Scm slide chap 1

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SUPPLY CHAIN MANAGEMENT

Lecturer: Th.s Đoàn Thị Hoàng Thảo

UNIVERSITY OF TRANSPORT HOCHIMINH CITY

COURSE STRUCTURE

CHAPTER 1

1.1 Introduction

1.2 Supply Chain Management Activities

1.3 Supply Chain Structure

1.4 Supply Chain Members

1.5 Supply chain and business strategy

1.6 Supply Chain Management Model

CHAPTER 1 OBJECTIVES

After completing this chapter, students should achieve the following objectives:

 Define Supply Chain and Supply Chain Management

 Describe the structure of Supply Chain

 List of all member that are involved in Supply Chain

 Analyze the operating principles of the Supply Chain

 Understand the Supply Chain Management Model

1.1 Introduction

1.1.1 Definition of Supply Chain and Supply Chain Management

“Supply Chain (SC) is a network of partners that work together to transform basic goods (upstream) into a finished product (downstream), delivering value to customers and managing returns at each stage.”

- Alan Harrison và cộng sự

(2014)-“Supply Chain Management (SCM) involves planning and controlling the entireprocess related to purchasing, production, transportation, and distribution within asupply chain SCM includes the coordination and collaboration among partners,which may consist of suppliers, intermediaries, third-party service providers, andcustomers Essentially, SCM integrates the management of supply and demandwithin and across companies to meet the needs of the end customer.”

- Council of Supply Chain Management Professionals

(2010)-1.1.2 The Purpose of the Supply Chain

- The purpose of every supply chain is to maximize supply chain value (supply chain surplus)

Supply chain surplus = Value for customers - Supply chain costs

Consumer surplus + Revenue - Expense

Measure the

success of SC!

SC surplus

SC surplus

1.2 SUPPLY CHAIN ​​MANAGEMENT ACTIVITIES

5

INFORMATION

Basis for decision making

1.2 SUPPLY CHAIN ​​MANAGEMENT ACTIVITIES

5

INFORMATION

Basis for decision making

1.3 SUPPLY CHAIN ​​STRUCTURE

(Source: Alan Harrison và cộng sự, 2014)

Basic Supply Chain

Center company

Supplier Level 1

Extended Supply Chain

Supplier

Level 2

Customer level 1

Customer level 1

Center company

Supplier Level 1 Supplier

Level 2

Customer level 1

Customer level 2

Customer level 1

Customer level 1

Customer level 2

Customer level 2

Customer level 2

Customer level 2 Customer

level 1

Customer level 3

Supplier

Level 2

Supplier Level 1

Supplier Level 1

Supplier

Level 2

Customer level 3

Customer level 3

Service providers

Service

providers

Nonwoven fabric

MicrofiltrationNose bar

Elastic band

Paper boxSpandex

Custom er

Custom er

Mask Manufacturer

Customer Customer Customer

Requirement: If you are working for a company that produce household products

or is a supplier of raw materials for any product Choose a type of product and

draw a supply chain network diagram for this product.

Note: The diagram should extend to suppliers and customers at least two levels.

1.4 Supply Chain Members

1 Manufacturer and Supplier

2 Distributor

3 Retailer

4 Customer

5 Service Provider

- The roles of the members participating in the supply chain

are relative A business can play the role of a central

company, a supplier or a customer

- An entity can participate in the Supply Chain in many

different roles.

(Essentials of SCM, p.22)

CASE STUDY: FORD MOTOR COMPANY

1.5 Supply chain and business strategy

Responsiveness

Efficiency

+

Steps to align supply chain with business strategy

Step 1: Understand the requirements of customers and the market.

Step 2: Identify the core capabilities and the role of the company in the

supply chain.

Step 3: Develop the necessary supply chain resources to support the

company's roles.

• Flexible Manufacturing

• Small Factories

• Less excess capacity

• Narrow

• Few hub company

• Product variety

• Low Inventory

• Not much stock

areas

1.6 Supply Chain Management Model

SCOR Model