1. SUPPLY CHAIN
MANAGEMENT

2. What it Supply Chain?
 A supply chain consists of all parties involved,
directly or indirectly, in fulfilling a customer
request.
 It includes Manufacturer and suppliers,
transporters, warehouses, retailers and
customers.
 Within each company, the supply chain includes
all functions involved in fulfilling a customer
request (product development, marketing,
operations, distribution, finance, customer
service)

3. What it Supply Chain?
 Customer is an integral part of the supply chain
 Includes movement of products from suppliers
to manufacturers to distributors, but also
includes movement of information, funds, and
products in both directions
 Probably more accurate to use the term “supply
network” or “supply web”
 Typical supply chain stages: customers, retailers,
distributors, manufacturers, suppliers

4. Supplier Manufacturer Distributor Retailer Customer
Manufacturer Distributor Retailer Customer
Supplier Manufacturer Distributor Retailer Customer
Supply Chain Stages

5. Supply Chain Stages
 Each stages in a supply chain is connected
through the flow of products, information and
funds.
 These flows often occur in both directions
 Depends upon customer needs

6. Objectives of Supply Chain
 Maximise the overall value of the product
 Maximise Supply Chain Profitability/supply
chain surplus
 Flow of information and funds
 Effective Supply Chain Management –
Management of supply chain assets, product,
information and fund flow

7. Importance of Supply Chain Decisions
 Supply Chain Flow – product, information and
funds
 Supply Chain design, planning and operation
decisions play a significant role in the success or
failure of a firm.

8. Decision Phases in a Supply chain
 Supply Chain Strategy or Design
 Marketing and pricing plans for a product
 Structuring the supply chain for several years
 In-House or Outsource
 Decides the SC Configuration
 Supply Chain Planning
 Planning for quarter year to a year
 Forecasting
 Supply Chain Operation
 Weekly or daily operation
 Individual customer orders

9. Process Views of Supply Chain
 Cycle View
 The processes in a supply chain are divided into a
series of cycles, each performed at the interface
between two successive stages of a supply chain
 Push/Pull View
 Pull processes are initiated by a customer order
 Push processes are initiated and performed in
anticipation of customer orders.

10. Cycle View of Supply Chain Processes
 Customer order cycle
 Replenishment Cycle
 Manufacturing Cycle
 Procurement Cycle

11. Cycle View of Supply Chain Processes
Customer
Customer Order Cycle
Retailer
Replenishment Cycle
Distributor
Manufacturing Cycle
Manufacturer
Procurement Cycle
Supplier

12. Sub Process
Supplier Stage Buyer returns
Market Product reverse flows to
supplier or third
party
Buyer Stage Places
Order Buyer Stage receives
supply
Supplier Stage
receives order Supplier Stage
supplies order

13. Push /Pull view of supply chain
processes
 Pull Process
 With Pull Process, execution is initiated in response
to a customer order
 Also referred to as Reactive Processes
 This process operate in an environment in which
customer demand is known

14. Push /Pull view of supply chain
processes
 Push Process
 Execution is initiated in anticipation of customer
orders
 Demand is not known and must be forecast
 Also known as Speculative Processes

15. Push /Pull view of supply chain
processes
Push/pull Boundary
Push Processes Pull Processes
Process Process Process Process Process Process Process
1 2 3 4 5 6 7
Customer Order Arrives

16. Supply Chain Macro Processes in a Firm
 Customer Relationship Management (CRM)
 All processes that focus on the interface between the
firm and its customers
 Internal supply chain management (ISCM)
 All processes that are internal to the firm
 Supplier Relationship Management (SRM)
 All processes that focus on the interface between the
firm and its suppliers

17. Supply Chain Macro Processes in a Firm
Supplier Firm Customer
SRM ISCM CRM
Source Strategic Planning Market
Negotiate Demand Planning Price
Buy Supply Planning Sell
Design Collaboration Fulfillment Call Center
Supply Collaboration Field Service Order
Management