Supply Chain Management Overview

Supply Chain Overview

• Sequence of organizations involved in producing and delivering products or services, often called value chains.
• Comprises a network of suppliers, manufacturers, assemblers, delivery centers, and logistics facilities.
• Functions include material sourcing, processing, and shipment of products to buyers.

Facilities in Supply Chain

• Begins with basic suppliers and extends to final customers.
• Key facilities include:
  • Warehouses
  • Factories
  • Processing centers
  • Distribution centers
  • Retail outlets
  • Offices

Functions and Activities of Supply Chain

• Critical activities include:
  • Forecasting
  • Purchasing
  • Inventory management
  • Information management
  • Quality assurance
  • Scheduling
  • Production and delivery
  • Customer service

Supply Chain Management (SCM)

• Involves strategic coordination of business functions and supply chain for integrating supply and demand management.
• Main objective is to effectively and efficiently match supply with demand.

Key Issues in SCM

• Critical factors include:
  • Determining appropriate levels of outsourcing
  • Rapid identification and response to problems
  • Procurement management
  • Risk management
  • Supplier management
  • Customer relationship management

Trends Affecting SCM

• Notable trends include:
  • Measuring supply chain ROI
  • Greening the supply chain for sustainability
  • Re-evaluating outsourcing strategies
  • Integrating information technology
  • Managing supply chain risks
  • Adopting lean principles for efficiency

Procurement Functions

• Responsible for obtaining materials, parts, supplies, and services necessary for production.
• Aims to develop purchasing plans that align with operational strategies.

Supplier Management

• Involves processes such as:
  • Choosing suppliers and auditing them.
  • Supplier certification and relationship management.
  • Developing partnerships through Collaborative Planning, Forecasting, and Replenishment (CPFR) and strategic partnerships.

Logistics in Supply Chain

• Manages the movement of materials, services, cash, and information.
• Includes internal facility movements, incoming shipments, and outgoing shipments.

Creating an Effective Supply Chain

• Begins with strategic sourcing to analyze the procurement process.
• Goals include reducing costs, increasing profits, decreasing risks, and improving supplier performance.
• Essential elements include:
  • Trust and effective communication
  • Information velocity and supply chain visibility
  • Event management capability and performance metrics

Operations Strategy for SCM

• Effective supply chains are essential for organizational success, requiring integration at all levels.
• Strong supplier relationships are a foundational component of supply chain strategy.
• Lean operations and Six Sigma methodologies are utilized to enhance supply chain performance.