Summering up Supply Chain Management Operation Management

Ahmed Mohamed Abdelkhalek

– Group 2U – Sunday 6 pm

Supply Chain Management

Content
1- Introduction
 Terms of supply chain and logistics
 Key aspects of supply chain management
2- TRENDS IN SUPPLY CHAIN MANAGEMENT
 Outsourcing benefits and risks
 ERP software
 E-business
 Code of conduct (Ethics)
 Organizational strategy
3- Risk Management and Resiliency
 How to reduce the risk impact
4- Global supply chains
5- ETHICS AND THE SUPPLY CHAIN
6- MANAGEMENT RESPONSIBILITIES
7- SUPPLIER MANAGEMENT
8- INVENTORY MANAGEMENT
9- CREATING AN EFFECTIVE SUPPLY CHAIN
10- Managing Returns

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1- INTRODUCTION
 Supply chain: it is involved at all steps of production at all levels from supplying row
material, incoterms, warehouses, rate of production and distribution Venus until
delivery to end consumer.
 Supply chain management is the strategic coordination of business function between
the business organization and the different suppliers. The managers of supply chain
responsible for managing the supply and demand across the business organization are
also involved in planning, and coordinating activities of materials, transformation, and
logistics.
 The Supply chain is the lifeblood of the business, it connects the supplier with the
producer and the end consumer. The next figure shows the farm to market supply
chain with adding values for goods or services to the chain.
 Logistics is considered an important part of the supply chain process also involved in
forward and reverse goods flow, cash, services, information, material handling and
order fulfilment. As well as movement of goods from mill to consumer is part of
production control.

1. From incoming vehicles to receiving 4. From one work center to the next
2. From receiving to storage 5. From the last operation to final storage
3. From storage to the point of use 6. From storage to packaging/shipping
7. From shipping to outgoing vehicle

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2- TRENDS IN SUPPLY CHAIN MANAGEMENT

There are huge different at the terms, policies, and evaluation of supply chain management
between the types of businesses and industries but most of these businesses emphasized the
following
 Measuring supply chain ROI
It is very series to select the best alternative which enhances their business like
producing in-house or outsourcing and other rational basis to manage their supply
chain.
 “Greening” the supply chain
There are varieties of reasons including corporate responsibilities, regulations and
public stress which may push them to redesign their products, packaging, and
services to reduce pollution from transportation and selecting the green suppliers
help them to control the output pollution. We can also add the ethics of the company
under this subject.
 Reevaluating outsourcing – Strategy
 Corporations must take another look to outsourcing from global supplier
compared to the cost of labors and the variation & fixed cost of producing
the same product but that depending on the corporation strategy, so they
must select the most alternative supporting their organizational strategy.
Also shifting some risks with supplier is considered taking advantage of
supplier expertise.
 Development of supply chains should be accorded strategic importance.
Achieving an effective supply chain requires integration of all aspects of the
chain

There are many issues may face the supply chain process and on it that off sure will lack the
production subsequently will delay the return of investment so there are some essential
points will decrease the impact of this issues

 Integrating IT (ERP software- E-Business)

 Existing Real time data supports the company plane and help business by
using ERP systems to control cost, find the problems reasons, respond quickly
to the issues and measure quality & productivity.
 E-business
It refers to the use of electronic technology to facilitate business
transactions. E-business, or e-commerce, involves the interaction of different
business organizations, as well as the interaction of individuals with business
organizations.
 ERP software
It can provide the ability of coordinate, monitor, and manage the supply
chain which enhance the visibility of activities and events in areas like
 Supplier Relationship Management
 Performance Management
 Sales and Order Fulfillment
 Customer Relationship Management

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 Adopting lean principles

Using lean principle not only for production stage but also for other steps at chain to
overcome the weaknesses by eliminating the non-value-added activity, using fewer
good supplier and supplier certification program which decrease inspection time,
adopting lean attitude never ceasing the progress of operation
 Being agile
To respond fair quickly to unpredictable changes like supplier issues, transportation
issues and changing demand
 Establishing transparency
Transparency between all parts of a chain starting from supplier, producer, and
buyer.
 Adopting new delivery modes
Adding more shipper options such as truck, boat, train, and companies like FedEx

Finally, all the above points and trends we are advised to reduce risk, increase profit, reduce
impact from different issues and generally increase customer satisfaction.

3- Risk Management and Resiliency

It is depending on identifying risks, assessing their impact and likelihood then developing
organization strategy for addressing those risks by the below steps
 Risk avoidance
By not dealing with supplier in certain territory (Red areas)
 Risk reduction
By replacing unreliable supplier (variety in Basket supplier)
 Risk sharing
Spreading risks by different partners which decrease the impact on all of them rather
than only one bears all the effects solely at that may done by contractual agreements

Resiliency is essential for any entity to recover quickly from negative events which may be
done at any time. Recovery is a function from severity of negative events, impact of these
events and the plans to cope-with these negative events, so the managers need for resiliency
to manage risks.

Key elements for successful risk management includes

 Knowing your suppliers

Mapping the supply chain
 Providing supply chain visibility
means that a major trading partner can connect easily to each other
 Developing event-response capability
It is the ability to detect and respond quickly to the unplanned events

Shortening the Supply Chain having a good effect on the availability and cost of the product
for end consumer, currently the businesses are trying continuously to reduce or eliminate the
cost and time of transportation, so some of them emphasize on using nearby suppliers,
storage facilities and processing centers or consolidate their supply chain.

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4- Global supply chains

Everyday passes, the volume of business increase continuously between partners around the
world which increase the volume of information can share between partners like customer
needs in different markets and the producer always try to satisfy these needs, which make
enhancing supply chain process not option but mandatory.
Globalization having a dark side specially on supply chain because risks may be related to
supply like weather conditions, supplier failure, quality issues, sustainability issues,
transportation issues, pirates, and terrorism.
As well globalization having positive factors depending basically on technology advances in
communications. Unfortunately, the parts of the globe are still not connected.
5- ETHICS AND THE SUPPLY CHAIN
 As we said before that the supply chain is considered as the lifeblood of any
organization, so we have to enroll the ethics of the organization and code of conduct
to the factors which may affect the chain process. There are many companies of
unethical behavior such as bribing, exporting smokestacks to developing countries
ignoring health, safety, and environmental standards, ignoring rights of workers,
paying substandard wages, forced labor, child labor, and mislabeling certificate of
origin. So, every company should update its code of conduct or ethical code not only
itself but also the supplier which deal with them as the companies try to reduce
impact of unethical of suppliers’ behavior by putting restrictions for accepting
supplier at their vendor list. Nowadays there are third parties to ensure that
suppliers which deal with you apply ethical codes and give them international
certificates like ECOVADIS.
 Ethics in purchasing
Good conduct is essential in business. The National Association of Purchasing
Management has established a set of guidelines
for ethical behavior. standards as following:
 Perceived Impropriety.
 Conflicts of Interest.
 Issues of Influence.
 Responsibilities to Your Employer.
 Supplier and Customer Relationships.
 Sustainability and Social Responsibility.
 Confidential and Proprietary Information.
 Reciprocity. Avoid improper reciprocal agreements.
 Applicable Laws, Regulations, and Trade Agreements.
 Professional Competence.

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6- MANAGEMENT RESPONSIBILITIES
 Strategic Responsibilities
 Supply chain strategy alignment
 Network configuration
 Information technology
 Products and services
 Capacity planning
 Strategic partnerships
 Distribution strategy
 Uncertainty and risk reduction
 Key Tactical and Operational Responsibilities

7- SUPPLIER MANAGEMENT
It is step is very vital for your organization health so the below steps for proper management

Choosing Suppliers Supplier Relationship Management

Supplier Audits Supplier Partnerships
Supplier Certification Strategic Partnering

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8- INVENTORY MANAGEMENT
Warehouses are a main component of supply chains. They relate to the venues of inventories
in the supply chain, the speed at which inventory moves through the supply chain and dealing
with the effect of demand changing on inventories.
9- CREATING AN EFFECTIVE SUPPLY CHAIN
The SCOR® (Supply Chain Operations Reference) model (www.supply-chain.org/SCOR)
provides steps that can be used to create an effective supply chain:

10- Managing Returns

Defected merchandise is revised to the supplier for different reasons, and in a variety of
conditions. As the following:

Defective products Unsold products returned from retailers

Recalled products Parts replaced in the field
Obsolete products Items for recycling

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