What is Supply Chain???

Definition
• A supply chain is a network of facilities and distribution options that
performs the functions of procurement of materials, transformation
of these materials into intermediate and finished products, and the
distribution of these finished products to customers. Supply chains
exist in both service and manufacturing organizations, although the
complexity of the chain may vary greatly from industry to industry
and firm to firm.
Concept of Supply Chain
Supply Chain Network Diagram
Concept ……..

Co- Partners
Mutual
Mutually operatio Business hips /
sharing Focus on
Integrated sharing n and process Long - Sustaina
of risks custome Resilience
Behaviour informat Co- integrati term bility
and rs
ion ordinati on relations
rewards
on hips
Where all Supply Chains work ???
Defence / Aerospace

Agriculture

FMCG

Consumer Durables

Garments and fashion accessories

Automobiles

Pharma industry

Banks and financial institutions

Insurance

Industrial Equipment

Construction

And so on……….
 Objectives of SCM
Customer service

Competitiveness

Efficiency

Minimum WIP

Visibility

Cost reduction

Supplier management

Minimum time

Quality

Business expansion

System orientation

Value creation

Sustainability
Significance
Cost reduction

Increased customer expectations

Strategic decisions

Quick and customized response

Logistics in service and non-manufacturing sectors

Value creation

Risks and complexity

Military and defence

Environment
Functions of SCM
Supply Chain Process
Why are supply chains complex?
Example - Amazon
What is Global Supply Chain Management?
Global SCM
• Global supply chain management focus on the global business, and it
applies on firms who increasingly focus on both domestic and global
markets. Globalization is defined as “the interdependence of
economies globally that results from the growing volume and variety
of international transactions in goods, services, and capital, and also
from the spread of new technology.” Globalization and supply chain
management influence each other.
Best Global supply Chains
Some imp examples ……..
Characteristics of GSCM
• Flexibility

• Agility

• Global reach

• Optimized Inventory

• Sustainable

• Proactive

• Innovative
Challenges in Global SCM
Supply Chain Strategy
Examples of Supply Chain Strategy
SCM Strategy

• Product segments
• Procurement
• Manufacturing / Operations
• Logistics
• Inventory policy
• Marketing
• Financial
• HR
The 4 pillars of SCM Strategy
The Value Chain Concept
Value Chain Diagram
What is a value chain???
• A value chain is a step-by-step business model for transforming a product
or service from idea to reality

• Value chains help increase a business's efficiency so the business can

deliver the most value for the least possible cost.

• The end goal of a value chain is to create a competitive advantage for a

company by increasing productivity while keeping costs reasonable.

• The value-chain theory analyzes a firm's five primary activities and four
support activities.
Example of Value Chain
Value Delivery Systems
The Bull-whip effect
Concept of Bull-whip effect
• It was first explained by Prof. Hau Lee, at Stanford University in 1990s.

• A phenomenon that exhibits how demand forecasts yields supply

chain inefficiencies.

• He explained the concept using the example of Volvo.

Demonstration

+100 nos
+150 nos
+50 nos +75 nos
Causes of Bull-Whip effect
• Lead time issues
• Lack of optimization across the channel
• Communication gaps
• Over estimation or under estimation
• Over stocking policy
• Discounts, price changes and other cost variations
• Inaccurate forecasts
• Over dependence on historical data
Solutions ………
• Better communication and collaboration
• Better forecasting methods
• Use of Electronic Data Interchanges (EDI)
• Better visibility using inventory optimization software
• Use of Predictive Analytics , Artificial Intelligence, Internet of Things
• Supply chain strategy – Push approach for stable demand products and Pull
approach for erratic demand
Green Supply Chain Management
Example of GSCM
Objectives of GSCM
Effective management of Suppliers

Dissemination of technology, advanced techniques, capital and knowledge among the chain partners

Transparency of the supply chain

Large investments and risks are shared among partners in the chain

Better control of product safety and quality

Increased sales and revenue

Beneficial uses for waste

Improved quality and products

Adapting to Regulation and Reducing Risk

Product Differentiation and Competitive Advantage

Lowered Costs and increased efficiency

Sustainability of resources
A Case Study of Mumbai Dabbawalas
• https://youtu.be/IHDA4r_feM0