Date:

Topic Subject

CHAP 1: INTRODUCTION
SUPPLY CHAIN MANAGEMENT
TO SCM

Essential Questions:

Main Ideas Notes

I. PART 1: DEFINE OF 1. A supply chain:

SCM
A network of connected and interdependent organizations mutually
and co-operatively working together to control, manage and improve
the flow of materials and information from suppliers to end users (J
Aitken)

2. SCM define:

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)

*Flow – Product/Components; Information (order, complaints,

Money (cash/ fundings)

3. Primary purpose of Supply Chain

 To sastify customer needs
 To maximise:

The total value generated = [What customer pays] – [Total effort

expended to fulfill]

4. The different Logistic vs SCM

Logistics
Managing flow of items,
information, cash and ideas
SCM
Managing a network consisting
of suppliers, manufacturers,
distributors and customers
5. Differences between services and goods

intangible process that cannot be

Service weighed or measured
requires some degree of
interaction with the custome
inherently heterogeneous and can
produce unpredictable outcome
perishable and time dependent,
and unlike goods, they can’t be
stored
- Four features of Services:
 Supporting facility (location, decoration, layout, architectural
appropriateness, supporting equipment)
 Facilitating goods (variety, consistency, quantity of the
physical goods that go with the service; for example, the food
items that accompany a meal service)
 Explicit services (training of service personnel, consistency of
service performance, availability and access to the service, and
comprehensiveness of the service)
 Implicit services (attitude of the servers, atmosphere, waiting
time, status, privacy and security, and convenience)
 6. Efficiency, effectiveness, and value

A ratio of the actual output of a process

Efficiency relative to some standard. Also, being
“efficient” means doing something at the
lowest possible cost
Effectiveness Doing the things that will create the most
value for the customer
Value The attractiveness of a product relative to its
price.
7. Current issues in supply chain management
 Coordinating the relationships between mutually supportive
but separate organizations
 Optimizing global supplier, production, and distribution
networks.
 Managing customer touch points.
 Raising senior management awareness of SCM as a significant
competitive weapon
8. The Major Challenges

 Variable demand of product

Uncertainty (shorter lifecycles)
 Variable manufacturing yield
 Unreliable sourcing of raw
materials
 Inconsistent transit lead times

Increased  Exploding number of Stock Keeping

complexity Units (SKUs)
 Higher and diverging customer
 demands
 New & merging channels (Omni-
Channel)

Global operations

Summary