Materials

Management
Prof. Dr. Salaheldin Ismail Salaheldin

Dr. Mai Shawki

Department of Business Admin.

Faculty of Commerce & Business Admin.
Helwan University

Week Nine (Lecture Nine - On Line):

Spring - 2024
1
 Week Nine
Chapter Seven
Supply Chain
Management (SCM)

2
 INTRODUCTION
• SCM manages how goods and services are transformed
from new ideas and raw materials into finished products.
• SCM includes information on moving and storing the
materials used to produce goods or to provide services,
and also storing the finished products until they are sold
and tracking where sold products go, so that organizations
can use that information to drive future sales.
• SCM integrates materials, finances, suppliers,
manufacturing facilities, wholesalers, retailers and
consumers into a unified system.
SUPPLY
SUPPLY CHAIN
CHAIN MANAGEMENT
MANAGEMENT DEFINITION
DEFINITION

• SCM refers to the movement and storage of raw

materials, semi finished goods and finished
goods from point of origin to point of
consumption.
• SCM also can be defined as the "design,
planning, execution, control of supply-chain
activities with the objective of creating net value,
building a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply with
demand and measuring performance globally".
4
 SCM
SCM DEFINITION
DEFINITION
• SCM is the broad range of activities required to plan,
control and execute a product's flow from materials to
production to distribution in the most economical way
possible.
• SCM integrates planning and execution of processes
required to optimize the flow of materials, information
and capital in functions that broadly include demand
planning, sourcing, production, inventory management
and logistics or storage and transportation.
5
 CIRCULAR
CIRCULAR SUPPLY-CHAIN
SUPPLY-CHAIN MANAGEMENT
MANAGEMENT

Circular Supply-Chain Management (CSCM) is "the

configuration and coordination of the organizational
functions i.e. marketing, sales, R&D, production, logistics,
IT, finance, and customer service within and across
business units and organizations to close, slow, intensify,
and dematerialize material and energy loops to minimize
resource input and waste out of the system, improve its
operative effectiveness and efficiency and generate
competitive advantages".
6
 IMPORTANCE
IMPORTANCE OF
OF SCM
SCM
• Supply chain management is an essential part of
any business success. The journey from idea
creation to end product is a complicated process
with many moving parts. How well a company
manages this process can directly be translated
into increased revenues and reduced operating
expenses. This reflects a company’s efficiency.
7
 IMPORTANCE
IMPORTANCE OF
OF SCM
SCM
• Supply-chain management plays an important role in
improving trust and collaboration among supply-chain
partners, and thus, improving inventory visibility and
the speed of inventory movement.
• Modern supply chains helped to improve living
standards by enabling consumers to buy essential
products at lower costs. This is because an effective
supply chain streamlines the process of getting products
to market, and ultimately to consumers.
8
 IMPORTANCE OF SCM
• Some key reasons reflect the importance of SCM implementation:
• Basic life necessities. Through supply chain management, individuals access
necessities such as food and clothing, as well as life-saving medicines and health
care products.
• Power and light. People use electrical energy for homes and businesses for
light, heat, and air conditioning. The energy supply chain involves the
transformation of raw materials into usable energy and uses supply chain
management principles to bring energy resources to consumers.
• Infrastructure. National highway systems, railroads, ports, and airports
facilitate the exchange of goods between businesses and consumers.

9
• New Jobs. Supply chain management plays a critical role
in job creation. Supply chain professionals work in areas
such as transportation, warehousing, inventory
management, packaging and logistics information.
•When considering why supply chain management is
important, it’s worth noting the potential consequence of
an ineffective supply chain. For example, a lack of raw
materials can result in a manufacturer not having the
resources can not produce goods or provide services at the
right time, the right quantity, the right quality and the
night price.
10
 HOW
HOW DOES
DOES SCM
SCM WORK?
WORK?
Supply chain management coordinates procurement,
suppliers, manufacturing facilities, retailers, distributors
and customers as they move together through the
production, sales and buying cycles.
IT requires active management because it is affected by
many factors outside the control of the business, such as
transportation costs and other environmental conditions.
When a company is highly aware of those factors, it can
manage supply chains more effectively. With effective
SCM, inventory, production, distribution, sales and seller
inventory are all strongly controlled.
11
HOW
HOW DOES
DOES SC
SC MANAGER
MANAGER DIFFER
DIFFER FROM
FROM AN
AN
??OPERATIONS
OPERATIONS MANAGER
MANAGER
•Operations Management is Internally-
focused:
•Operations management focuses primarily
upon activities that happen within a
company's walls to produce a good or
provide a service.
This includes developing policies, managing
the daily operations and workflow,
overseeing workers, and participating in the
design, planning and the physical production
of the product.
12
•Supply Chain Management Is Externally Focused:
Supply chain managers work with external
partners to procure parts and raw materials
needed to produce goods and provide services,
create the inventory, and sell the products to
outside markets. They also evaluate suppliers and
negotiate contracts with vendors. Because this role
is a vital necessity, we can see why supply chain
management exists under the umbrella of
operations management. Without materials, there
are no products to manage and no need for
workers to make the products.
13
 WHAT
WHATDOES
DOESAASUPPLY
SUPPLYCHAIN
CHAINMANAGER
MANAGERDO?
DO?
A supply chain manager responsible for:
1-Devolving strategy of the supply chain.
2-Identifying source of the materials used to make the goods to sell.
3-Helping in achieving efficient production of the manufacturing
process in getting the goods ready for the market.
4-Facilitating the delivery mechanisms and logistics move the
products to the consumers and distributors.
5-Creating the system for managing the return of defective or
unwanted products.
Consequently, the SC manager works to prevent shortages and
reduce costs through these five elements mentioned above, which
directly impact profits.
14
 WHAT
WHAT ARE
ARE THE
THE BENEFITS
BENEFITS OF
OF SCM?
SCM?
When done effectively, SCM helps a business to gain a
competitive advantage by delivering products more quickly to
customers. Here are some ways in which SCM accomplishes
this without requiring the company to lower prices:
•SCM helps balance the supply of products with market
demand. Using the grocery store example, if you buy tomatoes
directly from the farmer, you can better negotiate and adjust
how many tomatoes you buy each season.
•SCM allows for more efficient and effective customer
service. This occurs because customers receive their products
quickly and as promised. For example, if the farmer brings the
tomatoes directly to your grocery store, then the product will
likely be fresher and less damaged than if it traveled through a
third-party supplier before arriving on your shelves.
15
 •SCM lowers the cost of doing business. This is
accomplished by reducing purchasing and
production expenses. For example, if you own a
grocery store and buy tomatoes directly from the
farmer, you eliminate the expense of having a third
party buy products for you. Purchasing directly
from the source saves you money and places the
food on your shelves more quickly.
•SCM builds partnerships that can support future
growth or expansion. If you, as the grocery store
owner, develop strategic partnerships with farmers
early in your business operation, then the farmers
can grow their operations as you grow yours.
16
 AN EXAMPLE OF SCM
•Viewpoint Tech company closely examines every step in
the supply chain and determines that approximately 90%
of its expenses are related to the supply chain. The
management team focuses on improving its efficiency,
resulting in a high-performing supply chain, which allows
it to negotiate better pricing with vendors for the raw
materials needed to produce goods. Since it can produce
the goods for less, Viewpoint Tech company makes more
profit off its goods, allowing it to grow revenue at a rate
that beats the average for the industry without lowering
prices.
17
The
The End
End

18