SUPPLY CHAIN MANAGEMENT

JASWINDER SINGH TANVI SINGH

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

information flows

An integrated group of processes to source, make, and deliver products

SUPPLY CHAIN PROCESSES

FACILITIES
Warehouses Factories Processing centers Distribution centers Retail outlets Offices

INTRODUCTION
is a set of approaches used to efficiently integrate suppliers, manufacturers, warehouses, and customers 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. The sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service.

Supply chain management

SUPPLY CHAIN MANAGEMENT (SCM)

Managing flow of information through supply chain in order to attain the level of synchronization that will make it more responsive to customer needs while lowering costs Keys to effective SCM
information communication cooperation trust

ILLUSTRATION : TYPICAL SUPPLY CHAIN FOR A MANUFACTURER

Supplier

Supplier Storage Mfg. Storage Dist. Retailer Customer Supplier

1. Improve operations

NEED FOR SUPPLY CHAIN MANAGEMENT

2. Help in decision making 3. Help increase in overall efficiency

4. Competitive pressures
5. Increasing globalization 6. Increasing importance of e-commerce 7. Manage inventories

COMPONENTS OF SUPPLY CHAIN MANAGEMENT

Plan Source Make Deliver

Return

SUPPLY CHAIN MANAGEMENT PROBLEMS

Distribution Network Configuration

Distribution Strategy

Information

Inventory Management

ELEMENTS OF SUPPLY CHAIN MANAGEMENT

Element
Customers Forecasting Design Processing Inventory Purchasing Suppliers Location Logistics

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 Deciding how to best move and store materials

LOGISTICS

Logistics

Refers to the movement of materials and information within a facility and to incoming and outgoing shipments of goods and materials in a supply chain

LOGISTICS
Movement within the facility Incoming and outgoing shipments

Bar coding
EDI Distribution JIT Deliveries
214800 232087768

SUCCESSFUL SUPPLY CHAIN

Trust among trading partners Effective communications

Supply chain visibility

Event-management capability
The ability to detect and respond to unplanned events

Performance metrics

MODERN TRENDS IN SUPPLY CHAIN MANAGEMENT

Strategies for supply chains evolve toward supporting corporate strategiesalthough not fully at this time. Organizing for supply chain management remains an elusive solution. While major competitive advantages have been seen in some industries, our respondents expect mostly incremental improvement roles for their future supply chains

 Corporate recognition of the importance of the supply chain is growing rapidly. Supply chain management today is mostly cost- and asset-focused with large potential benefits not yet addressed. Effective supply chain management is far more complex and difficult than is generally recognized

SCM SOFTWARE
Enterprise Resource Planning (ERP)
software that integrates components of a company by sharing and organizing information and data SAP was first ERP software mySAP.com
web enabled modules that allow collaboration between companies along the supply chain

CREATING AN EFFECTIVE SUPPLY CHAIN

1. Develop strategic objectives and tactics 2. Integrate and coordinate activities in the internal supply chain

3. Coordinate activities with suppliers with customers

4. Coordinate planning and execution across the supply chain 5. Form strategic partnerships

SUPPLY CHAIN PERFORMANCE DRIVERS

1. Quality 2. Cost

3. Flexibility
4. Velocity 5. Customer service

MEASURING SUPPLY CHAIN PERFORMANCE

Key performance indicators
inventory turnover
cost of annual sales per inventory unit

inventory days of supply

total value of all items being held in inventory

fill rate
fraction of orders filled by a distribution center within a specific time period

KEY PERFORMANCE INDICATORS

Cost of goods sold Inventory turns = Average aggregate value of inventory

Average aggregate value of inventory = =(average inventory for item i) X (unit value item i)

Average aggregate value of inventory Days of supply = (Costs of goods sold)/(365 days)

OTHER MEASURES OF SUPPLY CHAIN PERFORMANCE

Process Control
used to monitor and control any process in supply chain

Supply Chain Operations Reference (SCOR)

establish targets to achieve best in class performance

EFFECTS OF 9/11 ON GLOBAL CHAINS

Increase security measures
added time to supply chain schedules Increased supply chain costs

24 hours rules for risk screening

extended documentation extend time by 3-4 days

Inventory levels have increased 5%

Other costs include:

new people, technologies, equipment, surveillance, communication, and security systems, and training necessary for screening at airports and seaports around the world

CHALLENGES
Barriers to integration of organizations Getting top management on board

Dealing with trade-offs

Small businesses Variability and uncertainty Long lead times

SUPPLY CHAIN ISSUES

Strategic Issues
Design of the supply chain, partnering

Tactical Issues

Operating Issues

Inventory policies Quality control Purchasing policies Production planning and Production policies control Transportation policies Quality policies

BIBLIOGRAPHY
Wikipedia

Google

Textbook of Logistics and Supply Chain Management --D.K. Agrawal

THANK YOU