E-Commerce

• Value Chain• Supply side- raw materials, inbound

logistics and production processes• Demand side- outbound logistics,

marketing and sales.

WHAT IS SUPPLY CHAIN MANAGEMENT

" Is the strategic management of activities involved in the acquisition and conversion of materials to finished products delivered to the customer"

SupplierManagement

Schedule /Resources Conversion

Stock Deployment Delivery

CustomerManagement

Leads to Business Process Integration

Material Flow

Information Flow

• Supply chain is the system by which organizations source, make and deliver their products or services according to market demand.

• Supply chain management operations and decisions are ultimately triggered by demand signals at the ultimate consumer level.

• Supply chain as defined by experienced practitioners extends from suppliers’ suppliers to customers’ customers.

• SUPPLY CHAIN INCLUDES :

– MATERIAL FLOWS

– INFORMATION FLOWS

– FINANCIAL FLOWS

• SUPPLY CHAIN MANAGEMENT IS FACILITATED BY :

– PROCESSES

– STRUCTURE

– TECHNOLOGY

• Supply chain serves two functions:

– Physical

– Market mediation

• Supply chain objectives may differ from situation to situation.

• For functional products, cost efficiency is the critical factor.

• For innovative products, responsiveness is the important factor.

• Leanness + Agility together make up Leagility

Supply Chain Structure

Information Flow

Raw Materials

RETAILERFACTORY DC RDC

SUPPLIER

Finished Goods

Supply Chain and Demand Chain

• Demand chain is defined as the system by which organizations manage sales and distribution of products and services to end users.

• Conceptually incorrect to look at demand chain separately

• Look at the pipe as a whole.

• But is there a pipe at all?– More a network– Not necessarily linear

• Value chain orchestration rather than controlling the flow through the pipe

• A network of independent and interdependent organizations mutually and cooperatively working together to control, manage and improve the flow of materials and information from suppliers to end users

SUPPLY CHAIN DRIVERS

Not new. Value system of Michael Porter• Why sudden interest?

– Demanding customers– Shrinking product life cycles– Proliferating product offerings– Growing retailer power in some cases– Doctrine of core competency– Emergence of specialized logistics

providers– Globalization– Information technology

SUPPLY CHAIN ELEMENTS

• Supply Chain Design• Resource Acquisition• Long Term Planning (1 Year ++)

Strategic

• Production/ Distribution Planning• Resource Allocation• Medium Term Planning (Qtrly,Monthly)

Tactical

• Shipment Scheduling• Resource Scheduling• Short Term Planning (Weekly,Daily)

Operational

• Supply Chain Goals

Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on – Revenue growth– Better asset utilization – Cost reduction.

Reduce Overall Cycle Time : Improve Response

Supply Chain Management

Underlying Principles

Compression

Conformance

Co-operation

Communication

(Planning/Manufacturing/Supply)

(Forecasts/Plans/Distribution) (Cross -Functional)

(Real Time Data)