Itm

Enfocus Requirement Suite
Supply Chain
Management
Overview for Business Analysts
Enfocus Solutions Inc.

www.EnfocusSolutions.com
Copyright 2012 Enfocus Solutions Inc. All Rights
www.EnfocusSolutions.co
Enfocus
Solutions Inc.
Reserved.
July 2012
1
What is a Supply Chain?

A supply chain consists of all parties involved, directly or
indirectly, in fulfilling a customer request. The supply chain
not only includes the manufacturer and suppliers, but also
transporters, warehouses, retailers, and customers
themselves.
Within each organization, such as manufacturers, the supply
chain includes all functions involved in receiving and filling a
customer request. These functions include, but are not
limited to, new product development, marketing, operations,
distribution, finance, and customer service.
A typical supply chain may involve a variety of stages. These
supply chain stages include:
Customers
Retailers
Wholesalers/Distributors
Manufacturers
Component/Raw material suppliers
What is a Supply Chain (continued)?

A supply chain must have at least a set of three or
more companies linked by one or more of the
upstream or downstream flows of products, funds,
or information.
What is Supply Chain Management

(SCM)?
Supply chain management is the active management of supply
chain activities to maximize customer value and achieve a
sustainable competitive advantage. It represents a conscious
effort by the supply chain organizations to develop and run
supply chains in the most efficient ways possible.
Supply chain activities cover everything from product
development, sourcing, production, and logistics, as well as the
information systems needed to coordinate these activities.
The organizations that make up the supply chain are linked
together through physical flows and information flows. Physical
flows involve the transformation, movement, and storage of
goods and materials. They are the most visible piece of the
supply chain. Information flows are just as important.
Information flows allow the various supply chain partners to
coordinate their long-term plans and to control the day-to-day
flow of goods and material up and down the supply chain.
Supply Chain Concept

A supply change is a complex network of relationships that
organizations maintain with trading partners to source,
manufacture and deliver their products, including materials,
information, and financial flows, as depicted below.
Information Flows
Supplier
Product
Flow
Manufacturing
Product
Flow
Distribution
Product
Flow
Retailer
Product
Flow
Consumer
Payment Flows
SCM is not Traditional Materials

Management
Supply chain management is significantly different from
traditional materials management. The difference lies in
the coordination and commitment of all the firms in the
supply chain required to implement the specific
strategic objectives of each firm.
Supply chain management requires partners to provide
support for each to reach their objectives. Firms
voluntarily agree to integrate human, financial, or
technical resources in order to create a business model.
All firms have something to gain from collaborating to
create an efficient supply chain.
What are the benefits of Supply Chain

Management?
Lower inventories
Higher productivity
Greater agility
Shorter lead times
Higher profits
Greater customer loyalty
Key Issues
The goal of SCM is to match supply to demand as
effectively and efficiently as possible
Key issues are:
Determining the appropriate levels of outsourcing
Managing procurement
Managing suppliers
Managing customer relationships
What are the Key Challenges for SCM?

Managing supply chain complexity - Complexity within
the supply chain stems primarily from handling a
multiplicity of partners. And while these various partners
can be integrated within the supply chain to produce a
cohesive chain, a large volume of communications has the
potential to compromise the integrity of supply chain
processes.
Achieving visibility into the supply chain - As
businesses strive to establish a fluid network, several
factors must be considered for organizations to gain
visibility into their supply chains. Data management is
required to ensure businesses can establish the mobility of
relevant dataand rapidly identify impending issues and
manage by exception.
Managing collaboration - Within a supply chain, issues
are rarely resolved by a single party, but are rather
resolved through collaboration among multiple partners.
The way a company connects
with its partners to promote
Types of Supply Chains

Integrated Make-to-Stock
smoothing demand in mass production industries
linked to postponement in distribution channel
Continuous Replenishment
customer-demand pull system across firms
ECR Efficient Consumer Response
QR Quick Response
Build-to-Order
efficient SCM allows return to BTO model
inventory substituted with information (Dell)
10
Supply Chain Cycle Illustration

One way to view a supply
chain is as a series of
cycles. The cycles are
triggered by a customer
order, replenishment
orders from the
distributors, or by the
forecast of customer
demand and current
product availability in the
warehouse.
11
Order Penetration and Postponement

Order Penetration Point: The point (in time) at
which a product becomes earmarked for a particular
customer. Downstream from this point, the system is
driven by customer orders; upstream processes are
driven by forecasts and plans.
Postponement: A product design strategy that shifts
product differentiation closer to the consumer by
postponing identity changes, such as assembly or
packaging, to the last possible supply chain location.
12
SCM Example
13
Example who is this?
14
Comparison of Lean, Agile, and Leagile

Supply Chains
(Source: Agarwal, A. et.al. 2006)
15
Getting Started
1.
2.
3.
4.
5.
Understand industry specifics

Start with customer expectations
Reduce cycle time to gain competitive advantage
Consider starting with internal supply chain
Focus on problem areas
16
#1 Understand Industry specifics
Type of product
Complexity of production process
Type(s) of customers
Complexity of supply chain (e.g., lead times)
Complexity of demand function (e.g., seasonality)
These attributes determine the strategies that are suitable.
17
#2 Start with Customer Expectations
Product availability
Length of order cycle time
Consistency of order cycle time
Invoice/billing procedure accuracy
Information requests responsiveness
Flexibility in resolving problems
Distance to suppliers warehouse
Special customer request
Frequency of damaged goods
Quality of order department
On time delivery
A combination of these will add to customer

satisfaction.
18
#3 Reduce Cycle Time to Gain

Competitive Advantage
Reducing supply chain cycle time means decreasing the
days of inventory held and reducing the cash conversion
cycle. The savings mean that capital is available for other
uses.
By focusing on key processes, the supply chain can
significantly improve its performance and become a
source of competitive advantage for the organization.
Opportunities for cycle-time reduction exist on both an
intra-organizational and inter-organizational basis.
19
#4 Internal Supply Chains

The internal supply chain is that portion of a given supply
chain that occurs within an individual organization.
Internal supply chains can be quite complex. Given the
multidivisional, international organizational structures
found in many business enterprises, it is not uncommon
for the internal part of a supply chain to have multiple
links that span the globe.
Developing an understanding of the organization's
internal supply chain is often an appropriate starting
point for firms considering an SCM initiative.
20
#5 Typical SCM Areas that Require

Attention
Lack of knowledge of the end-to-end demand function
high levels of uncertainty
Erratic variations in demand (Bull whip effect)
Inconsistent / out-of-date data about SC (poor decision
making)
Fragmentation of processes and operations
Lack of process integration with partners
Need for fundamental structural changes
Need for integrated information systems
21
Key Components for SCM Automation
Demand management and planning

Warehouse management
Order management
Transportation management
Collaboration and integration
Supplier relationship management
Supply chain analytics
22
Demand Management and Planning

S&OP Sales and Operations
Planning
Vendor Managed Inventory
Replenishment
DRP Distributed Requirements
Planning
APS Advanced Planning &
Scheduling
DDM Demand Driven
Manufacturing
Mathematical Forecasting
Promotion Planning
Pricing and Profit Optimization
Forecasting
Merchandise Planning
Life-Cycle Planning
Consensus Planning
Collaborative Planning
Event Planning
Metrics and Reporting
Demand Management
Architecture
23
Warehouse Management
Product Setup
Warehouse Configuration
Bin Location Setup
Inventory Control
License Plate Tracking
Receiving
Quality Control
Put Away
Picking
Packing
Shipping
RFID
Reports, Documents, and
Queries
Warehouse Optimization
Kitting and Assembly
Cross-Docking
Available to Promise
Vendor Managed Inventory
Reverse Logistics
Multi-Term Aliases
24
Order Management
Order Promising
Inventory Management and Visibility
Sourcing
Execution Visibility
Inbound Assembly Coordination
Shipping and Outbound Management
25
Transportation Management
System Definition
Interfaces and Integration
Planning
Execution
Shipment Tracking
Transportation Network Optimization
Analysis
26
Collaboration and Integration

Portals
Commerce Platform (EDI)
Purchase Order Processing
Sales Order Processing
Payment Processing
Outbound Shipments
Inbound Shipments
Accounting
Workflow
Content Management
Product
Compliance
Logistics
Integrative Technologies
27
Supplier Relationship Management
Design and Setup
Sourcing
Supplier Management
Supplier Scorecard
RFI/RFP and Bid management
Contract Management
Risk, Liability, and Flexibility
Catalog Management
MRP Driven Procurement

Requisition Driven
Procurement
Procurement Reporting, and
Queries
Prices, Discounts, and Cost
Management
Returns
Manufacturing
Settlement
Project Management
Bill of Materials Explosion
Activity Based Costing
Supplier and Buyer Portal
Analytics
28
Supply Chain Analytics

Supply chain network optimization Procurement collaboration
Transportation network
Order management and
optimization
fulfillment
Inventory management
optimization
Supply chain event management
Production and supply planning
Sales and operations planning
Supply pipeline planning
Operational planning
Process manufacturing
Repetitive manufacturing
Discrete manufacturing
Engineer to Order
29

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Enfocus Requirement Suite

Overview for Business Analysts

Enfocus Solutions Inc.

What is a Supply Chain?

Enfocus Solutions Inc.

What is a Supply Chain (continued)?

Enfocus Solutions Inc.

What is Supply Chain Management

Enfocus Solutions Inc.

Supply Chain Concept

Enfocus Solutions Inc.

SCM is not Traditional Materials

Enfocus Solutions Inc.

What are the benefits of Supply Chain

Enfocus Solutions Inc.

Enfocus Solutions Inc.

What are the Key Challenges for SCM?

Types of Supply Chains

Enfocus Solutions Inc.

Supply Chain Cycle Illustration

Enfocus Solutions Inc.

Order Penetration and Postponement

Enfocus Solutions Inc.

Enfocus Solutions Inc.

Example who is this?

Enfocus Solutions Inc.

Comparison of Lean, Agile, and Leagile

(Source: Agarwal, A. et.al. 2006)

Enfocus Solutions Inc.

Understand industry specifics

Enfocus Solutions Inc.

#1 Understand Industry specifics

These attributes determine the strategies that are suitable.

Enfocus Solutions Inc.

#2 Start with Customer Expectations

A combination of these will add to customer

#3 Reduce Cycle Time to Gain

Enfocus Solutions Inc.

#4 Internal Supply Chains

Enfocus Solutions Inc.

#5 Typical SCM Areas that Require

Enfocus Solutions Inc.

Key Components for SCM Automation

Demand management and planning

Enfocus Solutions Inc.

Demand Management and Planning

Enfocus Solutions Inc.

Enfocus Solutions Inc.

Enfocus Solutions Inc.

Collaboration and Integration

Supplier Relationship Management

Design and Setup

MRP Driven Procurement

Supply Chain Analytics

Enfocus Solutions Inc.

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