Introduction to Supply Chain Management
In this lesson, you’re expected to:
– understand what a supply chain is
– learn the basics of supply chain management
– explore the dynamics of a supply chain network
What is a supply chain?
”A set of three or more entities (organizations or individuals) directly involved in the upstream and downstream flows of products, services, finances, and/or information from a source to a customer.”
– Mentzer, et al. (2001)
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The concept of supply chain can be understood at different levels:
– Direct supply chain: a company, a supplier and a customer.
– Extended: direct supply chain plus suppliers’ suppliers and customers’ customers.
– Ultimate: all entities upstream and downstream.
A supply chain is dynamic and involves a constant flow of physical products, services, information, ownership, and funds
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– Mentzer et al. (2001)
– Demand Management
– Purchasing (Procurement)
– Inventory Management
– Physical Distribution Management
The definition also includes the coordination with other traditional business functions, such as:
– Marketing & Sales
– Research & Development
– Customer Service
– Information Systems
Enlarged version: http://bit.ly/2pKP4uV
In order to effectively manage the supply chain, it is necessary to understand the dynamics of the entire network.
• In a current globalized business environment, several companies have started to implement business strategies that rely on supply chain management as a major source of competitive advantage (e.g. Apple, McDonald’s, Amazon, Unilever, P&G, Samsung, Zara etc.)
• Supply chain management implies the idea of understanding the entire network, not only the operations of a single business.press ENTER
Importance of Understanding the Supply Chain Understanding the supply chain is helpful for a company in:
– Building a strong competitive position
– Rolling up the business strategy to the supply chain
– Understanding the long-term perspective of the network
– Understanding the needs of the final customer
– Identifying the links between the nodes in the network
– Identifying the bottlenecks
– Controlling the chain’s costs
Reference: Chopra & Meindl (2013)