Introduction

to

ECT 7240

Supply Chain Management

Definition

A firm’s Supply chain consists of all processes and

activities that are necessary to bring products to market.

It includes

procurement to acquire raw material;

manufacturing to convert raw materials into

components and final products; and

distribution to respond to market demand

The objective of supply chain management is to

coordinate and integrate all these processes and

activities so as to meet customers’ expectations in the

most cost-effective way

• SCM is a set of approaches to manage the SC, i.e.,

• to efficiently integrate suppliers, manufacturers, warehouses, and

stores, so that merchandise is produced and distributed at the right

quantity, to the right location, and at the right time.

• “Efficiently means “minimizing” the system-wide cost while satisfying

service level requirement, or maximizing the total profit.

A process overview: manufacturing

SCM activities and main business processes

(Source: Ernst and Young Consulting)

Smile Curve 微笑曲线

Source: Adapted from the Stan Shih �Smile Curve� concept.

Supply Chain

Example 1: Park’n Shop

Customers Request:

Buying detergent,

towels, heaters, …...

Park’n Shop

Stores

Park’n Shop

or third-

party

distribution

centers

Procter & Gamble

(Thail.)

Plastic ProducerYarn Producer

Da-Fa Textile, Inc. (China)

Philico Factory (Malaysia)

Electronics Components Producer

Chemical Producers Color suppliers

Package Producer

Metal Processors

Supply Chain Examples

Consumer

Retailer

Mfg.

Mat'l Flow

VISA®

Credit Flow

Supplier

Supplier Wholesaler

Retailer

CashFlow

OrderFlow

Schedules

Information

After sales support

Warehouse

Demand-Supply Web

Pietra Rivoli holds up the Fort Lauderdale t-shirt

that guided her journey.

Four Components of SC

Materials flows (inventory)

Transportation

Facilities

Information flows

Cash flows

Looking at these flows -- logistics

Logistics Management and Supply Chain

Management: what are the differences?

• They are ALMOST the SAME THING!

• … but,

– Supply chain include Logistics - containing high level activities

– SCM emphasis more on relationship, and is used more often

when talking to customers and other partners on the

chain/channel, e.g., cost/profit-sharing, choosing suppliers,

coordinating channel…

– Logistics Management focuses more on Materials Flow execution

• Moving, storing, …

– We have a logistics industry but no SCM industry

Logistics Management and Supply Chain

Management: what are the differences?

… often they overlap

SCM activities actually are logistics

activities

Because, interactions between companies

– partners thru 3 flows - two of them are

logistical nature

Course Plan (tentative)

Session (Date) Process analysis

1 (7/9) Intro., Push & Pull Processes, Demand Forecasting: Chapters 1/7

2 (14/9) Demand Forecasting (continued) and Intro to MRP/DRP: Chapter 7

3 (21/9) Intro. To Inventory Management: Chapter 9

4 (28/9) Managing Uncertainty in SC + : Chapter 11

5(5/10) Design Supply Chains for Short Life Cycle Products: Chapter 12

6 (12/10) Midterm Exam. (90 min) +

7 (19/10) Determining the Optimal Level of Stock: Chapter 12

8 (2/11) Managing risk in operations & Postponement. Chapters 11/12

9 (9/11) Beer Game +

10 (16/11) Supply Chain Coordination/Integration: Chapter 17

11 (23/11) Supply chain coordination: contracts

12 (30/11) Transportation in a SC & Revenue Management: Chapters 13/15

13(7/12) Supply Chain Strategies and Network Design: Chapters 2/3/5

14 (14/12) Final Exam. (open-book/notes)

(Time allowed, green SC will be discussed)

Course Objectives Introduce the SCM

vocabulary

Understand major

qualitative features

regarding the operations of

a SC

Provide some basic SCM

analytical tools

Gain insights into the IT

implications

Textbooks and Readings

Required textbook:

1. Chopra S. and Meindl, P.: Supply Chain Mgmt,

Strategy, Planning & Oper. (3rd edition)

Reference books

1. Designing and Managing the Supply Chain,

Simchi-Levi, D, Kaminsky, P & Simchi-Levi E.

Mcgraw-Hill, 2009.

2. Matching Supply with Demand: An Introduction to

Operations Management, 2nd Edition, by Gerard

Cachon and Christian Terwiesch. McGraw-Hill,

2009.

Grading

There are three major parts to your final grade:

Individual:

There are 4 major parts to your final grade:

Case Preparation (I.e., case reading)

o The instructor will present 3 cases in class.

o These cases are typically long and contain complicated scenarios.

o 2 weeks before the case presentation, you are given a set of questions.

o You should hand in your answers to these questions prior to the class in which we will discuss the case.

o Any late submission will be discarded and marked zero. Those cases will be tested in the final examination.

Assignments (Two Sets) 18%

Case preparation 12%

Midterm (open book/notes) 20%

Final Examination (open book/notes 50%

Make-up

exams are not

offered.

Grading

Assignments

o They consist of short case studies and homework. Assignments

will be graded. Only only accept electronic submission is

accepted (via the course email), and the score to later

submission will be discounted according to the number of days of

lateness.

Zero tolerance to plagiarism (both parties will be equally penalized).

Final Exam

Final is open-book

Textbooks, notes, everything except …

Combination of quantitative & qualitative questions

May include questions drawn from the cases

Course Logistics

TA:

Note handouts – also available online

My Tel No: 2609-8310, email: yhchen@se.cuhk.

Office Hrs: TBD, Office: Engg-II, 507

Class website www.aect.cuhk.edu.hk/~ect7240

Login ID: ECT7240, password: cEt7240

Teaching Method

Lectures

Topics

Case analysis

Assignments

Game playing (by applying what you

have learnt)

Mathematics: Simple algebra, Basic

Probability & Stat.

Quantitative > Qualitative