Supply Chain Basics Course - Supply Chain is the Future! What is Supply Chain? - Part I

Supply Chain Way by Alvis Lazarus

12 May 202008:00

Summary

TLDRIn this informative video, Alvis Lazarus from supplychainway.com introduces the basics of supply chain management through a relatable story of a mother preparing lunch for her son. The narrative illustrates key supply chain activities, from demand planning to distribution, involving stakeholders like suppliers, manufacturers, retailers, and customers. The video aims to clarify the concept for those curious about supply chain careers or the field in general, providing a simple yet comprehensive model of the supply chain process.

Takeaways

🔍 The competitive edge for organizations has shifted from manufacturing efficiency to supply chain management due to widespread adoption of best practices.
📚 The focus of the video series is to provide a basic understanding of supply chain concepts for those interested in building a career in this field.
👩‍🍳 A story about a mother preparing lunch for her son is used as a metaphor to explain the supply chain process in simple terms.
📝 Demand planning is the first step in the supply chain, where the mother notes down her son's favorite dishes, representing customer preferences.
🛒 Supply planning involves the mother deciding on the ingredients needed and the vendors who can provide them, akin to sourcing and procurement in a business context.
📅 Production planning includes deciding on the dishes and timing for the meals, which is similar to scheduling production in a supply chain.
🛍️ Purchasing ingredients from the vendor is analogous to sourcing in a supply chain, where raw materials are acquired for manufacturing.
🍽️ Manufacturing is represented by the mother preparing the lunch based on the son's daily request, reflecting the production of goods in response to demand.
🚚 Distribution is symbolized by the neighbor delivering the lunch to the son, which is the final step of delivering products to the customer in a supply chain.
👦 The son represents the customer in the supply chain, who places orders and receives products.
🏢 The mother is the manufacturer, the vendor is the supplier, and the neighbor is the distributor or retailer, highlighting the key stakeholders in a supply chain.

Q & A

What is the focus of competitive advantage for organizations in the manufacturing industry today?
-The competitive advantage for organizations today has shifted from manufacturing capability and efficiency to the supply chain, emphasizing the importance of the big picture in operations.
What are some of the best practices in manufacturing that have leveled the playing field?
-The widespread adoption of best practices from the Toyota and Ford production systems has contributed to a more even playing field in manufacturing.
Who is Alvis Lazarus and what is his role in the video?
-Alvis Lazarus is the Supply Chain coach in the video, presenting a series of videos to help viewers understand the basics of supply chain management.
What is the purpose of the video series on supplychainway.com?
-The purpose of the video series is to discuss multiple topics that will help viewers understand the basics of supply chain, whether they are planning a career in supply chain or curious about what it entails.
What is the main subject of the specific video discussed in the script?
-The main subject of the video is to explain what a supply chain is, who all are part of it, and what the key activities within it are.
How does the video use a story to explain the concept of supply chain?
-The video uses the story of a mother who wants to send home-cooked lunch to her son to illustrate the various steps and activities involved in a supply chain, such as demand planning, supply planning, sourcing, manufacturing, and distribution.
What is the role of the mother in the supply chain story presented in the video?
-In the story, the mother acts as the manufacturer, responsible for planning, sourcing ingredients, and preparing the lunch based on her son's daily needs.
Who are the key stakeholders in the supply chain model described in the video?
-The key stakeholders in the supply chain model are the supplier, manufacturer, retailer, distributor, and customer.
What does the video suggest as the starting point of the supply chain engine?
-The supply chain engine starts with demand planning, which provides demand forecasts to supply planning, leading to purchase and production orders.
How does the video script define the roles of the son and the neighbor in the supply chain story?
-In the story, the son represents the customer, and the neighbor acts as the distributor or retailer, responsible for delivering the lunch to the son.
What is the final step in the supply chain process as described in the video?
-The final step in the supply chain process is the distribution of the finished product to the customer, either through an online retailer who ships the product or an offline retailer where the customer picks up the product.

Outlines

00:00

🍽️ The Story of a Mother's Supply Chain

This paragraph introduces the concept of supply chain through a relatable story about a mother who wants to send home-cooked lunch to her son. The mother's process of planning, sourcing ingredients, and preparing the food is likened to the key activities in a supply chain. The story outlines steps from demand planning, where the mother notes her son's favorite dishes, to supply planning, where she decides on the necessary ingredients. It then moves on to sourcing, where she chooses vendors, and production, where she prepares the food. The story concludes with distribution, represented by the mother's neighbor delivering the lunch to the son. This analogy is used to simplify the understanding of a complex supply chain model.

05:04

🔄 Translating the Story into a Basic Supply Chain Model

The second paragraph builds on the mother's story to explain the basic components of a supply chain model. It identifies the key stakeholders: the supplier (vendor), manufacturer (mother), distributor/retailer (neighbor), and customer (son). The paragraph outlines the supply chain process, starting with demand planning, which leads to supply planning, followed by purchase orders, production orders, sourcing, manufacturing, sales orders, and distribution. The summary clarifies the roles each stakeholder plays in the supply chain and emphasizes the importance of each step in delivering the final product to the customer. The paragraph concludes by inviting viewers to ask questions in the comment section for further clarification, ensuring an interactive and informative learning experience.

Mindmap

Keywords

💡Competitive Edge

The term 'Competitive Edge' refers to the unique strengths or advantages that an organization possesses, allowing it to outperform its competitors. In the video's context, it is mentioned that the competitive advantage for organizations has shifted from manufacturing capabilities to supply chain management. This shift is illustrated by the adoption of best practices from the Toyota and Ford production systems, which have leveled the playing field in manufacturing, leading to a focus on the supply chain as the new competitive battleground.

💡Supply Chain

A 'Supply Chain' is the network of organizations, people, activities, information, and resources involved in moving a product or service from raw material to the end customer. The video uses the concept of a mother preparing lunch for her son to explain the supply chain process, from demand planning to distribution, emphasizing the importance of each step in ensuring the product (in this case, home-cooked lunch) reaches the customer (the son) efficiently.

💡Demand Planning

Demand Planning is the process of forecasting and managing the demand for products or services. In the script, the mother's initial step of noting down her son's favorite dishes represents demand planning, as she is essentially predicting what her son will want to eat and thus planning the meals accordingly.

💡Supply Planning

Supply Planning involves determining the amount of inventory needed to meet anticipated demand. The mother's action of planning for all the needed ingredients based on her son's preferences is an example of supply planning in the script. It is a crucial step in ensuring that all necessary components are available for the production process.

💡Purchase Order

A 'Purchase Order' is a commercial document and a legal agreement between a buyer and a supplier, specifying the terms of the delivery and payment for goods or services. In the video's narrative, the mother's decision to tell the vendor what ingredients she needs is akin to issuing a purchase order, which is a key step in the supply chain process.

💡Production Order

A 'Production Order' is a document that authorizes the production of a specified quantity of a product. The mother's planning of the dishes and timings for the week, as mentioned in the script, is analogous to creating a production order, which is essential for organizing the production process according to the planned demand.

💡Sourcing

Sourcing is the process of finding, evaluating, and selecting suppliers for the components, parts, or raw materials needed for production. In the script, the mother's decision on where to buy the ingredients represents sourcing, which is a critical part of the supply chain to ensure quality and cost-effectiveness.

💡Sales Order

A 'Sales Order' is a document that a customer signs to confirm their order of a product or service. In the video's story, the son telling his mother what he wants for lunch each day is similar to placing a sales order, which triggers the manufacturing and distribution process to fulfill his request.

💡Manufacturing

Manufacturing refers to the process of converting raw materials into finished goods through a series of production steps. The mother preparing the lunch each day as described in the script is an example of manufacturing, where the ingredients (raw materials) are transformed into a meal (finished product).

💡Distribution

Distribution is the process of delivering products from the manufacturer to the customer. In the script, the neighbor's role in delivering the lunch to the son's school represents distribution, which is the final step in the supply chain to ensure the product reaches the end user at the right place and time.

💡Stakeholders

Stakeholders are individuals or groups that have an interest or a stake in the activities of an organization. In the context of the video, the mother, son, vendor, and neighbor are all stakeholders in the supply chain of getting the home-cooked lunch to the son. Each plays a different role, from supplier to customer, and their actions impact the overall success of the supply chain.

Highlights

The Competitive Edge for organizations now lies in supply chain management rather than just manufacturing capability and efficiency.

Best practices in manufacturing have leveled the playing field, shifting focus to the supply chain.

Introduction to the basics of supply chain by Alvis Lazarus, a Supply Chain coach.

Discussion on building a supply chain career and understanding the supply chain field.

Exploration of who is part of the supply chain and key activities involved.

A story is used to simplify the concept of supply chain, involving a mother preparing lunch for her son.

Demand planning is illustrated through the mother noting her son's favorite dishes.

Supply planning is shown by the mother planning for ingredients based on her son's preferences.

The mother's selection of vendors for ingredients represents the sourcing process.

Scheduling the dishes and timings for the week is akin to production planning.

The mother's daily preparation of lunch based on her son's request is manufacturing in the supply chain.

The neighbor's role in delivering the lunch to the school is the distribution aspect.

Translation of the story into a basic supply chain model with key activities.

Identification of key stakeholders in the supply chain: supplier, manufacturer, retailer, and customer.

The supply chain engine starts with demand planning and moves through supply planning, purchase orders, and production orders.

The process of how suppliers ship parts to manufacturers and finished goods to retailers.

The customer's interaction with the supply chain through placing orders with the retailer.

Differentiation between online and offline retail experiences for the customer.

Invitation for viewers to ask follow-up questions or seek clarifications in the comment section.