Supply Chain Management Introduction. Supply Chain Management. Session Agenda 1) Introduction to module 2) Assessments 3) Source of information Text Books On-line sources Digital Library. Supply Chain Management. Text Books
1) Introduction to module
3) Source of information
Definition: Supply Chain Management
“The management of the flow of goods or services between
entities in the chain to realize the delivery of end products
or services, satisfying customers at minimum cost”
Definition 2: Supply Chain Management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses and stores, so that merchandise is produced and distributed in the right quantities, to the right locations at the right time in order to minimize system wide costs while satisfying service level requirements.
Purchasing professional's goal to a company
should be to provide:
PAYMENT £££Supply Chain Management
Purchasing Topics to Cover:
Importance of purchasing:
Cost of manufacturing company, 1979 Cost of same manufacturing company, 1999
The bigger the percentage of total spend is allocated to purchasing, the bigger the
potential saving to the organisation by cutting the purchasing costs. (Lysons (2000), pp3-4)
(Slack. 2001. p417)Supply Chain Management
The purchasing function brings together the operation and its suppliers
Letter of Credit (L/C)
Types of L/C:
Negotiation Definition and Comments:
“The process whereby two or more parties decide what each will give and take in an
Exchange between them.” (Lysons & Farrinton)
“Negotiation is the process by which we search for terms to obtain what we want from
somebody who wants something from us.” (Total Success Training)
“Negotiating is a trading game. There is only one way to play the game; that is to trade what
we want from somebody else for what they want from us. The best way of being able to do
this is to know what we want and what we are prepared to give to get it.” (Total success
“Negotiation is discussing or bargaining in order to reach agreement.” (Owen)
Negotiation (What it isn’t):
• Negotiation is not selling.
• Negotiation is not ‘giving in’ or conceding.
Types of negotiation:
Adversarial and Collaborative
Adversarial Negotiation (distributive or win-lose
(Lysons & Farrington)
Collaborative Negotiation (integrative or win
(Lysons & Farrington)
Why would we buy something
(items, components, services)
when we could provide it ourselves?
Reasons to buy:
Reasons to provide in-house:
HBL Sacks over 2,000 employees
An announcement of HBL said on Friday that the bank had abolished
the entire cadres of manual workers with immediate effect under a
retrenchment order of March 10.
The order further said that it had been decided to concentrate on
core banking activities and retrench all non-clerical cadres including
guards, messengers, godown guards, drivers, maintenance staff and
other categories of manual workers.
The bank has also decided to outsource services with service providers
for providing quality and efficient services at competitive market rate.
Currently, there are over 2,300 employees working in the HBL
dedicated to non-core activities including security, transport and other
The announcement said the administration and management of these
activities like business development and customer services.
All Manual (I.e. Non-Clerical) Workmen in Habib Bank Ltd. Retrenchment (cutback)
In order to focus on core banking activities and rationalize our staff strength,
HBL had introduced Voluntary Separation Schemes in the past.
Currently there are over 2300 employees working in HBL dedicated to non
-core activities including Security, Driver and other manual work.
The administration and management of these activities is causing a severe
lack of focus on core activities like business development and customer
service etc. the market practices amongst progressive Bank dictates an urgent
need for outsourcing such services.
Ethics in Buying:
End of Topic