BSBA MM 2-9 GROUP 1 NARRATIVE REPORT

1. CENTURY SUPPLY CHAIN, LOGISTICS, MATERIAL MANAGEMENT

A. Organizational Concept of Supply Chain, Logistics, and Material Management

SUPPLY CHAIN MANAGEMENT

● is a crucial process because an optimized supply chain results in lower costs and a
more efficient production cycle. Companies seek to improve their supply chains so
they can reduce their costs and remain competitive.
● Also the handling of the entire production flow of a good or service — starting from
the raw components all the way to delivering the final product to the consumer.

KEY POINTS
● A supply chain is a network of companies and people that are involved in the production and
delivery of a product or service.
● The components of a supply chain include producers, vendors, warehouses, transportation
companies, distribution centers, and retailers.
● The functions of a supply chain include product development, marketing, operations,
distribution, finance, and customer service
● Effective supply chain management results in lower costs and a faster production cycle.

HOW SUPPLY CHAIN MANAGEMENT (SCM) WORKS

● SCM attempts to centrally control or link the production, shipment, and distribution of a
product. By managing the supply chain, companies can cut excess costs and deliver products
to the consumer faster. This is done by keeping tighter control of internal inventories, internal
production, distribution, sales, and the inventories of company vendors.
● SCM is based on the idea that nearly every product that comes to market results from the
efforts of various organizations that make up a supply chain. Although supply chains have
existed for ages, most companies have only recently paid attention to them as a value-add to
their operations.

1. RAW MATERIALS - A raw material, also known as a feedstock, unprocessed material, or

primary commodity, is a basic material that is used to produce goods, finished products,
energy, or intermediate materials that are feedstock for future finished products.
2. SUPPLIER - A supplier is a person, organization, or other entity that provides something that
another person, organization, or entity needs.
3. FACTORY - Structure in which work is organized to meet the need for production on a large
scale usually with power-driven machinery. Mass production, which transformed the
organization of work, came about by the development of the machine-tool industry. With
precision equipment, large numbers of identical parts could be produced at low cost and with
a small workforce.
 4. DISTRIBUTION - Distribution is the activity of both selling and delivering products and
services from manufacturer to customer. This can also be called product distribution.
Distribution is an important element of operations as, without a role that tracks and improves
the relationship between manufacturers and customers, a company cannot ensure the best
possible service.
5. RETAILER - A retailer, or merchant, is an entity that sells goods such as clothing, groceries,
or cars directly to consumers through various distribution channels with the goal of earning a
profit. This merchant can operate in a physical building or online.
6. CUSTOMER - A customer is an individual or business that purchases another company's
goods or services. Customers are important because they drive revenues. Without them,
businesses can neither survive or thrive

ROLE OF SUPPLY CHAIN MANAGEMENT

Supply chain management sets the foundation for economic growth by enabling the exchange of
goods between businesses and consumers. The important role of supply chain management and its
impact on economic growth is possible because of the entities involved in the supply chain, which
include the following;

● Materials processors. This includes companies that process raw materials, such as metal,
rubber, and wood, from natural resources.
● Manufacturers/producers. These are the companies that create the products available for
sale, turning raw materials into products for consumer use.

Not all supply chains produce physical products. For example, in the energy sector, energy producers
use raw materials, such as coal, to produce a form of energy for consumption

● Transportation companies. Examples of transportation companies include freighter,

container ship and trucking companies. At this point in the supply chain, the products arrive at
another site with one purpose: to distribute the product to retailers.
● Distribution centers. Distribution centers are regional facilities that house the products to be
redistributed to retailers, wholesalers, and, sometimes, directly to consumers. A distribution
center can include refrigeration facilities to preserve perishable products
● Retailers. At the tail end of the supply chain are the retailers who sell products directly to
consumers in shopping centers, stores, and online

IMPORTANCE OF SUPPLY CHAIN MANAGEMENT

● BASIC LIFE NECESSITIES. Individuals access necessities such as food and clothing, as
well as life-saving medicines and health care products.
● POWER AND LIGHT. Individuals access necessities such as food and clothing, as well as
life-saving medicines and health care products.
● INFRASTRUCTURE. Interstate highway systems, railroads, ports, and airports facilitate the
exchange of goods between businesses and consumers.
● JOBS. Supply chain professionals work in areas such as transportation, warehousing,
inventory management, packaging and logistics information.

EXAMPLE:

Starbucks is a well-known global coffee retailer and coffeehouse chain. The company is renowned for
its premium coffee and innovative customer service. Starbucks has consistently invested in its supply
chain strategy to maintain its competitive advantage. Starbucks’ Supply Chain Strategy focuses on
various aspects, such as efficient sourcing of coffee beans, manufacturing, logistics, and distribution.
The success of Starbucks can be attributed to its supply chain strategy.

LOGISTICS MANAGEMENT

Logistics refers to the overall process of managing how resources are acquired, stored, and transported
to their final destination. Logistics management involves identifying prospective distributors and
suppliers and determining their effectiveness and accessibility. Logistics managers are referred to as
logisticians.

KEY POINTS:

● Logistics is the overall process of managing how resources are acquired, stored, and
transported to their final destination.
● Poor logistics in a business can impact its bottom line
● Logistics is now used widely in the business sector, particularly by companies in the
manufacturing sectors, to refer to how resources are handled and moved along the supply
chain

IMPORTANCE OF LOGISTICS MANAGEMENT

Logistics is critical to a company's bottom line. It enables the movement of materials or goods, the
satisfaction of contracts, and the fulfillment of services. Effective logistics management ensures
smooth movement along the supply chain and can provide a competitive advantage.

JOBS IN LOGISTIC INDUSTRY

● Customer service representative

● Dispatcher
● Truck Driver
● Freight agent
● Supply chain manager
● Transportation analyst
● Procurement manegement
● Logistician
● Operations manager

LOGISTICS COMPONENT

● Intake from suppliers and material handling;

● Labeling, packaging into smaller units, organization and warehousing;
● Inventory management for production or distribution;
● Demand planning;
● Order fulfillment; and
● Transport.

BENEFIT OF LOGISTICS MANAGEMENT

VISIBILITY. This enables businesses to better control costs, tease out efficiencies, spot supply chain
problems, conduct demand planning and gain insights into opportunities.

REDUCED OVERHEAD. It enables companies to reduce overhead in areas from cutting shipping
costs to shrinking how much warehouse space they need by proactively controlling inventory levels
IMPROVED CUSTOMER EXPERIENCE. By delivering orders accurately and quickly, you
improve the customer experience which in turn increases brand loyalty and future sales.

PREVENTING LOSS. Companies can also track movement and current location so stock won’t be
misplaced or diverted without notice. In addition, by ensuring optimal storage and transport
conditions, such as temperature and moisture management, solid logistics prevents spoilage and
damage.

SUPPORT EXPANSION. Demand forecasting supports expansion by realistically calculating

inventory needs and ordering, transporting and stocking accordingly.

FACTOR AFFECTING THE LOGISTICS MANAGEMENT COST

● Understanding about the actual cost of outsourcing raw materials which include the freight
charges, duties to be paid and cost involving the transportation of inventory.
● Focusing the variations in the timings between the transits which causes the freight
forwarding charges and also storing of inventory in bulk is another factor affecting cost.
● Considering the cost that is involving in the duty and tariff rates of the region

EXAMPLE

Ensuring timely and efficient transportation is essential to deliver fresh food to McDonald's
restaurants. The company manages transportation and delivery logistics, including using dedicated
distribution centers, fleet optimization, and route planning.

MATERIAL MANAGEMENT

Materials management is a basic element of supply chain management that involves the design and
execution of supply chains to satisfy a company's or organisation's material requirements.

OBJECTIVES OF MATERIAL MANAGEMENT

● RIGHT MATERIAL. Is to guarantee that suitable materials are accessible for production.
● RIGHT TIME. Is to guarantee that the right supplies or materials are available at the right
time.
● RIGHT AMOUNT. Is to guarantee that enough supplies and materials are available for
production.
● RIGHT PRICE. Is to ensure that materials are purchased at the right price.
● RIGHT SOURCES. Is to make sure that resources are obtained properly.

TYPES OF MATERIAL MANAGEMENT

MATERIAL REQUIREMENTS PLANNING. A manufacturing process that includes determining

the materials and quantities needed in production and monitoring their flow to assure on-time order
fulfilment.

PURCHASING. Is frequently defined as obtaining items of the right quality, quantity, time, price,
and source.

INVENTORY CONTROL. Is maintaining your inventory levels to ensure that you have a sufficient
amount of each product.
QUALITY CONTROL. Material quality management is also important because excellent materials
lead to good products. Depending on the application, factors such as durability, dimensional
correctness, trustworthiness, performance, reliability, and aesthetic appeal can all be relevant quality
considerations for materials management.

CHALLENGES IN MATERIAL MANAGEMENT

DATA MANAGEMENT. is an essential phase toward implementing efficient data analysis at scale,
which leads to important conclusions that provide value to your consumers and enhance your bottom
line.

COST CONTROL. is the process of identifying and reducing business expenses in order to enhance
profits; it begins with budgeting.

IMPORTANCE OF MATERIAL MANAGEMENT

In conclusion, material management is essential for ensuring a consistent flow of items for
manufacturing purposes in order to satisfy customer demands.

Materials management can help organizations reduce costs, improve customer satisfaction, and
enhance their competitive advantage.

B. The Changing Logistics Management Process

LOGISTICS MANAGEMENT PROCESS

Organizations can plan, manage, and put into place methods to move and store items with the use of
supply chain management functions, which are overseen by logistics management.

Logistics coordinates the movement and storage of resources such as goods, equipment and inventory.
For manufacturers, logistics starts with the incoming supply of raw materials and carries through to
the delivery of finished products to customers.

● Logistics management functions include customer service, production planning and

scheduling, and packaging.
● Logistics is the foundation of the supply chain and is vital to a company’s success.
Well-organized logistics can reduce expenses, save time, help meet customer demands and
enhance a brand’s reputation.

1. Inbound logistics is the process of moving goods from suppliers into a warehouse, then into a
production facility to make products. Inbound logistics can include raw materials, tools,
component parts, office equipment and supplies.
● Inbound logistics is the way materials and other goods are brought into a company. This
process includes the steps to order, receive, store, transport and manage incoming supplies.
Inbound logistics focuses on the supply part of the supply-demand equation.

2. Outbound logistics is the process of moving finished products out of warehouse inventory and
shipping them to customers.

● Outbound logistics focuses on the supply- demand side of the The process involves storing
and moving goods to the customer or end user. The steps include order fulfillment, packing,
shipping, delivery and customer service related to delivery.
INBOUND

1. PURCHASING AND SOURCING - Find and buy raw materials.

2. RECORDING AND RECEIPTS - Records purchase order, invoice and receipt.
3. REAL-TIME INFORMATION - Seller notifies buyer that goods have been shipped.
4. LOAD ARRIVAL- The goods arrive.
5. RECEIVING- Goods unloaded, checked and sent to storage

OUTBOUND

1. CUSTOMER ORDER - A customer places an order.

2. ORDER PROCESSING - Company validates order and allocates product.
3. REPLENISHMENT - Reserve inventory moves to primary storage & replaces purchased
products
4. PICKING - Staff pick products to fulfill the order.
5. PACKING, STAGING, AND LOADING - Order is packaged and loaded.
6. SHIPPING AND DOCUMENTING - Order departs and tracking information sent to
customers

EFFECTS

● Good logistics management ensures that products are shipped in the most economical, safe,
efficient and timely manner. This results in cost savings for the company and more satisfied
customers.
● Poor logistics management can result in damaged or delayed shipments, which can then lead
to dissatisfied customers, returns and scrapped products. The consequences of these problems
include higher costs and customer relation problems.

WAYS TO IMPROVE

● Focus on order to deliver lead time and plan accordingly. The goal of the logistics chain was
customer satisfaction, the duration from picking up the order, up to the process of delivering
all the way to the customer was really important.
● Evaluate and redefine the standard operating procedures. The goal of the logistics chain
was customer satisfaction, the duration from picking up the order, up to the process of
delivering all the way to the customer was really important.
● Examine the transportation and redesign for cost/ time efficiency. Examine every step of the
transportation process to identify the areas with the highest or the lowest cost.
● Optimize warehouse management for maximum productivity. A proper warehouse must
have a sector to identify the perishable and non perishable products and what is the
atmosphere it requires.
● Embrace automation and make the most of new technology. During the advancement of the
technology, the equipment of corporate logistics automation must have a technological
advancement to speed up the man power and organizational efficiency.

C. Materials Requirement Planning

WHAT IS MATERIAL REQUIREMENTS PLANNING (MRP)

An approach to inventory management in which a company uses computers to predict the timing and
quantity of materials needed to complete a production process.

Is a software based integrated inventory and supply management system designed for
business.
HOW MATERIAL REQUIREMENTS PLANNING WORKS?

MRP helps businesses and manufacturers define what is needed, how much is needed, and
when the materials are needed and works backward from a production plan for finished
goods.

MATERIAL REQUIREMENTS PLANNING STEPS AND PROCESS

1. IDENTIFYING REQUIREMENTS TO MEET DEMAND.

2. CHECKING INVENTORY AND ALLOCATING RESOURCES.

3. SCHEDULING PRODUCTION.

4. IDENTIFYING ISSUES AND MAKING RECOMMENDATIONS.

ADVANTAGE AND DISADVANTAGE OF MATERIAL REQUIREMENTS PLANNING (MRP)

PROS

• REDUCED CUSTOMER LEAD TIMES

• MATERIALS AND COMPONENTS ARE AVAILABLE WHEN NEEDED

• MINIMIZE INVENTORY LEVELS AND ASSOCIATED COST

• INCREASED LABOR PRODUCTIVITY

• INCREASED MANUFACTURING INFFICIENCY

CONS

• EXPENSIVE TO IMPLEMENT

• LACK OF FLEXIBILITY IN THE PRODUCTION SCHEDULE

• HEAVY RELIANCE ON INPUT DATA ACCURACY

• TENDENCY TO HOLD MORE INVENTORY THAN NEEDED

D. The Elements of Effective Logistics Management

LOGISTICS MANAGEMENT - Logistics management refers to planning, implementing, and

controlling the efficient, effective flow and storage of goods, services, and related information from
the point of origin to the point of consumption.

WHAT IS EFFECTIVENESS OF LOGISTIC MANAGEMENT SYSTEM

An efficient logistics strategy will give a company control over inbound freight, keep inventory at
optimal levels, organize the reverse flow of goods, and ensure freight moves on the proper
transportation modes–all of which can cut costs significantly.

WHAT ARE THE ELEMENTS OF A LOGISTICS SYSTEM AND HOW DO THEY WORK?

1. STORAGE, WAREHOUSING, AND MATERIALS HANDLING

 ● This element involves safe and economical stockpiling of the goods that must be
shipped. This process is critical in maintaining a balance between supply and demand.
2. PACKAGING AND LABELING
● The packaging must be sufficiently robust to handle transportation and accommodate
the product’s dimensions. It should include proper labeling, boxing, and sealing.
3. INVENTORY
● Inventory is a critical element of any logistics system. It refers to the goods and
materials that a business holds for the ultimate goal of resale, production or
utilization. Efficient inventory management is key to ensuring the availability of
goods, minimizing stockouts, and reducing holding costs.
4. TRANSPORTATION
● Transportation is a vital element of the logistics system, as it involves the physical
movement of goods from one location to another. Efficient transportation
management is crucial to ensure timely delivery of products, reduce transportation
costs, and improve customer satisfaction.
5. DELIVERY
● Delivery involves the transportation of goods from a warehouse or distribution centre
to the end customer. Efficient delivery logistics rely on effective communication,
route optimization, and timely execution to ensure that products reach their
destination quickly and safely.
6. REVERSE LOGISTICS
● Reverse logistics is an essential element of logistics systems that deals with the
handling of products and materials after they have been delivered to customers. It is
the supply chain process of returning products from end users back through the
supply chain to either the retailer or manufacturer.

ADVANTAGES OF EFFECTIVE LOGISTICS MANAGEMENT

● REAL -TIME VISIBILITY

● ENHANCED CUSTOMER EXPERIENCE
● REDUCED OPERATIONAL COST
● DEMAND FORECASTING
● RISK MANAGEMENT
● WAREHOUSE MANAGEMENT
● PREVENTIVE MAINTENANCE
● BOOST BUSINESS PROFITABILITY
● ROUTE PLANNING
● QUALITY ASSURANCE

GROUP 1 MEMBERS

AGUILAR, ALLEYSSA

AVENDANO, KURT JUSTINE

BAGTAS, REYNALDO

BALLECER, MARK JERALD

BAQUIR, NINO

BAUTISTA, CHRISTINE JOY

BENITEZ, AGATHA JENELLA D.

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