Rutgers Business School ain h C ly p
Rutgers Business School ain h C ly p p u S t n e em g a n Ma What is Supply Chain Management?
What is a Supply Chain? § Any organization, anywhere in the world, offering a product or a service has a supply chain. § Products and Services are created from materials, materials using equipment, equipment labor, labor time, time money, money and other resources § Producing and delivering products and services requires Suppliers, Suppliers Manufacturers, Manufacturers and Customers; Customers all of which make up the links in a supply chain. § Supply chains exist in organizations that are: – Large or Small (i. e. , a multinational corporation or a “mom & pop shop” on the local corner) – Public or Private (i. e. , a publically traded company or a privately held company) – For-Profit or Not-for-Profit (i. e. , a commercial business, government or a charitable institution) 2
What is a Supply Chain? (continued) Suppliers Manufacturer Customers (Your Company) Internal Raw Material Suppliers Intermediate Suppliers Finished Material Suppliers (Tier 3) (Tier 2) (Tier 1) Internal Finished Product Manufacturer Externa l Wholesaler & Distributor Customers Retail Customers Consumers (Tier 1) (Tier 2) (Tier 3) Facilitated through the use of Logistics Warehousing Truck Inbound Transportation Rail Air Pipeline Outbound Transportation A supply chain consists of the flow of materials and products. . . § From SUPPLIERS: Raw Material, Intermediate, and/or Finished Material Suppliers § To MANUFACTURERS: Finished Product Manufacturers (Internal and/or External) § To CUSTOMERS: Wholesalers, Distributors, Retailers and/or Consumers Each of these are “Links” in the supply chain Water
Think about typical products that you buy Ø Automobiles Ø Books Ø Candy Bars Ø Cell phones Ø Clothes / Shoes Ø Fast food Ø Laptop computers Ø Soft Drinks 4 What is your favorite Candy Bar? Do you know what goes into making it?
Candy Bar Supply Chain (Simplified) Suppliers Sugarcan e Manufacturer Customers Sugar Milk Fat Lactose Cocoa Beans Cocoa Butter Soy Lecithin Paper 5 Packaging Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) Consumers Chocolate
Supply Chain Disruption Suppliers Sugarcan e Sugar Milk Fat Lactose Manufacturer 1 Customers What happens if there is a shortage of Cocoa Beans ? ? ? Cocoa Beans Supply Disruption Cocoa Butter Soy Lecithin Paper 6 Packaging Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) Consumers Chocolate
Supply Chain Disruption Suppliers Sugarcan e Sugar Milk Fat Lactose Manufacturer 2 Customers Suddenly, you cannot get the Chocolate and Cocoa Butter that you need to make your Candy Bars Cocoa Beans Supply Disruption Cocoa Butter Soy Lecithin Paper 7 Packaging Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) Meanwhile. . . your other suppliers will continue to ship their products to you Consumers Chocolate
Supply Chain Disruption Suppliers Sugarcan e Sugar Milk Fat Lactose Manufacturer 3 Customers Candy Bar production will be forced to stop and your inventory of the other materials will start to build up Cocoa Beans Candy Bar Manufacturer Supply Disruption Cocoa Butter Soy Lecithin Paper 8 Packaging Wholesalers and Distributors Retailers (Stores) Your customers still have inventory of candy bars that they previously purchased from you which they can continue to sell Consumers Chocolate
Supply Chain Disruption Suppliers Sugarcan e Sugar Milk Fat Lactose Manufacturer 4 Customers You are forced to cancel your orders for materials from all your suppliers until Cocoa Beans are available again Cocoa Beans Candy Bar Manufacturer Supply Disruption Cocoa Butter Soy Lecithin Paper 9 Packaging Wholesalers and Distributors Retailers (Stores) The disruption impacts all suppliers Consumers Chocolate
Supply Chain Disruption Suppliers Sugarcan e Sugar Milk Fat Lactose 5 Manufacturer Customers Your customers sell out all remaining inventory of candy bars which creates a TOTAL MARKET STOCKOUT Cocoa Beans Candy Bar Manufacturer Supply Disruption Cocoa Butter Soy Lecithin Paper 10 Packaging Wholesalers and Distributors Retailers (Stores) Consumers Chocolate The disruption impacts all customers
Candy Bar Supply Chain (Simplified) Suppliers Sugarcan e Sugar Milk Fat Lactose Manufacturer Customers All supply chain links are interconnected and a disruption with one will likely impact all Cocoa Beans Cocoa Butter Soy Lecithin Paper 11 Packaging Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) The supply chain is only as strong as its weakest link Consumers Chocolate
Supply Chains in the Service Industry It is not just products. . . services have a supply chain as well. Service firms offer intangible products, products meaning products that cannot be physically touched. Many services require the use of Facilitating Goods which are tangible elements that are used along with the service provided. 12 These items need to be purchased, purchased transported, transported received, received and warehoused in order to provide the service activity, and each has a supply chain.
What is a Supply Chain Management? It is the coordination of a network of otherwise independent trading partners creating a desired product or service, and moving it from suppliers, suppliers through manufacturing, manufacturing and out to customers when and where they want it. Supply Chain Management is the way business gets done. It is the execution process of any business. 13
Rutgers Business School ain h C ly p p u S t n e em g a n Ma Career Opportunities in Supply Chain Management
Talent Shortage in Supply Chain Management accounts for $1. 4 trillion (≈8%) of the total U. S. economy ---> annually Companies have been expanding globally and speeding up every link in the supply chain to stay competitive. This has created a significant and growing shortage of supply chain talent --- which translates to JOBS !!! Current trends will continue to raise the bar in supply chain management, and by extension, the skills required: Continued and accelerated pace of globalization Expansion of e-Commerce Heightened focus on supply chain risk Widespread adoption of new technologies and innovations
Technology and Innovation Supply Chain Management is a skilled profession with cutting edge technologies and major innovations happening at an accelerated pace. Just a few examples:
Typical Supply Chain Career Areas Suppliers Manufacturer Raw Material Suppliers Intermediate Suppliers Finished Material Suppliers (Tier 3) (Tier 2) (Tier 1) Finished Product Manufacturer Customers Wholesaler & Distributor Customers Retail Customers Consumers (Tier 1) (Tier 2) (Tier 3) Abundant job opportunities across all of these functional areas Purchasing Strategic Sourcing Ethical and Sustainable Sourcing Supplier Relationship Management Planning & Scheduling Customer Service Operations Management Forecasting and Demand Planning Quality Assurance Distribution Channel Management International Trade Risk Management Customer Relationship Management Project Management Logistics: Warehousing, Transportation, and Distribution Inbound Transportation Warehousing Inventory Management Material Handling Outbound Transportation Distribution
Talent Crisis in Supply Chain Management The U. S. is projected to create an incremental 270, 000 supply chain jobs annually through at least 2020, however, the 8, 000 postsecondary educational institutions in the U. S. offering supply chain training and education (including RBS) generate only 75, 000 supply chain professionals annually. For those who do graduate with a degree in supply chain management, the result is: 92% are placed within 3 months of graduation, with 75% placed at or before graduation. Average starting salary for a Rutgers supply chain undergraduate is $60, 000 (+ up to $18, 325 in additional salary and signing bonus) Average annual salary for an experienced (i. e. , 3 -5 years) Supply Chain Manager is $84, 232
Careers in Supply Chain Management Top 10 things you can expect from a career in Supply Chain Management 1. Job Availability (entry level and advanced) 2. Accelerated Growth and Advancement opportunities 3. Job Security 4. Excellent Income and Compensation packages 5. Career Contentment 6. Supply chain jobs available in every Industry and Worldwide 7. Work Location choices. Your supply chain skills are portable! 8. Travel and Relocation opportunities 9. Opportunities to Specialize in supply chain Disciplines & Sectors Recent survey = 79% content with their career 10. Innovation and cutting edge Technologies
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