Dr Andrea Gyarmathy

andrea.gyarmathy@gcu.ac.uk
Department of Business Management
Glasgow School for Business and Society

Operations Management

Supply Chain Management Part 1

 Lecture Outline

• Define Supply Chains

• Matching the operations resources in the supply chain

• Types of supply network arrangement

2
This chapter examines supply chain
management

3
 Supply Chain Management (SCM)

• Managing the flow of information and product through supply

chain in order to attain the level of synchronization that will
make it more responsive to customer needs while lowering
costs

• Keys to effective SCM

– information
– communication
– cooperation
– trust

10-4 4
 Supply Chains Activities
Second- First-tier First-tier Second-tier End
tier supplier customer customer customer
supplier

Supply side Demand

side
Purchasing and Physical distribution
Information supply management management
flow

Physical flow

Materials management

Logistics

Supply chain management

5
A simple supply network for a small catering
company

6
 SUPPLY CHAINS

Upstream Downstream

Second Tier First Tier

Supplier Supplier Distributor Retailer

Alcoa Ball Corp Anheuser-Busch M&M Meijer Final

customers

Transportation companies

INFORMATION
7
Case: Does Apple really have the best supply chain
in the world?

• Credited: ‘best supply chain in the

world’
• Frequent product introduction
• Success: connection between the
Apple product and its supply chain
• Integrated detailed advanced planning
• Exclusive rights for it suppliers
• The nature of the relationships with its
suppliers
• Financial muscle guarantee sufficient
supply capacity
• SCM is giving maximum visibility to all
supplier

8
Case: Does Apple really have the best supply chain
in the world?

• Refine its relationship with suppliers

• Partly outsourcers arrange its own
supply but Apple also take control
• Hired hundreds of engineers and
SC managers
• Risk in extensive outsourcing
• Criticism of work practice
• Extensive effort to improve
suppliers’ workplace issues in Asia
• Model for other companies

9
Global sourcing/offshoring
Reshoring/near sourcing
Global sourcing/offshoring
Numerous organization in the last 40 years shift their production or sources to
low-cost-country suppliers or producers.
Reshoring/Near
sourcing
Supply disruptions
motivated production
companies to start
shifting back
production closer to
their end-customer.
Journal paper: Gyarmathy A,
Peszynski K, Young L, 2020
Theoretical Framework for a
Local, Agile Supply Chain to
Create Innovative Product
Closer to End-user: Onshore-
Offshore Debate, OPERATIONS
AND SUPPLY CHAIN
MANAGEMENT Vol. 13, No. 2,
2020, pp. 108 - 122
10
The real world complexities

11
 SCM – Key activities

To develop an effective and efficient supply chain, companies must:

1. INTEGRATE activities across the chain
2. Look for ways to COORDINATE them
3. Work out how to SYNCHRONISE them

12
Why use a Supply Chain
Management approach?

13
 Importance of Supply Chain Management
In 2010, the US companies spent $1 trillion (10% of GNP) on supply-related
activities (movement, storage, and control of products across supply chains).
Source: State of Logistics Report

Frequent Supply shortages Low order fill

Inefficient rates
logistics
High
Tier 1 Manufacturer Distributor Retailer Customer stockouts
Supplier

Glitch-Wrong Material, Ineffective

Machine is Down – effect High inventories through High landed costs to
the chain promotions the shelf
snowballs

Eliminating inefficiencies in supply chains can save millions of $.

14
 Adaptability

• The most difficult risk management method to implement

effectively.
• Requires all supply chain elements to share the same culture,
work towards the same objectives and benefit from financial
gains.
• Need a community of supply chain partners that morph and
reorganize to react efficiently and effectively to a sudden
crisis.

15
Thanks for the attention!

Any questions?

16 16
 References
• Rogers, P. A. (2005), “Optimising supplier management and why co-dependency equals
mutual success”, Journal of Facilities Management, Vol. 4 No. 1, pp. 40-50.
• Russell R.S. & Taylor B.W. (2016) Operations Management & Supply Chain
Management, 9th Edition, Wiley
• Simchi-Levi D., Kaminsky P., Simchi-Levi E., Bishop W. (2007), Designing and Managing
the Supply Chain
• Johnston, Clark & Shulver (2012) - Ch 3 “Managing Supply networks and supplier
relationships’
• Hill & Hill (2011), Essential Operations Management, Palgrave MacMillan.
• Ogden, S. M. and McCorriston, E., (2007) “How do supplier relationships contribute to
success in conference and events management?”, International Journal of
Contemporary Hospitality Management, vol 19, no 4 pp 319-327.
• Srivastava,S.K. (2007), ‘Green Supply Chain Management: A state of the art literature
review’, International Journal of Management Reviews, Vol 9 Issue 1, pp53-80.

17