1. Supply Chain Management
Def: Supply Chain
What is Supply Chain Management?
Strategic Importance of SCM
Purchasing
Operations/Materials Management
Marketing and Customer Service
Uncertainty In Supply Chain & Some Solutions
Supply Chain Design
Accounting and Finance

2. Supply Chain
Facilities, functions, activities for producing & delivering product or service from supplier to customer
Planning, managing, acquiring, producing, warehousing, distribution, delivery

3. What is Supply Chain Management?
Manufacturer or
Service Provider
Supplier
Customer
Scheduling Information
Cash Flow
Order Flow
Credit Flow
Material Flow
Inv.
Customer
Marketing/
Sales/
Cust. Serv.
Purchasing-
Vendors
Operations/
Materials Man.
Accounting and Finance

4. Strategic Importance of SCM
Deals w/the complete cycle of materials flows
SCM plays key role in
Product customization
Quality control
Cost reductions
Speed-to-market
Effective SCM is to balance the production stream with uncertainty (customer, supplier, economic, etc.)

5. Purchasing Why Important?
Substantial % of sales, both goods and services
e.g., Industry % of Sales
All %
Lumber %
Food %
Petroleum %
Quality of goods and services produced are directly related to those purchased/received

6. Purchasing Selecting suppliers Ordering materials
Shipping & delivery of raw materials
Information management
Quality management - w/regard to suppliers
Customer service - w/regard to suppliers and fellow workers

7. Operations/Materials Management
Ordering materials - in conjunction w/purchasing
Inventory control
Scheduling production & capacity
Shipping & delivery - in conjunction w/warehouse
Information management - linked to 3 major business areas
Quality management - garbage in/garbage out principal
Customer service - vendors and final customer

8. Marketing and Customer Service
Forecasting demand
Selecting suppliers - in conjunction w/purchasing
Shipping & delivery - contract requirements
Information management
Quality management - first place customer complaints and/or compliments
Customer service - make the sale next time?

9. Uncertainty In Supply Chain
Wrong forecasts
Late deliveries
Poor quality
Machine breakdowns
Canceled orders
Erroneous information

10. Some Solutions Vertical integration Single sourcing
JIT - moving suppliers closer
Keiretsu - Japanese concept of partnering a small # of suppliers and vertical integration
Information technology improvements- MRP, ERP
Improved inventory control - goods as well as services

11. Supply Chain Design Strategic issue
Apply quality management principles
Control inventory
Work with suppliers & customers to achieve goals
Major goal of distribution is speed
Locate close to major markets
Use IT to speed information flow - e.g., EDI, Internet, etc.
Outsource international distribution

12. Summary Def: Supply Chain What is Supply Chain Management?
Strategic Importance of SCM
Purchasing
Operations/Materials Management
Marketing and Customer Service
Uncertainty In Supply Chain & Some Solutions
Supply Chain Design
Accounting and Finance