Supply Chain Management

Supply Chain

 Sequence of organizations-their facilities, functions and activities- that are involved in

producing and delivering a product or service

 Sequence begins with the suppliers of raw materials and extends all the way to the final
customer

 Facilities include: warehouses, factories, processing centers, distribution centers, retail

outlets and offices
Supply Chain

 Functions and activities include forecasting, purchasing, inventory

management, information management, quality assurance, scheduling,
production, distribution, delivery, and customer service
 Sometimes referred to as Value Chains, reflects the concept that value is
added as goods and services progress through the chain
3 kinds of movement in these systems:

 Physical Movement of material

 The flow of cash
 Exchange of information
Supply Chain Management

 The strategic coordination of the supply chain for the

purpose of integrating supply and demand management
 Goal: link all the components of the supply chain so that
market demand is met as efficiently as possible across the
entire chain
BENEFITS OF EFFECTIVE SUPPLY
CHAIN MANAGEMENT

 Provides strategies and methods for integrating separate organizations in the supply chain
and their functions into a cohesive operating system
 Lower inventories
 Lower costs
 Higher productivity
 Greater agility
 Shorter lead times
 Higher profits
 Greater customer loyalty
 ELEMENTS OF SUPPLY CHAIN
MANAGEMENT
Element Typical Issue
Customers Determining what products and/or services customer want
Forecasting Predicting the quantity and timing of customer demand
Design Incorporating customers, wants, manufacturability, and time to market
Capacity Planning Matching supply and demand
Processing Controlling quality, scheduling work
Inventory Meeting demand requirements while managing the costs of holding inventory
Purchasing Evaluating potential suppliers, supporting the needs of operations on purchased goods and
services
Suppliers Monitoring supplier quality, on-time delivery, and flexibility, maintaining supplier relations
Location Determining the location of facilities
Logistics Deciding how to best move information and materials
Supply Chain Manager

 People at various levels of the organization who are responsible for managing supply and
demand both within and across business organizations.
 Involved in planning and coordinating activities that include sourcing and procurement of
materials and services, transformation activities, and logistics
ELEMENTS OF SUPPLY CHAIN BUT NOT
PART OF LOGISTICS

 Product Development
 Packaging
 Manufacturing
 Quality Processes