Supply Chain Management: Lesson 7
Supply Chain Management: Lesson 7
Management
Lesson 7
Supply Chain
• A supply chain is the
sequence of organizations
—their facilities,
functions, and activities –
that are involved in
producing and delivering a
product or service
Supply Chain
Management
• is the strategic coordination
of business functions within
a business organization and
throughout its supply chain
for the purpose of
integrating supply and
demand management.
• is the part of a supply chain involved with the forward and reverse flow of
goods, services, cash, and information. Logistics management includes
management of inbound and outbound transportation, material handling,
warehousing, inventory, order fulfillment and distribution, third-party logistics,
and reverse logistics (the return of goods from customers).
Key aspects relate to:
• 1. Determining the appropriate
level of outsourcing
• 2. Managing procurement
• 3. Managing suppliers
• 4. Managing customer
relationships
• 5. Being able to quickly
identify problems and respond
to them
Measuring supply chain ROI
Being agile
Resiliency
Know your suppliers
Key elements
of successful
Provide supply chain
risk visibility
management
include:
Develop event response
capability
Global Supply Chains
• As businesses increasingly make
use of outsourcing and pursue
opportunities beyond their
domestic markets, their supply
chains are becoming increasingly
global. For example, product
design often uses inputs from
around the world, and products
are sold globally.
ERP and Supply
• Supply chain management that
Chain Management integrates ERP is a formal
approach to effectively plan and
manage all the resources of a
business enterprise.
Implementation of ERP involves
establishing operating systems
and operating performance
measurements to enable them to
manage business operations and
meet business and financial
objectives.
Supplier Relationship
Management
an integrated
system that Performance Management
provides for system
wide visibility of
Sales and Order Fulfillment
key activities and
events in areas
Customer Relationship
Management
Ethics and The
Supply Chain
Small Businesses
• Small businesses do not always
give adequate attention to their
supply chains. However, there
are many benefits to be had for
small businesses by actively
managing their supply chains,
including increased efficiencies,
reduced costs, reduced risks, and
increased profits.
Three aspects of supply chain management that
are often of concern to small businesses are:
suppliers.
Recognize warning signs of supplier issues (e.g., late
Important steps deliveries, incomplete orders, quality problems)
are:
Have plans in place to manage supply chain
problems
Work with someone who has expertise to help
Work oversee foreign suppliers, preferably someone
The Small who spends a good deal of time in that country.
• Legal responsibilities
include being knowledgeable
about laws and regulations
of the countries where
supply chains exist, obeying
the laws, and operating to
conform to regulations
Strategic Responsibilities
paragraphs.
Suppliers
Purchasing receives the requisition.
Receiving orders
Centralized versus Decentralized Purchasing
Ethics in Purchasing
• Ethical behavior is important in
all aspects of business. This is
certainly true in purchasing,
where the temptations for
unethical behavior can be
enormous. Buyers often hold
great power, and salespeople are
often eager to make a sale.
Unless both parties act in an
ethical. manner, the potential for
abuse is very real.
E-Business
• The commercial blossoming
of the Internet has led to an
explosion of ties many of
which have a direct impact
on organizations' supply
chains, even if those
organizations aren't
themselves users of the
Internet.
Supplier • Reliable and trustworthy suppliers
Management are a vital link in an effective supply
chain. Timely deliveries of goods or
services and high quality are just
two of the ways that suppliers can
contribute to effective operations.
Choosing Suppliers • In many respects, choosing a
vendor involves taking into
account many of the same
factors associated with making
a major purchase (e.g., a car or
stereo system). A company
considers price, quality, the
supplier's reputation, past
experience with the supplier,
and service after the sale.
• Periodic audits of suppliers are a means of
Supplier Audits keeping current on suppliers' production (or
service) capabilities, quality and delivery
problems and resolutions, and suppliers'
performance on other criteria.
Supplier Certification
• Supplier certification is a
detailed examination of the
policies and capabilities of
a supplier The certification
process verifies that a
supplier meets or exceeds
the requirements of a buyer.
Supplier Relationship Management
common
approaches: Assemble-
to-Order
Make-to-
Stock
(ATO) (MTS)
Logistics
Source
Steps that can be
used to create an
Make
effective supply
chain
Deliver
Manage returns
Effective
communication
Three
important Information velocity
aspects of
this are
Performance metrics
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