Chapter 9-OM-Supply Chain Management

PRODUCTION AND OPERATIONS
MANAGEMENT
Dr. Nguyễn Thị Vân Hà

Faculty of Economics and Transport
Department of Business Administration
04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹1›
Copyright by Dr. Nguyen Thi Van Ha

Subject Introduction
8
Chapter 1 - Introduction of Production and
Operations Management ❖ Reference
Chapter 2 – Forecasting • Production Management –

Dr. Nguyễn Thanh Liêm
Chapter 3 – Design of Goods and Services
• Operations Management,
Chapter 4 – Process Strategy and Capacity Planning
R.S. Rusell and B.W. Taylor
Chapter 5 – Location Strategies and Layout
Strategies III (Prentice Hall, 4th Edition,
Chapter 6 – Aggregate Planning 2003)
Chapter 7 – Inventory Management • Production and Operation

Management, Kaijewski và
Chapter 8 – JIT and Lean Management
Ritzmen (Pearson, Prentice
Chapter 8 – Lean & Supply Chain Management Hall, 2007)
Chapter 8: Supply Chain Management
8
Learning Objectives
▪ Understand a supply chain and define supply chain
management
▪ Describe the importance of supply chain management
▪ Describe the important elements of supply chain

management
▪ Describe future trends of supply chain management

Chapter 8: Supply Chain Management
8
Chapter Outline
▪ Case study of Li & Fung supply chain
▪ Concepts of supply chain and supply chain management
▪ Importance of supply chain management
▪ Important elements of supply chain management
▪ Future trends of supply chain management

Case study of Li & Fung supply chain
8

8
An Illustration: How Li & Fung Limited Might Make a Dress
Product Design QC & Shipping

[Hong Kong] [Hong Kong]
Yarn Spinning Weaving Stitching

[Korea] [Taiwan] [Indonesia]
Zippers+…
[Japan+…]
Globally Dispersed Manufacturing

8
LI&FUNG LÀ MỘT NHÀ MÁY KHÔNG KHÓI

8
https://www.lifung.com/wp-
content/uploads/2018/03/dig
ital-platform_x264.mp4
8

8

8
Table 1. The Gartner Supply
Chain Top 25 for 2021.
Each year, Gartner analysts

research the supply chains of
hundreds of companies —
and not just for their financial
performance. We look at what
peer organizations say and
how these companies score
on key activities such as
environmental, social and
corporate governance (ESG).
The top performers offer
valuable lessons in supply
chain excellence.

8.1 Concepts of supply chain and supply chain management
8.1.1 What is supply chain? 8
Increased Interests in Supply Chain
and Supply Chain Management
Increased Increased
Interdepen- Benefits of
dence SCM
Flows in a Supply Chain

8.1.1 What is supply chain? 8
- A supply chain consists of
Supplier Manufacturer Distributor Retailer Customer
Upstream
Downstream
- Supply chain management
- aims to Match Supply and Demand,
profitably for products and services
SUPPLY SIDE DEMAND SIDE

- achieves
The right
Product
+ + + + +
The right
Price
The right
Store
The right
Quantity
The right
Customer
The right
Time
= Higher
Profits
utdallas.edu/~metin
8.1.2 What is supply chain management? 8
“The management of a network of relationships within a firm and
between interdependent organizations and business units consisting of
material suppliers, purchasing, production facilities, logistics, marketing,
and related systems that facilitate the forward and reverse flow of
materials, services, finances and information from the original producer
to final customer with the benefits of adding value, maximizing
profitability through efficiencies, and achieving customer
satisfaction” Source: Stock and Boyer (2008)
Supply Chain Management is the integration of key business

processes from end user through original suppliers that provides
products, services, and information that add value for customers and
other stakeholders. Source: Global Supply Chain Forum

8.1.2 What is supply chain management? 8
Supply Chain Management:
Integrating and Managing Business Processes Across the Supply Chain

8.2 Importance of supply chain management
8
❖ Competition has changed from being between individual enterprises to increasingly
being between supply chains
❖ Achieve greater profitability by adding value and creating efficiencies, thereby
increasing customer satisfaction
❖Costs decrease as a result of reduced redundancies, lower inventory levels,
shorter lead time and lessened demand uncertainties.
❖Improved process performance result in enhanced product quality, customer
service, market responsiveness, and target market access
Large inventories
Customer with large
Large number of suppliers and manufacturers purchasing budgets
8
Supply Chain Management and related costs

8
Benefits of Cisco’s supply chain management
Turn its inventory five times faster and save

30% operating costs
8
AMR research
http://www.amrresearch.com publishes
reports on supply chains and
other issues.
The Top 25 supply chains report

comes out in Novembers.
The table on the right-hand side is

from The Second Annual Supply
Chain Top 25 prepared by Kevin
Riley and Released in November
2005.

8.3 Elements of supply chain management
8
Supplier management, supplier evaluation,
Purchasing supplier certification, strategic
partnerships
Demand management, MRP, ERP,
inventory visibility, JIT (AKA lean
Operations
production & Toyota Production System),
TQM (AKA Six Sigma)
Transportation management, customer
relationship management, distribution
Distribution
network, perfect order fulfillment, global
supply chains, service response logistics
Process integration, performance
Integration
measurement
8.3 Important Elements of supply chain management
8

8

8

8

8.3 Future Trends in Supply Chain
Management 8
Expanding the Supply Chain
▪Worldwide firms are expanding partnerships and building

facilities in foreign markets
▪The expansion involves:

▪ breadth- foreign manufacturing, office & retail sites,
foreign suppliers & customers
▪ depth- second and third tier suppliers & customers
Principles of Supply Chain Management: A Balanced Approach by Wisner, Leong, and Tan.
© 2005 Thomson Business and Professional Publishing

8.3 Future Trends in Supply Chain Management
8
Increasing Supply Chain Responsiveness
▪Firms will increasingly need to be more flexible and

responsive to customer needs
▪Supply chains will need to benchmark industry
performance and meet and improve on a continuous basis
▪Responsiveness improvement will come from more
effective and faster product & service delivery systems
8
The Greening/Sustainability of Supply
Chains
▪Supply chains will work harder to reduce
environmental degradation
▪Large majority (75%) of consumers
influenced by a firm’s environmental
friendliness reputation
▪Recycling and conservation are a
growing alternative in response to high
cost of natural resources
27
8
Reducing Supply Chain Costs
▪Cost reduction achieved through:
▪ Reduced purchasing costs
▪ Reducing waste
▪ Reducing excess inventory
▪ And reducing non-value added activities
▪Continuous Improvement through
▪ Benchmarking- improve over competitors’ performance
▪ Trial & error
▪ Increased knowledge of supply chain processes
28
8.4 Discussions and Questions
8
1. Define supply chain and supply chain management?
2. Why is supply chain management more important in global economy
today?
3. What are the important elements of supply chain management?
4. What are the future trend of supply chain management
5. What are the opportunities for integrated supply chain management?
6. Select a case study of supply chain management and analyze the
involvement of stakeholders, the application of information technologies,
and the issues of this supply chain.

8
Thank you for your attention!
Dr. Nguyen Thi Van Ha

Department of Business Administration
Faculty of Economics and Transport
University of Transport and Communications
Tel: 0836-06-2526 Email: nguyenha@utc.edu.vn

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PRODUCTION AND OPERATIONS

Dr. Nguyễn Thị Vân Hà

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹1›

Copyright by Dr. Nguyen Thi Van Ha

Chapter 2 – Forecasting • Production Management –

Chapter 7 – Inventory Management • Production and Operation

▪ Describe the importance of supply chain management

▪ Describe the important elements of supply chain

▪ Describe future trends of supply chain management

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹3›

▪ Case study of Li & Fung supply chain

▪ Concepts of supply chain and supply chain management

▪ Importance of supply chain management

▪ Important elements of supply chain management

▪ Future trends of supply chain management

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹4›

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹5›

Product Design QC & Shipping

Yarn Spinning Weaving Stitching

Globally Dispersed Manufacturing

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹7›

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹9›

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹10›

Each year, Gartner analysts

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹11›

Flows in a Supply Chain

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹12›

SUPPLY SIDE DEMAND SIDE

Supply Chain Management is the integration of key business

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹14›

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹15›

Supply Chain Management and related costs

Turn its inventory five times faster and save

The Top 25 supply chains report

The table on the right-hand side is

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹19›

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹21›

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹22›

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹23›

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹24›

▪Worldwide firms are expanding partnerships and building

▪The expansion involves:

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹25›

▪Firms will increasingly need to be more flexible and

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹29›

Thank you for your attention!

Dr. Nguyen Thi Van Ha

04.11.2023 | UTC | FET- DBA| Dr.Nguyen Thi Van Ha | ‹30›

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