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Supply Chain Management - an overview

What is Supply Chain Management ?
A supply chain is the stream of processes of moving goods from customer order through the raw materials stage Supply Production and distribution of products to the customer Material and information flow Up and Down the Supply Chain

Major objectives of supply management :

  • To provide an uninterrupted flow of materials, supplies and services required to operate the organization

  • Minimize inventory investment and loss

  • Maintain and improve quality

  • Create relationships with competent suppliers

  • Set standards for supplies

  • Get supplies and services at lowest cost

  • Achieve harmonious, productive working relationships with other departments

  • Keep purchasing administrative costs low

  • Improve the organization's competitive position


    key elements to a supply chain


    Production Element of Supply Chain

    • Focus on what customer & market demand
    • Resource Management
    • Internal sourcing (what and which plants)

    • Outsourcing to capable suppliers
    • Capacity Management
    • Workload schedules
    • Equipment plans (acquisition/maintenance)
    • Order Management
    • Quality control

    Supply Element of Supply Chain

    • Partners in the Supply Chain
    • Assessing core/strategic competencies
    • Identifying capable suppliers
    • Making sourcing decisions
    • Relationship management

    • General Procurement

    Inventory Element of Supply Chain

    • How Much Inventory and Where to Store It
    • Analysis of fluctuations in demand
    • Identification of optimal storage locations in support of *Customer demand
    • Identification of optimal stock levels by location
    • Establishing inventory ordering policies

Location Element of Supply Chain

  • Strategic placement of production plants, distribution and stocking facilities
  • Understand customer markets
  • Perform Locating decisions for production and stocking facilities
  • Lightweight/market driven near the end-user
  • Heavy industries near raw material source
  • Evaluation of tax and tariff issues and transportation accessibility

Transportation Element of Supply Chain

  • Supporting inventory decisions and customer demand requirements (transportation is up to 30% of Product Cost!)

  • Identify customer service levels

  • Identify modal forms

  • Establish strategic transportation partnerships

Information Element of Supply Chain

Obtaining, linking and leveraging information across the Supply Chain
Organization of information
Linking computers through networks and the internet
Streamlining information flow
Consolidating information
Information warehousing
Decision support tools

Key Attributes of a “Chain”

  • Cannot exceed the capacity of its weakest link
  • A break in the chain makes the chain non-functional
  • All links must move in synchronization
  • All links have an interdependency

Adaptive forms of Relationship Management

  • Relationship Assessments
  • Alliance evaluation mechanisms
  • Assessing key variables of Reliability, Competence, *Affect Based Trust (Goodwill), Vulnerability
  • Risk sharing and Loyalty
  • Conflict Resolution
  • Aversion to legal disputes
  • Arbitration as a business decision

  • Mini-trial
  • Rent-a-judge
  • Information as a Common Thread

Challenges in Supply Chain Management Today

  • Strategic imperative of supply chain
  • Deliberate redesign of supply chain networks
  • Offshore outsourcing (lead-times/customer service impact)
  • Supply chain design to customer requirements
  • Cash-to-cash cycle
  • Supply chain visibility technology
  • Strategies for inventory positioning near customers
  • Warehouse Management challenges
  • Collaboration with supply chain partners




Supply Chain Driving Factors

  • Information Revolution

  • Intra-Enterprise Technology

  • The Internet

  • E-Commerce

  • Inter-Enterprise Technology

  • Dynamic Operating Systems

  • Relational data stores

  • Desktop Tools

  • COTS Revolution (ERP, S&OP, CPFR)

  • Customer Demand




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