1. Agenda of Week II. Introduction to SCM Purposes : • Understanding the definition of SCM • Analyzing SCM through system approach. 1 2 3 4 Review of week 1 Definition of SCM Objective of SCM Structure and functions of SCM • Office and contact point • Education • Research interest • Visibility • Examples • What is SCM • Diagram • 3PL • Network • Logistics • Players in SC • Physical vs. Cyber • Organically functioning

2. Review of Week I. Introduction Purposes : • Understanding the general aspects of SCM lecture through introduction of professor and whole class. 1 2 3 Professor Introduction Lecture Issues Modules • Office and contact point • Education • Research interest • Module I: Theoretical SCM • Module II: SCM issues • Lecture site • Text book • Lecture structure

3. What is SCM? • Diagram for typical supply chain Product Design Suppliers Manufacturer 3rd party logistics company Retailers Wholesalers Distributors Customers

4. Definition of SCM • Supply chain • Chain relationship among companies which participate in providing a final product for customers • TraditionallyManufacturer is the master of supply chain and suppliers, distributors, wholesalers, and retailers are included • CurrentlyProduct design, customers, customer services are included • Supply chain network

5. Definition of SCM • Supply chain Management • To manage the whole supply chain in order to achieve some objectives • To decide the parameters (such as quantity, quality, price, and delivery date etc.) between two players in supply chain • Logistics • To concentrate on moving the products including parts, raw materials, w.i.p., and final products

6. Objectives of SCM • Visibility • Through supply chain • To make Whole SC visible to all who have some interests in an industry • To integrate the power of all players in SC to optimize the SC performance • To maximize the customer satisfaction • Example: Television, Pizza

7. Structure of SCM • Players in supply chain • Logistics infra • Seaport, airport, railroad, road, warehouse, handling facilities • Vessels, cargos, trains, trucks etc. • Logistics policy, laws, regulations etc.

8. Physical SC vs. Cyber SC • Information technology • e-Business • e-Commerce • Cyber SC • Supply chain which is made up of e-business systems and e-commerce systems • Each player is e-business and it is connected by e-commerce • Cyber chain controls and manages physical chain

9. Functions of SCM • Inbound logistics • Product design based on feedback from customer service area • Timely procurement of quality raw materials and parts at a ‘reasonable’ price • Production/operations • Production of products effectively and efficiently to satisfy divergent customer needs • Innovation of service system • Technology improvement vs. process improvement

10. Functions of SCM • Outbound logistics • Timely distribution to correct destinations of correct quantity at a ‘reasonable price’ • Distributed quantity, destination, compensation for distribution, and penalty etc. • Art of delivery • Marketing and customer service • Fast and accurate identification of customer needs and reflection of them to products • Progress in information technology and telecommunication networks

11. Functions of SCM • Inventory management • Raw materials, parts, work-in-process, and final products • Safety stock model, EOQ, EPQ • News vender model, stochastic news vendor model, MRP, JIT