THE PROVIDERS
INFRASTRUCTURE AND SERVICES eg finance, transport, storage
Product flows
THE
Information
FLOWS flows
Financial flows
The supply chain system has four sub-systems
How supply chain management creates and delivers value
Supply chain management works differently to traditional business
Consumers
Input Supplier
ቤተ መጻሕፍቲ ባይዱ
Producer
3. The value sub-system deals with economic flows,
their creation and appropriation
4. The governance sub-system deals with chain
relationships, leadership and the role of power
Supply Chain Management and Experiences from Australia
Associate Professor Ray Collins School of Natural and Rural Systems Management The University of Queensland
24
40
40
1 Exporter
For one tray of 20 pieces of fruit, retailed at $2 each, consumers pay a total of $40. This is the total value created, thus available to be distributed within the chain.
1. The product sub-system deals with the dynamics of
product flow and quality
2. The information and communication sub-
system deals with what firms in the chain need to know, what they provide and what they receive
Supply chain management challenges traditional ways of doing business
Consumers
In traditional primary producer supply chains
Input Supplier
? Producer ? Processor ? Wholesaler ? Retailer
A supply chain is a system
The system is based on the chain that links producers with consumers
Consumers
THE
Input
PLAYERS Supplier
Producer
Processor
Wholesaler Retailer
Supply chain management focuses on creating and delivering value
Freight company
4
Consumers
Input Suppliers
Primary producer
12
17 Importer
21
21 Wholesaler
24 Retailer
•Relationships are adversarial rather than based on trust •Information is not exchanged freely (information = power) •Horizons are short term and opportunistic •Price is the basis of transactions •Product is pushed towards the consumer •Participants struggle to get a larger slice of the pie
Processor Wholesaler Retailer
•Relationships are more collaborative •Information is exchanged freely •Horizons are medium to long term and more strategic •Value is the basis of transactions •The chain’s aim is to have product pulled by the consumer •THERE IS FAR MORE POTENTIAL FOR INNOVATION, ALLOWING PARTICIPANTS TO COLLABORATE TO INCREASE THE SIZE OF THE PIE
Supply chain management is an approach to managing the supply
chain as a complete system
•Supply chain management is a systems-based business model that links individual firms in the chain • The role of supply chain management is to create, deliver and share value for stakeholders •Government can play a role in creating an environment that supports and encourages supply chain management thinking and practice