2. Introduction
Supply Chain Management enclose all
Logistics Management activities.
Importantly it also includes coordination
collaboration with channel partners which
can be suppliers, intermediaries, third party
service providers and customers.
In essence, Supply Chain Management
integrates supply and demand management
within and across companies.
3. Introduction
It represents a conscious effort by the
supply chain firms to develop and run
supply chains in the most effective &
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.
5. SCM objectives: SCM outcomes:
What?
Establish policies , objectives and
operating footprints.
How much?
Deploy resources to match supply
with demand .
When ? Where?
Schedule , monitor , control
and adjust production.
Do:
Build and transport.
Objectives.
Supply policies(service levels).
Network design.
Demand forecast
Production ,procurement &logistic plan
Inventory target.
Work center scheduling
Order/inventory tracking
Order cycle
Material movement.
Strategically
Tactical
Operational
Execution
6. Business value
goals:
•Rapid demand
fulfillment.
•Collaborative
supply chain
planning and
execution.
Customer value
goals:
Give customer
what they want ,
when and how
they want it , at
low cost.
•Enterprise
coordination of
manufacturing
and business
process.
•Effective
distribution
system
•Responsiven
ess and
accountability
to customers.
Goals of SCM
7. Links of SCM
The organizations that make up the supply
chain are “linked” together through
1. Physical flows and
2. Information flows.
Physical flows involve the transformation,
movement, and storage of goods and
materials. They are the most visible piece of
the supply chain.
8. Information system and
SCM
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.
10. How information
system facilitate SCM
Information from supply chain management
system helps firms
Decide when and what to produce , how to
store and move.
Rapidly communicate others.
Track the status of orders.
Check inventory availability and monitor
inventory levels.
11. How information
system facilitate SCM
Reduce inventory , transportation and
warehouse cost.
Track shipments.
Plan production based on actual customer
demand.
Rapidly communicate changes in product
design.
12. Concept of Supply Chain
Management
The concept of Supply Chain Management
is based on two core ideas.
The first is that every product that reaches
an end user represents the “cumulative
effort of multiple organizations”. These
organizations are referred to collectively as
the supply chain.
13. Concept of Supply Chain
Management
The second idea is “to give best product
to consumer” while supply chain have
existed for a long time , most organizations
have only paid attention to what was
happening within their “four walls”. Very few
organizations realized about delivering
goods to final consumer .
14. Need of SCM
Supply chain management is as much a
philosophical approach as it is a body of
tools and techniques.
It typically requires a great deal of
interaction and trust between companies to
work.
15. Need of SCM
There are three major developments that
have brought SCM to the forefront of
management’s attention.
1. The information revolution
2. Increased competition and globalization in
today’s markets
3. Relationship management
16. The Information
Revolution
The late 1990s and early 2000s people saw
the emergence of on-line “trading
communities” that put thousands of buyers
and sellers in touch with one another.
The old “paper”-type transactions are
becoming increasingly obsolete.
17. The Information
Revolution
At the same time, the growth of new
telecommunications and computer
technology has made prompt
communications a reality.
Such information systems — like Wal-Mart’s
satellite network — can link together
suppliers, manufacturers, distributors, retail
outlets, and ultimately, customers,
regardless of location.
18. The Information
Revolution
Such information
systems — like Wal-
Mart’s satellite network
— can link together
suppliers,
manufacturers,
distributors, retail
outlets, and ultimately,
customers, regardless
of location.
20. Increased
Competition and
Globalization The second major trend is increased
competition and globalization of businesses.
New competitors are entering into markets
that have traditionally been dominated by
“domestic” firms.
At the same time, customers are demanding
quicker delivery, state-of-the-art technology,
and products and services better-suited to
their individual needs.
21. Increased
Competition and
Globalization
To meet this challenge, managers are
seeking to find ways to rapidly expand their
global presence.
They must position inventories so products
are available when customers (regardless of
location) want them, in the right quantity,
and for the right price.
22. Increased
Competition and
Globalization
This level of
performance is a
constant challenge to
organizations, and can
only occur when all
parties in a supply
chain are “on the same
wavelength”.
24. Relationship
Management
The third major trend is relationship
management, now the firms must manage
the relationships with their upstream
suppliers as well as their downstream
customers.
SupplierSupplier ManufacturerManufacturer DistributorDistributor RetailerRetailer CustomerCustomer
Upstream
Downstream
25. Sectors of Industrial
Supply Chains
The industrial supply chain consists of three
key sectors:
1. Primary (or extractive) sector
2. Secondary (or manufacturing) sector
3. Tertiary sector
28. Just in time
Just-in-time (JIT) is an inventory strategy
which companies adopt to increase
efficiency and decrease waste by receiving
goods only as they are needed in the
production process, thereby reducing
inventory costs.
The purpose of JIT production is to avoid
the waste associated with overproduction,
waiting and excess inventory.
29. Just in time
The key benefits of JIT are:
– Low inventory
– Low wastage
– High quality production
– High customer responsiveness.
30. Just in time
A philosophy that seeks to eliminate all types of waste (like excessive
levels of inventory and waiting times)
31. Virtual Integration
Virtual integration is a
new form of value
chain management.
Under such a system,
the links of the value
chain are brought
together by informal
arrangements among
suppliers and
customers.
32. Virtual Integration
Today the vision for many manufacturers is
to become virtual companies, owning only
the brand and the customer. The design,
system development, product sourcing,
logistics, and even final assembly can all be
outsourced to supply chain partners.
33. Amazon.com was a virtual business
pioneer. As an online bookstore, it delivered
bookstore services without a physical retail
store presence; efficiently connecting
buyers and sellers without the overhead of a
brick-and-mortar location.
34. Outsourcing
Outsourcing refers to the strategic decision
to shift one or more of an organization’s
activities to a third-party specialist.
This practice is used by different companies
to reduce costs by transferring portions of
work to outside suppliers rather than
completing it internally.
Outsourcing is an effective cost-saving
strategy when used properly
38. Push versus pull
In push based supply chain production and
distribution decision are based on long term
forecasts.
In pull based supply chain production and
distribution decision are demand driven so
that they are coordinated with true customer
demand rather then forecast demand
39. Push versus pull
Push versus pull based supply chain models:
Push model:
Supply to production based inventory based stock based purchase what
Forecast on forecast on forecast on forecast is available
Pull model:
Supply to produce to order automatically automatically customer
Order replenish replenish stock orders
warehouse
Supplier
Supplier Manufacturer Distributer Retailer
Manufacturer Distributer Retailer Customer
Customer
43. References
David Simchi, Kaminsky Phillip, 2003. Designing and managing through supply chain, The Mc Graw
Hill companies .
David Simchi-Levi, Philip Kaminsky ,Edith Simchi-Levi. Introduction to Supply Chain Management.
Martin, Michael J.C. (1994). Managing Innovation and Entrepreneurship in Technology-based Firms.
Wiley-IEEE. p. 44. ISBN 0-471-57219-5.
Edward G. Hinkelman & Sibylla Putzi (2005). Dictionary of International Trade – Handbook of the
Global Trade Community. World Trade Press. ISBN 1-885073-72-0.
Peter, J. Paul; James H. Donnelly (2002). A Preface to Marketing Management. McGraw-Hill
Professional. p. 132. ISBN 0-07-246658-8.
Dowling, Grahame Robert (2004). The Art and Science of Marketing. Oxford University Press.
p. 266. ISBN 0-19-926961-0.
Terry P. Harrison, Hau L. Lee and John J. Neale (2003).The Practice of Supply Chain Management.
Springer.
J., Ashayeri; R.P., Kampstra (2005). "Demand Driven Distribution: The Logistical Challenges and
Opportunities" (Department of Econometrics and Operations Research Tilburg University).
Hopp, Wallace J.; Spearman, Mark L. "To pull or not to pull: what is the question?". Manuf Serv Oper
Manage. Retrieved 13 June 2014.
