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Introduction to Supply Chain Management (key concepts/ definition…
Introduction to Supply Chain Management
key concepts/ definition
sequence of events that cover a product’s entire life cycle, from conception to consumption
one-size-fits-all supply chain strategy is doomed to failure
Building a best-in-class supply chain requires money, time, talent, energy, focus, commitment, and guts
series of activities starting originally source and ending at the customer
plan
source
make
deliver
return
bullwhip effect
inventories within a supply chain fluctuate the further they are from the end user
Supply chain is the frontier of competition
supply chain managers role
minimising costs
avoid disruptions
enhance profitability
Porter's competitive advantage theory
company could become more profitable by strategically analyzing the five primary processes on which its supply chain framework is built
Inbound logistics - activities associated with receiving,storing, and disseminating inputs to the product (material handling,warehousing, inventory control, transportation scheduling, and returns to suppliers).
Operations - activities associated with transforming inputs into the final product form (machining, packaging, assembly,equipment maintenance, testing, printing, and facility operations).
Outbound logistics - activities associated with collecting,storing, and physically distributing the product to buyers (finished goods warehousing, material handling, freight delivery, order processing, and scheduling).
Sales & Marketing - activities that induce buyers to purchase a product and enable them to buy it (advertising, promotions, sales force, quoting, channel selection,channel relations, and pricing).
Service - activities associated with providing service to enhance or maintain the value of the product (installation, repair,training, parts supply, and product adjustment).
operations improvements can be significant by focusing on interrelationships between business units
interrelationship = tangible opportunities to reduce costs and enhance differentiation in respect to any activity within the value chain
pursuit of this is becoming more popular among competitors and encouraging others to follow
focus on horizontal strategy important
coordinated set of goals and policies across distinct but interrelated business units
aka supply chain management
represents the essence of corporate strategy
challenges associated to vertical strategy
compartmentalizing every department and grouped into unconnected silos
counterproductive to long term health and growth of a company (Ref: Porter & Forester)
Underlying goal of supply chain management
Explicitly state what the supply chain looks like and encompasses
explicitly identify bottlenecks which slow down service, info, and goods
put the right processes in place, to deliver the right right products to the right place on time
empower the right people so the other elements can be achieved
Roadblocks
Technology failed
internet bubble bursting
projects were expensive and failed to meet service targets
supply chain projects did not match business strategy
mostly because businesses did not have a well defined strategy
to difficult to manage the chain internally & externally
collaboration internally is often uncooperative
trusting own people comes first, only then can you trust with other companies
characteristics of a top performing supply chain
aim for balance
consistently good in all areas makes them the best overall
increase demand visibility
high level of forecast accuracy is key to reaching order fulfillment and is the centre of customer service
isolate high costs
concentration on where they hold costs and invest in these areas
e.g. best practices and tech investments
ability to respond quickly to shifts in demand with innovative processes and goods
commitment from the highest corporate levels
strategies that identify and track key supply chain processes early and often.
developing a supply chain strategy
starting with
assessing the future needs of their customers.
strategy development process then determines the new supply chain capabilities the company will need in the future to meet its customers’ needs