Assessment Criteria Notes

Learners need to research information and produce a review of the strategic supply chain management and logistics taking place in an organisation.

For 1.1, learners need to explain the importance of effective supply chain management in achieving organisational objectives. To illustrate this, they could relate this explanation to the achievement of objectives in their own organisation.

For 1.2, learners need to explain the link between supply chain management and business functions in their own/chosen organisation. To illustrate these links, the explanation needs to contain real examples from their chosen organisation.

For 1.3, learners need to discuss the key drivers that are moving their chosen organisation towards implementing an integrated supply chain.

For 2.1, learners need to describe the strategies used in their chosen organisation to maintain relationships with suppliers before evaluating the effectiveness of these strategies.

For 2.2, learners need to demonstrate how they have used IT to create strategies to develop their chosen organisation’s relationship with its suppliers. From this, they need to develop systems to maintain these relationships (AC2.3).

To demonstrate their understanding of the role of IT in supply chain management for their chosen organisation, they need to assess the effectiveness of IT in managing the supply chain, (AC3.3), evaluate how IT has contributed to the management of the supply chain (AC3.2) and assess how IT could assist in the integration of different parts of the supply chain (AC3.1).

For 4.1, learners need to explain the role of logistics in the management of the supply chain in their chosen organisation and then evaluate procurement practices (AC4.2). Having examined both procurement and logistics management, learners need to discuss the factors that must be considered when looking at making improvements to both procurement practices and logistics in the organisation (AC4.3).

For 5.1, having reviewed their chosen organisations’ supply chain and logistics activity, learners need to plan a strategy to improve the management of the supply chain.

For 5.2, learners need to assess how their improvement strategy from 5.1 will benefit overall business performance in their chosen organisation.

For 5.3, learners need to identify any current or potential barriers that could prevent or hinder their improvement strategy from being implemented successfully in their chosen organisation. Learners need to explain clearly how these barriers will be overcome.

Unit Content – linked to Assessment Criteria

1. Understand the relationship between supply chain management (SCM) and organisational business objectives

Concepts: demand and supply management; push and pull models; enterprise resource planning (ERP); vendor managed inventory (VMI); efficient consumer response (ECR); value chains; lean supply; global SCM; contribution to business objectives

Development: physical distribution management; materials management; logistics management and SCM (upstream and downstream)

Organisational objectives and business functions: financial, marketing, sales, operational, manufacturing, human resource

Key drivers: facilities; inventory; transportation; information; sourcing; pricing; globalisation; technology; customer expectation

Integrated supply chain: strategic goals; culture change; roles and responsibilities of staff; organisational rationalisation; higher volume and speed of transactions; enhanced market position; reduced supply chain complexity; potential for smooth process operations following complex initial set-up; enhanced, lean and agile systems

2. Be able to use information technology to optimise supplier relationships in an organisation

Different types of relationship: alliances eg adversarial, developmental, collaborative, strategic; supplier development; e-tailing; business to business, business to consumer; intermediation and disintermediation; networks; supplier associations; supplier tiering; organisational networks; personal networks; auctions

Use of information systems: intranets; extranets and virtual private networks (VPNs) for supply chain integration; operational issues eg eliminating ‘media breaks’ to exchange supply information on a common digital platform; opportunity to use sales service staff in call centres dealing with supply exceptions; order processing, web-based EDI, tracking systems

Individual elements: the use of intranets and extranets in building value chains for organisations linked in the supply chain, order processing, web-based electronic data interchange (EDI), tracking systems

Differing applications for cost reductions and customer service: time compression, demand fulfilment, total cost of ownership reduction

3. Understand the role of information technology in supply chain management

Role of information technology: the internet; online communication systems; online business communities; decrease in transaction costs; closer buyer supplier relationships; improved purchasing, order processing, EDI, inventory management, production scheduling; Just in Time (JIT) programmes; tracking shipments; reducing lead times; information sharing; lean organisations

4. Understand the role of logistics and procurement in supply chain management

Procurement: supplier selection; optimal procurement policies; reliability; quality

Logistics: role within supply chain management; planning; implementation and control of the movement and storage of goods; management of raw materials; link between the marketplace and operating activity of the organisation; customer satisfaction; coordination of materials and information flows; point of origin to point of consumption

5. Be able to plan a strategy to improve an organisation’s supply chain

Benefits: reduced stock holding; elimination of waste; improved customer service; reduced labour costs; improved manufacturing planning; Just in Time (JIT)

Barriers: inappropriate distribution networks; ineffective distribution strategies; trade-offs in logistical activity eg a full truckload of a product is ordered to reduce transportation costs resulting in increased inventory holding costs; inability to integrate processes through the supply chain to share information; poor inventory management; cash flow problems

This Assignment is based upon the Pearson Edexcel Strategic Management and Leadership from August 2010 Programme Specification found at http://www.lcbuk.org/pdf/Edexcel_level7_SML.pdf