Scribd
Upload
38 views

SCM Lecture-1

The document provides an overview of supply chain management. It discusses how SCM involves managing the flow of goods and services between entities in a supply chain to deliver products to customers at low cost while satisfying demands. It notes SCM aims to efficiently integrate suppliers, manufacturers, warehouses, and stores. The document also outlines some of the challenges in SCM like reconciling different objectives among supply chain participants and meeting customer demands for low prices, quick delivery, flexibility, and quality. It emphasizes that supply chains rather than individual companies compete and opportunities exist at the interfaces between partners.

Uploaded by

Hogunn
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
38 views

SCM Lecture-1

The document provides an overview of supply chain management. It discusses how SCM involves managing the flow of goods and services between entities in a supply chain to deliver products to customers at low cost while satisfying demands. It notes SCM aims to efficiently integrate suppliers, manufacturers, warehouses, and stores. The document also outlines some of the challenges in SCM like reconciling different objectives among supply chain participants and meeting customer demands for low prices, quick delivery, flexibility, and quality. It emphasizes that supply chains rather than individual companies compete and opportunities exist at the interfaces between partners.

Uploaded by

Hogunn
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 29

SUPPLY CHAIN

MANAGEMENT
LECTURE – 1
Supply Chain Management

Management of the flow of goods or services between


entities in the chain to realize delivery of end products or
services, satisfying customers at minimum cost.
OR
Set of approaches utilized to efficiently integrate suppliers,
manufacturers, warehouses and stores, so that merchandise
is produced and distributed in the right quantities, to the
right locations at the right time in order to
minimize system wide costs while
satisfying service level requirements.
Supply Chain
Supply Chain Management
More Realistic Supply Chain
FLOW WITHIN SUPPLY CHAIN
Why is SCM difficult?
Different facilities may have different, conflicting objectives

◦ Suppliers want manufacturers to commit themselves to purchasing large quantities in stable volumes with
flexible delivery dates

◦ Manufacturers want large production runs

◦ Warehouses and Distribution Centers want to reduce inventory

◦ Reduction in inventory levels increase transportation costs


Customers demand

◦ Lower prices

◦ Reduced lead time

◦ Product and volume flexibility

◦ Improved quality

◦ Improved pre-sale and after-sale service


SUPPLY CHAIN:
Supply chains compete, not companies
Most of the opportunities for cost reduction and value enhancement lie
at the interface between supply chain partners
Supply chain integration implies process integration
Purchasing
Purchasing

The acquisition of goods and services needed to support the various


activities of an organization, at the best possible cost and from
reliable suppliers.
Purchasing professional's goal to a company
should be to provide:

The best pricing

Communication

Research in finding sources

Supplier performance Evaluation

Service level agreements (SLA’s)


Purchasing Topics to Cover:
◦ Importance of Purchasing Today

◦ Purchasing Processes

◦ Import Documentation

◦ Negotiation Skills

◦ Make – or – Buy Analysis

◦ Ethics in Buying
Importance of purchasing:
Competition
Material cost
Lead time
Customer Demand
Quality
Single Sourcing

Advantages
Disadvantages
 Potentially better quality because more
 More vulnerable to disruption if a
SQA possibilities.
failure to supply occurs.
 Strong relationships
 Individual supplier more affected by
 Greater dependency encourages more volume fluctuations.
commitment and effort.
 Supplier might exert upward
 Better communication. pressure on prices if no alternative
 Easier to cooperate on new supplier is available.
product/service development.
 More scale economies.
 Higher confidentiality.
Multi-sourcing

Advantages Disadvantages
 Purchaser can drive price down by  Difficult to encourage commitment
competitive tendering. by supplier.
 Can switch sources in case of  Less easy to develop effective SQA.
supply failure.  More effort needed to
 Wide sources of knowledge and communicate.
expertise to tap.  Suppliers less likely to invest in
new processes.
 More difficult to obtain scale
economies.
Recognize, describe and define the need
Transmit the need (requisitions)
Determine sources, investigate, and select supplier/analyze bids
Prepare and issue the PO
Follow-up the order (including expediting and de-expediting)
Receive and inspect the material
Clearance of the invoice and payment to supplier
Import Documents:

Bill of Lading
Commercial Invoice
Packing List
Weight Memo
Certificate of Inspection
Certificate of Origin
Insurance Policy
The process whereby two or more parties decide what each will give and take in
an Exchange between them.” (Lysons & Farrinton)

“Negotiation is the process by which we search for terms to obtain what we want
from somebody who wants something from us.”
(Total Success Training)

“Negotiation is discussing or bargaining in order to reach agreement.” (Owen)


Negotiation (What it isn’t):

Negotiation is not selling.


Negotiation is not ‘giving in’ or conceding.
(Owen)
Negotiation (What it isn’t):

Negotiation is not selling.


Negotiation is not ‘giving in’ or conceding
(Owen)
Adversarial Negotiation:
Win or lose negotiation
Assumption

Collaborative Negotiation:
Win-Win negotiation
Assumption
The unit cost is cheaper,
We don't use it enough,
We don't have space,
We don't understand the technology,
We don't have the skill,
It's not our core business/expertise,
It's expensive to set up the process,
The unit cost is cheaper,
It's critical to the business,
Retain specialist knowledge/skills,
We have control over the supply,
Quality issues are critical,
No suitable supplier,
It's part of our core business/expertise
Child Labor
Company’s Environment
Green Supply Chain
Fair Trade
THANK YOU

You might also like