Chapter 1: Introduction to Supply Chain Management

Flashcards covering the definition, history, core functions, seven Rs of logistics, customer service phases, and strategic concerns of supply chain management.

Supply Chain Function

One of the core operational areas of any business that keeps operational costs at a minimum and aims to increase company profits through optimal productivity levels.

Supply Chain Cycle Components

The flow includes bulk delivery of raw material, manufacturer/producer, inventorying and warehousing, distribution, primary transport, retailers, spaza shops, and finally the consumer.

1950s Supply Chain History

A period when manufacturers, wholesalers, retailers and transporters only saw themselves as having customers and suppliers.

1960s-1970s Supply Chain History

A period focused on the physical distribution function, improving product quality to satisfy consumer needs, and changing the inventory function.

1980s Supply Chain History

A period where business functions like purchasing, operations, and distribution began grouping work activities together, emphasizing logistics management and internal flexibility.

1990s Supply Chain History

A period characterized by building greater external relations with stakeholders, instilling quality value-added supply chains, and becoming heavily dependent on technology.

2000s Supply Chain History

A period marked by increased consumer demands, global competition, niche market segments, and the use of technology to connect stakeholders throughout the supply chain.

2010s Supply Chain History

An era focused on the convenience of all stakeholders and minimizing operational costs through advances in the transportation industry.

Operations and Production Management

The core function where the production process starts, involving decisions on product specifications, cost implications, and planning for sourcing raw materials.

Production Principles

Basic principles including innovative developments, value-added activities, efficient/effective production, customer expectations, and strategy and operations.

Operations Activities

Includes production, design and improvement, financial control, reverse logistics, decision-making, strategy, and integration.

Logistics Management

The part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information.

The Seven Rs

The logistical function requirements: Right product, Right quantity, Right time, Right customer, Right price, Right condition, and Right place.

Third-party logistics services (3PL)

Services that play a vital role in the logistics function across various industries.

Inventory and Warehousing Management

Function responsible for balancing demand and supply, minimizing the risk of late supply, and coordinating the purchasing and distribution of inventory items.

Procurement Management

Focuses on operational processes for orders, identifying suppliers, setting up contractual agreements, and ensuring manufacturing materials meet quality requirements.

Transportation Management

The movement of goods from point A to point B in the most cost-effective way, supported by technology.

Customer Service Management

A critical function that aims to create and deliver value while building relationships with both the manufacturer (for raw materials) and the consumer (for the final product).

Pre-transactional (Strategic) Phase

The phase where managers build customer relationships before a product or service is purchased.

Transactional (Tactical) Phase

The phase focused on maintaining existing customer relationships during the transaction.

Post-transactional (Operational) Phase

The phase involving after-sales services and managing ongoing customer service.

Supply Chain Concerns

Major factors facing southern African organisations including the economy, government and legislation, environmental issues, technology, and employees.

Benefits of a Supply Chain

Includes reduced uncertainty and risk, quality customer service delivery, improved operational costs/profitability, and competitive advantage.