Unit 6

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 1.
Lead-in

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Aims
- Compare different strategies for stock control and manufacturing
- Discuss potential supply chain risk

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supply chain (n) /səˈplaɪ ˌtʃeɪn/
= the system of people and things involved in the process of
moving raw materials from suppliers all the way to end customers.

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 What is Logistics?
❖ Logistics is widely known as the overall process of planning and managing the efficiency
of flow of products, services and related information from the point of origin to the point
of consumption.
❖ Logistics involves materials handling, packaging, warehousing, transportation, security,
and information flow.

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 Logistics vs. Supply Chain

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 Logistics vs. Supply Chain

⮚ Logistics Management is a part of Supply Chain Management.

⮚ Logistics Functions = The 7 R’s or Principles of Logistics
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At the highest level, logistics management shares the goal of SCM: “to meet
customer requirements”, lowering costs, and increasing profits.

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What is Inventory Management?/ Challenges?
https://www.youtube.com/watch?v=M_cxIPipAJk&t=222s

• Inventory Management is a system that ensures

production and consumer demands are met
throughout the process of (1) ordering, (2) storing,
(3) product sales, and (4) managing stock and
raw materials.
• It is an important asset of every business that
helps prevent profit loss and operation disruption
when managed properly.
• Challenges:
- Overstocking or understocking of goods.
- Inefficient inventory visibility
- Inability to determine the market demand
- Supply disruption (due to unforeseen
circumstances)

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 READING
Vocabulary exercise: page 51

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 READING
Vocabulary exercise: page 51

Answers: 1 D 2 C 3A 4B 5G 6E 7F 8H
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 Push and Pull strategies

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Push and Pull strategies

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Push and Pull strategies
https://www.youtube.com/watch?v=NFIWKiSGENs
An example at 2 restaurants.

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 ▪ Traditionally, with Push Production:
Production processes are scheduled with raw materials ordered or manufactured to create
stock based on a forecast of what the customer is expected to order.
▪ This typically produces products in large quantities or batches and ties up a huge
amount of your capital in stock and Work in Progress (WIP).
⮚ MRP I: Material Requirement
Planning (quy trình hoạch định
nhu cầu nguyên vật liệu cần thiết
cho quá trình sản xuất.)
⮚ MRP II: Manufacturing Resources
Planning (Lập kế hoạch tài
nguyên sản xuất)
⮚ OP: Operations Planning
(quá trình lập kế hoạch và quản lý
các hoạt động sản xuất )
MRP II combines MRP I and capacity
planning with a better control system.
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 ▪ Pull production works in reverse:
When a customer takes a product from the end of your production process,
a signal is then sent back down the line to trigger the production of the next part.
▪ This process is controlled through the use of a Kanban.

⮚ MRP I: Material Requirement

Planning (quy trình hoạch định
nhu cầu nguyên vật liệu cần thiết
cho quá trình sản xuất.)
⮚ MRP II: Manufacturing Resources
Planning (Lập kế hoạch tài
nguyên sản xuất)
⮚ OP: Operations Planning
(quá trình lập kế hoạch và quản lý
các hoạt động sản xuất )

MRP II combines MRP I and capacity

planning with a better control system.
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Just-in-time (JIT)
JIT focuses on creating the ideal balance of inventory
and workflow, to avoid excess and shortages.
The concept is attributed to the legendary Toyota
Production System (TPS).

What is JIT
https://www.youtube.com/watch?v
=zCTmN17ZDek
The origin of JIT.
https://www.youtube.com/watch?v
=u5vFlKu2p30

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 What is Kanban?
• Kanban is a visual method for controlling production as part of JIT& Lean Manufacturing.
• Its purpose is to ensure you only produce what the customer is asking for& nothing
more.
• It is a part of Pull system to control what is produced, in what quantity and when and used
through the value stream to pull product from customer demand back to raw materials.

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 What is Kanban?
• It is a part of Pull system to control what is produced, in what quantity and when and used
through the value stream to pull product from customer demand back to raw materials.

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Lean manufacturing/ Lean production
“Waste” is commonly defined as any action that does not add
value to the end customer; therefore, the customer does not
want to pay for it.

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 Lean manufacturing/
Lean production
= a Japanese approach to
management which aim to reduce
wastes, while ensuring quality, for
example by keeping stock low and by
working flexibly
✔ This approach can be applied to
all aspect of business: design,
production and distribution

⮚ JIT manufacturing focuses on efficiency.

⮚ Lean manufacturing emphasizes customer desires
• Both prioritize the elimination of waste, improved efficiencies, and a
focus on customer value.
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 READING
Reading 1: Push and Pull strategies (p.51)
These eight paragraphs make up a text about inventories, push and pull
strategies, and Just-in-time (JIT) production. Put them in the right order to
make a logical text.

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 READING
Reading 1: Push and Pull strategies (p.51)
These eight paragraphs make up a text about inventories, push and pull
strategies, and Just-in-time (JIT) production. Put them in the right order to
make a logical text.
Answers:
1. Manufacturing companies can produce…
2. With a pull strategy…
3. In other words, this is a…
4. This replenishment strategy was…
5. Historically, Kanban was…
6. Apart from JIT…
7. With a push strategy…
8. Supplies are scheduled…

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 READING
Reading 1: Push and Pull strategies (p.51)
- Comprehension: Match up the following half sentences

1. Pull strategies are based on A. Current demand

2. Pull systems only buy or produce B. Estimated future demand
3. Kanban systems signal C. Safety stocks and lead times
4. Push strategies are based on D. That items need to be replaced
5. Push strategies often flow for E. Things when they are needed

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 READING
Reading 1: Push and Pull strategies (p.51)
- Comprehension: Match up the following half sentences

1. Pull strategies are based on A. Current demand

2. Pull systems only buy or produce B. Estimated future demand
3. Kanban systems signal C. Safety stocks and lead times
4. Push strategies are based on D. That items need to be replaced
5. Push strategies often flow for E. Things when they are needed

Answers: 1 A 2E 3D 4B 5C
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 READING
Reading 2: Supply-chaining (p.52)
Wal-marts are large, discount department store in
the US. At the time of writing, Wal-marts had the
largest revenue of any company in the world, and
was the world’s largest private employer

- Read the extract. What is Friedman’s overall

impression of the operation?

Answer:
Friedman is clearly very impressed with
Wal-mart’s distribution Centre.

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 READING
Reading 2: Supply-chaining (p.52)

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 READING
Reading 2: Supply-chaining (p.52)
- Comprehension:

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 READING
Reading 2: Supply-chaining (p.52)
Fill in the gaps:
a. bar code b. truck c. merchandise d. conveyor belt e. scans
f. signal g. supplier h. delivered i. stores j. loaded
Note: other words are possible answers
b. lorry c. goods h. sent i. shops
Put the sentences in the correct order:
1. A Wal- Mart truck…
2. The goods are unloaded…
3. The boxes are placed…
4. The small conveyor belt…
5. A machine reads…
6. Electric arms guide…
7. This belt leads to…
8. The products are delivered…
9. A customer buys…
10. The cashier scans…
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 READING
Reading 2: Supply-chaining (p.52)
2. What are three main metaphors Friedman uses in this passage? Why does he
use them?

2.1.Freidman describes the

automated system in the distribution
center as a “show”.

2.2 He describes the conveyor belt as

streams and rivers, because that
what they look like from above. (from
the “viewing perch” in the
distribution center).

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 READING
Reading 2: Supply-chaining (p.52)
2. What are three main metaphors Friedman uses in this passage? Why does he
use them?
2.3 He describes the whole
complex operation as a never-
ending symphony in multiple
movements, because
symphonies consist of several
movement and involve complex
arrangements of a lot of
“component” or instruments
and melodies, and this one has
no finale.

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 READING
Reading 3: Manufacturing supply chain work flow (p.52)
Look at these flow chart and complete the chart with right order

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 READING
Reading 3: Manufacturing supply chain work flow (p.52)
Look at these flow chart and complete the chart with right order
1. The sales department identifies a need for a product, and tell the
marketing department about it.
2. The marketing department researches the project, and forwards a detailed
business plan to the Business Unit Manager.
3. The senior business managers make a decision on the project.
4. The plan is approved and passed to the analysts to prepare and implement
the manufacturing process.
5. The analysts pass details of raw materials and components to purchasing.
6. The purchasing, logistics and transport departments plan the purchase of
materials and then delivery to the manufacturing plant.
7. Suppliers receive orders and dispatch raw materials and component to the
manufacturing site on agreed dates.
8. The product is manufactured.
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 READING
Reading 3: Manufacturing supply chain work flow (p.52)
Look at these flow chart and complete the chart with right order

9. Finished goods are put into inventory in a warehouse awaiting orders, and
the company computer system is updated.
10. Customers place orders through customer service.
11. Customer services take orders and input them to the computer system.
12. The order is sent to the ware house.
13. The transport company collects the consignment and delivers it to the
customer.
14. As stock has now been used, the computer system generates a request for
a new stock.
15. The re-order process generates a request to the purchasing department to
place new orders with the suppliers.

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Manufacturing supply chain work flow

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 WRITING
Write a summary of 100-150 words of the Wal-mart supply chain in Reading 2

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 WRITING
1. Write a summary of 100-150
words of the Wal-mart supply
chain in Reading 2
2. Write a short report (100-150
words) summarizing the
potential supply chain risks
faced by one if the bussinesses
in the Case Study, and
explaining how they could be
minimized

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