These are the complete lecture notes for the first year subject in IBA (VU university) of Global Supply Chain Management. It contains the full lecture content with additional comments and information provided by the lecturer Yousef Ghiami.
GRADE SEPARATION:
- 20% is group assignment (5-6 members) /
- 10% class participation /
- 70% exam at the end of the period /
, 1. LECTURE 1: 01/02/2021 (Monday)
CHAPTER 1: UNDERSTANDING THE SUPPLY CHAIN
SUPPLY CHAIN
It is a set of organizations who work together to deliver a specific product or service to the final customer.
These organizations work together with each other, there is always a customer, retailer, distributor,
manufacturer & supplier.
All stages may not be present in all supply chains (eg. No retailer or distributor)
SUPPLY CHAIN MANAGEMENT
A set of approaches, techniques and tools to make sure there is coordination between suppliers,
manufacturers, warehouses and stores are all connected and arranged so that the products and services are
delivered on time.
• The customer is what makes the supply chain move.
•
Eg. Customer Satisfaction
- In 1999 Toys R Us made a promise
- Orders were placed by Dec 10, it will be delivered by Christmas
- Enough inventory was available for most items
- They got do much demand they could not handle the deliveries
- What went wrong? Capacity constraint in e-fulfilment
- 350,000 dollar fine from US Federal Trade Commission
- Deliveries were outsource to Amazon.com
FLOWS IN SUPPLY CHAIN
+ Upstream: Supplier of raw materials till the point where the manufacturer
+ Downstream: when you’re one of the businesses, these stages include the stage at the port, till they get
their products, and to when the retailer gets the product and finally reaches the consumer.
What makes supply chain challenging, is there is a constant change in the environment (information,
products and funds), it is quite dynamic, and decision-makers must take this into account.
A more complicated case scenario…
, DELL SUPPLY CHAIN
Direct sale: for corporate clients
MANAGING THE FLOW
The more complicated the supply chain gets, the more organization needed. Every stage must be taken into
account. The three flows move both ways.
OBJECTIVE OF A SUPPLY CHAIN
To maximize SC surplus…
, DECISION PHASES IN A SUPPLY CHAIN
- Supply chain strategy or design
+ How to structure the supply chain over the next several years
- Supply chain planning
+ Decisions over the next quarter or year
- Supply chain operation
+ Daily or weekly operational decisions
DECISION: STRATEGY OR DESIGN
Strategic supply chain decisions:
• Whether to outsource or perform in-house operation
• Locations & capabilities of facilities
• Products to be made or stored at various locations
• Modes of transportation
• Information systems
Supply chain design decisions are long-term and expensive to reverse; must take into account market
uncertainty.
DECISION: PLANNING
Planning decisions:
• The goal is to maximize the supply chain surplus over the planning horizon,
• Which markets will be supplied from which locations,
• Subcontracting, backup locations,
• Inventory policies,
• Timing and size of market promotions.
In planning decisions demand uncertainty, exchange rates, competition over the time horizon must be
considered.
DECISION: OPERATION
- Time horizon is weekly or daily.
- Supply chain configuration is fixed, and operating policies are determined.
- Operation decisions:
• Allocate orders to inventory or production
• Set delivery schedules
- Much less uncertainty (short time horizon)
CYCLE VIEW OF A SUPPLY CHAIN
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