1. Supply Chain Management Educational Series-Part 1
Author-Gourab Ray
2. Content Supply Chain Management Definition Integrated Supply
Chain Framework Logistics Management Overview of Logistics
Logistics Work
3. Supply Chain Management-History in perspective Colonization
by European powers-India, Sri Lanka, African countries & etc.
Reason: SCARCITY if raw materials- Cotton, Food grains, precious
metals, oil, coal and etc.. Securing supply chains for raw
materials needed to sustain Industrial revolution New markets for
finished goods. Colonization gave both administrative control over
the sourcing and over the market.
4. Supply Chain Management-Definition A supply chain is a
sequence of organizations - their facilities, functions and
activities - that are involved in producing and delivering a
product or service. Supply chain management deals with linking the
organizations within the supply chain in order to meet demand
across the chain as efficiently and low cost as possible. It is one
of the oldest disciplines in management that had been
subconsciously used in the history of Mankind.
6. Supply Chain Management (contd) Why is supply chain
management so important? To gain efficiencies from procurement,
distribution and logistics To make outsourcing more efficient To
reduce transportation costs of inventories To meet competitive
pressures from shorter development times, more new products, and
demand for more customization To meet the challenge of
globalization and longer supply chains To meet the new challenges
from e-commerce To manage the complexities of supply chains To
manage the inventories needed across the supply chain Why is supply
chain management difficult? Different organizations in the supply
chain may have different, conflicting objectives Manufacturers:
long run production, high quality, high productivity, low
production cost Distributors: low inventory, reduced transportation
costs, quick replenishment capability Customers: shorter order lead
time, high in-stock inventory, large variety of products, low
prices
7. Integrated Supply Chain Framework M A T E R I A L S S u p p
l y N e t w o r k s I n t e g r a t e d E n t e r p r i s e M a r k
e t D i s t r i b u t i o n N e t w o r k D1 D2 D3 Procurem ent
Customer Accomodati on Manufactu ring R1 R2 R3 C U S T O M E R
BIDIRECTIONAL FLOW OF INFORMATION, SERVICES, FINANCIAL &
KNOWLEDGE, UNIDIRECTIONAL FLOW OF MATERIALS, PRODUCT
9. LOGISTICS MANAGEMENT Logistics is the management of the flow
of goods/ materials/ services from point of origin to the consumer
in order to meet some requirements, of customers or corporations.
Also defined as getting products/ services where they are needed at
the right time. (Right Time, right place and right quantity)
Logistics is part of Supply Chain Management but alone does not
comprise Supply Chain Management.
10. LOGISTICS MANAGEMENT (Contd) Logistics Order Management
Inventory Management Transportation Warehousing, Packaging &
Material Handling Logistics is the combination of: Order Management
Inventory Management Transportation Warehousing, Material Handling
and Packaging.
11. LOGISTICS MANAGEMENT (Contd) It is also defined as the
responsibility to design and administer systems to control movement
and geographical positioning of raw materials or work-in-progress
(unfinished goods) or finished goods at the lowest total cost.
Marketing, Manufacturing and International commerce depend on
Logistics Management. Dependence of other faculties on
Logistics
12. LOGISTICS MANAGEMENT Goal of Logistics is to support:
Procurement Manufacturing Customer requirement and satisfaction.
Operational Requirement Product Innovation (R&D) Logistics
Procurement Customer satisfaction Operational requirement
Manufacturing
13. LOGISTICS WORK MANAGEMENT 1. Order Processing 2. Inventory
Management. 3. Transportation 4. Warehousing, Material Handling
& Packaging 5. Facility Network Facility Network Order
Processing Inventory Management Transportation Warehousing,
Packaging & MH
14. LOGISTICS WORK MANAGEMENT (contd) 1. Order Processing: a.
Foremost starting point of logistics process. b. Receiving &
processing orders from customers via mail, email, mobile apps,
telephones or hard copy forms. c. Processing of orders involve
managing customer requirement, initial order receipt, delivery,
invoicing & collection Order Processing via app
15. LOGISTICS WORK MANAGEMENT (contd) 2. Inventory Management:
a. Processed goods at depot/ warehouse which are ready for
customers. b. Inventory strategy is to achieve desired customer
satisfaction with minimum inventory commitment. c. Inventory Cost:
Are huge and risky and leads to huge losses.
16. LOGISTICS WORK MANAGEMENT (contd) 2. Inventory Management
(contd): d. 80/20 Rule: Less than 20% of all the products marketed
account for 80% of the total profit. e. Product stocking plan or
Raw material stocking plan at a particular depot/ warehouse has
direct impact on profitability. f. It is best to stock materials
based upon their requirement location.
17. LOGISTICS WORK MANAGEMENT (contd) 3. Transportation: a. It
is defined as the geographical movement & positioning of
inventory. b. It has high visibility and higher costs than all
other works and hence it is the most focussed area for financial
control.
18. LOGISTICS WORKS MANAGEMENT (contd) 3. Transportation
(contd): c. The following are the factors for transportation
management: Total Costs (including labour, fuel and rent and
maintenance). Speed (movement speed of in- transit inventory).
Consistency/ Dependability (variation in time required to perform a
specific movement over a number of shipment)
19. LOGISTICS WORK MANAGEMENT (contd) 4. Warehousing, Material
Handling & Packaging: a. Warehouse is the local/ regional depot
where the goods are stocked or stored. b. Within warehouse,
material handling is the major activity. c. Products must be
received, moved, stored, sorted, assembled and packed to meet order
requirement. d. WMS: Warehouse management system-used to manage all
activities in warehouses.
20. LOGISTICS WORK MANAGEMENT (contd) 5. Facility Network
Design: a. Deals with strategic placement of warehouses and
facilities and overall network design for efficient business
operation. b. Requires determining the optimized number of
warehouses and facilities over a given geographical location to
peform logistics works at minimal total cost. c. Facilities can
consists of: Manufacturing plants Warehouses Retail stores
21. Fictional Facilities Network Of e-Commerce Legends: Retail
Outlet Warehouse