Introduction of supply chain
management
Presented By:
Eng . Sameh Said
Agenda
• Introduction of operation management.
• Operation management (definition and
solution role).
• Definition of supply chain management.
• Problem face allocation of supply chain.
• Integration of supply chain in organization.
Definition of Operation Management
Operations management (OM) is the business function that plans,
organizes, coordinates, and controls the resources needed to produce a
company’s goods and services.
Defined the role of operation management?
The role of operations management is to transform a company’s inputs into
the finished goods or services
DIFFERENCES BETWEEN MANUFACTURING AND SERVICE
ORGANIZATIONS.
Historical Development of Operations Management
1700
Industrial Revolution
Change production to use machine power instead of human power
1900-1960
Scientific Management
- Management science (improve techniques to solve operation problem)
- Human relation focus (role of human element in job design)
- Computer (processing a large amount of data)
1980-1995
TQM&JIT Technique
Supply Chain Management
E- Commerce
Operation Management Across The Organization
Defining Supply Chain
- The systemic, strategic coordination of the traditional business
functions and the tactics across these business functions.
Information
Supplier
Product
Funds
Customer
Supply chain refers to the flow of materials, information,
payments, and services from raw material suppliers, through
factories and warehouses (Value Chain), to the final consumer
(Demand Chain). It includes tasks such as purchasing, payment
flow, materials handling, production planning & control, logistics
& warehousing, inventory control, and distribution. When it is
managed electronically it is referred to as an e-supply chain.
The objective of applying supply chain
Objective is to be able to have the right products in the right
quantities (at the right place) at the right moment at minimal cost
Supply Chain Management (SCM)
To plan, organize, coordinate and optimize all the
supply chain’s activities
Supply chain problem
The bullwhip effect refers to
erratic shifts in orders up and down
the supply chain because of poor
demand forecasting or variation of
order size.
Causes
- Little or no communication between supply chain partners
- Delay times between order processing, demand, and
receipt of products
Uncertainties exist in delivery times
–
–
–
Machine failures
Road conditions
Shipments
Order Size
The Dynamic solution of the Supply Chain
Customer
Demand
Distributor Orders
Retailer Orders
Production Plan
Time
Order Size
What Management Gets...
Customer
Demand
Production Plan
Time
Volumes
What Management Wants…
Production Plan
Customer
Demand
Time
Supply Chain Solutions
Information sharing among supply chain partners (c-commerce)
sometimes referred to as the collaboration supply chain is one
method to overcome problems in the flow. Others are:
•
Optimal Inventory Levels
•
Supply Chain Coordination and Collaboration
•
Supply Chain Teams
•
Performance Measurement and Metrics
•
Various IT-Assisted Solutions
–
wireless technology
–
optimal shipping plans
–
strategic partnerships with suppliers
–
just-in-time
Essentials of the Supply Chains
Reduce uncertainty
(demand forecast-delivery
time)and risks in the supply
chain
positively affecting inventory
levels, cycle time, business
processes, and customer service
Increase profitability
and competitiveness
Integration of supply chain management
Business
Impact
Best Practice
Plan
Management Focus
- Plan a Strategy for managing all the resources that go toward
meeting customer demand for the product or service which is
depend on the type of organization and nature of products.
A Framework for Structuring Drivers
Efficiency
Responsiveness
Supply chain structure
Facilities
Transportation
Inventory
Drivers
Information
Integration of supply chain management is continued
Business
Impact
Best Practice
Source
Plan
Management Focus
Source - Choose the suppliers that will deliver the goods and services to create the
product or service. Develop a set of pricing, delivery and payment
processes with suppliers and create metrics for monitoring
and improving the relationships
Integration of supply chain management is continued
Best Practice
Business
Impact
Make
Source
Plan
Management Focus
Make - This is the manufacturing step. Schedule the activities necessary for
production, testing, packaging and preparation for delivery
optimization knowhow of planning, schedule and sequencing which is
mean productivity optimization
Integration of supply chain management is continued
Best Practice
Business
Impact
Deliver
Make
Source
Plan
Management Focus
Deliver - Coordinate the receipt of orders from customers, develop a network
of warehouses, pick carriers to get products to customers and set up
an invoicing system to receive payments
Integration of supply chain management is continued
Current Best Practice
Return
Business
Impact
Deliver
Make
source
Plan
Management Focus
Return - Create a network for receiving defective and excess products back
from customers and supporting customers who have problems with
delivered products (product recall by batch)