Primary Understanding about Supply Chain

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The Supply Chain
A supply chain is the network of all the individuals, organizations,
resources, activities and technology involved in the creation and sale of a
product.
A supply chain consist of a series of activities involving many organization
through which the material moves from initial suppliers to final customers.
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Objectives & Importance
 Objective
SCM is concerned with the efficient integration of suppliers, factories, warehouses and stores
so that merchandise is produced and distributed:
- In the right quantities
- To the right locations
- At the right time
In order to
- Minimize total system cost
- Satisfy customer service requirements
- Face global competition
- Improve standardization
Importance
- help businesses to be more efficient.
- reduce delivery times and improves the experience of buyers increases
customer satisfaction
- lowest cost with highest quality products

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principles of supply chain.
 Dividing Customers into Groups
 Maintaining Differentiation of Products and Delivery on Time
 Setting up a Network for Supply Chain Systems
 Proper Planning of Market Demand
 Creating Cooperation and Commitment with the Supplier Chain
 Using Technology in the Supply Chain
 Supply Chain strategy design
 Supply Chain Planning
 Supply Chain Operation
Decision Phases of a Supply Chain

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Process View
Cycle view
Push/Pull view

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 Cycle View: The processes in a supply chain are divided into
a series of cycles, each performed at the interface between
two successive stages of the supply chain.
 Push/Pull View: The processes in a supply chain are divided
into two categories, depending on whether they are
executed in response to a customer order or in anticipation
of customer orders. Pull processes are initiated by a
customer order, whereas push processes are initiated and
performed in anticipation of customer orders.

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SCM vs Traditional Purchasing
 Traditional purchasing focuses on initial cost; SCM focuses on total
cost of ownership
 Traditional purchasing tries to negotiate the price that is best for the
purchaser; SCM focuses on negotiating a price that is best for the
entire supply chain.
 Traditional purchasing focuses on the flow of goods and information
from the immediate supplier and immediate customer; SCM focuses
on the flow of goods and information from initial supplier to ultimate
customer.
 Opportunities for unethical behavior are enormous and
temptations are high
 Many companies have strict rules and codes of conduct
that define acceptable behavior
 Institute for Supply Management (ISM) has developed a
detailed set of principles and standards for ethical behavior
Ethics in the Supply Chain