Supply Chain Management

BACHELOR OF COMMERCE SUPPLY CHAIN

MANAGEMENT

(BCOM YEAR 2)

Facilitator: Nancy Kiliswa

1 March 2014

SUPPLY CHAIN MANAGEMENT 2A

PART TIME CLASS

WEEK 1

Overall Program objectives

1. Ability to discuss strategic importance of a good supply

chain management for competitive advantage

2. Identify and evaluate key drivers which affect supply

chain performance

3. Attain commitment to quality, timeliness and continuous

improvements

4. Analyze logictics and operations in SCM

5. Develop client and vendor relation skills

6. Perform warehousing activities effectively

7. Develop contract and negotiation skills

SCM 2A – Production and Operations Management

The purpose is to introduce students to the concept of

supply chain management

Provide students with the understanding of the nature of

activities in operations management

Students learn the creation of goods and services through

transformation of inputs into outputs

This module will help students understand production

and operations management within the framework of

company’s competitive advantage

Supply Chain Management 2A

Content

1. Introduction

2. Introduction to Operations and Supply Chain

Management

3. Operations and Supply Chain Strategies

4. Business Processes

5. Managing Quality

6. Developing Products and Services

7. Managing Inventory

8. Supply Chain Information Systems

1. Introduction - Aims of the Module

Understand supply chain management

Develop competence in analysis of key aspects of

production and supply chain management

Develop critical thinking skills to allow for

effective supply chain decision making

Learning Objectives:

Define operations management

Define the concept of supply chain management (SCM)

Understand the importance of SCM in the 21st century

Understand the SCOR model and its application to SCM

Be knowledgeable about the potential career paths in the

field of SCM

2. Introduction to Operations and Supply Chain

Management

1. Introduction

In the ever changing business environment

organizations are more demand driven and

customer focused.

Supply chain management is often seen as a

mechanism for obtaining and sustaining

competitive advantage in the constantly changing

environment

Why study operations and supply chain management?

Every organization must make a product or

service that someone values

Most organizations function as part of a larger

supply chains

Organizations must carefully manage their

operations and supply chains in order to prosper

and survive

Operations function

It is the collection of people, technology and

systems within an organization that has primary

responsibility for providing the organization’s

products and services

Every organization has an operations function

Supply chain

A network of manufacturers and service providers

that work together to convert and move goods

from raw materials to finished goods

Supply chain links together the operations

function of many different organizations

Supply chain

A supply chain consists of the flow of product and

services from:

Raw materials manufacturers

Component and intermediate manufacturers

Final product manufacturers

Wholesalers and distributors

Retailers

They are connected by transportation and storage and

integrated through planning and sharing of information

Supply chain

Detergent supply chain:

Customer wants

detergent

Pick n Pay

Supermarket

Third

party

Distributor

Unilever or other

manufacturer

Plastic container Producer

Chemical

manufacturer

Packaging

company

Paper

Manufacturer

Timber

Industry

Chemical

manufacturer

Activity

Identify any organization of your choice and develop its

supply chain

Concepts essential in understanding supply chains

Upstream: activities or firms positioned earlier in the

supply chain

Downstream: activities or firms positioned later in the

supply chain

First tier suppliers: provide products or services directly

to a particular firm

Second tier suppliers: provide products to a firm’s first

tier supplier

Supply Chain Management

It is the active management of supply chain activities

and relationships in order to maximize customer value

and achieve sustainable competitive advantage

Enables firms to run supply chains in the most effective

and efficient way possible

Managing supply and demand, sourcing raw materials

and parts, manufacturing and assembly, warehousing

and inventory tracking, order entry and order

management, distribution across all channels, and

delivery to the customer

-- The Supply Chain Council

Supply Chain Management

Supply Chain Management is primarily concerned with

the efficient integration of suppliers, factories,

warehouses and stores so that merchandise is produced

and distributed in the right quantities, to the right

locations and at the right time, and so as to minimize

total system cost subject to satisfying customer service

requirements.

Important elements of Supply Chain Management

Purchasing: Supplier alliances, supplier management,

strategic sourcing

Operations: Demand management, MRP, ERP, JIT,

TQM

Distribution: Transportation management, customer

relationship management, network design, service

response logistics

Integration: Coordination/Integration activities, global

integration problems, performance measurement

The SCOR Model

To understand the supply chain activities better the

Supply Chain Operations Reference (SCOR) model

must be examined

Developed by the Supply Chain Council

Provides standardized description of processes,

relationships and metrics that define supply chain

management

The SCOR Model

It enables users to address, improve and communicate

SCM practices within the supply chain

It is a management tool spanning from supplier’s

supplier to customer’s customer

The SCOR Model

According to the SCOR model, the Supply Chain

Management covers five broad areas:

Planning activities

Sourcing activities

‘Make’ or production activities

Delivery activities

Return activities

Planning activities

Demand/Supply Planning and Management

Balance resources with requirements and

establish/communicate plans for the whole supply

chain, including Return, and the execution processes of

Source, Make, and Deliver.

Align the supply chain unit plan with the financial plan.

Sourcing activities

Identify, select and contract supply sources

Schedule deliveries; receive, verify, and transfer

product; and authorize supplier payments.

Assess supplier performance, and maintain data.

Manage inventory, capital assets, incoming product,

supplier network, supplier agreements, and supply

chain source risk.

Production activities

Cover the actual production of a good or a service

Schedule production activities, issue product, produce

and test, package, stage product, and release product to

deliver.

Finalize engineering for the product.

Manage rules, performance, data, in-process products

(WIP), equipment and facilities, transportation,

production network, regulatory compliance for

production, and supply chain make risk.

Delivery activities

Order, warehouse, transportation, and installation

management of the product or service

All order management steps from processing customer

inquiries and quotes to routing shipments and selecting

carriers.

Warehouse management from receiving and picking

product to load and ship product.

Receive and verify product at customer site and install,

if necessary.

Invoicing customer.

Return activities

Return of raw materials and receipt of returns of finished

goods

All Return Defective Product steps from source

All Return Maintenance, Repair, and Overhaul product

steps from source

All Return Excess Product steps from source

Operations Management

Transformation process that takes inputs and

transforms them into goods or services

Every good or service has an underlying operations

function

Example is a plant that makes wooden chairs

Operations function also provide intangible services e.g

law firm

Operations Management

It is therefore defined as the planning, scheduling and

control of the activities that transform inputs into

finished goods and services

Decisions made may be long term or short term

The organizations aim at providing the best value to

customers while making the best use of their resources

Activity

Think of a manufacturing company and a service

company and discuss their operation functions

Potential Career Paths in Supply Chain Management

Analyst

Commodity manager

Customer service manager

Logistics services

Production manager

Sourcing analyst

Sourcing manager

Potential Career Paths in Supply Chain Management

Logistics and material planner

Systems support manager

Transportation manager

Activity

1. Define operations management and supply chain

management. Use practical examples to illustrate your

responses

2. Explain the role of professional bodies in the field of

SCM

3. Use examples to differentiate between upstream and

downstream flows in supply chain

4. Illustrate how the SCOR model can be applied in an

organization of your choice

The End!