IBO Supply chain management summary
Contents
Supply chain management tutorial - book.............................................................................................. 2
1 – SCM Introduction (wk1) ............................................................................................................ 2
2 – SCM processes (wk1) ................................................................................................................ 3
3 – SCM process flow (wk1) ............................................................................................................ 3
4 – SCM flow components (wk1) .................................................................................................... 4
5 – SCM decision phase (wk2)......................................................................................................... 5
12 – SCM Integration (wk2) ............................................................................................................ 6
14 – SCM Agile and reverse supply chains (wk2) ............................................................................ 7
6 – SCM Performance Measures (wk4) ........................................................................................... 8
7 – SCM Strategic Sourcing (wk4) ................................................................................................... 9
E-book (bookboon) fundamentals of Supply Chain Management (Daiwei) ......................................... 10
Chapter 1 Introduction (wk1) ....................................................................................................... 10
Chapter 4 Lean Supply Management (wk2) .................................................................................. 13
Chapter 5 Agile SCM (wk2) ........................................................................................................... 16
Chapter 6 Purchasing and Supplier selection (wk4) ..................................................................... 20
Chapter 7 Relationship and Integration (wk4) .............................................................................. 23
Article CSCMP - SC strategies: which one hits the mark? (wk2) ........................................................... 24
Article SC opz – 30 lessons from Supply chain case study (wk2) .......................................................... 30
Operations management: creating value along the supply chain (Russell) (wk3)................................ 31
Article A Portfolio Approach to Supply Chain Network Design, by SCMR (wk6) .................................. 33
Article Gartner – Weathering the Storm: Supply Chain Resilience in an Age of Disruption (wk7) ...... 36
Article Harvard Business Review – Resilient Supply Chains / Global Supply Chains in a post-pandemic
world (wk7) ........................................................................................................................................... 38
SCM classes ........................................................................................................................................... 41
Week 1 – repetition of Y1 ................................................................................................................. 41
Lecture week 1 .................................................................................................................................. 51
Lecture & training week 2 ................................................................................................................. 53
Training week 3 – video clip MRP ..................................................................................................... 66
Slides of training & lecture week 3 ................................................................................................... 67
Slides of training & lecture week 4 – Sourcing & SRM ..................................................................... 87
Training week 5 – Inventory Management ....................................................................................... 98
Training week 6 – SC network design, distribution strategies, risk management .......................... 114
Slides lecture week 7 .......................................................................................................................... 143
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,Supply chain management tutorial - book
1 – SCM Introduction (wk1)
SCM = the management of flow of products and services, which begins from the origin of
products and ends with the product’s consumption at the end-user. It also comprises
movement and storage of raw materials that are involved in work in progress, inventory
and fully furnished goods.
Main objective SCM: to monitor and relate production, distribution, and shipments of
products and services. This can be done by checking over internal inventories,
production, distribution, internal production and sales.
SCM basically merges the supply and demand
management. It uses different strategies and
approaches to view the entire chain and work
efficiently at each and every step involved in the
chain. Every unit that participates in the process
must aim to minimize the costs and help the
companies to improve their long term
performance, while also creating value for its
stakeholders and customers. This process
can also minimize the rates by eradicating the
unnecessary expenses, movements and
handling.
Supply chain event management = considers factors that may interrupt the flow of an
effective supply chain. Possible scenarios are considered, and solutions are made for
them.
Advantages of SCM
• Develops better customer relationship and service.
• Creates better delivery mechanisms for products and services in demand with
minimum delay.
• Improvises productivity and business functions.
• Minimizes warehouse and transportation costs.
• Minimizes direct and indirect costs.
• Assists in achieving shipping of right products to the right place at the right time.
• Enhances inventory management, supporting the successful execution of just-
intime stock models.
• Assists companies in adapting to the challenges of globalization, economic
upheaval, expanding consumer expectations, and related differences.
• Assists companies in minimizing waste, driving out costs, and achieving
efficiencies throughout the supply chain process.
Goals of SCM
Main goal: match supply with demand timely, with the most efficient use of resources.
Also, contribute to the financial success of an enterprise.
• Supply chain partners work collaboratively at different levels to maximize
resource productivity, construct standardized processes, remove duplicate efforts
and minimize inventory levels.
• Minimization of supply chain expenses is very essential, especially when there are
economic uncertainties in companies regarding their wish to conserve capital.
• Cost efficient and cheap products are necessary, but SC managers need
to concentrate on value creation for their customers.
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, • Exceeding the customers’ expectations on a regular basis is
the best way to
satisfy them.
• Increased expectations of clients for higher product variety,
customized goods,
off-season availability of inventory and rapid fulfilment at a
cost comparable to
in-store offerings should be matched.
• To meet consumer expectations, merchants need to leverage
inventory as a
shared resource and utilize the distributed order management
technology to
complete orders from the optimal node in the supply chain.
• Aims at leading enterprises using the supply chain to improve differentiation,
increase sales, and penetrate new markets. The objective is to drive competitive
benefit and shareholder value.
2 – SCM processes (wk1)
SCM is used by companies to make their SC efficient and cost-effective. 5 basic
components:
1. Plan. Develop a plans/strategy to address how products will satisfy demands and
necessities of customers. Planning should focus on getting maximum profit.
2. Develop/Source. Build strong relationships with suppliers of required raw
materials for production. Identify dependable suppliers, and SC managers need to
construct a set of pricing, delivery and payment processes with suppliers and
create the metrics for controlling and improving the relationships. Finally,
managers combine all these processes for handling their inventory (which
involves receiving+examining shipments, transferring it to manufacturing
facilities and authorizing supplier payments).
3. Make. Manufacture the demanded products: they are designed, produced, tested,
packaged and synchronized for delivery. SC manager schedules all activities
required for this. This stage is most metric-intensive unit of SC, where firms can
gauge the quality levels, production output and worker productivity.
4. Deliver. The products are delivered at location, done by supplier. The delivery
stage is often referred as logistics, where firms collaborate for the receipt of
orders from customers, establish a network of warehouses, pick carriers to
deliver products to customers and set up an invoicing system to receive
payments.
5. Return. Defective or damaged goods are returned to the supplier by the
customer. Here, the companies need to deal with customer queries and respond
to their complaints etc. often seen as a problematic section of SC, because
planners need to discover a responsive and flexible network for accepting
damaged, defective and extra products back from their customers and facilitating
the return process for customers who have issues with delivered products.
3 – SCM process flow (wk1)
SCM = a systematic flow of materials, goods, and related information among suppliers,
companies, retailers, and consumers. 3 different types of flow in the SC:
1. Material flow. Includes a smooth flow of an item from producer to consumer
through various warehouses among distributors, dealers and retailers. Main
challenge: ensuring tat the materials flows as inventory quickly without stopping
through different points in the chain.
➔ the quicker is moves the better, as it minimizes the cash cycle.
The item can also flow from the consumer to the producer for any kind of repairs, or
exchange for an end of life material. Finally, completed goods flow from customers to
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, their consumers through different agencies. A process known as 3PL (third party
logistics) is in place in this scenario. There is also an internal flow within the customer
company.
2. Information / data flow. Comprises the request for quotation, purchase order,
monthly schedules, engineering change requests, quality complaints and reports
on supplier performance from customer side to the supplier. Regular interaction
between producer and consumer is needed. Other partners like distributors,
logistic providers and retailers also participate in the information network.
From the producer’s side to the consumer’s side, the information flow consists of
the presentation of the company, offer, confirmation of purchase order, reports
on action taken on deviation, dispatch details, report on inventory, invoices, etc.
3. Money flow. On the basis of the invoice raised by the producer, the clients
examine the order for correctness. If the claims are correct, money flows from
the clients to the respective producer. Flow of money is also observed from the
producer side to the
clients in the form of
debit notes.
To achieve an efficient and
effective SC, it is essential to
manage all three flows
properly with minimal efforts.
It is a difficult task for a SC
manager to identify which
information is critical for
decision-making. Therefore,
he or she would prefer to
have the visibility of all flows
on the click of a button.
4 – SCM flow components (wk1)
Transportation
Shipment is necessary for an uninterrupted and seamless supply. Factors with impact:
- Economic uncertainty and instability
- Varying fuel prices
- Customers’ expectations
- Globalization
- Improvised technologies
- Changing transportation industry
- Labor laws
Major factors that influence transportation:
--Long term decisions. The transportation manager has to choose what the primary
mode of transportation will be. He has to understand the product flows, volume,
frequency, seasonality, physical features of products and special handlings necessities.
Also, he has to check if outsourcing should be done for each product.
--Lane operation decisions. Focused on daily freight operations. Check real time
information on products’ requirements at different system knots, and collaborate at
every move of the product that is both inbound and outbound shipping lanes so as to
satisfy their services demands at the minimal possible cost. Doing it right: handle
information and utilize opportunities for profit, assure that the product is moved to
customers directly whenever it is demanded, and at the right quantity. Besides this,
saving costs on transportation too.
--Choice and mode of carrier. Choosing the right mode of transportation can improve the
whole SC process. E.g. looking at delivery time, special handling requirements and costs.
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