Supply Chain Management
Chapter 1 introduction to supply chain management
1.1 What start a supply chain?
The flow of materials:
The range from raw materials, to work in progress, all the way to finished goods. This goods flow
encompasses the supplier’s supplier through the end consumer.
Flow of information:
e.g. order confirmation or dispatch advice.
Forms of reverse flows:
1. Goods, e.g. quality defect products or obsolete products
2. Information, e.g. customer feedback
3. Packaging material, e.g. outer cartons
4. Transportation equipment, e.g. cages, pallets or containers.
Reverse flows of funds:
Money that flows back into the supply chain
2 forces in the chain of goods, information and funds are:
1. Product supply
2. Customer demand
(see fig 1.1)
,Summary:
Supply chain can be triggered by product supply(commodities) or by customer demand(customized
products). The degree of customization dictates how much and in which format the supplying
company holds inventory: no stock at all, raw or basic materials only or sub-assemblies of their
products. The strategies and associated decoupling of products supply from customer demand for a
crucial part of supply chain management( see chap 7 on strategy).
1.2 A functional view of supply chain management
When you start engaging in supply chain management, you will most likely be confronted with some
of these questions:
1.How many products are you going to sell?
2. Where are you going to sell them and when?
3. How much production do you need to schedule in your factory?
4. What are your raw and packaging materials you need in order to fulfil the production plan?
All of these belong to the functional plan process, where demand and supply are balanced to develop
a course of action to meet sourcing, production and delivery.
Purchasing/Procurement:
decide to source services such as transport and warehousing
it describes the process of buying goods or services to meet planned or actual demand.
( the emphasis in this stage of the process is on selecting suppliers, establishing policies and assessing
performance)(see chap 3 on source)
SCOR Model:
This model describes all processes that transform your raw materials or subassemblies into the
finished product with the aim to meet customer demand.
, This process within the supply chain operations reference model looks at questions such as:
1. How to set up manufacturing?
2. How to make sure the productions runs efficiently?
3. How to improve the making process? ( see chap 4 on make)
The last process in the chain concerns reverse logistics or product return. This functional process
comprises all task that are associated with the return of product. Returns can occur for quality
reasons, for recycling or for post-delivery customer support( see chap 6 on return)
Summary:
After manufacturing your products are ready for distribution or delivery. Under the deliver function,
all supply chain processes are included that provide finished goods to customers. Thus, the order
management, warehousing and transport management of your product all form part of this process
( see chap 5 on delivery)
1.3 Supply chain architecture
A supply chain consist of three nodes:
1. Company
2. Supplier
3. Customer
In an extended supply chain, we consider three additional supply chain nodes:
1.on the upstream side ( towards supply), there is the supplier’s supplier or the ultimate supplier at
the of the extended chain.
2. At the downstream side( toward demand), there is the customer’s customer or the end consumer
at the end of the extended supply chain. The distinction here is the different kind of customers that
exist between your company and the end consumer.
(FIG 1.3 Supply chain architectures( a) Simple supply chain (B) Extended supply chain):
A
Chapter 1 introduction to supply chain management
1.1 What start a supply chain?
The flow of materials:
The range from raw materials, to work in progress, all the way to finished goods. This goods flow
encompasses the supplier’s supplier through the end consumer.
Flow of information:
e.g. order confirmation or dispatch advice.
Forms of reverse flows:
1. Goods, e.g. quality defect products or obsolete products
2. Information, e.g. customer feedback
3. Packaging material, e.g. outer cartons
4. Transportation equipment, e.g. cages, pallets or containers.
Reverse flows of funds:
Money that flows back into the supply chain
2 forces in the chain of goods, information and funds are:
1. Product supply
2. Customer demand
(see fig 1.1)
,Summary:
Supply chain can be triggered by product supply(commodities) or by customer demand(customized
products). The degree of customization dictates how much and in which format the supplying
company holds inventory: no stock at all, raw or basic materials only or sub-assemblies of their
products. The strategies and associated decoupling of products supply from customer demand for a
crucial part of supply chain management( see chap 7 on strategy).
1.2 A functional view of supply chain management
When you start engaging in supply chain management, you will most likely be confronted with some
of these questions:
1.How many products are you going to sell?
2. Where are you going to sell them and when?
3. How much production do you need to schedule in your factory?
4. What are your raw and packaging materials you need in order to fulfil the production plan?
All of these belong to the functional plan process, where demand and supply are balanced to develop
a course of action to meet sourcing, production and delivery.
Purchasing/Procurement:
decide to source services such as transport and warehousing
it describes the process of buying goods or services to meet planned or actual demand.
( the emphasis in this stage of the process is on selecting suppliers, establishing policies and assessing
performance)(see chap 3 on source)
SCOR Model:
This model describes all processes that transform your raw materials or subassemblies into the
finished product with the aim to meet customer demand.
, This process within the supply chain operations reference model looks at questions such as:
1. How to set up manufacturing?
2. How to make sure the productions runs efficiently?
3. How to improve the making process? ( see chap 4 on make)
The last process in the chain concerns reverse logistics or product return. This functional process
comprises all task that are associated with the return of product. Returns can occur for quality
reasons, for recycling or for post-delivery customer support( see chap 6 on return)
Summary:
After manufacturing your products are ready for distribution or delivery. Under the deliver function,
all supply chain processes are included that provide finished goods to customers. Thus, the order
management, warehousing and transport management of your product all form part of this process
( see chap 5 on delivery)
1.3 Supply chain architecture
A supply chain consist of three nodes:
1. Company
2. Supplier
3. Customer
In an extended supply chain, we consider three additional supply chain nodes:
1.on the upstream side ( towards supply), there is the supplier’s supplier or the ultimate supplier at
the of the extended chain.
2. At the downstream side( toward demand), there is the customer’s customer or the end consumer
at the end of the extended supply chain. The distinction here is the different kind of customers that
exist between your company and the end consumer.
(FIG 1.3 Supply chain architectures( a) Simple supply chain (B) Extended supply chain):
A
