Module 1: What is Supply Chain Management? (ASU-WPC-SCM) - ASU's W. P. Carey School

welcome to

supply

chain

management

and I know that most of you have spent your childhood afternoons dreaming of taking your first

supply

chain

management

course, but for those few of you who may not know

what

it is supply chain management, let me give you a brief explanation, let's take a A simple product like a water bottle, clean water, a plastic bottle, a plastic cap and a label, buy them in the store or vending machine It can cost you about a dollar fifty. How much of that do you think is profit? No, it's wrong, it's wrong again, it's probably not water. plastic bottle and a label that couldn't cost more than 50 cents and if you buy them in bulk, how could each bottle not give you at least a dollar profit?

Seriously, if you think you can make a dollar a bottle, you should give it up. College right now and get into the bottled water business. You see, this here illustrates one of the most common consumer misconceptions. The cost of the product is not equal to the cost of the material. And in business you don't have the luxury of thinking only as a consumer. Think like a business executive or, better yet, an entrepreneur, so to figure out where all those profits went, we must imagine

what

it took to get that bottle of water into your hands. You must first negotiate the purchase of the empty bottles and The caps of those bottles will be much easier to transport if they are in boxes.

We'll have to wrap those bottles so they don't fall out of the box. We can move many boxes quickly if they are all placed. Pallets To move pallets, you will need a forklift, which means you will need a forklift driver. That forklift will then take the pallet and place it on a truck, requiring fuel and insurance for the truck driver. You will also need a label for that water bottle, so you need to design the label, print the label and send it to the plant, another trucker, more fuel and insurance, our water bottling plant will not be free and neither will the energy that is used in our bottling. plant we will have employees and bottling machines and let's not forget the day to day items like light bulbs garbage bags machine parts cleaning supplies toilet paper and anything else that the employees will use in the plant oh yes and we will also need access to the machines of drinking water that will then purify the water, other machines will bottle the water and put labels on the bottles and another set of machines will shrink wrap and then palletize the bottles so those pallets can be moved again.

We will need a forklift, which means we will need another forklift driver, that forklift will take the pallets and place them on trucks that will go to the distribution centers and as we have seen, those trucks will require fuel and insurance for the drivers, those centers Distribution centers will also require forklift employees and power from the distribution center will be directed to retail stores and yet another truck that will require a driver. fuel and insurance that store will need employees to unload the truck. store the water bottles on the shelf or in the refrigerator if you have a refrigerator of course it will need power, if we want to protect our stock we can get a security guard or a security system and of course the store will probably get a sure.

Also imagine the costs associated with returning and replacing bottles that are damaged, and For some reason, even water bottles sometimes have 1-800 numbers, which means you'll need a call center staffed to answer questions. questions from customers about their water bottle. Wow, all those materials, boxes, people, machines, buildings, energy, fuel and vehicles, they cost money, that stuff. They were not free and were probably not used efficiently and it is likely that several bottles did not survive the journey to the consumer. Oh, and by the way, the employees of the water company, you know, are the ones who work in finance, accounting, marketing, human resources. and they also want a paycheck, so through that simple example of a super simple product, we're starting to see that companies face challenges when they buy things, make things move things, sell things, and service things. , which includes repair and maintenance.

Oh, and let's not forget. Companies need to do all of these things using sustainable materials, energy and methods. Guess whose job it is to make sure all these things happen smoothly with minimal effort and of course, minimal cost. You guessed it. Supply chain managers. The supply chain manager must be able to. To do all of these things, they need to give the customer the product they want, when they want it, as often as they want it, at a reasonable price while still making a profit. This requires world-class skills and knowledge in studying the offer. chain management, there's that scary term again supply chain management, let me try to make it friendlier by mixing up the words there you go, supply chain management for some reason seems a lot easier to understand, isn't it?

So? It also helps us understand the complex nature of supply chain management, I mean supply chain management. Now let's think about other products and what their supply chains might encompass. Burgers, sweaters, coffee tables, cars and airplanes. Now I know what many of you are saying, but I live in a service economy, I won't manufacture anything bad again As of 2008, the US was still the number one exporter of manufactured goods, well, maybe not by much time, so let's talk about service economy supply chains, think about something that probably sounds familiar to you. With the hotel industry, what do hotels manufacture? lodging experiences dining experiences spa experiences that together make up vacation and conference experiences to be able to do all of these things effectively and efficiently what is required hotels need to buy things like beds furniture televisions cable food soaps towels also make things or, in In this case, manufacturing services like housekeeping, meals, massages, and special events, hotels also move things like transporting clean towels and food to and from rooms, as well as transporting guests and their luggage to and from the airport, even They sell things like in-room movies, internet services, and event tickets, and finally, they also provide services like making reservations, organizing events, making wake-up calls, and even cleaning and ironing clothes.

Once again, we see that the fundamental skills learned in supply chain management can be used to manufacture services. experiences as much as they help in the manufacturing of products. I hope this has given you an idea of ​​what supply chain management is all about. You see, this is why little kids all over the world want to be supply chain managers and want to take part in making the best products and services in the world, so welcome again to supply chain management. where all your childhood supply chain dreams are about to come true.