To provide an overview of basic concepts of logistics and supply chain management Instructional Objectives
After completing this chapter, you should be able to:
• Define supply chain
• State the objectives of supply chain management
• Describe the importance of supply chain management
• Elaborate the cycle view of the supply chain processes
• Illustrate the push-pull view of the supply chain processes
At the end of this chapter, you are expected to:
• State supply chain
• Describe the objectives of SCM
• Appraise the significance of supply chain management
• Examine the cycle view of the supply chain processes
• Demonstrate the push-pull view of the supply chain processes
One of the world’s largest manufacturers…show more content… The chip had to work, so there were no service trade-offs that could be made. Being a single component, there was also no way to pay less in the way of duties. Intel had already whittled packaging down to a minimum and with a high value-to-weight ratio, the chips’ distribution costs could not really be pared down any further.
The only option was to try and reduce levels of inventory which were, at that point, kept very high in order to support a nine-week order cycle. The only way Intel could find to make supply chain cost reductions was to try and get this cycle time down and therefore reduce inventory.
The Path to Cost reduction:
Intel decided to try what was considered an unlikely supply chain strategy for the semiconductor industry: a true make-to-order scenario. The company began with a pilot operation using a manufacturer in Malaysia. Through a process of iteration, they gradually sought out and eliminated supply chain inefficiencies to incrementally reduce order cycle time. Further improvement initiatives included:
• Reduced the chip assembly test window from a five-day schedule to a bi-weekly, 2-day-long…show more content… In the case of INTEL, one of the major objectives of supply chain management, that is overall cost reduction is achieved through decisions at the design, planning and operational levels of supply chain. Exhibit 1.1.1 provides an overview of supply chain issues, strategies and benefits.
In the following sections, the basic concepts of supply chain management, its objectives, significance and different process views of a supply chain are elaborated.
1.1.1 Basic Concepts of Supply Chain Management
A supply chain consists of all the people or entities who are directly or indirectly involved, in fulfilling customer requirements. Specifically, it is a sequence of suppliers, transporters, warehouses, manufacturers, wholesalers/ distributors, retail outlets and final customers.
Supply chain management (SCM) is an integrated part of strategic management that includes the flow of material, funds and information throughout the network to deliver values to the