SUPPLY CHAIN MANAGEMENT

Learning Objectives:
At the end of the lessons the students are expected to:
1. To understand the basic push promotion strategy for channel members
2. To define logistics and supply chain management.
3. To identify the components and types of supply chain.
4. To discuss the supply chain of a certain company.

Supply Chain - The network of external suppliers, internal processes, and external distributors,
and the links connecting them, that deliver a finished product or service to the customer.
- A supply chain is composed of all the companies involved in the design, production, and
delivery of a product to market.

Supply Chain Management entails:

 Making decisions regarding the structure of the supply chain
 Coordinating the movement of goods and delivery of services
 Sharing information between members of the supply chain.
 is the coordination of production, inventory, location, and transportation among the
participants in a supply chain to achieve the best mix of responsiveness and efficiency for
the market being served. The goal of supply chain management is to increase sales of
goods and services to the final, end use customer while at the same time reducing both
inventory and operating expenses.

SCM integrated with 3 different types of flows

1) Flow of Information: (Sales Planning Coordination, Follow ups, Control, Feedbacks etc.)
2) Flow of Product/Materials: (Forward flow of finished goods from Company to Market &
Expiry/Damaged/Unsold/Repair/Breakages through reverse logistics from market to company)
3) Flow of Funds: (Sales revenue from the market/distribution back to company)
4) Reverse Product Flow
 QUIZ

1. Which of the following statements is true?

A. Logistics and supply chain are same.

B. Physical distribution and logistics are the same.
C. Transportation and logistics are same.
D. Supply chain is a subset of logistics.
E. Logistics is a subset of supply chain.

2. If a customer visiting a departmental store cannot find his desired soap manufactured by
Hindustan Unilever Ltd (HUL) in the store, which of the following chain partner will he hold
responsible for the non-availability of the soap?

A. The suppliers of raw materials and components

B. The distributor
C. The logistics service provider
D. Hindustan Unilever Ltd
E. The departmental store

3. Which of the following sequence is true?

Sourcing → Inbound logistics → Conversion into finished goods → Outbound logistics → Retailing
Sourcing → Conversion into finished goods → Inbound logistics → Outbound logistics → Retailing
Inbound logistics → Sourcing → Conversion into finished goods → Outbound logistics → Retailing
Sourcing → Outbound logistics → Conversion into finished goods → Inbound logistics → Retailing
Sourcing → Inbound logistics → Outbound logistics → Conversion into finished goods → Retailing

4. Supply chain is concerned with the

a. flow of raw materials, WIP and finished products in the forward direction

b. flow of information in both the directions

c. flow of cash in the reverse direction

d. a & b above

e. a, b & c above

5. The objective of a supply chain is:

a. to improve the efficiency across the whole supply chain

b. to improve responsiveness across the whole supply chain

c. to deliver improved value to the customers

d. a, b & c above
e. b & c above

6. Which of the following statements is true?

Dell supply chain believed in medium-term relationship with the suppliers with loosely held supplier
network.

Toyota supply chain believed in medium-term relationship with the suppliers with loosely held supplier
network.

Ford supply chain is both highly efficient as well as highly responsive.

Dell supply chain is both highly efficient as well as highly responsive.

Dell supply chain propagated the concept of long-term relationship with the suppliers.

7. In today’s supply chain, there has been a shift in the power structure in a chain towards

Retailers

Raw-material suppliers

Manufacturers

Distributors

Third-party logistics service providers

8. Which of the following statements is true regarding outsourcing?

a. Higher level of outsourcing enables a firm to have better control on all outsourced activities.

b. Higher level of outsourcing makes a firm more vulnerable to outside influences.

c. Higher level of outsourcing enables a firm to outsource core activities to other competent players.

d. Higher level of outsourcing enables a firm to outsource non-core activities to other competent
players.

e. b & d above

f. a & c above

9. If the focus of a retailer is to achieve leadership in cost, then which of the following phenomenon will
hold good?

Customers will prefer a large variety of products but the retailer will not keep a large variety in the store
in order to achieve economies of scale.
 Customers will prefer short lead time for their products and the retailer will keep higher amount of
inventory in order to satisfy customer needs in time.

Customers will like to have convenience and the retailers will also set up a number of stores at different
locations in order to provide convenience to the customers.

Customers will prefer a large variety of products and the retailer will also keep a large variety in the
store in order to satisfy customer needs.

None of the above

10. The companies will realize the benefits of implementing IT when which of the following is
undertaken?

a. Companies need to invest heavily in information systems.

b. Companies need to automate the existing supply chain systems and processes.

c. Companies need to re-engineer their supply chain structure.

d. Companies need to undertake revision in the supporting organizational processes.

e. c & d above

f. b & c above

11. Ford supply chain is characterized by

Loosely held supplier networks

Vertical integration

Long-term relationship with the suppliers

Increased product variety

Individual customization

12. Toyota supply chain is characterized by

Loosely held supplier networks

Vertical integration

Long-term relationship with the suppliers

Individual customization

Zero product variety

14. Which of the following statements is true?

A 3PL company is a professional logistics service provider meeting the logistics requirements of an
organization and can also integrate its resources, capability, and technology in order to provide
comprehensive solution to its customers.
 a. A 4PL company is a professional logistics service provider meeting the logistics requirements of an
organization and can also integrate its resources, capability, and technology in order to provide
comprehensive solution to its customers.

b. A 4PL company is a professional logistics service provider meeting only the logistics requirements of
an organization.

c. A 3PL company is a professional logistics service provider meeting only the logistics requirements of
an organization.

d. b & d above

e. a & c above

ESSAY. Logistics is much more than simply sharing products to customers. Explain.

The movement of the right amount of the right products to the right place at the right time.
planning, implanting and controlling the physical flows of materials and finals goods from points of use to
meet customers’ needs at a profit.

Should coercive power be the basis for developing a sales quota program for channel members? Explain
why or why not.

4. Discuss the rationale for using trade shows as a basis for obtaining promotional support
from channel members.
5. Describe the importance of demand management for effective supply chain management.
6. Discuss the role of information in the supply chain and how it supports supply chain
planning and execution.

TRUE OR FALSE

1. Reverse logistics is the process of sending the invoice up the supply chain to the supplier. F
2. Supply-chain management (SCM) involves only the process of moving goods between
businesses. F
3. The internet-enabled supply chain provides opportunities to streamline the process of SCM. T
4. The push system is a supply chain in which suppliers only produce and deliver goods to their
customers as the goods are needed. F
5. The global economy has had a drastic impact on the area of supply-chain management. T
6. Supply-chain management impacts both providers of goods and providers of services. T
7. Business process reengineering is the process of constant and incremental improvement to
business processes. F
8. Reverse Logistics are the internal processes for handling customer returns, either for a refund or
for repair or replacement under warranty. T
9. Supply chain management is the management of processes used to design, supply, product, and
deliver valuable goods and services to customers. F
10. To participate in a supply chain, a firm must actually handle the physical goods at some point.
TRUE
A supply chain is the global network of organizations and activities involved in:

A)Designing a set of goods and services and their related processes

B)Transforming inputs into goods and services

C)Consuming these goods and services

D)Disposing of these goods and services

E)All of the above.

Other terms sometimes substituted for supply chain include:

A)Demand chain

B)Extended enterprise

C)Supply network

D)Supply web

E)All of the above