Supply Chain Management Review PowerPoint Presentation Slides

Supply Chain Management Review
Your Company Name
1

Deck
Outline
Supply Chain Management
Process
SCM Decision Phases
Strategic Sourcing Process
Logistics & IT
Introduction Planning & Forecasting
Inventory Management
Inventory
Management Models
Performance Measures
Common Problems
with SCM
2

Introduction
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SCM Introduction Goals
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Advantages
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SCM Implementation
Steps
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SCM Process
Flow
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Supply Chain
Components
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3

Introduction (1 of 2)
It is the management of flow of
products and services, which begins
from the origin of products and ends
at the product’s consumption
It also comprises movement and
storage of raw materials that are
involved in work in progress,
inventory and fully furnished goods
This can be done by companies
with a very good and tight hold
over internal inventories,
production, distribution, internal
productions and sales
It uses different strategies and
approaches to view the entire
chain and work efficiently at
each and every step involved
in the chain
To monitor and relate
production, distribution,
and shipment of products
and services
Objectives Finances
Information
Product
Finances
Information
Product
Supplier Manufacturer Distributor ShopperRetailer
4

Introduction (2 of 2)
Second Tier
Customer
First Tier
Customer
Second Tier
Supplier
First Tier
Supplier
End CustomerDemand SideSupply Side
Supply Chain Management
Purchasing And
Supply Management
Physical Distribution
Management
Materials
Management
Logistics
Information Flow
Physical Flow
5

Components Of The Supply Chain
SupplyChain
Management
Supply
Manufacturing
Distribution &
Warehousing
Retail
Consumer
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6

7
Outbound
Logistics
Inbound
Logistics
Internal
Logistics
Bottle
Manufacturing
Plant
Oil
Drilling
Plastic
Manufacturer
Label
Printer
Maker
Paper
Manufacturer
Tree
Plantation
Juice
Butting
Plan
JuicingFarm
National
Distribution
Center
Focal
Firm
Regional
Distribution
Center
Shops
Supermarkets
Vending
Components Of
The Supply Chain
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Company Timeline
Vendor
Sourcing
Inbound Storage/
Transport Data
Operation
Outbound Storage/
Transport Data
Consumer
Distribution
Consumer
Material Flow
Information Flow
Money Flow
• Material flow through various warehouses
among distributors, dealers and retailers.
• Main challenge is in ensuring that the material
flows as inventory quickly without any stoppage
through different points in the chain
Material Flow
• It comprises the request for quotation,
purchase order, monthly schedules,
engineering change requests, quality
complaints and reports on supplier performance
from customer side to the supplier
Information Flow
• On the basis of the invoice raised by
the producer, the clients examine the
order for correctness. If the claims are
correct, money flows from the clients
to the respective producer
Money Flow
This slide
demonstrates the flow
of Material,
Information & Money
across the value chain
and showcases all the
important steps in the
SCM process
8

SCM Advantages9
Develops better customer relationship and service
Creates better delivery mechanisms for products and services
in demand with minimum delay
Improvises productivity and business
functions
Minimizes warehouse and transportation
costs
Minimizes direct and indirect costs
Assists in achieving shipping of right products to the right
place at the right time
Enhances inventory management, supporting the successful execution of just-in-
time stock models

SCM Implementation Steps
Project Management And Communication
Concept Phase Conversion Phase Execution Phase
Developing
An
SCM Vision
Assessing
Supply Chain
Opportunities
Developing
An SCM
Strategy
Creating The
Optimum SCM
Organizational
Structure
Establishing
The SCM
Information
And
Communication
Network
Translating
The SCM
Strategy Into
Actions
10

SCM Goals
To leverage inventory as a shared resource and utilize the
distributed order management technology to complete
orders from the optimal node in the supply chain
Cost efficient and cheap products are necessary, but
supply chain managers need to concentrate on value
creation for their customers
To maximize resource productivity, construct
standardized processes, remove duplicate efforts
and minimize inventory levels
Increased expectations of clients for higher product variety,
customized goods, off-season availability of inventory and
rapid fulfillment should be matched
Minimization of supply chain expenses
is very essential
Step 01
Step 02
Step 03
Step 04
Step 05
11

Supply Chain Management Process
Source Deliver
Plan ReturnExecute
There are six
important steps
involved in Supply
chain management
process. Each of
these steps have been
discussed separately
in the later slides.
12

13
Plant
Location
Plant
Size
Warehouse
Designing Plan
Delivery
Models
IT
Solutions
Transportation Cost
Modeling SCM
Process -
Plan
Planning is the strategic
part of supply chain
management process, to
find out a best possible
blueprint of how to fulfill the
end requirement. SCM
managers should identify a
list of key parameters as
mentioned in this slide

SCM Process - Plan
S.No. Supplier Name RM Procured Annual Amount Key Benefits Derived
1 Name 1 Iron
2 Name 2 Steel
3 Name 3 Aluminum
4 Name 4 Plastic
5 Name 5 Desktop
6 Name 6 Mouse Pad
7 Name 7 Rod
At this stage of supply chain
management, the emphasis is on
to ascertain the most reliable of
suppliers for raw materials so that
production process would never
jeopardize. a capable supplier is
one thing, but there should be a
tangible system in place for the
continuous development of
suppliers which would boost their
efficiency as well.
14

SCM Process - Execute
S.No. Manager Name
Area of
Responsibility
Key Strategies under
each Supervisor
1 Name 1 Testing
2 Name 2 Packaging
3 Name 3 Delivery
4 Name 4 Procurement
5 Name 5 Logistics
6 Name 6 Finance
7 Name 7 Marketing
This is the stage where well
designed processes are
implemented so that a
perceivable shape is given
to existing plans in the form
of manufactured products
which are ready for testing,
packaging, and delivery.
15

SCM Process - Deliver
S.No. Manager Name
Area of
Responsibility
Key Strategies under
each Supervisor
1 Name 1 Warehousing Networks
2 Name 2 Inventory Models
3 Name 3 Invoice Receipts
4 Name 4 Payment Receipts
5 Name 5 Road Shipment
6 Name 6 Sea Shipment
7 Name 7 Air Freight
16
The managers have a task at
hand to deliver the
product/service in the right
quantity, at the right place and
right time by employing
suitable carriers. Supply chain
managers should be fully
equipped with modern IT tools
to keep a track on the following
parameters

SCMDecision
Phases
The decision to be made here is a long term prediction and
involves price of goods that are very expensive if it goes
wrong. It is very important to study the market conditions at this
stage
Supply Chain Strategy
Supply chain planning should be done according to the demand
and supply view. In order to understand customers’ demands, a
market research should be done. The second thing to consider is
awareness and updated information about the competitors and
strategies used by them to satisfy their customer demands and
requirements
Supply Chain Planning
The objective behind this decisional phase is minimizing
uncertainty and performance optimization. Starting from
handling the customer order to supplying the customer with
that product, everything is included in this phase.
Organizational StrengthStrategy, Planning &
Operations are the three
important steps of SCM
decision process. This is a
summary slide and guidelines
have been mentioned in the
boxes which will further help in
writing the key points under
each step
17

Strategic Sourcing Process
Understanding
the Spent
Category
Supplier Market
Assessment
Supplier
Survey
Building the
Strategy
RFx Request
Communication
with new
suppliers
These are the important
steps in the strategic
sourcing process from
your vendor. Each of this
steps have been
discussed in separate
slides
18

19
The five major segments that are analyzed in the
first stage are as follows
Complete previous expenditure records and volumes
Expenditures divided by items and sub items
Expenditures by division, department or user
Expenditures by the supplier
Future demand projections or budgets
In this first stage, the team needs to do a complete survey on the total expenditure
Understanding
The Spent
Category

Supplier Market Assessment
The second step includes frequent assessment of the
supplier market for pursuing substitute suppliers to present
incumbents
A thorough study of the supplier marketplace dynamics
and current trends is done
The major element of the key products design is
should-cost.
Along with it, an analysis on the major suppliers’ sub-tier
marketplace and examination for any risks or new
opportunities are also important
The should-cost analysis supplies a valuable tool that
drives minimizing of cost and regular progress efforts of
the supplier
20

Supplier
Survey The third step is developing a
supplier analysis for both
incumbent and potential
substitute suppliers
This analysis assists in
examining the skills and
abilities of a supplier
Data collected from
incumbent suppliers is used
for verifying spend
information that suppliers
have from their sales
systems
Key Factors To Be Looked For In A Supplier
Feasibility Capability Maturity Capacity
21

How willing is the marketplace
to oppose the supplier?
How supportive are the clients
of a firm for testing incumbent
supplier relationships?
What are the substitutes to
the competitive assessment?
Building
The
Strategy
22

Strategic Sourcing – Next Steps
In this approach, a request for
proposal or bid needs to be
prepared (e.g., RFP, RFQ,
eRFQ, ITT) for most spend
classifications or groups.
01
RFx Request
After informing the winning
supplier(s), communication plan
will be set up, including any
modification in specifications
and improvements in delivery,
service or pricing models
Communication
03
In this approach, a request for
proposal or bid needs to be
prepared (e.g., RFP, RFQ,
eRFQ, ITT) for most spend
classifications or groups.
Selection
02
23

Order Fulfillment Process
Customer Sales Department Credit & Billing Shipping
Order
Goods
Submit Order
Prepare
Payment
Check
Inventory
Pick And
Side Goods
Check
Credit
Send
Invoice
Credit
Ok?
24

Steps Of Order Fulfillment
DDU/RDU
Order
Management
Customer Merchant
USPS DDU/RDU
25

26
Logistics & IT
Transportation
Medium
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Transportation
Challenges
IT in
SCM

27
Transportation
Medium
Plane
Truck
Rail
Ship
Electronic
Choose the right
transportation medium as
per your project
requirements and
highlight the reason for
choosing it because it
has a direct impact on
your freight cost

Transportation Challenges
Varying Fuel Prices
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Customer’s Expectation
Improvised Technologies
Globalization
Changing Transportation Industry
Labor Laws
Economic Uncertainty
CHALLENGE
28

Information Technology in a Supply Chain: Analytical Applications29
Strategic
Planning
Operational
Supplier
Apps
SCM
Transport execution & WMS
Transport & Inventory
Planning
MES
APS Dem Plan
CRM/ SFA
Supplier Manufacturer Distributor Retailer Customer
These circles
demonstrates the most
commonly used IT/ERP
tools in each stage of the
supply chain
management. You can
edit it as per the tools
used in your company

Planning&
Forecasting
Production
Planning
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Budget
Forecasting
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attention.
Demand
Forecasting
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Sales
Forecasting
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attention.
30

Supply Chain Management Budget Forecasting
Budget Forecasting
Your Text Here +0.00 $
Your Text Here 55$
Your Text Here 65$
Your Text Here $25
Your Text Here 35$
45%
30%
15%
10%
Sales
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
31
Enter your projected
quarterly sales and
the budget
forecasted for the
key categories

Demand Forecasting
This graph/chart is linked to excel, and changes automatically based on data. Just left click on it and select “Edit Data”.
0
200
400
600
800
1000
1200
1400
1600
1800
0 2 4 6 8 10 12 14
DemandQuality
Months
32

1
1.2
1
1.8
2
3 2.9
3.8
5.4
4.9 5
5.22
5.38 5.39
6
6.2
2017 Sales 2018 Forecast
January 420
February 440
March 410
April 424
May 467
June 755
July 720
August 800
September 780
October 960
November 1200
December 1100
January 1150 1150
February 1240
March 1280
April 1310
May 1360
June 1370
Sales Forecasting (Option 1 of 2)33

Sales Forecasting (Option 2 of 2)
2
5
12
3
9
10
12
4
5
3
7
4
-10
-5
0
5
10
15
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
34

Master Production Planning (Option 1 of 2)
Products
2017
Units
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Product $391
Product 1 $234
Product 2 $354
Product 3 $543
Product 4 $300
Product 5 $694
Product 6 $358
35

Master Production Planning (Option 2 of 2)
Week 1 Week 2 Week 3 Week 4 Week 5
Demand Forecast(in Units) 120 240 300 480 600
Customer Order(committed) 400 200 150 300 435
Initial Inventory in Period week=0 750
Net inventory before mps 250 100 500 960 320
Master Production Schedule(MPS) 1200 800
Projected on hand Inventory 250 800 650 350 330
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36

✓ Introduction
✓ EOQ Model
✓ EOQ Model Cost Curves
✓ EOQ Cost
✓ EOQ Important Characteristics
✓ EOQ Basic Assumptions
needs and capture your audience's
attention.
37

Manufactures
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Warehouse
Distributors
Wholesalers
Customers
38

Economic Order
Quantity (EOQ)
Model
capture your audience’s attention.
Order
Placed
Order
Placed
Order
Received
Order
Received
Demand
Rate
InventoryLevel
Reorder
Point, R
Order
Quantity, Q
Time
Lead
Time
Lead
Time
0
39

Slope = 0
Minimum
Total Cost
Annual
Cost ($) Total CostThe EOQ Model
Cost curves
Order Quantity, QOptimal Order Q*
40

41
D Annual Demand
Order QuantityQ
S Cost Of Placing Order
H Annual Per-unit Holding Cost
Ordering cost = SD/Q
Holding cost = HQ/2
Total Cost = SD/Q + HQ/2
EOQ Cost Model
2DS
H
Q*=√

▪ At EOQ, the annual holding cost is the same as annual ordering cost
▪ The total cost curve is flat near EOQ. So, the total cost does not change much with a slight
change in the order quantity
2DSH
Q
DS
2
HQ
costannualTotal
2
DSH
H
2DS
DS
Q
DS
costorderingAnnual
2
DSH
H
2DS
2
H
2
HQ
costholdingAnnual
*
*
*
*
=+=
===
===
Important Characteristics of the
EOQ Cost Function
42

43
Bi-Level Optimization
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audience’s attention.
Stochastic Modeling
Uncertainty Modeling
Inventory
Management Models

▪ Demand occurs at a constant rate of D items per year
▪ Ordering Cost is $S per order
▪ Holding Cost is $H = $CiI per item in inventory per year (note holding cost is based on
the cost of the item, Ci)
▪ Purchase Cost is $C1 per item if the quantity ordered is between 0 and x1, $C2 if the
order quantity is between x1 and x2, etc
▪ Delivery time (lead time) is constant
▪ Optimal order quantity: The procedure for determining Q* will be demonstrated
▪ Number of orders per year: D/Q*
▪ Time between orders (cycle time): Q*/D years
▪ Total annual cost: [(1/2)Q*H] + [DS/Q*] + DC (holding + ordering + purchase)
EOQ Assumptions
44

Stochastic Modeling
It is a mathematical approach of representing
data or predicting outcomes in situations where
there is randomness or unpredictability to some
extent
Parameters like input materials, reliability of
machine and competence within the
employees have an impact on the outcome of
the manufacturing process but it is impossible
to measure them with absolute values
This modeling strategy helps in predicting the
result of this process with some defined error
rate by considering the unpredictability of
these factors
45

0
1000
2000
3000
4000
5000
6000
Loss
Return Period
High Medium Low
Uncertainty
Modeling
We use uncertainty
modeling for
characterizing the
uncertain parameters
with probability
distributions
While using a realistic
modeling approach, the
system has to take
uncertainties into account.
The uncertainty is
evaluated to a level where
the uncertain characteristics
of the system are modeled
with probabilistic nature
It takes dependencies into
account easily as input just
like Markov chain or may use
the queuing theory for
modeling the systems where
waiting has an essential role
46

A bi-level issue
arises in real life
situations whenever
a decentralized or
hierarchical decision
needs to be made
In these types of
situations, multiple
parties make
decisions one after
the other, which
influences their
respective profit
Bi-Level Optimization
needs and capture your audience’s attention.
47

Performance
Measures
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Financial Measures
Non-Financial Measures
48

Cycle
Time
Customer
Service
Level
Supply Chain
Lead Time
It can be simply
defined as the end-to-
end delay in a
business process
Order-To-Delivery
Lead Time
Time of delay in the
middle of the
placement of order
by a customer and
the delivery of
products to the
customer
Backorder
Level
Gauge of total
number of
orders waiting
to be filled
Stock
Out Rate
It is the reverse
of order fill rate
and marks the
portion of orders
lost because of
a stock out
Probability Of On-
Time Delivery
It is the portion
of customer
orders that are
completed on-
time, i.e., within
the agreed-upon
due date.
49

Raw Material
Enter the amount of raw material consumed & left-out
Work-In-Progress
Enter the amount of WIP that is in stock
Finished Goods
Enter the amount of Finished goods; both in weight & value terms
Spare Parts
Mention the amount of spare parts consumed & leftover in the company
Replace the text
from the comments
box and add the
relevant details
there
50

Manufacturing Resources
Include the machines, material handlers, tools, etc.
Storage Resources
Comprise warehouses, automated storage and retrieval systems
Logistic Resources
Engage trucks, rail transport, air-cargo carriers, etc.
Human Resources
Consist of labor, scientific and technical personnel
Financial Resources
Include working capital, stocks, etc..
Resource
Utilization
The main motto is to utilize
all the assets or resources
efficiently in order to
maximize customer service
levels, reduce lead times
and optimize inventory
levels. So, Enter the
required parameters
51

Financial Measures
Cost of Raw Material
Revenue from Goods Sold
Inventory Holding Cost
Transportation Cost
Cost of Expired
Perishable Goods
Cost of Goods Return
By Customer
Cost of Goods Return
By Customer
52

Common Problems With SCM
Theft
Transaction
Errors
Information
Delays
Misplaced
Inventory
Product Quality
And Yield
Spoilage
Lack Of
Visibility In Scs
Major problem for
furniture retailers
Retailers with inaccurate
inventory records for 65%
of SKUs
dated information,
incompatible info.
systems
16% of items cannot be
found at a major retailer
active ingredients in the
products are losing their
properties
▪ Do you know the inventory your
distribution centers hold?
▪ Do you know the inventory your
fellow retailer holds?
Poor Inventory Status Information
Lack Of Relevant SCM Metrics: How To Measure Responsiveness?
53

Common
Problems With
SCM
01 Not knowing the order status
Poor Delivery Status Information
02 ▪ Unreliable, duplicate data
▪ Security problems: too much or too little
Poor IT Design
03 Giving lower priority to internal customers than external customers
Internal Customer Discrimination
04 Poor Integration
Accounting systems do not capture opportunity
costs
Elusive Inventory Costs
05
54

Supply Chain Optimization
Raw Material
And
Component
Suppliers
Customer
Product Flow
Demand Signal
Transportation
Sourcing
Procurement
Central
Manufacturing
Distribution,
Assembly And Repair
Sales Marketing And
Customer Service
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Supply Chain Optimization
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04030201 05
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Stacked Column
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0
10
20
30
40
50
60
70
80
90
100
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18
SalesinPercentage(%)
▪ Product 01 ▪ Product 02
58

Scatter Bubble Chart
Profit(InSales)
18
25
33
40
48
57
10
20
30
40
50
60
70
10 20 30 40 50
Highest Profit
Financial Year 2017
Product 01
59

Donut Pie Chart
This graph/chart is linked to
excel, and changes
automatically based on data.
Just left click on it and select
“Edit Data”.
80% 20%
excel, and changes
“Edit Data”.
70% 30%
excel, and changes
“Edit Data”.
60% 40%
60

Scatter Chart
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30
50 48
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$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
0% 10% 20% 30% 40% 50%
5%
15%
20%
22%
32%
40%
46%
35%
Inprice
▪ Product 01
▪ Product 02
61

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Vision
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Mission
Goal
Our
Vision

Meet Our Team
Name Here
Designation
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replaced by your own image. Just right click and
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We are Professional
replace image.
We are Creative
replace image.
We are Talented
01
02
03
About
Us

Quotes66
Nelson Mandela
“Things may
come to those
who wait, but
only the things
left by those who
hustle.”
Abraham Lincoln
“It always
seems
IMPOSSIBLE
until it’s
DONE.”

Dashboard
Low
20
100
60
Medium
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100
60
High
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100
60
67

Location
%70
Brazil
your needs and capture your audience's
attention.
Australia
attention.
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Our
Goal
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Comparison
VS
attention.
75%
attention.
60%
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Silhouettes
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Hierarchy
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Time Line
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Mind Map01
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04
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01
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04
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Puzzle
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Bulb Or Idea
GENERATE
IDEA
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Idea 04
Idea 03
Idea 01
Idea 02
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Address
# street number,
city, state
Email Address:
emailaddress@123.com
Contact Numbers:
0123456789
Thank You
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