Supply Chain Management

Assignment

Registration ID: 2201047

Name: Shaharyar Amin
Program: MBA (1.5) Evening

Supply Chain Management

Submitted to: Sir Mudassar Rasool Alvi Dated: 21-03-2020

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Supply Chain Management

“Macro & Micro aspects of supply chain in firm”

Supply Chain:
“A supply chain is an entire system of producing and delivering a product or service, from the
very beginning stage of sourcing the raw materials to the final delivery of the product or service
to end users”. Supply chain lays out all aspects of the production process, including the activities
involved at each stage, information that is being communicated, natural resources which are
transformed into useful materials, human resources, and other components that go into the
finished product or service.

Supply Chain management:

Supply chain management is the management of the flow of goods and services and includes all
processes that transform raw materials into final products. It involves the active streamlining of a
business's supply-side activities to maximize customer value and gain a competitive advantage in
the marketplace.

Macro aspects of supply chain in firm:

There are three macro processes as follows:

• Customer Relationship Management (CRM): Processes that focus on downstream interactions

between the enterprise and its customers.

• Supply Chain Management (SCM): Processes that focus on internal operations within the
enterprise. Note that we are adopting the software industry’s definition of supply chain
management, which generally refers to operations conducted within the enterprise. This is in
contrast to our definition of extended SCM (ESCM), which encompasses the entire supply chain
and includes all three macro processes (CRM, SCM, and SRM).

 • Supplier Relationship Management (SRM): Processes that focus on upstream interactions

between the enterprise and its suppliers. These macro processes rest on a transaction
management foundation (TMF), which includes basic enterprise resource planning (ERP) and its
components such as financials and human resources, database, storage, security, infrastructure,
and integration software. TMF software is the infrastructure that enables the three macro
processes to function and to communicate.

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Supplier Relationship Management

Those processes focused on the interaction between the enterprise and suppliers that are
upstream in the supply chain
Key processes:
 Design Collaboration
 Source
 Negotiate
 Buy
 Supply Collaboration
There is a natural fit between ISCM and SRM processes.

Internal Supply Chain Management

Includes all processes involved in planning for and fulfilling a customer order.
ISCM processes:
 Strategic Planning
 Demand Planning
 Supply Planning
 Fulfillment
 Field Service
There must be strong integration between the ISCM and CRM macro processes.

Customer Relationship Management

The processes that take place between an enterprise and its customers downstream in the supply
chain
Key processes:
 Marketing
 Selling
 Order management
 Call/Service center

Micro aspects of supply chain in firm:

Demand for variety and customization is exploding, adding huge complexity and cost. To
compete, companies must find ways to identify and deliver value to profitable customer
segments at an appropriate cost.

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Micro supply chains are finite, decentralized, agile ‘mini operating models’, with flexible
supplier contracts and relationships, and manufacturing closer to the point of purchase. Most
importantly, supply chain leaders should balance complexity and variety by understanding the
sources of value from variety – like speed, service and cost – and optimizing their delivery
systems to offer value, using standard processes.

Because micro supply chains are largely independent, mini operating models, the way in which
one customer segment is served should not impact other segments. Companies can run multiple
standard work processes in parallel, reducing the costs of complexity that would typically be
associated with multiple variations of products.

Three key steps to building a micro supply chain are:

 Identify and understand the sources of value in the market – like speed, quality, price,
convenience, service levels, product features and customization
 Understand the drivers of cost along the supply chain, by measuring the cost of
complexity within each segment including labor, infrastructure, supplier and logistics
costs
 Produce models of different value streams, in order to pinpoint the optimum balance of
variety and cost, and to generate performance trade-offs.

Examples:

 Understanding the importance of SCM to its business, Walgreens Boots Alliance Inc.
placed focused effort on transforming its supply chain in 2016. The company operates
one of the largest pharmacy chains in the United States and needs to efficiently manage
and revise its supply chain so it stays ahead of the changing trends and continues to add
value to its bottom line.

 As of July 5, 2016, Walgreens has invested in the technology portion of its supply chain.
It implemented a forward-looking SCM that synthesizes relevant data and uses analytics
to forecast customer purchase behavior, and then it works its way back up the supply
chain to meet that expected demand.

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 For example, the company can anticipate flu patterns, which allow it to accurately
forecast needed inventory for over-the-counter flu remedies, creating an efficient supply
chain with little waste. Using this SCM, the company can reduce excess inventory and all
of the inventories' associated costs, such as the cost of warehousing and transportation.

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