LESSON 7 (Supply Chain Management) : Group 2

Members:
Galan, Andrea Day
Viray, Anne Loreene Gutierrez, Lalaine
Nario, Shyluck Dave Ganzon, Aivie Shein
Regala, Lyka Alonzo, Mygirl Joy
De dote, Kiana Francisco, Aaron
Guilas, Kathleen Rose Pangan, Paul John
Parungao, Deejay Bucu, Pauline
David, Zianna Christienne Chancoco, Clouie
Capili, Paul Andrew Lorenzo, Kirk Hammet
Dagdag, Maria Francine Bagtas, Symond Carl

Intro
- In the intricate structure of global business, good supply chain management is the key to
corporate success. Good Morning, we are group 2, and we will be discussing lesson 7.
This report will provide a comprehensive analysis of supply chain management, by
discussing its definition, understanding its importance and overall goal, identifying the six
components of SCM, and lastly, understanding the SCM in the hospitality industry.

● Objectives
At the end of our discussion, we will be able to to understand the following objectives:
1. Define Supply Chain Management;
2. Understand the importance of SCM;
3. Understand the overall goal of SCM;
4. Identify and explain the six components of SCM; and
5. Understand the supply chain management in the hospitality industry.

1. Define Supply Chain Management;

Certainly, let's break down the components of Supply Chain Management (SCM) in more
detail, as they pertain to the profit, management, analysis, logistics, time to market,
planning, distribution, procurement:
Profit:
• Profit is a fundamental consideration in SCM. The goal is to maximize profitability by
managing costs, optimizing processes, and ensuring products are delivered to
customers on time and at competitive prices. Cost efficiency and revenue generation are
key drivers of profit in SCM.

Management:
• SCM management involves overseeing the entire supply chain process. This includes
strategic decisions about sourcing, production, distribution, and customer service.
Effective management ensures that the supply chain operates efficiently and in
alignment with the organization's goals and objectives.

Analysis:
• Analysis in SCM involves collecting and analyzing data at various stages of the supply
chain. This data can include demand forecasts, inventory levels, transportation costs,
and customer preferences. Data analysis helps in making informed decisions, optimizing
processes, and identifying areas for improvement.

Logistics:
• Logistics is the process of planning, implementing, and controlling the efficient
movement of goods and services. It encompasses transportation, warehousing,
inventory management, and order fulfillment. Effective logistics management is crucial to
ensure products reach their destinations on time and at minimal cost.

Time to Market:
• Time-to-market refers to the speed at which a product or service is developed,
produced, and made available to customers. SCM plays a role in accelerating
time-to-market by streamlining production processes, reducing lead times, and ensuring
efficient product development and launch.

Planning:
• Planning in SCM includes demand planning, production planning, and inventory
planning. Demand planning involves forecasting customer demand, while production
planning ensures that resources are used optimally to meet that demand. Inventory
planning aims to balance supply and demand.

Distribution:
• Distribution involves the physical movement of products from manufacturing facilities or
distribution centers to their final destinations, which can be retailers, wholesalers, or end
consumers. Efficient distribution is critical for timely order fulfillment and customer
satisfaction.

Procurement:
• Procurement is the process of acquiring goods and services from suppliers. Effective
procurement involves supplier selection, negotiation, and contract management. It's
essential to secure quality inputs in favorable terms to support the supply chain.

Certainly, in simpler terms, Supply Chain Management is the process of overseeing how
things are made or sourced and then delivered to people who want to use them. It starts
when things are created and ends when they are used by consumers. It's like ensuring a
smooth journey for products and services from start to finish.

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Let's provide a detailed explanation of how supply chain management includes the
movement and storage of raw materials, work in progress, inventory, and fully furnished
goods:

Raw Materials:
• Supply chain management involves the handling of raw materials from their source to
the production facility. This includes sourcing, procurement, and transportation of raw
materials to the manufacturing.

Work in Progress:
• During the production process, raw materials are transformed into products through
various stages. Supply chain management includes the monitoring and coordination of
these intermediate stages, ensuring that production remains on schedule and that
quality standards are met.

Inventory:
• Effective inventory management is a critical component of supply chain management.
This involves maintaining optimal levels of raw materials, work in progress, and finished
goods to balance supply and demand. Inventory needs to be tracked and stored
efficiently.
Fully Furnished Goods:
• Once products are fully manufactured and ready for distribution, supply chain
management ensures that these finished goods are efficiently stored and transported to
their final destinations. This includes managing warehousing and distribution processes.

In other words, Supply Chain Management also involves handling the transportation and
storage of the materials used to make products, as well as the products themselves at
various stages, from the initial raw materials, to works in progress, inventory, and the
final fully finished goods. It's all about managing the entire journey of these materials and
products, from their early stages to their completion and storage, until they're ready to be
delivered to customers.

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The core aim of supply chain management is to oversee and establish connections
between the processes of creating, delivering, and shipping products and services. It's
about keeping a watchful eye on these activities and ensuring they work together
seamlessly. To start with:

Suppliers:
• Supply chain management involves establishing relationships with suppliers, ensuring
a steady supply of high-quality raw materials or components. This includes negotiating
contracts, managing inventory levels, and monitoring supplier performance to maintain a
reliable source of input.

Manufacturers:
• It also extends to manufacturers, overseeing the production process to meet demand
efficiently. This includes optimizing manufacturing processes, maintaining quality
standards, and managing production schedules.

Distributors:
• For distributors, the focus is on effectively getting products from manufacturers to
distribution points or retailers. This may involve managing transportation, warehousing,
and ensuring timely deliveries to meet demand.

Retailers:
 • Retailers play a role in managing the last mile, ensuring products are available to
shoppers when and where they need them. They need to maintain proper inventory
levels, align with consumer preferences, and create an attractive shopping experience.

Shoppers:
• Ultimately, the objective of supply chain management is to ensure that shoppers, or
end consumers, have access to the right products at the right time. Meeting customer
expectations is central, which includes offering a wide range of products, ensuring
product availability, and providing a positive shopping experience.

The primary objective of supply chain management is to oversee the production,

streamline the distribution, and facilitate the timely shipment of products and services.

- Next objective is understanding its importance.

2. Understand the importance of SCM;

Importance of Supply Chain Management
- Supply Chain Management (SCM) is essential to the performance and sustainability of
firms in a variety of sectors. Its significance influences many elements of a company's
operations, efficiency, and overall effectiveness. Here are some fundamental reasons
why Supply Chain Management is important:

● Avoiding expensive shortages or cycles of product oversupply, restrictions over shipping

procedures will enhance customer support.
- It is important to achieve balance between the supply and demand chain to avoid
expensive shortages and cycles of product oversupply. Achieving this balance is crucial
not only for our operational efficiency but also for enhancing customer support. We can
generate accurate forecasts by studying historical data, market trends, and client
behavior. This insight allows us to match our production and inventory levels to
anticipated demand. Anticipating demand changes, flexible production, and inventory
management can help to strike the right balance and improve customer service.

● Overall, supply chain management offers businesses several ways to increase their
profit margins, which is particularly relevant for large and multinational businesses.
- One of the primary goals of the businesses is to increase profit by negotiating favorable
contracts with suppliers, and by optimizing inventory levels, and minimizing operational
costs.
- Global supply chain optimization is critical for large and multinational businesses. We
can improve overall supply chain efficiency by strategically situating manufacturing
facilities, warehouses, and distribution sites, all of which have a direct influence on profit
margins.

● Supply Chain Management is important since it can help meet many company goals.
 - Lastly, effective supply chain management can be the key to achieve of business’ goals.
Achieving cost efficiency, ensuring customer satisfaction, proper allocation of
inventories, expanding into global markets, embracing sustainability, and maximizing
profit. Supply chain strategy is integral to meet many company goals.

Example:
1. increase product quality by regulating production processes, minimizing the
possibility of recalls,
2. litigation while helping to create a strong customer brand.
- It is important to build a resilient customer brand. By prioritizing legal compliance,
proper risk management, and continuous improvement. With these, we can
strengthen the core of the business.

Advanced Analytical Tools

- This proactive approach is vital for maintaining our operational efficiency and ensuring
customer satisfaction. By the use of advanced analytical tools, we can achieve the
following examples.

● Identifying potential problems before they occur

- In supply chain management, one of the advanced analytical tools is to identify the
potential problems before they occur. Analyzing historical data, we can forecast potential
disruptions in the business. We can plan for a solution in advance. Risk management
and scenario planning is important for the business.

- For instance, we may observe deviations from our plans as they occur, whether they are
caused by transportation delays, accurate demand forecasting, or manufacturing
concerns.

● Optimizing price dynamically

- Optimizing price dynamically can be a game-changer for our supply chain. To have
successful pricing, we have to understand the market dynamics. We obtain significant
insights by researching trends, consumer behavior, competitor pricing,and economic
conditions which allows us to set rates that are not only competitive but also responsive
to market developments.

● Improving the allocation of available to promise inventory

- When we say available-to-promise or ATP inventory, it refers to inventory levels that a
business can guarantee to have in stock to process future customer orders.

- Effectively managing our available inventory ensures we meet customer demand while
maximizing operational efficiency. To have and effectively manage inventory, it means
having a clear picture of stock levels across all locations, including warehouses and
distribution centers. Analyzing historical data, market trends, and customer behavior
enables us to allocate inventory more precisely, reducing the risk of stockouts or excess
 inventory. It is also important to establish rules that take into account factors such as
shipping distance, product shelf life, and regional demand differences.

Advantages of Supply Chain Management - Key Benefits

● Assists companies in adapting to the challenges of globalization, economic upheaval,
expanding consumer expectations, and related differences.
- Global supply chains enable companies to benefit from decreased costs related to
international markets. Businesses can procure resources from nations with lower labor
and production expenses, leading to more economical operations. Additionally, it gives
businesses the adaptability to swiftly modify their processes in response to client
demand. This enables companies to react swiftly to market developments, including the
introduction of new products or a change in customer preferences. Higher standards of
quality control can be ensured by global supply chains by utilizing data analytics and the
newest technologies. Increased client loyalty and satisfaction may come from this.

● Assists companies in minimizing waste, driving out costs, and achieving efficiencies
throughout the supply chain process.
- Efficient and successful operations are hindered by waste, which might include
materials, gas, extra inventory, and more. Increased pressure to eliminate waste in the
supply chain has been placed on customers and suppliers in an effort to control resource
scarcity, lower costs, increase return on investment, and lessen the environmental effect
of operations. Businesses that reduce waste also become more resilient and competitive
and raise their corporate social responsibility and other social responsibility profiles.
Companies whose waste management is out of control will find that their activities are
less viable. Furthermore, because it affects their supply chain and values, other
businesses could not collaborate with organizations that produce excessive waste.

● Assists in achieving shipping of the right products to the right place at the right time.
- After goods are manufactured and sales are completed, a business needs to get the
goods into the hands of its clients. A business that has efficient supply chain
management (SCM) will have strong delivery networks and logistical capacities to
guarantee the prompt, affordable, and safe delivery of its goods.

● Creates better delivery mechanisms for products and services in demand with minimum
delay.
- This entails having a fallback or a variety of distribution strategies in case one mode of
transportation becomes momentarily unsuitable. For instance, how can record snowfall
in distribution center areas affect a company's delivery process?

● Develops better customer relationship and service.

- Organizations should use market research and customer feedback analysis to determine
customer expectations in order to develop customer relationships. The next step is to
make sure that supply chain solutions take into account consumer feedback to make
sure that customers' wants and preferences are met. The next step is to tailor supply
 chain solutions to fulfill particular client needs and provide tailored experiences. A
seamless customer experience requires the integration of supply chain strategy with
customer service goals. It is recommended that organizations prioritize customer
satisfaction across the entire organization in order to build a customer-centric culture. In
order to achieve alignment and synergy, integrate supply chain plans with customer
service goals. To enable smooth communication between the customer service and
supply chain management divisions, establish cross-functional teams. Effective
communication and end-to-end visibility are essential for ensuring client satisfaction.
Organizations can accomplish this by utilizing technology, like supply chain management
software, to increase transparency and improve information flow. Additionally, they must
make sure that clients are informed in a proactive manner about order status, any
delays, and critical updates.

● Enhances inventory management, supporting the successful execution of just-in-time

stock models.
- The supply chain is a set of procedures intended to transport both the product and the
raw materials needed for manufacture to their intended location. Getting what it needs
from suppliers, processing it, and getting it to clients quickly is the aim of the supply
chain. Controlling the movement of items into, out of, and within warehouses and
distribution centers is the responsibility of inventory management, which is a subset of
supply chain management. Analyzing current stock levels at each warehouse and
projecting future demand for items are key components of the inventory management
process, which aims to minimize surplus or superfluous inventory. Other factors, such as
key performance indicators (KPIs), are also used to gauge how effective inventory
management is. The intricate process of managing the supply chain inventory can have
an impact on how well an organization operates as a whole. Good inventory
management is essential since both too little and too much inventory can have
detrimental effects on an organization's ability to manage its inventory. However, by
maintaining a consistent inventory flow, effective inventory management or inventory
optimization can boost profitability, improve supply chain visibility, and manage to
improve operations.

● Improvises productivity and business functions.

- There is no doubt that the efficiency of your supply chain has a direct impact on the
success of your company. The modernization of processes and more globalization have
led to an increase in the complexity of global supply networks. Because of this
complexity, a data-driven approach to supply management is urgently required. The top
offshore firms in Melbourne provide outstanding data-driven supply chain management
services that enable end-to-end visibility and facilitate the analysis of the movement of
goods, services, and information from procurement through manufacture and delivery to
the final customer. A multitude of elements contribute to efficient supply chain
management. Important motivators include data, strong vendor and supplier
connections, choosing the best logistics partner, and efficient cost control. Using
cutting-edge supply chain technologies has a big influence as well. The significance of a
 dedicated team in boosting supply chain productivity cannot be overstated, even when
looking past logistical infrastructure, analytics factors, and technology.

● Minimizes direct and indirect costs.

- Comprehending and projecting the costs of both direct and indirect manufacturing will
improve the accuracy of your expense forecasting and help you identify areas for
reduction. An organization can undergo a radical change if it uses the correct
manufacturing insights solution to identify reductions. Manufacturers can reap numerous
benefits by realizing this unrealized potential and utilizing production insights. Above all,
they save expenses. Additionally, they increase productivity, lessen labor and supply
chain issues, and bolster their marketability and competitiveness.

● Minimizes warehouse and transportation costs.

- Lastly, reducing transportation and warehousing expenses is critical to effective supply
chain management. Optimizing warehouse operations entails making the most use of
available space and putting advanced technologies in place, such as Warehouse
Management Software (WMS), to automate tasks and lower error rates. Simultaneously,
efficient demand forecasting guarantees the right amount of inventory, reducing the
requirement for superfluous storage. Furthermore, strategic cargo consolidation, route
optimization via Transportation Management Systems (TMS), and supplier cooperation
for better terms can also help reduce transportation costs. All things considered,
attaining cost efficiency in the supply chain requires a comprehensive strategy that
incorporates technology and strategic alliances.

- Next objective will help us to understand the overall goal of SCM

3. Understand the overall goal of SCM;

- Achieving good supply chain management is a challenge for supply chain managers.
Essentially, it is about matching supply and demand profitably, and generating profit
means that customers’ needs and wants are being catered to while minimizing cost.
However, having an effective supply chain is difficult. Supply chain management is about
being able to deliver the right products of the right quality at a lower cost.

The following are the goals of supply chain management.

● Improving Efficiency
Is the supply chain optimized and efficient?

Keeping the supply chain efficient and organized reduces inefficiencies and any quality
issues. The primary goal of supply chain management is to make sure that there is
always inventory on hand in customer-facing positions in order to satisfy demand.

Efficiency refers to cutting down on waste in terms of wasted resources, man hours,
delivery time, and others. Managing production, inventory, transportation, and logistics
 will benefit the company by reducing waste, saving costs, and increasing supply chain
efficiency.

For instance, a company may adopt intelligent supply chain software to get real-time
visibility updates and share inventory data with the supplier. Through this, the company
can replenish inventory quickly to keep up with customer demand.

● Improving Quality
Is quality embedded in the supply chain?

Another crucial goal is to ensure that the product and the customers’ experience are as
good and efficient as they can be. To prevent making costly corrections with unsatisfied
customers, it’s important to regularly check for quality at every stage throughout the
supply chain.

Several companies conduct pre-shipment inspections at different stages of

manufacturing to detect issues after production is finished and before they are shipped
out. Early inspections will identify and correct quality issues before they become a
problem.

Further, a company can identify the things that need to change in order to improve them
by communicating feedback from customers about the product’s experience.

● Improving Stability
Is the supply chain focused on identifying risks?

When supply chains are concentrated on cost performance, efficiency, and execution,
they function most effectively. But understanding business risks is the most critical
component of maintaining a stable supply chain.
For example, material in the supply chain may be at risk of becoming unavailable to
suppliers, and maybe having an alternative supplier or material is ideal.
By keeping an eye on possible risks associated with parts of the supply chain, a
business can take steps to alleviate risk.

- 4th objective is about identifying and explaining the six components of SCM

4. Identify and explain the six components of SCM; and

The different components of the supply chain creates the foundation of the entire
management for the businesses to thrive in. The entire process must be thoroughly
planned as each element plays a crucial role in the operation. Any disruption in this
system can also negatively affect the other components. By understanding and taking
advantage of these six components, a company will be able to devise strategies to better
achieve customer satisfaction and a good profit margin.
 The following are the six components of the supply chain management:

● Planning
This is the first and most essential process of supply chain management. Before the
supply chain begins, it is important to finalize the strategies that the company will use as
a blueprint for its operation. This involves planning and managing the resources required
to meet the demands of the customers for the company’s products or services.
Companies must try to predict its future needs using reliable data and plan its resources
accordingly. Other factors such as checking the viability of resources, equipment
capacity and limitations, and manpower are also relevant.

Designing the supply chain and determining which metrics to use in measuring the
efficiency and effectiveness in meeting customers’ expectations and organizational goals
will be an important decision that a company will make.

● Sourcing
The next phase focuses on working with suppliers and vendors to procure raw materials
and services needed to the organization. This does not just entail the sourcing of
materials, but also seeking out reliable suppliers that give the best value without
sacrificing quality and can timely deliver the required quantities. A company can only
create good quality products from good quality resources, so suppliers have an
important role in the system. This will involve identifying, evaluating, and establishing
agreements with suppliers.

After suppliers are under contract with the organization, the company will need to
monitor their work and manage its supplier relationship to ensure proper cooperation.
The main processes are ordering materials, receiving, managing inventory,
communication with suppliers, and scheduling suppliers’ payments.

● Making
This is considered as the heart of the supply chain management process, This is the
stage where the company transforms its supplied raw materials into finished goods. The
final product is the ultimate goal of this component. This can be divided into different
tasks. Examples of these activities are accepting raw materials, assembling the product,
testing for quality, packing for shipping, and scheduling the final delivery. It is the
responsibility of supply chain managers to coordinate the various activities that are part
of production.

This also includes quality control, the storage of data, condition of production facilities,
waste reduction, inventory management, and regulatory compliance. It ensures a high
standard of production that will not only result in better customer satisfaction, but also
reduce the work needed by maximizing efficiency.
● Delivering
When the production is finished and orders are received, the company must deliver its
products to its customers. This is another important component of supply chain
management which allows for direct/indirect integration with the customers. Also called
as logistics, it encompasses many activities such as processing customer’s orders,
scheduling delivery, dispatching deliveries, invoicing customers, and receiving payments.

The speed of your delivery depends on the fleet of the company’s vehicles. Many
companies outsource to haulage and delivery partners to reduce their work and when
dealing with products that require special handling and extra efforts, An organization can
improve on this component by optimizing routes, managing inventory, and timely goods
in perfect condition. Effective delivery will result in customer satisfaction, reduce delivery
times, and lower transportation cost.

● Returning
There are some problems that are likely to occur in the production that are inevitable.
Defective products could make it onto the market as a result of quality control errors. The
customer may experience delays due to shipping issues. In some cases, unfulfilled
orders occur as a result of damaged or lost products. A supply chain deals with these
issues by returning defective products or recycling them. Further, at this stage, the
company monitors the performance, costs, and inventory of the returned product.

● Enabling
In relation to the manufacturing and distribution processes, a supply chain requires
support processes to facilitate information flow and regulatory compliance. This includes
human resources, IT, product design, marketing, sales, and quality assurance. It involves
the use of technology and data to monitor and improve supply chain performance.

- Lastly, this objective is about understanding the SCM in the hospitality industry.

5. Understand the supply chain management in the hospitality industry.

- When it comes to hospitality, the logistics behind the scenes can be tough to navigate.
Suppliers need to be selected, distribution networks must be mapped out, inventory
monitored, and employees scheduled for optimal efficiency. All of these elements come
together with supply chain management, that is why it plays a vital role in the
modern-day hospitality industry to achieve operational effectiveness and efficiency.

● Competitive Strategy defines the set of customer needs a firm seeks to satisfy through
its products and services.
- In a competitive strategy, defining consumer demands is like creating a roadmap. By
concentrating on what clients really want, a company can develop a distinctive value
proposition. The business firm can also obtain a competitive advantage and differentiate
itself in the market by matching its goods and services to these demands.
 ● Product development strategy specifies the portfolio of new products that the company
will try to develop.
- A product development strategy specifies the portfolio of new products a company aims
to develop to align its efforts with overall business objectives. It helps prioritize and
allocate resources effectively, ensuring that the products being developed contribute to
the company's growth, market position, and competitive advantage.

● Marketing and sales strategy specifies how the market will be segmented and product
positioned, priced, and promoted.
- It includes identifying the target market through market segmentation, customizing the
good or service to satisfy particular client requirements, and coming up with competitive
pricing. The capacity of a business to draw clients and establish a strong brand is
ultimately improved by a well-designed marketing and sales plan

● Supply chain strategy determines the nature of material procurement, transportation of

materials, manufacture of product or creation of service, distribution of product.
- A well-defined strategy helps optimize costs, reduce lead times, enhance quality, and
improve overall supply chain performance. By aligning these elements with strategic
objectives, a company can gain a competitive edge and adapt to dynamic market
conditions.

● All functional strategies must support one another and the competitive strategy.

● The creation of a supply chain leads to a better understanding of the whole chain and
thus implementation of common standards becomes easier. It is implied and obvious that
in the coming era of hyper-competition the basis of competition in many industries will
revolve around supply chain development.
- Creating a supply chain entails outlining every step of the entire process, from raw
materials to the end product. The process of creating a supply chain entails outlining
every step of the procedure, from raw materials to the final product. This
all-encompassing perspective helps to improve comprehension of the chain's
interdependencies, barriers, and efficiencies, with this knowledge, stakeholders may
identify areas for improvement and establish uniform procedures throughout the supply
chain, making the implementation of common standards easier.

Outro:
In conclusion, the strategic utilization of supply chain management serves as the foundation of
one firm. Effective supply chain management is pivotal for optimizing operations, minimizing
costs, and enhancing overall business resilience. Striving for continuous improvement,
adaptability, and strategic alignment ensures that supply chains not only meet current demands
but also remain resilient in the face of evolving market dynamics
As the group presentation comes to an end, we, the reporters, would like to share the quotation
from Steven J. Bowen that 'supply chain is all about four steps: buy, make, move, and fulfill'.
Once again, we are group 2, thank you, and have a blessed day.