Course Contents

• Basic Concepts of Supply Chain Management

• Coordination, Pricing & Landed Cost in Supply Chain
• Demand Management, Forecasting & Customer Service
• Procurement and Supply Chain
• PPRA Rules
• Managing Material/Inventories
• Warehouse Management
• Logistics/Transportation Management
• Use of Information Technology, E-Business, Bullwhip Effect, VMI,
3rd Party Logistics
 Learning Objectives
• Familiarization with concept & Techniques of SC
• Strengthen knowledge of SC
• Knowledge that can be used in Work Environment
• Knowledge which provide basis for further study leading
to National/ International Certifications
i.e. Chartered Institute of Logistics & Transport (CILT),
Certified Supply Chain Manager (CSCM) by International
Supply Chain Education Alliance (ISCEA) and Certified
in Production & Inventory Management (CPIM) by The
American Production & Inventory Control Society
(APICS)
 Reference Book
• The Management of Business Logistics:
A Supply Chain Perspective

By Coyle, Bardi & Langley

 What is Supply Chain

“Integration of Activities/PROCESS
Starts from Suppliers….Supplier
To Customers…..Customer”

Always focus on Customer

 What is Supply Chain

• Its Management of network of

interconnected businesses involved in
supply of Product or Service.
• It starts from Procurement of Raw
Material, Work in Progress Inventory and
Transportation of Finished Goods from
point of origin to point of consumption.
 APICS Definition of Supply Chain

“Design, planning, execution, control, and

monitoring of supply chain activities with
the objective of creating net value, building
a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply
with demand and measuring performance
globally."
 What is Supply Chain

An Effective SC ensures high level of

Customer Service at optimum level of
working capital & cost.

An Efficient SC that ensures products are on

the shelf, available for sale
…..when Customer come to buy.
 THE BASIC SUPPLY CHAIN
Manufacturing Plan & Control

BUSINESS PLAN

SALES & OPERATIONS PLAN

MASTER PRODUCTION SCHEDULE (MPS)

Material Requirement Plan (MRP)

Purchase Production Activity Control (PAC)

Physical Supply
Material Mgt Physical Distribution
Up-Stream Down-Stream Customer
Customer Outbound Logistics
Inbound Logistics
Product Flow
Cash Flow
Information
 Tech Terms
• Business Plan: Org goals of sale, reasons to attain and plan
E.g. Unilever
• Sales & Operations Plan: Individual goals/targets for individual
products/SBU. E.g. Milk, yog, butter etc.

• Master Production Schedule: What we have & what we want

to do based on order/demand.

• Material Requirement Plan (MRP): What ingredients

/components we require for production.

• Production Activity Control (PAC): Individual production

priority/order
 Supply Chain Management:
Introduction

• Supply chain management now part of the

business vocabulary.
• Impact of global marketplace drastically
changed the landscape of business.
• Change was rapid and continuous in the
1990s.
• Doing business in the comfort zone was no
longer synonymous with success.
10
The Changing Business Landscape:
Five Driving Forces

• The Empowered
Consumer
• Power Shift in the Supply
Chain
• Deregulation
• Globalization
• Technology
11
The Changing Business Landscape:
Five Driving Forces

• The Empowered Consumer

– Impact on logistics is more direct.
– Informed consumers have low tolerance for
poor quality in products and services.
– Changing demographics commands 24/7
service.
– Increased customer service increases the
importance of logistics and supply chains.
12
The Changing Business Landscape:
Five Driving Forces

• Power Shift in the Supply Chain

– Large retailers more demanding and
commanding.
– Focus upon distribution costs and their
impact on “everyday low prices”.

13
 The Changing Business Landscape:
Five Driving Forces

• Deregulation
– Changing economic controls empowered creativity
and competition.
– Changes in transportation – fewer or no economic
controls over rates and services.
– Change in financial institutions blurred traditional
differences and increased competition.
– Change in the communications industry also resulted
in more competition.
– Changes in the utility industry allows more
competition.
14
The Changing Business Landscape:
Five Driving Forces

• Globalization
– Global marketplace concept
– Global network sourcing, manufacturing,
marketing, Warehousing and distribution
– Global alternatives have blossomed
– No geography --- access available to the world
– Supply chain challenges
– McDonald challenges

15
The Changing Business Landscape:
Five Driving Forces

• Technology
– Information Age provides new and
unrestricted access to the place aspect of
business.
– My time, my place
– Warehouse technology has changed
dramatically with computer devices in use
from the office space to the forklifts.
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The Changing Business Landscape:
The Supply Chain Concept

• Development of the Concept

– Total systems cost - remains an important element
of logistics analysis.
– Outbound logistics - was the initial focus with
higher value finished goods.
– Inbound logistics – deregulation allowed new
focus on coordination of inbound and outbound
movements.
– Value chain analysis integrated logistics activities.
– Terminology growing as supply chain concept
matures.

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 Figure 1-1
A View of Business Logistics in a Firm

18
 Figure 1-2
Integrated Logistics Management

19
 The Changing Business Landscape:
The Supply Chain Concept
• Business Case for Supply Chain Management: Why so
much attention on supply chain management?
– ECR and Best-in-class studies (see next two slides)
– Complexity of the supply chain
– Extended enterprise concept
– Two-way flow of:
• Products
• Information
• Cash
– Inventory visibility

20
Figure 1-5: Comparison of Average Throughput
Time of Dry Grocery Chain before and after ECR
Implementation

21
 Figure 1-6: Total Supply Chain
Management Cost --- All Sectors

14

12

10
Revenue %

8
Best-in-class
6 Median

0
1996 1997

22
 Figure 1-7:
Integrated Supply Chain

23
The Changing Business Landscape:
The Supply Chain Concept

• Characteristics of Supply Chain Management

– Inventory
• Visibility
• Pull systems
– Landed Cost
• Companies must realize that their strategies
may affect the landed cost.
• Coordination of supply chain activities may
lower the landed cost.
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