SCS Tutorial 1

Supply Definition

The quantity of goods available for use or The actual or planned replenishment of product or component. The replenishment quantities are created in response to demand for the product or component or in anticipation of such a demand

Supply Chain Definition

Supply Chain is the set of value-adding activities that connects a firm's suppliers to the firm's customers. It consists of all parties involved, directly or indirectly, in fulfilling a customer request. It is the system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer

Supply Chain Management Definition

Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies

Supply Chain Stages:

Customers Retailers Wholesalers/distributors Manufacturers Component/raw material suppliers Transporters

Supply Chain Flow

Product flow: includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs.

Financial/Funds flow: consists of credit terms, payment schedules, and consignment and title ownership arrangements.

Information flow: involves transmitting product information, orders and updating the status of delivery

Supply Chain Objectives

The objective of a supply chain should be to maximize overall supply chain profitability. Supply chain profitability is the difference between the revenue generated from the customer and the total cost incurred across all stages of the supply chain.

Supply Chain Decisions Phases

Supply chain decisions may be characterised as strategic (design), planning, or operational depending on the duration over which they apply. Strategic decisions relate to supply chain configuration. These decisions have a long-term impact lasting several years. Planning decisions cover a period of a few months to a year and include decisions such as production plans, subcontracting, and promotions over that period. Operational decisions span from minutes to days and include sequencing production and filling specific orders. Strategic decisions define the constraints for planning decisions and planning decisions define the constraints for operational decisions.

Supply Chain Decisions Impacts

Supply chain decisions have a large impact on the success or failure of each firm because they significantly influence both the revenue generated as well as the cost incurred. Successful supply chains manage flows of product, information, and funds to provide a high level of product availability to the customer while keeping costs low

Cycle View

A cycle view of a supply chain divides processes into cycles, each performed at the interface between two successive stages of a supply chain. Each cycle starts with an order placed by one stage of the supply chain and ends when the order is received from the supplier stage.

The cycles are the customer order cycle, replenishment cycle, manufacturing cycle and procurement cycle. The customer order cycle occurs at the customer/retailer interface and includes all processes directly involved in receiving and filling the customer. The replenishment cycle occurs at the retailer/distributor interface and includes all processes involved in replenishing retailer inventory. The manufacturing cycle typically occurs at the distributor/manufacturer (or retailer/manufacturer) interface and includes all processes involved in replenishing distributor (or retailer) inventory. The procurement cycle occurs at the manufacturer/supplier interface and includes all processes necessary to ensure that the materials are available for manufacturing according to schedule

Push-Pull View

A push/pull view of a supply chain characterizes processes based on their timing relative to that of a customer order. Pull processes are performed in response to a customer order while push processes are performed in anticipation of customer orders.

Supply Chain Macro Processes

All supply chain processes can be classified into three macro processes based on whether they are at the customer or supplier interface or are internal to the firm. The CRM macro process consists of all processes at the interface between the firm and the customer that work to generate, receive, and track customer orders. The ISCM macro process consists of all supply chain processes that are internal to the firm and work to plan for and fulfill customer orders. The SRM macro process consists of all supply chain processes at the interface between the firm and its suppliers that work to evaluate and select suppliers and then source goods and services from them

Could a firm have more than one supply chain? Explain.

Most firms do. If firms carry or sell different types of products, each has an associated supply chain

Describe the four cycles in this supply chain and identify the location of the push/pull boundary

The customer order cycle connects the customer with the retailer; this connection is made as the book is selected and paid for by the customer.

The replenishment cycle connects the retailer and the distributor and is triggered by the retailer's need to fill the empty shelf space with another copy of this book.

The manufacturing cycle connects the distributor and the manufacturer. As demand for the book is realized and distributors empty their warehouses, they signal the manufacturer to print another million copies to fill their empty warehouses.

Finally, the procurement cycle connects the manufacturer and the supplier. The manufacturer requires raw material inputs of paper, ink, etc., to begin the assembly process for another batch of the book.

The push/pull boundary exists where demand switches from reactive (pull) to speculative (push) production. For most bookstore supply chains the push/pull boundary is between the customer order cycle and the replenishment cycle.

The customer order pulls the book from the bookstore shelf but the initial production of the book was triggered by a build order that moved materials along the supply chain to the retail outlet