An-Najah National University

Faculty of Engineering
Industrial Engineering Department

Project Report:
Supply Chain Management

Preparation and research student:

Abdulmajeed Ghanim

Submitted to:
DR.Nijim Abuhajleh

This report provides an update to the requirements of

the course:
Introduction to Idustrial Engineering
1
Table of Contents:
Understanding the Supply Chain
 What Is a Supply Chain……………………….…………….3,4
 The Objective of a Supply Chain………………………….4,5
 Decision Phases in a Supply Chain…………………..….6,7
 Process Views of a Supply Chain………………………….8,9
 Supply Chain Macro Processes in a Firm………………..10
 Examples of Supply Chains…………..………...……..11,12
 Challenges………………………………..…………………….12

LIST OF FIGURES :
Figure 1-1 Supply Chain stages….…………………………….3
Figure 1-2 Flows in a supply chain……..…………………….4
Figure 1-3 What Is a Supply Chain………….…………………5
Figure 1-4 Cycle view……………………………………….…...8
Figure 1-5 Push/Pull View……………………………………….9
Figure 1-6 Macro Processes……………….………………….10

Figure 1-7 Dell supply chain…………………………………..11

Figure 1-8 IKEA supply chain…………………………………12

2
 What Is a Supply Chain “supply network” or “supply web”?
Networks of manufacturers and service providers that work
together to move goods from the raw material stage through to
the end user.

A supply chain consists of all parties involved, directly or

indirectly, in fulfilling a customer request.

The supply chain involve a variety of stages, not only the

manufacturer and suppliers, but also transporters, warehouses,
retailers, and even customers themselves. (Figure 1-1 Supply
Chain stages) All
stages may not be present in all supply
chains( e.g., no retailer or distributor for Dell)

(Figure 1-1 Supply Chain stages)

3
Each stage in a supply chain is connected through the flow of
products, information, and funds. (Figure 1-2 Flows in a
supply chain)

(Figure 1-2 Flows in a supply chain)

Within each organization, such as a manufacturer,

the supply chain includes all functions involved in receiving
and filling a customer request.
These functions include, but are not limited to, new product
development, marketing, operations, distribution, finance, and
customer service.
-------------------------------------------------
-----
 The Objective of a Supply Chain:
The objective of every supply chain should be to maximize the
overall value generated.
Thevalue (also known as supply chain surplus) a supply chain
generates is the difference between what the value of the final

4
product is to the customer and the costs the entire supply
chain incurs(expends) in filling the customer’s request.
Supply Chain Surplus = Customer Value( revenue) - Supply Chain Cost

Supply chain incurs costs (information, storage, transportation,

components, assembly, etc.)

Supply chain profitability is total profit to be shared across all

stages of the supply chain. (Figure 1-3 What Is a Supply
Chain)

Supply chain success should be measured by total supply chain

profitability, not profits at an individual stage.
Supply chain management is the management of flows between
and among supply chain stages to maximize total supply chain
profitability

5
Video explain : https://www.youtube.com/watch?v=lZPO5RclZEo

(Figure 1-3 What Is a Supply Chain)

 Decision Phases in a Supply Chain :

Successful supply chain management requires many decisions

relating to the flow of information, product, and funds. These

decisions fall into three categories or phases, depending on the

frequency of each decision and the time frame during which a
decision phase has an impact.

1. Supply chain strategy or design:

A company decides how to structure the supply chain over the

next several years. Decisions about the structure of the supply
chain and what processes each stage will perform.

6
 Strategic decisions made by companies include perform a
supply chain function in-house: the location and capacities
of production and warehousing facilities, the products to

be manufactured or stored at various locations, the modes

of transportation to be made available along different
shipping legs, and the type of information system to be
used.

2. Supply chain planning:

The goal of planning is to maximize the supply chain surplus that

can be generated over the planning horizon given the constraints
established during the strategic or design phase.

Companies start the planning phase with a forecast for the

coming year of demand and other factors.

includes making decisions regarding which markets will be

supplied from which locations, the subcontracting of
manufacturing, the inventory policies to be followed, and the
timing and size of marketing and price promotions.

7
In the planning phase, companies must include uncertainty in

demand, exchange rates, and competition.

3. Supply chain operation:

The time horizon here is weekly or daily. During this phase,

companies make decisions regarding individual customer orders.

The goal of supply chain operations is to handle incoming

customer orders in the best possible manner. the goal during the
operation phase is to exploit the reduction of uncertainty and
optimize performance.

 Process Views of a Supply Chain :

There are two ways to view the processes performed in a supply

chain.

1. Cycle view:

The processes in a supply chain are divided into a series of

cycles, each performed at the interface between two
successive stages of the supply chain.

supply chain processes can be broken down into the following

four process cycles, as shown in (Figure 1-4 Cycle view)

1-Customer order cycle (customer-retailer)

8
2-Replenishment cycle (retailer-distributor)
3-Manufacturing cycle (distributor-manufacturer)
4-Procurement cycle (manufacturer-supplier)

(Fi
gure 1-4 Cycle view)

2.Push/Pull View of Supply Chain Processes:

The processes in a supply chain are divided into two categories,

depending on whether they are executed in response to a
customer order or in anticipation of customer orders. Pull
processes: are initiated by a customer order, whereas push

Processes are initiated and performed in anticipation (forcasting)

of customer orders(Figure 1-5 Push/Pull View). Push/pull boundary
separates push processes from pull processes.

9
(Figure 1-5 Push/Pull View)

 Supply Chain Macro Processes in a Firm:

All supply chain processes can be classified into

(Figure 1-6 Macro Processes):

1. Customer relationship management (CRM): all processes at the

interface between the firm and its customers.

2. Internal supply chain management (ISCM): all processes that are

internal to the firm.

10
3. Supplier relationship management (SRM): all processes at the
interface between the firm and its suppliers.

(Figure 1-6 Macro Processes)

 Examples of Supply Chains:

 Dell Computer:
 Customer ---Dell’s web site ---Dell assembly
plant ---Dell’s suppliers.
 Website provides the customer with information
regarding pricing, product variety and product
availability.
11
  Customer can enter the order, pay for the product
and check the status of the order.

(Figure 1-6 Dell supply chain)

 IKEA

12
(Figure 1-6 IKEA supply chain)

-------------------------------------------------
-----

 Challenges:
1. Customers are never satisfied.
2. Supply chains are large.
3. Product life cycles are getting shorter.
4. Lots of data.
5. Narrow profit margins.
6. Increasing number of alternatives.

13
14