Supply Chain Mgmt(2)

7/28/2019 Supply Chain Mgmt(2)

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SUPPLY CHAINMANAGEMENT

JASWINDER SINGH

TANVI SINGH



SUPPLY CHAIN

All facilities, functions, activities, associated with flow

and transformation of goods and services from raw

materials to customer, as well as the associated

information flows

An integrated group of processes to “source,” “make,”

and “deliver” products



SUPPLY CHAIN PROCESSES



FACILITIES

Warehouses

Factories

Processing centers

Distribution centers

Retail outlets

Offices



INTRODUCTION

“Supply chain management is a set of

approaches used to efficiently integrate suppliers, manufacturers, warehouses, and customers so that merchandise is produced anddistributed at the right quantities, to the right locations, and at theright time in order to minimize system wide costs while satisfying service-level requirements.”

The sequence of organizations - their facilities, functions, andactivities - that are involved in producing and delivering a product or

service.



SUPPLY CHAIN

MANAGEMENT (SCM)

Managing flow of information throughsupply chain in order to attain the level of

synchronization that will make it moreresponsive to customer needs while lowering costsKeys to effective SCM

• information

• communication• cooperation• trust



ILLUSTRATION:

TYPICAL SUPPLY CHAIN FOR AMANUFACTURER

Supplier

Supplier

Supplier

Storage} Mfg. Storage Dist. RetailerCustomer



NEED FOR SUPPLY CHAIN

MANAGEMENT1. Improve operations

2. Help in decision making

3. Help increase in overall efficiency

4. Competitive pressures

5. Increasing globalization

6. Increasing importance of e-commerce

7. Manage inventories



COMPONENTS OF SUPPLY

CHAIN MANAGEMENT

Plan

Source

Make

Deliver

Return



SUPPLY CHAIN MANAGEMENT

PROBLEMS

Distribution Network Configuration

Distribution Strategy

Information

Inventory Management



ELEMENTS OF SUPPLY

CHAIN MANAGEMENT

Deciding how to best move and store materialsLogistics

Determining location of facilitiesLocation

Monitoring supplier quality, delivery, and relationsSuppliers

Evaluating suppliers and supporting operationsPurchasingMeeting demand while managing inventory costsInventory

Controlling quality, scheduling work Processing

Incorporating customer wants, mfg., and timeDesign

Predicting quantity and timing of demandForecasting

Determining what customers wantCustomers

Typical IssuesElement





LOGISTICS

Logistics

Refers to the movement of materialsand information within a facility and

to incoming and outgoing shipments

of goods and materials in a supplychain



LOGISTICS

• Movement within the facility

• Incoming and outgoing shipments

• Bar coding

• EDI

• Distribution

• JIT Deliveries

0

214800 232087768



SUCCESSFUL SUPPLY CHAIN

Trust among trading partners

Effective communications

Supply chain visibility

Event-management capability

• The ability to detect and respond to unplanned events

Performance metrics



MODERN TRENDS IN SUPPLY CHAIN MANAGEMENT

Strategies for supply chains evolve toward supporting corporate strategies-although not fully at this time.

Organizing for supply chain management remains an elusive solution. While major competitive advantages have been seen in some industries, ourrespondents expect mostly incremental improvement roles for their future supply chains



Corporate recognition of the importance of the supply chain is growing rapidly.

Supply chain management today is mostly cost- and asset-focused with large

potential benefits not yet addressed.

Effective supply chain management is far more complex and difficult than isgenerally recognized



SCM SOFTWARE

Enterprise Resource Planning (ERP)

• software that integrates components of a company by sharing and

organizing information and data

• SAP was first ERP software

• mySAP.com

• web enabled modules that allow collaboration between companies along the supply chain

http://www.mysap.com/

http://www.mysap.com/



CREATING AN EFFECTIVE

SUPPLY CHAIN

1. Develop strategic objectives and tactics

2. Integrate and coordinate activities in the internal supply chain

3. Coordinate activities with suppliers with customers

4. Coordinate planning and execution across the supply chain

5. Form strategic partnerships



SUPPLY CHAIN

PERFORMANCE DRIVERS

1. Quality

2. Cost

3. Flexibility

4. Velocity

5. Customer service



MEASURING SUPPLY CHAIN

PERFORMANCE

Key performance indicators

• inventory turnover• cost of annual sales per inventory unit

• inventory days of supply • total value of all items being held in inventory

• fill rate• fraction of orders filled by a distribution center within

a specific time period



KEY PERFORMANCE

INDICATORS

Inventory turns = Average aggregate value of inventory

Cost of goods sold

Average aggregate value of inventory =

= (average inventory for item i)X (unit value item i )

Days of supply =(Costs of goods sold)/(365 days)

Average aggregate value of inventory



OTHER MEASURES OFSUPPLY CHAINPERFORMANCE

Process Control

• used to monitor and control any process in supply chain

Supply Chain Operations Reference (SCOR)

• establish targets to achieve “best in class” performance



EFFECTS OF 9/11 ON

GLOBAL CHAINSIncrease security measures

• added time to supply chain schedules• Increased supply chain costs

24 hours rules for “risk screening” • extended documentation• extend time by 3-4 days

Inventory levels have increased 5%

Other costs include:• new people, technologies, equipment, surveillance,

communication, and security systems, and training necessary for screening at airports and seaports around the world



CHALLENGES

Barriers to integration of organizations

Getting top management on board

Dealing with trade-offs

Small businesses

Variability and uncertainty

Long lead times



SUPPLY CHAIN ISSUES

Quality controlProduction planning and

control

Inventory policiesPurchasing policies

Production policies

Transportation policies

Quality policies

Design of the supplychain, partnering

Operating Issues Tactical Issues Strategic Issues



BIBLIOGRAPHY

Wikipedia

Google

Textbook of Logistics and Supply Chain Management

--D.K. Agrawal



THANK

YOU

Supply Chain Mgmt(2)

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