SUPPY CHAIN MANAGEMENT
Group Members
Manoj Jain
Jigisha Patel
Pinkesh Shah
Niraj Singh
Mansi Nagrecha
Jitendra Solanki
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What is Supply Chain Management
Supply chain management is a set of approaches utilized to
efficiently integrate suppliers, manufacturers, warehouses, and stores,
so that merchandise is produced and distributed at the right
quantities, to the right locations, and at the right time, in order to
minimize system wide costs while satisfying service level requirements.
Management beyond the borders of an organization
Upstream
The upstream business partners are the external organizations
that supply products or services to an organization.
Downstream
The downstream supply chain is the organizations external
distribution channels, processes, and functions that the product
passes through on its way to the end customer.
Evolution Of SCM.
The concept of SCM has only recently stepped into the marketing
world. It rooted three decades back and has passed through three
phases
Phase 1: Physical distribution management: This phase is better
characterized as inventory push phase when manufacturing was
handled in isolation and output was pushed down to the finished
goods warehouses.
• Phase II : Integrated Logistics Management : This Phase Recognized The
Importance Of Integrating Operations Within the Organization Like Sales,
Procurement, Manufacturing, Warehousing, Distribution And
Transportation To Achieve An Efficient And Effective Goods Distribution
System.
• Phase III : SCM : The Graduation Of Logistics Management To Its Modern
Day Avatar Is Better Known As ‘SCM’. SCM Extends The Scope To Link
External Partners Like Suppliers, Vendors, Distributors And Customers
With A View To Deliver Enhanced Customer And Economic Value
Through Synchronized Management Of The Flow Of Physical Goods and
associated Information from Source To Consumption.
What Drove Logistics To SCM?
One can identify a number of drivers for a paradigm shift from logistics to
SCM The major ones are:
• First, the expectations of customer for increased value addition, response
time sensitivity, need for reliability, cost consciousness and information
sensitivity.
• Second, the nature of competition favouring firms that have been in a
position to decrease lead times as well as operational costs.
• Third, the recent revolution taken place in the field of information
technology has enabled and encouraged the firms to initiate newer means
in the field of distribution management.
• Fourth, managers have realized and
recognized the need for continuous
improvement of process involved in
marketing activity. The attitude of
managers has changed in favor of
integrating all activities in the chain
from sourcing to consumption.
LOGISTICS MANAGEMENT
Logistics management
Logistics management is that part of the Supply Chain
Management process that plans, implements, and controls
the efficient, effective forward and reverse flow and storage
of goods, services, and related information between the point
of origin and the point of consumption in order to meet
customers' requirements
Types Of Logistics
Third-party logistics:
Third-party logistics (3PL)involves using external organizations
to execute logistics activities that have traditionally been
performed within an organization itself
Fourth-party logistics:
Fourth-party logistics (4PL) as an integrator that
assembles the resources, capabilities and technology of
its own organization and other organizations to design,
build, and run comprehensive supply chain solutions
•Why sudden interest ?
 Demanding customers
 Shrinking product life cycles
 Proliferating product offerings
•Why sudden interest ?
 Growing retailer power in some cases
 Doctrine of core competency
 Emergence of specialized
logistics providers
 Globalization
Supply Chain Structure
SUPPLIER
FACTORY
DC
RDC
RETAILER
Raw Materials
Finished Goods
Information Flow
Supply chain Flow
 Material/merchandise flows
 Information flows
 Financial flows
 Supply chain management is the
management of flows between and
among supply chain stages to maximize
total supply chain profitability
Merchandise Flow
Information Flow
Supply Chain Planning Processes
Material Requirement Planning
Raw Material
Requirement
Supplier
Demand Forecasting
Demand Planning
Production
Plan
Plant
Warehouse
Logistics
Order Management
Retailer
Benefits of SCM
Cost and Financial
Retailers
Improvements
Manufacturers
Distributors
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Streamlined inventories and reduced
costs
Reduced errors and redundant labor
Increased visibility of all business
transaction
Improved return on inventory
investment
Optimized transportation costs,
routes, and load times
Increase cost savings from
outsourcing for low cost materials
Benefits of SCM
Improved forecast accuracy as
well as resource and distribution
planning
Processes
Improved manufacturing and
replenishment cycle time
 Manufacturers
Improvements
Enhanced manufacturing
scheduling
Increased effectiveness of
planning and decision making
Improved overall efficiency in
production
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APPLICATIONS OF SCM
BLOOD BANK
IT INDUSTRY
RETAIL INDUSTRY
COURIER SERVICE INDUSTRY
Importance of Supply Chain Management
If it’s not in store you can’t show it. If you can’t show it
you can’t sell it.
What is Retailing?
• Retailing – a set of business activities that adds
value to the products and services sold to
consumers for their personal or family use.
Basic elements of a retailing supply chain
ACTIVITY
INSTITUTION
OTHER ACTIVITIES
Sourcing materials
Materials supplier
Warehousing, transport to
producer
Producing the product
Producer
Design, warehousing, selling
through agents, transport to
wholesaler
Wholesale distribution
Wholesaler
Retail distribution
Retailer
Consumer
Warehousing, transport to
retailer, cash and carry
Regional and local
distribution
centres, transport to store/
home
WAL-MART
 The US-based Wal-Mart ranked first in the global Fortune 500 list earning
revenues of $219.81 billion Wal-Mart is the largest retailing company in
the world.
 Captain Vernon L. Beatty, aide-de-camp to the commander, Defense
Supply Center, Columbus, Ohio said, "Supply chain management is moving
the right items to the right customer at the right time by the most efficient
means. No one does that better than Wal-Mart."
Retail Link system
 More than 10,000 Wal-Mart suppliers use Retail Link to monitor sales
of their goods at the store level and replenish inventories as needed.
 Integrates into one of the largest data warehouses around, with more
than 100 terabytes of information.
 Make daily transactions details (more than 10 million daily) available
to every Wal-Mart store by 4 a.m. the next day.
Wal-Mart's Best of practice on SCM
 Relevant information is available to its partner.
 The system is dynamic and adjust quantity of orders according to
current situation
 Wal-Mart must be able to get most up-to-date information out of the
system to do be able to do proper prediction..