Principles of
Global Supply Chain Management
Assoc.Prof.Dr. Khuu Thi Phuong Dong
School of Economics, Can Tho University
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What is supply chain management?
Product Flows
Producers
Wholesalers
Processors
Distributors
Retailers
Consumers
Information Flows
Finance Flows
Upstream agents = Input Suppliers
Downstream agents = Customers
Q1: First-Tier Customers? Second Tier Customers?
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Golan et al. (2004)
What is supply chain management?
Product Flows
Producers
Wholesalers
Processors
Distributors
Retailers
Consumers
Information Flows
Finance Flows
A network of connected and interdependent organizations mutually
and cooperatively working together to control, manage and
improve the flow of materials and information from suppliers to
end users (Christopher, 2011)
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What is supply chain management?
[Supply Chain Management plays a significant role in the development of
civilization. It is much about managing suppliers as about managing customers
– must consider both sides.]
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What is supply chain management?
Main Objects of SCM:
 Mitigate risks
 Supply monitory
 Scheduling
 Supplier selection
 Storage/inventory/logistics
 New ways of adapting into market
 Information flow and products management
- Just in Time
- Trustworthy
- Transparency
- Sharing Information
- Integrating
- Exploring Information Technology
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What is supply chain management?
Finance Flows
• Financial services are based on cooperation in the supply chain with
at least 3 parties
• Financial institutions link to the SC offering a range of technical,
business and financial services that are build on the relationships in
the chain
• Chain or service supporters: banks or other credit providers, input
suppliers, labour, transport, grading, storage, packaging, research,
training, advice, advertising
• The total environment: chain actors, chain supporters and chain
context.
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What is supply chain management?
Finance Flows
• SCF - financial services and products flowing to and/or through
supply chain participants to address and alleviate driving constraints
to growth
• At least 3 parties are involved: a buyer, a seller and a financial
institution
• An agreement covers 4 aspects:
• the product
• the financial service
• information exchange
• risk management
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What is supply chain management?
Finance Flows
SCF is more than just finance
• Besides financial services, SC supporters provide other services such
as training, information management, monitoring which leads to
efficiency and effectiveness
• SC actors get better access to financial services to improve their
business
• Financial institutions can develop new markets for their services
• This stimulates economic development and poverty reduction
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What is supply chain management?
4R of Christopher (2001)
 Responsiveness
 Resilience
 Reliability
 Relationships
The supply chain should support the
satisfaction of end-user requirements
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Principles of Global SCM
Background
(Bernard et al., 2002)
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Principles of Global SCM_Quality control
Only Required by…
Importing
countries
Food Safety Laws
Background
Required by…
High Standards
Markets (HSM)
Traceability
Safety & Quality
Country of Origins
Laws
Sanitary & Phytosanitary
Regulations (SPS)
Quality Assurances
Certificates
(Charlebois et al., 2014; David & Bailey, 2002)
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Principles of Global SCM_Quality control
Background
Japan
Antibiotics?
ASC/GAP/BAP
certificate?
Producers
Origins???
USA
HACCP
certificate?
EU
Vietna Thailand
m Indonesia
Serious pressures from importing countries
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Principles of Global SCM_Quality control
Complicated in Product Flows Management
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Principles of Global SCM_Quality control
Evidences: Vietnamese shrimp’s Supply chain
Local side Global side
Middlemen
Collectors
Farmers
Consumers
Retailers
Brokers
Traders
Processors
Importers
(Tran et al., 2013; Loc, 2006 and Suzuki & Nam, 2018)
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Principles of Global SCM_Quality control
Can Bypass Middlemen? No
Brokers
Collectors
Farmers
Processors
(Kusumawati et al., 2013, Lap et al., 2015)
80%
Brokers
Collectors
Processors
Supply chain depended on middlemen
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Principles of Global SCM
Information Flows Management
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Principles of Global SCM
Information Flows Management
Want
and
right –
to
know
Consumers
But… Retailers driven and “Need to know basis”rule
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Principles of Global SCM
Information Flows Management: Depend on
purposes/willing to share
 Call for collaboration/Integration
 Invest/Consider to invest to information technology
systems
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Principles of Global SCM
Finance Flows
• Input suppliers: need working capital to keep their business
going on
• Farmers/Fishers: pre-finance crops and credit for investments
• Farmer/Fishers organisations: administrative controls and high
administrative costs leading to inflexibility
• Traders: need working capital with high turnover, credit to
invest (vehicles, warehouse, equipment)
• Processors: need working capital and credit to invest, lease
equipment, medium term loans
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Principles of Global SCM
Sources of financing?
It is often difficult for supply chain actors to have access to finance
from commercial banks (formal credit) due to:
• Collaterals and loan related requirements
• Risks associated with a loan contract
• Production risks: weather, quality, storage, etc.
• Price risks: fluctuation in market prices, seasonality
• Market risks: in ability to sell on time
• Default risks: non-repayment,
• Exchange risks: fluctuation of exchange rates
• Other risks: political, legal, social
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Principles of Global SCM
Sources of financing?
• The problems of asymmetric information and formal credit
accessibility
• Are we living in the world of asymmetric information?
• AI leads to high cost of financing
• AI leads to less credit available for supply chain actors
• Which feasible ways to solve AI problems?
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Principles of Global SCM
Financing supply chain actors: point of attention
• Rural agri-households and microenterprises are part of a bigger
economic system
• Increasing incomes of microenterprise/rural agri-household
incomes may require interventions beyond their activities
• SC actors can cooperate and link themselves to others in the
chain
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To sum up…
Supply chain management: all activities supports to meet the
requirements of end-users.
Including: product flows, information flows and finance flows
Collaboration, Integration, and Relationship are the most
important
From the supply side perspectives: difficult to call for collaboration
and integration.
From the demand side perspectives: too complicated requirements
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THANK YOU FOR YOUR ATTENTION
Q & A?
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