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Supply Chain Management Presented By: Kapil Batra Jyoti Arora

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Agenda <ul><li>Introduction to Supply Chain Management </li></ul><ul><li>Concept of Supply Chain Management </li></ul><ul><li>Need of supply Chain Management </li></ul><ul><li>Evolution of Supply Chain Management </li></ul><ul><li>Issues involved in development of SCM framework </li></ul>

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Introduction to Supply Chain Management

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Introduction to Supply Chain Management <ul><li>Retail helps in </li></ul><ul><ul><li>Making goods available </li></ul></ul><ul><ul><li>At the right time </li></ul></ul><ul><ul><li>Takes care of customer preference </li></ul></ul><ul><ul><li>Services to the customer </li></ul></ul>

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Complexity of Retail Department Store Cosmetics Kitchen Apparel Gifts Appliances Electronic Gadget

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Department Store Cosmetics Kitchen Apparel Gifts Appliances Electronic Gadgets Men Women Kids

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Department Store Cosmetics Kitchen Apparel Gifts Appliances Electronics Men Women Kids Casual Formal Access- ories

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Department Store Cosmetics Kitchen Apparel Gifts Appliances Electronic Gadgets Men Women Kids Casual Formal Access-ories Shirts Trousers

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Department Store Cosmetics kitchen Apparel Gifts Appliances Electronic Gadgets Men Women kids Casual Formal Access-ories Shirts Trousers Full Sleeves Half Sleeves

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The challenge of Supply Chain Management in Retailing <ul><li>Increased complexity over the last decade </li></ul><ul><li>Opening of global markets </li></ul><ul><li>Uncontrollable cost of </li></ul><ul><ul><li>Transportation </li></ul></ul><ul><ul><li>Warehousing </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Shipping </li></ul></ul><ul><ul><li>Has led to decrease in </li></ul></ul><ul><ul><li>profitability of retailers </li></ul></ul>

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Overcoming the Challenge <ul><li>To overcome the challenge of complexity in SCM various innovations have been done </li></ul><ul><ul><li>Just In Time (JIT) </li></ul></ul><ul><ul><li>Total-Quality Management (TQM) </li></ul></ul><ul><ul><li>Zero Inventory (ZI) </li></ul></ul><ul><ul><li>Vendor Management Inventory (VMI) </li></ul></ul><ul><ul><li>Efficient Consumer Response (ECR) </li></ul></ul>

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Concept of Supply Chain Management

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Concept of Supply Chain Management <ul><li>“ Supply chain is a network of facilities & distribution options that performs the function of procurement of raw materials , transformation of these materials into intermediate & finished products and distribution of these products to the customers ” </li></ul>

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Customer’s Customer Customer Buyer Delivery of a superior value: Quality, Flexibility, Innovation & Value flow to the customer Demands for low pricing, high quality; Customer; Supplier Integration across a responsive & flexible supply chain Supplier Supplier’s Supplier Value acquisition from Suppliers Value added in production Value delivery to customers

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<ul><li>Supply Chain Involves 5 Basic Steps </li></ul>Plan Deliver Feedback Source Make SOURCING RAW MATERIALS MANAGING SUPPLY & DEMAND WAREHOUSING & INVENTORY TRACKING DISTRIBUTION ACROSS CHANNEL MANUFACTURING & ASSEMBLY

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These Five Steps Broadly Define These Efforts <ul><ul><li>Delivery To The End Customers </li></ul></ul><ul><ul><li>Distribution Across Channels </li></ul></ul>Order Entry & Order Management <ul><ul><li>Warehousing & Inventory Tracking </li></ul></ul><ul><ul><li>Manufacturing & Assembling </li></ul></ul>Sourcing Raw Materials <ul><ul><li>Managing </li></ul></ul><ul><ul><li>Supply & Demand </li></ul></ul><ul><li>Reduced Cost </li></ul><ul><li>Speed To Market </li></ul><ul><li>Better Services </li></ul>

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Objectives of SCM for Retailers <ul><li>Objectives:- </li></ul><ul><ul><li>R ight Product </li></ul></ul><ul><ul><li>Right Place </li></ul></ul><ul><ul><li>Right Time </li></ul></ul><ul><ul><li>Right Price & </li></ul></ul><ul><ul><li>Profit for </li></ul></ul><ul><ul><li>the retailer </li></ul></ul>Product Time Price & Profit Place R ight

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SUPPLIER Flow of Goods Flow of Information SCM also Involves RAW MATERIAL WAREHOUSE STOCK MANUFACTURER WAREHOUSE DISTRIBUTION CENTRE RETAILER CUSTOMER

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Need of SCM

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Need of SCM <ul><li>Change in Customer Buying Habits </li></ul><ul><ul><li>Demand changes frequently </li></ul></ul><ul><ul><li>Shorter product lifecycle </li></ul></ul><ul><ul><li>Increased cost of holding inventory </li></ul></ul><ul><li>Increased Competition </li></ul><ul><ul><li>Multiple buying options for customer </li></ul></ul><ul><ul><li>Hence, need of making product accessible to customer </li></ul></ul><ul><ul><li>Minimize the cost </li></ul></ul><ul><ul><li>Efficient distribution result </li></ul></ul>

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<ul><li>Increasing pressure of profit margins earned </li></ul><ul><ul><li>Emphasis on integration of SCM process </li></ul></ul><ul><ul><li>Helps in cost cutting </li></ul></ul><ul><li>Technology Driven World </li></ul><ul><ul><li>Information plays an important role </li></ul></ul><ul><ul><li>Product availability has increased </li></ul></ul>Need of SCM

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Evolution of Supply Chain Management

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Evolution of Supply Chain Management Traditional Mass Manufacturing Inventory mgmt & cost containment 1950s 1960s 1970s 1980s 1990s 2000s Future JIT, TQM, BPR, Supplier & Customer Alliances Supply Chain Relationship Formation & Extension Increased Supply Chain Capabilities

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Issues Involved In Developing Efficient Supply Chain Framework

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Issues Involved In Developing Efficient Supply Chain Framework Warehouse Design & Operations STRATEGIC Customer Service Network Strategy STRUCTURAL Channel Design Transportation Management Materials Management Information Systems Policies & Procedures Facilities & Equipments Organization & Change Management FUNCTIONAL IMPLEMENTATION

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Thank You