Supply Chain Management Ppt Prsntn-prince Dudhatra-9724949948

8/7/2019 Supply Chain Management Ppt Prsntn-prince Dudhatra-9724949948

1/19

SUPPLY CHAINMANAGEMENT


2/19

History of Supply Chain Management

1960s - Inventory Management Focus, Cost Control

1970s - MRP & BOM - Operations Planning

1980s - MRPII, JIT - Materials Management, Logistics

1990s - SCM - ERP - Integrated Purchasing,Financials, Manufacturing, Order Entry

2000s - Optimized Value Network with Real-Time

Decision Support; Synchronized & Collaborative

Extended Network

2


3/19

What Is the Supply Chain?

Also referred to as the logistics network Suppliers, manufacturers, warehouses, distribution

centers and retail outlets facilities

and the

Raw materials

Work-in-process (WIP) inventory

Finished products

that flow between the facilities

3

Suppl iers Manufacturers Warehouses &

Distribution Centers

Customers

Material Costs

TransportationCosts

TransportationCosts Transportation

CostsInventory CostsManufacturing Costs


4/19

It is an integrated management approach for planning

and controlling the flow of material from suppliers

through the distribution channel to the end user Lisa

M. Ellram.

SCM provides companies with a boundary-spanningchannel focus where all the steps of a products

movement, regardless of corporate, political or

geographical boundaries, from raw material supply

through final delivery to ultimate user to satisfy a

particular customer group are planned and supervised

D. F. Ross.

4

Definition of SCM


5/19

The Supply Chain

5

Suppliers Manufacturers Warehouses &Distribution Centers

Customers

Material Costs

TransportationCosts

TransportationCosts

Transportation



6/19

The Supply Chain Another View

6

Suppliers Manufacturers Warehouses &Distribution Centers

Customers

Material Costs

TransportationCosts

TransportationCosts Transportation


Plan Source Make Deliver Buy


7/19

What Is Supply Chain Management (SCM)?

A set of approaches used to efficiently integrate

Suppliers

Manufacturers Warehouses

Distribution centers

So that the product is produced and distributed

In the right quantities

To the right locations And at the right time

System-wide costs are minimized and

Service level requirements are satisfied 7



8/19

Why Is SCM Difficult (NEED) ?

Uncertainty is inherent to every supply chain

Travel times

Breakdowns of machines and vehicles Weather, natural catastrophe, war

Local politics, labor conditions, border issues

The complexity of the problem to globally optimize a supply

chain is significant

Minimize internal costs

Minimize uncertainty

Deal with remaining uncertainty8



9/19


10/19

The Importance of Supply Chain Management

Shorter product life cycles of high-technology products

Less opportunity to accumulate historical data on customer

demand

Wide choice of competing products makes it difficult to predict

demand

The growth of technologies such as the Internet enable greater

collaboration between supply chain trading partners

If you dont do it, your competitor will

Major buyers such as Wal-Mart demand a level of supply chain

maturity of its suppliers

Availability of SCM technologies on the market Firms have access to multiple products (e.g., SAP, Baan, Oracle, JD

Edwards) with which to integrate internalprocesses

10


11/19

Supply Chain Management Benefits

A 1997 PRTM Integrated Supply Chain Benchmarking Survey of

331 firms found significant benefits to integrating the supply

chain

11

Delivery Performance 16%-28% Improvement

Inventory Reduction 25%-60% Improvement

Fulfillment Cycle Time 30%-50% Improvement

Forecast Accuracy 25%-80% Improvement

Overall Productivity 10%-16% Improvement

Lower Supply-Chain Costs 25%-50% Improvement

Fill Rates 20%-30% Improvement

Improved Capacity Realization 10%-20% Improvement


12/19


13/19

Stages in SCM

In traditional setup, functions or departmentsorient the organization setup with very little

emphasis on business processes that cut across

the functional boundaries.

As the awareness of SCM increases,organization tends to shift to next stage towards

identification of business processes that create

value for ultimate customers and formation of

cross functional teams.

During this stage, the top management has very

little information about the total costs involved in

the entire supply chain from end-to-end. 13


14/19

Stages in SCM (contd)

Then enterprise wide integration of information

systems that cut across the organizational

boundaries and include the channel partners

as well.

Now, the top management is fully aware of the

costs involved in the entire supply chain from

end-to-end.

The top management is also aware of the

opportunities of reducing the costs as well as

cycle time of supply chain without affecting the

performance. 14


15/19

Key Drivers of SCM

THREE key drivers for SCM initiative i.e.MATERIAL, MONEY & INFORMATION.

Materials blocked in form of inventory can causeblockage of money. If info about such blockages orpossibility of such inventory build up is not

available, the concerned entity in the SCM may notbe in a position to initiate proactive actions toprevent such situations of excess inventories aswell as possible stock outs.

It is important that all the three key drivers are

managed through synchronization approach. For effective SCM, periodic measurement and

reporting system for Key Performance Indicators(KPI). 15


16/19

Weaknesses in Supply Chain

Lack of trust between different business

entities in the supply chain resulting inobliteration of free exchange of information.

High inventory levels at different stages of thesupply chain.

High occurrence of stock out situationsresulting in loss of production and delay indeliveries causing cascading effect in terms ofdelays down the supply chain.

High cost of operations due to inefficientprocurement and rush purchases.

Loss of business as customers move tocompetitors due to non-availability of goodswhen customers need them.

16


17/19

SCM related Concepts

VMI Vendor Management Inventory. Herevendor monitors the inventory of specific items atmanufacture location and also reacts to theexpected off take and arranges to replenish thestocks.

3PL Third Party Logistics. Third party i.e. otherthan supplier or customer plays a role ofhandling the logistics activities.

4PL Fourth Party Logistics. It extends theapproach of third party logistics to include afourth party that is brought in to manage theplanning and management functions that areprovided by the third party. 17


18/19

SCM related Concepts (contd)

e-Procurement ElectronicProcurement. Itmakes use of Internet based solutionsincluding concepts like reverse auctions,posting of requirements at specializedelectronic marketplaces.

CPFR Collaborative PlanningForecasting &Replenishment. It involves collaborative effortsby various entities in the supply chain in order

to bring about effective and efficient forecastingof demand and activities associated withfulfilling the demand through replenishmentbased shipments.

18


19/19

THANK YOU

Supply Chain Management Ppt Prsntn-prince Dudhatra-9724949948

Documents

Transcript of Supply Chain Management Ppt Prsntn-prince Dudhatra-9724949948