Chapter 1

21st-Century Supply
Chains

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 Introduce Supply Chain Management 1

What is supply chain management

Supply chain value and processes
Customer service
Business models and sourcing
Manufacturing and integrated planning
Integrated operations planning
Advanced planning and scheduling

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 Introduce Supply Chain Management 2

Inventory management
Transportation
Warehousing and material handling
Packaging
Global supply chains
Supply chain design
Relationship management
Performance measurement
Future trends
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 Course Objectives
Understand supply chain management and its role for
the firm, the supply chain, and the economy.
Compare and contrast the supply chain characteristics
for various industries.
Understand the differences between supply chain and
value chain.
Understand the functions, activities, and processes
involved in supply chain management with a specific
focus on procurement, manufacturing, planning, and
globalization.

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 What Is Supply Chain Management?

Define supply chain management.

Define supply chain value proposition.
Provide examples of supply chain management:
• Manufacturing.
• Distribution.
• Services.
• Talent.
• Humanitarian.
• Facilities.
• Recycling.
• Military.
Identify major industry disrupters and their impact.
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 Supply Chain Management: Defined
Supply chain management is a set of processes used to
effectively and efficiently integrate suppliers,
manufacturers, distribution centers, distributors and
retailers so that products are produced and distributed
at the right quantities, to the right locations, and at the
right time in order to minimize system-wide costs while
achieving the consumer’s desired value proposition.

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 Additional Definition
“Supply Chain Management encompasses the planning
and management of all activities involved in sourcing
and procurement, conversion, and all logistics
management activities. Importantly, it also includes
coordination and collaboration with channel partners,
which can be suppliers, intermediaries, third-party
service providers, and customers. In essence, Supply
Chain Management integrates supply and demand
management within and across companies.” (Council of
Supply Chain Management Professionals – CSCMP –
http://www.cscmp.org/Website/AboutCSCMP/Definitions
/Definitions.asp)
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 THE INTEGRATED SUPPLY CHAIN 1

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 What is SCM and logistics?
Designing, planning, executing, or measuring activities
related to:
• Sourcing.
• Procurement.
• Manufacturing.
• Integrated operations planning.
• Transportation.
• Inventory management.
• Warehousing.
• Customer service.
• Returns and repairs.
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 Common Definition Themes
Provides a combination of product, service, or solution
to the end-consumer.
Considers end-to-end activities across the supply chain.
Requires the performance of a number of physical and
service processes.
Integration within the firm and across supply chain
partners.
Requires execution of sequence of functions.

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 Supply Chain Value Adds
Reduced operating cost.
Increased revenue:
• Fill rate.
• Extended offerings:
• Location.
• Mix.
• Product/Service/Solution.
• Customization.
• New product introduction.
Asset utilization:
• Facilities.
• Production.
• Transportation.
• Inventory.
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 THE INTEGRATED SUPPLY CHAIN 2

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 Integrated Supply Chain Management 1

Firms Can Be Fast Alone. It’s Called Hurry Up And

Wait. The Goal is Supply Chain Synchronization.

Consumer
Retailer
Distributor
Service provider
Manufacturer
Material provider

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 Integrated Supply Chain Management 2

The process of moving and positioning inventory to

meet customer requirements at the lowest possible
total cost to serve.

Time and place positioning

Lowest total cost
Asset minimization
Supply chain connectivity
Synergy and collaboration across channels
Value and solution delivery
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 Integrated Supply Chain

World Class Supply Chain

Synchronized Operating Environment
• Cycle time compression - 10x.
• Point-in-time performance.
• Integrated OTD execution.
• Consistent data across relevant channel participants.
• One Informed Voice (SPOC – Single point of contact).

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 Supply Chain Industry Disruptors
Technology adoption
• Autonomous vehicles, IoT.
• Artificial intelligence.
• “Uberization.”
• 3D printing.
• Big data.
• Alternative fuels.
Consumer requirements
• “Want it now.”
• Personalization.
• Millennial preferences.
• Omnichannel shopping.
• Aging consumer needs.
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 Value Chain Creation: Chronological
History
The evolution of value creation from supply chain to
integrated value chain:
• Single company integrated supply chain model.
• End-to-End integrated supply chain model.
• Single company integrated value chain model.
• End-to-End integrated value chain model.

End-to-End Integrated Value Chain Management

provides firms with the next transformational
opportunity for value creation.

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 Supply Chain Value Adds
Discuss how firms employ supply chain competencies
to create competitive advantage.
Identify the functions that firms use to execute supply
chain management activities.
Explain the value adds that result from supply chain
management.

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 Supply Chain Value Proposition 1

Configure in a customer relevant way while

simultaneously increasing quality, productivity, and
operational excellence.

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 Supply Chain Value Proposition 2

Configure in a customer relevant way while

simultaneously increasing quality, productivity, and
operational excellence.

Service Excellence - Effectiveness

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 Supply Chain Value Proposition 3

Configure in a customer relevant way while

simultaneously increasing quality, productivity and
operational excellence.

Service Excellence – Effectiveness

Cost Minimization and Avoidance – Efficiency

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 Supply Chain Value Proposition 4

Configure in a customer relevant way while

simultaneously increasing quality, productivity and
operational excellence.

Service Excellence – Effectiveness

Cost Minimization and Avoidance – Efficiency
Value Generation - Relevancy

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 Supply Chain Value Proposition 5

Configure in a customer relevant way while

simultaneously increasing quality, productivity and
operational excellence.

Service Excellence – Effectiveness

Cost Minimization and Avoidance – Efficiency
Value Generation – Relevancy
Continuous Improvement – Sustainability

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 EERS Value Performance Model

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