B L O C K C H A I N I N S U P P LY C H A I N A N D
LOGISTICS MANAGEMENT
T U TA 3 3 0 0
KHUR AM SHAHZA D
Supply chain
and its
challenges
MODULE 3
Supply chain and its key
components
▸ What is a supply chain?
▸ The supply chain includesall the activities, people, organizations, information, and
resources required to move a product from inception to the customer
▸ The concept, The industry, The function
▸ What is supply chain management (SCM)?
▸ SCM is the process of integrating the supply and demand management, not only
within the organization, but also across all the various members and channels in
the supply chain so they work together most efficiently and effectively
3
Michigan State University Resources (2020)
Supply chain and its key
components
Zhang (2019)
▸ Planning ▸ Delivering
▸ Forecasting demand, designing SC intentionally, ▸ Coordinating the orders, scheduling delivery,
and determining how organization will measure dispatching, invoicing, and receiving payments
the supply chain to ensure it is performing as
expected
▸ Supporting customers
▸ Supply chain managers also need to develop a
▸ Sourcing network that supports customers
▸ Selecting suppliers is a critical component
▸ Making
▸ Supply chain managers also need to help
coordinate all the steps involved in creating the
product itself
4
Michigan State University Resources (2020)
Supply chain management and
logistics
Michigan State University resources (2020)
▸ The terms logistics and SCM are sometimes used interchangeably
▸ SCM is an overarching concept that links together multiple processes to achieve competitive advantage
▸ Logistics refers to the movement, storage, and flow of goods, services and information within the overall
supply chain
Key differences
SCM Logistics
is a way to link major business processes within and as activities – transportation, warehousing,
across companies into a high-performance business packaging and more – that move and
model that drives competitive advantage position inventory and acknowledge its role
in terms of synchronizing the supply chain
5
Bowersox, Closs and Cooper (2020). Supply Chain Logistics Management, 5th Edition, McGraw-Hill Eduction, New York, NY.
Global supply chain and logistics
6
Vyas, Nick, et al. (2019)
SCM trends and challenges
▸ SCs to support business strategies – a key business process Michigan State University resources (2020)
▸ Distribution networks are evolving – from centralized to distributed and hybrid
▸ Multimode logistics & transportation
▸ Shipping directly to customers
▸ These growing trends pose challenges such as SC risks, disruption
communication, multi-sourcing, safety, sustainability, regulatory compliance,
resource utilization, material consumption and so on…
7
Pagano & Liotine (2020)
Challenges and complexities
of SCs
Supply chain complexity
▸ Evolving customer requirements, challenges from competition, geographically
separated operations, and the adoption of new business models (such as e-
commerce) make the current SC a highly complex system
▸ Increasing demand for customized products, transparency and provenance
▸ Consumer expectations, more routes to market, international complexities
▸ Covid-19 and its challenges for supply chain
8
Zhang (2019)
Supply chain complexities and failures
@PA images
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Challenges and complexities of SCs
(cont.)
Traditional challenges Current age/most pressing challenges
▸ Consumer demands pulls the need for improved ▸ Supply chain sustainability
speed, quality and service ▸ Fast changing markets – technological
▸ Managing supply chain relationships advancements
▸ Single-source amplifies SC risk ▸ Limited transparency & traceability
▸ Slowed digital transformation ▸ Supply chain visibility issues
▸ Lack of actionable data and insights ▸ Outdated means of data sharing
▸ Longer lead times & cash flow issues ▸ Compliance challenges
▸ Exchange rate & transaction costs ▸ Asynchronous flows of SC – physical flow and
information flow
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(Blume Global 2021; Zhang, 2019; Shahzad, 2018; Shahzad et al., 2018; Shahzad et al., 2020
Sustainable supply chain
management (SSCM)
▸ Sustainability is mostly seen as a supply chain
management responsibility
Carter and Rogers (2008)
▸ In supply chain management, sustainability
centers around creating value by achieving social,
▸ Sustainable supply chain
environmental and economic goals
management is not just about
▸ Environmental and social impacts occur across operational efficiencies; it’s also
the supply chain; in general, the biggest impacts about marketing and public relations
are on raw materials and in areas related to
transportation
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(Waller, Matthew et al., 2019)
Sustainability challenge
▸ Climate change - aiming for sustainability
▸ Fair labor practices
▸ Low carbon emission – environmental footprints
▸ Transforming manufacturing to be lean, green, equitable and empowering
▸ Sourcing responsibly
▸ Waste management and reduction
12
(Ashby & Smith, 2014; Qafila, 2021; Boariu, 2015)
Examples
https://www.nestle.com/sites/default/files/2021-
03/creating-shared-value-report-2020-en.pdf
https://corporate.marksandspencer.com/sustainability/b
usiness-wide/responsible-sourcing https://www.walmartsustainabilityhub.com/s
ustainability-index
13 https://www.unilever.com/planet-and-society/
https://purpose.nike.com/supply-chain-sustainability-index
Transportation management issues
▸ Importance of transportation in supply chain
▸ Two-thirds of the costs in US logistics – $894.7 billion each year
▸ In China, transportation costs as a percentage of GDP is 8.1% of total logistics costs
▸ Challenges
▸ Disputes over payments in transportation industry
▸ Processing and administration costs
▸ Temperature control challenges
▸ Industry’s struggle with matching shippers (the demand) with carriers (the supply)
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(Waller, Matthew et al., 2019)
Traceability & tracking
▸ Lack of traceability
▸ Transparency issues
▸ Tracking supply data on outdated technology
▸ Heavily centralized supply chain
▸ No ‘clear path’
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Pagano & Liotine 2020; Saberi et al., 2019; Bateman, 2015
Visibility and provenance
in supply networks
▸ Structural holes in supply network
▸ Three symptoms of a structural hole
▸ You don’t know something valuable
▸ Lack access to important information
▸ High cost to access the information
Summary of challenges in supply network stages
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(Waller, Matthew et al., 2019)
Visibility and provenance in supply
networks (cont.)
▸ Transparency remains a challenge for high-value items
▸ Traceability starts with the consumer
▸ Sustainability challenges to automotive industry
▸ Employ appropriate technologies
▸ Renewable resources
▸ Blood supply chain and its challenges
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EverLedger, 2020; Shahzad & Helo, 2021 (forthcoming)
Why blockchain?
▸ Blockchain is seemed to be a solution
▸ It can address the pressing industrial
concerns
▸ Reshaping existing supply chain
ecosystem
Blumeglobal.com
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Shahzad & Helo, 2021a and 2021b (forthcoming)
THANK YOU!
KHURAM . S HA H ZAD @ U WA SA . FI
