Alan P. Nebrida Ralp C.

Pablo
DEM-Electrical Engineering March 11, 2023

Activity Report
Characteristics of Supply Chain Management

The objectives of a supply chain may include:

1. Defining the concept of supply chain management
2. Understanding the various elements of a supply chain
3. Highlighting the importance of effective supply chain management
4. Describing the characteristics of a successful supply chain

SUPPLY CHAIN MANAGEMENT

Supply chain management (SCM) is the coordination and management of
activities involved in the production and delivery of a product or service. It
encompasses all aspects of sourcing raw materials, managing production
processes, and delivering the final product to the customer. Supply chain
management aims to optimize the flow of goods and services, minimize waste,
reduce costs, and increase customer satisfaction.

The concept of supply chain management has evolved over time to include
not only traditional supply chain functions such as procurement, production,
and logistics, but also activities such as supplier management, demand
planning, and customer service. Effective supply chain management requires
collaboration and coordination across all elements of the supply chain, from
suppliers and manufacturers to distributors and customers. The goal of SCM is
to create a seamless flow of materials and information, so that products can
be delivered to customers quickly, reliably, and at the lowest possible cost.

ELEMENTS OF A SUPPLY CHAIN

A supply chain can be viewed as a system of interconnected components
that work together to create value for customers. The key elements of a supply
chain can be divided into three categories: suppliers, production processes,
and customers.

1. Customers: The most important element of a supply chain is the customers.

They are the end-users of the finished goods or services and the primary
reason for the existence of the supply chain.

2. Demand planning: The process of forecasting customer demand for goods

or services and developing strategies to meet that demand.

3. Inventory management: The control and tracking of raw materials,

components, or finished goods to ensure that inventory levels are optimized
and production or delivery schedules are met.

4. Suppliers: Companies or individuals that provide the raw materials,

components, or services needed to produce a product or service.

5. Procurement: The process of acquiring the materials, goods, or services

necessary for production or service delivery. This can include sourcing,
negotiation, and purchasing activities.

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 6. Production: The process of transforming raw materials or components into
finished goods or services.

7. Transportation: The movement of goods or materials from one location to

another, including shipping, delivery, and logistics management.

8. Warehousing: The storage and management of inventory or finished goods,

including inventory tracking, distribution, and order fulfillment.

9. Distribution: The process of delivering finished goods or services to

customers or retail outlets, including the management of shipping and
logistics.

10. Performance monitoring: The ongoing monitoring of supply chain

performance, including tracking key performance indicators (KPIs) such as
delivery times, inventory levels, and cost efficiency.

Key Benefits
Key benefits of effective supply chain management can include:
1. Improved efficiency and productivity
Improved efficiency and productivity are key benefits of effective
supply chain management. By streamlining processes and reducing
waste, companies can improve their overall efficiency and get more
done in less time. This can result in increased productivity, as well as cost
savings, as the company is able to get more value from its resources.
Additionally, by automating certain supply chain processes and using
technology to track and manage information, companies can reduce
the risk of human error and improve the accuracy of their data, leading
to even greater efficiency and productivity. Other benefits of effective
supply chain management include increased flexibility, improved
customer satisfaction, and increased competitiveness in the
marketplace.

2. Better management of resources

Effective supply chain management can result in better management
of resources, such as raw materials, human resources, and capital. This
can be achieved by streamlining processes, reducing waste and
inefficiencies, and optimizing the use of available resources. Effective
supply chain management also enables companies to make better use
of data and analytics to track resource usage, identify areas for
improvement, and make data-driven decisions. Companies that have
well-managed supply chains can operate more effectively, respond
more quickly to changing customer needs, and reduce costs, which can
help them to achieve a competitive advantage.

3. Increased customer satisfaction

Effective supply chain management can lead to increased customer
satisfaction in several ways:
a. Improved delivery times: By optimizing transportation and logistics
processes, companies can ensure that products are delivered to
customers in a timely manner.

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 b. Increased product quality: Effective supply chain management
can help companies ensure that products are of high quality,
which can lead to higher levels of customer satisfaction.
c. Better collaboration and communication: Companies can
improve communication and collaboration with suppliers and
other partners in the supply chain to ensure that customer needs
are met.
d. Improved responsiveness: Companies that have a well-managed
supply chain are better able to respond to changes in customer
demand, which can increase customer satisfaction.
e. Lower costs: By improving supply chain processes, companies can
reduce costs and pass those savings on to customers, resulting in
higher levels of customer satisfaction.

4. Better risk management and improved supplier relations

Effective supply chain management can help mitigate risk by
proactively identifying and addressing potential threats to the supply
chain, such as supplier bankruptcy, natural disasters, and political
instability. This can be achieved through implementing risk management
strategies, such as supplier diversification, contingency planning, and
supply chain mapping. Additionally, effective supply chain
management can also improve supplier relations by establishing open
lines of communication, fostering a culture of collaboration, and
creating a shared understanding of expectations and goals. This can
help ensure that suppliers are aligned with the company's needs,
leading to increased reliability, improved quality, and reduced costs.

5. Reduced costs and improved profitability.

Effective supply chain management can lead to reduced costs and
improved profitability by streamlining processes, reducing waste,
improving supplier relationships, and optimizing the use of resources. For
example, a company can negotiate better prices with suppliers, reduce
inventory costs through improved forecasting and demand planning, or
reduce transportation costs by optimizing delivery routes and schedules.
By improving the overall efficiency and effectiveness of the supply
chain, a company can ultimately achieve lower costs and higher profits.

6. Increased flexibility and adaptability to change.

Increased flexibility and adaptability to change is a key benefit of
effective supply chain management as it enables a company to
respond quickly and efficiently to changes in customer demand, market
conditions, or other factors. By having a well-designed and managed
supply chain, a company can quickly adjust its operations to meet
changing needs, reducing the risk of lost sales or reduced profits. This
can be achieved through implementing flexible processes, using
technology to automate and streamline operations, and maintaining
strong relationships with suppliers and other key partners. These actions
can help a company to respond rapidly to changes in the market and
maintain its competitiveness, leading to improved business performance
and profitability.

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7. Improved quality of products and services.
Improved supply chain management can lead to improved quality of
products and services by better monitoring of the production process,
implementing quality control measures and reducing the risk of defects
or problems. Effective communication with suppliers and suppliers'
adherence to quality standards can also help ensure the quality of
inputs. Additionally, regular performance evaluations and continuous
improvement initiatives can help drive quality improvements throughout
the supply chain.

One example of a company that has realized the benefits of effective

supply chain management is Amazon. The company has invested
heavily in its logistics and transportation infrastructure to deliver goods
to customers in a timely and cost-effective manner. This has resulted in
improved customer satisfaction, reduced costs, and increased
competitiveness in the market. Other benefits of Amazon's supply chain
management include improved inventory management, better supplier
relations, and the ability to quickly adapt to changes in customer
demand.

CHARACTERISTICS OF A SUCCESSFUL SUPPLY CHAIN

The key characteristics of a successful supply chain include:

1. Integration: a seamless flow of information and materials between
supply chain partners
2. Responsiveness: the ability to quickly respond to changes in
demand or supply
3. Resilience: the ability to quickly recover from disruptions
4. Flexibility: the ability to adapt to changing conditions
5. Cost efficiency: minimizing costs and maximizing profits.
6. Collaboration: working closely with suppliers and customers to
achieve mutual goals
7. Transparency: having a clear view of the entire supply chain
8. Sustainability: considering the environmental impact of supply
chain activities.

Here is a brief outline of the main points you can cover for each of the
characteristics of supply chain management:

1. Integration:
➢ Definition of integration in supply chain management
➢ Benefits of integration, such as increased efficiency and reduced
costs
➢ Examples of integrated supply chain processes, such as
procurement and distribution

Integration in supply chain management refers to the coordination

and alignment of all the activities involved in the production and
delivery of a product or service. This includes procurement,
production, distribution, and customer service.

The benefits of integration in supply chain management include:

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 ➢ Increased Efficiency: Integration helps to streamline processes
and reduce duplication of effort, leading to increased efficiency
and reduced costs.
➢ Improved Visibility: Integrating processes and systems provides a
more complete view of the supply chain, which allows for better
decision-making and improved risk management.
➢ Increased Agility: By integrating activities and processes, the
supply chain can respond more quickly to changes in customer
demand and market conditions.

Examples of integrated supply chain processes include:

➢ Procurement: The integration of procurement processes, such as
supplier selection and contract management, helps to ensure that
the right goods and services are acquired at the right time and
cost.
➢ Distribution: Integrating distribution processes, such as
transportation, warehousing, and delivery, helps to ensure that
products are delivered to customers in a timely and cost-effective
manner.
➢ Customer Service: Integrating customer service processes, such as
order management and returns, helps to ensure that customer
needs are met and that the supply chain is responsive to their
demands.

2. Collaboration:
➢ Definition of collaboration in supply chain management
➢ Importance of collaboration for effective supply chain management
➢ Examples of collaboration in supply chain, such as supplier
partnerships and cross-functional teams

Collaboration in supply chain management refers to the practice of

working together and sharing information among different organizations
and departments involved in the production and delivery of a product
or service.

The importance of collaboration in supply chain management includes:

1. Improved Efficiency: Collaboration helps to eliminate duplication
of effort and improve coordination among different departments,
leading to increased efficiency and reduced costs.
2. Better Decision-Making: By sharing information and working
together, organizations can make better decisions that benefit
the entire supply chain.
3. Enhanced Customer Service: Collaboration helps to ensure that
customer needs are met by improving communication and
coordination among different organizations and departments
involved in the supply chain.

Examples of collaboration in supply chain management include:

1. Supplier Partnerships: Working closely with suppliers to establish
long-term relationships that benefit both parties.
2. Cross-Functional Teams: Bringing together individuals from
different departments, such as procurement, production, and

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 distribution, to work together on supply chain projects and
initiatives.
3. A: Sharing data, such as sales forecasts and inventory levels,
among different organizations and departments involved in the
supply chain to improve coordination and decision-making.

3. Visibility:
➢ Definition of visibility in supply chain management
➢ Benefits of visibility, such as improved decision-making and reduced
risk
➢ Examples of tools used to improve visibility in supply chain, such as
real-time tracking and data analytics

Visibility in supply chain management refers to the ability to track and

monitor the flow of goods, information, and financial transactions from
end-to-end throughout the supply chain.

The benefits of visibility in supply chain management include:

1. Improved Decision-Making: By having real-time visibility into the
supply chain, organizations can make better informed decisions
about production schedules, inventory levels, and risk
management.
2. Reduced Risk: Improved visibility allows organizations to identify
and mitigate potential risks, such as supplier disruptions or
inventory shortages, before they become major problems.
3. Increased Efficiency: By having real-time visibility into the supply
chain, organizations can identify and eliminate inefficiencies,
such as bottlenecks or waste, leading to increased efficiency and
reduced costs.

Examples of tools used to improve visibility in the supply chain include:

1. Real-Time Tracking: Systems that track the movement of goods in
real-time, providing up-to-date information on their location,
condition, and expected delivery times.
2. Data Analytics: Software that analyzes large amounts of data from
different sources, such as sales data and supply chain metrics, to
provide insights into the performance of the supply chain.
3. Electronic Data Interchange (EDI): A standard format for
exchanging business data electronically between organizations,
allowing for seamless communication and information sharing
throughout the supply chain.

4. Responsiveness:
➢ Definition of responsiveness in supply chain management
➢ Importance of responsiveness for meeting customer demand and
adapting to changes in market conditions
➢ Examples of responsive supply chain practices, such as just-in-time
inventory management

Responsiveness in supply chain management refers to the ability of the

supply chain to respond to changes quickly and effectively in customer
demand and market conditions.

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 The importance of responsiveness in supply chain management
includes:
1. Meeting Customer Demand: A responsive supply chain can
quickly adjust to changes in customer demand, ensuring that
products are available when and where customers want them.
2. Adapting to Market Conditions: By being able to respond quickly
to changes in market conditions, such as new competitors
entering the market or changes in consumer preferences,
organizations can remain competitive and maintain their market
position.
3. Improved Customer Satisfaction: A responsive supply chain leads
to improved customer satisfaction, as customers receive the
products they want, when they want them.

Examples of responsive supply chain practices include:

1. Just-In-Time (JIT) Inventory Management: A system in which
inventory is only ordered and delivered as needed, reducing
inventory costs and improving responsiveness to changes in
customer demand.
2. Real-Time Monitoring: Systems that track supply chain data in real-
time, allowing organizations to quickly respond to changes in
customer demand and market conditions.
3. Cross-Functional Collaboration: Teams that bring together
individuals from different departments, such as procurement,
production, and distribution, to work together on supply chain
projects and initiatives, improving responsiveness to changes in
customer demand and market conditions.

5. Efficiency:
➢ Definition of efficiency in supply chain management
➢ Importance of efficiency for reducing costs and increasing
profitability
➢ Examples of efficient supply chain practices, such as streamlining
processes and reducing waste

Efficiency in supply chain management refers to the ability to optimize

resources and minimize waste, leading to reduced costs and increased
profitability.

The importance of efficiency in supply chain management includes:

1. Reduced Costs: By streamlining processes and minimizing waste,
organizations can reduce their costs, leading to increased
profitability.
2. Increased Profitability: An efficient supply chain allows
organizations to produce and deliver products or services more
quickly and at lower costs, leading to increased profitability.
3. Improved Customer Service: An efficient supply chain can reduce
lead times, improve delivery times, and increase product
availability, leading to improved customer satisfaction.

Examples of efficient supply chain practices include:

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 1. Streamlining Processes: Implementing processes that eliminate
waste and optimize the flow of goods and information, leading to
reduced costs and improved efficiency.
2. Reducing Waste: Implementing programs that minimize waste
and reduce the use of resources, such as energy, materials, and
labor.
3. Automation: Implementing systems and technology that
automate manual processes, reducing errors and increasing
efficiency.
4. Lean Manufacturing: A production philosophy that focuses on
reducing waste and improving efficiency by streamlining
processes, reducing inventory, and maximizing productivity.

6. Sustainability:
➢ Definition of sustainability in supply chain management
➢ Importance of sustainability for reducing environmental impact and
improving social and ethical standards
➢ Examples of sustainable supply chain practices, such as using
renewable energy and reducing packaging waste.

Sustainability in supply chain management refers to the integration of

environmental, social, and ethical considerations into the management
of the supply chain. The goal is to minimize the negative impact of the
supply chain on the environment, society, and stakeholders, while also
improving the long-term viability of the supply chain.

The importance of sustainability in supply chain management includes:

1. Reducing Environmental Impact: Implementing sustainable
practices can help reduce the environmental impact of the
supply chain, such as reducing greenhouse gas emissions and
conserving resources.
2. Improving Social and Ethical Standards: By incorporating
sustainability into the supply chain, organizations can improve
social and ethical standards, such as promoting fair labor
practices, reducing waste, and improving human rights.
3. Enhancing Reputation: A commitment to sustainability can
enhance an organization's reputation and create a positive
image among customers, suppliers, and stakeholders.

Examples of sustainable supply chain practices include:

1. Using Renewable Energy: Implementing renewable energy
sources, such as wind, solar, and hydropower, to power supply
chain operations.
2. Reducing Packaging Waste: Implementing packaging designs
that minimize waste and promote recycling, reducing the impact
of packaging on the environment.
3. Sustainable Procurement: Procuring materials and products from
suppliers that adhere to sustainability standards, reducing the
environmental and social impact of the supply chain.
4. Carbon Footprint Reduction: Implementing programs to reduce
the carbon footprint of the supply chain, such as reducing energy
use and greenhouse gas emissions.

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Conclusion
In conclusion, effective supply chain management (SCM) involves managing
the flow of goods and services from the supplier to the customer to achieve a
competitive advantage by reducing costs, improving efficiency, and
enhancing customer satisfaction. Based on a literature review of relevant
research, the key characteristics of SCM include collaboration and
coordination, continuous improvement, supply chain visibility, risk
management, and sustainability.

Collaboration and coordination require strong leadership, clear

communication, and a willingness to share information among different
parties involved in the supply chain. Continuous improvement involves
identifying areas for improvement, collecting data, analyzing the data, and
implementing changes to improve supply chain performance and customer
loyalty. Supply chain visibility enables organizations to monitor and manage
the flow of goods and services from the supplier to the customer by collecting
and analyzing data related to inventory levels, transportation times, and
supplier performance to make data-driven decisions. Risk management
involves identifying potential risks, developing contingency plans, and
implementing risk mitigation strategies to prepare for and manage potential
disruptions in the supply chain. Sustainability involves promoting environmental
and social responsibility in the supply chain by reducing carbon emissions,
promoting ethical sourcing practices, and minimizing waste to achieve cost
savings, improved reputation, and increased customer loyalty.

Organizations that prioritize these characteristics are well-positioned to

achieve a competitive advantage by reducing costs, improving efficiency,
and enhancing customer satisfaction. Therefore, it is essential for organizations
to focus on collaboration, continuous improvement, supply chain visibility, risk
management, and sustainability to improve the performance of their supply
chains.

In conclusion, effective SCM requires a holistic approach that involves all

stakeholders in the supply chain. The key characteristics of SCM must be
prioritized to create a competitive advantage and improve the performance
of supply chains. The literature review provides evidence of the importance of
these characteristics and how organizations can implement them to achieve
success in SCM.

Recommendations

Supply chain management (SCM) is a vital area of business operations that

involves the management of the flow of goods and services from the point of
origin to the point of consumption. Effective SCM practices enable businesses
to achieve greater efficiency, reduced costs, improved quality, and better
customer service. In this recommendation, I will highlight some of the essential
characteristics of SCM, as described in the literature.

One critical characteristic of SCM is collaboration. Collaboration between

different players in the supply chain is essential for successful SCM. This
collaboration involves sharing information, resources, and expertise to ensure
that all parties in the supply chain work together towards common goals.

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According to Lee et al. (2015), effective collaboration leads to better
coordination, improved efficiency, and reduced costs in the supply chain.

Another critical characteristic of SCM is visibility. Visibili ty refers to the ability to

track and monitor goods and services as they move through the supply chain.
According to Chen and Paulraj (2004), visibility enables businesses to identify
and address potential problems in the supply chain, such as delays,
disruptions, or quality issues, before they become more significant problems.

Flexibility is another important characteristic of SCM. Flexibility refers to the

ability to adapt to changes in the supply chain, such as changes in demand,
supply, or production. According to Chopra and Meindl (2016), flexibility
enables businesses to respond quickly to changing market conditions, reduce
lead times, and improve customer service.

Finally, sustainability is an increasingly important characteristic of SCM.

Sustainable SCM involves managing the supply chain in a way that minimizes
negative environmental and social impacts while maximizing economic
benefits. According to Seuring and Müller (2008), sustainable SCM requires a
holistic approach that considers the entire supply chain and involves
collaboration between different players.

In conclusion, effective SCM practices involve collaboration, visibility,

flexibility, and sustainability. Businesses that incorporate these characteristics
into their SCM practices are better able to achieve greater efficiency,
reduced costs, improved quality, and better customer service.

References

Chen, I. J., & Paulraj, A. (2004). Towards a theory of supply chain management:
The constructs and measurements. Journal of Operations Management, 22(2),
119-150.

Christopher, M., & Ryals, L. (2014). The supply chain becomes the demand
chain. Journal of Business Logistics, 35(1), 29-35.

Chopra, S., & Meindl, P. (2016). Supply chain management: Strategy, planning,
and operation. Pearson Education India.

Lee, H. L., Padmanabhan, V., & Whang, S. (2015). The bullwhip effect in supply
chains. MIT Sloan Management Review, 38(3), 93-102.

Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., &
Zacharia, Z. G. (2001). Defining supply chain management. Journal of Busine ss
Logistics, 22(2), 1-25.

Sarkis, J., & Dhavale, D. G. (2015). Supplier selection for sustainable operations:
A triple-bottom-line approach using a Bayesian framework. International
Journal of Production Economics, 166, 177-191.

Srivastava, S. K. (2014). Green supply chain management: A state-of-the-art

literature review. International Journal of Management Reviews, 16(4), 488-
504.

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Seuring, S., & Müller, M. (2008). From a literature review to a conceptual
framework for sustainable supply chain management. Journal of Cleaner
Production, 16(15), 1699-1710.

Tan, K. C., & Kannan, V. R. (2015). Supply chain risk management: a literature
review. International Journal of Production Economics, 164, 104-114.

Wang, J., Chen, H., & Hao, Q. (2016). The impact of supply chain visibility on
supply chain performance: A systematic review and future research.
International Journal of Production Economics, 171, 241-252.

Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain
management: a balanced approach. Cengage Learning.

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