Chapter 1 - SCM

CHAPTER 1 - UNDERSTANDING THE SUPPLY CHAIN
Dung H. Nguyen
Faculty of International Economic Relations
University of Economics and Law
‹#› Het begint met een idee

CONTENTS
 The supply chain

 The objective of a supply chain
 The importance of supply chain decisions
 Decision phases of a supply chain
 Process view of a supply chain
 Logistics vs supply chain management
2
Vrije Universiteit Amsterdam
THE SUPPLY CHAIN
Supply chain consists of all links/stages

involved directly or indirectly in
fulfilling customer’s request /order
3
DETERGENT SUPPLY CHAIN
Paper Packaging
Timber Company
Manufacturer Company
Retailers
FMCG
Wholesalers (Wal-Mart, Customers
(P&G, Unilever)
Carrefour)
Chemical Plastic
Manufacturer Producer
Source: Chopra and Meindl (2016)
4
APPAREL SUPPLY CHAIN
buyer supplier --> vertical relationship

same state, kiu competitor --> horizontal reationship
Source: Gereffi and Memedovic (2003) 5

SUPPLY CHAIN MANAGEMENT
“The planning and management of all activities

involved in sourcing and procurement, conversion and
all logistics management activities. Importantly, it also
includes coordination and collaboration with channel
partners, which can be suppliers, intermediaries, third-
party service providers and customers.” (CSCMP)
6
SUPPLY CHAIN MANAGEMENT = MANAGING FLOWS
 Flows of goods
 Flows of funds
 Flows of information
7
SUPPLY CHAIN VS VALUE CHAIN
“Value chain is a set of activities that focuses on creating or adding

value to the product.”
Source: mindtools (2022) 8

SUPPLY CHAIN VS VALUE CHAIN
Supply Chain Value Chain

Transfering material from one Providing value for price of product or
place to another service
Beginning with product request Beginning with the customer’s request
and ending when it reaches the and ending with the product
customer
Main objecitve is to gain complete Main objective is not to gain complete
customer satisfaction customer satisfaction, but to gain
competitive advantage
Source: Kumar et al. (2021)
Supply chain of IP: chun b các thành phn (mua thành phn t các nc khác)--> design product satified customers --
> h sn xut va làm hài lòng khách hàng v mc chc nng và hình dáng ng thi cng phi minimized the cost
value chain: apple need to think about how competit with samsung --> choose very good supplier, enhance ios system, how to connect betwen ios
system (va iu chnh itself va ngh cách cnh tranh vi i th cnh tranh)
Supply chain: adjust itself and minimized cost 9

Value chain: competitive advantages
THE OBJECTIVES OF A SUPPLY CHAIN
 Integrating supply chain players involved

 Minimizing system-wide costs, while meeting customer requirements
 Maximizing supply chain value
Supply Chain Surplus = Customer Value - Supply Chain Cost

Customer Surplus = Customer Value – Selling Price
Supply Chain Profitability = Selling Price – Supply Chain Cost
Supply Chain Surplus = Customer Surplus + Supply Chain Profitability
10
WHY IS SUPPLY CHAIN COMPLEX?
 All parties involved in fulfilling a customer request: trade-offs &

conflicting objectives
 Dynamic flows: variations
 Geographically dispersed complex network: risks
 VUCA world
 Supply chain decisions are important!
11
DECISIONS PHASES OF A SUPPLY CHAIN
 Supply chain strategy or design the top --> company make long term decission
o How to structure the supply chain over the next several years
 Supply chain planning the second (quyt nh cp chin thut)
o Decisions over the next quarter or year

 Supply chain operation cp vn hành --> lowest level
o Daily or weekly operational decisions
12
SUPPLY CHAIN STRATEGY OR DESIGN
 Strategic supply chain decisions

o Locations and capacities of facilities
o Outsource or perform in house
o Products to be made or stored at various locations
o Modes of transportation
o Information systems
 Supply chain design must support strategic objectives
 Supply chain design decisions are long-term and expensive to
reverse
13
SUPPLY CHAIN PLANNING
 Fixed by the supply configuration from previous phase that

establishes constraints for planning
 Supply chain planning decisions
o A forecast of demand in the coming year
o Which markets will be supplied from which locations
o Subcontracting
o Inventory policies
o Timing and size of market promotions
o Demand uncertainty, exchange rates, competition
14
SUPPLY CHAIN OPERATION
 Decisions regarding individual customer orders

 Supply chain configuration is fixed and operating policies are
determined
 Allocate orders to inventory or production, set order due dates,
generate pick lists at a warehouse, allocate an order to a particular
shipment, set delivery schedules, place replenishment orders
 Uncertainty more or less?
operational ---> less certainly
15
PROCESS VIEW OF A SUPPLY CHAIN
 Cycle view: supply chain processes divided into a series of cycles

 Push/Pull view: supply chain processes divided into two categories
o Push: processes executed in anticipation of customer orders
o Pull: processes executed by a customer order
16
CYCLE VIEW OF SUPPLY CHAINS
Customer
Customer Order Cycle

Retailer
Replenishment Cycle
Distributor
Manufacturing Cycle
Manufacturer
Procurement Cycle
Supplier
17
SCOR MODEL
in scor has 3 level (scope, configuration, process element activties) , 6 management

SCOR: Supply chain operations reference processes (plan, source, make, deliver, return, enable)
mô hình tham chiu vn hành chui cung ng
Source: ascm (2022)
18
PUSH/PULL VIEW OF SUPPLY CHAINS
 Useful in considering strategic decisions relating to supply chain

design push view: speculative processes
pull view: reactive processes
 Push/pull boundary separates push processes from pull processes

in reality push pull boundaries (mix pull and push)
19
Source: Chopra and Meindl (2016)
LOGISTICS VS SUPPLY CHAIN MANAGEMENT
 Logistics is responsible for the movement of raw materials, work-in-

process, finished inventories from suppliers through an
organization to customers.
 “Logistics management is that part of supply chain management
that plans, implements, and controls the efficient, effective forward
and reverse flow and storage of goods, services, and related
information between the point of origin and the point of
consumption in order to meet customers’ requirements.” (CSCMP)
 Logistics is a subset of supply chain

20
Logistics Supply chain management

Logistics basically consists of activities within SCM refers to network among organizations
an organization (intra-organization). coordinating to deliver products to markets
(inter-organization)
Logistics focuses on transport, inventory SCM consists of logistics activities, marketing,
management, warehousing, etc. new product introduction, finance, customer
service
21
Source: Rushton et al. (2014)

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CHAPTER 1 - UNDERSTANDING THE SUPPLY CHAIN
THANK YOU!
‹#› Het begint met een idee

Chapter 1 - SCM

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Chapter 1 - SCM

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CHAPTER 1 - UNDERSTANDING THE SUPPLY CHAIN

‹#› Het begint met een idee

 The supply chain

Supply chain consists of all links/stages

Source: Chopra and Meindl (2016)

buyer supplier --> vertical relationship

Source: Gereffi and Memedovic (2003) 5

“The planning and management of all activities

“Value chain is a set of activities that focuses on creating or adding

Source: mindtools (2022) 8

Supply Chain Value Chain

Source: Kumar et al. (2021)

Supply chain: adjust itself and minimized cost 9

 Integrating supply chain players involved

Supply Chain Surplus = Customer Value - Supply Chain Cost

 All parties involved in fulfilling a customer request: trade-offs &

 Supply chain decisions are important!

o Decisions over the next quarter or year

o Daily or weekly operational decisions

 Strategic supply chain decisions

 Fixed by the supply configuration from previous phase that

 Decisions regarding individual customer orders

operational ---> less certainly

 Cycle view: supply chain processes divided into a series of cycles

Customer Order Cycle

in scor has 3 level (scope, configuration, process element activties) , 6 management

Source: ascm (2022)

 Useful in considering strategic decisions relating to supply chain

 Push/pull boundary separates push processes from pull processes

 Logistics is responsible for the movement of raw materials, work-in-

 Logistics is a subset of supply chain

Logistics Supply chain management

Source: Rushton et al. (2014)

‹#› Het begint met een idee

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