5.6.1 Components of the supply chain

• What does Supply Chain Management (SCM) involve managing?

  Goods, services, information flow
• Supply chain management begins with supply chain planning
• What is the focus of sourcing and procurement in SCM?

  Selecting suppliers, negotiating contracts
• Production planning in SCM focuses on managing capacity and ensuring timely delivery
• What does logistics and distribution involve in SCM?

  Transportation, warehousing, order fulfillment
• Arrange the primary components of the supply chain in the order they typically occur in the process.

  1️⃣ Supply Chain Planning

  2️⃣ Sourcing and Procurement

  3️⃣ Production Planning

  4️⃣ Logistics and Distribution
• Supply chain planning involves forecasting demand and setting inventory levels.
• Production planning in SCM includes scheduling production and managing capacity
• Match the supply chain component with its primary activity:

  Supply Chain Planning ↔️ Forecasting demand

  Sourcing and Procurement ↔️ Negotiating contracts

  Production Planning ↔️ Scheduling production

  Logistics and Distribution ↔️ Transporting products
• What is the primary goal of supply chain planning?

  Coordination of supply chain activities
• Sourcing and procurement focuses on identifying and selecting suppliers.
• Production planning ensures timely product delivery by managing capacity and coordinating production schedules
• What is an example of logistics and distribution in action?

  Using trucks to distribute products
• The components of Supply Chain Management (SCM) are interconnected and interdependent
• Supply chain planning informs sourcing and procurement by determining the required raw materials.
• What input does sourcing and procurement provide for production planning?

  Necessary raw materials
• Production planning informs logistics and distribution about the products to be delivered
• Sourcing and procurement provides the necessary inputs for production planning.
• Why are the components of SCM interconnected?

  To ensure efficient operations
• Logistics and distribution ensures timely delivery of products to customers
• Production Planning schedules production based on the availability of materials
• The components of Supply Chain Management (SCM) are interconnected and interdependent.
• Which component of SCM informs Sourcing and Procurement about required materials?

  Supply Chain Planning
• In a clothing business, Supply Chain Planning forecasts demand for winter jackets
• What are three benefits of efficient Supply Chain Management (SCM)?

  Reduced costs, improved customer satisfaction, increased competitiveness
• Efficient SCM reduces costs by minimizing waste and optimizing resources.
• What is the outcome of improved customer satisfaction in SCM?

  Increased customer loyalty
• Match the SCM component with its description:

  Supply Chain Planning ↔️ Forecast demand and set inventory levels

  Sourcing and Procurement ↔️ Select suppliers and negotiate contracts

  Production Planning ↔️ Schedule production and manage capacity

  Logistics and Distribution ↔️ Transport products to consumers
• Logistics and Distribution ensures timely delivery of products using transportation and warehousing
• The components of SCM are interconnected and interdependent.
• Arrange the components of Supply Chain Management (SCM) in the order they typically interact within the process flow:

  1️⃣ Supply Chain Planning

  2️⃣ Sourcing and Procurement

  3️⃣ Production Planning

  4️⃣ Logistics and Distribution
• Supply Chain Planning informs Sourcing and Procurement by determining the required raw materials and components
• What input does Sourcing and Procurement provide for Production Planning?

  Raw materials
• Production Planning informs Logistics and Distribution about the products to be delivered based on material availability.
• Supply Chain Planning interacts with Sourcing and Procurement and Production Planning to determine demand and required materials
• Match each supply chain component with its primary interaction(s):

  Supply Chain Planning ↔️ Sourcing and Procurement, Production Planning

  Sourcing and Procurement ↔️ Supply Chain Planning, Production Planning

  Production Planning ↔️ Sourcing and Procurement, Logistics and Distribution

  Logistics and Distribution ↔️ Production Planning
• In a clothing business example, what ensures that winter jackets are delivered to stores before winter?

  Logistics and Distribution
• Cost Reduction in SCM minimizes waste and optimizes resource use
• Improved customer satisfaction in SCM ensures timely and accurate product delivery.
• Which company uses supply chain planning to forecast demand for coffee beans, cups, and syrups?

  Starbucks