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SUPPLY CHAIN MANAGEMENT

LESSON 1

• THE PURPOSE OF A LOGISTIC SYSTEM - To provide high level of service to customers

by fulfilling the “6 rights” in the logistics

system.

• what is Logistics? - is concerned with the physical movement and

storage of goods. Logistics is the broader field

that involves the planning, implementation, and

control of the physical flow of goods and

services.

• Logistic system? - is a more specific term that refers to the

organized structure and coordination of various

logistics components to ensure effective and

efficient operations.

• SUPPLY CHAIN

A supply chain is a network of organizations,

people, activities, information, and resources

involved in the production, handling, and

distribution of goods or services from the point

of origin to the end consumer. It encompasses

all the steps and processes that products or

services go through, from the initial creation or

extraction of raw materials to the final delivery

to the customer.

• The main components of a supply chain

include:

1. Suppliers: The entities that provide the raw

materials, components, or services needed

for the production of goods or services.

(Example: Local tour operators sourcing

transportation services, cultural guides, and

admission tickets to attractions from various

suppliers.)

2. Manufacturers or Producers:

Organizations that transform raw materials

into finished products or provide services.

(Example: Tour companies creating

customized itineraries, brochures, and

promotional materials to showcase the tour

offerings.)

3. Distributors and Warehouses:

Intermediaries that store and manage

inventory, facilitating the movement of

products between manufacturers and

retailers.

(Example: A central office or online platform

managing the distribution of tour packages,

coordinating bookings, and handling the

logistics of resource allocation.)

4. Retailers:

Businesses that sell products directly to

consumers, often operating through

physical stores, online platforms, or a

combination of both.

(Example: Travel agencies selling tour

packages directly to customers, either

through physical offices or online platforms)

5. Customers:

The end consumers or businesses that

purchase and use the products or services.

(Example: Tourists or travelers booking

guided tours for sightseeing, adventure

activities, or cultural experiences.)

6. Transportation and Logistics:

The movement and coordination of goods

throughout the supply chain, involving

transportation, warehousing, and

distribution.

(Example: Transportation services such as

buses, vans, or boats arranged to transport

tourists between destinations, and logistics

management for coordinating schedules

and ensuring smooth transitions between

activities)

7. Information Systems:

Technologies and systems that enable the

flow of information and communication

among various entities in the supply chain.

(Example: Online booking platforms, mobile

apps, or reservation systems that allow

customers to browse available tours, book

experiences, and receive real-time updates

or recommendations during their trip)

• SUPPLY CHAIN MANAGEMENT (SCM) - Supply Chain Management (SCM) is the process

of managing the flow of goods and services to

and from a business. It includes every step

involved in turning raw materials and

components into final products and getting

them to the ultimate customer.

• Activities comprising Supply chain

management in hospitality industry:

1. planning

2. production

3. purchasing

4. delivery of goods C services

• other activities include:

1. Sourcing of raw material

2. Production and Manufacturing

3. Inventory Evaluation and Storage

4. Transportation