SUPPLY CHAIN MANAGEMENT

VUONG THI BICH NGA, PHD

 Course title: Supply Chain Management
Course code: TMAE313
Department: School of Economics and International
Business
Course conducting: Department of Logistics & Supply
chain management
• COURSE OBJECTIVES
• This course provides an understanding of fundamental
concepts of supply chain management. All functional areas
of supply chain management are explored in an integrated
view of procurement, manufacturing and operations
management, transportation and logistics, inventory and
warehousing, demand planning, scheduling, network design,
collaboration and performance measurement.
• 3. COURSE LEARNING OUTCOMES
• 3.1. Learning outcomes about knowledge, skills, autonomy and
responsibility
• 3.1.1. Knowledge
– Demonstrate an understanding of SCM principles and practices.
– Describe the critical factors affecting SC design and operations.
– Able to use the SCM tools to examine business problems and
recommend solutions to SC operations.
– Demonstrate effective teamwork and problem-solving abilities.
• 3.1.2. Skills
– Analyze state-of-the art supply chain management
– Explain wide scope of function and concepts in supply chain
– Examine how different partners in supply chain collaborate each other
• 3.1.3. Autonomy and responsibility
– Positively doing his own research on supply chain management of
organization the international business environment
•
 CONTENT
• Chapter 1: Overview of supply chain, supply chain management.

• Chapter 2: Procurement and Sourcing

• Chapter 3: Demand Forecasting

• Chapter 4: Inventory Management

• Chapter 5: Distribution

• Chapter 6: Supply chain design and integration

Course book and support materials

• 1. Supply Chain Management (strategy,

planning, and operation, 7th edition, Sunil
Chopra, Peter Meindl (Course book)

• 2. Alan Hrrison: Logistics management and

strategy competing through the supply chain (fifth
edition), Pearson
 References
• Tinh hoa quản trị chuỗi cung ứng: Michael Hugos (Essentials
of Supply Chain Management)
• Quản trị chuỗi cung ứng: Đoàn Thị Hồng Vân
• Quản trị chuỗi cung ứng: Những trải nghiệm tuyệt vời
• Quản trị chuỗi cung ứng hoàn hảo: (Peter Bolstorff, Robert
Rosenbaum) Nxb Lao động Xã hội
• SUPPLY CHAIN MANAGEMENT Strategy, Planning and
Operation: Sunil Chopra, Peter Meindl
• Purchasing Supply Management : P. Fraser Johnson
• Supply Chain Logistics Management: Donald J. Bowersox
• Logistics & Supply Chain Management: creating value-adding
networks (3rd Edition): Martin Christopher
 Assessment

• 10%: Attendance
• 30%: In class process
– 15%: midterms test (online test – multiple choice)
– 15%: team work (group presentation)

• 60%: Final test

– Closed book
– 60-90 minutes
– Multiple choice questions, short questions and practices
 Chapter 1: Overview of the supply
chain and supply chain management

1 vDefinition and Objectives (SC, SCM)

2 vThe objectives and elements of SCM

3 vLocal, regional and global SC activities

4 vA brief history and current trends in SCM

5v The bullwhip effect and how it impact SC

 Learning Objective
Students should be able to:

• Describe a supply chain and define supply chain

management.
• Describe the objectives and elements of supply chain
management.
• Describe local, regional and global supply chain
management activities.
• Describe a brief history and current trends in supply
chain management.
• Understand the bullwhip effect and how it impacts the
supply chai
12
13
 Questions
1. You purchase a can of Coke at a convenience store.
Describe the various stages in the supply chain and the
different flows involved?
2. You purchase a laptop at Amazon.com. Describe the
stages in the supply chain and the different flows
involved?
3. Consider the supply chain involved when a customer
orders a book from Shopee
4. Consider the supply chain involved when a customer
purchases a book at a bookstore
5. You purchase an I phone 14 promax at The Gioi Di dong.
Describe the stages in the SC ?
A typical SC may involve a variety of
stages, including
• Customers
• Retailers
• Wholesalers/ Distributors
• Manufacturers
• Components/ material Supplier
 1. Definition of Supply chain

• A supply chain is a network of partners who collectively

convert a basic commodity (upstream) into a finished
product (downstream) that is valued by end-customers.
(Alan Harrison and et., 2014)

• A supply chain is the global network used to deliver

products and services from raw materials to end
customers through an engineered flow of information,
physical distribution, and cash” (Blackstone 2013)
 1. SCM

SCM encompasses the planning and controlling of all processes

involved in procurement, conversion, transportation and
distribution across a supply chain. SCM includes coordination and
collaboration between partners, which can be suppliers,
intermediaries, third party service providers, and customers. In
essence, SCM integrates supply and demand management within
and between companies in order to serve the needs of the end-
customer (Council of SCM Professionals-CSCMP, 2010)
Process Orientation

Coordination, collaboration, synchronization

Integrating flows
Throughout from the origin to destination
Internal and external
 Participants in The Supply Chain

• Producers
• Distributors
• Retailers
• Customers
• Service providers
How Supply chain work
 Framework for Structuring Drivers

Sourcing Pricing

Efficiency Responsiveness
Supply chain structure

Facilities Transportation Inventory Information

Drivers

3-24
Drivers of Supply Chain Performance
• Facilities
– places where inventory is stored, assembled, or fabricated
– production sites and storage sites, distribution centres.
• Inventory
– raw materials, WIP, finished goods within a supply chain
– inventory policies
• Transportation
– moving inventory from point to point in a supply chain
– combinations of transportation modes and routes
• Information
– data and analysis regarding inventory, transportation, facilities
throughout the supply chain
– potentially the biggest driver of supply chain performance
3-25
 Facilities
• Role in the supply chain
– the “where” of the supply chain
– manufacturing or storage (warehouses)

• Role in the competitive strategy

– economies of scale (efficiency priority): IKEA
– larger number of smaller facilities
(responsiveness priority): 7 Eleven

• Example 3.1: Toyota and Honda

• Components of facilities decisions

 A picture is better than 1000 words!
How many words would be better than 3 pictures?
- A supply chain consists of

Supplier Manufacturer Distributor Retailer Customer

Upstream
Downstream

- aims to Match Supply and Demand,

profitably for products and services

SUPPLY SIDE DEMAND SIDE

achieves
The right
Product
+ + + +
Right
price
Right
Store
Right
Quantity
Right
Customer
+ Right
Time
= Higher
Profits
Differences between Logistics and SCM
Differences between Logistics and SCM
 Why Supply Chain Management?
1950-1980s Manufacturing
• 50 years ago, U.S. is the only
country that can manufacture cars.
● You buy a car from GM, all the Parts $5,000
money will go to the GM. Labor 4000
1980-2000s Supply Chain Overhead 2000
Management
Management
• Today, foreign parts and labors are
Marketing 3000
much cheaper than that in US.
Total Cost $14,000
● You buy a car from GM, only a
portion of money will go to the GM.
2. Objective of Supply Chain
Management (continued)

Cost savings and better coordination of resources are

reasons to employ Supply Chain Management

– Reduced Bullwhip Effect

• Defined as: Erratic demand forecasts causing
excess safety stocks, which cause production
planning problems.
• SCM reduces safety stocks and costs due to
coordinated planning and better sharing of
information

31
Origins of Supply Chain Management

32
Origins of Supply Chain Management

1950s-1960s
U.S. manufacturers focused on mass production
techniques as their principal cost reduction and
productivity improvement strategies

1960s-1970s
Introduction of new computer technologies lead to
development of Materials Requirements Planning
(MRP) and Manufacturing Resource Planning
(MRPII) to coordinate inventory management and
improve internal communication

33
 Origins of Supply Chain
Management (continued)

1980s-1990s
Intense global competition led U.S.
manufacturers to adopt:
– Supply Chain Management (SCM)
– Just-In-Time (JIT)
– Total Quality Management (TQM)
– Business Process Reengineering (BPR)
– Customer Relationship Management
(CRM)

34
Origins of Supply Chain Management (continued)

2000s and Beyond

Evolution along 2 parallel paths
1. Supply management emphasis from industrial
buyer
2. Logistics and customer service emphasis from
wholesalers and retailers

Focus on improving supply chain capabilities with

initiatives such as:
– Third-party service providers (3PLs)
– Integrating logistics
– Client/server SCM software - Enterprise
Resource Planning

35
Origins of Supply Chain Management (continued)

Today
Emphasis is being placed on the environmental
and social impacts of supply chains

– Sustainability - ability to meet the needs of

current supply chain members without hindering
the ability to meet the needs of future
generations
– Triple bottom line – taking care of people,
planet and profits

36
 Elements of Supply Chain
Management
Supply base reduction, supplier alliances,
Supply SRM, global sourcing, ethical and
sustainable sourcing (Ch. 2-4)
Demand management, CPFR, inventory
Operations management, MRP, ERP, lean systems, Six
Sigma quality systems (Ch. 5-8)
Logistics management, customer relationship
management, network design, RFID, global
Logistics
supply chains, sustainability, service
response logistics (Ch. 9-12)
Barriers to integration, risk and security
Integration management, performance measurement,
green supply chains (Ch. 13,14)

37
 Elements of Supply Chain
Management (continued)

Supply Elements:
– Supplier management - improve
performance through
• Supplier evaluation (determining supplier
capabilities)
• Supplier certification (third party or internal
certification to assure product quality and
service requirements)
– Strategic partnerships - successful and
trusting relationships with top-performing
suppliers
38
– Ethics and sustainability – recognizing
suppliers’ impact on reputation and carbon
footprint
 Elements of Supply Chain
Management (continued)

Operations Elements:
– Demand management - match demand to
available capacity
– Linking buyers & suppliers via MRP and
ERP systems
– Extending order communication and
inventory visibility farther up the supply
chain
– Radio frequency identification (RFID)
systems scan cartons describing contents
of the packages
– Use lean systems to improve the flow of
materials to reduce inventory levels
– Employ Six Sigma to improve quality
compliance among suppliers 39
 Elements of Supply Chain
Management (continued)

Logistics Elements:
– Transportation management -
tradeoff decisions between cost &
timing of delivery / customer service via
trucks, rail, water & air
– Third party logistics providers
(3PLs) – for hire outside agencies
providing transportation and services
– Creating distribution networks based
on tradeoff decisions between cost &
sophistication of distribution system

40
 Elements of Supply Chain Management (continued)

Integration Elements:
– Supply Chain Process Integration - when
supply chain participants work for common
goals. Requires intra-firm functional
integration, with efforts to change attitudes &
adversarial relationships
– Supply Chain Performance Measurement
- Crucial for firms to know if procedures are
working as expected
– High level supply chain performance occurs
when strategies at each firm fit well with
overall supply chain strategies

41
 4. History and current Trends in SCM

Supply Chain Analytics - examining raw supply chain

data and reaching conclusions or making predictions
with the information

– Growth being pushed by the rise in computing capabilities

and big data
– Huge volumes of data generated in business
organizations including retail, healthcare, manufacturing,
and electronics

42
Origins of Supply Chain Management

43
Origins of Supply Chain Management
1950s-1960s
U.S. manufacturers focused on mass production
techniques as their principal cost reduction and
productivity improvement strategies
1960s-1970s
Introduction of new computer technologies lead
to development of Materials Requirements
Planning (MRP) and Manufacturing Resource
Planning (MRPII) to coordinate inventory
management and improve internal
communication

44
 Origins of Supply Chain
Management (continued)

1980s-1990s
Intense global competition led U.S.
manufacturers to adopt:
– Supply Chain Management (SCM)
– Just-In-Time (JIT)
– Total Quality Management (TQM)
– Business Process Reengineering (BPR)
– Customer Relationship Management
(CRM)

45
Origins of Supply Chain Management (continued)

2000s and Beyond

Evolution along 2 parallel paths
1. Supply management emphasis from industrial
buyer
2. Logistics and customer service emphasis from
wholesalers and retailers

Focus on improving supply chain capabilities with

initiatives such as:
– Third-party service providers (3PLs)
– Integrating logistics
– Client/server SCM software - Enterprise
Resource Planning

46
Origins of Supply Chain Management (continued)

Today
Emphasis is being placed on the environmental
and social impacts of supply chains

– Sustainability - ability to meet the needs of

current supply chain members without hindering
the ability to meet the needs of future
generations
– Triple bottom line – taking care of people,
planet and profits

47
 Current Trends in Supply
Chain Management (continued)

Most companies are trying to improve their

supply chain sustainability
performance
– Can lead to
• enhance processes
• reduce costs
• increase productivity
• uncover product innovation
• achieve market differentiation
• improve societal outcomes

48
 Current Trends in Supply
Chain Management (continued)

Increasing Supply Chain Visibility

– Knowing exactly where products are,
at any point in the supply chain
– Inventory visibility is made easier by
technology
– Sophisticated software applications
for tracking orders, inventories,
deliveries, returned goods, and even
employee attendance

49
 Case study: Wal-mart

Lower costs, increase productivity

1. Strategies to expand around distribution centers

2. Using EDI electronic data exchange standard
3. Big box design
4. Every day low price
”THANK YOU!"