EEC 231

1
COURSE LEARNING OUTCOMES
At the end of the module, you should
be able to:
1. Promote the Louisian core values
in making sound supply chain
management decisions.
2. Discuss fundamentals of supply
chain management as they
pertain to sustainable
relationships among various
industry players
3. Apply supply chain and
distribution management
concepts, principles, processes
SUPPLY CHAIN and strategies in case analysis
MANAGEMENT and practical business decision
making situations
4. Critique supply chain drivers and
supply chain operations
5. Integrate concepts/techniques
learned through application in
the preparation of a
comprehensive distribution plan
6. Evaluate alternative solutions to
supply chain issues, trends, and
transformations related to the
dynamics of the environment

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 No matter how prepared you are, there will always be times when things don’t do to plan. The key is to
prepare as well as you can, but at the same time train yourself to adapt to change and be solution-
focused in the moment.

Once you have momentum, fight to keep it. Fight for it with everything you can because it’s one of the
hardest things to create. When you have it, you can ask for things that you never could have without
it.

– Daniel Flynn

COURSE INTRODUCTION
Enterprising individuals and organizations face the unprecedented challenges of the
current economy. Having the competency to make objective choices, rational decisions
and a resilient attitude are necessary to sustain business operations.
In practice, supply chain managers need to be well-versed in process management
and development to ensure maximum product offerings and optimal shipments that
guarantee business client’s order specifications and customer order requirements.
This course intends to equip you with the necessary competencies of a supply chain
manager to facilitate beneficial interdependencies among diverse industries. You are
expected to be able to examine via observation and synthesis the general concepts of
supply chain management to develop a comprehensive purview of the logistical processes
linking the whole supply chain networks. This will enable you to have an ethical perspective
and attitude towards supply chain decision making with a clear focus on value-laden
relationships while maintaining a balance of responsiveness and efficiency leading to the
development and crafting of strategies that emphasize on the philosophy of sustainable
business enterprises. Given the vital role of supply chain managers, this three-unit course
hopes to nurture your potential in decision making relevant to supply chain management.
Supply chain management course covers a comprehensive study of the concepts,
processes and strategies used in the management of supply chains with particular emphasis
on the interrelationships of logistics among diverse industries vis-à-vis the value laden
relationships among the supply chain participants. Moreover, key strategic business
principles relative to channel management or logistics management will also be covered.
Physical distribution as a functional area within the firm and its interface with channel
intermediaries will be analyzed emphasizing on the inter-organization management of the
relationship of these institutions. Specific topics include the supply chain drivers and supply
chain operations that stresses on the systems-approach to managing the entire information
flows, financial flows and materials and services from raw materials suppliers to the end-users.
Current trends and issues in the global perspective will also be introduced to aid you with
competency in supply chain management decision making in the perspective of a supply
chain manager.

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 To help you find your way through the module, the following study icons are used:
ENGAGE:
Activate student’s prior knowledge and interest.
Activities that aim to let you process the relevance and meaning of
the topic. Motivation activities are given to help you gain focus on
the lesson and identify knowledge gaps via pre-assessment activities
to stimulate recall or prior learning. It also presents a contextualized
introduction to the topic for you to appreciate and value.
EXPLORE:
Discover information to model expected behavior.
This part of the module will present the main lesson through the
materials that will be read, viewed or explored. In the face-to-face
classroom, this is the part of the lecture or demonstration of new
knowledge.
EXPLAIN:
Articulate understanding of the lesson.
This part will allow you to share what you have learned during the
explore phase. Your teacher will contextualize the information from
the materials and provide additional readings or recordings which
can include article reviews, videos, commentaries, or other aids that
aim to boost your understanding of the lesson.
ELABORATE:
Use higher order thinking to apply learning.
This is the part of the module that asks you to apply what you have
learned and will provide you the opportunity to enhance your
knowledge and skills before the evaluation.
EVALUATE:
Demonstrate mastery of the lesson.
This part of the module may include graded self-assessment, peer-
assessment, writing assignments, and exams.

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 MODULE 1. INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

UNIT 1. Supply chain management and the supply chain participants.

After the completion of this module you should be able to:
a) Define supply chain management.
b) Identify the supply chain participants
c) Distinguish the roles and functions of the participants in the supply chain

ENGAGE:
Recall encounters with individuals and organizations producing and
distributing goods and services from producers to business users and
consumers
Think of an item sold at the department store. How do you think that item got to the
retail shelf and ultimately to the end-user? Illustrate your answer using a flow chart to show
your basic understanding of the supply chain. In your flow chart, use different shapes/icons
to represent the organizations and/or individual/s that were involved in the steps to move
the item you have chosen from them to the next until it becomes available on the retail shelf
for customers to buy. Make sure to label your shapes.

EXPLORE:
Describe supply chain management and outline the roles and functions of
the supply chain participants.

Figure 1: Supply Chain

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 I. Supply chain management, defined
Supply chain management (SCM) deals with the planning, coordinating, and
controlling of materials (parts and finished goods), information, and financial (services and
money) flows in a network consisting of suppliers, manufacturers, distributors and customers
in a way that maximize the efficiency and responsiveness of the process. It is a business
strategy in which supply chain participants jointly commit to work closely together, to bring
greater value to the customer with the least possible supply chain cost and time. Hence, the
objective of supply chain management is to maximize value and lower wastes.
The supply chain is the alignment of firms that bring products or services to the market
comprised of all stages involved, directly or indirectly in fulfilling a customer request. It
includes the manufacturers and suppliers, but also transporters, warehouses, retailers and
customers themselves.
The supply chain has three main links, (a) materials flow from suppliers and their
‘upstream’ suppliers at all levels, (b) transformation of materials into semi-finished and
finished products through the organization’s own production process, and (c) distribution of
products to customers and their ‘downstream’ customers at all levels.
The supply chain comprises of three or more individuals or organizations directly
involved in the upstream and downstream flows of products or services, finances and
information from the supplier to the customer. The upstream refers to suppliers providing
goods and services to the organization needed to satisfy demands which originates at point
of demand or use, as well as other flows such as return product movements, payments for
purchases, etc. Conversely, the downstream refers to one or more companies or individuals
who participate in the flow of goods and services moving from the manufacturer to the final
user.

Figure 2: Flows in a Supply Chain

The responsibility and authority for implementing supply chain management must be
placed at the highest levels of an organization because organizations that attempt to imbed

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 supply chain management requires a comprehensive knowledge of functional areas such
as purchasing, operations, or logistics as well as the business entities involved in the network.
Management must be able to integrate the organization’s processes to identify and achieve
the lowest total cost while maintaining customer’s specifications.

II. The roles and functions of supply chain participants

The supply chain participants serve to facilitate work focus, routinization,

standardization and control. Such will become efficient through collaboration, enterprise
extension, and integrated service providers. First, collaboration serves to enhance cross-
organizational sharing of operating information, technology and risk as ways to increase
competitiveness. Second, enterprise extensions build on sharing information about future
strategic initiatives to facilitate joint operations essential among supply chain participants.
This enable them to collectively do things that customers demand faster and more
efficiently. The enterprise extension also maximizes overall results-based process
specialization designed for the overall supply chain operations. Third, the integrated service
providers (ISPs) are transportation and warehousing specialists whose value proposition is
based on specialization, efficiency and scale economies. Of which, value is generated by
a carrier’s capability to provide shared transportation services for multiple shippers. ISPs are
also known as third-party logistics (3PL).
Supply chain participants optimize the relationships among the various elements of
the supply chain. They are the following:
a) Producers are organizations that make a product; producers of raw materials and
finished goods; miners of minerals; fill for oil and gas and cut timber; organizations that
farm the land, raise animals or catch seafood. They can also create products that are
intangible such as music, entertainment, software or design which also includes
services as well.
b) Distributors are companies that take inventory in bulk from producers and deliver a
bundle of related product lines to customers. They are known as wholesalers who fulfill
“time and place” function and they deliver products when and where the customers
want them. Their functions also include inventory management, warehouse
operations, product transportation, customer support and post-sales service, product
promotion and sales and the distributor is the agent that continually tracks customer
needs and matches them with available products.
c) Manufacturers are organizations that make finished goods through a process
involving raw materials, components or parts on a large scale.
d) Warehouse performs activities such as receiving, delivering goods to storage location,
packing, dispatching, carrying out immediate quality controls, controlling inventory
of stored goods, correcting storage of goods, preparing orders to be sent to regional
warehouses, customers or both, rapid dispatching of orders, returns and value
adding.
e) Wholesalers perform functions for the smooth flow of goods, ownership, finance and
information. They are also known as distributors, dealers and resellers. They deal with
retailers who have rational business-oriented motives in their transactions.
f) Retailers stock inventory and sell in smaller quantities to the general public. They
advertise to their customers and often use some combination of price, product

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 selection, service and convenience as the primary means to attract customers for the
products they offer for sale (e.g. department store and restaurants).
g) Customers or consumers are any organization that purchase and use a product. A
customer organization may purchase a product in order to incorporate it into another
product that they in turn sell to other customers or a customer may be the final end
user of a product who buys the product to consume it. Customers are defined as
destination points in a supply chain. Customers either consume a product or use it as
an integral part or component of an additional process or product. The essential point
is that the original product loses its unique configuration when consumed. Business
entities (e.g. wholesalers and retailers) that purchase products from manufacturers for
resale are referred to as intermediate customers.
h) Service providers provide services to producers, distributors and retailers and
consumers in the areas of logistics, finance, market research, product design,
information and technology. They have developed special expertise and skills that
focus on a particular activity needed by a supply chain. May include transportation
services and warehousing services (trucking companies, public warehouse
companies also known as logistics providers), financial service providers deliver
services such as making loans, doing credit analysis, and collecting on past due
invoices (banks, collection agencies), some deliver market research and advertising
while others provide product design, engineering services, legal services, and
management advice. Still others provide information technology and data collection
services. All these service providers are integrated to a greater or lesser degree into
the ongoing operations of the producers, distributors, retailers, and consumers in the
supply chain.

EXPLAIN:
Present diagrams showing connections between and among
supply chain participants.

Figure 3: Manufacturing Supply Chain Figure 4: Service Supply Chain

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 In order to understand the relationship between and among the supply chain
participants, read the article lifted from the official cultural magazine “idapuan” of White
and Blue, Saint Louis University publication (AY 2016-2017).
The North’s Agora: Visiting the La Trinidad Trading Post By the time we left at evening, the scene was still the same
(Tangonan, 2017). – everyone was still doing their jobs except that plenty of
traders were already holding their calculators, reviewing
The open-air market place of Greece, dotted with tents,
their record books, and counting their cash. Under such
was called Agora. Its hectic environment and the noisy
circumstances, making interviews as well as distributing
rush of people engrossed in business along its streets could
questionnaires proved to be difficult. My team and I then
be compared to the forums of the late Roman Empire, the
changed plans; for several days, we went back and forth
Silk Road trades of the Han Dynasty, and the ports of
to the trading post and conducted our interview and
Renaissance-period Venice. Perhaps in present-day
survey little by little until the requirement for our research
Philippines, it is reanimated in one of the busiest trading
was satisfied. In those several instances or days, La Trinidad
markets in the North.
Trading Post was still the same as what we saw in our first
In the highland region of the country, underneath the starry visit—full of trucks, carts, vegetables, busy and hardworking
sky, stands an economically powerful and fast-growing people who hold time and energy as equivalents of gold.
province: Benguet. Within this rich agricultural province lies
Vehicle for Agricultural Growth. The La Trinidad vegetable
a symbol of economic power – the La Trinidad trading post,
trading post has generated a lot of jobs throughout the
located a few kilometres away from one of the most well-
Benguet province: from carriers, to truck drivers, helpers,
known spots in the country, Baguio City.
packers, washers, dealers, and several others. It paved the
The North’s Agora: the First Encounter way for a centralized trading. This saved many farmers and
traders from causing traffic jams by selling their goods on
When we eat meals with vegetables such as cabbages roads or streets, or losing business opportunities by selling in
and potatoes, perhaps we have asked ourselves, “Where isolated, bulky, or narrow places. In short, the establishment
do these vegetables come from? Who produces them? of the trading post increased vegetable transactions
Barring the imports from foreign countries, where else do throughout the province, thus generating more profits for
we get them?” the local middlemen and farmers while meeting the
My research team and I found the answer when we sought dietary needs and also uplifting the social well-being of
our respondents, who were farmers and traders. At about other residents.
8 am, we went to the La Trinidad Trading Post to conduct Aside from boosting provincial revenue, it also allowed the
interviews. The trading post seemed rather small as we farmers to concentrate on the production of the
approached, but we saw plenty of trucks and jeepneys vegetables, leaving their products’ disposal to the
queuing as they entered the place. Even without going in, middlemen. Farmers are able to reinvest more on their
just from seeing all the vehicles and thousands of sacks of operations to increase outputs. It also gave the middlemen
vegetables, it wasn’t hard to imagine what we would and their workers a share in the profits.
encounter inside the La Trinidad trading post.
Vegetables from the municipalities of Benguet and other
Plenty of carriers, locally referred to as ‘komboy’ (from parts of the Cordillera region are often transported to the
convoy) rolled carts containing hundreds of kilos of La Trinidad trading post. It is then from the La Trinidad
vegetables from stall to stall while some of them loaded or trading post where these goods would be delivered
unloaded produce from the trucks that entered. Workers through dealers or bulk buyers to the different parts of the
counted, weighed, and washed vegetables. Some people Philippines, even reaching as far as Mindanao. In fact, the
who seemed to be the managers called out to workers. Philippines used to be a major exporter of vegetables in
They talked to buyers and suppliers as they held receipts, Southeast Asia, and these exports would come from La
calculators or notes. The place was raucous, the paths Trinidad.
swamped with bodies and wares. A komboy may even
scold you for blocking the way. As he is carrying three to
five sacks on his back, that would be understandable.

Author’s Note: a major resource of this article was the study conducted with Danica R.
Buendia and Juvina Cassandra Subido under the guidance of our adviser, Mrs. Evelyn Dizon.
White and Blue: The Official Student Publication of Saint Louis University (2016-2017)

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 What is the difference between supply chain and supply chain management?
The supply chain also known as distribution channels naturally exist in business while
supply chain management requires efforts by the individuals and organizations within the
supply chain.
ELABORATE:
Distinguish the roles and functions of the various supply chain participants in
different industries.
There are three degrees of supply chain complexity:
(Mentzer, DeWitt, Keebler, Min, Nix, Smith, Zacharia, 2001)

a) Direct supply chain includes a company, a supplier and a customer.

Figure 5

b) Extended supply chain includes suppliers of the immediate supplier and customers of
the immediate customer. (Figure 7)

Figure 6

c) Ultimate supply chain includes all organizations from the ultimate supplier to the
ultimate customer. (Figure 8)

Figure 7

The above configurations illustrate the myriad possibilities of how each of the supply
chain participants interact with each other. One thing noteworthy in these relationships is
that the ultimate recipient of all the activities is the consumer or the end user.
What are the different industries that you are familiar with? How are their supply chains
set up or designed in order to help them maximize value and lower waste?

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 EVALUATE:
Assess your understanding of supply chain participant’s roles and functions.
Evaluation Questions: Answer the following discussion questions. Your
answer should be 100-150 words for each number.

1. Why would service industries have fewer supply chain participants than
manufacturing industries?
2. In the feature story, The North’s Agora, the Cordillera Administrative Region vegetable
trading was highlighted. Explain your insights on the supply chain participants
mentioned. What is their contribution to the vegetable supply chain of vegetables?
3. Compare and contrast the upstream and downstream of supply chains in terms of
the product flows. Be specific regarding similarities and differences.
4. Compare and contrast the upstream and downstream of supply chains in terms of
the information flows. Be specific regarding similarities and differences.
5. Compare and contrast the upstream and downstream of supply chains in terms of
the financial flows. Be specific regarding similarities and differences.

UNIT 2: Value creation in the context of supply chain and logistics management
After the completion of this module you should be able to:
a) Describe the value-driven supply chains
b) Differentiate supply chain management and logistics management
c) Analyze the importance of value creation in supply chain and logistics

ENGAGE:
Revisit knowledge of value-driven principles and practices learned in the
field of marketing management.

Multiple Choice. Each question has four answer choices. Read each question and encircle
the letter of the ONE best answer.
1. A social and managerial process by which individuals and organizations obtain what
they need and want through value creation refers to which one of the following
concepts?
a. Advertising c. Marketing
b. Management d. Selling
2. Marketing is defined by the American Marketing Association as the activity, set of
institutions, and processes for ___,___,___, and ___ offerings that have value for
customers, clients, partners and society at large.

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 a. Creating, communicating, delivering, and exchanging
b. Creating, advertising, selling and transferring
c. Making, arranging, maintaining, and selling
d. Performing, displaying, offering and exchanging
3. Exchange as a key concept in marketing refers to the act of trading a desired product
or service to receive something of ____ in return.
a. Benefit c. Value
b. Convenience d. Utility
4. The task of any business is to deliver ____ at a profit.
a. Customer demand c. Customer satisfaction
b. Customer needs d. Customer value
5. Each department in a company that carries out value-creating activities can be
thought of as a link in the company’s ____
a. Distribution chain c. Internal value chain
b. External value chain d. Supplier chain
6. The marketing logic by which a company hopes to create customer value and
achieve profitable customer relationships is referred to as the ___
a. Marketing management c. Unique selling proposition
b. Marketing strategy d. Value chain
7. The consumer’s estimate of the product’s overall capacity to satisfy his or her needs
is called:
a. Product cost c. Product satisfaction
b. Product need d. Product value
8. Which of the following is the set of benefits a company promises to deliver the
customer to satisfy their needs?
a. Good customer service c. On time delivery
b. Low price d. Value proposition
9. It is most accurate to say that customers buy from stores and firms that offer which of
the following?
a. The highest customer-perceived value
b. The highest level of customer satisfaction
c. The highest value for their money
d. The most attractive company offering
10. The final step in the marketing process is ___
a. Capturing value from customers
b. Creating customer lifetime value
c. Creating customer loyalty
d. Designing a customer-driven marketing strategy

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 EXPLORE:
Analyze the salient features of value-driven supply chains.

I. The value-driven supply chains

Supply chain management is a holistic enterprise wide view of a seamless channel
structure that consists of different competencies with a coherent customer-satisfying system
to successfully respond to any marketplace opportunity with superior competitive
advantage.
The supply chain begins with the unprocessed raw materials moving through the
supply chain participants and ending with the final customer using the finished goods. It
involves the flow of resources from the suppliers to customers while value chain is the flow of
perceived value from the customer (any one of the supply chain participants) to the buyer
(any one of the supply chain participants). Say for instance, if the supply chain participant
delivered the specified resources ordered (value) by their customers at the price the
customer is willing to pay then there will be smooth product flow and in return, there will be
effective financial flow. However, for example, if the manufacturer perceived no value in
what the producer or supplier provides then there will be no demand.
Andrew Feller (2015) argues that “supply chains focus upstream on integrating
supplier and producer processes, improving efficiency and reducing waste, while value
chains focus downstream, on creating value in the eyes of the customer.”

Figure 8: Value Chain vs. Supply Chain

(source: http://www.mepsupplychain.org/develop-efficient-value-chain/)

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 II. Supply chain management versus Logistics management
According to the Council of Supply Chain Management Professionals (CSCMP),
supply chain management:
a) encompasses the planning and management of all activities involved in sourcing and
procurement, conversion, and all logistics management activities
b) includes coordination and collaboration with channel partners, which can be
suppliers, intermediaries, third-party service providers, and customers
c) integrates supply and demand management within and across companies
d) links major business functions and business processes within and across companies
into a cohesive and high performing business model
e) includes all of the logistics management activities including manufacturing
operations
f) drive coordination of processes and activities within and across marketing, sales,
product design, finance and information technology.

According to the Council of Supply Chain Management Professionals (CSCMP), logistics

management:
a) include inbound and outbound transportation management
b) include fleet management, warehousing, materials handling, order fulfilment, logistics
network design, inventory management, supply/demand planning and
management of third-party logistics services providers
c) include sourcing and procurement, production planning and scheduling, packaging
and assembly, and customer service.
d) has an integrating function which coordinates and optimizes all logistics activities?
e) Integrates other functions including marketing, sales manufacturing, finance and
information technology.

Figure 9: Integrated Supply Chain

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 Supply chain management consists of firms collaborating to leverage strategic
positioning to improve operating efficiency. Whereas, logistics management is that part of
supply chain management that plans, implements, and controls the efficient, effective flow
of goods and services and related information between the point of origin and the point of
consumption to meet customer requirements.

Logistics focuses its attention on activities such as procurement, distribution,

maintenance, and inventory management while supply chain management acknowledges
logistics and all activities such as marketing, new product development, finance and
customer service. Logistics is the process that creates value by timing and positioning
inventory and it is the combination of a firm’s order management, inventory, transportation,
warehousing, materials handling, and packaging as integrated throughout a facility
network. Logistics is a subset of and occurs within the broader framework of a supply chain.
Thus, value results from the synergy among firms composing the supply chain with respect to
three critical flows comprised of the product/service, information, and finance. Moreover,
logistics is the primary conduit of product and service flow within a supply chain
arrangement.

Logistics management is the process of planning, implementing and controlling

efficient cost-effective flow and storage of goods, services and related information. It has
two major functions: (a) procurement involving inventory control, warehousing and materials
handling, and (b) facility location and network design involving transportation, customer
service and order processing.

III. Value creation in supply chains and logistics

Logistics is a set of approaches used to efficiently integrate suppliers, manufacturers,

warehouses, and customers so that merchandise is produced and distributed at the right
quantities, to the right locations, and at the right time in order to minimize system wide costs
while satisfying service-level requirements. Its’ classic objective means having the right
products at the right quantities, at the right moment at the right cost.

Figure 10: Logistics Management Objective

Right products mean that the goods or services match the customer order
specifications particularly in the features, functions and benefits that the customer requires.
The right products coupled with the right quantities based on the demand of the customer
results to flexibility. Flexibility is the ability of the supplier to respond to changes in the
environment like customer order alterations, fortuitous events and others.

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 The right quantities prepared at the right moment leads to delivery reliability for a
particular supplier. Delivery reliability is the ratio calculated by dividing the total number of
deliveries received on time and without errors divided by the total number of deliveries (error
free deliveries / total number of deliveries = delivery reliability). Errors may include a missed
delivery date/s as well as mistakes in quantity or price.

The combination of right moment and right cost leads to effective delivery time and
efficient lead time. The lead time refers to the number of minutes, hours, or days that must
be allowed for the completion of an operation or process or must elapse before a desired
action takes place. For example, in a certain purchase order, the recipient or buyer expects
to receive their items at a particular time and date. Here, the sender or seller calculates how
much time it takes to prepare/package and ship the item until it has finally been delivered
to the recipient or buyer. In this case, the total lead time includes (1) receipt of customer
order + (2) prepare item + (3) ship the item + (4) actual delivery to the buyer.

The right cost means that the seller will be able to produce the right inventory based
from the customer order specifications at a profit and the buyer will receive the right
inventories that will enable them to gain benefits. There are three types of inventories,
namely, raw materials inventory (RMI), work-in process inventory (WIP) and finished goods
inventory (FGI).

Value could have different meanings to the entities (individuals and organizations) in
the supply chain. The value is relative to the usefulness or utility of the product that is in their
possession. Say for example, value means freshness of harvested crops for the vegetable
farmer – producer, goods meeting quality standards for the supplier, cost-efficiency for the
warehouse, speed and convenience of delivery for the distributor, satisfaction in
consumption by the consumer and others.

EXPLAIN:

Present flowcharts of logistics and supply chain networks.

There is an underlying difference between supply chain management and

logistics management. Logistics refers to activities that occur within the
boundaries of a single organization and supply chains refer to networks of companies that
work together and coordinate their actions to deliver a product to market.

Figure 11: Formal Supply Chain: Vegetable Product Flow

The formal supply chain of vegetables begins from planting to harvesting of the crops
by the farmers considered as producers or suppliers. The assembler-consolidator or
facilitator-buyer or contract buyer acts as a middleman to the farmer and their clients. They
organize the farmers with formal agreements stipulating production and delivery schedules,

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 volume, quality requirement and commitments, price and payment terms. The facilitator-
buyer assesses whether the farmer meets the standards to qualify in the supply chain.
Consequently, the facilitator-buyer or contract buyers enter into a formal agreement with
institutional buyers. Then the consumers purchase the vegetables based on their relationship
with the supermarkets or vegetable stalls.

Figure 12: Informal Supply Chain: Vegetable Product Flow

The informal supply chain of vegetables is usually visible in the market where
immediate transactions occur. The decision of farmers on crops depends on the availability
of resources such as cash, input requirements of the crop (i.e. seedling, farming implements,
etc.) and technology. Farmers produce vegetables using the ‘hit and miss’ attitude making
them dependent on the wholesalers and retailers for the sale of their produce. The
wholesalers and retailers depend on the vegetables supplied by the farmers. The assembling,
transporting, distribution and utilization of vegetables is done between and among the
wholesalers and retailers. Vegetable farming and marketing initiatives are not market driven.
The volume, quality and variety of vegetable consumption is not in accordance with what
the market demands.

Figure 13: Distribution destinations of vegetable products from the trading post

One of the trading posts of vegetable products from Benguet is the Baguio Hanger
Market. In terms of its logistic management, they oversee the movement of the vegetables
from them as suppliers/wholesalers to the point of sale in the different geographic
destinations who in turn receive the vegetables in bulk quantities or wholesale ready for
distribution and sale to the consumers. Distribution includes bulk-breaking, packaging,
inventory, warehousing, and selling.

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 ELABORATE:

Compare and contrast value creation in supply chain networks and logistics.

Logistics experiences in textile focus on speed and variety due to seasonality

concerns; retailers manage their logistics to prevent stores from having empty shelves or
overstocks, and frozen storage; healthcare organizations are concerned with hygiene,
limited shelf life, special storage conditions and high inventory risks; in the automotive
industry, the focus is on just-in-time, delivering parts from thousands of kilometers, and special
packaging; and in fuel and petroleum transportation, there is concern for very special tanker
security systems.

Think of other ways how supply chains create value in their activities, processes and
operations. To do this, you are advised to have a comprehensive view of an industry and
cross-industries that will give you an opportunity to enhance your skills in designing the inter-
relationships between logistics and supply chains.

EVALUATE:

Critique value creation in the context of supply chain management.

Value creation in supply chain management

Cite a product item for your supply chain analysis (e.g. vegetables) Write chosen item
here: _________________

Supply chain Value held and contributed to Challenges in functions to

participants the supply chain (VC) be performed (C)
Producer/supplier
Manufacturer
Warehouse
Wholesaler
Retailer
Business customer
Consumer
Example: vegetables. Producer: fresh crops (VC) + turbulent climate (C), Manufacturer:
quality preserved vegetables (VC) + standard of raw vegetables (C), Warehouse: longer
shelf life (VC) + wrong storage, Wholesaler: availability of vegetables (VC) + shortage
(C), Retailer: access to vegetables (VC) + rotten inventory (C), Business customer or
Restaurant: unique meal preparation (VC) + no orders (C), Consumer: pleasure and
payment (VC) + no demand.

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means, electronic, mechanical, photocopying, recording, or otherwise of any part of this document, without the prior written permission of SLU, is strictly prohibited. 17