EEC 231

10
COURSE LEARNING OUTCOMES
At the end of the course, you should be
able to:
1. Promote the Louisian core values
in making sound supply chain
management decisions.
2. Discuss fundamentals of supply
chain management as they
pertain to sustainable
relationships among various
industry players
3. Apply supply chain and
distribution management
concepts, principles, processes
SUPPLY CHAIN and strategies in case analysis
MANAGEMENT and practical business decision
making situations
4. Critique supply chain drivers and
supply chain operations
5. Integrate concepts/techniques
learned through application in
the preparation of a
comprehensive distribution plan
6. Evaluate alternative solutions to
supply chain issues, trends, and
transformations related to the
dynamics of the environment

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 No matter how prepared you are, there will always be times when things don’t do to plan. The key is to
prepare as well as you can, but at the same time train yourself to adapt to change and be solution-
focused in the moment.

Once you have momentum, fight to keep it. Fight for it with everything you can because it’s one of the
hardest things to create. When you have it, you can ask for things that you never could have without
it.

– Daniel Flynn

COURSE INTRODUCTION
Enterprising individuals and organizations face the unprecedented challenges of the
current economy. Having the competency to make objective choices, rational decisions
and a resilient attitude are necessary to sustain business operations.
In practice, supply chain managers need to be well-versed in process management
and development to ensure maximum product offerings and optimal shipments that
guarantee business client’s order specifications and customer order requirements.
This course intends to equip you with the necessary competencies of a supply chain
manager to facilitate beneficial interdependencies among diverse industries. You are
expected to be able to examine via observation and synthesis the general concepts of
supply chain management to develop a comprehensive purview of the logistical processes
linking the whole supply chain networks. This will enable you to have an ethical perspective
and attitude towards supply chain decision making with a clear focus on value-laden
relationships while maintaining a balance of responsiveness and efficiency leading to the
development and crafting of strategies that emphasize on the philosophy of sustainable
business enterprises. Given the vital role of supply chain managers, this three-unit course
hopes to nurture your potential in decision making relevant to supply chain management.
Supply chain management course covers a comprehensive study of the concepts,
processes and strategies used in the management of supply chains with particular emphasis
on the interrelationships of logistics among diverse industries vis-à-vis the value laden
relationships among the supply chain participants. Moreover, key strategic business
principles relative to channel management or logistics management will also be covered.
Physical distribution as a functional area within the firm and its interface with channel
intermediaries will be analyzed emphasizing on the inter-organization management of the
relationship of these institutions. Specific topics include the supply chain drivers and supply
chain operations that stresses on the systems-approach to managing the entire information
flows, financial flows and materials and services from raw materials suppliers to the end-users.
Current trends and issues in the global perspective will also be introduced to aid you with
competency in supply chain management decision making in the perspective of a supply
chain manager.

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 MODULE 10. SUPPLY CHAIN OPERATIONS (Deliver)
After the completion of this module you should be able to:
a) Outline the activities in order management and delivery scheduling
b) Discuss DELIVER in terms of receiving and delivering customer orders between and
among supply chain participants
c) Evaluate DELIVER in creating and capturing value in supply chains

ENGAGE:
Recall the supply chain drivers

Instruction: Read the statements and put T/F before the statement corresponding your
answer.

1. To be considered as inventory, goods must be finished and waiting for delivery

2. Warehouse overhead is considered part of holding cost
3. The percentage of all order cycles that don't experience a stock out is a service level
4. A cost trade-off is a situation where some costs increase and some costs decrease
5. The costliest activity in many firms is location mapping
6. To hold down distribution cost, the lowest transportation mode should always be used
7. Materials handling is concerned with breaking bulk
8. A company's competitive strategy defines the set of customer needs that it seeks to
satisfy through its products and services
9. A company's supply chain determines the nature of procurement and transportation
of materials as well as the manufacture and distribution of the product
10. The degree of information responsiveness does not need to be consistent with the
implied uncertainty

EXPLORE:
Describe logistics management of supply chains.

The ‘deliver’ includes order management and delivery scheduling. It encompasses the
activities that are part of receiving customer orders and delivering products to customers
enhanced by the forward and backward information flows between them.

Order management
– Process of passing order information from customers back through the supply chain from
retailers to distributors to service providers and producers.

– Includes passing information about order delivery dates, product substitutions, and back
orders forward through the supply chain to customers.

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 – Relies on the use of the online-offline communication medium and paper documents
such as purchase orders, sales orders, change orders, pick tickets, packing lists, and
invoices.

– Order management process needs to do exception handling and provide people with
ways to quickly spot problems and give them the information they need to take
corrective action. The processing of routine orders and orders that require special
handling should be automated because of issues such as insufficient inventory, missed
delivery dates or customer change requests need to be brought to the attention of
people who can handle these issues.

Basic Principles in Order Management

a) Enter the order data once and only once
o customer order entry system
o capture data electronically as close to its original source as possible and do not
manually re-enter the data as it moves through the supply chain

b) Automate the order handling

o manual intervention minimized for routing and filling of routine orders
o computer systems should send needed data to the appropriate locations to fulfil
routine orders
o exception handling should identify orders with problems that require people to get
involved to fix them

c) Make order status visible to customers and service agents

o customer order tracking
o customers should be able to see order status on demand
o when an order runs into problems, bring the order to the attention of service
agents who can resolve the problems

d) Integrate order management systems with other related systems to maintain data
integrity
o order entry systems need product descriptive data and product prices to guide
the customer in making their choices.
o order data is needed by other systems to update inventory status, calculate
delivery schedules, and generate invoices. Order data should automatically flow
into these systems in an accurate and timely manner.

Delivery Scheduling
– Works within the constraints set by transportation decisions.
– Two types of delivery methods:

a) Direct deliveries
o deliveries made from one originating location to one receiving location.
o routing is simply a matter of selecting the shortest path between the two locations
o they are efficient if the receiving location generates economic order quantities
that are the same size as the shipment quantities

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 o involves decisions about the quantity to deliver and the frequency of deliveries to
each location.
o advantages: simplicity of operations and delivery coordination

b) Milk run deliveries

o deliveries that are routed to either bring products from a single originating location
to multiple receiving locations or deliveries that bring products from multiple
originating locations to a single receiving location.
o decisions must be made about delivery quantities of different products, about the
frequency of deliveries, routing and sequencing of pickups and deliveries.
o advantage: more efficient use of the mode of transportation used and the cost of
receiving locations get fewer and larger deliveries

Delivery sources
– single product location: facilities such as factories or warehouses where a single product
or a narrow range of related items are available for shipment. These facilities are
appropriate when there is a predictable and high level of demand for the products they
offer and where shipments will be made only to customer locations that can receive the
products in large, bulk amounts.

– distribution centers: facilities where bulk shipments of products arrive from single product
locations. When suppliers are located a long distance away from customers, the use of
distribution center provides for economies of scale in long-distance transportation to
bring large amounts of products to a location close to the final customers.

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 Source: https://www.researchgate.net/figure/Nikes-distribution-channel-strategy_fig13_323809440

Return processing
– “Reverse logistic” involves the end customers, retailers, distributors, and manufacturers
returning products under certain circumstances such as rework, replacement, repair,
damage, recycle, reuse and others.

o Wrong products were delivered

o Products that were delivered were damaged in transit or were defective from the
factory
o More product was delivered than was needed by the customer

– Returning of products due to supply chain inefficiencies. Companies and supply chains
need to keep track of the kinds of returns that happened, their frequency, and if the
return rates are rising or falling

– One area where returns are a value added activity for the entire supply chain is where
product recycling comes into play. Returns happen at the end of the product life cycle
as the end user sends the product back to the manufacturer or some other organization
that will either reuse or safely dispose of the product.

– Recycling companies will emerge to handle this activity not as a return processing but
instead as a sourcing activity which will be the way they acquire their raw materials.

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 EXPLAIN:
Analyze the impact of reverse logistics in supply chains.

Source: https://www.packagingstrategies.com/articles/94625-demystifying-the-circular-economy-
of-product-packaging

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 Source: https://blogs.helsinki.fi/inventionsforcirculareconomy/circular-economy/

ELABORATE:
Construct value-chain flowcharts from point of origin to point of destination
with the interplay of product/material, finance/fund and information flows in
supply chains.

Supply chain managers are beginning to realize the difference between a product’s success
and failure often depends on how the end of life of the product is managed. And it is all too
important to take good care of consumers. Indeed, customer satisfaction is the key to long
term success. Currently, enabling them to return products without penalty contributes to
sustainability. The supply chain must use reverse logistics as a core capability that can
reduce cost and increase revenues.

In a regular supply chain, the intent is to have responsive, efficient, and continuous flow of
products from production to retailer’s shelves unto the end consumers. Products are
expected to arrive at distribution centers or retail outlets according to schedule. Conversely,
in a reverse supply chain, the flow begins when the consumer decides to return an item or
when a retailer decides to pull slow-moving products or when a manufacturer designs a new
package, or when rework, repair, replacement, recycling, and reusing is needed. The end
result urges the company to classify the returned individual items to decide as to its
disposition.

EVALUATE:
Reflect on the supply chain operation, DELIVER. Instruction for Critical
Incident Journal. Maximum word count is 1000.

Consider your thoughts and reactions about the lessons learned in the topic
‘deliver’. Describe a significant experience or insight that you have learned
in this module. Why was it significant to you? What underlying issues (societal, interpersonal)
surfaced as a result of this experience/insight? How will this influence your future behavior
personally and professionally?

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