INDIVIDUAL ASSIGNMENT

MUSLIM

2201920953
SUPPLY CHAIN

A supply chain therefore is the set of entities and relationships that cumulatively define
materials and information flows both downstream toward the customer and upstream toward the
very first supplier (Schroeder, Roger G.,Et.al.,2018)

APICS Dictionary, 8th edition, 1995 Define Supply chain as :

The processes from the initial raw materials to the ultimate consumption of the finished product
linking across supplier user companies.

The functions within and outside a company that enable the value chain to make products and
provide services to the customer

Materials and requisite information (usage instructions, inventory levels, invoices, etc.)
flow downstream or forward from suppliers to customers, with materials being transformed by
the various entities into units of the final product sold to the customers. Return materials (e.g.,
defective units, recyclables, customer returns), requisite informa tion (e.g., demand, forecasts),
and monetary payments also flow upstream or backward from customers to suppliers, with
information facilitating capacity and inventory plan ning within the supply chain. Although a
supply chain generally can be depicted without specifying a vantage point (as in Figure.1), it is
often more useful to show a supply chain from the perspective of a firm, a factory, a service
delivery unit for a firm, a product family (e.g., automobiles), or even a type of service (e.g.,
outpatient surgeries). Figure. 2, for example, shows the

Fig 1. A typical supply chain.

(Schroeder, Roger G.,Et.al.,2018)

 Fig 3. A typical supply chain from the perspective of entity F.

(Schroeder, Roger G.,Et.al.,2018)

The flow of materials from upstream nodes into the focal entity generally is referred to as
physical supply and the flow of materials from F through downstream nodes toward the end
customers is referred to as physical distribution. Distribution channel, a term frequently used in
marketing, is a specific route from a producer (in this case, F) forward through the various nodes
(e.g., distributors and wholesalers) to the end customer and is therefore only part of the supply
chain for F. Notice also that the physical supply for the focal entity can be segmented further into
tiers such that 1st-tier suppliers have a direct linkage (represented by an arrow) to F, 2nd-tier
suppliers have a linkage to F through 1st-tier suppliers, and so on. Similarly, the focal entity has
linkages to downstream entities (distributors and wholesalers) as part of its physical distribution.
SUPPLY CHAIN MANAGEMENT

Supply chain management is the design and management of seamless, value-added

processes across organizational boundaries to meet the real needs of the end customer
(Schroeder, Roger G.,Et.al.,2018)

SCM, by this definition, involves a sequence of value-added processes that not only cut
across organizational boundaries but also must be tightly integrated. To be integrated, the
processes must be appropriately designed and systematically managed to allow information to
flow and be deployed within and across them. The design and management of these processes
therefore require that decisions be made to implement strategies and solve problems to ensure an
effective and efficient flow of materials and requisite information across the entire supply chain.
These strategies and problem resolutions are intended to reduce uncertainty across the entire
supply chain. Taking a systems perspective is therefore paramount so that strategies and problem
resolutions to reduce uncertainty at one node do not end up negatively affecting another node.

Besides defining SCM from a process or decision-making orientation, many scholars and
managers define SCM as the integration of three traditionally separate functions: sourcing
(purchasing), operations, and logistics. This integration is best captured by a cross-industry
standard known as the SCOR model, which is described in the Operations Leader box. With
respect to our example, sourcing would be the function that deals with the physical supply to
ensure the flow of materials and information into the focal entity, operations would be the
function that strives to guarantee the flow of materials and The SCOR, or “Supply Chain
Operations Reference,” model represents a cross-industry process framework and standard for
defining what SCM entails.

Figure 3 SCOR Model

(Schroeder, Roger G.,Et.al.,2018)

 SCOR was introduced in November 1996 by the Supply-Chain Council. At that time the
Supply-Chain Council included 69 voluntary members representing a cross section of industry
leaders (e.g., Dow Chemical, Texas Instruments, Federal Express). The 69 member firms worked
for six months to define common supply chain management processes, best practices for those
processes, and benchmark performance data.

The current version of the SCOR model is represented as a four-level pyramid, with
Level 1 (Top Level) defining SCM to encompass management of five distinct processes—Plan,
Source, Make, Deliver, and Return. The Plan process refers to the development of a course of
action (i.e., strategy) for balancing demand and supply while meeting the requirements of
sourcing, production, and delivery. The Source process refers to the set of activities involved in
procuring materials and services to meet planned or actual demand. Make refers to pro cesses
that transform materials into a finished product. The Deliver process is the set of activities
involved in order entry, materials handling, and transporting of goods and services to meet
demand. The Return process is the set of activities for handling returns of goods. Level 1 of the
SCOR model also establishes performance objectives and targets for performance.

Seven Principles of SCM

The periodical Supply Chain Management Review (SCMR) has charted the evolution of
the SCM discipline. In its first edition in the spring of 1997, SCMR laid out basic SCM
principles in what has become its most requested article. It republished the article in its ten-year
anniversary issue in 2007.The seven time-tested principles listed in Table below (David L.
Anderson. Et al. 1997):

No. Prinsiple Comment

1 Segment customers based on service This implies the possibility of multiple supply
needs and customize the supply chain to chains or, at a minimum, built-in flexibility in
serve each profitably. supply chain design to meet the requirements
of customer segments.
Supports revenue growth.
2 Customize the logistics network to “Logistics networks” should be interpreted
segment service requirements and broadly beyond physical distribution to all
profitability. aspects of customer interaction.

Supports asset utilization.

3 Listen to market signals and align
demand and plan accordingly. Have
“consistent” forecasts and “optimal”
resource
allocation.
Today, practitioners seek to capture the
“voice” of the customer in the design of the
supply chain and in the replenishment
decisions required in daily operation. Many
seek to “immunize” themselves from reliance
on forecasts, using actual demand as much to
No. Prinsiple
Supports asset utilization.
4 Differentiate the product closer to the
customer and speed conversion across
the supply chain.
Supports cost reduction and asset
utilization.
5 Manage sourcing strategically to reduce
the often-unseen total cost of ownership
(TCO) for purchased materials and
services. Supports cost reduction.
6 Develop a supply chain-wide, enterprise
technology strategy that supports
multiple levels of decision making and
provides visibility over the flow of
products, services, and information.
Supports asset utilization.
7 Adopt vertical or end-to-end measures
for each channel to gauge based costing to clarify supply chain costs. In
multicompany success in reaching end
users effectively and efficiently.
Supports revenue growth, asset scorecards with trading partners
utilization, and cost reduction.
Comment
“pull” products through the chain.
Postponement and synchronization are
initiatives in this direction. Such efforts call on
participation by marketing, sales, and
engineering functions.
Many organizations associate SCM with the
purchasing function. And many purchasing
organizations are viewed as paper-pushing,
even clerical, functions ill-equipped to act
strategically.
The SCMR authors note that systems must
cover short-term transactional needs,
intermediate planning, and strategic analysis.
Such systems must go beyond churning out
data to providing information that decision
makers can act on in a timely way.
The SCMR authors point to tools like activity-
traditional costs, overhead is applied evenly
rather than to the root “driver” of the cost.
Activity-based costs also enable shared

Scope Area in manufacturing Company

Supply Chain Management When referring to a manufacturing company, the main

activities included in the classification of Supply Chain Management are:
1. product development
2. procurement
3. planning and control
4. production
5. distribution

Benefits of Supply Chain Management

In general, the application of the concept of Supply Chain Management in the company
will provide benefits as below (Sucahyowati, Hari., 2011):

1. Customer Satisfaction.
 Consumers or product users are the main targets of the production process activities of
each product produced by the company. Consumers or users referred to in this context are
certainly loyal consumers in the long term. To make customers loyal, consumers must
first be satisfied with the services provided by the company.Meningkatkan pendapatan.
Semakin banyak konsumen yang setia dan menjadi mitra perusahaan berarti akan turut
pula meningkatkan pendapatan perusahaan, sehingga produk-produk yang dihasilkan
perusahaan tidak akan ‘terbuang’ percuma, karena diminati konsumen.
2. Reducing Cost
The integration of the product flow from the company to the final consumer also means
reducing costs in the distribution channel.
3. Asset utilization
Assets, especially human factors, will be more trained and skilled both in terms of
knowledge and skills. Human workers will be able to empower the use of high
technology as required in the implementation of Supply Chain Management.
4. Increasing Profit.

With the increasing number of loyal consumers and users of the product, this in turn will
increase the company's profits. 6. The company is getting bigger. Companies that benefit
from the distribution process of their products will gradually become bigger, and grow
stronger.

Barriers/obstacles to Supply Chain Management (SCM)

SCM is something that is very complex, where many obstacles are faced in its
implementation, so that in its implementation it requires stages from the design stage to the
evaluation stage and continuous improvement. In addition, SCM implementation requires
support from various parties, starting from internal in this case all top management and external,
in this case all existing partners. The following are the obstacles that will be experienced in the
implementation of SCM which further strengthens the argument that SCM implementation does
require the support of various parties (Hayati, E.N. 2014):

1. Incerasing Variety of Products.

2. Now consumers seem to be spoiled by producers, this is seen by the increasingly diverse
types of products on the market. This is also seen from the company's strategy which
always focuses on the customer (customer oriented). If in the past producers did a
strategy by dividing segments to customers, now consumers are more spoiled by
throwing products according to the wishes of each individual, not according to the wishes
of a particular segment. The number of types of products and the uncertain number of
each product makes producers increasingly overwhelmed in satisfying the desires of
consumers.
 3. Decreasing Product Life Cycles.
The decline in the life cycle of a product makes it more difficult for companies to manage
their supply strategy, because to regulate the supply of certain goods, the company
requires a certain amount of time. Product life cycle is defined as the age of the product
on the market.
4. Increasingly Demand Customer.
Supply chain management tries to manage (manage) the increase in demand quickly,
because now customers are increasingly demanding the fulfillment of requests quickly
even though the demand is very sudden and not a standard product (customize).
4. Fragmentation of Supply Chain Ownership.
This illustrates that the supply chain involves many parties who have their respective
interests, so this makes supply chain management more complicated and complex.
5. Globalization.

Globalization makes supply chains more complicated and complex because the parties
involved in the supply chain include parties in various countries who may have locations
in various parts of the world.

Competitive and Supply Chain Strategies

Strategic fit merupakan konsistensi antara prioritas pelanggan yang diharapkan mampu dipenuhi
oleh strategi kompetitif dan kemampuan rantai nilai yang dapat dibangun dengan strategi supply
chain. Strategic fit dicapai dengan tiga tahap, yaitu:

1. Understanding the Customer and Supply Chain Uncertainty

First, companies must understand the needs of customers in each segment and the supply
chain uncertainties faced with fulfillment. needs. These needs help companies find cost
desires and demand for services. Supply chain uncertainty helps companies identify
levels of inability to predict demand, disruptions, and delays.
2. Understanding the Supply Chain Capabilities
There are several types of supply chains, each designed to perform a different task.
Companies should know how the supply chain is designed properly.
3. Achieving Strategic Fit
If there is unequal competition between the supply chain and customer needs, the
company will also rearrange the supply chain to support the competitive strategy or
change the competitive strategy. So the bottom line: The first step in achieving strategic
fit between competitive and supply chain strategies is understanding customers and
supply chain uncertainties. Uncertainty from the customer and supply chain can be
combined and mapped on the uncertainty spectrum. The second step in achieving
strategic fit between competitive and supply chain strategies is to understand the supply
chain and map it to the spectrum of reaction capabilities. The final step in achieving
strategic fit is to match the supply chain's responsiveness to the uncertainty of supply and
demand. The supply chain design and all functional strategies in the company must be
able to support the level of supply chain reaction capability. The scope of the fit strategy
is the functions that exist in the company and the appropriate steps that can find the
relationship between strategy and objectives. The inter-company scope of the fit strategy
is currently important because competition within the company's territory with companies
has turned into supply chain competition with one another. The company's co-workers in
the supply chain will determine the company's success. The intercompany scope of the fit
strategy requires evaluating each action on a company as a whole. This scope extends to
all steps in the supply chain.
LOGISTIC

APICS, the supply chain and operations professional organization, defines logistics as
“the art and science of obtaining, producing, and distributing material and product in the proper
place and in proper quantities.” (Jacobs, R.F. Et al., 2018)

Puprposes of Logistik

Donald Bowersox dan David Closs menyatakan tujuan logistik adalah otoritas pencatatan
dan logistik memerlukan koordinasi dari kegiatan yang mengelilingi dan mengontrol transportasi
termasuk network design, information, transportation, inventory dan warehousing. Terdapat 6
objek operasional dari sebuah sistem logistik yang dinyatakan oleh Donald Bowersox dan David
Closs (Long, 2004), antara lain:

1. Rapid Response
A company needs a way to react quickly to changes and make new developments. Often
the ability to provide what customers want is the key to achieving a company's business
goals.Minimum Variance
Yang dihasilkan seperti waktu pengiriman harus dilakukan secara konsisten dan tepat.
2. Minimum Inventory
Inventory or supplies are very expensive and therefore should be kept to a minimum.
3. Movement Consolidation
Transportation costs can be reduced by consolidating shipments of small shipments into
larger shipments so as to reduce the frequency of shipments.
4. Quality
Not only in terms of products that have the best quality but logistics services are also
needed to adjust quality standards.
5. Life Cycle Support
This means that it is not just about sending products, but how to handle product returns
properly. This return can occur if there is a defective item or damage to the packaging or
the product itself.

Decisions Related To Logistics

1. Transportation Modes
A key decision area is deciding how material will be transported. The Logistics-System Design
Matrix shown in Figure X depicts the basic alternatives. There are six widely recognized modes
of transportation: highway (trucks), water (ships), air (aircraft), rail (trains), pipelines, and hand
delivery. Each mode is uniquely suited to handle certain types of prod ucts, as described next
Processes. (Jacobs, R.F. Et al., 2018)
 .

Figure X Logistics-System Design Matrix: Framework Describing Logistics

(Jacobs, R.F. Et al., 2018)

1) Highway (truck) Actually, few products are moved without some highway transportation.
The highway offers great flexibility for moving goods to virtually any location not
separated by water. Size of the product, weight, and liquid or bulk can all be
accom modated with this mode.
2) Water (ship) Very high capacity and very low cost, but transit times are slow, and large
areas of the world are not directly accessible to water carriers. This mode is especially
useful for bulk items such as oil, coal, and chemical products.
3) Air Fast but expensive. Small, light, expensive items are most appropriate for this mode
of transportation.
4) Rail (trains) This is a fairly low-cost alternative, but transit times can be long and may be
subject to variability. The suitability of rail can vary depending on the rail infrastructure.
The European infrastructure is highly developed, making this an attractive alternative
compared to trucks, while in the United States, the railroad infrastructure has declined
over the last 50 years, making it less attractive.
5) Pipelines This is highly specialized and limited to liquids, gases, and solids in slurry
forms. No packaging is needed and the costs per mile are low. The initial cost to build a
pipeline is very high.
6) Hand Delivery This is the last step in many supply chains. Getting the product in the
customer’s hand is often a slow and costly activity due to the high labor content.
2. Warehouse Design
Special consolidation warehouses are used when shipments from various sources are
pulled together and combined into larger shipments with a common destination. This improves
the efficiency of the entire system. Cross-docking is an approach used in these consolidation
warehouses, where, rather than making larger shipments, large shipments are broken down into
small shipments for local delivery in an area. This often can be done in a coordinated manner so
the goods are never stored in inventory. Retailers receive shipments from many suppliers in their
regional warehouses and immediately sort those shipments for delivery to individual stores by
using cross-docking systems coordinated by computerized control systems. This results in a
minimal amount of inventory being carried in the warehouses. Hub-and-spoke systems combine
the idea of consolidation and that of cross-docking. Here, the warehouse is referred to as a “hub”
and its sole purpose is sorting goods. Incoming goods are sorted immediately to consolidation
areas, where each area is designated for ship ment to a specific location. Hubs are located in
strategic locations near the geographic center of the region they are to serve to minimize the
distance a good must travel. Designing a system is an interesting and complex task. The
following section focuses on the plant and warehouse location problem as representative of the
types of logistics decisions that need to be made. Logistics is a broad topic, and its elements
evolve as the value-added services provided by major logistics vendors expand. Having the
proper network design is fundamental to efficiency in the industry. (Jacobs, R.F. Et al., 2018)

LOCATING LOGISTICS FACILITIES

The problem of facility location is faced by both new and existing businesses, and its
solution is critical to a company’s eventual success. An important element in designing a
company’s supply chain is the location of its facilities. Criteria that influence manufacturing
plant and warehouse location planning are discussed next(Jacobs, R.F. Et al., 2018):

1. Proximity to Customers
2. Business Climate
3. Total Costs
4. Infrastructure
5. Quality of Labor
6. Suppliers
7. Other Facilities
8. Free Trade Zones
9. Political Risk
10. Government Barriers
11. Trading Blocs
12. Environmental Regulation
13. Host Community
14. Competitive Advantage
 REFERENCE

APICS Dictionary, 8th edition, 1995

Schroeder, Roger G.,Et.al.,2018. Operations management in the supply chain : decisions and
cases. McGraw-Hill Education : United States of America

David L. Anderson. Et al. (1997, “The Seven Principles of Supply Chain Management,” Supply
Chain Management Review (April 2007): 41–6.

Sucahyowati, Hari., 2011. “MANAJEMEN RANTAI PASOKAN (SUPPLY CHAIN

MANAGEMENT )”. GEMA MARITIM Vol 13 No. 1 Pebruari 2011

Hayati, E.N. 2014., SUPPLY CHAIN MANAGEMENT (SCM) DAN LOGISTIC

MANAGEMENT. Jurnal DINAMIKA TEKNIK, Vol 8 No 1 Januari 2014, h.25 – 34

Jacobs, R.F. Et al., 2018, “OPERATIONS AND SUPPLY CHAIN MANAGEMENT,

FIFTEENTH EDITION”. McGraw-Hill Education : United States of America