Supply chain two

• A supply chain is a system of organizations, people, technology, activities, information, and resources involved in moving a product or service from supplier to customer
• A supply chain is a network of retailers, distributors, transporters, storage facilities, and suppliers that participate in the production, delivery, and sale of a product to the consumer
• The supply chain consists of suppliers, manufacturing centers, warehouses, distribution centers, and retail outlets, as well as raw materials, work-in-process inventory, and finished products that flow between the facilities
• Supply chain management (SCM) is the oversight of materials, information, and finances distributed from supplier to consumer
• SCM involves coordinating the flow of materials within a company and to the end consumer
• Objective of Supply Chain Management:

  • Enhancing customer service
  • Expanding sales revenue
  • Reducing inventory cost
  • Improving on-time delivery
  • Reducing order to delivery cycle time
  • Reducing lead time
  • Reducing transportation cost
  • Reducing warehouse cost
  • Reducing supplier base
  • Expanding depth of distribution
• Importance of Supply Chain Management:

  • Reduce inventories along the chain
  • Share better information among partners
  • Plan in consultation rather than in isolation
• Activities of Supply Chain Management:

  • Strategic decisions: concerning the whole organization, such as manufacturing sites, partnerships with suppliers, products to be manufactured, and sales markets
  • Tactical decisions: focus on cost benefits, industry best practices, purchasing strategies, transportation strategies, and warehouse strategies
  • Operational decisions: affect how products move along the supply chain, involve schedule changes, purchasing agreements, order taking, and product movement
• Decision Phases in a Supply Chain:

  • Supply chain strategy or design: location and capacities of production and warehouse facilities, products to be manufactured or stored, modes of transportation, type of information system
  • Supply chain planning: markets supplied from locations, inventory buildup, subcontracting, inventory policies, market promotions
  • Supply chain operation: activities like allocating inventory, setting order fill dates, generating pick lists, allocating orders to shipping modes, setting delivery schedules, and placing replenishment orders
• The process view of supply chain can be categorized as linking competitive (business) and supply chain strategies
• The competitive strategy defines the set of customer needs which a firm seeks to satisfy through its products and services, including low cost, rapid response, and product differentiation
• Supply chain strategy determines the nature of material procurement, transportation of materials, and manufacture of product or creation of service, distribution of product
• Consistency and support between supply chain strategy, competitive strategy, and other functional strategies is important
• The marketing mix refers to the four key elements of a marketing strategy: product, price, place, and promotion
• Products are commodities and services that solve problems and satisfy the needs of consumers
• Price is the cost of the product that the consumer pays
• Place is where and how the product or service is purchased by customers
• Promotion refers to reaching the target audience with the right message at the right time
• Promotional strategies aim to show consumers why they would need a certain product and the reasons for buying it over other products
• Promotion includes various advertising channels such as word-of-mouth seeding, social networking, print marketing, television commercials, email marketing campaigns, and social media marketing
• Timing plays an influential role in promotional marketing, targeting specific events or seasons to entice consumers to try new products
• Promotional messages should cater to the target audience and distribution channels for successful product distribution
• The supply chain network consists of suppliers, manufacturing centers, warehouses, distribution centers, and retail outlets Raw materials, work-in-process inventory, and finished products flow between these facilities
• It is the collection of physical locations, transportation vehicles, and supporting systems through which products and services are managed and delivered
• All organizations have or can purchase components to build a supply chain network
• Distribution involves moving and storing a product from production to customer stage in a supply chain
• Distribution directly affects cost and customer experience, driving profitability
• A strong and efficient distribution network is crucial for a manufacturer
• Alternate channels of distribution may include distributors, retailers, and advertisements
• Both direct and indirect channels may be used in certain sectors
• Distribution network design involves locating production plants and distribution warehouses
• Determining the best strategy for distributing products to customers
• Factors influencing distribution network design include customer needs and the cost of meeting those needs
• Customer service elements influenced by network structure include response time, product variety, product availability, customer experience, order visibility, and returnability
• Changing the distribution network design affects supply chain costs such as inventories, transportation, facilities, handling, and information
• Design options for a distribution network involve decisions on product delivery to customer location or pickup from a predetermined site, and whether the product flows through an intermediate location
• There are five distinct distribution network designs: Manufacturer storage with direct shipping, Manufacturer storage with direct shipping and in-transit merge, Distributor storage with package carrier delivery, Distributor storage with last mile delivery, Manufacturer or distributor storage with customer pickup
• Manufacturer storage with direct shipping:

  • Product shipped directly from manufacturer to end customer
  • All inventories stored at the manufacturer
  • Information flows from customer, via retailer, to manufacturer
  • Product shipped directly from manufacturer to customers
• Manufacturer storage with direct shipping and in-transit merge:

  • Combines pieces of the order from different locations for a single delivery
  • Information and product flows for the in-transit merge network
• Distributor storage with package carrier delivery:

  • Inventory held by distributors or retailers in intermediate warehouses
  • Package carriers transport products from intermediate location to final customer
  • Outbound orders to the customer can be bundled into a single shipment