Scm Report

SUPPLY CHAIN MANAGEME NT Submitted By : Nirmal Maloo Vinay Lohiya Khushnuma Bathena Monika Bharara Ankit Vajpayee

Shashi Kabra Sec – “A”

Definition & Scope Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and 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. Supply chain management is the combination of the enterprise strategies, business process and information technologies that integrates the suppliers of raw materials or components, the manufacturers or assemblers of the finished products, and distributors of the products or services into one cohesive process to include demand forecasting, materials requisition, order processing, order fulfillment, transportation services, receiving, invoicing, and payment processing. Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and then the movement of finished goods out of the organization toward the end-consumer. As organizations strive to focus on core competencies and becoming more flexible, they have reduced their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other entities that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity. While ERP and CRM systems are intended to re-engineer internal business processes to achieve better resource planning and coordination across departments, SCM systems are utilized to facilitate the coordination with outside business entities, or in the scope of extended enterprise. SCM usually refers to the redesign of supply chain processes in order to achieve streamlining. It is generally performed only by large corporations with large suppliers. B2B exchange can extend Supply Chain Management to all trading

partners regardless of size by providing a central location to integrate information from all supply chain participants. Scope of Supply chain activities can be grouped into strategic, tactical, and operational levels of activities. Strategic •

Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities.

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Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics.

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Product design coordination, so that new and existing products can be optimally integrated into the supply chain, load management

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Information Technology infrastructure, to support supply chain operations.

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Where-to-make and what-to-make-or-buy decisions

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Aligning overall organizational strategy with supply strategy. Tactical

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Sourcing contracts and other purchasing decisions.

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Production decisions, including planning process definition.

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Inventory decisions, including quantity, location, and quality of inventory.

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Transportation strategy, including frequency, routes, and contracting.

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Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise.

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Milestone payments

contracting, locations,

scheduling,

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Operational •

Daily production and distribution planning, including all nodes in the supply chain.

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Production scheduling for each manufacturing facility in the supply chain (minute by minute).

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Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.

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Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers.

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Inbound operations, including transportation from suppliers and receiving inventory.

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Production operations, including the consumption of materials and flow of finished goods.

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Outbound operations, including all fulfillment activities and transportation to customers.

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Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers.

Goals of SCM • • •

to reduce inventory cost, to increase sales to improve the coordination and the collaboration with suppliers, manufacturers and distributors.

Components of SCM System - The components of an supply chain system consists of 1) supply chain software and hardware, 2) supply chain business processes and 3) users of SCM system. •

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SCM Software and Hardware - The core of an SCM system is SCM software. Supply chain software is module based application. Each software module automates business activities of a functional area in the supply chain. UNIX is the most common operating system for running SCM software Business Processes - Business processes of supply chain includes supply chain planning, execution and collaboration. and operational control.

Users - The users of SCM systems are workers of supply chain participants at all levels.

Partners in a Supply Chain •

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Suppliers - They are organizations that provide goods and/or services to a purchasing organization (a manufacturer or a distributor). It is often used synonymously with vendors but may also refer to an internal company resource. Manufacturers - They are the companies engaged in the original production and assembly of products, equipment or services. They sometime refer to companies that purchase such products or services manufactured or assembled in accordance with company specifications. Distributors - Those are the external entities that sell for suppliers or manufacturers directly and often collects all payments from customers and maintains an inventory of the supplier's or manufacturer's products. Other Elements - Elements of supply chain management consist of customers, forecasting, design, processing, inventory, purchasing, location and logistics.

Processes of Supply Chain Management •

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Demand Planning and Forecasting - Accurate demand forecasting is considered one of critical success factors in supply chain management. Supply chain software systems often utilize sophisticated mathematical models for predicating future demand from historical data. The accuracy of the demand forecasting is largely dependent on how abnormal data is treated in the demand forecasting. Demand forecasting is an ongoing process. Supply chain management systems can generate alerts at the frequencies of user preference, whether it's on a weekly, or monthly basis. Procurement - This is the process of choosing the suppliers that will deliver the goods and services you need to manufacture or assembly your products or to create your services. It involves price negotiation, receiving, and verifying the shipments. Supply chain management systems can be integrated with industry-specific B2B exchanges to automate the procurement processes. Manufacturing and Assembly - Raw components are assembled into final products or raw materials are manufactured into finished goods. Manufacturing involves the activities of production, testing, packaging and preparation for delivery. Distribution - Products or services are delivered to consumers. Distribution involves warehousing, delivering, invoicing and payment collection. Return - Return and refund are important parts and also the problem parts of supply chain management. Supply chain management systems should have infrastructure in place for receiving defective and excess products back from customers

Advantages and Disadvantages Advantages of SCM 1. Reduce overhead charges 2. Eliminates paperwork 3. Increase the speed of transactions 4. Facilitate Real-time data exchange 5. Increase revenue 6. Makes distribution more customer friendly 7. Receive regular forecasts for execution of production and sales plans 8. Analyze different supply line models and subsequently optimize them 9. Automate warehouse inventory management 10.Connect elements of market analysis and friendly interface relations with suppliers 11.Economies of scale and scope 12.Concentration to core competence 13.Lead time reduction 14.Flexibility to customers

Disadvantages 1. Supply chain management is tailored to specific industry and particular company. 2. Systems are often tightly integrated a limited few suppliers and trading partners. 3. The purposes of SCM is more of collaboration than price negotiation. 4. The cost of implementation is higher. 5. Many mistakes are done at first. 6. Has an internal resistance to change. 7. It’s hard to gain trust from your suppliers and partners.

Top 10 SCM Providers 1

SAP

2

Oracle

3

Infor

4

Manhattan Associates

5

i2 Technologies

6

JDA Software

7

RedPrairie

8

IBS

9

Epicor

10

Aldata

What is E-SCM? The e-Supply Chain High speed, low cost, communication and collaboration with your customers and suppliers are critical success factors to more effectively manage your supply chain. Then, the e-Supply Chain is very likely in your future. The very essence of Supply Chain Management is effective information and material flow throughout a network of customers and suppliers. The potential for improved productivity, cost reduction and customer service are enormous. Of course, the benefits are based on effectively employing the right processes and supporting information technology. This is a higher priority than ever before. Providing the right amount of relevant information to those who need to know it, when they need to know it is, in fact, effective Supply Chain Management from an information point of view. Good supply chain practitioners know that information should be passed on only to those who need to know it, in the form they need to have it. Demand information, inventory positions, order-fulfillment, supply management and a whole host of other information exchange activities will change how we sell products, supply products and make and receive payments for goods and services. The e-Supply Chain will have customers and suppliers seamlessly linked together, throughout the world, exchanging information almost instantly. The velocity of relevant information flow will be so fast that, as a result, responding to the inevitable changes in expected vs. actual customer demand will mandate demand-driven manufacturing and supporting processes that provide for faster changes in the actual material flow to match demand. Fast access to relevant supply chain information can pay-off handsomely in lower costs, less inventory, higher quality decisionmaking, shorter cycle times and better customer service. One of the biggest cost savings is in the overhead activity associated with lots of paperwork and its inherent redundancies. The non-value added time of manual transaction processing can instead be focused on higher revenue creation activities without proportional increases in expense. The result in cycle time compression, lower inventories, decision-making quality, reduced overhead costs, among other benefits makes e-Supply Chain Management a highly desirable strategy. Supply chain processes can be more streamlined and

efficient than could have been imagined just a few years ago. For many companies, more effective Supply Chain Management is where the profit and competitive advantages will emerge and be sustained.

Developing an e-Supply Chain Strategy E-Supply Chain Management significantly changes the way in which business does business. As a result, management needs to change how they view and serve markets. Yesterday’s methods are no longer sufficient, especially for those companies seeking to increase market share. As more and more companies evolve new supply chain models, management is compelled to take the right actions or risk being left behind. Supply Chain Management systems will be substantially altered in terms of strategy, process, and system. Mistakes here could prove very costly in the near-and longer terms. e-Supply Chain Management has redefined and will continue to redefine how companies will compete for customers. While the internet offers some exciting opportunities to improve Supply Chain Management effectiveness by lowering costs and increasing the speed of order-to-delivery, it is by no means the first step on the right path to having highly competitive e-Supply Chain capabilities.

What are some emerging technologies that will affect the Supply Chain? The most notable is Radio Frequency Identification, or RFID. RFID tags are essentially barcodes on steroids. Whereas barcodes only identify the product, RFID tags can tell what the product is, where it has been, when it expires, whatever information someone wishes to program it with. RFID technology is going to generate mountains of data about the location of pallets, cases, cartons, totes and individual products in the supply chain. It's going to produce oceans of information about when and where merchandise is manufactured, picked, packed and shipped. It's going to create rivers of numbers telling retailers about the expiration dates of their perishable items —numbers that will have to be stored, transmitted in real-time and shared with warehouse management, inventory management, financial and other enterprise systems. In other words, it is going to have a really big impact. Another benefit of RFIDs is that, unlike barcodes, RFID tags can be read automatically by electronic readers. Imagine a truck carrying a container full of widgets entering a shipping terminal in China. If the container is equipped with an RFID tag, and the terminal has an RFID sensor network, that container’s whereabouts can be automatically sent to Widget Co. without the truck ever slowing down. It has the potential to add a substantial amount of visibility into the extended supply chain.

Conclusion SCM is now a days one of the greatest emerging technological implication. Supply chain management (SCM) is a concept that has flourished in manufacturing, originating from Just-In-Time (JIT) production and logistics. Today, SCM represents an autonomous managerial concept, although still largely dominated by logistics. SCM endeavors to observe the entire scope of the supply chain. All issues are viewed and resolved in a supply chain perspective, taking into account the interdependency in the supply chain. SCM offers a methodology to relieve the myopic control in the supply chain that has been reinforcing waste and problems. Construction supply chains are still full of waste and problems caused by myopic control. Comparison of case studies with prior research justifies that waste and problems in construction supply chains are extensively present and persistent, and due to interdependency largely interrelated with causes in other stages of the supply chain. The characteristics of the construction supply chain reinforce the problems in the construction supply chain, and may well hinder the application of SCM to construction. Previous initiatives to advance the construction supply chain have been somewhat partial. The generic methodology offered by SCM contributes to better understanding and resolution of basic problems in construction supply chains, and gives directions for construction supply chain development. The practical solutions offered by SCM, however, have to be developed in construction practice itself, taking into account the specific characteristics and local conditions of construction supply chains.