College of Economics and Business Administration
Course Code: BSSL1208
Principles of Supply chain
and Logistics Management
1
Chapter 1
AN OVERVIEW OF
SUPPLY CHAIN & LOGISTICS
MANAGEMENT
Chapter 1
Learning Objectives
You should be able to:
• Define logistics, supply chains, and supply
chain management
• Explain the differences between logistics and
supply chain
• Describe the importance of supply chain
management
• Describe the brief history and current supply
chain management trends
• Describe the fundamental
Chapter Outline
• Introduction
• Supply Chain& Logistics Defined
• Why study supply chain and
logistics?
• The Importance of Supply Chain
Management
• The Evolutions of Supply Chain
Management
•
Supply Chain & Supply chain
Management (SCM): Definition
“Supply Chain Management unifies a network of connected but
interdependent organisations, mutually and cooperatively working together to
control, manage and improve the flow of material and information, from the
suppliers to the end users, while increasing value to the end users delivering
at less cost as a whole”.
Supply Chain Management In 6 Minutes | What Is Supply Chain Management? |
Simplilearn
Supply Chain
Principles of Supply Chain and Logistics Management (BSSL1208)- SPRING 2023-UTAS
Evolutions of Supply Chain Management
Evolutions of Supply Chain Management
• 1950s-1960s
U.S. manufacturers focused on mass production techniques
as their principal cost reduction and productivity
improvement strategies
• 1960s-1970s
Introduction of new computer technologies lead to
development of Materials Requirements Planning (MRP) and
Manufacturing Resource Planning (MRPII) to coordinate
inventory management and improve internal
communications
Evolutions of Supply Chain Management
1980s-1990s
Intense global competition led U.S. manufacturers to adopt:
Just-In-Time (JIT)-The just-in-time (JIT) inventory system is a management strategy
that aligns raw-material orders from suppliers directly with production schedules
Total Quality Management (TQM) Total quality management (TQM) is the continual
process of detecting and reducing or eliminating errors in manufacturing,
streamlining supply chain management, improving the customer experience, and
ensuring that employees are up to speed with training.
Business Process Reengineering (BPR)-BPR aimed to help organizations
fundamentally rethink how they do their work in order to improve customer service,
cut operational costs, and become world-class competitors.
Customer Relationship Management (CRM) Customer relationship management is one
of many different approaches that allow a company to manage and analyze its own
interactions with its past, current and potential customers.
Evolutions of Supply Chain Management
2000s and Beyond
• Focus on improving supply chain capabilities with initiatives such as:
• Third-party service providers (3PLs)
• Integrating logistics. It is a unique business management process that governs
the flow of materials, information and goods from the point of origin to the point of
arrival, in which all management activities are interconnected and
interdependent.
• Client/server SCM software - Enterprise Resource Planning
Today
• Emphasis is being placed on the environmental and social impacts of supply
chains
• Sustainability - ability to meet the needs of current supply chain members
without hindering the ability to meet the needs of future generations
• Triple bottom line – taking care of people, planet and profits
Discussion:
Discuss the benefits of Supply
chain.
Elements of Supply chain
management
Laboratory Information Management System (LIMS), RFO stands for request for
offer. RFI stands for Request for Information, Last in, first out (LIFO), First in first
out (FIFO)
Logistics Management:
Definition
Logistics management is that part of supply chain management
that plans, implements, and controls the efficient, effective
forward and reverse flow and storage of goods, services and
related information between the point of origin and the point of
consumption in order to meet customers' requirements.
([Link]
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 Center for Transportation & Logistics
Logistics is the function responsible for moving materials
through their supply chain.’ Donald Waters, Global Logistics,
2010.
The goal of Logistics
It aims to achieve a target level of customer service at lowest possible cost
Logistics consider wide set of activities dedicated to transformation & circulation
of goods (e.g., Warehousing; Materials handling; Inventory; Packaging
and Recycling
Freight Transport: inbound and outbound logistics; Information sharing)
[Link]
Logistics versus SC
Logistics & SCM: Why do we care?
Supply Chains & Logistics . . .
Span across the globe and cannot be managed as an
isolated function.
Have become critical to any organization’s
operations locally and internationally.
Connect functions, divisions, and business
units within and across firms
Cost of managing these functions is huge, and huge
opportunities to be unique through these activities.
Logistics & SCM: Their Economic Impacts
Economic Utility
Apart from the macro level economic impacts, logistics can affect individual consumers.
These impacts can be illustrated through the concept of economic utility, which is the
value or usefulness of a product in fulfilling customer needs or wants.
The four general types of economic utility are possession, form, time, and
place;
Possession utility
refers to the value or usefulness that comes from a customer being able to take
possession of a product
Form utility
refers to a product’s being in a form that can be used by the customer and is of
value to the customer.
Place utility
refers to having products available where they are needed by customers;
products are moved from points of lesser value to points of greater value.
Time utility
refers to having products available when they are needed by customers.
Importance of Supply Chain Management
Costsavings and better coordination of
resources are reasons to employ Supply Chain
Management
SCM reduces safety stocks and costs due to
coordinated planning and better sharing of
information
Firms with large system inventories gain the most
from successful SCM
Lower purchasing & carrying costs
Better product quality
Higher customer service levels
Why study Supply Chain and Logistics?
1. Career Stability
2. Immense Demand
3. Job Prospects in More
Locations
4. High Salary
5. Low Barriers to Entry
6. Career Growth Opportunities
7. Wider Industry and Workplace
Selection
8. Career Satisfaction
9. Transferrable Skills
10. International Opportunities
Activity
Design an supply chain for following companies.
• Manufacturing company of leather
• Suppliers of Auto Parts to various other related parties
• Logistics companies
• Customers as wholesalers
• Customers as Retailers
• End Consumers
Note: The Supply chain design should include all the parties including the
3PL’s.
References and Sample questions
References:
1. Principles of Supply Chain Management: A Balanced Approach by Wisner, Leong, and Tan, ISBN 13:
978-0-538-47546-4/ISBN 10: 0-538-47546-3
2. Contemporary Logistics by Paul R. Murphy, Jr.A. Michael Knemeyer, ISBN 13: 978-0-13-451925-8/
Pearson Education Limited
Questions:-
3. What is supply chain management's primary goal?
4. Distinguish the supply chain from logistics.
5. Using THREE examples of advantages a company that controls its supply chain effectively may
realize, define the term "value-enhancing benefits" and then explain what it means.
6. What are supply chain management's primary elements?
7. Describe the professional options open to graduates in the supply chain.
8. What do TQM, BPR, JIT, and CRM mean?
9. What is a third-party service provider's function? (3PLs)
10. Give your own concise definition of supply chain management.
CONTACT INFORMATION:
Name of the Staff: Office::[Link] Sultana.
Email: [Link]@[Link]
VERSION HISTORY
Version No Date Approved Changes incorporated
02 22/1/2024
29
