scm 300

Lecture 1: Strategy

Key Concepts

  • Business Strategy: Choosing what to do and what not to do based on the best available information.

  • Supply Chain Strategy: The blueprint of choices made to deliver what was promised in the corporate/business strategy.

  • Supply Chain Management (SCM): Managing the movement of materials, money, people, services, and information to fulfill customer needs efficiently.

Key Definitions

  • Michael Porter's Definition of Business Strategy:
    "A broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals."

  • CSCMP Definition of SCM:
    "The planning and management of sourcing, procurement, conversion, logistics, and collaboration with suppliers, intermediaries, and customers."

Key Takeaways

  • Future CEOs are expected to have backgrounds in SCM.

  • Compensation in SCM: Highly competitive salaries, with Chief Procurement Officers (CPOs) earning over $260,000 annually.

Lecture 3: Inventory & Warehouse Management

Key Concepts

  • Definition of Inventory: Materials and resources purchased by an organization.

  • Purpose of Inventory:

    • Buffer against demand fluctuations.

    • Mitigate supply chain disruptions.

    • Allow for flexible production.

    • Take advantage of economies of scale.

Types of Inventory

  1. Raw Material – Basic inputs (e.g., flour, eggs).

  2. Work-in-Process (WIP) – Partially completed products.

  3. Finished Goods (FG) – Ready-to-sell products.

  4. Safety Stock – Extra inventory for demand fluctuations.

  5. Market Inventory – Inventory positioned close to consumers.

  6. Anticipation Inventory – Stock held for future demand surges.

  7. Pipeline Inventory – Products in transit.

  8. Maintenance and Repair Operations (MRO) – Spare parts and tools.

Inventory Costs

  1. Purchase Cost – Cost to buy inventory.

  2. Holding/Carrying Cost – Storage, insurance, depreciation, taxes.

  3. Ordering Cost – Cost to place an order.

  4. Stockout Cost – Lost revenue when items are unavailable.

Warehouse Processes

  1. Receiving

  2. Putaway

  3. Storage

  4. Picking

  5. Packing

  6. Shipping

Lecture 4: Inventory Cost & Economic Order Quantity (EOQ)

Key Formulas

  • Total Cost (TC):

    • = Annual Demand

    • = Order Quantity

    • = Cost per Order

    • = Cost per Unit

    • = Annual Holding Cost per Unit

  • EOQ Formula:

    • Optimizes order size to minimize total costs.

  • Inventory Turnover:

    • Measures how quickly inventory is sold.

Pareto Principle (80/20 Rule)

  • ABC Classification:

    • A Items – 20% of inventory, 80% of value.

    • B Items – 40% of inventory, 15% of value.

    • C Items – 40% of inventory, 5% of value.

Lecture 5: Sourcing

Procurement Risks

  1. Supply Risk – Ensuring timely product delivery.

  2. Price Risk – Managing cost fluctuations.

  3. Quality Risk – Ensuring product consistency.

Sourcing Strategies

  • Centralized Procurement – A single team handles purchasing.

  • Decentralized Procurement – Local teams manage procurement.

Buying Contracts

  1. Spot Buy – One-time purchase.

  2. Long-term Contract – Fixed agreements for future needs.

  3. Options Contract – Paying a fee to secure future purchase rights.

Lecture 6: Manufacturing (Making-1)

Manufacturing 1.0 - 4.0

  1. 1.0: Steam & Water Power.

  2. 2.0: Assembly Line & Electricity.

  3. 3.0: Automation & Robotics.

  4. 4.0: AI, Big Data, Sustainable Manufacturing.

Production Strategies

  • Make to Stock (MTS) – Predict demand and produce inventory.

  • Make to Order (MTO) – Produce items only when an order is placed.

  • Assemble to Order (ATO) – Produce components and assemble when needed.

  • Engineer to Order (ETO) – Custom-made complex products.

Manufacturing Layouts

  1. Assembly Line – High-efficiency mass production.

  2. Job Shop – Small-scale custom manufacturing.

  3. Project Layout – Large-scale, stationary production (e.g., shipbuilding).

  4. Cell Layout – Self-contained work units.

Lecture 7: Line Balancing

Key Formulas

  • Cycle Time (C):

  • Theoretical Minimum Workstations (TM):

  • Line Efficiency:

Lecture 18: Blockchain 101

History of Blockchain

  • 1982: David Chaum proposes a blockchain-like protocol.

  • 2008-09: Satoshi Nakamoto releases Bitcoin whitepaper.

  • 2013: Ethereum is conceived by Vitalik Buterin.

How Blockchain Works

  • Immutable, distributed ledger with linked cryptographic blocks.

  • Used to prevent fraud and ensure transparency.

Types of Blockchain

  1. Public – Open, decentralized (e.g., Bitcoin, Ethereum).

  2. Private – Restricted access, controlled by an entity.

  3. Hybrid – Mix of public and private features.

  4. Sidechains – Parallel chains for efficiency.

Use Cases in Supply Chain

  1. Cryptocurrencies – Bitcoin, Ethereum, etc.

  2. Smart Contracts – Self-executing agreements.

  3. Supply Chain Tracking – Walmart uses blockchain for food traceability.

  4. Healthcare – Secure storage of medical data.

  5. Real Estate – Digital property records.

Key Blockchain Terms

  • Proof of Work (PoW) – Miners solve cryptographic puzzles to validate transactions.

  • Proof of Stake (PoS) – Validators stake assets to confirm transactions.

  • Smart Contract – Code executing business logic automatically.

  • NFT (Non-Fungible Token) – Unique digital assets.