Supply Chain Manage Men 1
Transcript of Supply Chain Manage Men 1
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Supply Chain Management
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Changing Business environment
Global elements.
Consumers taste and preference has
changed. Demand supply.
Powerful economic alliance.
Opening of eastern block countriesand European union.
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Government influence
Deregulation
Tax and duty structure.
Exemption for SSI.
Environmental protection laws
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Macro economic factors
Interest rates. Exchange rates
Inflation rates.
Saving rates.
Trade deficit / surplus.
Budget deficit / surplus.
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Technological innovation
Process innovation
Industrial disasters
IT revolution
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This resulted in,
Threat to new entrants
Bargaining power of the buyer
Bargaining power of supplier Threat of substitute
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Further it resulted in,
Expansion of business.
Merger with another company.
Acquisition with another company. Strategic alliance.
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Traditional S.C.M. approach MRP AGE
Supplier Others Planning Production Sales Customer
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MRP II Resource planning
Supplier Others Plan / purchase / Production SalesCustomer
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S.C.M. approach ERP age
Supplier Manufacturer Dist. Center Retailer Consumer
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Modern S.C.M. approach
Supplier Manufacturer Distribution center Retailer Consumer
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Concept of S.C.M.
The primal focus of SCM is to serve
consumer with excellent goods &
services against minimum possiblecosts and minimum time.
All the trading partners in supply chain
share long term mutually beneficialvision
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All the SCM decisions are inter-dependent
amongst the trading partners.
SCM is the demand driven situation whereconsumer defines his requirements and
orders. Hence the demands generated in
SCM are either based in the live consumerorder or the past consumer orders.
SCM strongly adheres to the lean thinking,
thus the manufacturing philosophy will besingle piece flow & batch size reduction.
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SCM performs is heavily based on
sophisticated IT systems & knowledgeworkers
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Definition
A supply chain consists of all the entities
necessary to transform ideas into
delivered products or services.Supply
chain management directs andtransforms a firms resources in order to
design, purchase, produce and deliver
high quality goods and services.
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Supply chain management I a paradigmdriving many businesses.
After globalization push business isreplaced by pull business.
Supply chain consists of, all parties
directly or indirectly, fulfilling customersrequest.
Supply chain management encompassesall activities with the flow of
transformation of goods from raw materialstage through end users as well asassociated information flows.
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Information flows in up & down
direction.
Directly involved in Supply chain
management activity are :-
a) Customer.
b) Retailer.
c) Distributor.
d) Manufacturer.e) Supplier.
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Indirectly involved in Supply chain
management are :-
a. Product development.
b. Marketing.
c. Operations.
d. Finance.
e. Human Resource.
f. Customer service.
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S.C.M principles :-
Compress the structure by reducing noof members in the chain.
Speeding up the activity reducing the
time between two activities.
Integrate the activities pooling them.
Collaborate & co-operate
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Key elements of S.C.M. :-
Production what, when & how many to
produce.
Supply what can be supplied
economically & efficiently & of the good
quality. Inventory levels at raw material, work in
progress, finished goods.
Location place of production, taxstructure, distribution modes etc
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Transportation for smooth supply
Air ship railway road. This needs
to be reviewed from time & expense
point of view.
Information Linking of computers
through networks and Internet and
streamlining the information flow.
a. MRP.
b. SAP.
c. ERP etc.
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Benefits of S.C.M.
Reduced supply cost.
Reduction in throughput time.
Better returns on investment.
Improved customer service.
Reduction in inventory.
Improved profit margins.