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Unit 25 - Supply Chain and Stock Management
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Unit 25Supply Chain and Stock Management
1
© Written by Mr. P. Hebels (2010) – All rights reserved.
, Index
P1 – Explain the meaning of supply chain management.
Page 3
P2 – Explain how supply chains for three different
products have been developed.
Page 8
P3 – Describe ways in which a supply chain for a selected
product has been integrated.
Page 8
P4 – Describe the potential advantages of an integrated
supply chain over conventional non-integrated approach
for a selected *rganization.
Page
18
P5 – Describe the potential disadvantages of dependence
on an integrated supply chain with reference to selected
organization.
Page
19
2
© Written by Mr. P. Hebels (2010) – All rights reserved.
, P1 – Explain the meaning of supply chain management.
What is Supply Chain?
Every product do have a supply chain, also every product do have its own supply
chain. The supply chain of a product is the whole process from the beginning of the
product, the raw materials, to the end product to sell it to the customers. For
instance a hamburger of McDonald’s; at the beginning of the supply chain you start
with the cow, where the hamburger is made of, than it goes to the butcher to make
the hamburger as a raw product. Further it will go to the wholesale trade company
of food and from there McDonald’s will buy the hamburgers to make with the other
products like the bread, salad, sauce etc. to make it as a hamburger to sell it to the
customer.
With the supply chain of a product you can see how much the total costs are from
the beginning to the end, and to finally make the selling price for the customer.
Managing of the supply involves coordinating. From the company that creates the
first product out of a raw material to the end company of the supply chain that sells
the product to the end consumer.
The management of the supply chain can be divided in three different main flows:
The product flow
The product flow is the flow between the suppliers of the products and services to
the end consumers. In this flow also the returning products and services from the
consumers are included.
The information flow
The information flow in the supply chain involves the status of delivery and to
update this and transmitting orders.
The financial flow
The financial flow involves the credit terms, payment schedules, consignment and
title ownership arrangements.
What most people think wrong is that the product costs aren’t equal to the selling
costs of the product in the store. The consumer’s mostly think that the store owner
can make a lot of profit on a product, but in theory this is wrong. You can’t just think
like a consumer in business. You have to think about all the costs that come by
when making a product from the beginning ended up finished as the product that is
for sale in the store. Most common costs when making a product are; labor costs,
transport costs, insurance costs, raw material costs etc.
3
© Written by Mr. P. Hebels (2010) – All rights reserved.
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