Chapter 1 :

A supply chain consist off all parties including directly or indirectly to fulfill a custumer’s request :

• Suppliers
• Retailers
• Trensporters
• Werehouses
• Customers
• Manufacturers

In each organisation, the main point is to fulfill all functions involved in receiving and filling a
customers request it includes also :

• New product developement

• Marketing
• Operations
• Distribution
• Finance and customer service

A supplu chain should be dynamic and indures the constant flow of information

• Each company has its own way to handle and share the informations
• Each one of there ways is an integral part of the supply chain
• The primary purpuse is to satisfy customer needs and generate profit for itself

Suppliers => manufacturers => distributers => retailers => customers

You should also be able to visulise information, funds ansd product flux along both directions of
this chain

• These are supply chain’s stages :

Custumors

Retailers

Distributers

Manufactures

Component / raw material suppliers

Each stage is connected through the flow of products, informations and funds.

These flows often occur un both directions and may be managed by one of the stages or an
intermediary

The appropriate design of the supply chain depends on both custumer’s needs and the
roles played by stages involved

The objectif of a supply chain :

The objectif is to maximise the overall value generated

The value (ava : SC SURPLUS) a SC generates is :

SC surplus = custumer Value – SC cost

Custumer value : value of the product

Sc cost : the cost of the entire SC used in filoing the customers’s request

Supply chain profitability = revenue generated from the customer - the overall cost across the SC

The higher, the more succesful

SC sucess should be measured in terms of SC suppliers not in terms of the profite at an

individual stage
Revenue : customers

The impoortance of SC decisions :

There’s a close connection between the design ans management of SC flows and the succès of a SC.

This can lead to the sucess of a companies, but it can also lead to failure caused by weakness in the
SC design

The failure is atributed mainly to their anability to design appropriate supply chain and
manage SC flows
Supply chaindesign, plannign and operation decisions play a significant rôle in the succès or
failure of a firm.
In order to stay competitive, SC must adapt to changing technology and custumers
expectations

Decision phases in a SC :
1. SC strategy or design :

Deciding how to structure the SC over the next several years

Strategic decision made by companies include wether to outsource or perform a SC function inhouse,
the location and capacities of production and warehousing facilities, the products to be
manufactured or stores 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 line frame considered is a quater to a year, therefore the SC’s configuration determined in the
strategic phase in fixed

• The goal is to maximise the SC surplus

• Forecast for the coming year
• Making decisious about which market will be supplied from which locations
• Include the uncertainty of demands, exchange rates and competitive over this line horizon
and their decisions
• Incorporate any flexibility
• Exploit it to optimize performance
• Companies define a set of operating policies that govern short-term operations
3. Supply chain operation

• Time horizon : weekly or daily

• Companies make decisions regarding individual customer orders
• SC configuration is fixed and planning policies are already defined
• The goal is to handle incoming customer orders in the best possible manner
• Firms allocate inventory or production to individual orders
Supply chain decision phases may be categorized as design, planning or operational,
depending on the line frame during which the decision made apply