Chapter -1
Introduction to
Supply Chain Management
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SUPPLY CHAIN MANAGMENT
LEARNING OBJECTIVES
After reading this chapter, you will be able to
1. Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success
of a firm.
2. Identify the three key supply chain decision phases and explain the significance of each one.
3. Supply chain process views and circular economy.
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Introduction
Introduction of products with shorter life cycles and the heightened expectations of
customers have forced business enterprises to invest in, and focus attention on, their supply
chains.
With continuing advances in communications and transportation technologies has
motivated the continuous evolution of the supply chain and of the techniques to manage it
effectively.
➢ Reduction of time to market
➢ Higher flexibility of the systems
➢ Drastic reduction of costs
➢ Extended quality concept SCM 6
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Supply Chain
A supply chain is a system of organizations, people, technology, activities, information and
resources involved in moving a product or service from supplier to customer.
Conceptual model of a basic supply chain
Supply chain activities transform natural
resources, raw materials and components
into a finished product that is delivered to
the end customer.
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The Evolution of Supply Chain Management
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Responsive Supply Chain Design
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Supply Chain Management
Supply chain management (SCM) is the oversight
of materials, information, and finances distributed
from supplier to consumer.
Supply chain management involves coordinating
this flow of materials within a company and to the
end consumer.
Supply chain management encompasses the
planning and management of all activities involved
in sourcing and procurement, conversion, and all
logistics management activities.
SCM is also called the art of management of
providing the right product, at the right time, right
place and at the right cost to the customer. SCM 9
Objectives of supply chain management
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Primary activities of SCM
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Flows in supply chain management
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Toyota Production System (TPS)
TPS is a lean manufacturing system that focuses on eliminating
waste and respecting employees. TPS includes principles like
just-in-time production, standardized work processes, and
visual management systems
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Decisions Phases in a Supply Chain
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Tata Motors- Network in India
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PROCESS VIEWS OF SUPPLY CHAIN
The supply chain process occurs in two ways, Cycle View and Push/Pull
view.
1. Cycle View
2. Push/ Pull view
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Cycle view of supply chain management
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Supply chain management (SCM) enablers
Enables are the key elements and capabilities that facilitate the smooth and efficient functioning of a supply chain
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Organization Infrastructure Technology
HRM
Strategic alliance
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Strategic fit
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Strategic fit
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HOW TO ACHIEVE STRATEGIC FIT
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Supply chain performance
Supply chain performance is how well a company's supply chain
meets customer needs and expectations
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Recent Trends in Supply Chain
Management
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Sustainable Supply Chain Management
• Sustainable Sourcing: Prioritizing ethically and environmentally responsible sourcing of
raw materials, components, and services.
• Efficient Logistics: Optimizing transportation and distribution to reduce fuel
consumption, emissions, and waste.
• Waste Reduction: Implementing strategies to minimize waste generation, recycle
materials, and promote a circular economy.
• Social Responsibility: Ensuring fair labor practices, safe working conditions, and
community engagement throughout the supply chain.
• Transparency and Traceability: Increasing visibility into supply chain operations to
identify and address potential risks and impacts.
• Eco-Friendly Packaging: Utilizing sustainable packaging materials and minimizing
packaging waste.
• Energy Efficiency: Reducing energy consumption and transitioning to renewable energy
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Circular Economy
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Benefits of Circular Economy
➢ Reduced Waste and Pollution
➢ Cost Savings
➢ Reduced Dependence on Raw Materials
➢ Increased Resource Efficiency
➢ Job Creation
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Supply chain of Indian FMCG sectors
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