Chapter 1:
21st Century Supply Chains
Supply Chain Management:
What Is It?
Supply Chain Management:
What Is It?
Logistics. =
Supply Chain Management.
Back in the day…
Back in the day…
But things began to change…
$$$$
But things began to change…
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But things began to change…
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The Value of Inventory
$
$
$
$
.
.
.
The Value of Inventory
$
$
$
$
The Value of Inventory
.
.
.
The Value of Inventory
.
.
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The ValueCarrying
of Inventory
Inventory
Costs
$
.
.
The Value of Inventory
• Housing the inventory
(the truck trailer).
• Security (trucks are
hijacked).
• Taxes.
• Insurance.
The Value of Inventory
• Housing the inventory
(the truck trailer).
• Security (trucks are
hijacked).
• Taxes.
• Insurance.
$1,000,000?
$500,000?
$750,000?
The Value of Inventory
• The value of inventory becomes very
important in supply chain management.
Back in the day…
Back in the day…
Supply Chain Management:
What Is It?
Logistics.
Supply Chain Management.
Business Logistics
Goods
Seller
Services
Buyer
Information
Money
.
Business Logistics
Goods
Seller
Services
Information
Money
Buyer
Business Logistics
•
•
•
•
•
•
•
•
Customer service
Demand forecasting
Inventory
management
Seller
Logistics
communication
Materials handling
Order processing
• Plant and
warehouse site
selection
• Packaging
Buyer
•
•
•
•
Procurement
Reverse logistics
Traffic, transportation
Warehousing, storage
Business Logistics
Goods
Seller
Services
Information
Money
Buyer
Supply Chain Management
Seller
Buyer
Flow of
goods, services
information,
money
Supply Chain Management
Supplier
Seller
Buyer
Supplier
Supplier
Flow of
goods, services
information,
money
Supplier
Supply Chain Management
What do we have?
Supplier
Supplier
Supplier
Seller
Buyer
Supplier
Supplier
Supplier
Supplier
An integrated supply chain
Flow of
goods, services
information,
money
.
.
Supplier
Supply Chain Management
What do we have?
Supplier
Supplier
Supplier
Seller
Buyer
Supplier
Supplier
Supplier
Supplier
An integrated supply chain
Flow of
goods, services
information,
money
Business Logistics
Goods
Seller
Services
Information
Money
Buyer
Supplier
Supply Chain Management
Supplier
Supplier
Supplier
Seller
Buyer
Supplier
Supplier
Supplier
Supplier
An integrated supply chain
Flow of
goods, services
information,
money
One More Thing…
End of Program.
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Lee Scott
Wal-Mart’s
Chief Executive Officer