Module 1

What is a supply chain?

All parties involved, directly or indirectly, in fulfilling a customer’s request — including suppliers, manufacturers, transporters, warehouses, retailers, and customers.

Who is the most important part of a supply chain?

The customer — they drive demand for everything else.

What functions are included inside a company’s supply chain

New product development, marketing, operations, distribution, finance, and customer service.

What are the three major flows in a supply chain?

• Product flow – goods move forward (supplier → customer).

• Information flow – moves both ways (customer ↔ supplier).

• Financial flow – money moves backward (customer → supplier).

What is the main objective of supply chain management?

To maximize total supply chain surplus (value for customer − total cost).

What is supply chain surplus?

The difference between what the customer values a product at and what it costs the whole supply chain to deliver it.

What are the three phases of supply chain decisions?

• Strategic/Design: Long-term structure (years ahead).

• Planning: Medium-term operations (months or quarters).

• Operational: Short-term daily decisions.

What happens in the design phase?

Decide facility locations, capacity, products, and whether to outsource. ( how will it look over the next few years)

What happens in the planning phase?

Plan inventory, promotions, markets, and production for the next year. (decisions over the next few years)

What are the two main process views?

Cycle view and Push/Pull view

What happens in the operations phase?

Handle daily orders, scheduling, and shipments to maximize efficiency. (daily - weekly decisions)

What is the Cycle View?

Divides the supply chain into cycles between each pair of stages

Customer Order Cycle: Customer ↔ Retailer,

Replenishment Cycle: Retailer ↔ distributor,

Manufacturing Cycle: Distributer ↔ Manufacturer

Procurement Cycle: Manufacturer ↔ Supplier

What is the Push/Pull View?

Push: Activities done in advance of customer orders (forecast-based).

Pull: Activities done after customer orders (demand-based)

 .What are the three macro processes in supply chain management?

• CRM (Customer Relationship Management): Deals with customer orders and relationships.

• ISCM (Internal Supply Chain Management): Manages internal production and inventory.

• SRM (Supplier Relationship Management): Manages supplier selection and procurement.