SUPPLY CHAIN

MANAGEMENT
SUPPLY CHAIN MANAGEMENT
OVERVIEW
This Subject will provide to learners the knowledge of supply chain
management which can be applied into one specific enterprise. With
such knowledge, learners can work for enterprises in such fields as
purchasing, supplier network management, logistics( warehouse and
transportation activities) to help enterprises to increase their
competitive advantages through reducing input cost, seamless flow in
their supply chain and create an maintain the good relationship with
their suppliers.
SUBJECT OBJECTIVES
After learning this subject, learners can do well such below activities:
Can describe and analyze clearly and correctly any supply chains for any
industries
Know how to choose the suitable supply chain strategy for enterprises
for such specific industry
Know how to build an efficiency measures for all supply chain in certain
industry
Know how to build and cooperate effectively with their supplier network
LEARNING RESULT SCORING
METHOD
 Groupworking and Presentation 30%
 Final examination 70%
References
Main course
1. Principles of Supply Chain Management: A Balanced Approach. 3rd E
( Author: Wisner, Leong and Tan,2012)

Reference books

1. Essentials of Supply Chain Management

( Author: Michael Hugos)
2. Supply Chain Management: Best Practices
( Author: David Blanchard)
3. Operation & Supply Chain Management
( Author: Jacobs & Chase)
4. Purchasing & supply chain management,2016
(Robert M. Monczka et al)
5. Managing supply chains : a logistics approach ,2013
(John J. Coyle et al,)
SCM CONTENT
Chapter 1: Introduction to SCM
Chapter 2: Purchasing Management
Chapter 3: Supplier Relationship Management
Chapter 4: Strategic Sourcing for successful SCM
Chapter 5: Collaborative, Planning, Forecasting, and Replenishing
Chapter 7: Inventory Management
Chapter 9: Logistics Management
Chapter 11: Location Management
CHAPTER 1: INTRODUCTION TO SCM
 MAIN CONTENT
- Supply chain and Supply chain management.
- Objectives and elements of supply chain management.
- Supply chain management activities.
- History and trends in SCM.
- Bullwhip effect

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 WHAT IS A SUPPLY CHAIN?
• A network of connected and interdependent organisations mutually and co-
operatively working together to control, manage and improve the flow of
materials and information from suppliers to end users. AitKen
• A supply chain is the alignment of firms that bring products or services to market
– Lambert, Stock, and Ellram.
• A supply chain is a set of firms that pass materials forward - La Londe and
Masters.
• The series of companies eventually making products and services available to
consumers—including all of the functions enabling the production, delivery and
recycling of materials, components, end products and services— Wisner, Tan,
Leong.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
 A Supply Chain Example

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
 HOW MANY TIERS?
• Supply chains – e.g., automobile supply chain - have many tiers.
• Others – e.g., law office, have a few tiers.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
 WHERE ARE SUPPLY CHAINS?
• Companies - multiple products - multiple supply chains.
• Products and services - approach customers - through supply chain—
some large, long and complex – Some simpler.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
 HOW ABOUT…INCOME?

• Income of supply chains - from end customers.

• “The things that we do within our supply chain
are driven around customer success,” Steve
Darendinger “We provide opportunities and
solutions for customers.”

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
 WHAT IS SUPPLY CHAIN
MANAGEMENT?
• “The planning and management of all activities involved in sourcing and procurement,
conversion and all logistics management activities. Importantly, it also includes
coordination and collaboration with channel partners, which can be suppliers,
intermediaries, third-party service providers and customers.” - The Council of Supply
Chain Management Professionals (CSCMP).
• “The design and management of seamless, value-added processes across organizational
boundaries to meet the real needs of the end customer.” - The Institute for Supply
Management (ISM).
• “The coordinated set of techniques to plan and execute all steps in the global network
used to acquire raw materials from vendors, transform them into finished goods, and
deliver both goods and services to customers.” - The Singapore-based Logistics & Supply
Chain Management Society.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
 MAIN IDEA: WORK
TOGETHER

• Firms need to work together to make supply chains

successful
• What to share: demand forecasts, production plans,
capacity changes,
new marketing strategies, new product and service
developments, new technologies employed,…

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 A CHANGE: CULTURE?

• Possible to change corporate cultures to conduct SCM?

• Traditional cultures: short-term, company-focused
performance  not align with SCM’s objectives.
• New culture: trust, collaboration and honest, cooperation,
accurate communications.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 WHY COOPERATION?

• Just create products following the orders of other member(s)?

• Purchasing, operations, logistics and transportation managers not only
must be equipped with the necessary expertise in these critical supply
chain functions but also must appreciate and understand how these
functions interact and affect the entire supply chain.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 WHY COOPERATION?
(cont.)
• Rebecca Morgan, president of an Ohio-based supply chain
management consulting firm, says too many companies go into
agreements they call partnerships and then try to control the
relationship from end to end.
• “A lot of the automotive companies did this in the beginning,”
she says. “They issued a unilateral ultimatum: you will do this
for me if you want to do business with me, no matter what it
means for you.”
• This type of supply chain management approach can lead to
distrust, poor performance, finding ways to “beat the system”
and ultimately loss of customers.
Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 THE IMPORTANCE OF SCM

Reduce bullwhip effect, implies that

demand variability increases as one
moves up the supply chain,
i.e., as one moves away from
customer demand

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 REDUCED BULLWHIP EFFECT

• Lower supply chain costs.

• Better customer service (fewer stockouts if purchase
quantities were decided ahead of time and shipping
companies delivered on time)
• Production quantities would be less, reducing purchase costs
and production time. The bullwhip effect leads to excess costs
on the order of 12 to 25 percent at each firm in the supply
chain, which can be a tremendous competitive disadvantage.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 REDUCED BULLWHIP
EFFECT (cont.)
• Better quality, since higher profit margins mean more
investment into materials research, better production
methods and use of more reliable transportation and
storage facilities.
• Suppliers will feel more comfortable investing capital
in better facilities, better products and better
services for their customers.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 ORIGINS OF SCM

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 ORIGINS OF SCM (cont.)
• 1950s and 1960s: mass production
• 1960s and 1970s, material requirements planning (MRP),
manufacturing resource planning (MRPII)
• The 1980s and 1990s: supply chain management.
Since 2000s
- third-party service providers (3PLs)
=> quick response, service response logistics, and integrated logistics

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 IMPORTANT ELEMENTS OF SCM

SCM ELEMENTS

Supply

Operations

Logistics

Integration

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 IMPORTANT ELEMENTS OF SCM
(cont.)
• Supply:
- Long-term relationships with suppliers.
- Supplier management:
+ Supplier evaluation
+ Supplier certification
- Strategic Partnership.
- Ethical and sustainable sourcing

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 IMPORTANT ELEMENTS OF SCM
(cont.)
• Operations
- Demand Management
- Material requirements planning (MRP)
- Enterprise resource planning (ERP) systems
- Lean production
- Six Sigma quality or a total quality management strategy

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 IMPORTANT ELEMENTS OF SCM
(cont.)

• Logistics
- Logistics decisions: cost and delivery timing or customer
service.
- Customer relationship management strategies
- Designing distribution network
- Global supply chain

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 IMPORTANT ELEMENTS OF SCM
(cont.)

• Integration
- Members work together to make decisions in the
supply chain.
- Supply chain performance measurement system

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 CURRENT TRENDS IN
SCM
• Expanding (and contracting) the Supply Chain
In two dimensions:
- Breadth: include foreign manufacturing, sales offices and
retail sites, along with foreign suppliers and customers;
- Depth: include the influencing of second- and third-tier
suppliers and customers.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 CURRENT TRENDS IN SCM (cont.)
• Increasing Supply Chain Responsiveness

- Firms should be flexible and responsive to customers’

changing requirement: by Agile manufacturing, JIT,
mass customization, lean manufacturing and quick
response.

- Mobile technologies are used in many supply chain

applications where real-time data transfers can
improve responsiveness.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
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 CURRENT TRENDS IN SCM
(cont.)
• The Greening of Supply Chains

- Purchasing, producing, packaging, moving, storing, repackaging,

delivering and then returning or recycling products => threat to the
environment such as discarded packaging materials, scrapped toxic
materials, carbon monoxide emissions, noise, traffic congestion
and other forms of industrial pollution.
- Green or sustainable supply chain initiatives are becoming more
popular.

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach.
South-Western/Cengage Learning.
 CURRENT TRENDS IN SCM
(cont.)
• Reducing Supply Chain Costs
Cost reduction is of importance.
- Reducing waste.
- Reducing purchasing and product distribution costs.
- Reducing excess inventories and non-value-adding activities among
the supply chain participants.
Continue to reduce costs by:
- Trial and error.
- Increased knowledge of the supply chain processes.
- Use of technology to improve information flow and
communication.
Benchmarking other successful supply chains.
Wisner Joel,- D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach.
South-Western/Cengage Learning.
References
• Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply
Chain Management: A balanced Approach. South-Western/Cengage
Learning.

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 END OF CHAPTER 1

Wisner Joel, D., Keah-Choon, T., & Leong Keong, G. (2012). Supply Chain Management: A balanced Approach. South-Western/Cengage Learning.
Thank you!