Chapter 9 - Supply chain management: Managing business-to-business interactions. After reading the material in this chapter, you should be able to: Explain the motivating forces behind the adoption of supply chain management (SCM), list examples of how customer actions affect suppliers and how supplier actions affect customers, explain the seven critical decision areas of SCM,. | Chapter 9 Supply Chain Management: Managing Business to Business Interactions Learning Objectives Explain the motivating forces behind the adoption of supply chain management (SCM). List examples of how customer actions affect suppliers and how supplier actions affect customers. Explain the seven critical decision areas of SCM. Describe the decisions that constitute the logistics network configuration. Describe an example of a supply chain and identify points of interaction between buyers and suppliers. Explain the pros and cons of outsourcing supply chain services. Explain the bullwhip effect and its possible causes. Describe risk pooling and the implications it has for distribution networks. Explain the current trend affecting supply chain management. 9- Generic Supply Chain Supply Chain – Encompasses all activities associated with the flow and transformation of goods from the raw material stage (extraction) through to the end user, as well as the associated information flows. . | Chapter 9 Supply Chain Management: Managing Business to Business Interactions Learning Objectives Explain the motivating forces behind the adoption of supply chain management (SCM). List examples of how customer actions affect suppliers and how supplier actions affect customers. Explain the seven critical decision areas of SCM. Describe the decisions that constitute the logistics network configuration. Describe an example of a supply chain and identify points of interaction between buyers and suppliers. Explain the pros and cons of outsourcing supply chain services. Explain the bullwhip effect and its possible causes. Describe risk pooling and the implications it has for distribution networks. Explain the current trend affecting supply chain management. 9- Generic Supply Chain Supply Chain – Encompasses all activities associated with the flow and transformation of goods from the raw material stage (extraction) through to the end user, as well as the associated information flows. Material and information flow both up and down the supply chain. 9- Increasing competition to meet customer expectations for value Recognition that customer decisions and actions often dictate costs and limitations for suppliers. Recognition that supplier decisions and actions often dictate costs and limitations for customers. Increased potential for timely communication and feedback brought about by technological advances. The Motivating Forces 9- . businesses spend 20-30% of revenue acquiring goods from outside suppliers Purchase cost savings have strong impact on bottom line. In this example, if the business saves just 6% in supply costs ($432,000), profit will increase by 45%. Motivating Forces: Supply Savings Example 9- Increased global competition forces companies to stretch and add value. Businesses, focused on core competencies and outsourcing, need closer relationships with firms they outsource to. Adding value by: Reducing inventory throughout supply chain. .
