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Supply Management

CUSCM208
Introduction
Overview
 Learning Objectives
 Introduction
 Definitions
 Types of supply chains
 Essential features of Supply chain
 Objectives of Supply chain Management
 Components of Supply chain management
 Factors influencing supply chain management
 Conclusions
 References

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Learning Outcomes
 To define Supply Chain Management
 To explain the evolution of supply chain
management
 Explain the essential features of Supply
chain management
 Evaluate the factors influencing the
existence of supply chain management

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Introduction
 The concept of supply chain
management(SCM) appeared as a hot
topic during the pervious years, especially
during the decade of 90’s , which was
characterized by the shift of power
from the manufacturer towards the
customer, using friendly technology, and
shifting the process of making profit from
outside the organization to the inside
environment.

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Introduction
 After the Second world war ,production
exceeded demand .
 The war emphasized the importance of reaching
the right product ,at the right time and at the
right amount and quality.
 This supply chain was referred to as “The
Logistics management”.
 History shows that logistic capabilities have
helped countries win wars, The case of the USA
and allies winning the gulf war was due to the
effective logistics, on the
other hand the defeat of Napoleon in Russia
Was due to poor logistics.
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Discussion : What is a Supply Chain
Management ?

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Definitions
 “A supply chain is a network of supplier,
manufacturing, assembly, distribution and logistics
facilities that perform the functions of
procurement of materials, transformation of these
material into intermediate and finished products,
and the distribution of these products to
customers.
 According to Professor Douglas M Lambert.“
Supply Chain Management as the integration of
business process from the end user through
original supplier who provide products, services
and information that adds value for the
customers. ”

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Continued....
 According to Ganeshan & Harrison. “A
supply chain is a network of facilities and
distribution options that perform the
function of procurement of material
transformation of these materials into
intermediate and finished products, and
the distribution of these finished products
to customers. ”

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Continued

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Three key areas in Supply chain management

Product
Flow

Information Finance
Flow Flow
Right Product  At Right Place

Right Quantity At Right Time

Right Quality At Right Value


Types of Supply chains
 Raw material supply chains.
 Internal supply chains.
 External supply chains.
 Self-monitored supply chains.
 Production oriented supply chain.
 Market – oriented supply chain.

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Raw Material Supply Chains
 Very basic type, found in small scale
industries, loosely organized , not enough
cooperation between units of the
organization.

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Internal Supply chain
 This type is the most common type , here
the organization has implemented ERP
(Enterprise resource planning),they are
well-organized from the inside, but not
connected to the suppliers or distributors

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Self monitored supply chain
 This type of supply chain is company
centric not customer centric, it brings all
partners together, it can achieve a
considerable speed to market, but it is
not because of total optimization.
 Aims at achieving company objectives

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Production oriented Supply chain
This type of supply chains focuses its
energy on production by optimizing the
capacity and labor,
Low value items are made and sold
through various channels, marketing and
distribution are not issues.
Aimed at optimizing low
cost of production

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Market oriented supply chain
This type of supply chain is triggered when
a customer places an order.
It is highly flexible because it focuses more
on the customer
Example: computer hardware sector or
clothing sector

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Essential features of supply chain
management
a. Integrated behaviour- SCM incorporates and
integrates stakeholders that is suppliers to
customers.
b. Mutually sharing information- For effective SCM
mutually sharing information among channel
members is required, especially for planning and
monitoring processes.
c. Co-operation- Co-operation among channel
members is required for effective SCM.
Co-operation refers to similar or complimentary
co-ordinated activities performed by the
organisation in a business relationship to produce
superior mutual outcomes or singular outcomes
that are mutually expected over time.

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…..Contd
d. Focus on serving customers – Supply chain
succeeds if all the members of supply chain have the
same goal and the same focus of serving customers.
- Establishing the same goal and same focus among
Supply chain members is a form of policy integration.
e. Integration of Processes – The implementation of
SCM needs the integration of processes from
sourcing to manufacturing and to distribution across
the supply chain.
- The integration can be accomplished through cross
functional terms, in plant supplier personnel and
third party service provider.

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…..Contd
f. Partners to Build and Maintain Long
Term Relationship – Successful
relationships aim to integrate channel
policy to avoid redundancy and overlaps
while seeking a level of co- operation
that allow participants to be more
effective at lower cost levels.
- Policy integration is possible if there
are compatible cultures and management
techniques among the chain members.

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Objectives of Supply Chain
Management
 Service Orientation.
 System Orientation.
 Competitiveness and Efficiency.
 Minimizing the Time.
 Minimizing Work in Progress.
 Improving Pipeline Visibility.
 Improving visibility Demand.
 Improving Quality.
 Reducing Transportation Cost.
 Reducing Warehousing Cost.

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Continued.....
 Service Orientation – (that is services to
customers) the very basis of supply chains has
been to provide superior customer service.
-Service is all about the value that the customer
gets, which in turn depends upon his own
perception about what constitutes value.
- The design, the alignment, the integration of the
companies on the supply chain and the co-
ordination between them are all for the
customer- the ultimate customer, and these are
performed as such.

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 System Orientation- system orientation is at
the existence of any supply chain. Synergy due to
co- operation and coordination is the main gain
of a supply chain.

 Competitiveness and Efficiency – Supply


chain is a business organization. It provides value
to the customers while being competitive.
 Competitiveness is essential for it to healthy
sustain itself in order to be able to provide
increasing value to its customer.
-Efficiency is an important element of
competitiveness.

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Continued.....
 Minimizing the time – efficient supply chain in
an organization reduces the time required for
converting orders into cash.
 So there is minimal time lag and increase in
productivity of the organization.
 Minimizing Work in Progress- supply chain
minimizes total work in process as a result of
coordinated effort
 Improving Pipeline Visibility – efficient supply
chain improves the visibility of each one of the
activities of the supply chain by each one of the
partners.
 .

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Continued....
 Improving visibility Demand- Efficient
supply chain improves visibility of demand by
each one of the partners
 Improving Quality- Efficient supply chain
management helps in improving the quality
of operation of the organization.
 TQM has become a major commitment
throughout all facet of industry.
 Overall commitment to TQM is one of the
major commitment throughout all facets of
industry.

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Factors Influencing the existence of
Supply chain Management
 Consumer Demand.
 Globalization.
 Competition.
 Information and communication.
 Government Regulation.
 Environment.(PESTEL)

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Conclusion
 Supply chain is an enabler of business
strategy
 The objectives of SC is to be efficient
and cost effective through the entire SC
system
 Due to its complex nature, SC
management faces a number of challenges
 SC managers need to understand how
they can develop SC strategies
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References
Happeck, S., (2005). Supply Chain Strategy:
The importance of aligning your
strategies. UPS Supply Chain Solutions
www.ups-
scs.com/solutions/white_papers/wp_supply_
chain.pdf

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi,


E., (2009). Designing and Managing the
Supply Chain. Mcgraw Hill, Boston
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