SUPPLY CHAIN MANAGEMENT

COURSE INSTRUCTOR
MUHAMMAD RAHEEL
INTRODUCTION OF THE PARTICIPANTS
INTRODUCTION OF THE INSTRUCTOR
WHAT IS SUPPLY CHAIN MANAGEMENT?
UNDERSTANDING SUPPLY
UNDERSTANDING MANAGEMENT

PLAN
ORGANIZE
LEAD
CONTOL
CHAIN BEHAVIOR (REAL SUCCESS)
WHAT IS SUPPLY CHAIN?
• A supply chain consists of all parties involved, directly or indirectly, in
fulfilling a customer request
– Suppliers, manufacturers, transporters, warehouses, retailers, and customers
• A supply chain includes all functions involved in receiving and filling a
customer request
– New product development, marketing, operations, distribution, finance, and customer
service
• A supply chain is the entire process of moving a product or service from
suppliers to customers
STAGES OF A DETERGENT SUPPLY CHAIN?
Timber Paper Pactiv
Company Manufacturer Corporation

Hyperstar
P&G or Other
or Third Customer
Manufacturer
Party DC

Chemical Plastic
Manufacturer Producer
STAGES OF A DETERGENT SUPPLY CHAIN?
Timber Supply
Paper chainPactiv
involves everybody,
Company Manufacturer Corporation
from the customer all the way to
the last supplier

The P&G Hyperstar

manufacturing plant
P&G or Other
receives or Third
raw material from a Customer
Manufacturer
Party DC
variety of suppliers, who may
themselves have been supplied by
lower-tier suppliers
Chemical Plastic
Manufacturer Producer
EXAMPLE: HYPERSTAR
Procter & Gamble Hyperstar
Customers Request:
or third-party Hyperstar
Da-Fa Clothing, Inc. (China) Buying detergent,
distribution Stores clothes, TV, …...
centers
SONY Factory (Malaysia)

Fabric Producer Electronics Components Producer

Plastic Producer
Zipper Producer Plastic Producer
Chemical Producer
Thread Producer
EXAMPLE: DELL
Monitors by SONY (Mexico)

Keyboards by Acer (Taiwan) Dell Customers order

Assembly computers on
CPU by Intel (USA) Plant Dell’s website

Other components

Dell is significantly revamping its entire supply

chain strategy and, in large measure, abandoning
its make-to-order model [April, 2008]
SUPPLY CHAIN
SC emerged as an important
business process concept that
links the supplier to the
customer through
manufacturing or intermediary
……
SUPPLY CHAIN
SC exist in both services and
manufacturing organizations;
however, the complexity of the chain
depends on its product-market
configuration.
SUPPLY CHAIN DISTRIBUTION CHANNEL
SUPPLY CHAIN STAGES
The term supply chain may imply that
only one player is involved at each
stage.
A manufacturer may receive material
from several suppliers and the supply to
several distributors, who may supply
several retailers.
Thus, most supply chains are actually
networks
SUPPLY CHAIN STAGES
SUPPLY CHAIN CYCLE
SUPPLY CHAIN CYCLE
What is a logical point to start?

o Prior to anything being produced it is of the company’s best interest to

predict the level of demand (Marketing).
o By conducting research and forecast demand. Once markets havebeen identified and demand has been established
o Specifications are decided (Product design)
o Raw materials (Suppliers)
o Supplied for production (Manufacturing)
o Transport (Logistics)
o Distribution centers, warehouses, retailers, customers (Customers)
o Returns and recycling (Reverse logistics)
o Data and feedback on products
THE OBJECTIVE OF A SUPPLY CHAIN
Maximize overall value created
• Supply chain value is the difference between what
the final product is worth to the customer and the
costs the supply chain incurs in filling the customer’s
request
• Supply chain profitability (or supply chain surplus) is
the difference between the revenue generated from
the customer and the overall cost across the supply
chain
THE OBJECTIVE OF A SUPPLY CHAIN
A picture is better than 1000 words!
How many words would be better than 3 pictures?
- A supply chain consists of
Supplier Manufacturer Distributor Retailer Customer

Upstream
Downstream

- aims to Match Supply and Demand,

profitably for products and services

SUPPLY SIDE DEMAND SIDE

- achieves

The right
Product
+ + + + +
The right
Price
The right
Store
The right
Quantity
The right
Customer
The right
Time
= Higher
Profits
FACTORS DRIVING SCM
▪Increasing numbers of world class global competitors
▪Sophisticated customer base
▪More performance at lower cost
▪Widely available information sources
▪Balance of power between buyers and suppliers
▪Greater levels of outsourcing
▪Customer expectations and requirements are constantly changing and more demanding
▪Major supply disruptions require the ability of a supply chain to react rapidly
▪Competition is now between supply chains, not just between companies
SUPPLY CHAIN PERFORMANCE DRIVERS
▪Facilities
▪Transportation
▪Inventory
▪Sourcing
▪Information Technology
▪Pricing
FROM STRATEGY TO DECISIONS
 Corporate Strategy

Competitive Strategy

Supply Chain Strategy

Responsiveness Efficiency

Facilities Inventory Transportation Information Sourcing Pricing

Logistical drivers Cross functional drivers