LnSCM

TW1

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Topic 1🎉

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Introduction to Logistics and Supply Chain Management

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Theory of Supply Chain Management (Cont’d)

Companies seek to design business models that meet customer needs better than competitors.

Success depends on the ability to

Design, Make, and Deliver

innovative, high quality, low cost products and services that customers demand.

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Supply chain management allows companies to focus on their unique skill sets.

It’s the theory of comparative advantage applied at the company level.

SCM allows companies to do what they do well.

Other activities are outsourced（外包） to companies with complementary capabilities.

Supply chain management requires

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• a common understanding of supply chain objectives and individual roles,

• an ability to work together, and

• a willingness to adapt in order to create and delivery the best products and services possible.

Supply Chain Management Defined

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Supply chain management is the design and management of seamless, value-added processes across organisational boundaries to meet the real needs of the end customer.

-Institute for Supply Management

Supply Chain: Manufacturing Example

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Logistics defined

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“…the part of the supply chain that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers’ requirements.”

- Council of Logistics Management

Third-party Logistics (3PL)

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3PL service providers are companies who provide a range of logistics activities for their clients. E.g. distribution centres, warehouse facilities, manage the delivery of the products through their transport fleets or undertake value-adding services such as re-packing.

4PL™

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• 4PLs™ originated by Accenture (previously Anderson Consulting).

• Modern supply chain network is global and complicated, the capabilities to manage does not exist in any one organisation.

• There’s a need for a specialist organisation, to form a JV with the focal firm, use its knowledge of SCs and 3PLs to manage and integrate end-to-end supply chain.