Faculty of Business and Management

Individual Assignment

Subject Name: Business Supply Chain Management

Subject Code: BL331
Lecture Name: Dazmin Bin Daun
Date of Submission: 22 June 2020
Due Date: 22 June 2020

Student Name: Nicole Tan Jing Si

Student ID: 1001850973
Semester: Y3S1

1
1. What is the purpose of understanding the concept Supply Chain Management in business?
Give ONE example.

The word ‘purpose’ defined as the reason for which somethings was exist or is done made and used.
For an example, when you do somethings with purpose, you do it with determination. When you have
a purpose, you have an aim or intention in mind. Purpose can also be used as a verb meaning "to
reach a decision" or "to intend," though these uses of the word are quite a bit less frequent nowadays.
The purpose of Supply Chain Management (SCM) is to keep chaos at bay – synchronizing the
activities of the network. All Supply Chain Management or central planning processes created to
manage an organization’s demand/supply network consists of three primary activities, as well as two
secondary activities. For logistics student, the reason for understanding Supply Chain Management is
to be well prepare for future work in logistics or supply chain department. A good understanding and
knowledge in Supply Chain Management are especially useful and helpful for their future job. For a
manager, the reason for well understanding in Supply Chain Management can helps to improve their
customer services, reduce operating cost and increase financial position. As a supplier, manufacturer,
distributors and retailers, the reason for understanding the supply chain management is because it
helps business to gain competitive advantage over competitors by reducing costs as well as increase
customer satisfaction. As an end user customer, the reason for understanding the Supply Chain
Management is important as it can act as a driver to move the supply chain towards the direction of
sustainability and generating new products or services.

Supply chain management is the management of the flow of goods and services and includes all
processes that transform raw materials into final products. It involves the active streamlining of a
business's supply-side activities to maximize customer value and gain a competitive advantage in the
marketplace. Supply Chain Management not only includes the manufacturer and suppliers, but also
transporters, warehouses, retailers, and customer themselves. While these are a part of the whole
ecosystem, modern supply change management encompasses the strategic alignment of end-to-end
business processes to realize market and economic value, as well as giving a firm the competitive
advantage over their business rivals. In recent times, the dawn of the digital age has brought
wholesale transformation to the world of commerce. Only twenty years ago, these processes were
arduous, labour intensive, time consuming and disorganized. It now may seem like ancient history;
delivery times have gone from two weeks to a month down to a turnaround of hours in some cases.
Automated systems and high-speed communication have paved the way for supply chain management
and its increased demand. The diagram below shows supply chain relationships to gain a continuous
competitive advantage in the marketplace

2
 SUPPLIER MANUFACTURE DISTRIBUTER RETAILER CUSTOMER

Supply Chain Management are so important because it helps to improve customer services.
Customers expect to receive the correct product mix and quantity to be delivered on time. For
example, if you buy five books from Amazon and only two of the actual titles arrive, one is an
entirely different book and two are missing, the customer will lose faith in Amazon, prompting them
to leave a bad review and hinder them from returning to the platform. Products also need to be on
hand in the right location, as an example, customer satisfaction is tarnished if your car’s brake pads
fail and the auto repair shop is delayed in making the repairs because parts are not available in-house.
Supply Chain Management are also important to help to reduce operating cost. Operating cost such as
purchasing cost, production cost and total supply chain cost can be reduced effectively if have a well
knowledge in Supply Chain Management. An efficient supply chain will decrease the purchasing cost
through effective inventory planning by distributing expensive inventories in the first place.

The word ‘businesses defined as a usually commercial or mercantile activity engaged in as a means of
livelihood. It combines factor of production to make products which satisfy people is wants. The role
of a supplier in a business can be a demanding one as retailers expect a certain level of quality, and
manufacturers expect suppliers to sell a lot of stock. Due to the suppliers must be flexible and
understand how to manage relationships. Other important elements of a supplier’s role including
compliance with local laws which suppliers should comply with all relevant laws and standards,
including human rights protection and child labour. Equitable transactions from all retailers: Suppliers
must provide equal opportunities for all retailers to do business with them. A retailer should not be
rejected due to their location, or any other reason.
Understanding the importance of SCM to its business, Walgreens Boots Alliance Inc. placed focused
effort on transforming its supply chain in 2016. The company operates one of the largest pharmacy
chains in the United States and needs to efficiently manage and revise its supply chain, so it stays
ahead of the changing trends and continues to add value to its bottom line. As of July 5, 2016,
Walgreens has invested in the technology portion of its supply chain. It implemented a forward-
looking SCM that synthesizes relevant data and uses analytics to forecast customer purchase
behaviour, and then it works its way back up the supply chain to meet that expected demand. For
example, the company can anticipate flu patterns, which allow it to accurately forecast needed
inventory for over-the-counter flu remedies, creating an efficient supply chain with little waste. Using
this SCM, the company can reduce excess inventory and all of the inventories' associated costs, such
as the cost of warehousing and transportation.

2. Refer to Slide number 6 in Chapter 2 from your UCSI CN. What can you learn from this
diagram in dealing with Supply Chain Management?

3
In Chapter 2 slide number 6 shows the cycle view of supply chain process. The processes in a supply
chain are divided into a series of cycles, each performed at the interface between two successive
stages of a supply chain. All supply chain processes can be broken down into the following four
process cycles which including customer order cycle, replenishment cycle, manufacturing cycle and
procurement cycle. Each cycle occurs at the interface between two successive stages of the supply
chain. Not every supply chain will have all four cycles separated. For example, a grocery supply chain
in which a retailer stock finished goods inventories and places replenishment orders, which a
distributor is likely to have all four cycles separated. A cycle view of a supply chain is especially
useful when considering operational decisions because it clearly specifies the rules and
responsibilities of each member of the supply chain. The detailed process description of a supply
chain in the cycle view forces a supply chain designer to consider the infrastructure required to
support these processes. The cycle view of a supply chain is useful, for example, when setting up
information systems to support supply chain operations, as process ownership and objectives are
clearly defined.

The first cycle is customer order cycle. The customer order cycle occurs at the customer/retailer
interface and includes all processes directly involved in receiving and filling the customer’s order.
Typically, the customer initiates this cycle at a retailer site and the cycle primarily involves filling
customer demand. The retailer’s interaction with the customer starts when the customer arrives, or
contact is initiated and ends when the customer receives the order. The processes involved in the
customer order cycle including customer arrival, customer order entry, customer order fulfilment and
customer receiving. The term “customer arrival” refers to the customer’s arrival at the location
where he or she has access to his or her choice sand makes a decision regarding a purchase. The
starting point for any supply chain is the arrival of a customer. The term “customer arrival” refers to
the customer’s arrival at the location where he or she has access to his or her choice sand decides
regarding a purchase. The starting point for any supply chain is the arrival of a customer. The term
“customer order entry” refers to customers informing the retailer what products they want to purchase
and the retailer allocating products to customers. At a supermarket, order entry may take the form of
customers loading all items that they intend to purchase onto their carts. At a mail order firm’s
telemarketing centre or website, order entry involves customers informing the retailer of the items and
quantities they selected. During ‘customer order fulfilment’ process, the customer’s order is filled and
sent to the customer. At a supermarket, the customer performs this process. At a mail order firm this
process includes picking the order from inventory, packaging it, and shipping it to the customer. All
inventories will need to be updated, which may result in the initiation of the replenishment cycle. In
general, customer order fulfilment takes place from retailer inventory. In a build-to-order scenario,
however, order fulfilment takes place directly from the manufacturer’s production line. ‘Customer
order receiving’ process the customer receives the order and takes ownership. Records of this receipt

4
are updated, and payment completed. At a supermarket, receiving occurs at the checkout counter. For
a mail order firm, receiving occurs when the product is delivered to the customer.

Second cycle is replenishment cycle. The replenishment cycle occurs at the retailer/distributor
interface and includes all processes involved in replenishing retailer inventory. It is initiated when a
retailer places an order to replenish inventories to meet future demand. A replenishment cycle may be
triggered at a supermarket that is running out of stock of detergent or at a mail order firm that is low
in stock of a shirt. The replenishment cycle is like the customer order cycle except that the retailer is
now the customer. The objective of the replenishment cycle is to replenish inventories at the retailer at
minimum cost while providing high product availability. The processes involved in the replenishment
cycle include retail order trigger, retail order entry, retail order fulfilment and retail order receiving.
The objective when setting replenishment order triggers is to maximize profitability by ensuring
economies of scale and balancing product availability and the cost of holding inventory. The outcome
of the retail order trigger process is the generation of a replenishment order that is ready to be passed
on to the distributor or manufacturer. As the retailer fills customer demand, inventory is depleted and
must be replenished to meet future demand. A key activity the retailer performs during the
replenishment cycle is to devise a replenishment or ordering policy that triggers an order from the
previous stage. The objective of the retail order entry process is that an order is entered accurately and
conveyed quickly to all supply chain processes affected by the order. This process is similar to
customer order entry at the retailer. The only difference is that the retailer is now the customer placing
the order that is conveyed to the distributor. This may be done electronically or by some other
medium. Inventory or production is then allocated to the retail order. The objectives of the retail order
fulfilment are to get the replenishment order to the retailer on time while minimizing costs. This
process is very similar to customer order fulfilment except that it takes place at the distributor. A key
difference is the size of each order as customer orders tend to be much smaller than replenishment
orders. The objective of the retail order receiving process is to update inventories and displays quickly
and accurately at the lowest possible cost. Once the replenishment order arrives at a retailer, the
retailer must receive it physically and update all inventory records. This process involves product flow
from the distributor to the retailer as well as information updates at the retailer and the flow of funds
from the retailer to the distributor.

Manufacturing cycle is the third cycle process. The manufacturing cycle view of supply chain is
triggered by customer orders, replenishment orders from a retailer or distributor, or by the forecast of
customer demand and current product availability in the manufacturer’s finished-goods warehouse.
One extreme in a manufacturing cycle is and integrated steel mill that collects orders that are similar
enough to enable the manufacturer to produce in large quantities. In this case, the manufacturing cycle

5
is reacting to customer demand. Another extreme is a consumer products firm that must produce in
anticipation of demand. In this case, the manufacturing cycle is anticipating customer demand. The
processes involved in the manufacturing cycle including order arrival form the finished-goods
warehouse, distributor, retailer or customer, production scheduling, manufacturing, and shipping and
receiving at the distributor, retailer, or customer. During order arrived process, a finished-goods
warehouse or distributor sets a replenishment order trigger base on the forecast of future demand and
current product inventories. The resulting order is then conveyed to the manufacturer. In some cases,
the customer or retailer may be ordering directly from the manufacturer. In other cases, a
manufacturer may be producing to stock a finished products warehouse. In the latter situation, the
order is triggered bases on product availability and a forecast of future demand. This process is similar
to the retail order trigger process in the replenishment cycle. The objective of the production
scheduling process is to maximize the proportion of orders filled on time while keeping costs down.
This process is similar to the order entry process in the replenishment cycle where inventory is
allocated to order. During the production scheduling process, orders (or forecasted orders) are
allocated to a production plan. The objective of the manufacturing and shipping process is to create
and ship the product by the promised due date while meeting quality requirements and keeping costs
down. This process is equivalent to the order fulfilment process described in the replenishment cycle.
During the manufacturing phase of the process, the manufacturer produces to the production schedule.
During the shipping phase of this process, the product is shipped to the customer, retailer, distributor,
or finished product warehouse.

The last cycle process is procurement cycle. The procurement cycle occurs at the
manufacturer/supplier interface and includes all processes necessary to ensure that materials are
available for manufacturing to occur according to schedule. During the procurement cycle, the
manufacturer orders components from suppliers that replenish the component inventories. The
relationship is quite similar to that between a distributor and manufacturer with one significant
difference. Whereas retailer or distributor orders are triggered by uncertain customer demand,
component orders can be determined precisely once the manufacturer has decided what the production
schedule will be. Component orders depend on the production schedule. Thus, it is important that
suppliers be linked to the manufacturer’s production schedule. Of course, if a supplier’s lead times are
long, the supplier has to produce to forecast because the manufacturer’s production schedule may not
be fixed that far in advance. In practice, there may be several tiers of suppliers, each producing a
component for the next tier. A similar cycle would then flow back from one stage to the next.

3. Find and read ONE article on “Push and Pull” in business. Give the definition/s on the
“Push and Pull” from the article. Compare the definition/s with the note in Chapter 3. Do
find any differences? Explain your answer.

6
Based on the article form ‘HubSpot’, Push marketing is a strategy focused on “pushing” products to a

specific audience. The goal is to bring what you offer to customers in your marketing. Social media

channels are “push” sources because they are great for launching new or niche products. According to

the note in chapter 3, push processes may also be referred to as speculative processes because they

response to speculated or forecasted rather than actual demand. Both definitions have the same

meaning as the sentence “forecasting inventory needs to meet customer demand” has the same

meaning as “response to speculated or forecasted rather than actual demand”. Companies must predict

which products customers will purchase along with determining what quantity of goods will be

purchased. The company will in turn produce enough product to meet the forecast demand and sell, or

push, the goods to the consumer. An example of a push system is Materials Requirements Planning

(MRP). MRP combines the calculations for financial, operations and logistics planning. It is a

computer-based information system which controls scheduling and ordering. Its purpose is to make

sure raw goods and materials needed for production are available when they are needed. As in the

chapter 3 notes, it also mentions that MRP is a production planning, scheduling and inventory control

system used to manage production in push process. According to the article, the advantage to the

push system is that the company is fairly assured it will have enough product on hand to complete

customer orders, preventing the inability to meet customer demand for the product. It has the same

meaning of advantage stated in chapter 3 notes, saying that push process has high inventory for

future safety or buffer stocks. Both stated that the advantages of push process are having sufficient

products or stocks. The disadvantages of the push system stated in the article are that forecasts are

often inaccurate as sales can be unpredictable and vary from one year to the next. Another problem

with push inventory control systems is that if too much product is left in inventory. This increases

the company's costs for storing these goods. Whereas the note in chapter 3 stated that push process

will generate large quantities of scrap before error are found. It also requires maintenance of large

facilities such as the maintenance of warehouse. Although the disadvantages from the article and

the notes are different, all the disadvantages have the same concept which result in an increase in

cost.

7
Based on the article form ‘HubSpot’, pull marketing is the opposite of push marketing. Pull

marketing is best for when you want to draw consumers to your product. The goal is to create loyal

customers by providing marketing that showcases what they’re looking for. Compare to the definition

from the note in chapter 3, there is no differences as the notes stated that pull processes may also be

referred to a reactive process because they react to either customer demand. Both definitions stated

that pull process is reacted based on either “customer order” or “customer demand”. With this

strategy, companies only make enough product to fulfil customer's orders. An example of a pull

system is the just-in-time which known as (JIT) system. The goal is to keep inventory levels to a

minimum by only having enough inventory, not more or less, to meet customer demand. The JIT

system eliminates waste by reducing the amount of storage space needed for inventory and the costs

of storing goods. It is the same as the note in chapter 3 stated that Just in time (JIT) inventory strategy

is used in pull activities to increase efficiency and decrease waste by receiving goods only as they are

needed in the production and thus reducing inventory costs. According to the article from “Chron”,

the advantage to the system is that there will be no excess of inventory that needs to be stored, thus

reducing inventory levels and the cost of carrying and storing goods. The note in chapter 3 stated

that the advantage of pull process is fast to get cash flow due to immediate purchasing from

customer. Although the advantages stated the article and notes are different, both advantage applies

to the pull process. Based on the article, one major disadvantage to the pull system is that it is likely

that a company will run into ordering dilemmas, such as a supplier not being able to get a shipment

out on time. This leaves the company unable to fulfil the order and contributes to customer

dissatisfaction. As in the note, it also mentions the same disadvantage as the article saying that any

delay of shipment or delivery will lead to customer dissatisfaction.

Reference of the article:

Kayla Carmicheal (2019, Sept 12) Push vs. Pull Marketing: How They Differ and Work Together

8
https://blog.hubspot.com/marketing/push-vs-pull-marketing

4. Read notes on Chapter 3 about “Push and Pull View”. Answer Question number 2 from

slide number 26.

All supply chain processes can be broken down into four process cycles that connect the five stages of

the supply chain, which are the customer order cycle, the replenishment cycle, the manufacturing

cycle, and the procurement cycle. The customer order cycle connects the customer with the retailer;

this connection is made as the book is selected and paid for by the customer. The replenishment cycle

connects the retailer and the distributor and is triggered by the retailer’s need to fill the empty shelf

space with another copy of this tome. The manufacturing cycle connects the distributor and the

manufacturer. As demand for the book is realized and distributors empty their warehouses, they signal

the manufacturer to print another million copies to fill their empty warehouses. Finally, the

procurement cycle connects the manufacturer and the supplier. The manufacturer requires raw

material inputs of paper, ink, and many more, to begin the assembly process for another batch of

Supply Chain Management. The push or pull boundary exists where demand switches from reactive

(pull) to speculative (push) production. For most bookstore supply chains the push or pull boundary is

between the customer order cycle and the replenishment cycle. The customer order pulls the book

from the bookstore shelf, but the initial production of the book was triggered by a build order that

moved materials along the supply chain to the retail outlet. Processes in the pull phase are the customer

arrival, customer order entry, customer order fulfilment and customer order receiving. Processes in the

push phase are replenishment of books in the bookstore, replenishing distributor inventory and

replenishing raw materials.