SUPPLY CHAIN MANAGEMENT
CORE CONCEPTS
Supply is all about managing flows of information, physical flows (logistics of physical
things and materials) and money.
Supply chain is like a supply web. It represents a trade off between money, financial and
costs ⇒ a trade off between level of service and costs.
I. Introduction to logistics and supply chain management :
Example :
1 - Perishability
2 - Sourcing
3 - Dependency on other products
4 - Client
⇒ Every product is a part of multiple supply chains.
The direction of a company decides differents strategies related to :
- Where to source from ? → sourcing and purchasing strategy
- How much inventory to hold ? → Inventory management strategy
, - How to forecast demand ? → Forecasting and demand planning
- Where to stock inventory ? → Warehousing management strategy
- How to move the product from source of production to final consumption ? →
Distribution strategy.
II. Definition of supply chain :
A supply chain is defined as two or more parties linked by a flow of resources (typically
material, information and money) that ultimately fulfill a customer request.
The primary purpose of a SC ⇒ Satisfy customer needs.
→ A company has only one source of revenue ⇒ THE CUSTOMER.
→ Payments between parties are just fund exchanges.
Supply Chain ⇒ Maximize the total value generated
= [What customer pays] - [Total effort expended to fulfill].
III - Logistics VS Supply chain management :
Definition 1 : Logistics involves “managing the flow of items, information, cash and ideas
through the coordination of supply chain processes and through the strategic addition of
place, period and pattern values”. (MIT CTL (Center of transportation and logistics)).
Definition 2 : “ SCM deals with the management of materials, information, and financial flows
in a network consisting of suppliers, manufacturers, distributors and customers.” (Stanford
Supply Chain Forum)
Definition 3 : “ Call it distribution or logistics or SCM.By whatever name it is the sinuous,
gritty and cumbersome process by which companies move materials, parts and products to
customers” (Fortune (1994))
● Difference between logistics and supply chain management :
According to the Council of SCM professionals :
CORE CONCEPTS
Supply is all about managing flows of information, physical flows (logistics of physical
things and materials) and money.
Supply chain is like a supply web. It represents a trade off between money, financial and
costs ⇒ a trade off between level of service and costs.
I. Introduction to logistics and supply chain management :
Example :
1 - Perishability
2 - Sourcing
3 - Dependency on other products
4 - Client
⇒ Every product is a part of multiple supply chains.
The direction of a company decides differents strategies related to :
- Where to source from ? → sourcing and purchasing strategy
- How much inventory to hold ? → Inventory management strategy
, - How to forecast demand ? → Forecasting and demand planning
- Where to stock inventory ? → Warehousing management strategy
- How to move the product from source of production to final consumption ? →
Distribution strategy.
II. Definition of supply chain :
A supply chain is defined as two or more parties linked by a flow of resources (typically
material, information and money) that ultimately fulfill a customer request.
The primary purpose of a SC ⇒ Satisfy customer needs.
→ A company has only one source of revenue ⇒ THE CUSTOMER.
→ Payments between parties are just fund exchanges.
Supply Chain ⇒ Maximize the total value generated
= [What customer pays] - [Total effort expended to fulfill].
III - Logistics VS Supply chain management :
Definition 1 : Logistics involves “managing the flow of items, information, cash and ideas
through the coordination of supply chain processes and through the strategic addition of
place, period and pattern values”. (MIT CTL (Center of transportation and logistics)).
Definition 2 : “ SCM deals with the management of materials, information, and financial flows
in a network consisting of suppliers, manufacturers, distributors and customers.” (Stanford
Supply Chain Forum)
Definition 3 : “ Call it distribution or logistics or SCM.By whatever name it is the sinuous,
gritty and cumbersome process by which companies move materials, parts and products to
customers” (Fortune (1994))
● Difference between logistics and supply chain management :
According to the Council of SCM professionals :
