UNDERSTANDING THE

SUPPLY CHAIN
MANAGEMENT

By Abdullah Athar

Definition of Supply Chain Mgt :

Basic

Supply Chain : a network

used to deliver product and
services from raw materials to
end customers through an
engineered flow of Information,
physical distribution and cash.
Supply chain = supply + chain+
mgt

SUPPLY CHAIN MANAGEMENT

Supplier

Manufactu
re

Warehou
se

Distribut
or

Product
Funds

Information

Retailer

Custome
r

 Generally

key pillars of supply

chain are
Customer
Manufacturer
Retailers
Wholesaler/distributor
Warehouse and transportation
Component /raw material suppliers
Each stage in supply chain is
connected through flow of products
, information and fund

During

operation, supply chain

closely interacts with other
functions like finance, sales ,
marketing etc

Supply Chain in Reality

Supply

chain process is not as

simple as explained. Complexity
includes due to involvement of
various real scenarios like many
suppliers, many distributors, many
manufacturing options .

Different Real Scenarios in Supply Chain

Supplier

Manufactu
re

Warehou
se

Add lines

Distribut
or

Retailer

Custome
r

Services also have supply

chains

Supply Chain-Historical Perspective

Sourcing ,
Procurement
and supply
management
(purchasing ,
supplier
relationship)

Material
Management
(Forecasting
Inventory,
store , stoke
keeping)

Logistics &
Distribution

Objective of Supply Chain

To satisfy customers need by

Matching variable demand with
variable supply
In shortest possible time
With minimum total cost

Significance of Supply Chain :

Supply chain designing and its
operation plays a significant role in
the success of firm.
o Supply chain is the channel which
ensure product availability to end
user, so it determines company
success.
Successful supply chain operation
requires well inter-connectivity within
functions and efficient role of all
functions.

Some Strategies in Supply Chain

Few suppliers/ many suppliers

Make or buy decision
Inventory Management
Capacity Planning

Decision Phase in Supply Chain

Supply

chain strategy

next several years

Supply

chain planning

Quarter to a yearly
Supply

chain operation

(weekly/monthly)

Process view of supply

chain
Supply

chain is a consequence of
processes and flows that take
place within and between
different stages and combine to
fill a customer need for a product.

Two

views of supply chain are

Cycle view :
Push/pull view

Cycle View
Processes

in supply chain are

divided into a series of cycles ,
each performed at the interface
between 2 consecutive stages of
supply chain.

Customer order cycle

Replenishment cycle
Manufacturing cycle
Procurement cycle
Fig 1.3 page 11

Push/pull view
The

process in supply chain are

divided into 2 categories
depending on whether they are
executed in response to a
customer order on in anticipation
of customer order. Pull processes
are initiated by a customer order.
Push process are initiated and
performed in anticipation of
customer need.
Fig 1.5 page 13

Push/pull process
Make

to stock order

Pull process : customer order cycle

Push process : procurement +
manufacturing
+replenishment
Build

to order

Pull process : customer order cycle

+manufacturing
Push process : procurement

Supply Chain Macro Process in a Firm

Supplier
SRM

Source
Negotiate
Buy
Design collaboration
Supply collaboration

Firm
ISCM

Customer
CRM

Demand planning
Market
Supply planning
Price
production
Sell
Warehouse
Order
management
Call centre