I’m Ma. Eppie A.

Antioquia, Assistant Professor IV from URS Binangonan

campus 18 years in service ,from the College of Business teaching Management
subjects, took up Bachelor of Science in Commerce Major in Management in Tomas
Claudio Memorial College, with Master in Management in University of Rizal System
and completed academic requirements in Doctor in Business Administration at
University of Rizal System.

Welcome to this subject and I look forward to working with you all in the class

If you have questions email me at [email protected]

Unit 3

Module 10

Course Title: Global Supply Chain Procurement and Distribution

Objectives:

1. Discuss global supply chain

2. Understand the procurement and distribution
3. Identify the six areas of concentration on global supply chain

Introduction:

Supply Chain Management can be defined as the management of flow of

products and services, which begins from the origin of products and ends at the
product’s consumption. It also comprises movement and storage of raw materials that
are involved in work in progress, inventory and fully furnished goods.
The main objective of supply chain management is to monitor and relate
production, distribution, and shipment of products and services. This can be done by
companies with a very good and tight hold over internal inventories, production,
distribution, internal productions and sales.
Supply chain management basically merges the supply and demand
management. It uses different strategies and approaches to view the entire chain and
work efficiently at each and every step involved in the chain. Every unit that
participates in the process must aim to minimize the costs and help the companies to
improve their long term performance, while also creating value for its stakeholders and
customers. This process can also minimize the rates by eradicating the unnecessary
expenses, movements and handling.
Contents :

A global supply chain is a dynamic worldwide network when a company

purchases or uses goods or services from overseas. It involves people, information,
processes and resources involved in the production, handling and distribution of
materials and finished products or providing a service to the customer.

Global supply chains are networks that can span across multiple continents and
countries for the purpose of sourcing and supplying goods and services. Global supply
chains involve the flow of information, processes and resources across the globe.

Low-cost country sourcing is linked to global supply chains and refers to the
procurement of products and services from countries with lower labour rates and
reduced production costs than that of the home country.

Global procurement enables firms to pursue the full potential of international

sourcing by capitalising on the world's best suppliers.

Information about Global Procurement

Global procurement is a broad concept of strategic nature that is usually found in
larger firms. It includes procurement from company-internal and company-external
suppliers and covers some issues of production and product development. The need to
increase the number of suppliers, non-availability of certain commodities in domestic
markets, competitiveness of overseas resources and access to worldwide technology
are among some of the reasons for a global procurement decision
Global procurement is different from and more complex than international
purchasing. The former represents a strategic direction and the latter is a functional
activity. Because of the complexity of global procurement the responsibility for it is
usually undertaken by specially designated teams who report at a high organisational
level. For example, the Unicef supply division is the department tasked with overseeing
Unicef's global procurement operations with 158 staff working in regional offices, as well
as at the supply headquarters in Copenhagen. The division also oversees a supply
section in New York and warehouse hubs in Dubai, Panama and Shanghai.

In commerce global supply-chain management (GSCM) is defined as

the distribution of goods and services throughout a trans-national companies' global
network to maximize profit and minimize waste. Essentially, global supply chain-
management is the same as supply-chain management, but it focuses on companies
and organizations that are trans-national.
Global supply-chain management has six main areas of concentration:
1. Logistics Management - Logistics is generally the detailed organization and
implementation of a complex operation. In a general business sense, logistics is
the management of the flow of things between the point of origin and the point of
consumption to meet the requirements of customers or corporations. The
resources managed in logistics may include tangible goods such as materials,
equipment, and supplies, as well as food and other consumable items. The
 logistics of physical items usually involves the integration of information
flow, materials
handling, production, packaging, inventory, transportation, warehousing, and
often security.
Logistics management is the part of supply chain management and supply chain
engineering that plans, implements, and controls the efficient, effective forward, and
reverse flow and storage of goods, services, and related information between the point
of origin and point of consumption to meet customer's requirements. The complexity of
logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation
software.
2. Competitor Orientation. When a business is competitively oriented, it constant
reassesses its strengths and weaknesses relative to its competitors. A
performance evaluation may include production efficiency, pricing, delivery
times, customer satisfaction, innovation, employee retention and market share.
In a competitive economic system, each economic entity is attempting to
maximize advantages for itself at the expense of its competitors. For companies
that deal entirely with other businesses, for example wholesalers or sellers of
raw materials, analysis of competition is more important than marketing or
public profile.

3. Customer Orientation. Customer-oriented business is engaged in by firms that

sell products and services to the general public and need to maintain a positive,
high-profile public image. For retail firms, competition is a serious issue, but it
can be engaged in by focusing on the customer rather than on the competition
itself. When two competing firms both attempt to lure in customers through low
prices, high quality and good service, they are competing with each other, but
through the medium of the customer. This is a different form of competitive
orientation than that engaged in by wholesalers and producers of raw materials.

4. Supply Chain Coordination Channel coordination (or supply chain

coordination) aims at improving supply chain performance by aligning the plans
and the objectives of individual enterprises. It usually focuses
on inventory management and ordering decisions in distributed inter-company
settings. Channel coordination models may involve multi-echelon inventory
theory, multiple decision makers, asymmetric information, as well as recent
paradigms of manufacturing, such as mass customization, short product life-
cycles, outsourcing and delayed differentiation.

5. Supply Management Supply management is the act of identifying,

acquiring, and managing resources and suppliers that are essential to the
operations of an organization. It includes the purchase of physical goods,
information, services, and any other necessary resources that enable a
 company to continue operating and growing. The main goals of supply
management are cost control, the efficient allocation of resources, risk
management, and the effective gathering of information for business
decisions.
6. Operations Management is an area of management concerned with designing
and controlling the process of production and redesigning business operation in
the production of goods or services. It involves the responsibility of ensuring
that business operations are efficient in terms of using as few resources as
needed and effective in terms of meeting customer requirements. Operations
management is primarily concerned with planning, organizing and supervising in
the contexts of production, manufacturing or the provision of services. It is
concerned with managing an entire production or service system which is the
process that converts inputs (in the forms of raw materials, labor, consumers,
and energy) into outputs (in the form of goods and/or services for
consumers). Operations produce products, manage quality and create services.
Operation management covers sectors like banking systems, hospitals,
companies, working with suppliers, customers, and using technology. Operations
is one of the major functions in an organization along with supply chains,
marketing, finance and human resources. The operations function requires
management of both the strategic and day-to-day production of goods and
services.

Global supply-chain management can be impacted by several factors who

impose policies that regulate certain aspects of supply chains. Governmental and non-
governmental organizations play a key role in the field as they create and enforce laws
or regulations which companies must abide by. These regulatory policies often
regulate social issues that pertain to the implementation and operation of a global supply
chain (e.g. labour, environmental, etc.). These regulatory policies force companies to
obey the regulations set in place which often impact a company's profit.
Operating and managing a global supply chain comes with several risks. These risks
can be divided into two main categories:
1.Supply side risk and demand side risk. Supply-side risk is a category that includes
risks accompanied by the availability of raw materials which effects the ability of the
company to satisfy customer demands.
2. Demand-side risk is a category that includes risks that pertain to the availability of
the finished product. Depending on the supply chain, a manager may choose to
minimize or take on these risks.
When companies enter global market supply chain becomes a strategic
challenge. Quality of production in some areas may be a challenge just as distribution
system may be less reliable, suggesting higher inventory levels than would be needed
in one’s home country, Also tariffs and quotas may block non local companies from
doing business.
The development of a successful strategic plan for supply chain management
requires innovative planning and careful research.
Supply chains in a global environment must be:
1. Flexible enough to react to sudden changes in parts availability, distribution or
shipping channels, import duties, and currency rates.
2. Able to use the latest computer and transmission technologies to manage the
shipment of parts in and finished products out.
3. Staffed with local specialists to handle duties, trade, freight, customs, and
political issues.
Successful global supply-chain management occurs after implementing the
appropriate framework of concentration, complying with international regulations set by
governments and non-governmental organizations, and recognizing and appropriately
handling the risks involved while maximizing profit and minimizing waste .

Logistics
Logistics refers to the movement of materials, services, cash, and information in a
supply chain. Materials include all of the physical items used in a production process. In
addition to raw materials and work in process, there are support items such as fuels,
equipment, parts, tools, lubricants, office supplies, and more. Logistics include
movement within a facility, overseeing incoming and outgoing shipment of goods and
materials, and information flow throughout the supply chain.
Movement within a facility
Movements of goods within a manufacturing facility is part of production control
1. From incoming vehicle to receiving.
2. From receiving to storage.
3. From storage to the point to use (work center).
4. From one work center to the next or to temporary storage.
5. From the last operation to final storage.
6. From storage to packaging/shipping.
7. From shipping to outgoing vehicles.
In some instances, the goods being moved are supplies; in other instances,
the goods are actual products or partially completed products; and in still other
instances, the goods are raw materials or purchased parts.
Movement of materials must be coordinated to arrive at the appropriate
destination at appropriate times. Workers and supervisors must take care so that the
items are not lost, stolen ,or damage during movement.
 Incoming and Outgoing Shipments
Overseeing the shipment of incoming and outgoing goods comes under the
heading of tariff management . This function handles schedules and decisions on
shipping method and times, taking into account costs of various alternatives,
government regulations, the needs of the organization relative to quantities and
timing, and external factors such as potential shipping delays or disruption (high way
construction, truckers, strikes etc.)
Computer tracking of shipments often helps to maintain knowledge of the current
status of shipments as well as to provide other up to date information on costs and
schedules.
SAQ

What do I need to get into supply chain, procurement & distribution management?

Skills Practiced
Use these tools to practice the following skills:

 Interpreting information - verify that you can read information regarding areas
that affect a supply chain and interpret it correctly
 Knowledge application - use your knowledge to identify an example of a
distribution problem
 Information recall - access the knowledge you have gained regarding an
example of a procurement issue

Activity

1. Which of these procurement issues may affect a service company more?

o A shortage of lumber
o A strike of welders
o A strike of textile workers
o A lack of paper suppliers

2. Which of these problems deal with transportation?

o There is a huge hail storm headed toward the open lot you store a great
deal of your car inventory for your dealership.
o Your flour supplier has run out of the particular flour you like for cupcakes.
o There is a massive pileup on the only interstate within 100 miles of your
biggest warehouse.
o None of your customers want bacon cheeseburgers today, and you have to
use the bacon by today.
Rubrics

96-100 91-95 86-90 81-85

Well-organized Well-organized Well-organized Well-organized
thoughts and ideas thoughts and ideas thoughts and ideas thoughts and ideas
are very are satisfactorily are fairly evident are not evident
satisfactorily evident evident
Grammar and Grammar and Grammar and Grammar and
format are very format are highly format are fairly format are not
highly observed observed observed observed

References:

William J Stevenson, Sum Chee Chuong(2010) Operation Management An Asian

Perspective Mc Graw-Hill New York NY.

Collier, Evans(2012)Operations Management.Ceenage Learning.Pasig, City

Philippiness

https://www.ups-scs.com/solutions/white_papers/wp_supply_chain.pdf

https://www.tutorialspoint.com/supply_chain_management/supply_chain_management_
introduction.htm#:~:text=Supply%20Chain%20Management%20can%20be,inventory%
20and%20fully%20furnished%20goods.