SUPPLY

CHAIN
MANAGEMENT
Presented by:
Ankit KhetaN (f-23)
Romial singhai (f-33)
Chandermev.v.p (f-55)
 Introduction
Supply chain management (SCM) is the management of a
network of interconnected businesses involved in the ultimate
provision of product and service packages required by end
customers. Supply chain management spans all movement and
storage of raw materials, work-in-process inventory, and
finished goods from point of origin to point of consumption
(supply chain).
 Suppliers Manufacturers Warehouses & Customers
Distribution Centers

Transportation Transportation
Costs Costs
Material Costs Transportation
Manufacturing Costs Inventory Costs Costs
An example of SCM for an company.
History of Supply Chain Management

1960’s - Inventory Management Focus, Cost Control

1970’s - MRP & BOM - Operations Planning
1980’s - MRPII, JIT - Materials Management,
Logistics
1990’s - SCM - ERP - “Integrated” Purchasing,
Financials, Manufacturing, Order Entry
2000’s - Optimized “Value Network” with Real-Time
Decision Support; Synchronized & Collaborative
Extended Network
The importance of information in an integrated supply
chain management environment:

Prior to 1980s the information flow between functional areas with in an organization
and between supply chain member organizations were paper based. The paper based
transaction and communication is slow. During this period, information was often
over looked as a critical competitive resource because its value to supply chain
members was not clearly understood.
IT infrastructure capabilities provides a competitive positioning of business
initiatives like cycle time reduction, implementation, implementing redesigned
cross-functional processes. Several well known firms involved in supply chain
relationship through information technology.
Two factors have strongly impacted this change in the importance of information.
 First, satisfying in fact pleasing customer has become something of a corporate obsession.
Serving the customer in the best, most efficient and effective manner has become critical.
 Second information is a crucial factor in the managers' abilities to reduce inventory and
human resource requirement to a competitive level. Information flows plays a crucial role
in strategic planning.
Key elements to a supply chain

Production
Supply
Inventory
Location
Transportation
Information
 Difficulties in SCM
Plan Source Make Deliver Buy

Uncertainty is inherent to every supply chain

 Travel times
 Breakdowns of machines and vehicles
 Weather, natural catastrophe, war
 Local politics, labor conditions, border issues

The complexity of the problem to globally optimize a supply chain is

significant
 Minimize internal costs
 Minimize uncertainty
 Deal with remaining uncertainty
The Importance of Supply Chain Management

Dealing with uncertain environments – matching supply and demand

 Boeing announced a $2.6 billion write-off in 1997 due to “raw materials
shortages, internal and supplier parts shortages and productivity
inefficiencies”
 U.S Surgical Corporation announced a $22 million loss in 1993 due to “larger
than anticipated inventories on the shelves of hospitals”
 IBM sold out its supply of its new Aptiva PC in 1994 costing it millions in
potential revenue
 Hewlett-Packard and Dell found it difficult to obtain important components
for its PC’s from Taiwanese suppliers in 1999 due to a massive earthquake
U.S. firms spent $898 billion (10% of GDP) on supply-chain related
activities in 1998
Shorter product life cycles of high-technology products
 Less opportunity to accumulate historical data on customer demand
 Wide choice of competing products makes it difficult to predict demand
The growth of technologies such as the Internet enable greater
collaboration between supply chain trading partners
 If you don’t do it, your competitor will
 Major buyers such as Wal-Mart demand a level of “supply chain maturity” of
its suppliers
Availability of SCM technologies on the market
 Firms have access to multiple products (e.g., SAP, Baan, Oracle, JD
Edwards) with which to integrate internal processes
Aspects of Supply Chain Management
Customer Service Management
Procurement Process
Product Development and Commercialisation
Manufacturing Flow Management:
Distribution
Outsourcing & Partnerships
Performance Measurement
 Application of SCM

Electronic Commerce
Electronic Data Interchange
Bar coding & Scanner
Data Warehouse
Enterprise Resource Planning
 Relationship between ERP and SCM
Company could assemble the information it needs to feed the SCM applications
from legacy systems (for most companies this means Excel spreadsheets spread
out all over the place), but it can be nightmarish to try to get that information
flowing on a fast, reliable basis from all the areas of the company. ERP is the
battering ram that integrates all that information in a single application, and SCM
applications benefit from having a single major source to go to for up-to-date
information. These days, most ERP vendors have SCM modules.
 Examples of SCM
 Wal-Mart’s partnership with Proctor & Gamble to
automatically replenish inventory

 Dell’s innovative direct-to-consumer sales and build-to-order

manufacturing
 Recent development in Supply chain management software is:

1. Base Rate, Carrier select & match pay (version 2.0) developed by Distribution
Sciences Inc. which is useful for computing freight costs, compares
transportation mode rates, analyze cost and service effectiveness of carrier.

2. A new software programme developed by Ross systems Inc. called Supply

Chain planning which is used for demand forecasting, replenishment &
manufacturing tools for accurate planning and scheduling of activities.

3. P&G distributing company and Saber decision Technologies resulted in a

software system called Transportation Network optimization for streamlining
the bidding and award process.

4. Logitility planning solution was recently introduced to provide a programme

capable managing the entire supply chain.
 Conclusion
As organizations grow increasingly cost competitive as well as trying to
increase speed of responsiveness to customer demand, systematic
approaches to supply chain management are the need of the hour.

The growth of IT has also prompted SCM in becoming a very competitive

stage of business with very low margin of error. With more delicacy companies
have to be very careful & their dependency on technology is sure to rise.