Definition of Supply Chain A supply chain is a network of individuals and companies who are involved in creating a product and delivering it to the consumer.. A supply chain is a network
Trang 1BỘ GIAO THÔNG VẬN TẢI TRƯỜNG ĐẠI HỌC GIAO THÔNG VẬN TẢI HỒ CHÍ MINH
BÁO CÁO MÔN HỌCTÊN MÔN HỌC: TỔNG QUAN VỀ LOGISTICS VÀ QUẢN TRỊ CHUỖI
CUNG ỨNG
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HỒ CHÍ MINH 2023
Trang 2CHAPTER 1: OVERVIEW OF SUPPLY CHAIN _31.1 Definition of Supply Chain _31.2 Definition of Supply Chain Management (SCM) _31.3 How Supply Chain Management Works _41.4 Phases of Supply Chain Management 41.5 Benefits of SCM for businesses _5
CHAPTER 2: MANAGING THE SUPPLY CHAIN OF ZARA 62.1 Supplier Relationship Management (SRM) _62.2 Diversification of Suppliers 6
2.2.1 Avoid dependence on a single supplier or region to mitigate risks. _62.2.3 Conduct risk assessments and develop contingency plans for critical components. _7
2.10.1 Optimize transportation routes to minimize costs and reduce environmental impact. 142.10.2 Utilize technology to track shipments in real-time and identify opportunities for efficiency improvements. _15
CHAPTER 3: CONCLUSION _173.1 The role of logistics in supply chain management _17
3.2 The importance of supply chain management for logistics _18
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Trang 3Chapter 1: Overview of Supply Chain
1.1 Definition of Supply Chain
A supply chain is a network of individuals and companies who are involved in creating a product and delivering it to the consumer Links on the chain begin with the producers of the raw materials and end when the van delivers the finished productto the end user
A supply chain is a network of companies and people that are involved in the production and delivery of a product or service
The components of a supply chain include producers, vendors, warehouses, transportation companies, distribution centers, and retailers
The functions of a supply chain include product development, marketing, operations, distribution, finance, and customer service
[The Supply Chain: From Raw Materials to Order Fulfillment (investopedia.com)]
Supply Chain example:
The generic supply chain begins with the sourcing and extraction of raw materials The raw materials are then taken by a logistics provider to a supplier, which acts as the wholesaler The materials are taken to a manufacturer, or probably to various manufacturers that refine and process them into a finished product
Afterward, it goes to a distributor that wholesales the finished product, which is next delivered to a retailer The retailer sells the product in a store to consumers Once the consumer buys it, this completes the cycle, but it’s the demand that then goes back and drives the production of more raw materials, and the cycle continues.[Supply Chain - Overview, Importance, and Examples
(corporatefinanceinstitute.com)]
1.2 Definition of Supply Chain Management (SCM)
Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers In essence, supply chain management integrates supply and demand management within and across companies
[https://cscmp.org/CSCMP/Educate/SCM_Definitions_and_Glossary_of_Terms.aspx
1.3 How Supply Chain Management Works
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Trang 4Supply chain management represents an ongoing effort by companies to make their supply chains as efficient and economical as possible.
Typically, SCM attempts to centrally control or link the production, shipment, and distribution of a product By managing the supply chain, companies can cut excess costs and needless steps and deliver products to the consumer faster This is done by keeping tighter control of internal inventories, internal
production, distribution, sales, and the inventories of company vendors
1.4 Phases of Supply Chain Management
Typically, the SCM process consists of these five phases:
a Planning
To get the best results from SCM, the process usually begins with planning to match supply with customer and manufacturing demands Companies must try to predict what their future needs will be and act accordingly This will take into account the raw materials or components needed during each stage of manufacturing, equipment capacity and limitations, and staffing needs Large businesses often rely on enterpriseresource planning (ERP) software to help coordinate the process
Effective SCM processes rely very heavily on strong relationships with suppliers Sourcing entails working with vendors to supply the materials needed throughout the manufacturing process Different industries will have different sourcing
requirements, but in general, SCM sourcing involves ensuring that: The raw materials or components meet the manufacturing specifications
needed for the production of the goods. The prices paid the vendor are in line with market expectations. The vendor has the flexibility to deliver emergency materials due to
unforeseen events
c Manufacturing
This is the heart of the supply chain management process, where the company uses its machinery and labor to transform the raw materials or components it has received from its suppliers into something new This final product is the ultimate goal of the manufacturing process, though it is not the final stage of supply chain management
d Delivery
Once products are made and sales are finalized, a company must get those products into the hands of its customers A company with effective SCM will have robust logistic capabilities and delivery channels to ensure timely, safe, and inexpensive delivery of its products
e Returns
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Trang 5The supply chain management process concludes with support for the product and customer returns It's bad enough when a customer needs to return a product, but even worse if that's due to an error on the company's part This return process is oftencalled reverse logistics, and the company must ensure it has the capabilities to receive returned products and correctly assign refunds for them Whether a company is conducting a product recall or a customer is simply not satisfied with the product, the transaction with the customer must be remedied.
1.5 Benefits of SCM for businesses
Supply chain management is important because it can help achieve several business objectives For instance, controlling manufacturing processes can improve product quality, reducing the risk of recalls and lawsuits while helping to build a strong consumer brand At the same time, control over shipping procedures can improve customer service by avoiding costly shortages or periods of inventory oversupply Overall, supply chain management provides multiple opportunities for companies to improve their profit margins and is especially important for businesses with large andinternational operations
Supply Chain Management (SCM): How It Works & Why It's Important (investopedia.com)
Chapter 2: Managing the supply chain of ZARA
Zara is a Spanish clothing brand based in Arteixo, Glacia owned by a Spanish tycoon Amancio Ortego Gaona Zara is a flagship chain store of Inditex Group which is the world’s largest apparel retailer
2.1 Supplier Relationship Management (SRM)
Suppliers and manufacturers are the pillars of any company Zara takes this fact very seriously and cares for its suppliers and manufacturers equally It efficiently protects the human rights of workers who work hard for making those fashionable garments
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Trang 6possible Zara’s sustainable business model helps in the development and growth of its suppliers As a result, it creates a positive impact in several countries
economically
Deep Collaboration: Supplier relationships are key and suppliers are all close to Zara
factories and collaborate tightly, so Zara can order on an everyday-need basis
Production Feedback: Everyday, store managers give customer feedback to the
market specialists, who then pass the information along to production & design teams.This rapid feedback loop enables a quick and agile response to the market
The company purchase the raw material to suppliers from Greece, Spain, Italy and Portugal
Those suppliers have to deliver the goods to “the cube “within 5 days mostly by truck,planes
and train Zara produce 60% of the items, so 40% of the production is being produce by 400
suppliers The majority are present in Europe, close to 70% and in Asia, 30% Zara choose to
work with European supplier mainly due to a question of quality but also of proximity Supplier
are a very important link of the supply chain, and to have supplier that are far away may cause
some issue in term of logistic like I said When Zara work with Europe suppliers for important
raw material as tissue, it works with Chinese supplier’s basics product such as button and zipper
With millions of products sold each years Zara is a huge and stable customer for thosesuppliers
that provide a great amount of command during the years.Production Feedback: Everyday, store managers give customer feedback to the market
specialists, who then pass the information along to production & design teams This rapid feedback loop enables a quick and agile response to the market
https://www.ivalua.com/blog/supply-chain-management-zara/
2.2 Diversification of Suppliers
2.2.1 Avoid dependence on a single supplier or region to mitigate risks.
Zara’s supplier list, therefore, includes twelve clusters that concentrate 92-97% of the production: Spain, Turkey, Morocco, Portugal, India, Bangladesh, China, Pakistan, Brazil, Vietnam, Cambodia, and Argentina These help the company keep an eye on labor quality and social compliance to apply them locally Including these clusters,
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Trang 7there are 32 new suppliers added in Asia The Zara supplier list also includes 1040 suppliers from Asia There are 459 in the European Union and 200 in the rest of Europe.
zara-suppliers-and-zaras-global-supply-chain/
https://fashinza.com/supply-chain/product-development/all-you-need-to-know-about-2.2.2 Identify and qualify alternative suppliers to ensure a diversified supply base.
As Zara grew, it realized that producing everything in high-cost locations in Europe was not helping increase margins Although it made sense to source the trendiest items from European factories that could produce them rapidly for European customers, basic items such as white T-shirts did not justify the same level of responsiveness So Zara began to source some products from lower-cost locations In doing so, it also reduced the impact of a potential disruption, since not all items wouldbe affected by a disruption in one geographic area
https :// sloanreview mit edu / article / reducing - the - risk - of - supply - chain - disruptions /
2.2.3 Conduct risk assessments and develop contingency plans for critical components.
Zara doesn’t outsource its products to Asia; the products are manufactured in the factories owned by the company It helps the company get an edge in the competition because they can offer people the products they wish to wear Buyers, therefore, get seasonal clothes, along with the basic T-shirts to wear casually
zara-suppliers-and-zaras-global-supply-chain/
https://fashinza.com/supply-chain/product-development/all-you-need-to-know-about-2.3 Technology Integration
2.3.1 Implement advanced technologies.
Zara utilizes advanced technology, such as RFID (Radio-Frequency Identification) tagging and real-time data analysis to optimize its supply chain
By tagging each item of clothing with an RFID chip, Zara is able to track inventory levels in real time and quickly respond to changes in demand This allows them to minimize inventory and reduce waste, while also ensuring that popular items are always in stock
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Trang 8In addition to RFID, Zara also uses a sophisticated logistics system to optimize transportation routes and ensure that new products are delivered to stores quickly This allows them to respond to changes in fashion trends and consumer preferences more quickly than their competitors.
Zara also collects data from its social media platforms and surveys They are active allthe time that helps them understand their customers’ fashion sense and needs.After collecting all the data from the above-mentioned sources, it is then collated in their data centre in Arteixo, Spain The analysts work 24 hours a day to process the data to initiate new design releases, ship to stores and much more Zara generates datadriven predictions weekly based on every single SKU they sell With the help of Data Analytics Zara understand customers in and out Hence, the popularity
growth
Zara design thousands of new styles annually, which they produce in small quantities to cycle them in stores every few weeks Zara then analyzes sell-out to produces more
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Trang 9of their successful products only, which keeps the customer coming back for styles that sold out too fast, or to see new styles altogether.
https :// www heuritech com / company - analysis / how - zara - can - stay - one - step - ahead - with - trend - forecasting /
Zara relies heavily on customer data and market research to determine trends and tailor its collections By constantly monitoring social media, fashion shows, and customer feedback, Zara stays on the cutting edge of fashion When Zara spots an emerging trend, its team of designers quickly develops styles to match New designs go into production immediately and are in stores just a few weeks later This data-driven model of fast fashion allows Zara to keep up with the latest trends and give customers what they want when they want it Staying ahead of trends and keeping a rapid pace of new styles in stores is how Zara built a fast fashion empire and earned its spot as one of the world's most successful clothing brands
https :// www thomasnet com / insights / zara - h - m - fast - fashion - ai - supply - chain /
Zara store management and staff use PDAs and POS systems to gather and analyze customer preference data to plan future designs based on feedback, rather than on hunches and guesswork
https://open.lib.umn.edu/informationsystems/chapter/3-2-dont-guess-gather-data/#:~:text=Zara%20store%20management%20and%20staff,than%20on%20hunches%20and%20guesswork
2.5 Inventory Management
2.5.1 Implement just-in-time (JIT) inventory practices to minimize holding costs.
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Trang 10Just-in-Time Manufacturing: Zara’s Agile Supply Chain
Just-in-time manufacturing is an efficient and cost-effective way of managing a supply chain Zara’s supply chain incorporates this approach, allowing them to quickly produce and deliver small batches of clothes that respond to changing fashion trends and customer needs While this approach provides many benefits, there can also be challenges associated with it
Zara’s supply chain incorporates just-in-time manufacturing principles to improve efficiency Zara is able to get clothes designed, manufactured, and delivered to stores within just two weeks They use a network of manufacturers worldwide to produce and deliver the small batches that Zara orders quickly This gives Zara an advantage over competitors with longer lead times, allowing them to respond rapidly to changing fashion trends and customer needs
Just-in-time manufacturing provides many benefits, such as reducing inventory costs and space requirements, streamlining production, and delivering a product that is exactly what customers want However, it can also come with challenges, such as increased pressure on suppliers to meet tight production timelines and the need for strong communication between different parts of the supply chain to coordinate effectively
2.5.2 Utilize efficient inventory tracking systems to reduce the risk of stockouts or overstock situations
Zara’s Dynamic Inventory Management System
Zara’s dynamic inventory management system is considered pioneering in the fashionindustry It allows Zara to respond quickly to the ever-changing fashion trends and demands of consumers The quick turnaround helps Zara maintain relevance and profitability in the dynamic industry The system provides real-time data and consumer behavior insights, enabling Zara to replicate and update consumer preferences This allows Zara to keep up with the latest fashion trends and choose the right quantities and items to stock in their stores