Foundations of Global Supply Chain Management

Building Blocks of Supply Chain Management

Y. NARAHARIComputer Science and AutomationINDIAN INSTITUTE OF SCIENCEBangalore – 560 012hari@csa.iisc.ernet.in

Foundations of Global Supply Chain ManagementSeptember 27, 2003

Enterprise

Network of independent companies possiblyNetwork of independent companies possiblyin different geographical locations forming ain different geographical locations forming astrategic alliance toward the common goal ofstrategic alliance toward the common goal ofdesigning, manufacturing and delivering right designing, manufacturing and delivering right quality products/services to customersquality products/services to customers

Functional perspectiveFunctional perspective Process perspectiveProcess perspective

Functional and Process Perspective

ORDER - TO - DELIVERY PROCESS

SUPPLY CHAIN PROCESS

Procurement DistributionManufacturing Logistics

Business ProcessA structured, measured set of activities ordered in time A structured, measured set of activities ordered in time and space, designed to produce a customer desired and space, designed to produce a customer desired output.output.

A business process could be decomposed into A business process could be decomposed into several other business processes.several other business processes.

Business Process

Macro Micro• SCP• ODP• NPDP• CRM Process• Order Mgmt

• Answering a query from a customer

• Checking the credit history of customer

Supply Chain Process

Integrated , coordinated network of valueIntegrated , coordinated network of valuedelivering business processes that procure rawdelivering business processes that procure rawmaterials, transform them into final products,materials, transform them into final products,services and delivers the product to the customers services and delivers the product to the customers

ProcurementProcurement Manufacturing/assemblyManufacturing/assembly Inbound logisticsInbound logistics WarehousingWarehousing DistributionDistribution Outbound logisticsOutbound logistics

Why study Supply Chains ? Supply chains are ubiquitous: you Supply chains are ubiquitous: you

could consider every product or service could consider every product or service to have its own supply chain.to have its own supply chain.

Companies world-wide are spending Companies world-wide are spending trillions of rupees on SCMtrillions of rupees on SCM

Backbone of E-businessBackbone of E-business Wholesome mix of industrial Wholesome mix of industrial

engineering, mathematics, computer engineering, mathematics, computer science, and managementscience, and management

Examples of Supply Examples of Supply Chains in IndiaChains in India

Automotive - Telco, ALL, Mahindra, MarutiAutomotive - Telco, ALL, Mahindra, MarutiAerospace - ADA, HALAerospace - ADA, HALChemicals - Asian Paints, Apollo tyres, RelianceChemicals - Asian Paints, Apollo tyres, RelianceApparel - Madura Coats, RelianceApparel - Madura Coats, RelianceFood - Cadbury, Parle, Amul Products, HLLFood - Cadbury, Parle, Amul Products, HLLConsumer durables - HLL, P & GConsumer durables - HLL, P & GForest Products - PapermillsForest Products - PapermillsConstruction - L & TConstruction - L & TPharmaceutical - Ranbaxy, GlaxoPharmaceutical - Ranbaxy, GlaxoElectromechanical – Kirloskar, L & TElectromechanical – Kirloskar, L & TTooling - HMT, Widia, MicoTooling - HMT, Widia, MicoPC/ Computer - IBM, WIPRO, HCL, IntelPC/ Computer - IBM, WIPRO, HCL, Intel

Supply Chain Building Supply Chain Building BlocksBlocks

StructuralStructural LogicalLogical IT / ITECIT / ITECInformationalInformational

Structural Building Blocks

SuppliersSuppliers Manufacturing / Assembly PlantsManufacturing / Assembly Plants WarehousesWarehouses Distribution CentersDistribution Centers Retailers / CustomersRetailers / Customers Logistics Network Logistics Network

InboundInbound OutboundOutbound

Customers OrdersCustomers Orders

Suppliers(International)

1.2 Million PC/Yr.Glasgow U.K.

Warehouse

PortPC Assembly

Plant

13 TransshipmentPoints (TPs) in Europe

Country-wide Distribution

Centers (DCs)

Retailers

Example of a Typical Supply Chain: IBM Europe PC Supply Chain

Logical Building Blocks

OPERATIONAL

TACTICAL

STRATEGIC

Procurement DistributionManufacturing LogisticsLogistics

Order/ Product Flow through Supply Chain Functions

Order Management Channel A

Channel B Customer

Channel CProduct Distribution

Manufacturing

Demand PlanningSupply PlanningPart Supply

Orders

DemandForecast

ComponentRequirement

PartsProduction Plans

Products Products

Orders

Products

Products

Orders

Orders

Examples of Decisions

Supplier Selection (Tactical)Supplier Selection (Tactical) Plant Location (Strategic)Plant Location (Strategic) Product Line Selection (Strat)Product Line Selection (Strat) Inventory Control (Tactical)Inventory Control (Tactical) Production Scheduling (Ops)Production Scheduling (Ops) Dynamic routing (Ops)Dynamic routing (Ops) MTO vs MTS vs BTO (Str)MTO vs MTS vs BTO (Str)

Mathematical Models Optimization Models (LP, ILP, MILP, CO, Optimization Models (LP, ILP, MILP, CO,

DP)DP) Stochastic Models (Markov chains, Stochastic Models (Markov chains,

Queuing networks, etc.)Queuing networks, etc.) Statistical ModelsStatistical Models Game TheoryGame Theory SimulationSimulation Machine learningMachine learning Auctions and Mechanism DesignAuctions and Mechanism Design

Information Building Blocks

IT : MRP, ERP, EDIIT : MRP, ERP, EDI Internet TechnologiesInternet Technologies Sensor NetworksSensor Networks E-Commerce, E-MarketsE-Commerce, E-Markets E-CRME-CRM Decision Support SoftwareDecision Support Software StandardsStandards

Key Problem in SCM

Design a supply chain networkDesign a supply chain networkthat delivers high qualitythat delivers high qualityproducts to the right customersproducts to the right customersat the right time at minimum costat the right time at minimum cost

Foundations of Global SCM

This one day workshop will introduce to you the important concepts and issues involved in successful design and operationof supply chain networks

What is Coming….

Srinivas Raghavan - DynamicsSrinivas Raghavan - Dynamics Dinesh Garg - PlanningDinesh Garg - Planning Mathirajan - LogisticsMathirajan - Logistics Shyam Bhaskar – Best PracticesShyam Bhaskar – Best Practices Kameshwaran – E-MarketsKameshwaran – E-Markets Chandrashekar - ProcurementChandrashekar - Procurement Visvanathan - SCM AutomationVisvanathan - SCM Automation Narahari Y– What Next?Narahari Y– What Next?

What Next? Books on SCM: Sunil Chopra and Peter Meindl. Supply Chain Management: Sunil Chopra and Peter Meindl. Supply Chain Management:

Strategy, Planning, and Operation. Pearson Education Asia, Strategy, Planning, and Operation. Pearson Education Asia,

2001.2001.

David Simchi Levi, P. Kaminsky, and Edith Simchi Levi, David Simchi Levi, P. Kaminsky, and Edith Simchi Levi,

Designing and Managing the Supply Chain, Irwin-McGrawHill, Designing and Managing the Supply Chain, Irwin-McGrawHill,

20002000

W.J. Hopp and M.L. Spearman. Factory Physics: Foundations of W.J. Hopp and M.L. Spearman. Factory Physics: Foundations of

Manufacturing Management, Irwin-McGrawHill, 1996Manufacturing Management, Irwin-McGrawHill, 1996

N. Viswanadham . Analysis and Design of Manufacturing N. Viswanadham . Analysis and Design of Manufacturing

Enterprises, Kluwer, 2000Enterprises, Kluwer, 2000

N. Viswanadham and Y. Narahari. Performance Modeling of N. Viswanadham and Y. Narahari. Performance Modeling of

Automated Manuafacturing Systems, Prentice Hall, 1992Automated Manuafacturing Systems, Prentice Hall, 1992

What Next? Papers on SCM Journals such as Interfaces, Operations Research, Journals such as Interfaces, Operations Research,

Management Science, European Journal of Management Science, European Journal of Operational ResearchOperational Research

Websites such as www.amrresearch.comWebsites such as www.amrresearch.com Our own website: Our own website:

http://lcm.csa.iisc.ernet.in/scm/scm.htmlhttp://lcm.csa.iisc.ernet.in/scm/scm.html http://lcm.csa.iisc.ernet.in/workshop/index.htmlhttp://lcm.csa.iisc.ernet.in/workshop/index.html

What Next? Contact any of us:

Narahari Narahari hari@csa.iisc.ernet.inhari@csa.iisc.ernet.in Raghavan Raghavan raghavan@mgmtraghavan@mgmt Mathirajan msdmathi@mgmtMathirajan msdmathi@mgmt Shyam BhaskarShyam Bhaskar shyam_bhaskar@dell.comshyam_bhaskar@dell.com Kameshwaran kameshn@csaKameshwaran kameshn@csa Chandrashekar chandra@csaChandrashekar chandra@csa Dinesh Garg Dinesh Garg garg@csagarg@csa Visvanathan Visvanathan vkvisva@hotmail.comvkvisva@hotmail.com

What Next? Start working in SCM …..Start working in SCM ….. Wish you all the very best ….Wish you all the very best …. See you again very soon ….See you again very soon ….

December 15December 15thth and 16 and 16thth, 2003, 2003International Workshop on IT Enabled International Workshop on IT Enabled

Manufacturing, Logistics, and SCMManufacturing, Logistics, and SCM