Supply Chain Management (SCM)

Supply Chain Management (SCM)

1. Definition

   • -A supply chain is a system of organisations, people, technology, activities, information and resources involved. -Supply chain management involves coordinating this flow of materials within a company and to the end consumerin moving a product or service from supplier to customer. -The objective of supply chain is to structure the supply chain to maximize its competitive advantage and benefits to the ultimate consumer.

2. The importance

   • 1) The coordinate of all supply chain activities, starting with raw materials and ending with satisfied customer. 2) Include suppliers, manufactures and/or service providers, distributors, wholesalers, retailers, and final customers. 3) Large portion of sales dollars spent on purchases 4) Supplier relationship increasingly integrated and long term. 5) Improve innovation, speed design, reduce cost. 6)Managing supplier relationships has added emphasis.

3. Sourcing Issues

   • Make-or-buy decisions
     • Choosing between obtaining products and services externally(buy) or internally(make) to produce.
   • Outsourcing
     • Transfer traditional internal activities and resources to outside vendors.

4. Sourcing strategies

   • Many suppliers
     • -Commonly used for commodity products -Purchasing is typically based on price -Suppliers compete with one another.-Supplier is responsible for technology, expertise, forecasting, cost, quality, and delivery.
   • Few suppliers
     • -Buyers forms long-term relationship with fewer suppliers. -advantages on cost(reduce)
   • Vertical integration
   • Joint ventures
   • Keiretsu networks
   • Virtual companies

5. objectives

   • 1) enhancing customer service 2) reducing inventory cost 3) improving on-time delivery 4) reducing transportation cost

6. Supply Chain Risk & tactics

7. Building the Supply Base

   • Supplier evaluation
   • supplier development
   • Negotiation
   • Contracting
   • E-procurement

8. Logistic Management

9. Shipping Sustem

   • Trucking
   • Railroads
   • Airfreight
   • Waterways
   • Pipelines
   • Multimodal

10. Distribution Management

    • Rapid response
    • Product choice
    • Service

11. ISM Ethical Standards

    • Perceived impropriety
    • Conflicts of interest
    • Issues of influence
    • Responsibilities to employer
    • Customer and supplier relationship