Summary Supply Chain Management

SUPPLY CHAIN MANAGMENT
28 DECEMBER 2021 – 2022




International Business Management
Prof. A. Resing
2021 – 2022

,CHAPTER 1: INTRODUCTION SUPPLY CHAIN
MANAGEMENT

1.1 THE DIFFERENCE BETWEEN LOGISTICS AND SUPPLY CHAIN
MANAGEMENT


1.2 PRODUCT OR SERVICE?

Product Service
- A pint of beer - Having a haircut
- A recycled coffee cup - Carwash
- A laptop - Weekly cleaning
- A car - Transport from A to B
- Your smartphone - Money transfer from X to Y
- A customer service callcenter
- An online webshop platform



WHAT IS TYPICAL FOR A SERVICE?

There are some questions you need to ask yourself in order to establish whether or not
something is a service:

 Is it tangible?
 Can I create inventory?
 Is it temporary?
 What is the added value?

WHAT IS TYPICAL FOR A PRODUCT?

 Tangible
 Inventory, like:
o Finished product (FP)
o Work-in-progress (WIP)
o Raw materials (RM)
o Assembly part
o Packaging
o Maintenance, repair and operations items (MRO):
 Preventive maintenance
 Repair or corrective maintenance
 Consumables (e.g.: filters)

AN ONLINE ORDER

Often a combination of product(s) and service(s)

E.g.: HelloFresh, Marley Spoon, Foodbag
 Products: raw materials and finished products
 Services (added value): choice recipe (routing), transport , payment and ETO




2
Emilie Dimitriou

,E.g.: A pair of Nike sneaker (or Bol.com, Coolblue, Zalando, etc…)
 Product: the sneakers
 Services (added value): choice, transport, payment, ETO, etc…



1.3 AN EXAMPLE OF A COMPLEX SUPPLY CHAIN

We have a couple of different parties involved in the supply chain:

 Farmers  Vessel captain
 Harvesters  Harbour crane machinist
 Sorters  Truck driver
 Carrier (shipment)  Warehouse manager
 Exporter  Stuffer container
 Importer


 Each play a different role




EXAMPLE OF A SUPPLY CHAIN

A supply chain exists of different stakeholders. Each stakeholder plays a different role in
the supply chain.
E.g.:
 Farmer will have to order seed (how much and when)
 The factory will have to sort, pack and check for quality
o How much will they have to provide? They are far away from the
customer, they will never see the customer.
o After harvesting time, they will have a huge amount of seasonal stock…
How will they process these huge stock levels?
 The shipping company doesn’t know the factory nor the customer, they just ship
the goods overseas to other countries.
 The exporter, importer, wholesaler,… they all buy and sell without ever knowing
the customer.


WHO IS PAYING?

 The customer
So, it makes sense that the customer dictates what, how much and where goods are
purchased.
 In the end, the customer is the trigger of all supply chains.

There is a small problem however:




3
Emilie Dimitriou

, “On the one hand, the customer doesn’t know what he/she wants and on the other
hand, the customer wants to be delivered in the right way at the right time and without
any errors.”
 The supply chain can be very long and the products ‘flow’ through these rivers of
goods which takes time… sometimes this takes weeks, months or even years.

Companies try to deal with these
How do we deal with these conflicting forces? difficult conditions.
 We have to supply goods:  Sometimes companies know
 On the right time what the customer wants,
 On the right spot because they make an ORDER
 Under the right conditions  Companies also try to ‘predict’
what customers will buy
through FORECASTING
IF the forecasting is done correctly and accurately, then
the forecasted volumes can be produced in advance by the companies and eventually
these products will be bought later on. So, forecasting helps the companies to deal with
the uncertainty of customers that don’t know what they will buy.

SUM of 2 volumes:
independent demand =orders+ forecast


1.4 CUSTOMER SERVICE AND THE 95%

CUSTOMER SERVICE

The customer service can be used in 2 different contexts:
1. As a wide management concept
 How ‘pleased’ is the customer with our total service.
This depends on a very wide range of aspects:
 Deliver on time
 Deliver with the correct
quantities as ordered
 Short leadtime
 No damages
 Accurate invoices
 Good paperwork
 Good follow up in case of
problems (after sales)

2. As a smaller concept within the field of demand management
 Can we deliver the goods as ordered by the customer (are the ordered goods
in stock?)


 Customer service is the main goal in the supply.


HOW TO ACHIEVE GOOD CUSTOMER SERVICE

1. Increase flexibility
 Flexibility is very important in fast changing market with a lot of competition.
 Companies that can adapt to a changing market survive



4
Emilie Dimitriou