Supply Chain and

Supply Chain Management

SUPPLY CHAIN

• a network of organizations, resources, activities, and technologies

involved in the creation and distribution of products or services from
the initial raw material stage to the end consumer.
• It encompasses everything from sourcing raw materials to
manufacturing, distribution, retail, and eventually reaching the
customer.
• An efficient supply chain is crucial for businesses to meet customer
demands, reduce costs, and remain competitive in the market.
• Connected by agents, transportation and even storing activities of a
product
Supply Chain: Coca Cola
Supplier Manufacturer/Producer Distributor/Wholesaler

Retailer Customer
Supplier Manufacturer / Distributor / Retailer Customer
•The source of raw Producer Wholesaler •Retailers sell •The ultimate
materials or •This stage involves •Distributors purchase products directly to consumer of the
components needed transforming raw products in bulk from the end consumers product or service.
for production. materials into manufacturers and through various •Meeting customer
•Suppliers play a vital finished products then supply them to channels, such as demands and
role in maintaining through various retailers or other brick-and-mortar providing quality
the quality and manufacturing businesses. stores or online products is a primary
availability of processes. platforms. goal of any supply
materials. chain.
 Supplier
Inventory Demand Logistics and Relationship
Management Forecasting Transportation Management
(SRM)

Just-In-Time Sustainability
Lean Risk
(JIT) and Ethical
Manufacturing Management
Production Considerations

Technology and
Globalization
Automation
 Balancing inventory
levels to avoid
stockouts (running
out of products)
while minimizing
carrying costs
(holding excess
inventory).

INVENTORY MANAGEMENT
 Using historical
data and market
trends to predict
future demand
accurately. This
helps in adjusting
production and
inventory levels
accordingly.

DEMAND FORECASTING
 Efficient movement
of goods from one
point to another,
considering factors
like transportation
mode, cost, time,
and sustainability.

LOGISTICS AND TRANSPORTATION

 Developing strong
relationships with
suppliers to ensure a
steady supply of quality
materials and favorable
terms.

SUPPLIER RELATIONSHIP MANAGEMENT (SRM)

 Minimizing waste
and optimizing
production
processes to
improve efficiency
and reduce costs.

LEAN MANUFACTURING
 Producing goods
only as needed to
reduce excess
inventory and
associated costs.

JUST-IN-TIME (JIT) PRODUCTION

 Identifying and
mitigating potential
disruptions in the
supply chain, such
as natural
disasters,
geopolitical issues,
or economic
fluctuations.

RISK MANAGEMENT
 Ensuring that the supply
chain operations are
environmentally friendly
and socially responsible.

SUSTAINABILITY AND ETHICAL CONSIDERATIONS

 Employing
technologies like
the Internet of
Things (IoT), data
analytics, and
automation to
enhance visibility,
track inventory,
and streamline
operations.

TECHNOLOGY AND AUTOMATION

 Managing supply
chains that span
multiple countries,
dealing with
challenges related
to customs,
regulations, and
cultural
differences.

GLOBALIZATION
Cost Efficiency

Improved Customer Satisfaction

Competitive Advantage

Innovation

Risk Mitigation

Sustainability
SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENT

• The strategic coordination and integration of various

processes, resources, and activities involved in the production,
distribution, and delivery of goods and services from the point
of origin to the end consumer.
• The primary goal of supply chain management is to create
value by optimizing efficiency, reducing costs, and meeting
customer demands while minimizing risks and disruptions.
Planning and Sourcing and Production and Inventory
Forecasting Procurement Manufacturing Management

Information
Logistics and Warehousing Distribution
and Technology
Transportation and Storage Network Design
Systems

Performance
Risk Collaboration
Sustainability Measurement
Management and
and Ethics and Continuous
and Resilience Communication
Improvement
 This involves
predicting future
demand for
products and
services based on
historical data,
market trends, and
other relevant
factors. Accurate
demand forecasting
helps in aligning
Planning and Forecasting production and
inventory levels.
 This stage involves
identifying
suppliers,
negotiating
contracts, and
purchasing raw
materials,
components, and
resources needed
for production.

Sourcing and Procurement


Production and Manufacturing
Manufacturing
processes transform
raw materials into
finished goods
according to
demand forecasts.
Efficient production
strategies such as
lean manufacturing
and just-in-time
production are often
employed.
 This component
focuses on
maintaining the
right balance of
inventory to meet
customer demands
while minimizing
carrying costs
associated with
excess inventory.

Inventory Management
 Efficient
transportation and
distribution of
goods from
manufacturers to
end consumers
require careful
planning of routes,
modes of transport,
and delivery times.

Logistics and Transportation

 Proper storage
facilities are
needed to manage
and safeguard
inventory
throughout the
supply chain.

Warehousing and Storage

 Designing an
optimal distribution
network involves
determining the
most efficient
locations for
warehouses and
distribution centers
to minimize
transportation costs
and delivery times.
Distribution Network Design
 Advanced software
and information
systems enable real-
time tracking,
communication, and
collaboration among
various stakeholders
within the supply
chain.

Information and Technology Systems

 Identifying and
mitigating potential
disruptions to the
supply chain, such
as natural
disasters,
geopolitical issues,
and supplier
problems, is crucial
to ensure
continuity.
Risk Management and Resilience
 Effective
communication and
collaboration
between suppliers,
manufacturers,
distributors, and
customers help in
streamlining
processes and
responding quickly
to changes.
Collaboration and Communication
 Sustainable and
ethical practices,
such as responsible
sourcing and
reducing
environmental
impact, are
becoming
increasingly
important in supply
chain management.
Sustainability and Ethics
 Regularly monitoring key
performance indicators (KPIs)
and analyzing data allows for
ongoing improvement of supply
chain processes.

Performance Measurement and Continuous Improvement

 Improved
Cost Competitive
Customer
Reduction Advantage
Service

Risk
Innovation
Mitigation
NEXT: SUPPLY AND DEMAND
Supply
- Refers to the quantity of a good or service that producers are
willing and able to sell at different price levels in a given time
period

Demand
- refers the quantity of a good or service that consumers are
willing and able to buy at different price levels in a given time
period
Law of Supply
- As the price of a good or service increases, the quantity supplied
increases and vice versa
- Producers supply more at a higher price to earn more profit
- Suppliers are willing to deliver more products and services when
paid more for doing so
Factors affecting Supply:
• Labor and materials (which reflect their opportunity costs of
alternative uses to supply consumers with other goods)
• The physical technology available to combine inputs
• The number of sellers and their total productive capacity over
the given time frame
• Taxes, regulations, or additional institutional costs of production
Law of Demand
- As the price of a good or service increases, the quantity
demanded decreases and vice versa
- The amount of good that buyers purchase at a higher price is less
because as the price of a good goes up, so does the opportunity
cost of buying the good.
Factors affecting Demand:
- Consumer preferences
- Availability of alternative goods / services
- Seasonal Changes
- Advertisement or Marketing Strategy
- Change in income of consumer
Law of Supply
- As the price of a good or service increases, the quantity supplied
increases and vice versa
- Producers supply more at a higher price to earn more profit
Factors affecting Supply:
• Labor and materials (which reflect their opportunity costs of
alternative uses to supply consumers with other goods)
• The physical technology available to combine inputs
• The number of sellers and their total productive capacity over
the given time frame
• Taxes, regulations, or additional institutional costs of production
Law of Demand
- As the price of a good or service increases, the quantity
demanded decreases and vice versa
- The amount of good that buyers purchase at a higher price is less
because as the price of a good goes up, so does the opportunity
cost of buying the good.
Factors affecting Demand:
- Consumer preferences
- Availability of alternative goods / services
- Seasonal Changes
- Advertisement or Marketing Strategy
- Change in income of consumer
Corn crops are very plentiful over the course
of the year and there is more corn than
people would normally buy.
To get rid of the excess supply, farmers need
to lower the price of corn and thus the price
is driven down for everyone.
A popular artist dies and, thus, he obviously will
be producing no more art.
Demand for his art increases substantially as
people want to purchase the few pieces that
exist.
There is a drought and very few strawberries are
available. More people want the strawberries
than there are berries available.
The price of strawberries increases dramatically.
A new restaurant opens up in town and gets
great reviews. There are only 12 tables in
the restaurant but everyone wants to get a
reservation.
The need for the reservations
goes up.