Supply Chain Management Overview

Study Notes

Goal: Create net value, streamline processes, and synchronize supply with demand.
Key Elements: Purchasing, logistics, operations, information systems, and customer service.
Enhances Customer Satisfaction: Improves product availability, reduces lead time, and increases product quality.
Emergence: Late 20th century in the U.S.
The Greening of Supply Chains: Trend focused on reducing environmental impact.
Logistics: Deals with the movement and storage of goods.
Challenges of Global Supply Chains: Logistics across different time zones, language barriers, and cultural differences.
Operations Elements: Day-to-day activities of manufacturing and production scheduling.
Artificial Intelligence and Automation: Technology improving supply chain responsiveness by predicting demand more accurately.
Importance of Integration: Seamless flow of information, materials, and products between suppliers and customers.

Key Business Function: Acquiring materials, services, and equipment.
Supply Management: Expanded set of responsibilities for purchasing professionals.
Purchase Order: Buyer's offer that becomes a binding contract when accepted by the supplier.
Outsourcing: Buying materials and components from suppliers instead of making them in-house.
Quality: Suppliers have better technology, processes, skilled labor, and economies of scale.
Cost Advantage: Suppliers may have economies of scale for non-vital components.
Purchasing Organization: Dependent on market conditions and types of materials required.
Tariff: Official list of duties, taxes, or customs imposed by a host country on imports or exports.
Incoterms (International Commercial Terms): Uniform rules simplifying international transactions of goods, defining costs, risks, and responsibilities.
Counter purchase: Exporter agrees to sell goods or services and simultaneously agrees to buy specific goods or services from the importer.

Managing External Resources: Supporting firm's long-term goals.
Ethical Sourcing: Ensuring procurement adheres to ethical standards.
E-Procurement Systems: Enable concentration of small purchases with few suppliers using electronic catalogues.
Vendor Managed Inventory (VMI): Supplier manages inventory levels at the customer's site.
Trust: Essential for successful collaboration between partners.
Shared Vision: Partners must have mutually agreeable objectives.
SRM Software: Software modules providing information for managing supplier relationships.