Professor Profile

 Course: Digital Supply Chain Management

 Professor: Seungwook Park
 Email: separk6112@inha.ac.kr
 Cell Phone: 010-4615-2351

 I received M.B.A. and Ph.D. at The Ohio State University. After

then, I had taught at Bowling Green State University for 2 years
and at California State University Fullerton for 8 years before I
joined Inha University in 2007. My specialty areas are supply
chain management, operations management, quality manage-
ment, purchasing management, and business modeling.

 Office Hour : Wed. 2:00 - 3:00PM

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Why should we take this course?

 The number of customers demanding customized

or personalized products/services has been in-
creased more than before.
 Many companies have globalized their supply
chain in terms of sourcing and marketing
 The discipline of supply chain management has
co-evolved with IT technologies.
 Digitalization of supply chain promises new digital
architecture, new capabilities, and more effective
IS and IT

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Textbook and assessment of the
course
 Textbook
- The Digital Supply Chain edited by Bart L. Mac-
Carthy and Dmitry Ivanov, Elsevier, 2023)
Articles related to the class topics (TBA)

 Assessment of the course

 Term paper: 50%
 Homework: 40%
 Attendance: 10%

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Digital Supply Chain Management

1. Basic Concepts of
Supply Chain Management

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1. Basic Concepts of Supply Chain
Management

LEARNING OBJECTIVES:
 Define supply chain management, its objectives.
 Explain why supply chain management became prevalent
 Understand alignment between business strategy and supply
chain strategy and its importance

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Advent of Supply Chain Manage-
ment
Fragmentation Early Integration Total Integration
1960 1980 2000

Demand forecasting
Purchasing
Production planning Inbound Logistics
Warehousing
Transportation Supply Chain
Management
Materials handling
Packaging
Distribution Outbound Logistics

Order processing
Customer services

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Definition of SCM
 Definition
 The synchronization of a firm’s processes with those of
its suppliers and customers to match the flow of
materials, services, and information with customer
demand

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Objective of Supply Chain Manage-
ment
 Objective of SCM:
 Maximizing the supply chain profitability
 Supply Chain profitability
 Difference between revenue generated from the customer and the
overall cost across the supply chain

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Supply Chain Coordination

 All stages in the supply chain need to take

actions together (usually results in greater
total supply chain profits)
 Supply chain coordination objectives
 Responsiveness, variance reduction, inventory
reduction, shipment consolidation, lower defect
rate
 Lack of coordination results when:
 Objectives of different stages conflict or
 Information moving between stages is distorted

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Supply Chain Dynamics
 Bullwhip Effect:
The phenomenon in supply chains whereby ordering patterns experience in-
creasing variance as you proceed upstream in the chain.
Upstream

Discussion: Is bullwhip bad in business?

Then, why does this happen?
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Alignment b/w Strategies

Business Unit Strategy

 Directions and plans to meet customer needs through the Business
products and services against competitors Strategy
 Competing with price, delivery, quality, and variety

Supply Chain Strategy

SC Strategy
 Defining operations, distribution, and service functions
Supply Operations Sales/ Customer
Distribution
and determining if the business unit performs them in Mgmt. Mgmt. Mktg. service

house or outsoucing.
Integration of info & materials
 Designing a supply chain considering inventory, trans-
portation, facility, and information flow.

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Examples of Good Alignment
Company Business Supply Chain Strategy
Strategy
• Cross-docking system
Low cost • Flow-through distribution
Wal-Mart (EDLP: Everyday • Fast information sharing with suppliers
Low Pricing) through EDI system

• Direct sales model

Dell Computer Mass customiza- • Assemble-to-order production policy
tion • Platform and modular design

• Reduction of time from design to sales (6

months -> 5~6 weeks)
Zara (Inditex) Fast Fashion • Separation of production (Uncertain demand
products: Europe, Certain demand products:
Asia)
• Locating stores in the busiest areas
7-Eleven Convenient buy- • Frequent delivery of small volume
ing • Deploying items fast using bar code systems

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Article to Read

“The Eight Essential Supply Chain Management Processes”

Supply Chain Management Review, Sep. 2004

Abstract:

The Global Supply Chain Forum of The Ohio State University has identi-
fied eight processes that form the foundation of supply chain success.
The challenge is to integrate these processes both internally and exter-
nally with key partners in the supply chain. Two of those key processes
— customer relationship management and supplier relationship man-
agement — help companies accomplish this integration and realize the
revenue and profitability gains that inevitably follow.

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