Summary Guide to Supply Chain Management - International Supply Chain Management 1 (1000IS1_22)

International Supply Chain Management
Chapter 1: introduction to supply chain management

1.1 what starts a supply chain?
 Flow of materials—these are depicted in the middle part of the diagram.
- They range from raw materials work in progress finished goods.
 This good flow encompasses the supplier’s supplier through the end consumer.
 Flow of information—order confirmation or dispatch advice.
 There are also reverse flows.
- Goods
- Information
- Packaging material
- Transportation equipment
 Reverse flow of funds.
- This is money that flows back into the supply chain.
 Two forces in the chain of goods, information and funds, which are:
1) Product supply
2) Customer demand
 The supply chains can be triggered by product supply (commodities) or by costumer demand (customized
products).
 The degree of customization dictates how much and in which format the supplying company holds inventory.
1.2 A functional view of supply chain management




1.3 Supply chain architecture
 in its simplest format, a supply chain consist of three nodes.
 In an extended supply chain, we consider three additional supply chain nodes.
 On the upstream side (towards supply), there is the supplier’s supplier or the ultimate supplier.
 At the downstream side (towards demand), there is the customer’s customer or the end consumer.
- the distinction here is the different kind of customers that exist between your company and the end
consumer.
 Customers in supply chain can be distributors, wholesalers or retailers.
 There are entire categories of companies that are service providers to other nodes in the supply chain. These
perform services in areas such as:
1) Transportation
2) Warehousing
3) Finance
4) Market research
5) New product design
6) Technology
7) Sustainability
1.4 supply chain dynamics
 ideally, supply chains react to changes in their environments.
 It is important that the rate of supply mirrors the rate of demand; otherwise the outcome will be very unfavorable
for Las Vegas.
 Their task is to balance the rate of product supply chain in accordance with the rate of customer demand.
- External influences will affect the equilibrium.

Chapter 3: guide to source in supply chain management

, 3.1 Introduction to sourcing

examples of direct and indirect items

Direct Indirect
Glass Factory security
Label Consultants
Sugar Cleaning products
Closure (cap) Electricity
Flavoring Protective clothing
Carbon Dioxide Stationery




 Sourcing in product companies generally involves dividing products or services into two distinct groups: direct and
indirect.
 Direct items are directly related to the product’s manufacturing process.
 Indirect items describe all other products and services that are needed to run the company.
- In organizations, sourcing is not exclusive to the supply chain, as it is deployed in all companies regardless of
whether they have a supply chain or not.
 Different organization refer to sourcing by different names.
3.1.1 The purchasing process: pre-order steps
 The purchasing process is also known as the purchase-to-pay process.
 NeedSpecificationsourcingTendering negotiation selectioncontracts
3.1.2 The purchasing process: Post-order steps
 Placing and handling orders Progressing and delivery Payment and review Performance indicators
3.1.3 Tactical sourcing
 The purchasing process of pre-order and post-order steps will continue on an operational basis daily.
 Tactical sourcing activities may be used in conjunction with the pre- and post-order steps or may sit outside.
- Market research
- Commodity analysis
- Forecasting requirements
- Supplier performance analysis and benchmarking
- Price and cost analysis
 Continual market research is essential to establish what is happening in the market for a particular item or
commodity.
 Suppliers efficiency can be raised by communicating better forecast requirements.
 by improving supplier efficiency, reduced costs and improved service are juxtaposed for both parties.
3.2 Strategic sourcing initiatives
 The category sourcing concept also aims to achieve a shift in customer and supplier relationship, striving for joint
benefits and co-ownership of the sale.
 Category sourcing (CS) or Category management (CM) are concepts where the products or services an
organization requires are broken down into discrete groups.
 The steps for a category sourcing process adapted from O’Brian (2009) are:
1. Profile the category group
2. Select the sourcing strategy
3. Generate the supplier portfolio
4. Follow the purchasing process
5. Negotiation
- going back to step one of the category sourcing process, the sourcing
strategy matrix adapted from Kraljic (1983) is a tool to segment the
different category groups.

3.2.2 Supplier Relationship Management

 breaking down functional barriers and functional mindsets
 promoting innovation and joint thinking for “doing things better”
 Improving supply chain visibility for buyer and supplier
 Sharing assets across supply chain, removing duplications
 Enhancing forward looking visibility giving more reliability to all parties.