What is a Supply Chain?

Summary

This video, presented by the Mike Ilitch School of Business, provides an introduction to Supply Chain Management. It explains the concept of supply chains by exploring how everyday products, like ice cream and cars, reach consumers through a complex network of businesses. The video also touches on the importance of logistics, efficiency, and sustainability in modern supply chains, including the role of recycling and reducing waste. It concludes with a look at strategic and tactical roles in supply chain jobs, encouraging students to explore this field further.

Takeaways

• 📦 Supply Chain Management (SCM) involves the entire process of bringing products and services to market, covering various businesses that contribute to this process.
• 📱 Products like smartphones and automobiles go through complex supply chains, involving raw materials, manufacturing, logistics, and retailing.
• 🍦 Even simple products like ice cream require a supply chain, which includes farms, refrigerated transport, warehouses, and expiration management.
• 🌍 SCM also emphasizes efficiency, aiming to minimize waste and increase profitability for all parties involved in the chain.
• ♻️ Sustainability and end-of-life design are becoming crucial in SCM, with companies focusing on recycling, reusing materials, and reducing waste.
• 🚛 Logistics is a major part of SCM, with some companies outsourcing these services while others like Walmart handle logistics in-house for competitive advantage.
• 🛠️ SCM involves both strategic and tactical decisions, from choosing suppliers and negotiating contracts to deciding on production capacity and day-to-day operations.
• 🏭 Reverse logistics, or the process of recycling and reusing materials from products, is a growing area in supply chain management.
• 📊 Strategic decisions in SCM include determining the location of plants, capacity planning, and equipment purchases, which can impact long-term business success.
• 👩‍💼 SCM careers are diverse, spanning logistics, purchasing, and operations, with roles requiring both high-level strategic thinking and hands-on tactical work.

Q & A

What is Supply Chain Management?

Supply Chain Management is the entire process and connection of businesses that work together to bring products and services to the market for consumers. It involves the planning, coordination, and oversight of all the activities required to turn raw materials into finished products.

How can students better understand a supply chain?

Students can think about supply chains by considering how everyday products, such as an iPhone or a car, come into existence. Each product involves a series of steps, from raw materials to manufacturing, logistics, and finally retail, all of which are part of the supply chain.

What role does logistics play in the supply chain?

Logistics is crucial for the movement of goods throughout the supply chain. It involves the transportation, warehousing, and inventory management of products, ensuring that they reach consumers in a timely and efficient manner.

Why is it important for supply chains to minimize waste?

Minimizing waste in the supply chain is essential for maximizing profitability. Waste adds unnecessary costs to the process, which can reduce the profitability shared by businesses involved in the supply chain. Efficient management helps in reducing waste and increasing the value of the products.

How are sustainability and supply chain management connected?

Sustainability is increasingly becoming a key aspect of supply chain management. Companies, consumers, and governments are focusing on reducing waste and reusing materials. Products are being designed with end-of-life recycling and reuse in mind to minimize environmental impact.

What is reverse logistics, and why is it important?

Reverse logistics refers to the process of returning used products or materials back into the supply chain for recycling or reuse. It plays a significant role in reducing the consumption of raw materials and minimizing waste, particularly in industries like electronics and automotive.

What are some examples of reverse logistics in the automotive industry?

In the automotive industry, reverse logistics includes activities such as recycling 80% of a car, repurposing materials like rubber for landscape mulch, and melting and reusing windshields and car bodies. Aluminum, in particular, is highly recyclable and can be reused repeatedly.

What are some strategic decisions made in supply chain management?

Strategic decisions in supply chain management include determining which suppliers to work with, whether to own or outsource logistics, and deciding where to build new manufacturing plants. These decisions are long-term and critical to a company’s supply chain success.

What are tactical decisions in supply chain management?

Tactical decisions are day-to-day operational choices that ensure the smooth flow of products through the supply chain. This can include managing inventory, ensuring shipments are on time, and coordinating with suppliers to meet immediate customer demand.

What are some common career paths in Supply Chain Management?

Career paths in supply chain management include roles in logistics (managing transportation and warehousing), purchasing and supplier management (selecting and negotiating with suppliers), and operations (overseeing the production of goods). There are both strategic and tactical roles available within each area.