SUPPLY CHAIN MANAGEMENT

By- Prof.P.K.Shah

UNDERSTANDING THE SUPPLY CHAIN

A supply chain consists of all parties
involved , directly or indirectly , in fulfilling
a customer request
Customers
Retailers
Wholesalers
Manufacturers
Suppliers of raw materials
By-Prof.P.K.Shah

INTRODUCTION TO SUPPLY CHAIN

All facilities, functions, and activities
associated with flow and transformation of
goods and services from raw materials to
customer, as well as the associated
information flows

By-Prof.P.K.Shah

By-Prof.P.K.Shah

Revised definition:
An integrated group of value driven processes
to source, make, and deliver products

By-Prof.P.K.Shah

VALUE

OBJECTIVE OF
SUPPLY CHAIN MANAGEMENT
Maximize the overall value generated
Supply chain surplus: Customer value-supply chain cost
Customer value-revenue generated from customers

By-Prof.P.K.Shah

HISTORICAL PERSPECTIVE
Three principal streams
Sourcing , procurement and supply management
Materials management in manufacturing process
Logistics and distribution
Companies involved in various stages of this process
are linked to each other through a supply chain

By-Prof.P.K.Shah

SUPPLY CHAIN V/S LOGISTICS

Logistics focuses on the actual transportation and
storage of goods. It deals with things such as inbound
and outbound freight, shipping, communications during
transit, storage and warehousing.
The supply chain encompasses a bigger picture. Supply chain

management
encompasses
the
planning
and
management of all activities involved in sourcing and
procurement, conversion, and all logistics management
activities. Importantly, it also includes coordination and
collaboration with channel partners, which can be
suppliers, intermediaries, customers.

By-Prof.P.K.Shah

IMPORTANCE OF
SUPPLY CHAIN DECISIONS
Supply chain design ,planning and operation
decisions play a significant role in the success
or failure of the firm. To stay competitive,
supply chains must adapt to changing
technology and customer expectations

By-Prof.P.K.Shah

SUPPLY CHAIN DECISION PHASES

Supply chain strategy or Design
Supply chain planning
Supply chain operation

By-Prof.P.K.Shah

PROCESS VIEWS OF A SUPPLY CHAIN

A supply chain is a sequence of processes and
flows that take place within and between
different stages and combine to fill a customer
need for a product
1. Cycle view
2. Push/Pull view

By-Prof.P.K.Shah

CYCLE VIEW
The processes in a supply chain are divided into a series
of cycles, each performed at the interface between two
successive stages of a supply chain

By-Prof.P.K.Shah

CYCLE VIEW CONTD

By-Prof.P.K.Shah

CYCLE VIEW CONTD

Each cycle has the same basic processes , yet
there are differences among the cycles
In the customer order cycle, demand is external
to supply chain and thus uncertain
Thus the sharing of information and operating
policies across supply chain stages becomes
more important

By-Prof.P.K.Shah

PUSH/PULL VIEW
PUSH processes are initiated by a customer
order
PULL processes are initiated and performed in
anticipation of customer order

By-Prof.P.K.Shah

PUSH/PULL VIEW

By-Prof.P.K.Shah

PULL/ PUSH
Initial Raw material supplier
Tier -2 supplier
Push :
Inventory at all
levels

Tier -1 supplier
Manufacturer
Distributor
Retailer
Customer
By-Prof.P.K.Shah

Pull :
Zero level of
Inventory

SUPPLY CHAIN PROCESSES IN A FIRM

Customer Relationship Management
Internal Supply Chain Management
Supplier Relationship Management

By-Prof.P.K.Shah

By-Prof.P.K.Shah

CURRENT TRENDS/INNOVATIONS
IN SCM

DISCUSSION

By-Prof.P.K.Shah