SUPPLY CHAIN
MANAGEMENT
SUPPLY CHAIN
MANAGEMENT
PARTICIPANTS
INTRODUCTION
LEARNING OBJECTIVES
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INTRODUCTION TO SUPPLY CHAINS
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SUPPLY CHAIN MANAGEMENT
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COMPONENTS OF SUPPLY CHAIN
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SUPPLY CHAIN PROCESSES
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SUPPLY CHAIN FLOWS
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PIT FALLS IN SUPPLY CHAIN MGMT
INTRODUCTION TO
SUPPLY CHAINS
INTRODUCTION TO
SUPPLY CHAINS
Aircraft spares
INTRODUCTION TO
SUPPLY CHAINS
Unilever ice cream
A TYPICAL SUPPLY CHAIN
WHY SUPPLY CHAIN
MANAGEMENT
CHANGES IN USER REQUIREMENTS
CHANGES IN PRODUCT/ SERVICE
SEASONALITY
THE RIGHT PRODUCT
IN RIGHT QUANTITY
AT RIGHT TIME
AT THE RIGHT PLACE
WHY SUPPLY CHAIN
MANAGEMENT
MANAGING SUPPLY CHAIN IS A COMPLEX
PROCESS
AN EFFICIENT AND RELIABLE SUPPLY CHAIN IS
BUSINESS WINNER
IT CONSIST OF A LOT OF INTER AND INTRA
COMPANY ACTIVITIES
IT’S A RELAY
SUPPLY CHAIN MANAGEMENT
The term supply chain refers to the entire
network of companies that work together to
design, produce, deliver, and service products.
“The integration of key business processes from
end user through original suppliers that provides
products, services, and information and add
value for customers and other stakeholders."
COMPONENTS OF SUPPLY CHAIN
Suppliers. Source of raw materials, component parts, semimanufactured products, and other items that occur early in the
supply chain - unfinished or non-consumable products.
Manufacturers. Makers of products. Suppliers produce
components or subassemblies, while manufacturers perform
the task of final assembly or product integration.
Distributors. Responsible for the storing, and handling of
materials at receiving docks, warehouses, and retail outlets.
Retailers. These are the manufacturer's customers - the
stores that buy the actual products.
Consumers. This is you - the person who actually buys the
product for consumption.
COMPONENTS OF SUPPLY CHAIN
Retailers
A
A
X
Y
Part
Suplier-1
Part
Suplier-1
Z
1
2
Part
Suplier-1
Stereo manufacturing
Company
assembled,
packaged,
labeled
Distributors
Majority of the companies use these Components:
Consumers
SUPPLY CHAIN IN SERVICES
Supply chains also exist for services,
you Involved
Inhas
a SC?
For example,Are
a commercial
bank
a supply chain,
In What
Inventory is represented
bycapacity?
each bank teller's capacity, or time
to serve customers.
A major challenge for banks is to effectively manage this
availability of its teller resources.
Trucking and logistics
companies.
Is Anyone
Else Involved
Capacity is available
for specific
in theonly
Supply
Chain?period of times.
OTHER PLAYERS
Logistics providers.
Transporting products.
Operating strategically placed warehousing or distribution
operations.
Sometimes, logistics providers offer multiple integrated services.
Contract manufacturers.
Provide subcontract manufacturing for manufacturers.
Information-based service providers.
Software or other information technologies providers
Information-based service providers may include IT firms, which
provide and manage systems for individual firms and for overall
supply chains.
Financial institutions.
Includes banks and other financial institutions, freight payment and
billing, inventory financing, and inter-firm transaction management.
SUPPLY CHAIN PROCESSES
Purchasing.
Activities related to the purchase of all goods and
services.
Order processing.
Fill customers' orders, such as order receipt, order
picking, and order shipment.
Demand planning.
Forecasts, actual sales, and current inventory levels.
Inventory mgmt.
Forecasting, proper positioning of stock, and
the active observation of product age and availability.
Warehousing.
The holding of goods with an emphasis on moving
product into, through, and out of warehouses in a
timely manner.
Transportation.
Movement of products from one specific destination to
another.
Customer service.
Includes all sales or after-sales related activities.
PURCHASING
•Component parts,
•Raw materials,
•Operating suppliers,
•Support equipment,
•Process equipment,
•Services
Focus on:
•Total Cost of ownership
•Exploiting the Capabilities
of Information Technology
•Supplier Relationships
•Consolidation of Suppliers
ORDER PROCESSING
•Customer places order
•Order received by manufacturer
•Order processed
•Credit checked and verified
•Order picked and packed
•Order shipped to customer
•Order received by customer
and placed in inventory
Focus on:
•Reduction of order Cycle Time
•Use of Electronic Data
Interchange (EDI)
DEMAND PLANNING
Product
Supply
•Forecasting
•Production Planning
•Material planning
Product
Demand
Main Concerns:
•Number of units of a specified product to be produced
•Time intervals over which production will occur
•Availability of materials and machines to produce the number of
units required within the specified time frame
INVENTORY MANAGEMENT
Inventory
levels
Customer
Service
Level
Inventory has a cost & low customer service levels have consequences.
Techniques:
•Just-in-Time (JIT)
•Vendor-Managed Inventory (VMI)
•Continuous Replenishment Program (CRP)
WAREHOUSING
• Movement
• Storage
• Information transfer
TRANSPORTATION
FLOWS
FUTURE FOCUS
•Departmental silos
•Finger pointing
•Conflicting Objectives
•Inefficient SC
•SC unresponsive to customer needs
•Create Value not just save money
•Use of inf. Technology in:
•Redefining SC structure.
•Designing new product
•Reaching new customer segments
PITFALLS OF POOR SC
DESIGN
–Inefficient Process Design
–Inadequate or Wrong Information Flow
–Inappropriate Performance Measures
PITFALL RESULTS
Inefficient Process
Design
Uncoordinated &
Ineffective Network
Operations
Inadequate or
Inaccurate
Information Flow
Inappropriate
Performance
Measures
 Misaligned value
chain
 Overly-complex
network
 Mismatched
processes
 Inadequate product
designs
 Inefficient linkages
between
components of the
supply chain
 Disjointed
 Inadequate,
 Barriers to interproduction planning inaccurate, and
functional
outdated data
communication
 Outdated inventory
 Inconsistent data
 Inefficient retrieval of
stocking policies
 Uncoordinated
 Non-responsiveness needed information
actions
from players within  Distortion of
company results
 Poor quality controls the supply chain
 Inefficient
procurement policies
 Inefficient
distribution methods
Develop a Supply Chain Wide
Technology Strategy
CENTRAL WAREHOUSE
REGIONAL WAREHOUSE
WORKSHOP STORES
CUSTOMERS
Develop a Supply Chain Wide
Technology Strategy
CUSTOMER
INQUIRY
RESPONSE
TO INQUIRY
MWS
CUSTOMER
OSP1 CUSTOMER INQUIRY RESPONSE PROCESS
DPC
Reception
DPC
Account Cards
RWH
Reception
CWH
Account cards
Reception
DPC
Account cards
Develop a Supply Chain Wide
Technology Strategy
CUSTOMER
INQUIRY
RESPONSE
TO INQUIRY
CWH
RWH
MWS
CUSTOMER
ROSP1 CUSTOMER INQUIRY
CENTRAL DATA NETWORK
Dou you think that as supply chain manager you
need to “wonderlaized” the management of the
THREE FLOWS.
Are there other processes in a supply chain that
we have studied namely……
Jazb-e-Baham or athletics relay refers to what
concept in a supply chain.