Scm Iqra Last 2 Classes

ERP - Containing the ability to link customers & suppliers into a complete supply chain - An enterprise wide set of management tools that balances demand & supply - Employing proven business processes for decision making and providing high degrees of cross functional integration among sales, marketing, operations, logistics, purchasing, finance, new product development, HR etc.

ERP - Sales Forecasting - Supplier rating & performance - MPS & MRP - Capacity - Shop floor planning - Customer order entry - Inventory in & out - Purchase order - Accounts payable, receivable, G. Ledger, Cash Mgt etc. - HR

MRP - What are we going to make - What does it take to make it

MRP

- What do we have - What do we have to get

Materials Planning

Production Planning

Process waste - Too many signature levels - Unclear job descriptions - Obsolete database - Purchase orders not matching quotation - Wrong data - Poor office lay out - Unnecessary e-mails - Waiting for next process step - Over production - Defects & extra inventory

Kaizen - Japanese term - Kai means “continuous” & zen means “improvement”. - Kai means “change” & zen means “good or for better”. - Derived from Gai San - Gai mean The action to correct - San mean action that benefit the society - “Just do it” by stakeholders (operators, owners, managers) - Ongoing improvement involving everyone

Lean - “A manufacturing philosophy that shortens the time line between customer order and the shipment by eliminating waste (non-value-adding activities).” - Commitment to continuous improvement - Systematic approach for Waste elimination from process - Doing more with less - Zero waiting time - Less of materials, time, resources, people, money

Lean / Continuous elimination of waste

Inactivity Excessive stocks

Dirt and disorder

Scrap and defects

5 S or Cando - Sort / Proper placing - Straighten/Arranging - Shine / Clean work area / Safety / e.g oil leakage - Standardize/systemize / Consistency - Sustain / To keep process going th. Training, communication etc.

Jidoka - Stop & notify the problem / abnormality - Rectify problem and then move - This system gave faith to worker & allow the worker to stop - This system gave liberty and authority to worker - Separate man’s work - Separate machine’s work - Quality in production process -

TPS (Toyota Production System) - Taiichi Ohno visited USA in 1956 where customer choose exactly what they wanted & in the quantities they wanted - Customer satisfaction - Just in time + Jidoka - Employee satisfaction - Mutual trust b/w employees & Mgt. - Team work - Delegate authority - Search for opportunities of further improvement -

Six Sigma - Motorola engineer Bill Smith pioneered the concept - A quantitative approach to measure quality & service - A metric that demonstrates quality levels at 99.9997% - Statistical approach to problem resolution & improvement -

Who Uses Six Sigma?

Sigma Levels and Defects per Million (DPM)

σ

Level

PPM or DPM

2

308,537

3

66,807

4

6,210

5

233

6

3.4

Comparison Six Sigma

Traditional

Focus on Prevention

Focus on Firefighting

Low cost

High cost

Stable/Predictable Processes

Processes based on Random Probability

Proactive

Reactive

Low Failure Rates

High Failure Rates

Focus on Long Term

Focus on Short Term

Efficient

Wasteful

Manage by Metrics and Analysis

Manage in haphazard wayants”

Just in time - Making only what is needed - Purchase only when it is required - It eliminates large inventories - Continuous flow

Kanban -The Japanese term means “signal” - Printed card contains the information like name, quantity etc. - Communication b/w workers / managers

ISO - Write what you say - Do What you write - More focus on documentation - DuPont, Toronto plastics, Sun Microsystems etc got benefits

Class A - Behavior - Process re-engineering - Involvement & integration - Trust & teamwork - Performance measurement - Root cause analysis - Frozen demand philosophy - Sales & operation planning - Open & honest communication - Internal customer agreements -Data accuracy , Success stories, projects etc.

Total quality - Perfection - Consistency - Eliminating waste - Speed of delivery - Compliance with policies - Doing it right the first time - Delighting customers - Total customer service & satisfaction - Hyundai, P&G

Logistics / Transportation - The frustration of going to a store to purchase an advertised item, only to find out that store’s shipment is arriving late. - The difficulty in shopping for food, clothing & other items if logistical system is on strike - Military Logistics - Largest area in logistics cost

Logistics / Transportation Responsible for the physical movement of materials / products Tangible products need transportation Less transportation cost may make trade more attractive Factors are fuel, Vehicles, taxes & Drivers Companies introduced regional warehousing rather national Transport is one of the most expensive part in supply chain

Logistics / Transportation Retailers Suppliers Logistics service  providers Consumers Electronic d ata i nterchange

Electronic data i nterchange

Consumers

Manufacturer

Suppliers

 Retailers

Mode of Transport - Air - Rail - Road (Trallers, Bus, Trucks, Vans, Dumpers, Trucking - Water (Cargo, Bulk Carriers, Tankers, Container ships, Ferries RORO - Pipeline

Players - Shippers (Include producers, couriers, brokers, agents, drivers) - Carriers (Shipping companies, lines, railway, trucking etc.

Factors - Per unit & Total cost - Protection of theft, weather - Direct Shipping vs Trans shipment - Time, Volume & Value - Distance - Packaging / Size & length/ temperature - Handling for loading and unloading

Intermodal Transport Divide the journey into stages and use the best mode for each stage Stages involved from trucking to rail to ship to truck to rail

Trans shipment / part shipment

Consolidation logistics - Gather / combine shipments - Find partner/partners to distribute freight - Control cost and save time

Clearing & Forwarding agents - Work on commission basis - Liaison b/w bank, company, shipping company & customs

Bill of lading / Airway bill - Non negotiable vs orignal - Issued by shipping company - Description, ship name & origin - Weight / Volume - Time of the shipment - Tentative / Original - Port of shipment - Shipper & Consignee - Destination

Demurrage / Penalty - Varies from country to country - Maximum 5 days

Expediting & Tracing shipments - Through shipping company websites - Through suppliers / indenters / local shipping agent - Can claim if shipment is unloaded with out any prior information - Direct shipment vs trans shipment - Through airline websites

Insurance - Local Policy - CIF, C&F, FOB

Logistics Communication - Coordination b/w distribution warehouse & customers - Inventory records - Agents / intermediaries

Reverse Logistics - Removal & disposal of waste - Reuse, reprocessing or recycling

Outsourcing for Transportation 99.9% of transportation activities are Outsourced

Trucking importance - Food, medicines, - Furniture - Cement - Sugar cane / Sugar - Wheat & rice - Chemicals - Cloths - Grocery - Others

Cost of lost sale & ABC costing - Current sale but future sale as well due to word of mouth negative publicity - Disclosure of bad performance - Extremely difficult to measure actual cost - Activity based costing can give accurate & meaning full basis

Technology - EDI - Bar coding - Satellite search

Virtual Private Network

5 PL E-Business

Mgt. of all parties in the supply chain in conjunction with e:business

Supply chain co-ordination and management by an entity that does not 4 PL Supply Chain Mgt supply (operate) underlying logistical services A specialized entity that operates and provides logistical services, and 3 PL may also co-ordinate/integrate the Forwarding/Contract Logistics services of others 2 PL Asset-based Logistics

1 PL Producer/Manufacturer

Traditional asset based transport & warehouse management Operation of logistics by the owner

Competitive advantage/ Weapon - May be the best source - Long term successful relations can bring distinction - Speed, safety, reliability & availability can bring change