Marketing and Supply Chain Reviewer PDF

LESSON 1 Fundamentals of Supply Chain Management A supply chain is basically a group of independent organizations Better managing a business is to connected together through the m...

LESSON 1 Fundamentals of Supply Chain Management A supply chain is basically a group of independent organizations Better managing a business is to connected together through the managing it along with the supply chain products and services that they separately and/or jointly add value on in Strategic positioning order to deliver them to the end consumer. Adequate Structural Configuration Collaboration Old ways of doing business : Integration Re-engineering Leadership Strategic Management Lean Thinking LESSON 2 Agile Manufacturing Balanced Scorecard, A broad conceptual consensus on Blue Ocean Strategy the notion of Supply Chain (SC) and Supply Chain Management (SCM) is The earliest appearance of the beyond anybody’s reasonable doubt. term “supply chain management” published in early 1980s A supply chain is formed and can only be formed if there are more First appeared in a Financial than one participating companies. Times article written by Oliver and A supply chain normally does not Webber in 1982 describing the range of belong to the same business activities performed by the organization in ownership, and hence there is a procuring and managing supplies. legal independence in between. Those companies are Early publications of supply interconnected on the common chain management in the 1980s were commitment to add value to the mainly focused on purchasing steam of material flow that run activities and cost reduction related through the supply chain activities One can imagine a supply chain as The major development and the something resembles a “chain”, in significant increases of publications in the which the “links” are the areas of supply chain integration and participating companies that are supplier-buyer relationship came in 1990s inter-connected in the value adding process Business Environment has changed in The link on the upstream side of terms of : the material flow is the supplier’s supplier; and on the Globalization downstream side of the material More severe competition flow is the customer. Heightened customer expectation Technological impact OEM – Original Equipment Manufacturer Geopolitical factors OBM – Original Brand Manufacturer Simply the “focal company.” Supply Chain Flow : Finance Flow : All supply chains have Supplier’s Supplier → Supplier → finance flow. It is basically the money OEM → Distributor → Retailer → flow or the bloodstream of a supply chain. Consumer Without it, a supply chain will surely At the end of a supply chain is the demise. However, for any supply chain, product and/or service that are created there is only one single source of such by the supply chain for the end finance flow – the end-consumer. consumer. Commercial flow : All supply chains It is not really a “chain”, rather it is represent a transactional commercial more like a “network”, when you consider flow. This means that the material flow that there are usually multiple suppliers that runs through the supply chain and multiple customers for each changes its ownership from one company participating company in the chain. to another, from supplier to buyer – buying and selling shifts the material If you view a supply chain as flow’s ownership from the supplier to basically a chain of value adding the buyer repeatedly until the end of the activities, you may like to call it supply chain – the end-consumer. “Value Chain” If you perceive a supply chain as continuous demands originated from the and stretched to upstream LESSON 3 suppliers, you may like to call the supply chain the “Demand DEVELOPMENT TRENDS IN SUPPLY Chain”. CHAIN Four intrinsic flows of a supply chain : Understanding and defining supply chain and supply chain Material Flow : All manufacturing management is that it is never supply chains have material flows from standstill and the subject has been the raw materials at the beginning of the continuously evolving since its inception in supply chain to the finished products at the the early 1980s. There are number of end of the supply chain. early development trends that can be observed evidently : Information Flow : All supply chains have and make use of information From a functional to process flows. Throughout a supply chain there perspective - Business management are multitude of information flows such as : used to see and take action on the Demand Information Flow functional silos in the business. It was Forecasting Information Flow understandable that naturally the function Production and Scheduling is what seemed to be the delivery part of Information Flows the business. Design and NPI Information Flows Unlike the material flow the information can run both directions, towards upstream and downstream alike.  From operational to strategic From local to regional, and from viewpoint - At early years of applying regional to global - Connections of supply chain management concept, supply networks have over the last two managers tend to see it as another decades grown from local to regional and operational tactic that will help to reduce to global. Hardly any major enterprise and operational cost, such as purchasing supply chain is not connected to some part function improvement and optimizing the of the world. You need to get out before logistics operations. you can get up. This trend is spurred by the lower From single enterprise to cost of labor and materials in many extended enterprise - Enterprise parts of the world, as well as first management is now arguably displaced by mover advantages in setting up supply chain management, where the global market presence. supply chain is by definition the extended The trends of supply chain enterprise. Management thinking over the development are not always extended enterprise produces a great deal positive and encouraging. of ideas that single enterprise alone cannot. LESSON 4 From transactional to Purchasing is the procurement relationship-based engagement - process a business or organization Business engagement between firms in uses to acquire goods or services to the past was predominantly transaction accomplish its goals. based and cost driven. The merit of any purchasing and procurement of externally Purchasing, also known as sourced materials and services was procurement, is the process used to judged by the transactional measures acquire raw materials, components, such as : products, services, or other resources Price from suppliers. Volume Delivery Terms Purchasing Activities : 1. Supplier selection A. Price B. Quality C. Selection D. Service E. Delivery schedule F. Dependability G. Emergency order H. Financing terms 2. Maintain appropriate inventory A. Proper amounts B. Proper items 3. Conduct negotiations Disadvantages : Lack of centralized control 4. Market Survey Inefficiencies Disorganized data 5. Determine requirements Missed opportunities for bulk purchasing 6. Maintain supplier relation Higher Overall costs More workload 7. Educate suppliers about needs 3. Direct – the process of buying raw 8. Purchase, receive and issue (FIFO, materials, components, and labor that are LIFO, FEFO) directly used in the production of a company’s goods or services 9. Record keeping and controls Advantages: TYPES OF PURCHASING : Lower costs Faster delivery 1. Centralized – a model where a single Reduced risk team or department is responsible for an Improved efficiency organization’s purchasing needs. Improved supplier management Innovation Advantages : Disadvantages: Cost-saving Supplier risk Better relationships Purchase value Improved cash flow Order risk Reduced inventory Profit margins Streamlined processes Increased purchasing power 4. Indirect – involves the purchase of the Disadvantages : goods and services, supplied and Bureaucracy materials including computers, hardware, Delayed deliveries software, maintenance, utilities and travel Emergency situations that are required for the day-today running Wrong buying of business Lack of expertise Advantages: 2. Decentralized – a business model Reduce costs where decision making authority for Saves money purchasing is given to local branches or Negotiates better prices and costs departments, instead of a centralized unit Operational Efficiency and agility Disadvantages: Advantages : Higher costs Faster decision-making Reduced control Improved purchasing efficiency Dependence on distributors Greater flexibility Quality variability Supplier diversity Lack of transparency Personalized relationships Exceeding spending budgets Immediate replacements 5. Standard Purchase Order – one- time 7. Industrial Purchase Order – is legally request for a specific shipment of goods binding contract between a buyer and a and services seller that outlines the terms of a purchase for goods or services Advantages : Avoids duplicate orders Advantages : Tracks orders Legal record Monitors prices Protect against price increases Ensures accuracy Avoids duplicate orders Meets compliance requirements Helps with tracking Manages budgets Improves accuracy Disadvantages : Reduces human errors Paperwork Saves time Cost Legal issues Communications challenges Disadvantages : Supplier performance Inaccurate data Finance involvement Lack of transparency Poor procurement planning 6. Planned Purchase Order – similar to Supplier dependence standard PO’s but they are not generally Forecasting challenges used for one-off orders. Advantages : Long term commitment Details included Omits delivery information Disadvantages : Supply chain disruptions Cost fluctuations Omits delivery information