Supply Chain ManagementLecture One
IntroductionEvery organization must make a product or a service that someone values.In the global competition in today's customer demands on high quality, increased variety of productsand services faster, has been caused increasing pressureson organizations.Today success of any organization is not only dependent on managing its relationships with its customers but also is dependent on considering suppliers group.2
IntroductionMost organizations function as part of larger supply chains.Supply chains integratingsuppliers, manufacturers, distributors and retailers, such that products are produced and distributed at the right quantities, to the right location, at the right time, with the mutual goalsof minimizing system wide costs and satisfying customer service requirements.3
Supply Chain … 4SuppliersMarket intermediariesCompanyCompetitorsEnd usersA group ofinter-connectedparticipating companies that addvalue to a stream of transformed inputs from their source oforigin to the end products or services that are demanded by thedesignated end customers.
Supply Chain ...A supply chain is the systemof organizations, people, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform raw materials and components into a finished product that is delivered to the end customer. Linked through physical, information, and monetaryflows 5
Sharing information from customers and suppliers. It is both directions.Supply chain ... FlowsInformation FlowMonetary Flowstarting from the raw materials to the end product to the customerthe funds flow from the consumers to the manufacturer, ... to supplier.Physical Flow6
TransactionalSupplier Relationship7… adversarial relationships … each party (supplier / customer) try to get much benefitSuppliers are not friends… no long term commitment to a supplier … encourages them to stay competitive … allow having better supplierShort term contracts and competitive tendering… supplier with reduced price is preferred … intend to reduce piece cost yearlyCost is everythingBasic Assumptions
TransactionalSupplier Relationship8Benefits•Efficient… maintains competition between suppliers•Flexible… add extra suppliers or turn-off some suppliers according to demand changes•Technology… take the advantage of innovations of any supplier
TransactionalSupplier Relationship9Criticism1. Costs may not be reduced:
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