Supply Chain

Management
 Basic Supply Chain

3 Entities
1. Raw Materials, Finished Products
2. Suppliers, Customers
3. Flow of goods (services), information, funds
 Basic Supply Chain
(for Manufacturing Industry)

The Basic Supply Chain (Chopra and Meindl, 2001)

 Basic Supply Chain
(for Service Industry)

Supplier Service Provider Customer Consumer

Raw Finished
Materials Products
 SCM Applications
• Manufacturing Industries • Service Industries
• Vegetable SC • Education SC
• Poultry SC • Hospital SC
• Fishing SC • Tourism SC
• RMG SC • Banking SC
• Textile SC • Insurance SC
• Apparel SC
• Pharmaceuticals SC
• Stationery SC

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 Necessity of SCM
Supply chain management (SCM) is needed for various reasons
(Stevenson, 2002)

• Improving operations
• Better outsourcing
• Increasing profits
• Enhancing customer satisfaction
• Generating quality outcomes
• Tackling competitive pressures
• Increasing globalization
• Increasing importance of E-commerce
• Growing complexity of supply chains

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 Supply Chain Management
Supply Chain Management: The sequence of
organizations - their facilities, functions, and
activities - that are involved in producing and
delivering a product or service.
 Facilities
• Warehouses
• Factories
• Processing centers
• Distribution centers
• Retail outlets
• Offices
 Functions and Activities
• Forecasting
• Purchasing
• Inventory management
• Information management
• Quality assurance
• Scheduling
• Production and delivery
• Customer service
 Decision Phases of a Supply Chain
• Strategy or Design
• Planning
• Operation

Level-One
Strategy

Level-Two Planning
Level-Three Operation
 Level One
Supply Chain Strategy or Design
• Structure of the supply chain
• Strategic supply chain decisions
– Locations and capacities of facilities
– Products to be made or stored at various locations
– Modes of transportation
– Information systems
• Supply chain design must support strategic
objectives
• SC design decisions are long-term and expensive to
reverse
 Level Two
Supply Chain Planning

• A set of policies that govern short-term operations

• Fixed by the SC design (strategy)
• Starts with a forecast of demand for the coming
year
 Level Two
Supply Chain Planning
• Planning decisions:
– Which markets will be supplied from which locations
– Planned buildup of inventories
– Subcontracting, backup locations
– Inventory policies
– Timing and size of market promotions
• Must consider demand uncertainty, exchange
rates, competition over the time horizon
 Level Three
Supply Chain Operation
• Time horizon is weekly or daily
• Decisions about individual customer orders
• Configuration is fixed and operating policies are
determined
• Goal is to implement the operating policies 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)
A Framework for Structuring Drivers

Competitive Strategy

Supply Chain
Strategy
Efficiency Responsiveness
Supply chain structure

Logistical Drivers

Facilities Inventory Transportation

Information Sourcing Pricing

Cross Functional Drivers

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 Drivers of Supply Chain
Performance
• Facilities
– places where inventory is stored, assembled, or fabricated
– production sites and storage sites
• Inventory
– raw materials, WIP, finished goods within a supply chain
– inventory policies
• Transportation
– moving inventory from point to point in a supply chain
– combinations of transportation modes and routes
• Information
– data and analysis regarding inventory, transportation, facilities throughout the supply
chain
– potentially the biggest driver of supply chain performance
• Sourcing
– functions a firm performs and functions that are outsourced
• Pricing
– Price associated with goods and services provided by a firm to the supply chain

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 Evolutionary Timeline of SCM
(Habib and Jungthirapanich, 2009)

O’Brien and Kenneth (1996) : Education, but there was no model.

Lau (2007): Education, but case study on City University of Hong Kong
Habib (2009): Integrated Tertiary Educational Supply Chain Management (ITESCM)