CHAPTER 3

THE SUPPLY CHAIN MANAGEMENT

PROCESS

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 WHAT IS SUPPLY CHAIN
MANAGEMENT PROCESS?

Supply chain management (SCM) is a sequence

of processes in product distribution. It is a way of
managing the flow of goods and services to and
from your business in the most efficient and cost-
effective way possible.
 HOW DOES SCM WORKS?
Supply Chain Management ensures smooth coordination of
goods, information, and finances from suppliers to
consumers, aiming to minimize inventory, enhance
production speed, and meet customer demands efficiently.
Strategic planning and technology integration play crucial
roles in achieving cost reduction and increased
profitability.
 THE COMPONENTS OF SCM
PLANNING
One of the biggest questions procurement teams need to
ask is whether the organization plans to manufacture
goods themselves or they will buy ready-made goods.
This involves forecasting demand, setting production and
inventory levels, and developing strategies to meet
customer requirements efficiently.
 SOURCING

This step is one of the most critical of the entire

supply chain as it is at this stage that the biggest
cost savings can be achieved.
It includes identifying and selecting suppliers,
negotiating contracts, and managing relationships
with suppliers to ensure a reliable supply of materials
or services.
 MAKING

manufacturing or making of products that

were demanded by the customer. In this
stage, the products are designed,
produced, tested, packaged, and
synchronized for delivery.
 ENABLING

The Enabling component involves the

creation of processes that support
information flow throughout the supply
chain as well as its ability to comply with
regulations.
 RETURN OF GOODS
The final supply chain component
addresses handling faulty product
returns, emphasizing the significance of
a well-defined protocol for enhanced
customer satisfaction and efficient
processes.
PRODUCTION AND TRANSPORTATION

This component focuses on maintaining

the right product volume, ensuring quality
standards in production, managing
warehouse storage, and orchestrating
transportation from depots to retail
stores.
 INVENTORY

This process involves managing and

optimizing the levels of raw materials,
work-in-progress, and finished goods
to meet customer demand while
minimizing holding costs.
 INFORMATION
Information forms the foundation for supply
chain performance, enabling transaction
execution and managerial decisions. It is
essential for understanding customer needs,
managing inventory, and determining production
and shipment schedules.
 PERFORMANCE MEASUREMENT

It involves monitoring and evaluating key

performance indicators (KPIs) to assess the
effectiveness and efficiency of the supply chain
processes and identify areas for improvement
 SUPPLIER DEVELOPMENT
The supplier development process is a key component
of an organization's procurement and supply chain
management operations. It can be used to improve
the quality and performance of an organization's
supplier base, as well as to identify and assess
potential new suppliers.
BENEFITS OF SUPPLIER
DEVELOPMENT
 COST REDUCTION: 25

The pressures of reducing costs

20

have made supplier development a

15

key ingredient for successful cost 10

reduction. 5

0
Item 1 Item 2 Item 3 Item 4 Item 5
QUALITY AND CYCLE TIME
IMPROVEMENT :

to help a supplier to improve the

quality of its products or services
and also decrease cycle time and
improve responsiveness to
customers.
 INCREASE BUSINESS
ALLIGNMENT :
-Working with suppliers on supplier
development can help increase
alignment, collaboration and trust.
Sharing business strategies and goals
for supplier development helps
suppliers become more aware of and
responsive to customer needs.
 THE PRODUCT
DEVELOPMENT WITHIN
HOSPITALITY

Product development can be identified as the

assessment of product and services to recognize the
chances of improvement, profit as well as the
customer satisfaction. This process it may provide the
improved quality for the product and the customer
satisfaction.
RETURN MANAGEMENT
 RETURN MANAGEMENT

• Management process by which activities

associated with returns, reverse logistics, gate
keeping, and avoidance are managed within
the firm and across key members of the
supply chain.
THREE PHASES OF RETURN
MANAGEMENT:
 SPEED

Speed
To save maximum time and keep customers
satisfied, consider automating decisions
related to approving returns and processing
returned materials.
 VISIBILITY

Visibility
Capture information about each return
before it even arrives at the receiving
facility.
 CONTROL

Control
Maintaining control over inventory flow is
challenging for busy operations,
particularly when handling returns.
WHY GOOD RETURN
MANAGEMENT IS
IMPORTANT?
 - It encourages customers to buy from you
An important part of your returns management
process should be your Returns Policy. If your
customers see a clear and simple Returns Policy
displayed on your website, it breaks down a
potential barrier to them making a purchase with
you.
 - A Returns Policy builds trust and credibility
and increases customer satisfaction. There’s a
lot to be said about peace of mind, and when
a customer knows they can easily return a
product to you, if it’s not quite right, their
chances of converting are much higher.
 - You’ll provide customers with a
better experience
Your returns management process
has a big part to play in a
customer’s overall experience with
your company.
CONSUMABLES IN
HOSPITALITY
In hospitality, consumables refer
to the products that are used up
or depleted during the course of
normal business operations.
SOME COMMON EXAMPLES
OF CONSUMABLES IN
HOSPITALITY:
 Food and beverages:
These are the most obvious consumables
in hospitality, as they are the products
that are sold to customers for
consumption. These can include items
such as ingredients, snacks, soft drinks,
and alcoholic beverages.
 Cleaning supplies:
Hospitality businesses require a lot of
cleaning to maintain a clean and
presentable environment for their guests.
Consumable cleaning supplies can include
things like paper towels, toilet paper,
disinfectant cleaners, and garbage bags.
 Guest supplies:
Many hospitality businesses provide
guests with amenities such as shampoo,
soap, and towels. These items are often
considered consumables because they
are used up and need to be replaced for
each new guest.
 Office supplies:
Hospitality businesses also require typical
office supplies such as pens, paper, and
printer ink. These items are often
considered consumables because they
are used up and need to be replaced
regularly.
 Overall, consumables are an important
aspect of hospitality operations, as they
are necessary for providing guests with a
high level of service and maintaining a
clean and functional business
environment.
IMPLEMENT SUPPLY CHAIN
MANAGEMENT IN
HOSPITALITY INDUSTRY
 Supply chain management in the
hospitality industry includes all the
activities involved in the procurement,
production, and delivery of goods and
services to customers. This includes
sourcing raw materials, manufacturing,
storage, transportation, and distribution.
 IMPLEMENTING CHAIN
MANAGEMENT IN THE
HOTEL INDUSTRY OFFERS
SEVERAL BENEFITS:
 1. Brand consistency:
- Chain management ensures that all
hotels within the chain maintain consistent
standards in terms of service quality,
amenities, and guest experience, which
helps build a strong brand identity.
 2. Economies of scale:
- Chains can leverage their size and
resources to negotiate better deals with
suppliers, access bulk purchasing
discounts, and implement cost-saving
measures, leading to improved
profitability.
 3. Centralized management and support:
- Chains typically have centralized
management systems and support structures,
including centralized reservations, marketing,
training, and operational support, which
streamline operations and reduce costs for
individual properties.
 4. Cross-selling and loyalty programs:
- Chain management allows hotels to
participate in cross-selling initiatives and
loyalty programs that encourage repeat
business and enhance guest loyalty across
the chain's properties.
 5. Access to technology and innovation:
- Chains invest in technology and innovation
to improve guest experiences, operational
efficiency, and revenue management,
providing individual properties with access to
cutting-edge solutions that they might not
afford independently.
 6. Marketing and distribution:
- Chains benefit from centralized marketing
efforts and distribution channels, including
global distribution systems (GDS), online
travel agencies (OTAs), and direct booking
platforms, which increase visibility and drive
bookings for all properties within the chain.
 7. Professional development and career
opportunities:
- Chain management often provides more
extensive training, development, and career
advancement opportunities for staff,
contributing to higher employee satisfaction
and retention rates.
 Overall, implementing chain
management in the hotel industry can
lead to improved operational efficiency,
brand consistency, marketing
effectiveness, and guest satisfaction,
ultimately driving profitability and
competitive advantage.
 THANKYOU FOR YOUR
ATTENTION!
GROUP 1 MEMBERS:

ANTIOQUIA CASTRO EZEKIEL DE JUAN CERLVALES

JEFREY A. JOSH A. REYNIER L. DAVE A.