ISYS1000 Lecture Notes - Lecture 9: Vertical Integration, Reverse Logistics, Mass Customization
29 May 2018
School
Department
Course
Professor
Module 9 – Supply Chai Maageet
LEARNING OBJECTIVES
13.1 Supply chains
13.2 Supply chain management
13.3 IT support for supply chain management
13.1 SUPPLY CHAINS
Modern organisations are increasingly concentrating on their core competencies and on
becoming more flexible and agile. They are relying on other companies to supply necessary
goods and services. This trend towards relying on an increasing number of suppliers has led
to the concept of supply chains.
SUPPLY CHAIN
The coordinated flow of materials, information, money and services from raw material
suppliers, through factories and warehouses, to the end customers. It includes the
organisations and processes that create and deliver products, information and services to
end customers.
Supply chain visibility
The ability of all organisations in a supply chain to access relevant data through the supply
chain.
STRUCTURE AND COMPONENTS OF SUPPLY CHAINS
Upstream
- Sourcing or procurement from external suppliers
- Select suppliers; develop pricing, delivery, and payment
- Manage inventory, receive and verify shipments, transfer goods to manufacturing
facilities
Internal
- Packaging, assembly, or manufacture products
- Schedule activities necessary for production, testing packaging, and preparing goods
for delivery
- Monitor quality levels, production output, and worker productivity
Downstream
- Receive customer orders
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- Develop a network of warehouses
- Select carriers
- Generate invoices
Tiers of suppliers
A supplier may have one or more sub-suppliers; the sub-supplier may have its own sub-
supplier(s)
Supply chain flows
Material flows
The physical products (raw materials, supplies) that flow along the chain
- Include reverse flows (or reverse logistics)
- Returned products, recycled products, and disposal of materials or products
Information flows
Consist of data related to demand, shipments, orders, returns, and schedules
Financial flows
Involve transfer of money, payments, credit card information
13.2 SUPPLY CHAIN MANAGEMENT (SCM)
FUNCTION/GOAL OF SCM
Function
To plan, organise, and optimise the various activities performed along the supply chain in
order to maintain partnerships and processes, providing an operational challenge.
Goal
Reduce the problems, or friction, along the supply chain
SCM UTILISES INFORMATION SYSTEMS
- SCM systems are often a type of inter-organisational IS (IOS)
- IOSs enable business partners to perform numerous tasks:
o Reduce costs of routine business transactions
o Improve the quality of the information flow by reducing errors
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Document Summary
Modern organisations are increasingly concentrating on their core competencies and on becoming more flexible and agile. They are relying on other companies to supply necessary goods and services. This trend towards relying on an increasing number of suppliers has led to the concept of supply chains. The coordinated flow of materials, information, money and services from raw material suppliers, through factories and warehouses, to the end customers. It includes the organisations and processes that create and deliver products, information and services to end customers. The ability of all organisations in a supply chain to access relevant data through the supply chain. Select suppliers; develop pricing, delivery, and payment. Manage inventory, receive and verify shipments, transfer goods to manufacturing facilities. Schedule activities necessary for production, testing packaging, and preparing goods for delivery. Monitor quality levels, production output, and worker productivity. A supplier may have one or more sub-suppliers; the sub-supplier may have its own sub- supplier(s)
