Supply Chain Management

a sequence of organizations, their facilities, functions

and activities, which are involved in producing and
delivering a product or service

Sequence begins with basic suppliers of raw materials,

and extends all the way to the final customer

Value chain or Supply chain?

Supply Chain Management

Demand Component

Distributor
Storage
Manufacturer
Supplier

Supply Component

Retailer

Customer

Supply Chain Management

Benefits
Lower inventories
Lower cost
Higher productivity
Improved ability to respond to fluctuations in demand
Shorter lead time
Higher profit
Greater customer loyalty

Supply Chain Management

Element of Supply Chain Management
Customer the driving force
Forecasting predicting demand
Design incorporating customers
Processing schedule, quality control
Inventory
Purchasing evaluating potential suppliers
Supplier product quality, on time delivery
Location
Logistics movement within facility

Supply Chain Management

Integrated Supply Chain
Internal Department
Purchasing
Production
Distribution

External Department
Supplier
Customer

Supply Chain Management

Stage 1
Supplier

Purchasing

Manufacturer

Distributor

Customer

Distributor

Customer

Stage 2
Supplier

Purchasing

Manufacturer

Internal Supply Chain

Supply Chain Management

Stage 3
Supplier

Purchasing Manufacturer Distributor

Internal Supply Chain
Integrated Supply Chain

Customer