Introduction To Supply Chain Management 1

Topics: Supply chain management, Supply chain, Logistics Pages: 22 (1454 words) Published: March 5, 2015
Introduction to Supply
Chain Management
By
Dr Hajar Fatorachian

Outline of lecture

 Definition of supply chain management
 Different approaches towards supply chain
management
 Drivers of supply chain management
 Importance of supply chain management
 New trends in supply chain management

Supply chain
 All activities concerned with receiving customer requests and meeting their demands as well as developing new
products, operations, marketing, distribution, finance, and
customer service (Janvier-James, 2012).
 A range of different stakeholders including: customers,
retailers; distributors/wholesalers; manufacturers; and
suppliers (Chopra and Meindl, 2012)
 Supply chains are dynamic.
 The integration of the whole supply chain is essential.

Supply Chain Management
(SCM)
 A process of collaboration, which integrates business
processes in the supply chain (Bowersox et al., 2002).
 Known as 'supply chain integration or optimisation': “the process of optimising a company's internal practices in
interacting with suppliers and customers in order to bring
products to market more efficiently” (Leon-Pena, 2008, p.59).  Main components of SCM: planning; sourcing; manufacturing; delivering; and returning (Koh and Maguire, 2004).

SCM (2)

‘Supply chain management is the management of the
interconnection of organizations that relate to each other
through upstream and downstream linkages between the
processes that produce value to the ultimate consumer in
the form of products and services’.
Supplier

Manufacturer Distributor

Upstream

Retailer Customer

Downstream

SCM (3)

 Supply Chain Management (SCM) is the design and management of flows of products, information, and funds throughout the supply chain

SCM (4)

Second-tier
supplier

First-tier
supplier

First-tier
customer

Demand side

Supply side
Purchasing and
Information
flow
Physical
flow

Second-tier
customer

supply
management

Physical distribution
management
Logistics

Materials management
Supply chain management

End
customer

The Boundary-Spanning Nature
of SCM
SCM spans and integrates functions within and between enterprises of the supply chain through:
 Intra – Organizational
Integration
 Cross – Enterprise Integration

http://www.youtube.com/watch?v=GHNuOLrAwlo

1-8

The SCM Network

Operations network for a plastic
home-ware company
Second tier
suppliers
Chemical
company

Wholesaler
Plastic
stockist

Cardboard
company
Ink
supplier

First tier
customers

First tier
suppliers

Plastic
homeware
manufacturer

Packaging
supplier

Direct supply
Information

Second tier
customers

Retailer

Retailer

Operations network for a
shopping mall
Second tier
suppliers
Recruitment
agency

First tier
suppliers

First tier
customers

Second tier
customers

Retailers

Retail
customers

Security
services

Cleaning
materials
supplier

Cleaning
services

Equipment
supplier

Maintenance
services

Shopping
mall

Direct supply
Information

Global Apparel Value Chain

Drivers of SCM
 Competition is based on supply chains/networks (Ketchen and Hult, 2007)  A significant source of providing competitive advantage (Li et al., 2006)  One of the main strategic challenges for organisations (Croom, 2005)  The speed of change and the uncertainty about market (Koh and Maguire, 2004)  Emphasis on quality of products (customer centric approach/customer satisfaction) (Hugos, 2006; Cegielski et al., 2012)

 Cost reduction and price pressure (Croom, 2005)
 Globalization (Moodley, 2001)
 Appearance of ICT (Haug et al., 2011)
 Compliance with environmental and governmental regulations (Handfield and Nichols,1999)

Why supply chain
management is important?
 In 2000, the US companies spent $1 trillion (10% of GNP) on supply-related activities (movement, storage, and control of...

References: Ketchen, D. J. and Hult, G. T. M. (2007). Bridging organization theory and supply chain
management: the case of best value supply chains
573-580 Li et al., 2006
Koh, S
management within SMEs. Journal of Small Business and Enterprise Development, 11 (3), 338348.
Moodley, S. (2001). E-Business and Supply Chain Management in the Automotive Industry:
Preliminary Findings from the Eastern Cape and Kwazulu-Natal Benchmarking Club Pilot Surveys.
Simchi D. L., Wu, S. D. and Shen, Z. M. (Eds.) (2004). Handbook of Quantitative Supply Chain
Analysis: Modelling in the E-Business Era
Slack, N., Chambers, S., & Johnston, R. (2009). Operations management. Pearson Education.
Wu, I. L. and Chuang, C. H. (2010). Examining the diffusion of electronic supply chain management
with external antecedents and firm performance: A multi-stage analysis
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