Page 313 - DMGT501_OPERATIONS_MANAGEMENT

Unit 13: Supply Chain Management and JIT

13.11 Summary Notes

Supply or material management activities focus on the upstream portion of the supply
chain and are mainly concerned with suppliers and inbound logistics.

'Supply Chain Management' is defined as the integration-oriented skills required for
providing competitive advantage to the organization that are basis for successful supply
chains.
Supply chain is an integral part of the value chain. The supply chain consists only of the
primary activities or the operational part of the value chain. The supply chain, therefore,
can be thought of as a subset of the value chain.
Major elements in supply chain are: production, location, inventory, supply, transportation
and information.

Logistics focuses on the physical movement and storage of goods and materials. This
involves evaluating and selecting various transportation options, developing and
managing networks of warehouses when needed, and managing the physical flow of
materials into and out of the organization.
Logistics decisions are often tightly intertwined with production and inventory decisions,
particularly when businesses must decide where to hold inventory in the supply chain.
A critical part in supply chains that involve manufacturing is getting all the required parts
and raw materials in the right sequence, the right quantity, the right quality and the right
time to the manufacturing and assembly plants.
Electronic Data Interchange (EDI) is the electronic exchange of business information–
purchase orders, invoices, bills of lading, inventory data and various types of
confirmations-between organizations or trading partners in standardized formats.

E-commerce is usually defined as the conduct of business online, via the Internet. E-
commerce means more choices, convenience and lower prices for consumers. It also provides
new ways for businesses to grow and meet customer needs, and important benefits and
cost-savings for governments and the people they serve.
Supply chain management allows all the firms in a supply chain to look beyond their own
objectives to the objective of maximizing the final customer's satisfaction.
A firm in the supply chain must initiate the attempt to form partnerships and actively
manage the supply chain. Often a firm that has a large amount of market power in the
chain will become the leader of the supply chain.
The SCOR model is based on a benchmarking process and used to measure the performance
of an existing supply chain and its related processes.
Supply chain management involves proactively managing the two-way movement and
coordination (that is, the flows) of goods, services, information, and funds from raw
material through end user.
Supply Chain Design is a strategic decision. It reflects the structure of the supply chain
over the next several years. It decides what the chain's configuration will be, how resources
will be allocated, and what processes each stage will perform.

A push/pull view of the supply chain is very useful when considering strategic decisions
relating to supply chain design. This view forces a more global consideration of supply
chain process as they relate to a customer order.

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