Supply Chain Management

Supply Chain Management

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  A REPORT ON Supply ChainManagement SUBMITTED BY MD SAIF ALI MBA 1st Sem SUBMITTED TO Mr. MADHAV SHARMA SIR
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  What is aSupply Chain ?  All activities associated with the flow and transformation of goods from raw materials to end users.  The term supply chain refers to the entire network of companies that work together to design, produce, deliver, and service products.  A network of facilities including: – Material flow from suppliers and their “upstream” suppliers at all levels, – Transformation of materials into semi-finished and finished products (internal process) – Distribution of products to customers and their “downstream”customers at all levels.
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  Components of theSupply Chain
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  Three Flows inSC  There are three kinds of flows in a supply chain: material, information, capital.  Downstream – Material: Products, Parts – Information: Capacity, Delivery Schedules – Finance: Invoices, Pricing, Credit Terms  Upstream – Material: Returns, Repairs, After-sales Services – Information: Orders, Point-of-sale Data – Finance: Payments
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  Push vs. Pullin supply chains     Push or Building-to-stock(BTS): Producing stock on the basis of anticipated demand. Demand forecasting can be done via a variety of sophisticated techniques (some from the Operations Research area and some using Data Mining). Pull or Building-to-order(BTO): Producing stock in response to actual demand (firm orders). The Push-Pull Point: In many supply chains, upstream units employ BTS, while downstream units employ BTO strategies. The point in the supply chain where the switch-over (from BTS to BTO) occurs is called the Push-Pull point. Optimally locating the Push-Pull point is a key determinant of supply chain performance. – Examples ?
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  Major Concepts  Orderfulfillment – Deliver right order on time  Front office operations: order taking, advertisement, CRM  Back office operations: Accounting, finance, inventor, packaging, logistics  Logistics: Managing the flow of goods, information and money along the supply chain
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  The Steps ofOrder Fulfillment 7. Purchasing, warehousing 8. Demand forecast 9. Accounting, billing 10. Customer contacts 11.Returns (Reverse logistics) 1. Payment Clearance 2. In-stock availability 3. Packaging, shipment 4. Insuring 5. Production (planning, execution) 6. Plant services
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  Supply Chain Management (SCM)   Aset of processes and sub-processes which attempt to implement and optimize the functions, connected entities, and interacting elements of a supply chain. Involves: – Organizations, procedures, people. – Activities: Purchasing, delivery, packaging, checking, warehousing, etc. – Establishment of long-term relationships with suppliers (supply alliances) and distributors – Effective flow of information through the supply chain – Supply chain optimization
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  Key Business Areas Enterprise performance  Customer service  Order management  Demand planning  Warehouse distribution  Partnerships  Supplier/supply base management
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  Benefits of SCM Reduce uncertainty along the chain  Proper inventory levels in the chain  Minimize delays  Eliminate rush (unplanned) activities  Provide good customer service
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  Problems along theSupply Chain  Delays in production, distribution etc.  Expensive Inventories  Lack of partners’ coordination  Uncertainties in deliveries  Poor demand forecast  Interference with production  Poor quality
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  Variability in thesupply chain  Demand variability – Even the most sophisticated demand forecasting tools often fail to anticipate demand – Examples of demand variability problems ?  Process variability – Production unit downtimes – Unexpected staff absences  Supply variability – e.g., late deliveries from suppliers
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  Technology in theSC    The internet and the web can be very effective communication enhancers Software includes demand forecasting tools and planning tools to allow all SC members to coordinate their activities and adjust their production levels. Software can allow members to: – review past performance – monitor current performance – predict future production levels of products.
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  Web SCM        Share informationabout consumer demand Receive rapid notification of product design changes and adjustments Provides specs and drawings more efficiently. Increase speed of processing transactions. Reduce cost of handling transactions. Reduce errors in entering transaction data Share information about defect rates and types.
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  Supply chain integration: Benefits Tangible benefits – Inventory reduction, personnel reduction, productivity improvement, order management improvement, financial cycle improvements.  Intangible benefits – Information visibility, new / improved processes, customer responsiveness, standardization, flexibility, globalization, and business performance.
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  Supply Chain Mgt.Software  Includes demand forecasting tools and planning capabilities to allow all supply chain members to coordinate their activities and adjust their production levels  Firms offering SCM software: – i2 Technologies RHYTHM – Manugistics
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  Purchasing, Logistics &Support Software  Enterprise Resource Planning (ERP) software is designed to integrate manufacturing, finance, distribution, and other internal business functions into one information system  Major ERP vendors include - – Baan – J.D. Edwards – Oracle – PeopleSoft – SAP
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  B2B E-Commerce Software Designed to help companies build Web sites that host: – Catalog – Marketplace and – other commercial sales activities  Major software packages include: – Netscape - SellerXpert & ECXpert, – OpenMarket Transact, IBM’s Websphere. – MS Site Server, and Ariba
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  The end THANK YOU