logistics & supply chain management isd252 · 2019-12-02 · • it is thesequence of...
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Kwame Nkrumah University of
Science & Technology, Kumasi, Ghana
LOGISTICS & SUPPLY CHAIN MANAGEMENT
ISD252
Matilda Kokui OwusuBioSupply Chain & Information Systems DepartmentSchool of [email protected]
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ISD252-MKOBIO 2
SUPPLY CHAIN MANAGEMENT
UNIT 2
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ISD252-MKOBIO 3
UNIT OVERVIEW
After reading this unit you should be able to understand:
• The conceptof Valuechain, Supply chain, and
SupplyChainManagement.
• Keyissues in Supply Chain Management
• Components of supply chain management
• Types ofSupplychain management
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THE CONCEPT OF VALUE CHAIN
It is the process or activities by which a company adds
value to an item (input) including production, marketing,
and the provision of after-sales service. For example;
Manufacturingcompanies create value by acquiring
raw materials and using them to produce something
useful.
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THE CONCEPT OF VALUE CHAIN
Retailersbring together a range of products and
present them in a way that's convenient to
customers, sometimes supported by services such
as fittingrooms,personal shopperadviceand online
customer service/support
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THE CONCEPT OF VALUE CHAIN
Avalue chain is the full range ofactivities, including:
Design,
Production,
Marketing and
Distribution,
Thatbusinessesgo through to bring a product or service from
conception todeliveryto its customers.
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THE CONCEPT OF VALUE CHAIN CONT’D…
• The valuechain is amodeldeveloped byMichaelPorterin 1985
which isused to describe the process by whichbusinesses;
Receive raw materials,
Add value to the raw materials through various processes to
create a finished product, and
Then sell that end product to customers.
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PORTERS VALUE CHAIN
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VIDEO ON VALUE CHAIN
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DEFINITIONS OF SUPPLY CHAIN
• It is thesequence of processes involved in the production and
distribution of a commodity.
• A supply chain consists of all parties involved, directly or
indirectly, in fulfilling a customer request.
• The supply chain includes the manufacturer and suppliers,
transporters, warehouses, retailers, and customers themselves.
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TheCouncil of Logistics Management (CLM) defines
Supply Chain (SC) as;
Aglobal network of organizations that cooperate to
improve the flows of material and information
between suppliers and customers at thelowest
costandthe highest speed.
DEFINITIONS OF SUPPLY CHAIN
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It isdefinedas;
• The management of materials, information, and
finances as they move in a process from a supplier to
manufacturer to wholesaler to retailer to consumer.
• The management of the flow of goods and services.
SUPPLY CHAIN MANAGEMENT
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• It is the integration of key business processes
fromEnd userthroughoriginal suppliersthat
provideproducts, servicesandinformationthatadd
valuefor customers and other stakeholders. (Lambert
et al, 1998)
SUPPLY CHAIN MANAGEMENT DEFINED
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• The management of upstream and downstream relationships
with suppliers and customers to deliver superior customer
value.(ChritopherM, 1998)
• It involves the management of supply chain assets and
products, information and funds flows to maximize total
supply chain profitability. (ChoppraandMeindl2007)
SUPPLY CHAIN MANAGEMENT
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SCMinvolvesthree main flows:
• The Product flow: This includesthe movement of goods from a
supplier to a customer, as well as any customer returns or service
needs.
• The Information flow:Itconsistsof credit terms, payment
schedules, consignment and title ownership arrangements.
• The Finance flow: It involvestransmitting orders and updating the
status of delivery.
SUPPLY CHAIN MANAGEMENT CONT’D…
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From the definitions discussed, Supply Chain comprises the following;
Suppliers
Manufacturers
Distributors
Retailers and
Consumers/Users
{Upstream SC} {Internal SC} {Downstream Supply Chain}
Supplier Manufacturer Distributor Retailer Consumer/User
SUPPLY CHAIN ILLUSTRATED
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The supply chain can be broadly classified into three
part:Upstream, InternalandDownstream(Turban et all.,
2003, 2004).
• Upstreamsupply chain:This part of the supply chain is
mainly concerned with the procurement of raw materials. It
includes suppliers that could be manufacturers themselves
COMPONENT OF SUPPLY CHAIN
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• Internal supply chain:This part is mainly concerned with
transforming the inputs obtained in the upstream supply chain into
outputs. It starts from the time raw material comes to
anorganisationand continues till it gets transformed into finished
goods and is sent for distribution.
• Downstream supply chain:This part is mainly concerned with the
processes involved in delivering the finished products from the
internal supply chain to the final customers.
COMPONENTS OF SUPPLY CHAIN MANAGEMENT
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Warehousing
Warehousing
Transportation
Transportation
Vendors/plants/ports
Transportation
Factory
Transportation Customers
Information
flows
SUPPLY CHAIN FOR AN INDIVIDUAL FIRM
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KFC SUPPLY CHAIN
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The type of supply chains depend on the nature of the
company(industry) in question. The complexity of the supply
chain is also attributed to the processes of the company in
question.
Thefollowing are the types of supply chains that are generally found
in business (Turban et al., 2003, 2004):
SUPPLY CHAIN MODELS
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• Integrated made-to-stock supply chain model
• Continuous replenishment supply chain
• Build-to-order supply chain
• Channel assembly supplychain
http://carl.sandiego.edu/itmg350/types_of_supply_chain.htm
SUPPLY CHAIN MODELS
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• Build-to-order supply chain
The build-to-order supply chain model begins processing a
customer order as soon as it is received from the customer.
Typical of the computer and Technology Industry, specialist
medical care andhigh end Jewelrymakers.
SUPPLY CHAIN MODELS
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VIDEO ON DELL COMPUTERS
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• Channel assembly supply chain
The channel assembly supply chain model is an improvement
on the build-to-order model. The parts of a product are
assembled as the product moves through the distribution
channel. It incorporates strategic alliances with third party
logistics company.
SUPPLY CHAIN MODELS
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•Integrated made-to-stock supply chain model
The integrated made-to-stock supply chain model meets customer
demand in real time. In this model, finished goods are stocked in the
inventory and once a demand occurs, production stocks the goods
again.
SUPPLY CHAIN MODELS
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• Continuous replenishment supply chain
The continuous replenishment supply chain model constantly replenishes
the inventory by continuously interacting with suppliers. Real-time
information is required regarding demand changes so that the desired
replenishment schedules can be maintained. Used in businesses
where demand is fairly stable.
SUPPLY CHAIN MODELS
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VIDEOS ON SUPPLY CHAIN
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• The global objective of a Supply Chain iscustomers’ satisfaction.
• Additionally,individual components of the SC aim at maximizing their shareholder value by maximizing the Return on Investment (ROI) of their investors.
THE TACTICAL OBJECTIVES OF SUPPLY CHAIN
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Supply chain management issues concern activities of
the firm at various levels of decision making, ranging
from Operational level to Strategic level via Tactical
level. Meaning it follows the organizational structure.
DECISION MAKING IN SCM
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• The Strategic level
The decision making at this level is made with long term objectives
and with long lasting effects.These include decisions regarding;
Location of various facilities, including the
manufacturing/Production plant
Distribution warehouses
Sourcing
The structure of the distribution channel.
DECISION MAKING IN SCM
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• The Tactical level
Decision making at this level is concerned with;
• Purchasing
• Production functions,
• Inventory policies and
• Transportation strategies.
These decisions will be usually updated on an annual basis.
DECISION MAKING IN SCM
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• The Operational level
Decision making at operational level will concern day to day management of activities such as;
• Scheduling,
• Routing and
• Vehicle loading
DECISION MAKING IN SCM
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• Product design:
This is concerned with the design of the product and its impact on total cost of the product.
• Customer value:
The key issue is the definition of customer value in an age of increasing consumer power.
KEY ISSUES IN SCM
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• Information Technology andDecisionsupport systems:
The concerns of contemporary supply chain management are the efficient use of modern technology including the Internet and computerised decision support systems.
KEY ISSUES IN SCM
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• Retailersget a choice of goods and also carry less stock and hence can offergood serviceto customers.
• Supplychains make movements simple, cost-effective and efficient as transport is simpler.
• Expertisecan be developed in a particular type of operation.
BENEFITS OF SCM
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• Supplychains bridge the gaps between the suppliers and the customers.
• Theyallow business to conduct operations at an appropriate time and place for the benefits of suppliers and customers.
BENEFITS OF SCM
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1. Logistics management is focused more on company-wide
physical movement of products and materials
2. SCM encompasses logistics management in addition to having
an overall view of materials, information, financial and
operational processes.
3. SCM focuses on both internal and external sources and plans for
the optimal outcomes.
DIFFERENCE BETWEEN LOGISTICS AND SCM
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• Logistics Analyst
• Logistics Consultant
• Customer Service Manager
• International Logistics Manager
• Inventory Control Manager
• Logistics Engineer
• Logistics Manager
• Logistics Services Salesperson
• Logistics SoftwareManager
LOGISTICS & SCM JOBS
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• Materials Manager
• Production Manager
• Purchasing Manager
• Supply Chain Manager
• Systems Support Manager (MIS)
• Transportation Manager
• Vendor Managed Inventory Coordinator
• Warehouse OperationsManager
JOBS IN LOGISTICS&SCM
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GROUP ASSIGNMENT
Identify a business operating within the
KNUST environs and;
1. Identify theirvalue chain activities
2. Illustrate their Supply Chain
3. Determine their Supply chain Model.
ISD470-MKOBIO 48
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GROUP ASSIGNMENT CONT’D
Instructions:
• Form groups of ten members
• Submit the assignment on Schoology
• Deadline for submission is
– 8:00pmon the28thof February 2019
• Indicate the group leader and only the group leader can submit
assignments on behalf of the group for the wholeof
thissemester.
• Note groups that have non members of theschoologygroup
would be penalized.
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End of Lecture
Thank You