Om Chap 10

CHAPTER 10
SUPPLY CHAIN
MANAGEMENT
GROUP 5:
ZYRIBELLE JAPSON
DENISE SABILA
KYLE ALEJO
HANS BORCELIS
ADRIELLE IPANAG
LEARNING
OBECTIVES
EXPLAIN THE BASIC CONCEPTS OF ENUMERATE THE OPERATIONAL
SUPPLY CHAIN MANAGEMENT ACTIVITIES THAT AFFECTS THE SUPPLY
CHAIN MANAGEMENT
DIFFERENTIATE THE SUPPLY AND IDENTIFY THE RISK MANAGEMENT

VALUE CHAIN INTEGRATION AND THE SHORT & LONG TERM RISK
THAT THE SUPPLY CHAIN MAY FACE
EXPLAIN THE IMPORTANCE OF SCOR UNDERSTANDING THE SUPPLY

MODEL AND ITS FUNCTIONS CHAIN RISK AND POSSIBLE
MANAGEMENT ACTIONS.
SUPPLY CHAIN
Supply chain represent the overall
process of a company's products --
from raw materials up to product
delivery to consumers.
SUPPLY CHAIN
MANAGEMENT
the management of all activities that
facilitate the fulfillment of a customer
order for a manufactured good to achieve
customer satisfaction at reasonable cost.
RELATED PARTIES WITHIN SUPPLY
CHAIN:
manufacturers,
suppliers,
transporters,
warehouses,
retailers,
and customers
SUPPLY CHAIN INTEGRATION
Supply chain integration (SCI) is a strategic collaboration
between manufacturers and their supply chain partners to
improve performance.
the process of coordinating the physical flow of materials to

ensure that the right parts are available at various stages of
the supply chain, such as manufacturing and assembly parts.
VALUE CHAIN INTEGRA TION
the process of managing information, physical goods,

and services to ensure their availability at the right
place, at the right time, at the right cost, at the right
quantity, and with the highest attention to quality.
SUPPLY AND VALUE CHAIN
DISTINGUISHED:
The main difference between supply and value chain

integration is that supply chain integration
focuses on moving a product or service from supplier
to customer while Value chain integration
focuses on adding value to the product and the
actors involved throughout the supply chain.
THE SUPPLY CHAIN OPERATIONS
REFERENCE (SCOR) MODEL
Is a framework for understanding the
scope of supply chain management
(SCM), that is based on five-basic
functions involved in managing a
supply chain: PLAN, SOURCE, MAKE,
DELIVER and RETURN.
PLAN
Developing a strategy that balances
Management Policies
resources with requirements and
Aligning the supply
establishes and communicates plans
chain with financial plans
for the entire supply chain.
SOURCE
Identifying & selecting
suppliers
Producing goods and services to
Scheduling deliveries
meet planned or actual demand
Authorizing payments
Managing inventory
MAKE
Production scheduling
Managing work-in-
Transforming goods and services to a process
finished state to meet demand Manufacturing, testing,
packaging & product
release
DELIVER Processing customer

orders to routing
Managing orders, transportations, and
shipments
distribution to provide the goods and
Managing goods at
services. distribution centers
Invoicing the customer
RETURN
Return authorization
Receiving
Processing customer returns; providing Verification
maintenance, repair and overhaul; and Disposition
dealing with excess goods. Replacement
OPERATIONAL ACTIVITIES
PURCHASING 01 05 WAREHOUSING
MANUFACTURING 02 06 LOGISTICS
INVENTORY MANAGEMENT 03 07 CUSTOMER SERVICE
DEMAND PLANNING 04
PURCHASING
The activity of acquiring goods and
services to accomplish the goals of
an organization.
Purchasing department is also
called as PROCUREMENT/BUYING
department
PURCHASING
The responsibilities of purchasing
department include
learning the material needs of the
organization
aggregating orders
selecting qualified suppliers
negotiating price
selecting transportation modes
MANUFACTURING
The production of merchandise

for use or for sale using labor
and machines in which raw
materials are transformed into
finished goods on a large
scale.
MANUFACTURING
The manufacturing department is responsible
for producing a company's products includes:
sourcing materials,
assembling products,
and testing products.
Manufacturing department is also called as

PRODUCTION department.
INVENTORY
MANAGEMENT
The process of ordering,

storing, using, and selling
company’s inventory.
INVENTORY
MANAGEMENT
Vendor-managed Inventory (VMI)
is where the vendor (supplier) monitors and manages
inventory for the customer.
VMI allows the vendor to view inventory needs from the

customer’s perspective and use this information to optimize
its production operations to reduce total supply chain costs.
DEMAND PLANNING
Process of forecasting
customer demand to drive
execution of such demand
by corporate supply chain
and business management.
DEMAND PLANNING
Demand planning departments are responsible for creating

and maintaining accurate forecasts for a company's
products.
They use historical sales data, industry trends, and

customer demand to predict sales volume. Demand
planning is a key component of sales and operations
planning.
WAREHOUSING
Performance of
administrative and physical
functions associated with
storage of goods and
materials.
WAREHOUSING
Warehousing departments are responsible

for storing, shipping, and distributing goods
from one location.
This can help reduce transportation costs,

increase flexibility, and reduce staffing
needs.
LOGISTICS
Management of
transportation activities and
the flow of materials within
a supply chain to ensure
adequate customer service
at reasonable cost.
LOGISTICS
Logistics managers have the ff. 3 primary

responsibilities:
1. Purchasing transportation services

2. Managing the transportation of
materials and goods through the
supply chain.
3. Managing inventories
CUSTOMER SERVICE
Process of ensuring
customer satisfaction with a
product or service. Could
be an in-person interaction,
a phone call, or self-
service systems.
RISK MANAGEMENT
involves identifying risks that can occur,

assessing the likelihood that they will
occur, determining the impact on the firm
and its customer, and identifying steps to
mitigate the risks.
2 RISKS THAT THE SUPPLY CHAIN FACE
1. TACTICAL SUPPLY CHAIN RISKS
-Tactical risks are those that influence the day-to-day management of
operations.
-Short-term risk that the supply chain face.
- Addressed by low and mid-level managers as well as frontline employees.
2. STRATEGIC SUPPLY CHAIN RISKS

-Strategic risk can impact the design of the entire supply chain.
- Long-term risk that the supply chain face.
-Addressed by the top level managers.
Tactical Supply Chain Risks and Possible
Management Actions
Ways to Mitigate Tactical
Tactical Risks
Risks
Inventory Risks
Add safety stock
Inventory and warehouse stockouts Change order quantities
Inventory backorders Reduce lead times
Imbalances between work centers Carry extra capacity
Add more inventory buffers
between stages (work-in-
process)
Capacity Risks Schedule overtime
Equipment shortage Tactical Risks Multiple suppliers
Overproduction Schedule under time
Equipment breakdowns Frequent preventive maintenance
Employee shortages, strikes, and Add temporary and backup (float
layoffs. pool), workers
Logistics and
Scheduling Risks Change order quantities
Extra local warehouse space
Supplier quality & delivery problems Increase quality control inspections
Poor transportation infrastructure by Hire new and/or multiple contract
country
manufacturer(s) and supplier(s)
Strategic Supply Chain Risks and Possible
Management Actions
Strategic Risk Ways to Mitigate Strategic Risks

Global Economic Risks
Franchise and company
Population and wealth forecasts owned store mix
by country Multicountry sourcing of
Monetary exchange rates and suppliers
market size Disaster and emergency
Natural disasters such as plans and pre-deployment of
earthquakes, tsunamis, volcanoes, resources
hurricanes, and droughts.
Government Risk
Global team to defend infringement
Intellectual/patent rights and protection Facility Locations (headquarters,
Man-made disasters such as wars, factory, warehouse, service centers,
chemical spills, transportation distribution hubs, call center, etc.)
accidents, political revolutions, Disaster and emergency plans and
government instability, and terrorist pre-deployment of resources
attacks.
Product Risks Better strategic planning and demand

forecasting capability
Product modifications due to cultural cooperative plans to resource
differences
hire more contract manufacturers and
Major forecasting errors by product, and by
country `
suppliers
Chronic inventory and capacity shortages
Thank You!

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CHAPTER 10

DIFFERENTIATE THE SUPPLY AND IDENTIFY THE RISK MANAGEMENT

EXPLAIN THE IMPORTANCE OF SCOR UNDERSTANDING THE SUPPLY

the process of coordinating the physical flow of materials to

the process of managing information, physical goods,

The main difference between supply and value chain

DELIVER Processing customer

INVENTORY MANAGEMENT 03 07 CUSTOMER SERVICE

The production of merchandise

Manufacturing department is also called as

The process of ordering,

VMI allows the vendor to view inventory needs from the

Demand planning departments are responsible for creating

They use historical sales data, industry trends, and

Warehousing departments are responsible

This can help reduce transportation costs,

Logistics managers have the ff. 3 primary

1. Purchasing transportation services

involves identifying risks that can occur,

2. STRATEGIC SUPPLY CHAIN RISKS

Strategic Risk Ways to Mitigate Strategic Risks

Product Risks Better strategic planning and demand

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