Welcome to CTL SC1x Fundamentals of Supply Chain
Management and Logistics.
In this lecture, all I want to do
is introduce concepts of Supply Chain Management and Logistics,
and set the stage for the remainder of the course.
But first, let's talk about some supply
chains for a few different products.
And so what I'm showing here are four very different products
that you would think have very different supply chains.
And you'd be right.
In the top left, we have bananas being
sold in a U.S. grocery store.
On the right, we have an integrated ignition assembly.
On the bottom right, we have women's pumps.
On the bottom left, we have a bunch
of bags of cement-- of concrete.
So if you look at these, you'd think, wow!
There's nothing that could be similar in these supply chains.
And the interesting thing about supply chain management
is that every product has a story,
and every product is part of multiple supply chains.
So everything you touch-- and most things you don't-- flow
through some kind of supply chain somewhere in the world.
It's very, very rare where you can
think of an item that gets created, manufactured,
or grown, and consumed in the exact same place,
at the exact same time.
You need to have supply chains to overcome
the tyranny of time and space.
And that's what supply chains do.
But again, you look at these four very different products,
and what's interesting is there's a lot of similarities
you might not think about.
So if I look at the bananas up here in the top left,
and compare that to the shoes, you
can think about perishability.
Because, yes, bananas will spoil over time,
but so will women's shoes.
Style is very fickle.
So what's in for this season will not be in for too long.
So the idea of perishability, how long something
will stay fresh and able to be sold
at its normal standard price, is something
that is not just about fruit, it's
about many other fashion items.
Then you can think about sourcing.
You don't have a lot of choice of where you can source cement,
or for where you can source bananas.
I can't grow bananas up here in Boston.
I could try in a greenhouse but it'd be very, very expensive.
You can't mine for cement where it doesn't already exist.
So sometimes your product is tied to a sourcing location
that you cannot change.
Then you could think of products that
are single-- individual items like bananas,
there's really only one part to the banana, or the cement--
while there are many chemicals you
might put in there as additives.
But you look at products like this ignition and the shoe.
They're made up of components.
And it could be that those components are not made by you,
but by someone else.
And therefore, you're part of a larger supply chain.
And finally, you can look at who you sell to.
For shoes, you're selling to a consumer.
A woman is probably buying these and, who knows, maybe a guy.
You never know.
So someone is buying this as a consumer.
Same thing with bananas.
It's a B to C, a business to consumer, business.
For these ignition assemblies, it's
probably being sold to an auto manufacturer,
or an original equipment manufacturer, or OEM.
Same thing with these bags of cement.
Chances are it's being sold to a construction company.
So if I look at these four different products, what's
really interesting is that the same decisions
are being made by the people managing those supply
chains in each one of these products.
Now the values and the outcomes might differ,
but they're all making the decisions
of where can I source from?
How much inventory do I hold?
How do I forecast my demand?
Where do I stock my inventory?
How do I move my product from source to final consumption?
And all those kind of things.
And what we'll do in this course,
is discuss the concepts and methodologies
that will allow you to plan supply chains for products
as diverse as bananas, women shoes, automotive parts,
cement, and everything in between.
So what are we going to do in this lecture?
Well, we're going to answer five big questions.
First is, what's a supply chain?
Then we're going to talk about the differences
between logistics and supply chain management.
Then we're going to talk about different perspectives of how
you can view supply chain management.
Because it's a very new and evolving field,
people have different perspectives,
and it helps you to understand those.
Finally, we'll talk about the challenges
that are faced in the supply chain.
And then, finally, the last thing we'll do,
is why should you care?
All right, so let's get started.