Supply Chain

Palmes, Michelle I.

functions.their facilities.  Supply Chain Management is the strategic coordination of the supply chain for the purpose of integrating supply and demand management. Supply Chain is the sequence of organizations. . and activities that are involved in producing and delivering a product or service.

inventory. and reverse logistics (the return of goods from customers). services. .  Logistic management includes management of inbound and outbound transportation. order fulfillment and distribution. cash and information. Logistics is the part of a supply chain involved with the forward and reverse flow of goods. material handling. warehousing. third party logistics.


 Value chain a term that reflects the concept that value is added as goods and services progress through the chain. Supply or value chains are typically comprised of separate business organizations. rather than just a single organization. .

The Need for Supply Chain Management 1.Increasing transportation costs 7.Increasing globalization 6.The need to improve operation 2.Competitive pressure 5.The need to manage inventories .Increasing importance of e.Increasing levels of outsourcing 3.The complexity of supply chain 8.

It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain. BULLWHIP EFFECT  The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. .

an extra 2 units are to ensure they don’t run out of floor stock. the retailer may then order 10 units from the distributor. The supplier then orders 20 units from the manufacturer.An actual demand from a customer is 8 units. The manufacturer then receives the order and then orders from their supplier in bulk.  Now 40 units have been produced for a demand of only 8 units. ordering 40 units to ensure economy of scale in production to meet demand. allowing them to buy in bulk so they have enough stock to guarantee timely shipment of goods to the retailer. meaning the retailer will have to increase demand by dropping prices or finding more .

Factors that cause or contribute to the bullwhip effect in supply chains      Disorganization Lack of communication Free return policies Order batching Price variations .