Supply Chain Management

Module 1
Kim Stephens
Key Topics

• Define what Supply Chain Management (SCM) is

• Identify the six major change drivers.
• Understand the major supply chain challenges and
issues organizations face currently and in the
future.
Supply Chain Management (SCM)

Is the management of the flow of goods and

services and includes all processes that
transform raw materials into final products.

It involves the active streamlining of a

business's supply-side activities to maximize
customer value and gain a competitive
advantage in the marketplace.

(Hayes, 2020)
Supply Chain Management (SCM)

SCM represents an effort by suppliers to develop and

implement supply chains that are as efficient and
economical as possible.

Supply chains cover everything from production to

product development to the information systems
needed to direct these undertakings.

(Hayes, 2020)
 Six External Change Drivers

Source Figure 1.1: Center for Supply Chain Research, Penn State University.
 Inventory management
challenges
• Faster duplicability of products &
services
• Faster reduction in demand
Globalization • Requirement of new pricing policies
• Higher risk of obsolescence

Longer and more complex

supply chain challenges
• Growth and increased scope of
outsourcing
Technology
The Internet. “Connected” 24/7
Social networks. Impact on customer
demand and the speed of information
transfers
The world’s “knowledge pool”
connection. Opportunities for
collaboration in supply chains.
Organization Consolidation
and Power Shifts
More collaboration among
organizations in supply chains
Win-win, improved services such as:
Scheduled deliveries
Advance shipments notices (ASNs)
shrink-wrapped pallets

Sharing of point-of-sale data to mitigate

the “bullwhip effect”
Empowered Consumers
Increased pressures on supply chain due to
increased demands at the retail level in terms of:

• Competitive prices
• High quality in products and services
• Tailored or customized products
• Convenience and responsiveness – 24/7
availability with a minimum of wait time
• Flexibility – Omnichannel distribution
strategies
Government Policy and Regulation
The transportation industry. Expanded services
beyond transportation, with service providers’
role evolving to outsourcing partners
The financial sector. More flexible and
responsive to customer needs, making
businesses more cognizant of supply chain
management impact on efficiency and cash flow
The communications industry. A component of
the information revolution, leading to dramatic
improvements and opportunities in logistics and
supply chains
Sustainability

Society. Focus on people is a significant

concern in the area of sustainability.
Environment. The objective of being “green” is
a key element of making positive contributions
to improving our environment. There are
many ways in which supply chains may help to
achieve desired outcomes.
Economy. Continued economic and financial
sustainability is essential to making future
positive impacts on society and the
environment.
 Six External Change Drivers

Source Figure 1.1: Center for Supply Chain Research, Penn State University.
 How has supply
chain changed over
the years?

• K. (n.d.).
 Concept
Evolution of Supply Chain Management

Source Figure 1.2: Center for Supply Chain Research, Penn State University.
 Integrated Supply Chain

Source Figure 1.4: Center for Supply Chain Research, Penn State University.
 Integrated Supply Chain—Network

Source Figure 1.5 : Center for Supply Chain Research, Penn State University.
 Supply Chain Flows

Center for Supply Chain Research, Penn State University.

Major Supply Chain Issues
• Supply chain networks • Technology
• Complexity • Transportation management
• Inventory deployment • Supply chain security
• Information • Talent management
• Cost and value
• Organizational relationships
• Performance measurement
Major Supply Chain Issues
Supply Chain Network Complexity

The challenges The challenges

Network system (facilities and Increased requirements in simplifying
supporting transportation services) and continually evaluating areas of
must be capable and flexible to respond complexity in the various aspects of
and change with market dynamics supply chains
 Major Supply Chain Issues

Inventory Deployment

The challenges
Increased requirements for coordination or integration to reduce inventory
levels on horizontal (single-firm) and vertical (multiple-firms) levels in the
supply chain
Major Supply Chain Issues
Information
The challenges
The sharing of information along
the supply chain
The discipline to ensure the
integrity of the vast amount of
data collected and stored
Organizational
Relationships
The challenges
Internal collaboration (marketing,
sales, operations, finance, etc.)
External collaboration (vendors,
customers, transportation
companies, 3PLs)
Major Supply Chain Issues
Cost and Value

The challenges
The prevention of sub-optimization
Major Supply Chain Issues
Performance Measurement
The challenges
Connecting lower-level metrics in an
organization directly to the high-level
performance measures of the organization
and the supply chain

Technology

The challenges
Evaluate, strategically plan, and successfully
implement the technology to make the
improvements desired
Major Supply Chain Issues
Transportation
Management
The challenges
Transport “perfect
storm.” Transport
market changes; driver
shortages; fuel costs;
infrastructure
constraints; and
regulatory changes
 Major Supply Chain Issues
The challenges
Supply Chain Risk of disruptions, vulnerability, and exposure to
Security terroristic threats exacerbated by distance and
complexity in global supply chain
Major Supply Chain Issues

The challenges
Talent
Attract, develop, and maintain the appropriate
management pool of talent from entry level to executive level
Major Supply Chain Issues
• Supply chain networks • Technology
• Complexity • Transportation management
• Inventory deployment • Supply chain security
• Information • Talent management
• Cost and value
• Organizational relationships
• Performance measurement
In SUMMARY

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Summary
• The rate of change has been driven by a set of external
forces including globalization, technology,
organizational consolidation and shifts in power in
supply chains, empowered consumers, and
government policy and regulations.
• Supply chains are extended enterprises which require
managing four flows—products, information,
financials (cash), and demand on a collaborative basis.
• The global supply chains of the best companies must
be adaptive, resilient, and responsive to meet the
challenges of the global economy and develop
mitigating strategies for disruptive forces.
References
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management

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