Chapter 1: Supply Chain Management:

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• Chapter 1 Supply Chain Management
• An Overview

• Learning Objectives
• After reading this chapter, you should be able to
  do the following
• Discuss the major change drivers in our economy
  and in the global
• marketplace.
• Understand the rationale for the development of
  supply chain
• management in leading organizations.
• Appreciate the importance and role of supply
  chain management
• among private and public organizations.

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• Learning Objectives (cont.)
• Understand the contributions of a supply chain
  approach to organizational efficiency and
  effectiveness.
• Analyze the benefits that can accrue from
  implementing effective supply chain practices.
• Understand the major challenges and issues facing
  organizations developing and implementing supply
  chain strategies.

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• Five major external forces seem to drive the rate
  of change and shape our economic and political
  landscape
• globalization
• technology
• organizational consolidation
• the empowered consumer
• government policy and regulation

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Physical supply Physical distribution material
s management outbound logistics inbound
logistics
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• Development of the Supply Chain Concept
• Started in the 1960s with the development of the
  physical distribution concept
• Initial focus on physical distribution or
  outbound logistics was logical since finished
  goods
• During the 1980s, the logistics or integrated
  logistics management concept developed in a
  growing number of organizations
• The underlying logic of the systems or total cost
  concept was also the rationale for logistics
  management
• Supply chain management can be viewed as a
  pipeline or conduit for the efficient and
  effective flow of products/materials, services,
  information, and financials

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• Major Supply Chain Issues
• Supply Chain Networks
• The network facilities and supporting
  transportation is important
• Increased complexity for organizations is a
  problem
• Inventory Deployments
• inventory duplication
• the bullwhip effect
• Collection and storage of vast amounts of data
• Cost/Value
• efficiency (cost) and effectiveness (value)
  prevention of suboptimization
• Organizational Relationships
• Tradeoffs and optimization
• Performance Measurement
• Why and how

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• Major Supply Chain Issues
• Technology
• challenge is to evaluate and successfully
  implement the technology
• Transportation Management
• right product, right time, right quantity, right
  quality, right cost, right destination
• Supply Chain Security
• concern and potential challenge since 9/11

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Chapter 1 Summary

• Cash flow has become one of the most important
  measures of financial viability in todays global
  markets. Supply chains are an important
  determinant of improved cash flow since they
  impact order cycle time to customers.
• Supply chains are an important determinant of
  capital consumption since they impact working
  capital, inventory levels, and other assets such
  as warehouses.
• Efficient and effective supply chains can free up
  valuable resources and improve customer
  fulfillment systems so as to increase return on
  investment or assets and improve shareholder
  value.
• The rate of change in our economy has accelerated
  the necessity of continuing changes in
  organizations or even transformation to remain
  competitive.

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Chapter 1 Summary (cont.)

• The rate of change has been driven by a set of
  external forces including but not limited to
  globalization, technology, organizational
  consolidation and shifts in power in supply
  chains, an empowered consumer, and government
  policy and regulations.
• The conceptual basis of the supply chain is not
  new. In fact, organizations have evolved from
  physical distribution management to logistics
  management to supply chain management.
• Supply chains need to focus on the customers at
  the end of the supply chain and be flexible and
  responsive.
• Technology is important to facilitate change, but
  it must follow a process and educate people to
  address problems and issues appropriately.

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Chapter 1 Summary (cont.)

• Transportation management and security have
  become increasingly important in the twenty-first
  century because of changes that have occurred.
• Supply chains are boundary spanning and require
  managing three flowsproducts, information, and
  financials (cash).
• Supply chain management is a journey, not a goal,
  and there are no silver bullets since all
  supply chains are unique.
• Information is power, and collaborative
  relationships internally and externally are a
  necessary ingredient for success.
• The performance of supply chains must be measured
  in terms of overall corporate goals for success.