1.

1 Concepts

1.2 Strategies & Challenges

Module 1 : Understanding the Supply Chain Management & Strategy

STUDY CASE : RETAIL CUT FLOWER INDUSTRY
$43 billion
Consider a customer who
purchases a bouquet for special
oilts from event : a valentine day.
Colombia

Roses form East

No more than 3
Africa or India days
$1.4 billion EU To ship over the
Tulipes from world at lower cost
before they fade
holland

Distributor
on French
Wholesaler maket
Ship

warehouse
sold at an electronic auction

2
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WHAT IS LOGISTIC ?
Art and Science of obtaining, producing, and distributing material and product in proper place and in
proper quantities

Plans
Logistic
Management Implement

Control

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WHAT IS A SUPPLY CHAIN AND SUPPLY CHAIN MANAGEMENT
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request.

The management of upstream and downstream relationships with suppliers and customers in order to
deliver superior customer value at least cost to the supply chain as a whole.
Supply Chain
Products/Inventory
Physical Flow

Upstream Downstream
Information Flows, Cash
Supplier Manufacture Distributor Retail Customer

ØIntegration of all Actors of the Supply Chain

ØOptimization of quantity, quality, delays and costs
Ø Customer satisfaction
à Inventory, information and cash
Supply Chain Management | 12-Jan-21
4
AN INTEGRATED, VALUE ADDED SUPPLY CHAIN
The Value Chain
The Value Chain model, originated by Michael Porter, shows the value-creating activities of an
organization. As you can see below, activities creating values relies heavily on supply chain functions.

In a value chain, each of a firm’s internal activities listed adds incremental value to the final product or
service by transforming inputs to outputs.

Supply Chain Surplus = Customer Value – Supply Chain Cost

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 STUDY CASE : ADDED VALUE & COSTS EFFECT ON SUPPLY CHAIN

A business is evaluating two strategic options:

1) reduce its supply chain costs by 50K$

2) increase sales by 25%

Supply Chain and Logistics Management Made Easy: Methods and Applications for Planning, Operations, Integration, Control and Improvement, and Network Designby Paul
MyersonPublished by Pearson, 2015
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WHAT IS INTERNATIONAL TRADE AND COSTS ?
International trade is an exchange of goods or services across national jurisdictions.
Inbound trade is defined as imports and outbound trade is defined as exports.
Trade can be a convenience, but also a necessity

GDP : Gross Domestic Product

https://transportgeography.org/?page_id=4066

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The Evolution of Supply chain management

Supply Chain Management | 12-Jan-21 https://transportgeography.org/?page_id=4438 8

Integrated Supply Chain
Integrated Supply Chain management is the direct linkage of a manufacturer's
supply-chain processes from their customer’s customers to their supplier's suppliers.

Enable

BUILDING BLOCK APPROACH

Processes Metrics
Best Practicies
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Technology 9
SCOR Model & PROCESSES

SCOR model in version 11 is composed of 6 processes

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PLAN – Balancing requirements and resources

Supply Chain Management | 12-Jan-21 11

 SOURCE – Ordering and receipt of goods

https://www.slideshare.net/melodis/scor100-for-supply-chain-optimization-8362098

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 MAKE – Conversion of materials

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 DELIVER – Fulfillment of customer orders

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RETURN – Reverse flow of goods

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Supply-Chain Operations Reference-model (SCOR model)

Plan P1 Plan Supply Chain

P2 Plan Source P3 Plan Make P4 Plan Deliver P5 Plan Returns

Source Make Deliver

Suppliers

S1 Source Stocked Products M1 Make-to-Stock D1 Deliver Stocked Products

Customers
S2 Source MTO Products M2 Make-to-Order D2 Deliver MTO Products

S3 Source ETO Products M3 Engineer-to-Order D3 Deliver ETO Products

D4 Deliver Retail Products

Return Return
Source Deliver

Enable

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Supply Chain Management | 12-Jan-21
Cycles and production type

Buy To Order

Make To Order

Assemble To Order

Make To Stock

Ship To Stock

Les points clés d'une Supply Chain par Fouad Riane, et Florence PIRARD

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Type of production

Variety of products
Engineer-to-order (ETO) - "Continuous process"
1000 Make-to-order (MTO) - Matter or ingredients "row material"
- Recipe,
100 Process batch or Lot
- Formula, blend mix
Co
mp Flow process
- Physical-chemical process
10 éte
nce - Products and co-products (marketable)
s - Heavy industry, favouring the use of
1
equipment
Volume - Yield
1 10 100 K M - Maintenance
- Automation
- "Unique"
- Minimum "direct" staff
- Multi discipline
- Project management (business)
- Uncertain - "Repetitive assembly" - "Process per batch," Lot "
- Long - Assembly line - Product changes, focusing on product
- Dear - Parts flows
- "Lot," "Batch" - Sub assemblies, assemblies, or - Start-up cost "setup cost" and economic
- Different: products, machines, finished products series
sequence, "run time", operators, - "Product Structure: "Bill of Material" - Detailed ordering
performance, rejection (scrap) - Technical changes - Lead time cycle time
- Queue Wait - Sync - Product mix
- Detailed order management - "Direct" and "indirect" staff
- Process-oriented organisation - 1 equipment for 1 product
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- Product-oriented organisation
Process View of Supply Chain
A supply chain is a sequence of processes and flows that take place within and between different stages and
combine to fill a customer need for a product.

Supplier Manufacturer Distributor Retailer Customer

Procurement Cycle Manufacturing Cycle Replenishment Cycle Replenishment Cycle Order Fullfillment Cycle

Push Process Pull Process

Procurement Customer Order
Manufacturing
Replenishment Cycles. Decoupling Point

There are two ways to view the processes performed in a supply chain.
• Cycle View : The processes in a supply chain are divided into a series of cycles, each performed at the
interfaces between two successive supply chain stages
• Push/pull view: The processes in a supply chain are divided into two categories depending on whether
they are executed in response to a customer order (pull) or in anticipation of a customer order (push)

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Product life cycle and strategies

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Products cycles and
strategies
(push/pull)
Key points

In essence, SCM can be understood by what it can achieve, such as:

• It manages three flows− Inventory, information and cash

• It manages four cycles−Procurement, manufacturing, replenishment and

order fulfilment

• It aligns capabilities of−Suppliers and service providers

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