Leading and managing supply
chains
Lectures Blok 1 – MSCLMSC119 – 2020-2021
Table of contents
Week 1 – Role of logistics & supply chain management in the global economy...............................................2
Week 2 – Integrated supply chain management & strategic alliance...............................................................8
Week 3 – Customer value............................................................................................................................. 14
Week 4 – Cost in supply chains..................................................................................................................... 21
Week 5 – Value chain management.............................................................................................................. 29
Week 6 – Supply chain performance............................................................................................................ 37
Week 7 – Value of information..................................................................................................................... 42
Week 8 – Sustainability in supply chains and recap.......................................................................................46
Semester recap..............................................................................................................................................48
,Week 1 – Role of logistics & supply chain management
in the global economy
Logistics management = that part of the SCM that plans, implements, and controls the
efficient, effective forward and reverse flows and storage of goods, services and other
related information between the point of origin and the point of consumption in order to
meet the customers’ requirements.
Evolution of logistics
- The 1950s’ transportation era
- The 1960s’ physical distribution era
- The 1970s’ physical supply and physical distribution
- The 1980s’ transportation deregulation and physical distribution
- The 1990s’ business logistics
Supply chain = all parties involved, directly or indirectly, in fulfilling a customer request.
- External view: includes manufactures, suppliers, transporters, warehouses, retailers
and customers
- Internal view: new product development, marketing, operations, distribution,
finance, customer service
Customer: an integral part of the supply chain
- Movement of products
- Form supplier to manufacturers to distributors
- Information
- Funds
- Products in both directions
Typical supply chain stages
- Customers
- Retailers
- Wholesalers
- Distributors
- Manufactures
- Suppliers
- Carriers
- Ports
- Terminals
Flows in a supply chain
- Information: can be human triggered,
automated by constraints/limits, automated
by smart contracts decisions
- Product: in bulk, container or unit
- Funds: in all variable currencies
,Stages of an automotive supply chain
- Supply chain involves everybody, form the customer all the way to the last supplier
- Key flows in the supply chain are: information, product and cash
- It is through these flows that a supply chain fills a customer order.
- The management of these flows is key to the success or failure of a firm
Example of a supply chain
Decision phases in supply chain
1. Supply chain strategy or design: How to structure the supply chain over the next
several years?
– Long term (3-5 years)
2. Supply chain planning: Decisions over the next quarter or year
3. Supply chain operation: Daily or weekly operational decisions
Supply chain strategy or design = decisions about the configuration of the supply chain,
allocation of resources, and what processes each stage will perform
- Strategic supply chain decisions
o Outsource supply chain functions
o Locations and capacities of facilities (production and inventory)
o Products to be made or stored at various locations
, o Modes of transportation
o Information systems
- Supply chain design must support strategic objectives
- Supply chain design decisions are long-term and expensive to reverse, must take into
account market uncertainty
Supply chain planning = definition of a set of policies that govern short-term operations.
- Fixed by the supply configuration form strategic phase
- Goal is to maximize supply chain surplus given established constraints
- Starts with a forecast of demand in the coming year
- Planning decisions
o Which markets will be supplied from which locations?
o Planned buildup of inventories
o Subcontracting
o Inventory policies
o Timing and size of market promotions
- Communication with sales and marketing
- Must consider demand uncertainty, exchange rates, competition over the time
horizon
Supply chain operation
- Time horizon is weekly or daily
- Decisions regarding individual customer orders
- Supply chain configuration is fixed and planning policies are defined
- Goal is to handle incoming customer orders as effectively as possible
- Allocate orders to inventory or production, set order due dates, generate pick lists at
a warehouse, allocate an order to a particular shipment, set delivery schedules, place
replenishment orders
- Much less uncertainty (short time horizon)
Summary of components
chains
Lectures Blok 1 – MSCLMSC119 – 2020-2021
Table of contents
Week 1 – Role of logistics & supply chain management in the global economy...............................................2
Week 2 – Integrated supply chain management & strategic alliance...............................................................8
Week 3 – Customer value............................................................................................................................. 14
Week 4 – Cost in supply chains..................................................................................................................... 21
Week 5 – Value chain management.............................................................................................................. 29
Week 6 – Supply chain performance............................................................................................................ 37
Week 7 – Value of information..................................................................................................................... 42
Week 8 – Sustainability in supply chains and recap.......................................................................................46
Semester recap..............................................................................................................................................48
,Week 1 – Role of logistics & supply chain management
in the global economy
Logistics management = that part of the SCM that plans, implements, and controls the
efficient, effective forward and reverse flows and storage of goods, services and other
related information between the point of origin and the point of consumption in order to
meet the customers’ requirements.
Evolution of logistics
- The 1950s’ transportation era
- The 1960s’ physical distribution era
- The 1970s’ physical supply and physical distribution
- The 1980s’ transportation deregulation and physical distribution
- The 1990s’ business logistics
Supply chain = all parties involved, directly or indirectly, in fulfilling a customer request.
- External view: includes manufactures, suppliers, transporters, warehouses, retailers
and customers
- Internal view: new product development, marketing, operations, distribution,
finance, customer service
Customer: an integral part of the supply chain
- Movement of products
- Form supplier to manufacturers to distributors
- Information
- Funds
- Products in both directions
Typical supply chain stages
- Customers
- Retailers
- Wholesalers
- Distributors
- Manufactures
- Suppliers
- Carriers
- Ports
- Terminals
Flows in a supply chain
- Information: can be human triggered,
automated by constraints/limits, automated
by smart contracts decisions
- Product: in bulk, container or unit
- Funds: in all variable currencies
,Stages of an automotive supply chain
- Supply chain involves everybody, form the customer all the way to the last supplier
- Key flows in the supply chain are: information, product and cash
- It is through these flows that a supply chain fills a customer order.
- The management of these flows is key to the success or failure of a firm
Example of a supply chain
Decision phases in supply chain
1. Supply chain strategy or design: How to structure the supply chain over the next
several years?
– Long term (3-5 years)
2. Supply chain planning: Decisions over the next quarter or year
3. Supply chain operation: Daily or weekly operational decisions
Supply chain strategy or design = decisions about the configuration of the supply chain,
allocation of resources, and what processes each stage will perform
- Strategic supply chain decisions
o Outsource supply chain functions
o Locations and capacities of facilities (production and inventory)
o Products to be made or stored at various locations
, o Modes of transportation
o Information systems
- Supply chain design must support strategic objectives
- Supply chain design decisions are long-term and expensive to reverse, must take into
account market uncertainty
Supply chain planning = definition of a set of policies that govern short-term operations.
- Fixed by the supply configuration form strategic phase
- Goal is to maximize supply chain surplus given established constraints
- Starts with a forecast of demand in the coming year
- Planning decisions
o Which markets will be supplied from which locations?
o Planned buildup of inventories
o Subcontracting
o Inventory policies
o Timing and size of market promotions
- Communication with sales and marketing
- Must consider demand uncertainty, exchange rates, competition over the time
horizon
Supply chain operation
- Time horizon is weekly or daily
- Decisions regarding individual customer orders
- Supply chain configuration is fixed and planning policies are defined
- Goal is to handle incoming customer orders as effectively as possible
- Allocate orders to inventory or production, set order due dates, generate pick lists at
a warehouse, allocate an order to a particular shipment, set delivery schedules, place
replenishment orders
- Much less uncertainty (short time horizon)
Summary of components
