NOT FOR RESALE
SCM101B – Exam Study Material
STUDY UNIT 1 – WEEK 1
This detailed summary of Study Unit 1: Introduction to Supply Chain Management
and the accompanying lecture slides is structured to assist your exam preparation
by highlighting core definitions, strategic frameworks, and technological impacts.
1. Foundations of Supply Chain Management (SCM)
• Definition: SCM is the art of designing, planning, executing, and controlling
the complex global chain that organizes the delivery of products and services
from raw materials to end customers. It involves a carefully engineered flow of
physical goods, information, distribution, and funds.
• Synergism: The effectiveness of the entire supply chain is more critical than
the effectiveness of a single unit within it. This concept emphasizes
coordination and collaboration across all functions to achieve optimal
performance.
• The Four Phases: A supply chain typically stretches through four main phases:
Plan (Design), Source (Procure), Make (Manufacture), and Deliver (Ship).
,2. Logistics: The Foundation of the Supply Chain
Logistics is a strategic function focused on the procurement, movement, and
storage of materials, parts, and finished inventory. The term logistics comes from the
French word logistique.
• Inbound Logistics: Focuses on supply and items coming into the business from
suppliers; its primary role is receiving.
o Sourcing & Procurement: This activity includes identifying and
evaluating potential suppliers, obtaining quotes, negotiating contracts,
developing suppliers and managing supplier performance.
o Purchasing & Ordering: Placing orders with suppliers and buying the
goods and materials the company needs. Ensuring the supplier
conforms to the 7Cs so that the correct quantity arrives at the right
time.
o Expediting: Monitoring order progress regarding scheduled delivery
dates and ensuring orders arrive on time, in full and are damage-free.
o Inbound Transportation: Selecting the correct carrier and mode of
transport to receive the order, contracting with 3PL or 4PL logistics
providers where appropriate. Manage inbound transport costs and
ensure delivery is made to the correct location within the plant.
o Receiving & Inspecting: Receiving and unloading goods from the
delivery transport and ensuring that the items conform to a copy of the
purchase order. Examining for any under- or over-delivery and ensuring
the items received are not damaged.
o Identifying & Putting Away: Using a warehouse management system
(where available) or manually, identify each item and assign a bar
code label. Locate a storage location within the warehouse and
position the identified items using the correct type of materials
handling equipment.
, o Warehousing & Storage: Ensure that items in storage are carefully
controlled both from a security standpoint and from damage or if
outdated. Applying the principle of first-in-first-out stock movement
unless clearly decided otherwise.
o Inventory Management: Managing stock levels by applying one or
more inventory management lot-sizing (how much is needed) rules
and order replenishment strategies.
o Internal Distribution: Delivering items to the production facility or other
users according to the company’s policies and procedures. Ensuring
that the correctly authorised documentation accompanies all item
movement.
o Order Tracking: In line with speeding up where necessary, track orders
from the time of placement to delivery, ensuring that the incoming
shipments arrive at the correct warehouse dock and are
accompanied by the necessary documentation.
o Reverse Logistics: Reverse logistics involves returning and monitoring
customers’ returns of goods, clearly identifying the reasons for return,
such as defects, excess to requirements, repair, refurbishing and so on.
Reverse logistics also includes recycling and scrapping materials and
goods that cannot be recycled.
• Outbound Logistics: Focuses on demand and finished products going out to
customers; its primary role is delivery.
o Warehousing & Storage Management: Effective and efficient storage
of goods in a warehouse or distribution centre ensures customer
delivery performance. Efficient storage methods ensure goods are
held for a minimum time and carefully protected while awaiting
customer delivery.
o Inventory Management: Effective inventory management entails
determining the quantity of each item to be held in inventory to ensure
that products are available to meet delivery schedules. Inventory
management is also concerned with the level of safety stock to be
held for items showing irregular demand patterns.
o Transportation: Transportation includes selecting a suitable carrier and
mode of transport (road, rail, air or water) to meet customer delivery
dates. The mode of transport used depends on the type, size,
characteristics and urgency of the goods.
o Distribution Management: Distribution channels determine how a
product reaches a customer. Selecting a distribution channel, such as
direct delivery, milk runs, cross-docking operations, drop shipment or
regional distribution network, affects the logistics organisation.
o Last-mile Delivery: Last-mile delivery is the most crucial function of
outbound logistics. It involves doorstep delivery of goods to customers.
, Last-mile delivery is often costly and inefficient, but it can be improved
by making multiple deliveries using a hub-and-spoke configuration,
meaning one distribution centre delivers to multiple locations.
o Delivery System Optimization: Logistics is a component of a supply
chain (which needs to operate as a value chain), so it is essential to
optimise delivery operations (both inbound and outbound) to make
them more efficient, improve visibility along the chain and enhance
customer service.
• Materials Management: These are the actions and procedures governing the
flow of materials through a manufacturing facility.
SCM101B – Exam Study Material
STUDY UNIT 1 – WEEK 1
This detailed summary of Study Unit 1: Introduction to Supply Chain Management
and the accompanying lecture slides is structured to assist your exam preparation
by highlighting core definitions, strategic frameworks, and technological impacts.
1. Foundations of Supply Chain Management (SCM)
• Definition: SCM is the art of designing, planning, executing, and controlling
the complex global chain that organizes the delivery of products and services
from raw materials to end customers. It involves a carefully engineered flow of
physical goods, information, distribution, and funds.
• Synergism: The effectiveness of the entire supply chain is more critical than
the effectiveness of a single unit within it. This concept emphasizes
coordination and collaboration across all functions to achieve optimal
performance.
• The Four Phases: A supply chain typically stretches through four main phases:
Plan (Design), Source (Procure), Make (Manufacture), and Deliver (Ship).
,2. Logistics: The Foundation of the Supply Chain
Logistics is a strategic function focused on the procurement, movement, and
storage of materials, parts, and finished inventory. The term logistics comes from the
French word logistique.
• Inbound Logistics: Focuses on supply and items coming into the business from
suppliers; its primary role is receiving.
o Sourcing & Procurement: This activity includes identifying and
evaluating potential suppliers, obtaining quotes, negotiating contracts,
developing suppliers and managing supplier performance.
o Purchasing & Ordering: Placing orders with suppliers and buying the
goods and materials the company needs. Ensuring the supplier
conforms to the 7Cs so that the correct quantity arrives at the right
time.
o Expediting: Monitoring order progress regarding scheduled delivery
dates and ensuring orders arrive on time, in full and are damage-free.
o Inbound Transportation: Selecting the correct carrier and mode of
transport to receive the order, contracting with 3PL or 4PL logistics
providers where appropriate. Manage inbound transport costs and
ensure delivery is made to the correct location within the plant.
o Receiving & Inspecting: Receiving and unloading goods from the
delivery transport and ensuring that the items conform to a copy of the
purchase order. Examining for any under- or over-delivery and ensuring
the items received are not damaged.
o Identifying & Putting Away: Using a warehouse management system
(where available) or manually, identify each item and assign a bar
code label. Locate a storage location within the warehouse and
position the identified items using the correct type of materials
handling equipment.
, o Warehousing & Storage: Ensure that items in storage are carefully
controlled both from a security standpoint and from damage or if
outdated. Applying the principle of first-in-first-out stock movement
unless clearly decided otherwise.
o Inventory Management: Managing stock levels by applying one or
more inventory management lot-sizing (how much is needed) rules
and order replenishment strategies.
o Internal Distribution: Delivering items to the production facility or other
users according to the company’s policies and procedures. Ensuring
that the correctly authorised documentation accompanies all item
movement.
o Order Tracking: In line with speeding up where necessary, track orders
from the time of placement to delivery, ensuring that the incoming
shipments arrive at the correct warehouse dock and are
accompanied by the necessary documentation.
o Reverse Logistics: Reverse logistics involves returning and monitoring
customers’ returns of goods, clearly identifying the reasons for return,
such as defects, excess to requirements, repair, refurbishing and so on.
Reverse logistics also includes recycling and scrapping materials and
goods that cannot be recycled.
• Outbound Logistics: Focuses on demand and finished products going out to
customers; its primary role is delivery.
o Warehousing & Storage Management: Effective and efficient storage
of goods in a warehouse or distribution centre ensures customer
delivery performance. Efficient storage methods ensure goods are
held for a minimum time and carefully protected while awaiting
customer delivery.
o Inventory Management: Effective inventory management entails
determining the quantity of each item to be held in inventory to ensure
that products are available to meet delivery schedules. Inventory
management is also concerned with the level of safety stock to be
held for items showing irregular demand patterns.
o Transportation: Transportation includes selecting a suitable carrier and
mode of transport (road, rail, air or water) to meet customer delivery
dates. The mode of transport used depends on the type, size,
characteristics and urgency of the goods.
o Distribution Management: Distribution channels determine how a
product reaches a customer. Selecting a distribution channel, such as
direct delivery, milk runs, cross-docking operations, drop shipment or
regional distribution network, affects the logistics organisation.
o Last-mile Delivery: Last-mile delivery is the most crucial function of
outbound logistics. It involves doorstep delivery of goods to customers.
, Last-mile delivery is often costly and inefficient, but it can be improved
by making multiple deliveries using a hub-and-spoke configuration,
meaning one distribution centre delivers to multiple locations.
o Delivery System Optimization: Logistics is a component of a supply
chain (which needs to operate as a value chain), so it is essential to
optimise delivery operations (both inbound and outbound) to make
them more efficient, improve visibility along the chain and enhance
customer service.
• Materials Management: These are the actions and procedures governing the
flow of materials through a manufacturing facility.
