What is Supply Chain Management?

Doug Fraser
Learning Objectives
 Establish what makes up a Supply Chain
 Define Supply Chain Management (SCM)
 Identify the drivers for SCM
 Provide examples of firms who have leveraged
SCM for competitive advantage
 Consider SCM challenges
What is a Supply Chain?
What is a Supply Chain?
 What is a Supply Chain?
All businesses operate in supply chains.

Supply chain definition:

“A supply chain consists of all stages involved, directly or indirectly, in
fulfilling a customer request. The supply chain not only includes the
manufacturer and suppliers, but also transporters, warehouses,
retailers and customers themselves” – Chopra et al
What is a Supply Chain?
Companies are linked to each other through supply chains

Retailer
Supplier
Distributor

Retailer
Supplier Manufacturer
Customer

Distributor Retailer
Supplier

Retailer

Freight forwarders, inspection agents, financiers etc

What is a Supply Chain?

• Number of supplier
and customer tiers
• Individual supply
chains within larger
networks
• Also internal supply
chains within single
entities
Supply Chain Management
 Strategic coordination of functions within a
business and entities within a supply chain to
improve performance of individual firms and
supply chain as a whole
 Wider than logistics, warehouse management,
inventory management or procurement
 Recognised in business literature since early 1980s
and grown as a profession since but long history
Components of Supply Chain

Inventory Management Supplier Management Procurement Management

Warehouse Management Logistics Management End Consumer

The Drivers for SCM
 Companies have specialised on core competencies
 Competition has increased and internationalised.
Increasingly between supply chains
 Need for greater agility/flexibility to respond to
customer needs
 Growth of lean philosophy
 Leverage “big data” and software
 Environmental and ethical considerations
 Risk management
Examples of Supply Chain
Examples of Supply Chain

Supply Chain of Apple Juice

Examples of Supply Chain

Supply Chain of Vegetables and Fruits

Examples of Supply Chain

Supply Chain of Bread

Examples of Supply Chain

Supply Chain of Milk and Milk Products

Examples of Supply Chain
Supply Chain of Tinned Fish
Examples of Supply Chain
Supply Chain of E-commerce
Global Supply Chain
Global Logistics
Competitive Advantage
Examples:

 Olam: competitive advantage is it’s SCM

 Walmart: early adopter of SCM and leader in SCM
technology
 Amazon: changed supply chains
 Inditex (Zara): led the “fast fashion” revolution
 DHL and UPS: greening the supply chain
The Challenges
 Need to align SCM strategy with business strategy
 Developing culture of information sharing and
openness cross-functionally and in supply chain
 Understanding role of power in the supply chain
 Obtaining and effectively analysing supply chain
data
 Attracting and retaining SCM talent
Supply Chain Issues
Current Supply Chain Issues

 During the start of the year 2020 the impact of Coronavirus on the Supply Chain and
Logistics turned out to be a wake up call for both suppliers and buyers alike to develop a
pandemic proof processes. The lock down imposed by Governments in all the Countries
to contain Coronavirus had a cascading effect across Industries that will last for several
years.
 The trade war between US and China, UK’s exit from Brexit, the possibility of war
between US & Iran, India & China, Protests in Hongkong against China, tensions among
other Countries has severely impacted the flow of global trade.
 Locusts ravaged millions of hectares of crops in Somalia, Ethiopia, Kenya, Uganda, Iran,
Pakistan, India and several other Countries thereby threatening the global food supply
chain. Unusual weather conditions further impacted the Agri supply chain.
 Natural disasters such as Cyclone, Earthquake, Floods etc had only worsened the existing
turmoil in the global supply chain.
 The loss of jobs, cost cutting measures by companies, poor demand from consumers has
severely hampered the supply chain across all the industries. However, the experts
predict the situation to improve by the year 2024 - 2025.
How will Supply Chain change in 2025
How will Supply Chain change in 2025
Factors causing Paradigm Shift by 2030

1. Supply Chain Solutions Will Continue to Move to the Cloud

2. Growth in Circular Supply Chains
3. Agile Supply Chains
4. Internet of Things (IoT)
5. Big Data
6. Artificial Intelligence and Machine Learning
7. Paperless Warehouses Will Leverage Automation
8. Green Logistics
9. Prescriptive Analytics and Predictive Supply Chain
10. Robotics and Automation in Logistics