Ray Owen Ray.owen@wlv.ac.uk Supply Chain Management Objective – to satisfy the end customer Quality – speed – dependability – flexibility - cost Ray Owen Ray.owen@wlv.ac.uk

The Transformation Process

Some terms Supply network – all operations related to interacting with suppliers and customers Supply side – your suppliers Demand side – your customers First tier suppliers – those that supply you directly Second tier suppliers – those that supply your first tier suppliers First tier customers – those you supply directly Second tier customers – those supplied by your first tier customers Immediate supply network – your first tier suppliers and customers Total supply network – first and second tier suppliers and customers

Downstream and Upstream The key to understanding supply networks lies in identifying the parts of the network which contribute to those performance objectives valued by end customers

Supply Chain

The Vertical Integration decision In–house or Outsource? Do or Buy? What are the issues?

Vertical Integration issues Quality – better control in-house but supplier may have more detail specialist knowledge Speed – internal customers might have lower priority but outside subject to delivery issue Dependability –easier communications but see internal above, outside suppliers can be held to account contractually Flexibility – greater closeness but outside supplier might wider capabilities to meet changing needs Cost - low volumes v higher volumes, greater scope for economies of scale

Supplier selection The issues: Short term ability to supply Long term ability to supply Single sourcing v multi sourcing E-procurement Global sourcing Corporate Social Responsibility

Types of supply chains Business to Business Business to Consumer Consumer to Business Customer to Customer

Reading: Slack, N., Chamber, S., and Johnston, R. (2010) Operations Management. 6th Ed., Harlow: FT Prentice Hall. Read Chapters 6 and 13