Scm

SUPPLY CHAIN MANAGEMENT

Definition • Combination of art and science to improve the way a company finds the raw components or service and deliver it to customers • Complex sequence of events and decisions, which connects sourcing raw materials with manufacturing and the end customer

Contd… • Integration of supplier factories and warehouses so that the product is produced in the right quantity with right quality and distributed to right location at the right time without any damages there by reducing the system cost satisfying the system requirements

Components of SCM •

Plan –

•

Source – – –

•

Schedule the activities necessary for production, testing, packaging and preparation for delivery. Measure quality levels, production output and worker productivity.

Deliver – –

•

Choose the suppliers for the delivery of goods and services to create product Develop a set of pricing, delivery and payment processes and create metrics for monitoring and improving the relationships Put together processes for managing the inventory of goods and services including receiving shipments, verifying them, transferring them to manufacturing facilities and authorizing supplier payments

Make – –

•

A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers.

Coordinate the receipt of orders from customers, develop a network of warehouses Pick carriers to get products to customers and set up an invoicing system to receive payments.

Return –

Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products.

Objectives • Reduce the supply demand gap • Obtain greater efficiency from labor, equipment and space • Provide flexible planning and control mechanisms • Minimizes the transportation cost • Helps in decision making • Pricing • Choosing the supplier

Traditional SCM

Extended SCM • Describes everyone who contributes to a product. • It is important to keep track of what is happening in extended supply chain • Problem may be with a supplier or a supplier’s supplier that could end up having an impact on the problem

Supply Chain Decision • Strategic – Made to Order – Made to Stock

• Operational • Decision areas – – – –

Location Inventory Transportation Production

Supply Chain Model • Network Design – Focus more on the design aspect of the supply chain and establishes network and the associated flows

• Rough Cut methods – Assume "single site" (i.e., ignore the network) – Add supply chain characteristics to it – Eg: such as explicitly considering the site's relation to the others in the network

• Simulation based methods – Evaluate the effectiveness of a pre-specified policy rather than develop new ones. – It is the traditional question of "What If?" versus "What's Best?".

SCM functions • Physical function – – – –

Procurement Transportation Storage Production

• Market interface function – – – –

Right product Right place Right quality Right time

• Requirements to implement SCM – Material – Information – Financial flows

• Key dimensions to implement SCM – – – –

Work flow condition Synchronization Information integration Trust factor

Benefits of SCM • • • •

Increased Visibility Increased Reliability Increase in velocity of business Savings and revenue improvements

THANK YOU…