Supply Chain Management

Overview

Supply Chain consists of entities that help in converting raw material to

finished products and services

Supply Chain…
Suppliers, Transporters, Buyer, Inventory
Demand Chain…
Production, Logistics, Distribution

Drivers
Technology, ERP, Internet, Customers
 The Framework
Process view of Supply Chain

Supply Chain Planning

Information Flow

Supplier Product Production Product Distribution Product Retailer Product

Payment Flow

Supply Chain Planning

 Process Focus

• Internal focus  Company vs Company

• External focus  Supply Chain vs Supply Chain
Advanced Planning and Scheduling (APS)

Produce right product, right quantity at right time by

• Integrated Information
• Integrated Communication
• Accurate forecasting
• Accurate scheduling
Resulting in
• Reduced inventory
• Reduced cycle times

Ariba
 Inventory Management

At all levels i.e. raw material and finished goods

Required to overcome
• Uncertainty in demand
• Uncertainty in supply
• Uncertainty in lead time
Involves
• Optimizing stock holding
• Minimizing inventory investment
• Managing risk
• Providing logistics
Increases the cost
Affects customer service
 Supply Chain Integration

Creating visibility across supply chain by

• Integration of fragmented and ad hoc process
• Process optimization
• Adoption of Best Practices
• Information integration
• Synchronization
• Technology
• Trust
 Supply Chain Advantage

• Inventory Reduction
• Right product at Right Time
• Reduced development cycle times
• Increased Customer Satisfaction
• Elimination of wastage
• End to end cost reduction
 Inventory Management

• Just in Time
• Integrated view - Reservation
• Ad hoc requirements
• Seasonality
• Quality Control
 Visibility Across Supply Chain

• Coordinated Planning & Accurate forecasting

• Compatible technology
• Security
• Response time (ATP)
• Trust
• Synchronized logistics
 CPFR

• Collaborative Planning, Forecasting and Replenishment

• Developed by VICS (Voluntary Inter-industry Commerce Standards Orgn)
• Coordinated planning & production
• Information integration and sharing
• Aims at
• Errorless forecasting
• Matching availability to demand
• Availability to Promise
 Collaborative Planning (ariba)
Planning & Analysis
Material preparation
Sourcing Order Management
Contract management Order Fulfillment
ARIBA Invoicing
Requisition
Settlement
Interact & Receive
Claims Service
Invoice

Payment

Supplier
Buyer
 Collaborative Design

• Use of CAD
• Across Geography
• Reduced product development life cycle
• Reduced R & D Costs
• Superior Design
Supplier Relationship Management
• Commodity based relationship
• Direct material
• Indirect material
• Strategic relationship
Selection Criteria
Commodity based Strategic
Price Suitability
Availability Service
Transportation Quality
Quality Time
Service Cost

E-nabled VMI
Commodity based Supplier Relationships

• Price major factor

• Proximity
• Ability to supply required quantities
• Quality
• Service
• Easy to change

• Contracts or schedule agreement

• Develop alternate sources
• E-auctions
Strategic Supplier Relationships

• Crucial component or skill

• Competence Development
• Capacity Building
• Outsourcing

• long term contracts

• trust
• supplier status
• efficiency
Supplier Relationship Management

• Partner-centric business model

• Supply Chain Integration
• Information Sharing
• Collaboration
• ERP extension
• Automated negotiation process
• Build-to-order startegies
Inter-enterprise Integration

• Available-to-promise
• Build-to-order
• Response to changes
• Intelligent supply chain
• Profitable-to-promise
 RFID
Radio Frequency Identification
• Point of sale scanners
• Automatic data capture
• ERP Integration
• Movement tracking

• Tags emit radio signals

• Receiver devices read the signals directly to ERP

• Customer privacy compromised

• Standards not yet developed
• Can not be stored in metal cases.