Supply Chain: A network or system consisting, of org, people, technology, information, and
everything which is required to move any product or service from supplier to customer.
Multiple organizations are connected and consist of several activities.
Supplier depends on various factors in operations. And known as the vendor who provides goods
and services to a company.
Read the Ford ka case
The flow of the supply chain: Information, product, and funds. The following comes under the same:
Process of the supply chain: - Cycles in Operations: Flow and interaction between connected
parties
1. Customer order cycle – the fulfillment of customer requirements and retailer fulfillment. I.e.
the communication established between, the customer and retailer.
2. Replenishment Cycle – the communication between retailer and distributor/wholesaler.
Here retailers look to replenish their resources and inventory
3. Manufacturing Order Cycle – Interaction between distributor and manufacturer.
4. Procurement Cycle - Material Requirement Planning: Used to generate the procurement
order, i.e., what can be manufactured by myself and what is need to be procured
The cycles mentioned above are known as sourcing be it raw material, work in progress, or more.
Supply chain design is based on 4 aspects:
1. Sourcing
2. Manufacturing
3. Distribution
4. Sales
Strategic level activity: Activity that affects the strategy concerning the supply chain strategy. Long
term.
Tactical Level: Production decisions, competitor analysis. Usually used to gain a USP or competitive
edge. 1 year to 1 and a half years.
Operations level: production plan, demand planning, and forecasting. Daily routine activities.
Process view of the supply chain: It helps in understating the supply chain
The process of the supply chain can be viewed in 2 ways:
1. Cycle View: The 4 different cycles we talked about above. Can be classified into several
activities (Refer to PPT)
2. Push/pull View: It can be done while estimating and forecasting the demand, here it is
decided whether to anticipate, speculate or react to the demand and customer orders
a. Push Process: done based on the anticipating of customer orders. This is done
through demand forecasting. Demand is not known it is forecasted and speculations
are made. Once the product is manufactured, we push them through the supply
chain.
b. Pull Process: It is about looking at actual demand and the execution of the supply
chain activities is based on customer orders. It is reacting to customer demand.
Session 2 – Sept 8
Strategic fit where Strategic level activity is aligned with operational level strategy.
Sourcing planning is the planning of raw material and gross requirements
The flow of all the raw materials and resources in the plan is known as inbound operations
Production operations are all the conversion activities into the plant.
Supply chain strategy –
How to align supply chain strategy to organizational strategy also known as a strategic fit. A
Supply chain strategy is also known as an operational strategy.
The supply chain concept is providing max customer value while maintaining cost. The profit
we are attaining through supply chain operations is known as supply chain surplus.
Demand floor strategy – how to manage the demand flow in the supply chain
Customer service strategy – how well the customers are getting serviced through the supply
chain
Collaborative strategy – how well the supply and organizations are collaborative in terms of
requirements and more. The Bull Whip effect comes here.
Information Technology Strategy – Setting up an IT strategy
Competitive strategy – how to compete in the market, target customer segment, and more.
The role played by supply chain strategy – (Refer to PPT)
Strategic Fit is also referred to as the operation strategy concept of operational resources
and market requirements.
Achieving Strategic fit:
It is a Three Step Process – Refers to
PPT
Implied demand uncertainty: The check of how much uncertainty is there in the market the
supply chain is targeting and not the entire demand.
Responsive supply chain – Responding to a large range of quantities, shorter lead time (Time
spent in orders placed and delivered), able to handle a large range of products through the
supply chain, Able to provide variety, an emphasis on highly innovative products, and can
handle high uncertainty.
To cater to uncertain demands, you must be responsive and in certain demands, we have to
be efficient.
Supply chain efficiency: Focus on reduction of cost.
Increasing costs lower efficiency
Cost-responsive efficiency frontier – Refer to PPT for the graph
Responsiveness spectrum – Refer to PPT for the model
Zone of strategic fit: an attempt to balance efficiency and responsiveness.
SESSION 3
Drivers of Supply chain. There are 6 drivers that enable overall supply chain performance
divided into logistical and cost functional drivers.
Logistical Drivers
1. Facilities – physical locations where the inventory will be stored and manufactured
2. Inventory – The complete set of materials that flows in the supply chain.
3. Transportation – Physical movement of the inventory from point of consumption to
point of origin.
Cross-functional drivers
1. Information – Regarding multiple aspects
2. Sourcing – Deciding on in-house or outsourcing
3. Pricing – MRP
Bull Whip Effect
The phenomenon of forecasting demand. When demand is forecasted it sometimes results
in a lower down the supply chain at retailer or distributor and as the level rises the
demanded number rises
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SCOR model
Consists of 5 activities
1. Plan - Demand/Supply Planning and management
2. Sourcing/Source
3. Make - Manufacturing
4. Deliver – Distribution
5. Return – at both upward and downward levels i.e., raw materials as well as finished
goods with respect to errors, defects, quality, and more
SCOR model has 4 levels of process – Refer to PPT
19-10-2022
Typology of Supply Chain
Characterizing processes in Nominal properties (e.g., a product is storable or not), ordinal
properties (e.g., an entity’s power or impact on decision-making is regarded as higher or
lower than average), or cardinal properties (i.e., the attribute can be counted as, like the
number of legally separated entities within a supply chain)
Two types of Attributes:
Functional Attributes:
Functional attributes: types-
1. Procurement Type
2. Production Type
3. Distribution Type
4. Sales Type
Structural Attributes -
