply chain is comprised of all

parties which are involved,
directly or indirectly, in fulfilling
a customer request
History of Supply Chain Management

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Objective of a Supply Chain
• Increased Sales:
• Faster to Market
• Improved Quality
• Pricing Flexibility
• Innovation

• Lower Total Cost:

• Acquisition Cost
• Processing Cost
• Quality Cost
• Risk Cost
• Cycle Time Cost
• Conversion Cost
• Non-value Added Cost
• Post Ownership Cost
Objective of a Supply Chain
Supply Chain Profitability (maximum overall value created)
Supply Chain Surplus = Customer Value- Supply Chain Cost
Example:
English Biscuit Manufacturing 5=20-15 (Sooper)

Continental Biscuit 3=20-17 (Bakery)

In a Nut-Shell: Supply Chain Value is correlated to bottom-line i.e. SC profitability (difference

between revenue generated and the overall cost across SC)
Supply Chain Objective
Funds / Money

Supplier Manufacturer Distributor Retailers Customer

Maximization of Customers’ Value

Maximizing the Value

The Right To The Right At The Right At The Right In The Right In The Right At The Right
Product Customer Time Place Quantity Condition Cost

Using The
Through The With The
From The Right
Right Right
Right Source Technology
Channels Paperwork
Maximizing the value

The Right To The Right At The Right At The Right In The Right In The Right At The Right
Product Customer
The Right
Time Place Quantity Condition Cost

From The
Right
Strategy
Through The With The
Right
Using The
Right
Right Source
Channels Paperwork Technology
Basic Supply Chain Flows

Supplier Manufacturer Distributor Retailers Customer

Material / Goods

Information

Funds / Money
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REFERENCES
• Chapter 1, Introduction to Supply Chain Management
Supply Chain Management (3ed.) by Chopra, Meindl and Kalra

• Chapter 1, Introduction to Supply Chain Management

Principles of Supply Chain Management by Wisner, Leong & Tan