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Explain the concept of value-enhancing benefits by giving THREE examples
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Module One—Introduction to Supply Chain Management



Define supply chain management in your own words


Supply chain management is the process of integrating finance, materials, and information among suppliers,

retailers, wholesalers, manufactures and consumers. It should combine these in the most efficient

manner. Reduction in inventory while maintaing product flow and reducing costs are marks of

efficiency in SCM


Explain the concept of value-enhancing benefits by giving THREE examples of benefits that may

be realized by a firm that successfully manages its supply chain

. Examples are

innovation through


, with long time partners, knowing product cycles and sharing information leads to lower

RD costs as well as reduced costs due to shared knowledge.

Lower costs

due to synergy amongst chain members

horizontal buying networks

across multiple markets

allow for expanded business with multiple

joint venture partners of chain partners.


Explain the difference between logistics and supply chain management

. Logistics is seen as the

integration and maintanence of movement of goods in and out of an organization while Supply chain

management involves logistics as well integration of several supply chain partners sharing knowledge

and information to achieve optimal efficiency in all aspects from product creation to sale and returns.


List three concepts used by supply chain managers in an attempt to make a firm more flexible

and responsive to customers' changing needs:

Agile manufacturing-the ability to respond quickly to customer needs and market changes while still

controlling costs and quality.

JIT -just in time manufacturing

Mass customization-combines the flexibility and personalization of custom order with the low unit

costs associated with



ESSAY QUESTIONS (8–10 sentences)


Discuss the differences between supply chain partnerships of the past and those that have

developed today.

In the past supply chain partnerships were straight forward one company to another

for various parts no integration now todays supply chains seek to integrate all the various companies

into one efficient chain. Each responsible to the entire chain not just themselves.


List the four elements of supply chain management and provide a short description of each of the four

elements. What types of failures might each of those elements create within the supply chain? Why

might those results be linked to errors in a particular element?


the requisition of goods required for the manufacturing of products, managing inputs. As well as

choosing, qualifying and managing suppliers . If costs are too high the chain fails to be efficient, poor


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supplier choice could lead to delays which affects the bottom line. Production slow downs can occur as

well as cost overruns.


combines demand planning, forecasting and production..this sets the schedule for the movement

of supplies and products from raw materials to consumer. When, where and how. Commits resources

to attain forecated sales and production goals. Poor operational execution leads to out of stocks, high

inventory, cost overruns, poor quality products and delays to name a few.


The logistics of getting products from warehouse to end users this includes packaging,

inventory and warehousing. Mistakes can lead to out of stocks, bad deliveries, damaged product, high

costs and inventory as well as high shrink.


The sharing of informtion, goals and processes amogst members of the upply chain. This

ensures all aspects work towards the most efficient outcome. Problems her can cause

miscommunication amonst chain members leading to production issues, too much or not enough

inventory, wrong delivery schedules, long wait times, bad forecast models for sales and production as

well as excessive costs leading to distrust amongst chain partners.


Starbucks sells coffee and other items and consumables through their tens of thousands of worldwide

outlets. Starbucks must satisfy its worldwide clientele with premium-quality beverages, foods, and

products that are representative of the Starbucks name and image.

What approach does Starbucks use to distribute their premier, beverages, foods and products that are

representative of the Starbucks name and image?

A complex and erratic supply chain led to massive cost hikes despite stagnant sales leading the

company to review and alter it's approach. Late deliveries were a major major factor in the cost

ovverrruns. Fourbasic functions were chosen for this change P

lan, source, make, and deliver


various areas were grouped into departments responsible for that function, cost drivers were

recognized and optimized/ With over 16000 stores and 80000 shipments weekly efficiency

and cost containment are key to success. Creating a single logistics system that could handle

its global market was the key. With coffee coming from Latin America, Asia and Africa the

coffee arrives via ocean container to be transported to one of six roasting centers. After

packaging they are sent to one of 5 regional distribution centers. 2 owned by the company

and 3 owned by a third party. 2 DC's are also in Europe and Asia, these are operated by the

third party firm as well. Stores are serviced by the DC's dependent on locale or by smaller

central DC's of which there are 33 in the U.S with several in Asia, Canada and Europe all but

one of these CDC's are operated by third party firms who provide warehousing for all

Starbucks products and supplies and provide dedicated transportation as well.

From bean to cup: How Starbucks transformed its supply chain. (n.d.). Retrieved December 2,

2015, from

The Flavors in Your Cup. (n.d.). Retrieved December 3, 2015, from

What Are the Four Elements of Supply Chain Management? (n.d.). Retrieved December 3,

2015, from


Supply Chain Management. (n.d.). Retrieved December 5, 2015, from

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