Introduction
to SCM
MODULE 1
MEC702
LOGISTICS AND SUPPLY CHAIN MANAGEMENT
LOGISTICS AND SUPPLY CHAIN MANAGEMENT 1
Syllabus
• Objectives of a Supply Chain Management, Stages of Supply Chain, Value
Chain Process, Cycle view of Supply Chain Process, Key Issues in SCM, Logistics
& SCM, Supply Chain Drivers / Decisions and Obstacles, Supply Chain
strategies, Strategic Fit, Best practices in SCM, Obstacles of Streamlined SCM.
• Supplier Selection, Supplier Quality Audits, Contract Management, Non-
Disclosure Agreement (NDA), Make and Buy Decision while in-out sourcing.
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Supply Chain Drivers
• Supply chains utilize drivers to improve their responsiveness and efficiency and
achieve a balance between the two.
• The types of Drivers in Supply Chain are:
• Logistical drivers
• Facilities
• Inventory
• Transportation
• Cross-functional drivers
• Information
• Sourcing
• Pricing
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Facilities
• Facilities are the actual physical locations in the supply chain network where
Product is stored, assembled, or fabricated.
• The two major types of facilities are production sites and storage sites.
• Decisions regarding the role, location, capacity and flexibility of facilities have
a significant impact on the supply chain's performance.
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Inventory
• Inventory encompasses all raw materials, work in process, and finished goods
within a supply chain.
• Changing inventory policies can dramatically alter the supply chain's efficiency
and responsiveness.
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Transportation
• Transportation entails moving inventory from point to point in the supply
chain.
• Transportation can take the form of many combinations of modes and routes,
each with its own performance characteristics.
• Transportation choices have a large impact on supply chain responsiveness
and efficiency.
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Information
• Information consists of data and analysis concerning facilities, inventory,
transportation, costs, prices, and customers throughout the supply chain.
• Information is potentially the biggest driver of performance in the supply
chain because it directly affects each of the other drivers.
• Information presents management with the opportunity to make supply
chains more responsive and more efficient.
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Sourcing
• Sourcing is the choice of who will perform a particular supply chain activity
such as production, storage, transportation, or the management of
information.
• At the strategic level, these decisions determine what functions a firm
performs and what functions the firm outsources.
• Sourcing decisions affect both the responsiveness and efficiency of a supply
chain.
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Pricing
• Pricing determines how much a firm will charge for goods and services that it
makes available in the supply chain.
• Pricing affects the behavior of the buyer of the good or service, thus affecting
supply chain performance.
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Supply Chain Strategies
• Supply chain strategy specifies what the operations, distribution, and service
functions, whether performed in-house or outsourced, should do particularly
well.
• Supply chain strategy includes a specification of the broad structure of the
supply chain and what many traditionally call "supplier strategy," "operations
strategy,“ and "logistics strategy.“
• Supply chain strategy also includes design decisions regarding inventory,
transportation, operating facilities, and information flows.
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