Supply Chain Manage Men 1

download Supply Chain Manage Men 1

of 22

Transcript of Supply Chain Manage Men 1

  • 8/14/2019 Supply Chain Manage Men 1

    1/22

    Supply Chain Management

  • 8/14/2019 Supply Chain Manage Men 1

    2/22

    Changing Business environment

    Global elements.

    Consumers taste and preference has

    changed. Demand supply.

    Powerful economic alliance.

    Opening of eastern block countriesand European union.

  • 8/14/2019 Supply Chain Manage Men 1

    3/22

    Government influence

    Deregulation

    Tax and duty structure.

    Exemption for SSI.

    Environmental protection laws

  • 8/14/2019 Supply Chain Manage Men 1

    4/22

    Macro economic factors

    Interest rates. Exchange rates

    Inflation rates.

    Saving rates.

    Trade deficit / surplus.

    Budget deficit / surplus.

  • 8/14/2019 Supply Chain Manage Men 1

    5/22

    Technological innovation

    Process innovation

    Industrial disasters

    IT revolution

  • 8/14/2019 Supply Chain Manage Men 1

    6/22

    This resulted in,

    Threat to new entrants

    Bargaining power of the buyer

    Bargaining power of supplier Threat of substitute

  • 8/14/2019 Supply Chain Manage Men 1

    7/22

    Further it resulted in,

    Expansion of business.

    Merger with another company.

    Acquisition with another company. Strategic alliance.

  • 8/14/2019 Supply Chain Manage Men 1

    8/22

    Traditional S.C.M. approach MRP AGE

    Supplier Others Planning Production Sales Customer

  • 8/14/2019 Supply Chain Manage Men 1

    9/22

    MRP II Resource planning

    Supplier Others Plan / purchase / Production SalesCustomer

  • 8/14/2019 Supply Chain Manage Men 1

    10/22

    S.C.M. approach ERP age

    Supplier Manufacturer Dist. Center Retailer Consumer

  • 8/14/2019 Supply Chain Manage Men 1

    11/22

    Modern S.C.M. approach

    Supplier Manufacturer Distribution center Retailer Consumer

  • 8/14/2019 Supply Chain Manage Men 1

    12/22

    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

  • 8/14/2019 Supply Chain Manage Men 1

    13/22

    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.

  • 8/14/2019 Supply Chain Manage Men 1

    14/22

    SCM performs is heavily based on

    sophisticated IT systems & knowledgeworkers

  • 8/14/2019 Supply Chain Manage Men 1

    15/22

    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.

  • 8/14/2019 Supply Chain Manage Men 1

    16/22

    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.

  • 8/14/2019 Supply Chain Manage Men 1

    17/22

    Information flows in up & down

    direction.

    Directly involved in Supply chain

    management activity are :-

    a) Customer.

    b) Retailer.

    c) Distributor.

    d) Manufacturer.e) Supplier.

  • 8/14/2019 Supply Chain Manage Men 1

    18/22

    Indirectly involved in Supply chain

    management are :-

    a. Product development.

    b. Marketing.

    c. Operations.

    d. Finance.

    e. Human Resource.

    f. Customer service.

  • 8/14/2019 Supply Chain Manage Men 1

    19/22

    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

  • 8/14/2019 Supply Chain Manage Men 1

    20/22

    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

  • 8/14/2019 Supply Chain Manage Men 1

    21/22

    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.

  • 8/14/2019 Supply Chain Manage Men 1

    22/22

    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.