BASIC CONCEPTS

AND OVERVIEW OF
SUPPLY CHAIN
MANAGEMENT
CHAPTER 1
Supply Chain
• it is a network of suppliers, manufacturers,
assemblers, supply and delivery centers, and
logistic installations that perform functions such as
material sourcing, processing, and shipment to
buyers of those materials of an intermediate or
finished product.
• It is the line up of companies tat market goods or
services
Supply Chain
• a network of organizations, resources, activities,
and technologies involved in producing and
delivering a product or service.
• It includes suppliers, manufacturers, distributors,
retailers, and customers.
ESSENTIAL
FEATURES OF
SUPPLY CHAIN
MANAGEMENT
Integrated Behavior
•Supply chain management integrates
stakeholder
•integration between the client and
provider
Mutually Sharing Information
• In particular for planning and surveillance
• processes, an efficient SCM exchange of
information between channel participants is
needed.
Mutually Sharing Channel
Risk and Rewards
• Effective SCM often includes reciprocal channel
risks and incentives to have a competitive
benefit.
• The long-term emphasis and coordination
between supply chain participants should be
risk-sharing and rewards-sharing.
Cooperation
• The successful SCM requires cooperation
between the channel participants.
• Cooperation refers to the company’s
coordinated, identical, or complementary
operations in an enterprising relationship, in
order to achieve collective reckoned, superior
results.
Focus on Serving Customers
• Supply chain is effective where all supply chain
members serve consumers with the same
objective and concentration. A mode of policy
convergence has the same aim and focal point
for supply chain members
Integration Processes
• Implementing SCM requires the convergence
systems from the supply chain to production and
delivery.
• Integration can be achieved under cross-
functional conditions, by staff of plant suppliers,
and service provided by third parties.
Partners to Build and Maintain Long-
term Relationship
• The objective of successful partnerships is to merge
channel policies to reduce duplication and overlap in
the search for a degree of cooperation that makes
partners more efficient at lower costs.
• Integration of policies is possible if the chain members
have clear cultures and management strategies
Benefits of Supply
Chain
Management
1. Build stronger partnerships and support
with clients
2. Provides better distribution processes,
with less delay, for demanded goods and
services
3. Increase efficiency and functions for
companies
4. Lowers shipping and warehouse costs
5. Eliminates cost directly and implicitly
6. Supports the shipping at the right spot
with the right goods
7. Enhances asset management and
encourages the effective implementation of
just-in-time inventory models
8. Assists businesses in responding to global
dynamics, economic upheavals, growing
market preferences, and associated
disparities
9. Assists businesses in the supply chain to
reduce duplication, eliminate risks,
and achieve efficiency
Functions of
Supply Chain
Management
1. Strategic Level
• Strategic network optimization involving warehouse,
fulfillment center, and facilities number, locations, and
scale
• Strategic relationship, contact networking for crucial
details, technological enhancements such as cross-
docking, exporting directly, or logistics with third
parties (with vendors, dealers, and consumers)
1. Strategic Level
• Management of inventory life cycles to optimally
combine new and current goods in the supply chain
and capacity management
• Chain operations for information technology
• Coordination of the whole corporate plan with
strategy supply
2. Tactical Level
• Sourcing and other procurement decisions
• Decisions on production including the
concept of contracts, schedules, and plans
for the operation
• Purchasing choices including inventory size,
location, and consistency
2. Tactical Level
• The strategy of transport including pace, routes,
and contracting
• Competition benchmarking of all processes
including best practices around the business
• Fees with milestones
• Customer demand and customer habits focus
3. Operational Level
• The coordination of the allocation of daily output for
each production plant in the supply chain (minute by
minute)
• Preparation and forecasting of demand, alignment of all
customers’ needs, and prediction and provision-sharing
with all suppliers
• In coordination with all vendors, the supply preparation,
including existing inventories and forecast demands
3. Operational Level
• Production processes involving materials use and finished
products streaming
• Outbound operations, all tasks including customer efficiency,
warehousing, and transport
• Pledging orders for all retailers, productions, fulfillment
center, and other clients on all restrictions within the supply
chain
• All cases of transit disruption from manufacturing level to
supply level, and plan for consumer repayment through
retention of business losses by the insurance provider
Factors Affecting
Supply Chain in
Hospitality
Industry
Customer satisfaction
• is critical in the hotel industry. This has a
detrimental impact on supply chain
management.
• Customer-related activities including food and
beverage production and service, housekeeping,
and front office administration are critical in the
hotel industry
Management systems
• of different types, such as hotel operators,
franchisees, chain hotels, and so on, are various
control systems that have varied implications on the
supply chain management.
• These factors add to the specific difficulties with
assets that are often disputed and handled differently
Current Market Trends
• indicates that computerized property
management systems are utilized but solely for
front office administration and reservation.
• Interconnections across office operation,
whether in the hotel front office, back office, or
buying process, are rare in most hotels.
Challenges of the
Hospitality Industry
related to Supply
Chain
Raw Material Cost
• The cost of purchasing raw materials in the hotel
industry is prohibitive.
• The vast majority of the hotel’s consumables are
organic.
• A hotel store handles massive amounts of goods at
meager (small / insufficient / not enough) prices.
• Much of the direct cost of materials is spent on these
items.
Material Ordering Cost
• Hotel owned by the same business may
purchase the same products from the same
vendors at different rates. The costs of
transportation and other associated
expenditures have also been reduced
substantially.
• Supply chain management may result in
significant cost reductions
Inventory Handling
• The required product forecast is very uncertain.
The purchasing department stockpiles large
quantities of goods and does not deliver the best
items to the user departments on time
• This is a common problem that leads to higher
expenses
Emergency Purchases
• Due to lack of preparation, emergency
purchases are the norm rather than the
exception.