SUPPLY CHAIN MANAGEMENT
HOORCOLLEGE 1: INTRODUCTION
All parties involved so that the final product is produced and collected end of life. Until the customer.
What is Supply Chain Management?
Supply chain management is a set of approaches utilized…
to efficiently integrate suppliers, manufacturers, warehouses, and stores….
so that merchandise is produced and distributed at the right quantities, to the right locations, and at
the right time…
in order to minimize system wide costs while satisfying service level requirements.
Other Definitions
• The design and management of seamless, value-added process across organizational
boundaries to meet the real needs of the end customer (Institute for Supply Management)
• Managing supply and demand, sourcing raw materials and parts, manufacturing and
assembly, warehousing and inventory tracking, order entry and order management,
distribution across all channels, and delivery to the customer (The Supply Chain Council)
Challenge: (a) Coordination among partners to (b) match supply with demand
The SCM Network
,The Goods – Services Continuum
Many firms offer a combination of goods and services
• Products are supported by services such as warranties and training
• Services are enhanced through the inclusion of products
Key Observations
• Every facility that impacts costs need to be considered
- Suppliers’ suppliers
- Customers’ customers
• Efficiency and cost-effectiveness throughout the system is required
- Increased pressure for sustainability
- Increased risks/disruptions require agility and resilience
• Multiple levels of activities
- Strategic – Tactical – Operational
What type of questions does SCM address?
What activities constitute SCM?
Supply Chain Management – Strategic
,Supply Chain Management: Tactical & Operational
Agenda:
1. Supply Chains: an evolutionary perspective
2. Matching Supply and Demand
3. Trends and developments
In the beginning
• Fewer channel intermediaries
• Sole suppliers
• Limited interactions and transactions
Henry Ford & Fully Integrated Supply Chains
• Vertical Integration
• Firm boundary was drawn to cover as many activities
• Ford Rouge plant
, Disintegrated with Geographical Proximity Emergence of the Toyota City concept
• Component and material suppliers are different firms
• Located in the same geographical area
• Toyota city
Early Supply Chains
• Geographical proximity
• Integrated ownership structures
Why?
• Transportation slow and costly
• Communication and information exchange challenges
Today’s Supply Chains
• Fragmented supply chains
• SKU proliferation
In contrast to FORD concept
HOORCOLLEGE 1: INTRODUCTION
All parties involved so that the final product is produced and collected end of life. Until the customer.
What is Supply Chain Management?
Supply chain management is a set of approaches utilized…
to efficiently integrate suppliers, manufacturers, warehouses, and stores….
so that merchandise is produced and distributed at the right quantities, to the right locations, and at
the right time…
in order to minimize system wide costs while satisfying service level requirements.
Other Definitions
• The design and management of seamless, value-added process across organizational
boundaries to meet the real needs of the end customer (Institute for Supply Management)
• Managing supply and demand, sourcing raw materials and parts, manufacturing and
assembly, warehousing and inventory tracking, order entry and order management,
distribution across all channels, and delivery to the customer (The Supply Chain Council)
Challenge: (a) Coordination among partners to (b) match supply with demand
The SCM Network
,The Goods – Services Continuum
Many firms offer a combination of goods and services
• Products are supported by services such as warranties and training
• Services are enhanced through the inclusion of products
Key Observations
• Every facility that impacts costs need to be considered
- Suppliers’ suppliers
- Customers’ customers
• Efficiency and cost-effectiveness throughout the system is required
- Increased pressure for sustainability
- Increased risks/disruptions require agility and resilience
• Multiple levels of activities
- Strategic – Tactical – Operational
What type of questions does SCM address?
What activities constitute SCM?
Supply Chain Management – Strategic
,Supply Chain Management: Tactical & Operational
Agenda:
1. Supply Chains: an evolutionary perspective
2. Matching Supply and Demand
3. Trends and developments
In the beginning
• Fewer channel intermediaries
• Sole suppliers
• Limited interactions and transactions
Henry Ford & Fully Integrated Supply Chains
• Vertical Integration
• Firm boundary was drawn to cover as many activities
• Ford Rouge plant
, Disintegrated with Geographical Proximity Emergence of the Toyota City concept
• Component and material suppliers are different firms
• Located in the same geographical area
• Toyota city
Early Supply Chains
• Geographical proximity
• Integrated ownership structures
Why?
• Transportation slow and costly
• Communication and information exchange challenges
Today’s Supply Chains
• Fragmented supply chains
• SKU proliferation
In contrast to FORD concept
