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Overview
Overview of fundamental
SCM concepts
Aligning resources with
organizational strategy
Design and continuous improvement
considerations
Inventory management and logistics
Understanding the market and demand
CRM and SRM
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Introduction
Key Concepts:
Supply chain entities, structures, flow, and processes
The SCOR model
Types and stages of supply chain management
SCM objectives, key terms, and benefits
Topic Preview
Topic 1: Basic Supply Chain
Topic 2: The SCOR Model: Linking
Processes, Metrics, Best Practices, and
Technologies
Topic 3: Vertical versus Horizontal Integration
Topic 4: Supply Chain Management Objectives
Topic 5: Supply Chain Management Benefits
Topic 6: Accounting and Financial Statement
Basics
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Information flow
Supplier
Producer
Primary product flow
Primary cash flow
Reverse product flow
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Customer
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Producer
Producer
Customer
Customer
Products
Power
Retailer
Wholesaler
Professional
services
Government
services
Educational
services
Distributor
End user
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Reactive
supply chain
Efficient reactive
supply chain
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Suppliers
Suppliers
Wholesale food
distributor
Growers
Miners
Utilities
Utilities
Manufacturers
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Suppliers
Producer
Retailer
Street vendor:
cooking
operations
Street vendor:
the stand and
its employees
Builders
Other merchants
Customer
Consumers
Tier 1 materials
supplier
Customer
Distributor
Tier 2 materials
supplier
Customer
Tier 2 service
supplier
Tier 1 materials
supplier
Manufacturer
Customer
Tier 2 materials
supplier
Tier 2 service
supplier
Distributor
Tier 1 service
supplier
Primary
product
flow
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Customer
Primary
cash
flow
Fuel supplies
Other
utilities
Electric backup
power
Electric
transformers
Electrical Power
Utility
Facility
maintenance
Programming
services
Janitorial
services
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Home
customers
Commercial
customers
Summing Up
Supply chains:
Stretch from raw materials to consumers
Include various entities and processes
Run in reverse as well as toward end user
Contain cash, product, and information flows
Connect to outside stakeholders.
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Section A:
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Plan
Deliver
Source
Return
Return
Make
Plan
Deliver
Source
Make
Deliver
Source
Return
Enable
Return
Return
Suppliers
Suppliers
Supplier
Supplier
Return
Enable
Supplier
Supplier
Deliver
Source
Return
Return
Enable
Customers
Customers
Customer
Customer
Customer
Customer
Internal
Internal or
or External
External
Internal
Internal or
or External
External
Your
Your Organization
Organization
Make
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Lateral (Horizontal)
Integration
Coordinated management of
separately owned links in the
supply chain; outsourcing
Raw
materials
extraction
Production
Components
Products
Services
Distribution
Retail
sales
Vertical Integration
Integrated
Integrated automotive
automotive company:
ownership,
management,
company: ownership,
marketing/sales,
finance
management, marketing
Showroom
Plant
Component
production
Raw materials
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Customer
Distribution
Control
Lateral Integration
Information flow
Raw
materials
Components
Plant
Distribution
Retail
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Customers
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ERP
Suppliers
Purchasing
Logistics
Production
control
R&D
Marketing/
sales
Distribution
Suppliers
Suppliers
Customers
Materials/products/services
Materials/products/services
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Customers
Payments
Payments
Customers
Suppliers
suppliers
Suppliers
Internal
chain
Materials/products/services
Materials/products/services
Customers
customers
Payments
Payments
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Customers
Discussion Question
If a firm uses a logistics supplier to integrate
with external members and internally combines
warehousing and transportation to optimize
costs, it has evolved to at least
a) Stage 1: dysfunctional enterprise.
b) Stage 2: semifunctional enterprise.
c) Stage 3: integrated enterprise.
d) Stage 4: extended enterprise.
Answer:
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Discussion Question
If a firm uses a logistics supplier to integrate
with external members and internally combines
warehousing and transportation to optimize
costs, it has evolved to at least
a) Stage 1: dysfunctional enterprise.
b) Stage 2: semifunctional enterprise.
c) Stage 3: integrated enterprise.
d) Stage 4: extended enterprise.
Answer: c
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Value stream
Value stream
mapping
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Financial
value
Supplier
Supplier
Producer
Producer
Customer
Customer
value
Social
value
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Governments
Employees
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Quality
Affordability
Availability
Service
Sustainability
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Social Values
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Discussion Question
Which of the following is most likely to increase
long-term net financial value for a supply chain
firm?
a) Reinvesting profits in research and infrastructure
upgrades
b) Channeling SC cost savings into end-user
discounts
c) Use of market leverage to force down supplier
costs
d) Large-scale layoffs and plant closings
Answer:
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Discussion Question
Which of the following is most likely to increase
long-term net financial value for a supply chain
firm?
a) Reinvesting profits in research and infrastructure
upgrades
b) Channeling SC cost savings into end-user
discounts
c) Use of market leverage to force down supplier
costs
d) Large-scale layoffs and plant closings
Answer:a
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High
Low
Low
High
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High
Low
Low
High
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The Three Vs
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Bullwhip Effect
Supplier
Factory
Distributor
Retailer
Customer
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Spend management
Goes upstream
(customer > producer > supplier)
Not linear
Advantages:
Reduces cash-to-cash cycle
time
Improves customer-supplier
relationships
Reduces imbalances between
larger and smaller supply chain
players
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Standard Costing
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Section 1A Review
Questions?
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