Presented To:Prof.

Manish Kumar

Presented By:Vivek Jaiswal

WHAT IS A SUPPLY CHAIN...?

SUPPLY CHAIN IS THE SYSTEM OF ORGANIZATIONS, PEOPLE,

ACTIVITIES, INFORMATION AND RESOURCES INVOLVED IN MOVING A PRODUCT OR SERVICE FROM SUPPLIER TO CUSTOMER.

SUPPLY CHAIN ACTIVITIES TRANSFORM RAW MATERIALS AND COMPONENTS INTO A FINISHED PRODUCT THAT IS DELIVERED TO THE END CUSTOMER.

SUPPLY CHAIN MANAGEMENT IS THE BUSINESS FUNCTION THAT COORDINATES ALL OF THE NETWORK LINKS:FROM SUPPLIERS TO MANUFACTURERS TO DISTRIBUTORS

COORDINATES MOVEMENT OF GOODS THROUGH SUPPLY CHAIN PROMOTES INFORMATION SHARING ALONG CHAIN LIKE FORECASTS,
SALES DATA, & PROMOTIONS

THE SUPPLY CHAIN

2007 Wiley

E- COMMERCE

COMPONENTS OF A TYPICAL SUPPLY CHAIN

External Suppliers Internal Functions External Distributors

INFORMATION

COMPONENTS OF A SUPPLY CHAIN

EXTERNAL SUPPLIERS
TIER ONE SUPPLIER SUPPLIES DIRECTLY TO THE PROCESSOR
TIER TWO SUPPLIER SUPPLIES DIRECTLY TO TIER ONE TIER THREE SUPPLIER SUPPLIES DIRECTLY TO TIER TWO

INTERNAL FUNCTIONS INCLUDE:

PROCESSING, PURCHASING, PLANNING, QUALITY, SHIPPING 7

EXTERNAL DISTRIBUTORS TRANSPORT

ELEMENTS OF SUPPLY CHAIN MANAGEMENT

Element Typical Issues
Determining what customers want
Predicting quantity and timing of demand Incorporating customer wants, mfg., and time Controlling quality, scheduling work Meeting demand while managing inventory costs Evaluating suppliers and supporting operations Monitoring supplier quality, delivery, and relations Determining location of facilities
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Customers
Forecasting Design Processing Inventory Purchasing Suppliers Location Logistics

Deciding how to best move and store materials

BENEFITS OF SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN ORIENTED COMPANIES COMMONLY REPORT:
LOWER INVENTORY, TRANSPORTATION, WAREHOUSING, AND PACKAGING COSTS GREATER SUPPLY CHAIN FLEXIBILITY IMPROVED CUSTOMER SERVICE

HIGHER REVENUES
INCREASED PERFORMANCE AND PROFITABILITY
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SCM IN A DAIRY PRODUCTS SUPPLY CHAIN

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THE BULLWHIP EFFECT

THE BULLWHIP EFFECT DESCRIBES REPLENISHMENT ORDERS AT DIFFERENT CHAIN LEVELS WITH NO APPARENT LINK TO FINAL DEMAND. WORST AT TIER 3 CAUSES: POOR DEMAND FORECASTING AT EACH LEVEL, WAITING TO BATCH ORDERS, PRICE FLUCTUATIONS & PROMOTIONS, RATIONING

COUNTERACTING THE EFFECT:

COLLABORATE FORECAST AT ALL LEVELS, SHARE REAL DEMAND INFORMATION (POS TERMINALS) 11 ORDER BASED ON DEMAND RATES, NOT BATCHING

SCM FACTORS
SCM MUST CONSIDER THE FOLLOWING TRENDS, IMPROVED CAPABILITIES, & REALITIES:
CONSUMER EXPECTATIONS AND COMPETITION POWER HAS SHIFTED TO THE CONSUMER

GLOBALIZATION CAPITALIZE ON EMERGING MARKETS

INFORMATION TECHNOLOGY E-COMMERCE, INTERNET, EDI, SCANNING DATA, INTRANETS GOVERNMENT REGULATIONS - LIKE TRADE BARRIERS
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ENVIRONMENT ISSUES E.G. WASTE MINIMIZATION

GLOBAL SCM FACTORS

MANAGING EXTENSIVE GLOBAL SUPPLY CHAINS INTRODUCES MANY COMPLICATIONS
SUBSTANTIAL GEOGRAPHICAL DISTANCES INCREASE LEAD TIMES AND INVENTORY INVESTMENT
FORECASTING ACCURACY COMPLICATED BY LONGER LEAD TIMES AND DIFFERENT OPERATING PRACTICES EXCHANGE RATES FLUCTUATE, INFLATION CAN BE HIGH INFRASTRUCTURE PROBLEMS LIKE TRANSPORTATION, COMMUNICATION, LACK OF SKILLED LABOR, & SCARCE LOCAL MATERIAL SUPPLIES 13

PRODUCT PROLIFERATION CREATED BY THE

CREATING AN EFFECTIVE SUPPLY CHAIN

DEVELOP STRATEGIC OBJECTIVES AND TACTICS INTEGRATE AND COORDINATE ACTIVITIES IN THE INTERNAL SUPPLY CHAIN COORDINATE ACTIVITIES WITH SUPPLIERS WITH CUSTOMERS COORDINATE PLANNING AND EXECUTION ACROSS THE SUPPLY CHAIN

FORM STRATEGIC PARTNERSHIPS

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INTEGRATED SCM
IMPLEMENTING INTEGRATED SCM REQUIRES:
ANALYZING THE WHOLE SUPPLY CHAIN

STARTING BY INTEGRATING INTERNAL FUNCTIONS FIRST

INTEGRATING EXTERNAL SUPPLIERS THROUGH PARTNERSHIPS

POSSIBLE SUPPLY CHAIN OBJECTIVES

REDUCE COSTS, IMPROVE QUALITY REDUCE LEAD TIME AND INVENTORY REDUCE TIME TO MARKET INCREASE SALES
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IMPROVE DEMAND DATA/FORECASTING

CURRENT TRENDS IN SCM

SUPPLY CHAINS WILL BE MORE AGILE, FLEXIBLE, AND INTEGRATED TO REFLECT CONSUMER EXPECTATIONS

TECHNOLOGY WILL FACILITATE REAL TIME DEMAND SHARING THROUGHOUT ENTIRE SUPPLY CHAINS
GREATER USE OF NET-MARKETPLACES TO BRING MORE SUPPLIERS INTO CONTACT WITH MORE SUPPLIERS TO REDUCE PRICE AND LOWER TRANSACTION COSTS GREATER USE OF E-DISTRIBUTORS PROVIDING PRODUCTS VIA E-CATALOG FROM THOUSANDS OF SUPPLIERS AT ONE MARKET PLACE
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E-PURCHASING COMPANIES CONNECTING ONLINE SUPPLIERS OFFERING VCM FOR MRO SUPPLIES

TRENDS IN SCM (CONTINUED)

MORE ONLINE EXCHANGES FOR SPOT REQUIREMENTS OF LARGE FIRMS IN A SINGLE INDUSTRY, E.G. E-STEELCOM, E-GREENBIZ.COM MORE USE OF VALUE ADDING THIRD PARTY LOGISTICS PROVIDERS LIKE UPS MORE VIRTUAL CORPORATIONS OVERSEEING NETWORKS OF SUPPLIERS SCM PERFORMANCE MEASUREMENTS WILL FOCUS ON QUALITY, SPEED, FLEXIBILITY, AND VALUE
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