CSU Supply Chain Management — Comprehensive Study Notes

Introduction

  • Course context: Supply Chain Management

  • Instructor: Dr. Rowan Hilend

  • Contact: Rowan.Hilend@colostate.edu

  • Course framing: Overview of supply chain topics including how operations, purchasing, and logistics fit together to deliver value to customers

Starbucks as a Global Supply Chain Case

  • A single cup of coffee can depend on as many as 19 different countries for inputs (beans, milk, sugar, paper cup, etc.)

  • Starbucks is a global hub that connects some of the poorest countries with some of the wealthiest via its supply chain

  • Global scale indicators:- Approximately 6,2006{,}200 stores worldwide

    • About three new stores opening daily

  • Inputs and sources highlighted:- Coffee beans, milk, sugar, and paper cups each sourced from multiple regions

    • The slide references sources such as Starbucks.com, US Department of Agriculture, and Fortune Magazine

  • Visuals emphasize the global reach and country-by-country store distribution (map with country buckets)

  • Contextual takeaway: The coffee value chain links disparate economies and exemplifies globalization of inputs and retail

What is Supply Chain Management? Core Components

  • SCM is viewed through three primary activities:- Operations: Make it

    • Logistics: Move it

    • Purchasing: Buy it

  • SCM integrates these activities to deliver to customers (the end-to-end view of getting the product to market)

  • Expression: Supply Chain Management = [Operations, Logistics, Purchasing] (illustrated as three steps in a process)

Purchasing: Boeing Global Supplier Network (Example)

  • Key idea: The most important job in purchasing is constant assurance of supply

  • Example use case: Boeing sourcing for complex aircraft components from a global network

  • Major supplier locations and components (illustrative, not exhaustive):- Spirit (Wichita, Kansas) — forward fuselage

    • Boeing (Frederickson, WA) — tail fin, landing gear doors

    • Messier-Dowty — landing gear components

    • KAL-ASD, Alenia (Italy), Kawasaki (Japan), Vought, Saab (Sweden), Latecoere (France), Goodrich, etc.

    • Horizontal stabilizer (England) and other major assemblies sourced globally

  • Relative material cost emphasis (illustrative):- Forward fuselage: relative cost ~120%

    • Horizontal stabilizer: ~80%

    • Wing/body fairing, center fuselage, and other parts shown with varying relative costs (scale appears to range from 0% to 120%)

    • Some components listed at 0% or very low relative costs in the slide, others much higher

  • Temporal dimension on supplier integration: Parts development and outsourcing evolved from 1945 through 2010 (timeline cues present)

  • Practical takeaway: Purchasing must manage a highly distributed supply base with significant cost variation while ensuring uninterrupted supply

Manufacturing Operations: Definition and Quality

  • Definition: Any activity or group of activities that takes inputs, transforms them, and provides outputs for customers

  • Key concepts:- Transformation processes convert inputs to outputs

    • Quality focus: Precision and Conformity

    • Quality Control as a critical function to ensure product/service meets specifications

Service Operations and Trends

  • Notable trend: Strong movement toward service operations

  • Economic context: The United States is a leading exporter of services, exceeding about 200extBillion200 ext{ Billion} annually

  • Conceptual framing: Service operations often resemble manufacturing processes in structure, but with service-oriented outputs and customer interactions

  • Link to media: A referenced video (URL provided in slide) discussing service vs. manufacturing process similarities

Logistics and Cost Trends (2015–2025)

  • 2015–2025 horizon for logistics metrics

  • Key trend: Inventories were lower in 2024, while overall costs continued to rise

  • Total U.S. logistics costs (2024): 2.58exttrillion2.58 ext{ trillion}

    • This amount is about 8.7 ext{% of GDP}

  • Implication: Logistics costs are a major component of the economy and a leading indicator of economic activity

U.S. Logistics Costs and a Practical Example

  • Re-emphasizing the 2024 figure:- Total U.S. Logistics Costs2024_{2024} = 2.58exttrilliondollars2.58 ext{ trillion dollars}

    • Share of GDP = 8.7 ext{%}

  • Example case: Safeway Distribution Center (DC) holding 23,000 frozen turkeys for Thanksgiving- Stored year-round

    • Refrigeration at 15°F below zero (approx.

      T=−15ext°FT = -15^ ext{°F}

      )

  • Takeaway: Real-world storage and capacity decisions illustrate the scale and complexity of logistics networks

Transportation Prices, Capacity, and Macro Impacts (2016–2025)

  • Concept: Transportation prices and capacity as key indicators of economic activity

  • Projection window: 2016–2025 with data illustrating prices and capacity trends

  • The slide emphasizes that transportation metrics are highly reflective and predictive of the broader macro economy

  • Macro events influencing transport costs and capacity:- Tax cuts

    • Trade wars / industrial slowdowns

    • COVID-19 outbreak and rapid consumer recovery

    • Ongoing “supply chain problems” and fuel dynamics

  • Resulting dynamic: Transportation costs and capacity respond to macroeconomic shifts and can signal turning points in the economy

Unknowns and Resilience in Supply Chains

  • Unknown-Unknowns: Conceivable but unusual and unexpected events (e.g., canal shutdowns) with major operational impacts

  • Practical response: Build resilience into the supply chain to withstand unforeseen shocks

  • Known-Unknowns vs Unknown-Unknowns: The slide notes that some events can become more manageable once they are understood as known unknowns

Disruptions and Resilience in an Interconnected World

  • Disruptions are ongoing even in connected networks

  • Firms need capable talent to handle disruptions and design resilient systems

  • A strategy highlighted: Aim to reduce global trade disruption impact by roughly a few months (the slide suggests about 3 months) by building resilience and planning

Recent Bullwhip Examples (Pandemic period)

  • Case focus: Toilet paper shortages during COVID-19 and related supply chain dynamics

  • Article: Ty Betts; publication in April 2020

  • Key takeaways:- Demand fluctuations caused stockouts and overreactions along supply chains

    • Kimberly-Clark experienced worst sales declines in a decade in the consumer-tissue segment

    • The example illustrates bullwhip effects and the challenges of forecasting in disrupted environments

Environmental Stewardship and Packaging Reductions (Apple case)

  • Packaging and material recovery milestones:- In 2015, Apple recovered 61,000,00061{,}000{,}000 lbs of reusable material from 90,000,00090{,}000{,}000 lbs of waste

    • Recovered 2,2042{,}204 lbs of gold from recycled products

    • Financial impact cited: about 40,000,00040{,}000{,}000 (relationships between recycling and cost savings)

    • Recovered materials: 23,000,00023{,}000{,}000 lbs steel, 13,000,00013{,}000{,}000 lbs plastic, 12,000,00012{,}000{,}000 lbs glass

  • Packaging reduction program (first 3 years):- Saved about 400,000,000400{,}000{,}000 gallons of water

    • Saved 95,000,00095{,}000{,}000 lbs of plastic

    • Saved 125,000,000125{,}000{,}000 lbs of cardboard

    • Saved 500,000500{,}000 gallons of diesel fuel due to lighter ships and fewer shipments

  • Overall takeaway: Environmental stewardship can yield significant resource and cost savings across the supply network

SCM at CSU (College of Business)

  • SCM became a major in Fall 2014

  • Enrollment: 253253 declared majors

  • Concentrations: 33.5 ext{%} are in double concentrations

  • Job market: 100% offer rate for graduates

  • Starting salaries: average around extUSD62,000ext{USD } 62{,}000 per year

  • Faculty: 5 tenure/tenure-track and 2 special appointment faculty

Pillars of Supply Chain Careers

  • Three primary pillars:- Procurement

    • Operations

    • Logistics

Procurement: Role, objectives, and responsibilities

  • Purpose: Serve internal stakeholders by acquiring supplies, goods, and services needed to achieve business goals

  • Primary objectives:- Decrease costs

    • Maximize value

    • Reduce supply chain risk

  • Key responsibilities:- Develop procurement policies

    • Issue RFPs

    • Establish product specifications

    • Perform market research for products/services

    • Explore value analysis and negotiate contracts

Operations: Role and responsibilities

  • Purpose: Implement the systems, structures, and processes to plan and execute the flow of goods and services from supplier to customer

  • Primary objectives:- Create value for the customer while maximizing profit

    • Ensure quality, maintain efficiency, and reduce costs

  • Key responsibilities:- Monitor and supervise production processes

    • Manage operational budgets

    • Manage workforce, task allocation, and performance monitoring

    • Conduct risk assessments and preventive measures

    • Analyze financial data to identify profitability opportunities

    • Perform quality controls and monitor production KPIs

Logistics: Role and responsibilities

  • Purpose: Ensure products, inventory, parts, or people move efficiently and cost-effectively from one place to another

  • Primary objective: Customer satisfaction via correct product, place, and time

  • Key responsibilities:- Plan and manage logistics, warehouses, transportation, and customer services

    • Direct, optimize, and coordinate the full order cycle

    • Liaise with and negotiate with suppliers, manufacturers, retailers, and customers

Industry Career Pros and Cons

  • Pros:- Variety of career paths and roles

    • Opportunities to advance across functions and geographies

    • Collaborative, cross-functional work across silos and countries

  • Cons:- Processes continually evolve

    • Responsibilities are often time-sensitive and 24/7 operations are common

    • Fast-paced and dynamic work environment

  • Note on timeline: September 4, 2025 (date label on slides)

Government Career Pros and Cons

  • Pros:- Pension benefits

    • High job security

    • Flexibility to shift work environments nationally and internationally

  • Cons:- Lower salary potential and promotional caps

    • Slower hiring processes

    • Remote work opportunities may be limited

Consulting Career Pros and Cons

  • Pros:- High earning potential

    • Variety of projects across industries

    • Collaborative environments and opportunities for growth

  • Cons:- Long hours and heavy workload

    • Tight deadlines and fast pace

    • High competition among firms and consultants

    • Challenging client communication

Continuing Education, Degrees, and Salaries

  • Educational attainment and median salaries (as per ASCM data):- Associate degree: ext(extmedian)92,543ext{( ext{median}) } 92{,}543

    • Bachelor’s degree: 108,240108{,}240

    • Master’s degree: 118,982118{,}982

    • Doctoral degree: 128,250128{,}250

  • Proportion with advanced degrees: approximately 53 ext{%} of supply chain professionals hold a master's or equivalent

Academia Careers: Pros and Cons

  • Pros:- Autonomy to pursue research interests

    • Flexible work environment and hours (tenure clock, often)

    • High job security after tenure

    • Mentorship opportunities and cross-sector connections

  • Cons:- High scrutiny and rejection rates from journals

    • Highly competitive across universities and high-pressure environments

    • Fewer tenure-track opportunities relative to demand

    • Additional education or prerequisites may be required

Thank You and Contact

  • Appreciation for engagement

  • Instructor contact: Rowan.Hilend@colostate.edu

  • End of slides