Supply Chain Management

What is a supply chain?a comprehensive and systematic approach to planning,

organizing, controlling, and optimizing the flow of materials, information, and finances
across the entire supply chain, from the procurement of raw materials to the delivery of
finished products to end customers. It is coordination of flow of goods and services
from point a to b including the process or raw materials into the final product.
- Vital role - so yung supply chain daw is may role siyang ginagampanan which is
yung goods or services dapat ay mapunta sa consumer or consumption.
- Activities is yung process na simula sa raw material to customers
- So yung goal lang ng SCM is mabigyan ng satisfaction si customer

- So below figure illustrates a very basic supply chain with three entities a
producer with one supplier and one customer,

- So the four basic flows to connect the supply chain entities together are as
follows, 1st floor of physical materials and services from suppliers to the end
customer which flow of cash from the customer to the raw material supplier, flow
of information back and forth along the chain and reverse flow of product to
return. So this basic supply chain can figure is made up of these entities: the
seller is a supplier who provides goods and services or a person or organization
with whom the buyer does business. Their generic term in market place is seller,
so the suppliers provides material, energy, services or components for a product
or service such as plastic, fabric, electric wire or aircraft, the producer is the one
who receives components from the seller to produce a finished product such as
shirts from fabric, crockery from plastic, power from electric wiring, , or aircraft
to provides transportation. Then the customer is the one who receives the
finished goods .

The entities and their communication involved in product manufacturing to product

delivery is collectively considered as a supply chain.
- represents flow of goods and services and includes all processes that transform
raw materials into final products.
5 Parts of SCM
1. Planning - so this refers about planning an operational strategy. involves
forecasting demand, setting inventory levels, and developing strategies to meet
customer needs while minimizing costs. This planning includes determining the
right quantities, locations, and timing for procurement and production. for
 example apple since its inception has a clear goal is to provide the best personal
computing devices to consumers the initiative of apple to scrutinize each app or
program before launching it on apple app store makes all apple devices more
secure, this pre-planned actions or strategies have been the most vital usp’s of
this organization.

2. Sourcing - It encompasses the selection and management of suppliers,

negotiating contracts, and establishing relationships to ensure a reliable and
cost-effective supply of materials, components, and services.
- Purchasing is the process of buying or acquiring materials supplies or
equipment for goods or services from suppliers.

Efficient SCM processes rely very heavily on strong relationships with suppliers.
Sourcing entails working with vendors to supply the raw materials needed throughout
the manufacturing process. A company may be able to plan and work with a supplier to
source goods in advance. However, different industries will have different sourcing
requirements. In general, SCM sourcing includes ensuring:

● the raw materials meet the manufacturing specification needed for the
production of goods.
● the prices paid for the goods are in line with market expectations.
● the vendor has the flexibility to deliver emergency materials due to unforeseen
events.
● the vendor has a proven record of delivering goods on time and in good quality.

Supply chain management is especially critical when manufacturers are working with
perishable goods. When sourcing goods, firms should be mindful of lead time and how
well a supplier can comply with those needs.

3. Manufacturing - this is where the process of making the product or service

kasama na dito yung engineering, maintenance and safety, also the quality
control and testing to make sure na maayos ba yung kalalabasan nang isang
product. involves overseeing the manufacturing and assembly processes to
ensure products are produced efficiently, meeting quality standards, and aligning
with demand forecasts.
At the heart of the supply chain management process, the company transforms raw
materials by using machinery, labor, or other external forces to make something new.
This final product is the ultimate goal of the manufacturing process, though it is not the
final stage of supply chain management.

The manufacturing process may be further divided into sub-tasks such as assembly,
testing, inspection, or packaging. During the manufacturing process, a firm must be
mindful of waste or other controllable factors that may cause deviations from original
plans. For example, if a company is using more raw materials than planned and sourced
for due to a lack of employee training, the firm must rectify the issue or revisit the
earlier stages in SCM.

4. Delivery - comes into play where the products ordered online get shipped to the
doorstep of consumers from storage warehouses whereas the distribution
centers on the other hand send items to retail stores for offline sales this whole
spinning process is carried out by third-party logistics vendors such as fadex,
flash, delivery apps.
- Once products are made and sales are finalized, a company must get the
products into the hands of its customers. The distribution process is often
seen as a brand image contributor, as up until this point, the customer has
not yet interacted with the product. In strong SCM processes, a company
has robust logistic capabilities and delivery channels to ensure timely,
safe, and inexpensive delivery of products.
- This includes having a backup or diversified distribution methods should
one method of transportation temporarily be unusable. For example, how
might a company's delivery process be impacted by record snowfall in
distribution center areas?
-

5. Returns - here the faulty or damaged products during delivery get shipped back
to the storage warehouses and then the assembly planned for refurbishment.
- Many consider customer returns as an interaction between the customer
and the company. However, a very important part of customer returns is
the intercompany communication to identify defective products, expired
products, or non-conforming goods. Without addressing the underlying
cause of a customer return, the supply chain management process will
have failed, and future returns will likely persist.
 The planning phase refers to developing an overall strategy for the supply chain,
while the other four elements specialize in the key requirements for executing
that plan.

Reactive- works well when the acts to fulfill demand from trade partners. For example,
let's say your business makes Superbowl sports jerseys. Your sales go way up when a
certain team is winning. Everyone wants their journey. But if they lose a game, your
demand plummets. ( Halimbawa, sabihin nating ang iyong negosyo ay gumagawa ng
mga Superbowl sports jersey. Tumataas ang iyong mga benta kapag nanalo ang isang
partikular na koponan.)

Stable supply strategy - is appropriate for chains that are focused on execution,
efficiency, and cost performance. They use simple connectivity technologies and have
little need for real-time information. Example is table salt manufacturer uses scale
production and dedicated capital assets. Which a company buys partly finished
materials and then quickly personalized the product in response to current market
conditions. (Halimbawa, table salt. Palaging in demand ang asin at maaaring mapanatili
ang malakihang daloy ng supply ng cost-efficiency nang walang gaanong input mula sa
mga producer at mamimili.)

Efficient Reactive- focus on the efficiency and cost management on the total delivered
cost of finished goods. Examples in supermarket chains, distribution centers, logistics
providers, and manufacturers cooperate to replace the goods sold in the shops within
less than 24 hours. (halimbawa sa mga sentro ng pamamahagi ng mga chain ng
supermarket, ang mga tagapagbigay ng logistik at mga tagagawa ay nagtutulungan
upang palitan ang mga produktong ibinebenta sa mga tindahan sa loob ng wala pang
24 na oras.)

Types of Supply Chain Models

Supply chain management does not look the same for all companies. Each business has
its own goals, constraints, and strengths that shape what its SCM process looks like. In
general, there are often six different primary models a company can adopt to guide its
supply chain management processes.
● Agile Model: This model is best for companies with unpredictable demand or
customer-order products. This model prioritizes flexibility, as a company may
have a specific need at any given moment and must be prepared to pivot
accordingly. So sa model na ito mas pinofocusan ng agile supply chain are speed,
cost, and efficiency. H&M focuses on cost efficiency for its production unit and
reducing lead times for its inventory.

● Fast Model: Using a fast chain model, a company strives to capitalize on a

trend, quickly produce goods, and ensure the product is fully sold before the
trend ends.
- most often used by businesses that manufacture finished products and
deal mainly with extremely trendy products that have a short lifecycle.
Example a fashion designer might have a specific line of designs in a
season.

● Flexible Model: The flexible model works best for companies impacted by
seasonality. an organization can easily scale to meet the needs of its consumers.
Some companies may have much higher demand requirements during peak
season and low volume requirements in others. A flexible model of supply chain
management makes sure production can easily be ramped up or wound down.

● Efficient Model: Under this model, the end goal is to maximize efficiency. For
companies competing in industries with very tight profit margins, a company may
strive to get an advantage by making their supply chain management process
the most efficient. This includes utilizing equipment and machinery in the most
ideal ways in addition to managing inventory and processing orders most
efficiently.

Toyota, with its highly efficient and successful lean manufacturing system, is an
example of a company using this supply chain model. They strive to eliminate
 unnecessary steps or resources in their supply chain operations to increase
efficiency and reduce waste.

● Custom Model: If any model above doesn't suit a company's needs, it can
always turn towards a custom model. Often applies to products such as cars,
which can be configured within a limited combination of product specifications,
usually by combining parts or sub-assemblies. Dell is an example of a company
using this supply chain model.(It develops, sells, repairs, and supports computers
and related products and services. )This is often the case for highly specialized
industries with high technical requirements such as an automobile manufacturer.