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TOPIC 2.1: Products, Services, Information and Financial Transactions

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This document discusses supply chain concepts and frameworks. It defines supply chain management as involving planning and coordination across all activities from sourcing to delivery in order to fulfill customer demands. Two frameworks are described - the SCOR model which identifies six key processes (plan, source, make, deliver, return, enable), and the GSCF model which includes eight processes involving multiple business functions. Logistics is shown to play an important role in both models, particularly in delivery, returns, and enabling other supply chain activities and processes.

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TOPIC 2.1: Products, Services, Information and Financial Transactions

Uploaded by

Nhsyy
66 views5 pages
This document discusses supply chain concepts and frameworks. It defines supply chain management as involving planning and coordination across all activities from sourcing to delivery in order to fulfill customer demands. Two frameworks are described - the SCOR model which identifies six key processes (plan, source, make, deliver, return, enable), and the GSCF model which includes eight processes involving multiple business functions. Logistics is shown to play an important role in both models, particularly in delivery, returns, and enabling other supply chain activities and processes.

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SCM

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This document discusses supply chain concepts and frameworks. It defines supply chain management as involving planning and coordination across all activities from sourcing to delivery in order to fulfill customer demands. Two frameworks are described - the SCOR model which identifies six key processes (plan, source, make, deliver, return, enable), and the GSCF model which includes eight processes involving multiple business functions. Logistics is shown to play an important role in both models, particularly in delivery, returns, and enabling other supply chain activities and processes.

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© All Rights Reserved
Download as DOCX, PDF, TXT or read online from Scribd
Download as docx, pdf, or txt
66 views5 pages

TOPIC 2.1: Products, Services, Information and Financial Transactions

Uploaded by

Nhsyy
This document discusses supply chain concepts and frameworks. It defines supply chain management as involving planning and coordination across all activities from sourcing to delivery in order to fulfill customer demands. Two frameworks are described - the SCOR model which identifies six key processes (plan, source, make, deliver, return, enable), and the GSCF model which includes eight processes involving multiple business functions. Logistics is shown to play an important role in both models, particularly in delivery, returns, and enabling other supply chain activities and processes.

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TOPIC 2.

1
- SUPPLY CHAIN CONCEPT
Logistics is part of supply chain management. Logistics and supply chain management are
closely interrelated with one another.

What is supply chain?


- THREE KEY TAKEAWAYS
Firstly, supply chain management is an overarching process that involves every activities
related to logistics and the processes in organizations involved in turning goods of raw
materials into finished products.
Secondly, collaboration, coordination and information sharing among channel partners, or
often called supply chain members, are integral elements.
Thirdly, supply chain is all about supplying the desired goods, services and information in
order to fulfil customer demands from within and across channel members.

In detail, the definition by Council of Supply Chain is


“Supply chain management encompasses the planning and management of all activities
involved in sourcing and procurement, conversion, and all logistics management activities.
Importantly, it also includes coordination and collaboration with channel partners, which
can be suppliers, intermediaries, third party service providers, and customers. In essence,
supply chain management integrates supply and demand management within and across
companies.”

Similar to the definition

“A combination of process, functions, activities, relationships and pathways along which


products, services, information and financial transactions move in and between enterprises
from original producer to ultimate end-user or consumer”
- John Gattorna, “Supply Chains are the business”, Supply Chain Management Review
(2006) 42-49.

Red – the activities


Blue – the flow
Green – the channel members

CONCEPT OF SUPPLY CHAIN


Even though the management discipline has a long history, supply chain management is
relatively..

1. A ‘young’ concept
Because it was rarely mentioned in either the academic or practitioner communities
prior to 1990.

2. Supply chain concept originated in the logistics literature


And logistics has continued to have a significant impact on the SCM concept
3. Throughout the 1980s and early 1990s
More specifically, a dominant logistical philosophy throughout “..”
Involved the integration of logistics with other functional areas of an organization, in
an effort to achieve the enterprises’ overall success.

4. Mid 1990s witnessed the growing recognition of SC concept


That there could be a value in coordination the various business functions, not only
within the organization but across organizations as well.

Therefore, constitutes what is known today as the SCM.

Based on definition by John Gattorna, a SCM can be illustrasted by several generic types.
Namely the direct, extended and ultimate supply chains.

A direct supply chain, consists of a focal firm, a supplier and a customer involved in the
upstream and downstream flows of products, services, finances and information.

Meanwhile, an extended supply chain, includes suppliers of the immediate supplier and
customers of the immediate customer, all involved in the upstream and downstream flows
of products, services, finances and information. Extended supply chain indicates that a
business could become a supplier’s supplier or a customer to another business. This reflect
the inner connective in the firms of a supply chain.

An ultimate supply chain, in which most organizations are involved, includes all the
organizations involved in all the upstream and downstream flows of product, services,
finances and information from the ultimate supplier to the ultimate customer.

Where does logistics fall in the supply chain..


In a supply chain, as goods move from one location or organization to another, logistics is
needed to facilitate the transportation, distribution, storage, inventory management and
order processing. In other words, logistics activities takes place between or within supply
chain members.

In summary, several key points

- Supply chain is not a new concept and involves a series of complex network goods,
services, information and financial flows between and within supply chain members.
Some products have more extended and intricate supply chain than others.
- It goes without saying, that parties in the supply chains are interdependent. For
supply chain to achieve its intended objective of satisfying customers, no singular
firm could do it all alone, and therefore, requires the help and the use of others,
even competitors.
TOPIC 2.2
- SCM PROCESS FRAMEWORKS

We focus on the SCOR (supply chain operations reference) model and GSCF (global supply
chain for) model, are prominent process frameworks in supply chain management. The
prominence of these models, is attributable to the fact that they identify business processes
in such a way that the processes can actually be implemented and thus evaluated by the
organizations. A primary distinction between the models is the degree of cross functional
involvement prescribed by each model. The GSCF model involves all business functions,
while the SCOR model, is focused on the logistics, operations and procurement functions.

SCOR MODEL: Identifies 6 processes associated with supply chain management


- Plan
- Source
- Make
- Deliver
- Return
- Enable (not shown in slide)

This model indicates that fundamentally, supply chain is all about planning on goods,
services, information and financial flow from the main suppliers all the way to the end
customers.

The focal company, which is in blue, indicates the manufacturer. Being a manufacturer, it
involves the process of sourcing for resources. Making or turning them to desired products
and having them delivered to customers. Return here, indicates that manufacturers also
have to manage return. Or reverse supply chain, such as product defects, warranty claim, or
recycling measures. These processes apply similar to the supplier and the customer. The
internal and external shown on the supplier and customer, indicate that the processes can
either be sourced from within the organization or acquired or use the service from
specialized firms outside the company.

The definitions of each process in the SCOR model


- Plan, it is the process that balances aggregate demand and supply to develop a
course of action which best meets sourcing, production, and delivery requirements.
- Source, it is a process that procures goods and services to meet planned or actual
demand.
- Make, it is a process that transform product to a finished state to meet planned or
actual demand.
- Deliver, it is a process that provides finished goods and services to meet planned or
actual demand, typically including order management, transportation management
and distribution management.
- Return, is the process associated with returning or receiving returned products for
any reason. These processes extend to post delivery customer support.
- Enable, is the process that manages relationships, performance, and information for
a supply chain. These processes interact with all other internal and external
processes associated with supply chain.
A closer analysis of the 6 processes and their definitions, indicates the important role of
logistics in supply chain management. It can be argued that logistics has some
involvement in both sourcing and making process. Alternatively, logistics can also be
involved in the delivering and returning processes. The definition of the delivery process,
specifically mentions the logistics components of order management, transportation
management and distribution management. And in terms of planning, logistics is a key
contributor to understanding capacity constraints that could inhibit the ability to meet
delivery requirements. With respects to the enable process, logistics assets such as
trucks and warehouses are scheduled and maintained in order to enable the ultimate
deliver process. In short, the next time you think of SCM, think of SCOR model and 6
processes.

GSCF MODEL
There are 8 processes:
1. Customer relationship management
2. Supplier relationship management
3. Customer service management
4. Demand management
5. Order fulfillment
6. Manufacturing flow management
7. Product development and commercialization
8. Returns management

Unlike the SCOR model, the GSCF model includes the involvement of all business
functions. Namely logistics, purchasing, marketing, finance, R&D, production and
purchasing. However, similar like the SCOR model, logistics plays an important role in
the processes associated with the GSCF model.

For example, logistics consideration such as on time pick up and delivery could arise
within the order fulfillment process as well as being monitored by the customer service
management process.

Additionally, the logistics function can contribute to customer relationship management


and supplier relationship management processes. In terms of outbound or inbound
material flow key customers or suppliers. Logistics decisions in support of a new product
in R&D can be seen in the manufacturing flow, demand management or product
development and commercialization processes.

Definition of processes
1. Customer relationship management
It provides the structure for how relationships with customers will be developed and
maintained.

2. Supplier relationship management


Provides the structure for how relationships with suppliers will be developed and
maintained.
3. Customer service management
Deals with the administration of the product service agreement (PSAs) developed by
customer teams as part of the Customer Relationship Management process.

4. Demand management
Balances the customers’ demand with the capabilities of the supply chain. Process
includes forecasting, synchronizing supply and demand, reducing variability, and
increasing flexibility.

5. Order fulfillment
Involves filling orders as well as all activities necessary to design a network and
enable a firm to meet customer requests while maximizing its profitability.

6. Manufacturing flow management


Deals with all activities necessary to obtain, implement, and manage manufacturing
flexibility as well as product movement into, through and out of plants.

7. Product development and commercialization


Provides the structure for developing and bringing to market products jointly with
customers and suppliers.

8. Returns management
Involves activities associated with returns, reverse logistics, gatekeeping, and
avoidance.

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