1. Supply Chain Management
Course Code: BA 4116
Instructor: Sana Ullah Khan

3. Course Outline CORSE DESCRIPTION/OBJECTIVE
Supply Chain Management involves the flows of materials and information among all of the firms that contribute value to a product, from the source of raw materials to end customers.
Elements of supply chain management have been studied and practiced for some time in marketing, logistics, and operations management.
This course will attempt to integrate these different perspectives to develop a broad understanding of how to manage a supply chain.

4. Course Outline INDENTED LEARNING OUTCOMES
By the end of this course it is expected that the student will be able to:
To develop an understanding of key drivers of supply chain performance and their inter-relationships with strategy and other functions of the company such as marketing, manufacturing and accounting.
To impart analytical and problem solving skills necessary to develop solutions for a variety of supply chain management and design problems and develop an understanding for use of information technology in supply chain optimization.
To understand the complexity of inter-firm and intra-firm coordination in implementing programs such as e-collaboration, quick response, jointly managed inventories and strategic alliances.

5. Course Outline
INDENTED LEARNING OUTCOMES By the end of this course it is expected that the student will be able to: 4. To develop the ability to design logistics systems and formulate integrated supply chain strategy, so that all components are not only internally synchronized but also tuned to fit corporate strategy, competitive realities and market needs. 5. To understand which information should be exchanged in a supply chain and how it should be used to benefit the entire supply chain.

6. Cont..
6. To identify improvement opportunities that exist within supply chains in different industries and to quantify the improvements that various supply chain strategies offer.
7. To understand which barriers companies face during the implementation of new supply chain strategies.
8. To developed knowledge and skills relating to Supply Chain management.
9. To developed modeling skills by using excel solver.

7. COURSE CONTENTS Week 01 Introduction to supply chain management.
Supply chain strategy
Week 03
SCM Decisions
Week 04
SCM Drivers and obstacles
Week 05
Facility location
Week 06
Warehousing
Week 07
Forecasting & Project Progress Presentation

8. Cont.. Week 08 Mid Term Week 09 Inventory Management Week 10
Transportation
Week 11
Linear Programming – Excel Solver
Beer Game Guidelines & Practical
(Time bound)
Week 12
Bullwhip effect

9. Cont.. Week 13 Job shop scheduling, ERP JIT and lean production
Outsourcing and Supplier Relationships
Week 15
IT and SCM
Week 16
Project presentations
Week 17
End Term

10. Books RECOMMENDED TEXT BOOKS
1. Sunil Chopra, Supply Chain management, 3rd Prentice Hall.
2. Martin Christopher, Logistics and Supply Chain management – Creating value added networks, FT – Prentice Hall.
RECOMMENDED REFERENCE BOOKS
1. W. Stevenson, Operations Management, 9th.

11. Readings & Assesments Core texts Assessment Method
Operation Management by Richard B. Chase, ‎F. Robert Jacobs, ‎Nicholas J. Aquilano
Supply Chain Management, 4th/e  By Sunil Chopra
Assessment Method
5 Quizzes %
5 Assignment %
Class Behavior & participation %
Mid Term %
Project/Report + Presentation %
Final Exam %

12. Supply Chain Management
Supply Chain: The sequence of organization’s facilities, functions, and activities that are involved in producing and delivering a product or service.

13. Need for Supply Chain Management
Improve operations
Increasing levels of outsourcing
Increasing transportation costs
Competitive pressures
Increasing globalization
Increasing importance of e-commerce
Complexity of supply chains
Manage inventories

14. Benefits of Supply Chain Management
Lower inventories
Higher productivity
Greater agility
Shorter lead times
Higher profits
Greater customer loyalty

15. What is Operations and Supply Chain Management?
Operations and supply management (OSM): the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services.
Concerned with the management of the entire system that produces a good or delivers a service.
OM is confused with operations research(OR), and management science(MS), and industrial engineering(IE).
OM is a field of management where as OR & MS are application of quantitative methods to decision making in all fields and IE is an engineering discipline .

16. Supply Chain of a Manufacturer
Dealer
network
Vehicle manufacturer
Distribution Chain of Parts Manufacturer
Manufacturing Chain
Distribution Chain of V.M.
Raw materials
Stockist
Sub-supplier
Supplier
Prime distributor
Area distributor
Local distributor

17. Supply Chain of a Manufacturer
First tier
suppliers
Second tier
customers
Second tier
suppliers
First tier
customers
The Operation
Purchasing & supply
management
Physical distribution
management
Logistics
Materials management
Supply chain management 17

18. Supply Chain Transformation Process
System
Input
Resources
Transformation Function
Output
Hospital
Patient
Drs, Nurses, medicines, equipments
Health care
( Physiological)
Healthy individuals
Restaurant
Hungry customers
Food, chef, Staff
Well-prepared,
Well-served food,
(Good environment.
Physical & Exchange)
Satisfied Customers
College or University
Graduates
Teachers, Books, Classrooms
Imparting Knowledge & skills
(Informational)
Educated Individuals.
Automobile Factory
Steel, engine parts
Tools, Machines, Workers
Fabrication & Assembly of Cars
( Physical)
High-quality cars

19. Supply Chain Transformation Process
Sourcing Process- How a firm purchases the raw material and other goods????
Logistics Process- the various ways that material can be moved. “ Inbound Logistics” and “Outbound Logistics”.
Distribution Process- Relate to warehousing/ storing functions.
Manufacturing & Servicing Process- Related with production of goods and services.

20. Differences between services and goods
Manufacturing Organization
Service Organization
Physical, durable product
Inventories (output)
Low Customer Contact
Long Response Time
Local and international Market
Large Facilities
Capital Intensive
Quality Easily Measured
Intangible
No Inventories
High Customer Contact
Short Response Time
Local Markets
Small Facilities
Labor Intensive
Quality not easily measured

21. Similarities between services and goods
Customers expect the best quality and service
Service providers must stock the input e.g. hospitals stock medicines- manufacturing can not stock short life cycle products .
Restaurants, retail stores and wholesalers are considered by US department of commerce and labor as service providers.
Customer Contact- (baggage handling area, back door diplomacy- backroom operations of a bank).

22. Servitization Strategies
Servitization refers to a company building service activities into its product offerings for its current users
Maintenance, spare parts, training, and so on
Success starts by drawing together the service aspects of the business under one roof
Manufacturers are adapting different service models
e.g- Nokia Integrated service model,
Coca cola and Dell Distribution Control Model

23. Growth of Services
Until the mid of 20th century focus was on manufacturing organisations, and thus called “Industrial Management or Production Management”.
Service Organisations were working at handicraft levels and were largely ignored.
Now more than 80% of the jobs in modern word in business are services. Services were 25 % of GDP in 1951 & 45 % in 2002 and 55% in 2010 in developing countries.

24. Efficiency, Effectiveness, and Value
Efficiency: Doing something at the lowest possible cost.
Effectiveness: Doing the right things to create the most value for the company.
Relationship between efficiency and effectiveness????
Value: quality divided by price.

25. Careers in Operations and Supply Management
Plant manager
Hospital administrator
Branch manager
Call center manager
Supply chain manager
Purchasing manager
Business process improvement analyst
Quality control manager
Lean improvement manager
Project manager
Production control analyst
Facilities manager

26. Historical Development of OSM
JIT & TQC- A production system in which processing and movement of materials and goods occur just as they are needed, usually in small batches.
JIT is coupled with TQC which eliminates causes of production defects.

27. Historical Development of OSM
2-Manufacturing strategy & paradigm- emphasis was on a focused strategy, focused factory that may perform a limited set of tasks well.
3- Service quality & productivity- McDonald’s introduced this approach.
4-TQM- Six sigma, ISO 9000

28. Historical Development of OSM
5- BPR- Emergence of LEAN philosophy led companies to reengineer their operations.
Japanese automobile manufacturer, Toyota, started lean manufacturing in mid 1900’s
Toyota's focus was on the elimination of all waste from every aspect of the process
Elimination of non value adding processes.
Widespread interest in lean manufacturing occurred after the book about automobile production “The Machine That Changed The World” published in 1991

29. Historical Development of OSM
6- SCM- A total system approach to manage the flow of information, materials & services from raw material suppliers to end customers.
7-E-Business- application of internet as an essential element of business activity. Amazon, E-buy,

30. Current issues in OSM
Coordinating the relationships b/w organizations- Outsourcing has led companies to integrate information system, product development & design, packaging, testing & distribution
Optimizing global suppliers, production & distribution networks- Global Supply Chains.
Increased co-production of goods and services- Mass- customization, E-Business.
Managing Customer touch points- Customer service level.

31. Elements of Supply Chain Management
Deciding how to best move and store materials
Logistics
Determining location of facilities
Location
Monitoring supplier quality, delivery, and relations
Suppliers
Evaluating suppliers and supporting operations
Purchasing
Meeting demand while managing inventory costs
Inventory
Controlling quality, scheduling work
Processing
Incorporating customer wants, mfg., and time
Design
Predicting quantity and timing of demand
Forecasting
Determining what customers want
Customers
Typical Issues
Element

32. Logistics
The goal of logistic work is to manage the completion of project life cycles, supply chains and resultant efficiencies.
Logistics is the art and science of managing and controlling the flow of goods, energy, information and other resources like products, services, and people, from the source of production to the marketplace.
Refers to the movement of materials and information within a facility and to incoming and outgoing shipments of goods and materials in a supply chain.

33. Logistics Logistics is the time related positioning of resources."
As such, logistics is commonly seen as a branch of engineering which creates "people systems" rather than "machine systems
It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging.

34. Logistics Movement within the facility Bar coding
Incoming and outgoing shipments
EDI (Electronic Data Interchange)
Distribution
JIT Deliveries

35. Logistics: Evaluating Shipping Alternatives
A situation that arises frequently in some businesses in making a choice between quicker( expensive) shipping alternatives such as overnight or 2 day air and slower but cheaper alternatives.
The decision in such cases often focuses on the cost savings of alternatives versus the increased holding cost that result from using slower alternative.

36. Distribution Requirements Planning
Distribution requirements planning (DRP) is a system for inventory management and distribution planning.

37. Uses of DRP Management uses DRP to plan and coordinate: Transportation
Warehousing
Workers
Equipment
Financial flows

38. Electronic Data Interchange
EDI – the direct transmission of inter-organizational transactions, computer-to-computer, including purchase orders, shipping notices, and debit or credit memos.

39. Electronic Data Interchange
Increased productivity
Reduction of paperwork
Lead time and inventory reduction
Facilitation of just-in-time systems
Electronic transfer of funds
Improved control of operations
Reduction in clerical labor
Increased accuracy

40. Efficient Consumer Response
Efficient consumer response (ECR) is a supply chain management initiative specific to the food industry.
Reflects companies’ efforts to achieve quick response using EDI and bar codes.

41. E-Commerce
E-Commerce: the use of electronic technology to facilitate business transactions.

42. Successful Supply Chain
Trust among trading partners
Effective communications
Supply chain visibility (Competitive )
Event-management capability
The ability to detect and respond to unplanned events
Performance metrics Value creation

43. Supply Chain Operational Reference (SCOR) Metrics
Perspective
Metrics
Reliability
On-time delivery
Order fulfillment lead time
Fill rate (fraction of demand met from stock)
Perfect order fulfillment
Flexibility
Supply chain response time
Upside production flexibility
Agility to obtain competitiveness
Expenses
Supply chain management costs
Warranty cost as a percent of revenue
Value added per employee
Assets/utilization
Total inventory days of supply
Cash-to-cash cycle time
Net asset turns

44. CPFR Collaborative Planning, Forecasting and Replenishment.
Focuses on information sharing among trading partners.
Forecasts can be frozen and then converted into a shipping plan.
Eliminates typical order processing.

45. Creating an Effective Supply Chain
Develop strategic objectives and tactics.
Integrate and coordinate activities in the internal supply chain.
Coordinate activities with suppliers with customers.
Coordinate planning and execution across the supply chain.
Form strategic partnerships.

46. Supply Chain Performance Drivers
Quality
Cost
Flexibility
Velocity
Customer service

47. Velocity Inventory velocity
The rate at which inventory(material) goes through the supply chain.
Information velocity
The rate at which information is communicated in a supply chain.

48. Challenges Barriers to integration of organizations
Getting top management on board
Dealing with trade-offs
Small businesses
Variability and uncertainty
Long lead times

49. Trade-offs Lot-size-inventory (order > demand)
Bullwhip effect
Inventory-transportation costs
Cross-docking (direct unload & load)
Lead time-transportation costs
Product variety-inventory
Delayed differentiation

50. Trade-offs Bullwhip effect
Inventories are progressively larger moving backward through the supply chain.
Cross-docking
Goods arriving at a warehouse from a supplier are unloaded from the supplier’s truck and loaded onto outbound trucks.
Avoids warehouse storage.

51. Trade-offs Delayed differentiation
Production of standard components and subassemblies, which are held until late in the process to add differentiating features.

52. Supply Chain Issues Quality control Production planning and control
Inventory policies
Purchasing policies
Production policies
Transportation policies
Quality policies
Design of the supply chain, partnering
Operating Issues
Day
Tactical Issues
Moths
Strategic Issues
Years

53. Supplier Partnerships
Ideas from suppliers could lead to improved competitiveness
Reduce cost of making the purchase
Increase Revenues
Enhance Performance

54. Critical Issues Technology management Benefits Risks
Strategic importance
Quality
Cost
Agility
Customer service
Competitive advantage

55. Operations Strategy
SCM creates value through changes in time, location and quantity.
SCM creates competitive advantage by integrating and streamlining the diverse range of activities that involve purchasing, internal inventory, transfers and physical distribution.

56. The End

57. References
Operation Management by Richard B. Chase, ‎F. Robert Jacobs, ‎Nicholas J. Aquilano
Supply Chain Management, 4th/e  By Sunil Chopra