0:10 welcome to Supply Chain management now I
0:11 know most of you have spent your
0:13 childhood evenings dreaming of taking
0:15 your first Supply Chain management
0:17 course but for those handful of you who
0:19 might not know what Supply Chain
0:21 management is let me provide you a brief
0:24 explanation let's take a simple product
0:27 like a bottle of water clean water a
0:30 plastic bottle a plastic cap and a label
0:32 buying them at the store or vending
0:34 machine might cost you about
0:37 a150 how much of that do you think is profit
0:38 profit
0:44 nope wrong wrong again not
0:47 likely water a plastic bottle and a
0:50 label That Couldn't cost more than 50
0:52 cents and if you buy them in bulk how
0:54 could each bottle not give you at least
0:58 a dollar in profit seriously if you
1:00 think you can make $1 per bottle you
1:02 should drop out of college right now and
1:04 get into the bottled water business you
1:07 see this right here illustrates one of
1:10 the most common consumer misconceptions
1:13 product cost is not equal to material
1:15 cost and in business you don't have the
1:17 luxury of thinking only as a consumer
1:18 you need to think like a business
1:22 executive or better yet an
1:25 entrepreneur so in order to figure out
1:27 where all that profit went we need to
1:29 imagine what it took for that bottle of
1:32 water to get into your hands first you
1:35 need to negotiate the purchase of the
1:37 empty bottles and caps those bottles
1:39 will be much easier to transport if
1:41 they're in boxes we'll need to shrink
1:42 wrap those bottles so they don't fall
1:45 out of the box we can move a whole lot
1:47 of boxes quickly if they're all put on
1:49 pallets in order to move the pallets
1:50 you'll need a forklift which means
1:52 you'll need a forklift driver that
1:55 forklift will then take the pallet and
1:57 put it into a truck which will require a
2:00 truck driver Fuel and insurance also
2:02 you'll need a label for that bottle of
2:04 water therefore you need to design the
2:07 label print the label and get the label
2:09 shipped to the plant another truck
2:11 driver more fuel and insurance our water
2:14 bottling plant won't be free and neither
2:16 will the energy it uses in our bottling
2:19 plant will have employees and bottling
2:20 machines and let's not forget the
2:23 day-to-day items like light bulbs
2:25 garbage bags machine parts janitorial
2:27 supplies toilet paper and anything else
2:30 that will be used at the plant by the
2:33 employees oh yeah and we'll also need
2:35 access to the drinking water machines
2:38 will then purify the water other
2:40 machines will bottle the water and affix
2:43 the labels to the bottles and still
2:45 another set of machines will box shrink
2:47 wrap and then palletize the bottles in
2:50 order to move those pallets again you'll
2:52 need a forklift which means we'll need
2:54 another forklift driver that forklift
2:56 will then take the pallets and put them
2:58 into trucks head it to the distribution
3:00 centers and
3:01 as we've
3:04 seen those trucks will require drivers
3:06 Fuel and insurance those distribution
3:09 centers will also require employees
3:11 forklifts and energy from the
3:13 Distribution Center they'll head out to
3:15 retail stores and still another truck
3:17 which will require a driver Fuel and
3:20 insurance that store will need employees
3:22 to unload the truck stock the bottles of
3:25 water on the shelf or refrigerator if
3:27 you have a refrigerator you'll of course
3:30 need energy if we want to secure our
3:32 stock we may get a security guard or a
3:34 security system and of course the store
3:38 will likely get insurance also Imagine
3:40 the cost associated with returning and
3:43 replacing bottles that are damaged oh
3:45 and for some reason even bottles of
3:47 water sometimes have 1800 numbers which
3:50 means you'll need a staffed call center
3:52 to answer the customer questions about
3:55 your bottle of water wow all those
3:58 materials boxes people machines
4:01 buildings energy fuel and vehicles they
4:03 cost money those things weren't free and
4:05 they probably weren't used efficiently
4:08 and it's likely that several bottles
4:09 didn't survive the journey to the
4:12 consumer oh and by the way the employees
4:14 at the water company you know the ones
4:16 that work in finance accounting
4:19 marketing human resources and it they
4:22 want a paycheck too so through that
4:24 simple example of a super simple product
4:26 we're beginning to see that companies
4:29 face challenges when they buy things
4:33 make make things move things sell things
4:35 and service things which includes repair
4:37 and maintenance oh and let's not forget
4:39 companies need to do all these things
4:42 using sustainable materials energy and
4:44 methods guess whose job it is to make
4:46 sure that all these things happen
4:49 flawlessly with minimal effort and of
4:52 course at minimal cost you guessed it
4:54 supply chain managers the supply chain
4:56 manager needs to be able to do all of
4:58 these things they need to give the
5:01 customer the product they want when they
5:03 want it as often as they want it for a
5:06 reasonable price while still managing to
5:08 make a profit this requires world-class
5:11 skills and knowledge in the study of
5:12 Supply Chain
5:14 management there's that scary term again
5:17 Supply Chain management let me try to
5:19 make it friendlier by shuffling around the
5:20 the
5:24 words there you go the management of the
5:26 chain of supplies for some reason that
5:28 just seems a whole lot easier to
5:30 understand doesn't it but but it also
5:33 helps us understand the complex nature
5:34 of Supply Chain
5:37 management I mean the management of the
5:40 chain of supplies now let's think of
5:42 other products and what their supply
5:45 chains might Encompass hamburgers
5:46 hamburgers
5:49 sweaters coffee tables
5:51 tables
5:53 cars and
5:55 airplanes now I know many of you are
5:58 saying but I live in a service economy I
6:00 won't be Manufacturing
6:04 anything wrong again as of 2008 the US
6:06 was still the number one exporter of
6:08 manufactured goods okay maybe not for
6:11 long so let's talk about service Economy
6:13 Supply chains let's think of something
6:16 you're probably familiar with the hotel
6:19 industry what do hotels manufacture
6:22 lodging experiences dining experiences
6:25 Spa experiences which altogether make up
6:28 vacation and Conference experiences in
6:30 order to do all these things effectively
6:33 and efficiently what's required hotels
6:36 need to buy things like beds furniture
6:40 televisions cable food soaps towels they
6:42 also make things or in this case
6:45 manufacture services like housekeeping
6:49 meals massages and special events hotels
6:51 also move things like transporting clean
6:54 towels and food to and from the rooms as
6:56 well as transporting guests and their
6:58 luggage to and from the airport they
7:01 even sell things like in room movies
7:04 internet services and tickets to events
7:07 and finally they also provide services
7:10 such as making reservations organizing
7:13 events making wakeup calls and even
7:16 cleaning and pressing clothes once again
7:18 we see that the fundamental skills
7:20 learned in Supply Chain management can
7:23 be used to manufacture service
7:25 experiences as much as they aid in manufacturing
7:26 manufacturing
7:29 products well I hope that this has given
7:30 you an idea of what Supply Chain
7:34 management is all about you see this is
7:36 the reason why little kids all around
7:37 the world want to be supply chain
7:40 managers they want to take part in
7:43 manufacturing the best products and
7:46 services on Earth so again welcome to
7:47 Supply Chain management where all of
7:50 your childhood supply chain dreams are
