Assoc. Prof.

Ho Thanh Phong
International University, VNU-HCM
Email: htphong@[Link]

Assoc. Prof. Ho Thanh Phong, International University 1

Course Objectives

 Understand the definitions Supply Chain, Logistics and

Operations Management
 Understand the concept and key points of Operations &
Supply Chain Management.
 Understand how to manage Production and/or Service in
the context of Supply Chain.
 Apply to a group project.

Assoc. Prof. Ho Thanh Phong, International University 2

References
 Text book:
1. Operations Management 6th Edition, Roberta Russell & Bernard W.
Taylor, III
2. Logistics - An Introduction to Supply Chain Management, Donald
Waters, PALGRAVE MACMILLAN, 2003.
 Lecture Notes:
 Operations Management, H.T. Phong
 Logistics and Supply Chain Management, H.T. Phong

Grading
 Midterm Exam 30%
 Home works 10%
 Group Project 20%
 Final Exam 40%
Assoc. Prof. Ho Thanh Phong, International University 3
 Chapter 0
Fundamentals of
Operations & Supply
Chain Management

Assoc. Prof. Ho Thanh Phong, International University 4

Supply Chain illustration

Fig. 1.1. Supply Chain structure

Assoc. Prof. Ho Thanh Phong, International University 5
1. THE SUPPLY CHAIN
People use different names for these chains of activities and
organizations. When they emphasize the operations, they refer to
the process; when they emphasize marketing, they call it a
logistics channel; when they look at the value added, they call it
a value chain, when they see how customer demands are
satisfied, they call it a demand chain. Here we are emphasizing
the movement of materials and will use the most general term of
supply chain.

A SUPPLY CHAIN consists of the series of activities and

organizations that materials move through on their journey
from initial suppliers to final customers.

Assoc. Prof. Ho Thanh Phong, International University

Structure of the supply chain
SUPPLY CHAIN = a series of activities and
organizations that move materials from initial
suppliers to final customers
Upstream supply chain activities: involve initial
supplier, third tier supplier, second tier supplier,
first tier supplier
Downstream supply chain activities: involve first
tier customer, second tier customer, third tier
customer, final customer

Assoc. Prof. Ho Thanh Phong, International University 7

Fig. 1.2. Supply Chain activities direction

Assoc. Prof. Ho Thanh Phong, International University 8

2. Basics Definition
 All organizations move materials. Manufacturing: raw materials
from suppliers and deliver finished goods to customers.
 Definition of Logistics: Logistics is the function that is
responsible for the movement of materials (and
information). It is responsible for the transport and storage of
materials between suppliers and customers.
 According to the Council of Supply Chain Management
Professionals (CSCMP), a professional organization for
Logistics and SCM professionals, logistics is defined as: “the
process of planning, implementing and controlling the efficient,
effective flow and storage of goods, services and related
information from point of origin to point of consumption for the
purpose of conforming to customer requirements”

Assoc. Prof. Ho Thanh Phong, International University 9

Basic Definition (contd.)
Products: Goods (tangible) and Services (intangible)
Operations: Operations include manufacturing, serving,
transporting, selling, training, and so on. The main outputs
are goods and services.
OPERATIONS
INPUT OUTPUT

- People - Manufacture - Goods

- Buildings - Serve - Services
- Raw materials - Supply - Profit
- Equipment - Transport - Waste
- Information - Sell - Wages
- Investment - Train etc…
etc. . . etc…

Fig. 1.3. Operations of a organization

Assoc. Prof. Ho Thanh Phong, International University 10
Basics Definition (contd.)
 LOGISTICS is the function responsible for
the flow of materials from suppliers into an
organization, through operations within the
organization, and then out to customers.

Fig. 1.4. Cycle of Supply and Demand

Assoc. Prof. Ho Thanh Phong, International University 11
 Fig. 1.5. Role of Logistics

Inbound logistics: activities between external suppliers and the

organization
Outbound logistics: activities between external customers and
the organization
Operations within the organization: activities between internal
suppliers and internal customers
Assoc. Prof. Ho Thanh Phong, International University 12
Link: [Link]
v=V4JRH3e4xrg&feature=related

Assoc. Prof. Ho Thanh Phong, International University 13

In practice, most organizations get materials
from many different suppliers, and sell products
to many different customers.
The supply chain converges as raw materials
move in through the tiers of suppliers, and
diverges as products move out through tiers of
customers.
A manufacturer might see sub-assembly
providers as first tier suppliers, component
makers as second tier suppliers, materials
suppliers as third tier suppliers, and so on. It
might see whole­salers as first tier customers,
retailers as second tier customers, and end users
as third tier customers .

Assoc. Prof. Ho Thanh Phong, International University 14

Fig. 1.6. Supply Chain around a Manufacturer

Assoc. Prof. Ho Thanh Phong, International University 15

3. ACTIVITIES OF LOGISTICS
Procurement or purchasing.
Inward transport or traffic management
Receiving
Warehousing or stores
Stock control, Order picking and Materials handling.
Outward transport
Physical distribution management
Recycling, returns and waste disposal
Location and Communication

Assoc. Prof. Ho Thanh Phong, International University 16

Case Study
NIKE logistics center
[Link]
v=NkfHVYv5nUo&feature=related

How UPS Cargo Containers Work

[Link]

Simulation [Link]
v=_0UJ0lKnn_o&feature=related

Assoc. Prof. Ho Thanh Phong, International University 17

 Summary
❑Every organization creates products to satisfy customer
demand. The operations that create these products need an
effective and efficient flow of materials. In this sense,
‘materials’ are all the goods and services needed to create
products.
❑ Logistics is the function that is responsible for the flow of
materials into, through and out of an organization.
❑ Materials move through a series of related activities and
organizations between initial suppliers and final customers.
These form a supply chain. Each product has its own supply
chain.
❑ There are many possible structures for supply chains, but the
simplest view has materials converging on an organization
through tiers of suppliers, and products diverging through
tiers of customers.
❑ Logistics consists of a series of related activities. These range
from procurement at the beginning of operations, through to
physical distribution at the end.
Assoc. Prof. Ho Thanh Phong, International University 18
Summary (contd.)
❑ An overall aim for logistics is to achieve high
customer satisfaction or perceived product value. This
must be achieved with acceptable costs.
❑ Every organization depends on the movement of
materials, and the way this is done affects costs,
profits, relations with suppliers and customers,
customer service, and virtually every other measure of
performance.
❑ There are a lot of pressures for improving logistics.
Current trends are: Improving communication, Improving
customer service, some other significant tendencies.
❑ Current themes:
LEAN logistics, AGILE logistics, INTEGRATION logistics.

Assoc. Prof. Ho Thanh Phong, International University 19