SCM in General

8/8/2019 SCM in General

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DESSERTATION ON SUPPLY CHAIN MANAGEMENT

DEFINITION OF SUPPLY CHAIN MANAGEMENT

What Is the Supply Chain?

- Also referred to as the logistics network- Suppliers, manufacturers, warehouses, distribution centers and retail outlets facilities- Raw materials- Work-in-process (WIP) inventory- Finished products

Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory,

and finished goods from point of origin to point of consumption (supply chain).

Another definition is provided by the APICS Dictionary when it defines SCM as the "design, planning,

execution, control, and monitoring of supply chain activities with the objective of creating net value,

building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand,and measuring performance globally."

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.


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SUPPLY CHAIN MANAGEMENT IS:

A set of approaches used to efficiently integrate

Suppliers

Manufacturers

Warehouses

Distribution centers

So that the product is produced and distributed

In the right quantities

To the right locations

And at the right time

System-wide costs are minimized and

Service level requirements are satisfied

SUPPLY CHAIN includes the following:

- MATERIAL FLOWS

- INFORMATION FLOWS

- FINANCIAL FLOWS


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Supply chain management (SCM) is the oversight of materials, information, and finances as they move in

a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management

involves coordinating and integrating these flows both within and among companies. It is said that the

ultimate goal of any effective supply chain management system is to reduce inventory.

SUPPLY CHAIN MANAGEMENT IS FACILITATED BY THE FOLLOWING:

- 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

GOALS OF SCM

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.


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The goal of supply chain management is to Reduce Organization Inefficiencies

The Process of Coordinating Activities Among

- Suppliers

- Production Facilities,

- Distribution Centers and

- Customers

So that its easy to make and distribute right product at the right time to the right location at a MinimumCost While maintaining a Desired Level of Service

OBJECTIVES OF SUPPLY CHAIN MANAGEMENT

- Enhancing Customer Service

- Expanding Sales Revenue

- Reducing Inventory Cost

- Improving On-Time Delivery

- Reducing Order to Delivery Cycle Time

- Reducing Lead Time

- Reducing Transportation Cost

- Reducing Warehouse Cost

- Reducing / Rationalize Supplier Base

- Expanding Width / Depth of Distribution

- Greater efficiency lower cost

- Enhance flexibility

- Improve customer service

- Optimize the value chain

IN WHICH INDUSTRIES SCM IS USED?


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Oil Industry, electronic industry, textile industry, food industry, Beverage industry, construction industry,

Computer industry, Pharmaceutical industry, Automobile industry, Fishing industry, Sugar industry etc....

ELEMENTS OF SCM

There are six key elements to a supply chain:

- Production

- Supply

- Inventory

- Location

- Transportation, and

- Information

The following describes each of the elements:

Production

Strategic decisions regarding production focus on what customers want and the market demands. This

first stage in developing supply chain agility takes into consideration what and how many products to

produce, and what, if any, parts or components should be produced at which plants or outsourced to

capable suppliers. These strategic decisions regarding production must also focus on capacity, quality

and volume of goods, keeping in mind that customer demand and satisfaction must be met. Operational

decisions, on the other hand, focus on scheduling workloads, maintenance of equipment and meeting

immediate client/market demands. Quality control and workload balancing are issues which need to be

considered when making these decisions

Supply

Next, an organization must determine what their facility or facilities are able to produce, both economically

and efficiently, while keeping the quality high. But most companies cannot provide excellent performance

with the manufacture of all components. Outsourcing is an excellent alternative to be considered for those

products and components that cannot be produced effectively by an organizations facilities. Companies


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must carefully select suppliers for raw materials. When choosing a supplier, focus should be on

developing velocity, quality and flexibility while at the same time reducing costs or maintaining low cost

levels. In short, strategic decisions should be made to determine the core capabilities of a facility and

outsourcing partnerships should grow from these decisions.

Inventory

Further strategic decisions focus on inventory and how much product should be in-house. A delicate

balance exists between too much inventory, which can cost anywhere between 20 and 40 percent of their

value, and not enough inventory to meet market demands. This is a critical issue in effective supply chain

management. Operational inventory decisions revolved around optimal levels of stock at each location to

ensure customer satisfaction as the market demands fluctuate. Control policies must be looked at to

determine correct levels of supplies at order and reorder points. These levels are critical to the day to day

operation of organizations and to keep customer satisfaction levels high.

Location

Location decisions depend on market demands and determination of customer satisfaction. Strategic

decisions must focus on the placement of production plants, distribution and stocking facilities, and

placing them in prime locations to the market served. Once customer markets are determined, long-term

commitment must be made to locate production and stocking facilities as close to the consumer as is

practical. In industries where components are lightweight and market driven, facilities should be located

close to the end-user. In heavier industries, careful consideration must be made to determine where

plants should be located so as to be close to the raw material source. Decisions concerning locationshould also take into consideration tax and tariff issues, especially in inter-state and worldwide

distribution.

Transportation

Strategic transportation decisions are closely related to inventory decisions as well as meeting customer

demands. Using air transport obviously gets the product out quicker and to the customer expediently, but

the costs are high as opposed to shipping by boat or rail. Yet using sea or rail often times means havinghigher levels of inventory in-house to meet quick demands by the customer. It is wise to keep in mind that

since 30% of the cost of a product is encompassed by transportation, using the correct transport mode is

a critical strategic decision. Above all, customer service levels must be met, and this often times

determines the mode of transport used. Often times this may be an operational decision, but strategically,

an organization must have transport modes in place to ensure a smooth distribution of goods.


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Information

Effective supply chain management requires obtaining information from the point of end-use, and linking

information resources throughout the chain for speed of exchange. Overwhelming paper flow and

disparate computer systems are unacceptable in today's competitive world. Fostering innovation requiresgood organization of information. Linking computers through networks and the internet, and streamlining

the information flow, consolidates knowledge and facilitates velocity of products. Account management

software, product configurations, enterprise resource planning systems, and global communications are

key components of effective supply chain management strategy.

THE IMPORTANCE OF SUPPLY CHAIN MANAGEMENT

- Shorter product life cycles of high-technology products.

- Less opportunity to accumulate historical data on customer demand

- Wide choice of competing products makes it difficult to predict demand

- The growth of technologies such as the Internet enable greater collaboration between supply

chain

trading partners

- If you dont do it, your competitor will

- Major buyers such as Wal-Mart demand a level of supply chain maturity of its suppliers

- Availability of SCM technologies on the market

- Firms have access to multiple products (e.g., SAP, Baan, Oracle, JD Edwards) with which to

integrate internal processes Supply Chain Management and Uncertainty Inventory and back-

order levels fluctuate considerably across the supply chain even when customer demand doesnt

vary The variability worsens as we travel up the supply chain


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SCM has allowed business nowadays to not just have productivity advantage alone but also on value

advantage.

As Martin Christopher in his book, Logistics and Supply Chain Management: Strategies for Reducing

Cost and Improving Service' states, 'Productivity advantage gives a lower cost profile and the value

advantage gives the product or offering a differential 'plus' over competitive offerings.' Through

maximizing added value and also reduce the cost in the same time, more innovation can be added to the

product and process. Mass manufacturing offers productivity advantage but through effective supply

chain management, mass customization can be achieved. With mass customization, customers are given

the value advantage through flexible manufacturing and customized adaptation. Product life cycles also

can be improved through effective use of SCM. Value advantage also changes the norm of traditional

offerings that is 'one-size-fits-all.' Through SCM, the more accepted offerings by the industry to the

consumers would be a variety of products catered to different market segments and customers

preferences.

PRINCIPLES OF SUPPLY CHAIN MANAGEMENT

Intimate customer knowledge

The first rule of any successful business is to fully understand customers and their needs. This knowledgemust include an understanding of the company, industry dynamics, and overall market environment. To

gainand keepthe confidence of their customers, companies must develop a sales plan, not a sales

forecast. Historically-based forecasts should just be the starting point. To encourage customers to

collaborate and share accurate information, companies should offer incentives such as price reductions,

better terms, and preferred allocations. To gain a true understanding of their customers businesses,

companies must focus on market knowledge, not just on direct customer demand or forecasts.

Consistent, continuous monitoring is crucial. Companies should constantly check execution against the

sales plan via point-of-sale data, market sales data, and other early indicators. Companies that conduct

post-mortems and share performance scorecards with customers demonstrate a passion for customer

serviceand maintain long-term, valuable customer relationships.


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Intimate supply knowledge

Over-forecasting causes suppliers to add judgment. To counteract that effect, companies must requiresuppliers to commit to requests in terms of a supply plan and to provide visibility into the status of the

supply plan. Post-mortems and performance scorecards keep suppliers accountable ensure goals are

communicated, and allow for continuous business evaluation.

Living and dying by the plan

Most plans are dead on arrival due to lack of visibility, modeling errors, and other constraints. Plans

need to be owned by the teams that are accountable and are empowered to make them happen.

Companies must implement rapid, constraint-based planning, and track any threats or deviations to theplan. The planning process must incorporate root-cause analyses of deviations, actions to overcome

threats, and rapid re-planning as a last resort, as well as post-mortems and performance management.

Cross-silo synchronization

Plans usually propagate in one direction only. To achieve agility, companies need to implement multi-

directional cross-silo synchronization. Static Sales and Operations Planning (S&OP) should be replaced

with dynamic Sales and Operations Management (S&OM).

An S&OM process extends the traditional S&OP process with a tight execution process through closed-

loop management. The closed-loop management process includes monitoring for deviations of actual

execution from plan, enables systematic root-cause analysis, and creates proactive and concerted

response. By enabling cross-silo synchronization across the ecosystem, organizations can move to one

version of the truth that is shared and acted upon.

Rapid, reliable fulfillment:

Order fulfillment is usually slow, rigid, and opaque. But companies can overcome this by responding to

customer requests with immediate commitments based on a firm, optimized, execution plan. Rapid,

reliable fulfillment can be achieved by pegging sub-plans to customer requests, tracking progress to

customer request fulfillment plans, and taking actions to compensate for any deviations.


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Supply chain design:

Supply chains are usually designed for cost rather than agility.

To achieve supply chain agility, companies must redesign planning and execution processes,organizations, and measurement. At the same time, companies need to reinvent network, inventory, and

fulfillment strategies, as well as component and sourcing strategies.

Business reconfiguration management:

The supply network is constantly changing. Todays business environment is characterized by new

products, suppliers, and customers, as well as new forms of production and fulfillment. Changes to a

physical network are expensive to replicate in computer systems, as multiple ERP systems, legacy

systems, and spreadsheets need to be synchronized. To keep system models in sync with the currentbusiness reality, companies must implement flexible IT systems.

STEPS INVOLVED IN SUPPLY CHAIN MANAGEMENT

Step1 - Designing the supply chain

- Determine the supply chain network

- Identify the levels of service required

Step 2 - Optimizing the supply chain


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- Determine pathways from suppliers to the end customer

- Customer markets to Distribution centers

- Distribution centers to production plants

- Raw material sources to production plants

- Identify constraints at vendors, plants and distribution centers

- Get the big picture

- Plan the procurement, production and distribution of product groups rather than individual

products in large time periods- quarters or years

Step 3 - Material flow planning

- Determine the exact flow and timing of materials

- Arrive at decisions by working back from the projected demand through the supply chain to theraw material resources.

- Techniques

- ERP

Step 4 - Transaction processing and short term scheduling

Customer orders arrive at random

This is a day to day accounting system which tracks and schedules every order to meet customer

demand

Order entry, order fulfillment and physical replenishment

THE VIRTUAL VALUE CHAIN

The value chain connects a companys supply side with its demand side.

Traditionally information has been a supporting function.

Information however can be managed far more creatively.

There are various stages of using value added information processes.


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The Six risk steps

Again, very similar to Martin Christopher, understanding and managing supply chain risks involves these

steps:

- Profiling the supplier base

- Assessing the supply chain vulnerability

- Evaluating implications

- Identifying mitigation and contingency actions

- Analyzing costs and benefits

- Implementing actions and measures

In describing each step, the level of detail Kiser and Cantrell provide is anything from several long

paragraphs to just a few short lines.

Step 1 - Supplier Base

This is an important task, particularly identifying what is essential for the company to be in control of, and

what does not matter so much:

Identify each raw material


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Identify strategic materials

Understand the strategic suppliers organization

Step 2 - Vulnerability

For each of the risks listed, the company must identify what scenarios that are likely to happen, why they

happen, and how the company is able or unable to cope with them.

Step 3 - Implications

This is one of the sections where the article falls short of mentioning anything substantially useful besidespromoting the Monte Carlo simulation technique.

Step 4 - Mitigation

This is where the company needs to set goals and targets and how to achieve them, e.g.:

Within 24 hours of a supply disruption of material X, purchase orders will be placed with the alternatesupply source to assure there will be no disruption in the supply of X.

This is in fact very similar to business continuity planning and evaluating how soon the the company can

get back to business as usual.


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Step 5 - Costs and benefits

Any cost in mitigation actions and measures brings with it the benefit of risk reductions and possible cost

savings in case of a disruption. But how much, and is it really worth it?

The cost of countermeasures to overcome potential disruptions, and hence the assumed reliability,

increase from left to right (dotted line). At point A, with no measures in place, the cost of disruptions is

high, at point B, with (expensive) measures in place, the cost is low, but the benefit/cost ratio is negative.

At point C the benefit/cost ratio is positive, but there is still room for improvement. Optimum is reached at

point D.

Step 6: Measures and actions

The most important part of implementing supply chain risk management is the clarification of roles and

responsibilities, including involving or partnering with the suppliers to in securing the supply chain, but not

only that.

For risk management to be effective, it must be fully integrated into the companys business processes.

The process of identifying risks, analyzing them, and planning mitigation strategies must be documented

and reported throughout the organization. To effectively evaluate risk strategy, management must

balance the cost of mitigation with available resources and optimum cost management objectives. The

risk management strategy should apply to everyone at all levels in the organization and focus on

achieving the companys business objectives.

There are seven steps that companies can take in order to become sustainable:-

- The first step is culture. Many companies are transfixed on short term results. The first industrialrevolution was defective and has transformed us into a disposable society. Unfortunately we havetrained our leaders on how to conduct business from a throwaway viewpoint. The assumptionsthese executives have had is if it is within the law, we are allowed to do it regardless of therepercussions to the environment. This is the first significant paradigm that must be changed.

CEO/Presidents must be sustainability leaders! They have to be relentless about instituting a

culture of eliminating waste, using environmentally friendly processes and products and


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conserving resources as much as possible. This culture starts with the top executive. Their words

and actions will play a large role on the implementation of a sustainability culture within an

organization.

Leaders need to realize that todays business actions will impact tomorrows environment.Progressive companies are appointing high level champions within their companies to signify the

importance of sustainability within the organization.

- The second step to instituting sustainability within a corporation is to educate the organization onsustainability. It is imperative to show employees the benefits of sustainability and what it can dofor a company and our environment.

Many organizations are holding conferences and workshops on sustainability. Several

universities including Syracuse University have a certificate program on sustainability. There are

countless books on sustainability such as The Ecology of Commerce, by Paul Hawken,Biomimicry, by Janine Benyus, Making Sustainability Work, by Epstein, Green to Gold, by Esty &

Winston and Cradle to Cradle, by McDonough and Braungart. The books are powerful advocates

for change and they show us how doing the right thing for the environment can help our

companies!

- The third step on our journey to sustainability is to complete a sustainability audit of ourcompanys supply chain. We need to develop a baseline measure for where we are today in orderto gauge where we need to go.

This audit should focus on the following areas: energy use, environmental costs, materials

recovery, water usage, transportation, products, hazardous materials used, processes, reverse

logistics, packaging and social responsibility. Once the audit is complete we can determine our

deficiencies and start focusing on improving these processes within our supply chains.

- The audit results should help the organization with our fourth step, which is determining the goalsand objectives for the sustainable supply chain. When developing goals and objectives,companies must make sure their goals are SMART (Specific, Measurable, Attainable, Relevant,and Timely) and that they are focused on sustainability. We should have goals on the reduction ofenergy consumption, the use of renewable resources, recycled material in our products,

eliminating waste and reducing a companys carbon footprint. We need to set goals that makesense for our company. Incremental steps towards the goals should be the plan. These goalsshould be incorporated into the overall objectives of an organization.

- Once we develop the sustainable goals for the organization, the fifth step would be to determinewhat actions need to take place in order to meet these objectives. A plan must be developed andprojects assigned to help meet the sustainable goals of the company. The objective is to achievea sustainable supply chain but unfortunately it will not happen overnight. This is a long arduous


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process and one that will take years to change. The actions and projects should facilitate thischange and help us reach our goals and objectives.

- Once the projects are in place the next step is to measure the sustainability progress. Measuresmust be in taken in order to see how effective we are with our projects. These sustainabilitymeasures must be posted and discussed at company meetings. Measuring objectives will driveresults! Once we reach a measure we need to raise the bar and focus on getting moresustainability within our supply chain processes. If we are falling short of our measures we needto find out what is preventing us from reaching our goals?

- Part of the last step on the journey to sustainability is benchmarking where your company is inregards to sustainability. Even though we have goals, and have projects and measures in place,we need to seek out other companies that are trying to achieve sustainability. What are theydoing that we can incorporate in our organizations? How can we replicate and incorporate theirsuccessful sustainability initiatives? We need to leverage the learning that is occurring in othercompanies and incorporate it into our organizations, which in turn will benefit society.

The key to becoming sustainable is to develop a culture of sustainability within your organization.Educate your employees, audit your supply chain processes, develop goals and objectives,

implement projects to meet your goals, measure your companys progress towards sustainability

and benchmark other sustainability initiatives.

A company will reach sustainability when they produce no waste, exclusively use renewable

resources, employ no hazardous materials in their process and develop products that are

recycled or used in another form that benefits the environment and society. The Industrial

Revolution is evolving into the Sustainable Revolution!


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STRATEGIES OF SCM

Strategy 1:

Adopt demand-driven planning based on real-time demand insights and demand shaping. The right

prediction and contingency planning tools will ensure a complete view and an effective response to risks

such as suppliers going out of business, political upheaval, and natural calamities affecting

manufacturing. Companies then can adjust pricing and promotions strategies to shape demand, move

additional product quickly, drive revenue growth, or further expand margins for a high-demand product

with limited market supply. The key is to have the foresight to leverage opportunities and mitigate

challenging events so that your business not only survives, but succeeds.

Strategy 2:

Build an adaptive supply chain with rapid planning and integrated execution. Once executives are able to

better predict demand and risk, they need to adapt their supply chains to changing market opportunities

and events. Companies must put in place dynamic planning and continually fine-tune operations. The old

model was to wait until the end of the month or quarter to shift production and supply based on shipments

and sales. The new model calls for more continuous, dynamic supply chain adjustments to rapidly

respond to market changes. This can minimize or even eliminate shocks across the supply network. The

resultsinclude better visibility; enhanced collaboration across the value chain, including sourcing and

supply, manufacturing, transportation, warehousing, and distribution; and accelerated decision-making

with better analytics and support.

Strategy 3:

Optimize product designs for supply, manufacturing, and sustainability in order to accelerate profitable

innovation. Innovation is crucial to being one step ahead of the competition. But innovation doesn't exist

in a vacuum. In order to be successful, products must be manufactured at the right cost. Decisions made

in the early cycles of product development can make or break the product. Designs must be optimized for

supply and manufacturability, and all the true costs must be accurately captured. In addition, product

innovation and competitive advantage increasingly stem from the selection of suppliers and technologies.If a company can manage the information, people, processes, and decisions regarding a product

throughout its life cycle, it can achieve strong dividends and market leadership.

Strategy 4:


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Align your supply chain with business goals by connecting sales and operations planning (S&OP) with

corporate business planning. Although S&OP processes provide coordination among sales,

manufacturing, and distribution, there still are disconnects and gaps among finance, strategy, and

operations in many companies. One way to bridge these gaps is with integrated business planning. This

process integrates financial strategic budgeting and forecasting systems with operations planning. The

resulting marriage of processes ensures revenue goals and budgets developed in finance are validated

against a detailed, bottoms-up operating plan. Concurrently, the strategy reconciles the operating plan

against financial goals. Integrated business planning, which connects S&OP processes with corporate

business planning, enables companies to achieve the right balance of supply and demand, aligned with

strategic business goals. It provides real-time visibility to all the key dimensions for success--demand,

supply, product, risk, and performance--across the organization and throughout the extended supply

chain.

Strategy 5:

Embed sustainability into supply chain operations. The triple bottom line of people, profit, and planet has

never been more important than it is today. Studies show that companies striving for social and

environmental sustainability achieve major competitive advantages, especially with regard to production

efficiency, supplier management skills, and attractiveness to employees. Substantial opportunities exist

for sustainability in supply chain operations:

Company leaders first need to include sustainability as a core component of their supply chain strategy.

This means incorporating it as a key requirement across all supply chain processes.

Second, professionals initially should focus on the basics to achieve quick wins through real-time visibility

to energy and resource consumption and resource or material movement. This enables reduction of

carbon inefficiencies, minimized energy consumption, less waste with "recycle-reuse-refurbish" materials,

and optimized travel and transportation.

Businesses can keep the momentum by ensuring continuous improvement through systemic

measurement, audit, and knowledge management. Compliance audits, best practices, and benchmarks

provide a governing framework for sustainable supply chain operations and ensure clarity around the

environmental impact of specific actions.

CHALLENGES OF SUPPLY CHAIN MANAGEMENT

Supply chain executives have a daunting daily challenge managing a global supply chain. They must

keep customers or stores properly stocked and deliver the perfect order every time. They must balance


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SUPPLY CHAIN MANAGEMENT IN SAP

You face enormous pressure to reduce costs while increasing innovation and improving customer service

and responsiveness. SAP Supply Chain Management (SAP SCM) enables collaboration, planning,

execution, and coordination of the entire supply network, empowering you to adapt your supply chain

processes to an ever-changing competitive environment.

SAP SCM is part of the SAP Business Suite, which gives organizations the unique ability to perform their

essential business processes with modular software that is designed to work with other SAP and non-

SAP software. Organizations and departments in all sectors can deploy SAP Business Suite software to

address specific business challenges on their own timelines and without costly upgrades.

SAP SCM can help transform a linear, sequential supply chain into a responsive supply network in

which communities of customer-centric, demand-driven companies share knowledge, intelligently adapt

to changing market conditions, and proactively respond to shorter, less predictable life cycles. SAP SCM

provides broad functionality for enabling responsive supply networks and integrates seamlessly with both

SAP and non-SAP software. The application:

Delivers planning and execution functions that are integrated by design Supports best practices and

provides preconfigured software for enabling collaborative business, accelerating implementation, and

reducing costs Is recognized by key industry analysts as the market-leading SCM application

SUPPLY CHAIN MANAGEMENT IN ORACLE


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Oracle Supply Chain Management breaks down the barriers to communication among organizations,

spots opportunities for revenue growth and savings, employs true business intelligence in every decision

at every step in a process and gets the job done better and faster while using fewer resources.

Oracle supply chain management (SCM) is a best-in-class, complete, open, integrated solution thatpowers information-driven supply chains. With Oracle SCM, companies can predict market requirements,

innovate in response to volatile market conditions, and align operations across global networks. Oracle

SCM provides industry-specific solutions based on best-in-class applications that span product

development, demand management, sales and operations planning, transportation management, and

supply management.

Only Oracle provides the ability to sense, shape, and fulfill demand with best-in-class demand

management and real-time sales and operations planning

Only Oracle provides best-in-class global transportation management and supply management

Only Oracle supports lean, mixed-mode manufacturing with integrated manufacturing execution systems

that meet both discrete and process requirements

Only Oracle's SCM applications are based on an open, complete and standards based architecture

Only Oracle delivers best-in-class capabilities including demand management, product design, analytics,

and optimization via strategic acquisitions including Demantra, Agile, and 360Commerce


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SUPPLY CHAIN MANAGEMENT IN BAAN

The Baan Supply Chain suite includes 19 integrated software modules that provide companies with a

framework to manage customer interactions while monitoring transactions and collaboration with

business partners, the company said.

Strategic planning modules help companies locate plants and distribution facilities, and other critical partsof the supply chain, while Operational planning modules manage "customer intelligence" and process-feedback and predict and analyze demand, while helping companies plan, price and coordinate theirmanufacturing and distribution strategies.

Transactional execution modules based on a collaborative technology framework provides integrationwith other applications on the network that are critical to the supply chain process--like ERP, CRM, andconfiguration.The new suite also includes integration with Baan ERP, Baan Front Office, Baan E-Enterprise and othercompeting enterprise applications, the company said.

"In this Internet economy, supply chains must ultimately serve the customer," said Baan chief executiveMary Coleman, in a statement. "Because today's customers want their products and services faster,cheaper and better than their last purchase, companies must continually re-architect their supply chain toincrease customer intimacy and satisfy ever-changing demand."

Baan's roots are in making enterprise resource planning (ERP) software that automates a company'sbusiness needs, including human resources and accounting. But like rivals SAP, J.D. Edwards,and Oracle, Baan has moved to offset a downturn in ERP software sales with a focus on the supply chainmarket, which has been historically dominated by companies such as i2 Technologies and Manugistics.

Analysts have bright expectations for the supply chain management market. AMR Research expects thesupply chain management market to grow 80 percent to $ 6.5 billion in 2009, and expand to $13.6 billionby 2018.

In 1998, Baan reported losses of $315 million as license revenues dropped and costs increased.Coleman said at the time that Baan had achieved its goal of cutting expenses, and stressed that it wouldtake about a year for the company to see the benefits of the cutbacks.

Available now, pricing for Baan's new supply chain management applications range from $50,000 to$800,000 per component, the company said.

SCM in General

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