The History Of The Supply Chain Management

Published Date: 02 Nov 2017

Introduction

During the inspection of trungson, the theoretical will focus on theory and management of supply chain risks. In addition, the thesis will include theoretical analysis of the value chain, focus on cost drivers. Understanding how trungson activities and how money is generated is very important, being able to suggest improvements in order to reduce the overall supply chain risks.

The thesis will focus general theories such as:

Supply chain management theory

Risk management theory

Purchasing theory

These theories should include aspects that can be appropriate to achieve the objectives of the thesis, which is to determine the facts risk and propose mitigation strategies for trungson. Theory of supply chain management includes the definition and interpretation of relevant provisions and the supportive frameworks for analysis purposes.

The theory of risk management including topics related to the meaning, framework, and strategies for supply chain risk. In addition, analysis of the external environment is covered in Pestel as part of risk management. Pestel can be a useful framework to examine the operating conditions of TrungSon.

With regards to purchasing theory, the Kraljic-model will be examined. Procurement is an important activity for TrungSon and strategies towards this aspect can help reduce costs and risk towards suppliers. Within purchasing is topics as supplier relationship and sourcing discussed.

Three factors, supply chain environment, temporal focus and supply chain flexibility, that affect to the choice of the firm when determining the risk management strategy of it is discussed later. However, Manuj and Mentzer (2008) argued that supply chain environment is the most important factor and the thesis will use factors such as the frameworks for this study. In addition, a risk management framework developed by Chain Risk Leadership Council supply (SCRLC 2011) will be used. This framework related to theory from Manuj and Mentzer (2008), Christopher (2005), and Waters (2011).

Supply chain

A supply chain can be recognized as a network that consists of suppliers, manufacturers, distribution centers, retailers, and raw materials, work-in-process inventory, and finished products that flow between facilities (David Simchi-Levi, P. K., & Edith Simchi-Levi 2004). Mentzer (2001) defines Supply chain as "a set of three or more companies directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to customer."

Based on these definitions we can make a generic illustration of a supply chain as follows:

Additionally, there are four types of supply chains Mentzer (2001), namely a "basic supply chain", an ‘’extended supply chain", an "ultimate supply chain" and a "partnership".

The basic supply chain is described as a network with a local company with an immediate supplier and customer directly connected with one or more of upstream and downstream flows of the products, services, finances and information.

The extended supply chain is equal to the basic supply chain, but it also includes the suppliers of the immediate suppliers and customers of the immediate customer, which are all linked to one or multiple streams of upstream and downstream products, services, finances and information. trungson can be considered in this category.

The ultimate supply chain is a network of all the companies involved in all of the upstream and downstream flows of the products, services, finances, and information from the original supplier to end customers.

A Partnership a dyadic relationship that differs from the supply chains described above because it only consists of two members, a buyer and seller, where there is no relationship upstream and downstream simultaneously between companies.

Supply Chain Management

There are many ways to define the supply chain management; however, it seems to be a common understanding of the expression. The general idea is that supply chain management involves coordinating activities between the different members of the supply chain.

According to David Simchi-Levi, P. K., & Edith Simchi-Levi (2004), SCM defined as a set of methods are used to efficiently integrate suppliers, manufacturers, warehouses, and stores so that goods is produced and distributed at the right quantities, place, and at the right time in order to minimize system wide costs while meeting service level requirements.

Whereas Tang (2006) defines SCM is the management of materials, information and finances flows through a network of organizations (eg, suppliers, manufacturers, suppliers, logistics, wholesalers / distributors, retailer’s retail) aims to produce and deliver products or services to consumers.

Supply Chain Risk

Many experts have a different look about the SCR, throughout many definition of expert, SCRLC (2011) & Kersten (2006) SCR is the damage that is rated by its ability to occur - it is caused by an event in a company, in its supply chain or the environment, affecting the business process at least a company in the supply chain negatively.

Supply chain risk can be calculated as a function of the probability of an interruption occurs and the consequences of the disruption (Aven 2007)

Manuj and Mentzer (2008) and Christopher (2005) there are many types difference of SCR. Christopher (2005) confirmed that supply chain risk is a source of potential risk to the business interruption.

. Supply risks

. Operational risks

. Demand risks

. Security risks

. Environmental risks

Supply risks cover areas such as supply disruptions, inventory, scheduling, and access to technology, price increasing, quality issues, uncertainly technology, product complexity, frequency of material design changes.

Operational risk includes operational analysis, production capacity, full processing, high level of process changes, changes in technology, and changes in active contact.

The demand risks involve aspects related to disruptions in the supply chain because of the difference in market demand.

The security risks concern information systems security; infrastructure security; freight breaches from terrorism, vandalism, crime, and sabotage.

Environmental risks are concerned to external forces that may disrupt the supply chain. These are forces or events that are difficult to forecast. An example of the risk environment can be a source of water pollution near to a farming site of TrungSon.

Waters (2011) talk about two different types of supply chain risks, Internal and External supply chain risks. External risks deals with risks outside Rauma Groups` control. The important task for Trungson is to construct the business to work as best as possible in the environment. The internal risks concerns risks to operations that Trungson can control.