Professional Documents
Culture Documents
The first supply chain was the barter system Traces of outsourcing was seen when Charles S. Rolls became selling agent for cars made by F. Henry Royce The essence of SCM was understood with the first phase characterized as an inventory push era that focused primarily on physical distribution of finished goods Companies began migrating from an inventory push to a customer pull channel Emergence of SCM WalMart introduced the concept of Cross Docking Internet revolutionized the distribution system of the business Concept of e-commerce changed the definition of business
Module 1:Supply Chain Management
It is a network of supplier, manufacturing, assembly, distribution and logistic facilities that performs the function of of procurement of materials, transformation of these materials in to intermediate and finished products and the distributions of these products to customer
It is a system approach to managing the entire flow of information, materials and services from raw materials supplier through factories and warehouses to the end customer
SUPPLIER
Cycle IV Supplier
Manufacturer
Customer
Retailer Cycle II
Distributor
CUSTOMER ARRIVAL
REPLENISHMENT CYCLE
MANUFACTURING CYCLE
ORDER ARRIVAL
RECEIVING
PRODUCTION SCHEDULING
PROCUREMENT CYCLE
RECEIVING AT MANUFACTURER
COMPONENT MANUFACTURING/SHIPPING
Pull View of SCM Execution is initiated in response to a customer order Demand is known with certainty It is also reactive process because they react to customer demand Push View of SCM Execution in anticipation of customer order Demand is not known and must be forecast It may also be referred to as speculative process
PUSH PROCESS
CUSTOMER
MANUFACTURER
PROCUREMENT CYCLE
PUSH PROCESS
Procur-ement
Manufa -cturing
Global
Distrib-ution
Logist-ics
PROCUREMENT DECISION
a Supplier Decision:
Where should be source raw materials, components and subassembles from.
MANUFACTURING DECISION
a. Plant location:
How many manufacturing plants should be set up and where should be they located.
c. Capacity planning:
How much capacity is needed in each plant.
d. Capacity Allocation:
How do we allocate plant capacity to products
e. Inventory Decision:
What raw materials/WIP/finished goods inventory should be stocked in each center.
g Input Control:
How do we introduce work in the plant
h. Production Scheduling:
How do we schedule the production.
i Constrained supply:
How do we optimize resource utilization when the suppliers are not enough to fulfil the requirements
DISTRIBUTION DECISIONS
a. Configuration of distribution facilities:
What type of distributions centers are required.
b. Location:
Where should distribution facilities be located.
c. Customer Allocation:
Which customers should a facility service.
d. Facility configuration:
What product should be handled by each facility? What product and in how many quantities should be stocked at each facility? What should be the replenishment strategy
LOGISTIC DECISION
a. Logistics mode selection:
a.What transport modes and lanes should be used to move products throughout the network.
b. Selection of ports:
Which ports should be used to bring product into and out of a country.
c. Direct Delivery: Which products should move directly from manufacturing centers to customer.
GLOBAL DECISION
a. Product & Process Selection
country.
Operational Decision
Transportation
Production
2. Operational Decision
It is short term It focus on activities over a day to day basis.
1.Location Decision
Where production facilities, stocking points and sourcing points are located
2. Production Decision
What products to create at which plant, which suppliers will service those plants, which plants will supply specific distribution centres and how goods will get to the final customer
3. Inventory Decision
It maintained because to buffer against any uncertainty That might exit in the supply chain
4. Transportation Decision
What modes have been used for delivering the odds to the customers.
it establishes parameters. Companies must include uncertainty in demand, exchange rates and competition.
ELEMENTS OF SCM
1. Planning System
It facilitate order taking and information gathering
It focus on having the right product at right time and at the right place.
2. Planning System
It facilitate the physical movement of good and services It focus on operational efficiency and application based system.
Managing the flow of physical goods from supplier. It include production planning, procurement and inventory management Managing the manufacturing process to ensure low production cost.
2. Integrated logistics:
3. Agile manufacturing:
Managing the financial flows with the supplier and customer through financial intermediaries.
Custo mer
STRATEGIC
Channel Network Design Strategy
STRUCTURAL
WarehouTransport se design -ation
Material
FUNCTIONAL
Information Policies And Facilities System Procedures And Equipments Orgn Changem Mgmt
IMPLEMENTATION
SCM FRAMEWORK
1. Strategic
What are the basic and distinctive service need of the customers. What can SCM do to meet these needs Be used to provide unique services to the customer.
What should the SCM network look like What product should be sourced from which manufacturing location. How many warehouses should the company have and where should be located. What is the mission of each facility.
2. FUNCTIONAL
3. Functional
factors
Geographical
Cultural Govt Legislation
Time
2. Processing
Focused on to manufacture standard products. Curtailing the huge inventory cost.
3.Warehousing Transportation
Management of demand i.e. to make available the right product, at the right place, at the right time and at the least cost.
2. Information Flow
Flows from vendor to the customer and from the customer to the vendor.
a. Backward Flow. b. Forward Flow
3. Cash Flow
Money paid for goods and services received.
Field stock
Customer Order
Value addition
Distribution
Manufacturing Procurement
Cost Addition
2. Inventory perspective
According to traditional view: inventories have bee viewed as a buffer to reduce co-ordination requirements across activities. According to current concept: inventories is a buffer to be used as a last resort after ensuring proper information Sharing and co-ordination.
4.System Approach
It is a single integrated system.