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Intro to Supply Chain Management

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Notes for the Supply Chain Management and
Logistics Network Design course
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Prof. Roberto Pinto
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University of Bergamo
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A.Y. 2022/2023
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Revision 0.1 (March 2023)

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Contents

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1 Introduction 3
1.1 What is a supply chain? . . . . . . . . . . . . . . . . . . . . . 3

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1.1.1 Chains vs networks . . . . . . . . . . . . . . . . . . . . 5
1.1.2 Roles in the supply chain . . . . . . . . . . . . . . . . . 5
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1.2 What is supply chain management? . . . . . . . . . . . . . . . 7
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1.3 Why is supply chain management important? . . . . . . . . . 11
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1.3.1 Supply chain management and other business areas . . 13

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2 Supply chain strategies 15

2.1 What is a supply chain strategy? . . . . . . . . . . . . . . . . 15
2.1.1 The push/pull view of supply chain processes . . . . . 17
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2.2 Efficient and responsive supply chains . . . . . . . . . . . . . . 20

2.2.1 The strategic fit . . . . . . . . . . . . . . . . . . . . . . 22
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Prof. Roberto Pinto @ University of Bergamo iv

Preface

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These notes serve as a study aid for students pursuing a master’s degree
involving supply chain management topics. This document complements the

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lectures and the slides provided, it does not replace them.
It is essential to note that this document is a “living document” that will
evolve over time without, from its initial publication in March 2023 (revision
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0.1). The rate of change of the contents of the document is not predeter-
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mined but is dependent on time availability and other factors. Therefore,

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this document is subject to change without prior notice. The contents may
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be updated, revised, or removed at any time, without any obligation to no-

tify the readers. I reserve the full right to modify this document to reflect
current knowledge and industry practices, as well as changes in the structure
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and organizations of the courses that can benefit from it.

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This is not a book. It is rather a collection of notes from direct experience

and excerpts from literature. The document is open to contributions from
anyone interested in submitting amendments, paragraphs, sections, or full
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chapters. Every submission will receive full consideration, and in case of

acceptance of the contribution, the author’s name will be acknowledged in
the “Credits” section below (upon authors’ consent).
It is essential to underline that these notes are not intended for commercial
purposes, and as such, no royalties will be paid to authors or contributors.

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 The focus of this document is to provide a valuable study aid for students
pursuing a master’s degree and to foster collaboration and knowledge sharing
among contributors.

Credits

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TBD

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Chapter 1

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Introduction

1.1 What is a supply chain? -D

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The products that we usually buy, use and consume are the results of a set
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of activities (or sets of activities, commonly referred to as processes) per-

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formed by different entities. Indeed, every product that reaches the market
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and the consumers can be seen as the result of the cumulative effort of mul-
tiple companies: from the companies producing raw materials to the com-
panies transforming these materials in components and finished products,
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from companies providing services (for example, tansportation or warehous-

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ing company, usually referred to as logistics service providers) to companies

selling the products in retail stores, and the like.
Each involved company is meant to provide its own capabilities and re-
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sources in order to effectively contribute to the production and distribution

of the goods. Clearly, all these contributions should be carefully coordinated
with each others with the aims at obtaining the right product in the right
place, at the right time, at the right price.
In summary, behind any product there is a set of companies (each with

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 its own resources and capabilities), potentially located all over the world,
directly or indirectly involved in their manufacturing and distribution to
fulfill market demand. Such a set of companies is commonly referred to as
a supply chain. In other words, the term supply chain refers to a set of
companies involved in the creation and delivery of a product or service to

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customers to fulfill market demand.

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What is a process?

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A process is a set of organized and coordinated activities (actions and de-
cisions) that, using the available resources (equipment, people, energy, and
capital), carries out the transformation of inputs (materials and compo-
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nents) into outputs (product or service) of value to the market and allows,
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at the same time, to achieve the objectives of the company’s business.
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Ideally, a supply chain encompasses all the companies from end to end:
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this means that all companies from the source of the very first raw material
to the final customer should be encompassed in the supply chain concept.
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Although this represents a desirable case (because this would allow for full
visibility and coordination among all involved companies), it is a hardly
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achievable one. From a pragmatic perspective, when a company refers to

its supply chain, it usually refers to the first-tier suppliers (also called direct
suppliers) and to the first-tier customers (also called direct customers). In
some cases, it may be possible (or mandated for safety and security purposes)
to go beyond the first tiers, but it may not be assumed as the standard case
in all contexts.

Prof. Roberto Pinto @ University of Bergamo 4

1.1.1 Chains vs networks

Although the term “supply chain” may evoke a straightforward, linear con-
nection between entities, the reality is that companies involved in a supply
chain are often linked together in a network. One company may be con-

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nected to many others on both the supplier and customer sides, creating a
complex web of relationships. Additionally, each individual company can be

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involved in more than one supply chain. For instance, a company that man-

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ufactures electronic components may participate in the automotive supply
chain, as well as in the domestic appliance or consumer electronics supply

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chains. Consequently, it is more accurate to refer to these interconnected re-
lationships as supply networks rather than chains. For the sake of simplicity,
we will use the terms “supply chains” and “supply networks” interchangeably
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unless explicitly stated otherwise.
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1.1.2 Roles in the supply chain

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A supply chain usually involves different entities with different roles. For
example, we can highlight (without claim of exhaustiveness) the following:
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• Raw materials suppliers: These are companies involved in the gathering

and extraction of natural resources and raw materials such as mining
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companies, timber harvesting companies, and agriculture companies.

They supply these materials to other companies in the supply chain for
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further processing or production.

• Manufacturers of components: These companies produce components

that are used in the production of other components or finished prod-
ucts. They take the raw materials and transform them into parts that
can be used in other products or assembled into finished products.

Prof. Roberto Pinto @ University of Bergamo 5

 • Manufacturers of finished products: These are companies that produce
final products that are intended for sale in the market. They take
the components produced by other companies and assemble them into
finished products that are ready for distribution and sales.

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• Distributors: These are companies that provide services (generally in
the form of warehousing and transport) to distribute the products on a

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large scale. They are responsible for transporting the finished products

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from the manufacturers to the retailers or end customers.

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• Retailers: These companies operate as a contact point between the pro-
duction and distribution phases and the market. They sell the products
directly to the end customers through physical stores or online market-
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places.
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• Service providers: These companies provide services to support or com-

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plement the production and distribution processes. These include lo-

gistics services such as transportation and warehousing, information
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and communication technology services, and financial services.

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• Temporary workforce providers: These companies provide temporary

or seasonal resources to manufacturing and logistics companies. They
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may include cooperatives, staffing agencies, or contract labor providers.

• Technical assistance centers: These companies provide support to cus-

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tomers in addressing questions, issues, and problems with the products.

They may offer technical assistance and support services such as repair
and maintenance, customer service, and troubleshooting.

• Customers: The end customers are the reason for the existence of any
supply chain. They are the ones who purchase the finished products

Prof. Roberto Pinto @ University of Bergamo 6

 and provide the demand for the supply chain to operate. Understanding
customer needs and preferences is essential for designing an effective
supply chain.

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1.2 What is supply chain management?

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The types of processes performed by the companies involved in a supply

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chain may vary according to the specific company, industry, product category,
market, position in the supply chain and so forth. However, at a higher

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level of abstraction we can state that, from the supply chain perspective, all
companies should perform the following standard processes to manufacture
and distribute the products:
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• Procure the material and services required for the production: This
process involves identifying and selecting suppliers, negotiating con-
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tracts and pricing, and managing relationships with suppliers. It also

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includes tracking inventory levels to ensure that the necessary materials

are available when needed.
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• Transform the material into components or finished products: This

process includes the actual manufacturing or production of the com-
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ponents or finished products, including quality control and testing, as

well as packaging and labeling the products for distribution.
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• Receive and manage the orders from the customers: This involves re-
ceiving orders from customers, processing them, and managing inven-
tory levels to ensure that orders can be fulfilled in a timely manner. It
may also involve forecasting future demand and adjusting production
and inventory levels accordingly.

Prof. Roberto Pinto @ University of Bergamo 7

 • Deliver the products to the customers: This process includes managing
transportation and logistics to ensure that products are delivered to
customers on time and in the most cost-effective way possible. It also
involves tracking shipments and managing any issues that may arise
during the delivery process, such as delays or damages.

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• Manage the return flow of products from the customers: This process

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includes managing the reverse logistics of returned products, including

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determining the reason for the return, assessing the condition of the re-
turned product, and managing any necessary repairs or refurbishment.

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It also involves managing the disposal of any products that cannot be
resold or returned to inventory.
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• Provide customer support and maintenance: This process aims to as-
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sist customers both before and after the sale in effectively selecting and
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using the product. Services provided can include technical support to

troubleshoot and resolve issues, product training, and repair services in
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the event of damage or malfunction. Services may also involve offering

additional products or upgrades to enhance product performance and
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improve the overall customer experience. Gathering customer feedback

is also an important aspect as it can help to identify areas for improve-
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ment in the product and supply chain processes.

• Plan all the above in the most effective way: This involves developing
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and implementing a decisions that take into account all of the above
processes, as well as any external factors such as market trends and
regulatory requirements.

• Performance monitoring: This process involves monitoring and mea-

suring the performance of the supply chain, and making adjustments

Prof. Roberto Pinto @ University of Bergamo 8

 as necessary to optimize efficiency and minimize costs.

The list of processes presented here is not exhaustive, as specific industries

or products may require additional processes. However, the ultimate goal
of all supply chain processes is to realize and facilitate the movement of

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goods from suppliers to customers in the most efficient and effective way

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possible. Therefore, we can state that supply chain management (SCM) is

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the management of all these processes with the aim at optimizing this flow
of goods and services through the supply chain, with the aim of reducing
costs, enhancing quality, and increasing customer satisfaction. Achieving

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effective supply chain management requires the coordination of activities
among various companies and stakeholders to guarantee timely delivery of
products to customers, while maintaining the appropriate levels of quality
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and cost.
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SCM cannot be limited to the management of goods movement through

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different companies, and it is essential to consider other relevant flows. Be-

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yond the physical flow of products, there are other two types of flows that
occur in supply chains, as follows:
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• Physical flow: the physical flow refer to the movements of goods through
the supply chain, and can be divided into two other flows:
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– The forward flow, that is the regular flow from higher tier suppliers
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upstream to the end-consumer downstream.

– The return flow, that is the reverse flow from customers to the
supply chain (product returns, exhausted products...).

• Financial flow: it refers to the flow of payments between companies in

the supply chain.

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 • Information flow: it refers to the double-sided exchange of information
between companies in the supply chain, from orders to other infor-
mation relevant to the management of the processes. Organizations
should share information to make better decisions that will improve
overall performance.

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Supply chain management
The management of upstream and downstream relationships with suppliers

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and customers in order to deliver superior customer value at less cost to the
supply chain as a whole.
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M. Christopher
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Therefore, supply chain management can be regarded as a set of carefully

engineered decision-making processes whose outcome determine the opera-
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tions of a company with respect to all the processes and flows involved.
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Supply chain and supply chain management

The global network used to deliver products and services from raw materials
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to end customers through an engineered flow of information, physical goods,

and cash.
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Apics dictionary

In conclusion, we can see SCM as a way to manage the supply chain

complexity through a focus co-operation, relationships, and trust, and the
recognition than the whole can be greater than the sum of its parts.

Prof. Roberto Pinto @ University of Bergamo 10

1.3 Why is supply chain management impor-
tant?

Supply chain management is not a new concept; yet, it is nowadays more

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important than ever to face an ever increasing complexity. In the past,
the management of processes was largely intuitive thank to the low-level of

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complexity. Today, supply chain management is a critical discipline that

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enables the efficient flow of goods and services from suppliers to customers
in the economic system. As the business landscape continues to evolve, it is

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increasingly becoming interconnected, creating new opportunities for compa-
nies across various industries. With the rise of globalization and e-commerce,
businesses can now engage with larger and more diverse audiences, expand-
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ing their reach on the global platform. This trend has been highly advan-
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tageous for most organizations, but it has also given rise to a significant
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requirement for professionals who possess expertise in managing global sup-

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ply chains. These experts play a critical role in ensuring that businesses can
efficiently and effectively manage their global operations, from procurement
to production, and distribution to customers. They must also have a deep
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understanding of the complexities involved in managing international logis-

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tics and customs regulations, as well as the cultural nuances and business
practices of different regions.
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Without effective supply chain management, companies would not be able

to provide products to customers on time, or at all, and would not be able to
deliver products at a bearable market price. The role of supply chain man-
agement is to ensure that products are available to consumers at the right
time, place, and cost, and to result in cost savings for companies, which can
then be passed on to customers in the form of lower prices. Supply chain

Prof. Roberto Pinto @ University of Bergamo 11

 management can also help improve the quality of products, reduce waste,
promote sustainability, and increase the speed and agility of the economic
system. It enables consumers to buy essential products at lower costs and im-
proves living standards. With evolving trade policies and climate-conscious
consumers, supply chain management has evolved to incorporate sustainable

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practices and adapt quickly to changing market conditions. An ineffective

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supply chain can result in a lack of raw materials, abrupt price hikes, and

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impact consumers. Therefore, supply chain management is essential to the
overall health and efficiency of the economic system.

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One of the key challenges facing supply chain management today is the
increasing complexity of global supply chains. Companies are sourcing ma-
terials and products from all over the world, which can lead to challenges
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in managing logistics and ensuring quality control. This has been further
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complicated by the COVID-19 pandemic, which has caused disruptions to
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global supply chains and highlighted the need for greater resilience in supply
chain management.
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Another important aspect of supply chain management is the need to en-

sure ethical and socially responsible practices throughout the supply chain.
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This includes issues such as fair labor practices, human rights, and environ-
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mental sustainability. Consumers are increasingly aware of these issues and

are demanding that companies take responsibility for their actions through-
out the supply chain.
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Overall, supply chain management is essential for the functioning of the

economic system, and it has a significant impact on our daily lives. It enables
companies to manufacture and distribute better products at lower costs, and
it ensures that essential products are available to consumers when they need
them.

Prof. Roberto Pinto @ University of Bergamo 12

1.3.1 Supply chain management and other business ar-
eas

Supply chain management does not encompass all the processes performed
by a company. There are other relevant processes that, although not included

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in the SCM boundary, affect the outcome of SCM decision or are affected by

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them. For example, we can name a few relevant areas as follows:

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• Product development. This is the process of introducing and bringing
products to the market. It can also involve updating or renewing an ex-

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isting product. Product development hinges on the materials available
to make a product and the ingenuity of individuals to design, engineer
and determine the purpose and function of a product.
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• Marketing. It is often said that a good product sells itself. In reality,
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organizations must try to stimulate demand for their goods. This is

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where marketing comes in. Marketing strategies include advertising

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and promotion, packaging, pricing, product placement, distribution,

and target audience selection.
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• Operations. A key aim of operations managers is to ensure the inner

workings of a business run efficiently to maximize productivity and
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reduce costs.

• Finance. This area works with departments like sales to set revenue
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goals, acquire money or capital and decide how to spend and invest.

Prof. Roberto Pinto @ University of Bergamo 13

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Chapter 2

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Supply chain strategies

2.1 What is a supply chain strategy? -D

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A supply chain strategy is a comprehensive plan that outlines how a company
will manage and optimize its supply chain to achieve its business goals. It
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defines the company’s approach to sourcing, procurement, production, and

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distribution of goods or services, and includes key decisions such as supplier

selection, transportation mode, inventory management, and delivery over
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time. The goal of a supply chain strategy is to ensure that the company
can meet customer demand in the most efficient and cost-effective manner
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while minimizing risks and maximizing profits. A well-designed supply chain

strategy can help a company to gain a competitive advantage by enabling it to
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deliver products faster, cheaper, and with better quality than its competitors.
It also helps the company to adapt to changes in the market, such as shifts
in customer preferences, changes in regulations, or disruptions in the supply
chain. A supply chain strategy should be aligned with the overall business
strategy of the company and should be periodically reviewed and updated to
ensure its continued effectiveness.

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 The supply chain strategy depends upon several factors, such as:

• Business strategy: A company’s overall business strategy will impact

its supply chain strategy. The supply chain strategy needs to align with
the business strategy, which includes factors such as product offerings,

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target market, and competitive positioning.

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• Customer demands: Customer demands are a critical determinant of a

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supply chain strategy. The strategy needs to ensure that the company
can meet customer expectations in terms of product quality, delivery

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time, and pricing.

• Product characteristics: The characteristics of a product, such as its

complexity, size, and value, will impact the supply chain strategy. For
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example, a complex product may require a more sophisticated supply
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chain network, while a large product may require specialized trans-

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portation.
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• Industry characteristics: Different industries have different supply chain

requirements, and a supply chain strategy needs to take these into ac-
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count. For example, the supply chain for a high-tech industry may be
different from the supply chain for a retail industry.
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• Supplier capabilities: The capabilities of suppliers will also impact the

supply chain strategy. The strategy needs to ensure that suppliers can
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provide the required materials or services on time and at the right cost.

• Technology: Advances in technology have a significant impact on sup-

ply chain strategy. The use of technology, such as automation, artificial
intelligence, and blockchain, can improve supply chain efficiency and
reduce costs.

Prof. Roberto Pinto @ University of Bergamo 16

2.1.1 The push/pull view of supply chain processes

Within the strategy of the supply chain, we have to define the timing of
the execution of the processes relative to the end customer demand. In this
respect, all processes in a supply chain fall into one of two categories, namey

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push and pull. The push/pull view of supply chain processes is a way of

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understanding how products move through a supply chain. In this view, the

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push processes are those that are initiated by the supplier, while the pull
processes are initiated by the customer.
Therefore, in a push supply chain, suppliers create products based on their

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forecasts of customer demand. They then “push” these products through the
supply chain to retailers and ultimately to customers. Under the push supply
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chain, the logistics are driven by long-term projections of customer demand.
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This type of system relies heavily on accurate forecasting and inventory man-
agement to ensure that the right products are available at the right time.
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This gives the companies time to meet their needs and time to figure out
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other logistics like where to store the inventory. But instead of responding to
actual demand, a push strategy relies on often wrong predictions that may
lead to lacking or excess inventory (i.e. stockouts or leftovers).
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In general, push supply chains are generally adopted for standard prod-
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ucts that have predictable demand and are not subject to customization. The
reason for this is that push strategies involve a more anticipatory approach,
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where goods are produced based on forecasts of demand rather than actual
customer orders. Therefore, push strategies are better suited for products
with stable demand patterns, where it is possible to predict the required
production volume with a reasonable degree of accuracy. Additionally, push
strategies are also advantageous for standard products because they allow for
the optimization of production processes and economies of scale. By produc-

Prof. Roberto Pinto @ University of Bergamo 17

 ing a large quantity of a standard product in advance, companies can benefit
from lower production costs and reduce the risks associated with stockouts
or production delays.

In contrast, a pull supply chain is one where products are produced in

response to actual customer demand. This means that when a customer

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places an order, the product is then “pulled” through the supply chain from

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the manufacturer to the retailer and ultimately to the customer. Under the

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pull supply chain, the manufacturing and supply process is driven by actual
customer demand. In this type of supply chain logistics, inventory is acquired

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on a need basis. This type of planning benefits includes less wastage in the
case of lower demand. The problem, however, is that the company might not
have enough inventory to meet rising demands due to unforeseen factors.
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Pull supply chains are often used when producing customized products,
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as these products are typically made to order rather than being produced
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in advance. Pull strategies allow companies to quickly respond to specific

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customer demands, producing and delivering products only when there is a

confirmed order. This approach minimizes the need for excess inventory and
reduces the risk of stockouts, as the products are made only when there is a
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demand for them. Additionally, pull strategies enable greater customization,

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as companies can tailor products to meet the specific needs of individual cus-
tomers. This can result in higher levels of customer satisfaction and loyalty,
as customers appreciate having products that are tailored to their unique re-
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quirements. However, pull strategies can also pose some challenges, such as
longer lead times and higher costs, as products are made only when there is a
confirmed order, which can require more complex planning and coordination
within the supply chain.

In many cases, a supply chain will utilize a combination of push and pull

Prof. Roberto Pinto @ University of Bergamo 18

processes, resulting in what is known as a hybrid push-pull supply chain. The
decision to implement a hybrid approach is based on various factors, such as
the product being produced and the needs of the business. When designing a
hybrid push-pull supply chain, it is important to establish a clear boundary
between the push and pull processes. The boundary indicates the point

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at which the supply chain shifts from a push strategy to a pull strategy.

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In the push stage of the supply chain, activities such as purchasing and

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production of common components are carried out in advance, allowing for a
more efficient production process in the pull stage. During the pull stage, the

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specific product that the customer wants is manufactured, based on demand
signals, which ensures that there is no leftover or stockout of the product.
By implementing a hybrid push-pull approach, a supply chain can achieve
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the benefits of both strategies while minimizing their limitations.
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Leftover and stockout

The term leftover refers to the quantity of unsold goods when the demand
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is lower than the available quantity, while the term stockout refers to the
situation in which the demand exceeds the goods availability. It is impor-
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tant to note that these two conditions are mutually exclusive; it doesn’t
make sense to have both leftover and stockout for the same product simul-
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taneously. To avoid such situations, it is crucial to identify the root causes

of leftover and stockout. These issues can arise due to inaccurate forecasts,
production or distribution issues, changes in the market, and other factors
that lead to a mismatch between the available products for sale and the
demand.

Prof. Roberto Pinto @ University of Bergamo 19

 2.2 Efficient and responsive supply chains

It is important to align a company’s supply chain strategy with the unique

characteristics of its products. In an interesting paper title “What is the
right supply chain for your product?”, Fisher (1997) argues that “The root

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cause of the problems plaguing many supply chains is a mismatch between

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the type of product and the type of supply chain”. Although this articles

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dates back to a couple of decades ago, it is still relevant to today’s discussion
about supply chain strategies and configuration.
First of all, it is possible to identify two macro-types of products: func-

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tional products are those that have a stable and predictable demand over
time, are usually low-cost, and have simple, well-understood production pro-
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cesses. Procurement is not complex and materials are usually available. Ex-
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amples of functional products are basic groceries like milk and bread, or stan-
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dard office supplies like paper clips and staplers; innovative products, on the
other hand, are those that are new to the market, have unpredictable demand
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and require more complex production processes. They are often higher-cost
items that require more marketing and advertising to create demand. Exam-
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ples of innovative products include new electronic gadgets, fashion products

or cars with new technology features.
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Given the different characteristics of the products, it descends that also

the characteristics of the relative supply chains should be different. In this
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respect, it is possible to identify two main supply chain types:

• Efficient supply chain: An efficient supply chain is characterized by a

focus on cost reduction. The primary goal of an efficient supply chain
is to minimize costs while maintaining an acceptable level of customer
service. To achieve this, an efficient supply chain will typically rely on

Prof. Roberto Pinto @ University of Bergamo 20

 economies of scale, forecast-based activities, process automation, and
standardization to maximize efficiency and minimize waste. The em-
phasis is on producing and distributing large volumes of standardized
products at low cost, which requires a high level of predictability in
terms of demand and supply. An efficient supply chain is typically

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characterized (even though to a different degrees in different contexts)

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by long production runs, centralized manufacturing and distribution

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centers, and a limited product variety. The ultimate objective of an
efficient supply chain is to minimize total supply chain costs, includ-

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ing inventory carrying costs, transportation costs, and manufacturing
costs.
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• Responsive supply chain: A responsive supply chain is able to quickly
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respond to changes in demand. This type of supply chain is character-
ized by a greater flexibility and a higher level of customization than the
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efficient supply chain. In order to be successful, a responsive supply

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chain needs to have a number of key features. One of the most impor-
tant is the ability to quickly identify changes in demand, and to be able
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to respond to these changes in a timely manner. This often requires a

closer relationship between the manufacturer and the customer, with
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the manufacturer working closely with the customer to identify their

needs and to develop new products that meet those needs. Other im-
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portant features of a responsive supply chain include a greater focus on

speed and a willingness to carry higher levels of inventory in order to be
able to quickly respond to changes in demand. Additionally, a respon-
sive supply chain often requires a higher level of collaboration between
the different players in the supply chain, including suppliers, manufac-
turers, and distributors, in order to quickly and effectively respond to

Prof. Roberto Pinto @ University of Bergamo 21

 changes in demand.

Interested readers can refer to the paper by Fisher (1997) mentioned

above.

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2.2.1 The strategic fit

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The term strategic fit refers to the alignment of the capabilities of a com-

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pany’s supply chain strategy with the unique characteristics of its products.
Therefore, a strategic fit can be achieved by designing a supply chain that
is aligned with the needs of the product, such as the desired level of respon-

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siveness, the level of product customization, and the required lead time. For
example, if a company produces innovative products that require a high level
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of customization, a responsive supply chain would be the best fit. This would
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involve a more flexible and agile supply chain that is capable of quickly re-
sponding to changes in demand and adapting to new product designs. On
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the other hand, if a company produces functional products that are highly
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standardized, an efficient supply chain would be the best fit. This would
involve a more streamlined and cost-effective supply chain that focuses on
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minimizing lead times and reducing costs.

In most cases, one of the most important problems to face is achieving
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a balance between efficiency and responsiveness. On one hand, the supply

chain needs to be efficient in terms of minimizing costs, reducing waste, and
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maximizing throughput. On the other hand, the supply chain also needs to
be responsive in terms of meeting customer demands, adapting to changing
market conditions, and handling unexpected disruptions. Balancing these
two competing priorities can be challenging, as improving one aspect of the
supply chain may come at the expense of the other. For example, increasing
inventory levels to improve responsiveness may lead to higher carrying costs

Prof. Roberto Pinto @ University of Bergamo 22

and reduced efficiency. Therefore, finding the optimal balance between effi-
ciency and responsiveness is a key challenge that requires careful planning,
coordination, and decision-making.

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Prof. Roberto Pinto @ University of Bergamo 24