Unit 11 Supply Chain Management


Unit 11:

Supply Chain Management


Unit code:

QCF level:

Credit value:


The aim of this unit is to examine the main principles, concepts and practices of supply chain management.

Unit abstract

This unit addresses the definition of a supply chain and supply chain planning, why it is important in any business, how the supply chain operates and the principles for supply chain improvement. Where appropriate, the global nature of the supply chain will be emphasised.

Learners will examine the components of supply chains and how these vary within different organisations. They will learn how organisations manage and control their supply chain functions to gain both competitive and cost advantage. They will also investigate supply chain planning from both the strategic and operational standpoint. They will identify and cost activities within supply chain operations, referring to performance indicators, marketing, response to customer needs and benchmarking.

As there is always a need to improve supply chain performance, learners will investigate methods used to enhance systems, approaches to performance improvement and the role of technology in supply chain improvement.

Learning outcomes

On successful completion of this unit a learner will:

1     Understand the strengths, weaknesses and competitive advantage of supply chains

2       Understand the use of supply chain planning

3       Be able to analyse an organisation’s supply chain operation

4       Be able to evaluate a supply chain, determine an optimum supply chain solution and prepare an implementation plan.

Unit content

1      Understand the strengths, weaknesses and competitive advantage of supply chains

Supply chain: what is meant by a supply chain; main components; variation within different organisations; importance of harmonising physical and information flows within a supply chain in an integrated manner; types of supply chain flow and direction; how organisations can manage and control their supply chain to gain competitive and/or cost advantages; why supply chains may not always function in an effective way eg Forrester or bullwhip effect, uncertainty in delivery, large amount of stock, lack of forward planning

2      Understand the use of supply chain planning

Supply chain planning: planning a supply chain from a strategic and operational standpoint; tactical plans; relationship between supply chain planning and customer service levels; role of inventory and the increasing need for effective inventory management in the supply chain; available supply chain alternatives eg outsourcing, contracting relationships, joint ventures, wholly owned subsidiaries; their characteristics and constraints; process involved in new and developing supply chain strategies; relationship with company objectives

Key elements: key elements involved in the supply chain eg location of suppliers, main processes carried out, relationships between each part of the supply chain, integration of parts of the supply chain

3      Be able to analyse an organisation’s supply chain operation

Supply chain operations: identifying and costing the separate activities within a supply chain; types and role of performance indicators in supply chain management; why an effective supply chain can operate as part of the marketing mix of an organisation; how and why supply chains respond to customer needs; the nature and use of benchmarking

4      Be able to evaluate a supply chain, determine an optimum supply chain solution and prepare an implementation plan

Supply chain improvement: ways in which supply chain performance can be enhanced towards lean and agile systems; principal trade-offs involved in supply chain management; different approaches to performance improvement; role of information processing systems in supply chain improvement; supply chain audit characteristics of an optimum supply chain solution; improvement implementation plan

Learning outcomes and assessment criteria

Learning outcomes

Assessment criteria for pass

On successful completion of

The learner can:

this unit a learner will:

Understand the strengths,
outline and explain three supply chains for an

weaknesses and

organisation and make comparisons with similar and

competitive advantage of

dissimilar types of organisation

supply chains
analyse the differences between the types and

directions of flows in a supply chain

evaluate the main strengths and weaknesses of an

organisation’s supply chain and the extent to which it

provides competitive advantage for the business

Understand the use of
explain how company objectives are translated into a

supply chain planning

meaningful supply chain strategy

analyse the pattern and requirements for inventory in

an organisation’s supply chain

devise suitable alternative supply chain solutions

including outsourcing potential

describe the importance of the key elements of the

supply chain

Be able to analyse an
prepare a cost report on the various activities within the

organisation’s supply chain

supply chain operation

measure the performance of an organisation’s supply


benchmark supply chain performance against that of

similar organisations

evaluate the suitability of benchmarks for use against

company objectives

Be able to evaluate a

conduct and evaluate a supply chain audit

supply chain, determine an

analyse the different trade-offs involved in a supply

optimum supply chain


solution and prepare an

determine an optimum supply chain solution

implementation plan

devise a suitable implementation plan.



This unit links with Unit 23: Engineering Procurement, Unit 34: Integrated Logistical Support Management and Unit 12: Material Handling Systems.

Essential requirements

There are no essential resources for this unit.

Employer engagement and vocational contexts

Liaison with industry should be encouraged in order to develop a valuable, relevant and alternative resource facility.