SUPPLY

CHAIN
MANAGEME
NT
Submitted By :
Nirmal Maloo
Vinay Lohiya
Khushnuma Bathena
Monika Bharara
Ankit Vajpayee
Shashi Kabra

Sec – “A”
 Definition & Scope
Supply Chain Management encompasses the planning and
management of all activities involved in sourcing and procurement,
conversion, and all Logistics Management activities. Importantly, it also
includes coordination and collaboration with channel partners, which can be
suppliers, intermediaries, third-party service providers, and customers. In
essence, Supply Chain Management integrates supply and demand
management within and across companies.

Supply chain management is the combination of the enterprise

strategies, business process and information technologies that integrates the
suppliers of raw materials or components, the manufacturers or assemblers
of the finished products, and distributors of the products or services into one
cohesive process to include demand forecasting, materials requisition, order
processing, order fulfillment, transportation services, receiving, invoicing,
and payment processing.

Supply chain management is a cross-functional approach to managing

the movement of raw materials into an organization, certain aspects of the
internal processing of materials into finished goods, and then the movement
of finished goods out of the organization toward the end-consumer. As
organizations strive to focus on core competencies and becoming more
flexible, they have reduced their ownership of raw materials sources and
distribution channels. These functions are increasingly being outsourced to
other entities that can perform the activities better or more cost effectively.
The effect is to increase the number of organizations involved in satisfying
customer demand, while reducing management control of daily logistics
operations. Less control and more supply chain partners led to the creation
of supply chain management concepts. The purpose of supply chain
management is to improve trust and collaboration among supply chain
partners, thus improving inventory visibility and improving inventory velocity.

While ERP and CRM systems are intended to re-engineer internal

business processes to achieve better resource planning and coordination
across departments, SCM systems are utilized to facilitate the coordination
with outside business entities, or in the scope of extended enterprise. SCM
usually refers to the redesign of supply chain processes in order to achieve
streamlining. It is generally performed only by large corporations with large
suppliers. B2B exchange can extend Supply Chain Management to all trading
partners regardless of size by providing a central location to integrate
information from all supply chain participants.

Scope of Supply chain activities can be grouped into strategic, tactical,

and operational levels of activities.

Strategic

• Strategic network optimization, including the number, location, and size of

warehouses, distribution centers and facilities.

• Strategic partnership with suppliers, distributors, and customers, creating

communication channels for critical information and operational
improvements such as cross docking, direct shipping, and third-party
logistics.

• Product design coordination, so that new and existing products can be

optimally integrated into the supply chain, load management

• Information Technology infrastructure, to support supply chain operations.

• Where-to-make and what-to-make-or-buy decisions

• Aligning overall organizational strategy with supply strategy.

Tactical

• Sourcing contracts and other purchasing decisions.

• Production decisions, including contracting, locations, scheduling, and

planning process definition.

• Inventory decisions, including quantity, location, and quality of inventory.

• Transportation strategy, including frequency, routes, and contracting.

• Benchmarking of all operations against competitors and implementation of

best practices throughout the enterprise.

• Milestone payments

Operational

• Daily production and distribution planning, including all nodes in the supply
chain.
• Production scheduling for each manufacturing facility in the supply chain
(minute by minute).

• Demand planning and forecasting, coordinating the demand forecast of all

customers and sharing the forecast with all suppliers.

• Sourcing planning, including current inventory and forecast demand, in

collaboration with all suppliers.

• Inbound operations, including transportation from suppliers and receiving

inventory.

• Production operations, including the consumption of materials and flow of

finished goods.

• Outbound operations, including all fulfillment activities and transportation to

customers.

• Order promising, accounting for all constraints in the supply chain, including
all suppliers, manufacturing facilities, distribution centers, and other
customers.
Goals of SCM

• to reduce inventory cost,

• to increase sales
• to improve the coordination and the collaboration with suppliers,
manufacturers and distributors.

Components of SCM System - The components of an supply chain system

consists of 1) supply chain software and hardware, 2) supply chain business
processes and 3) users of SCM system.

• SCM Software and Hardware - The core of an SCM system is SCM

software. Supply chain software is module based application. Each
software module automates business activities of a functional area in
the supply chain. UNIX is the most common operating system for
running SCM software
• Business Processes - Business processes of supply chain includes
supply chain planning, execution and collaboration. and operational
control.

Users - The users of SCM systems are workers of supply chain participants at
all levels.

Partners in a Supply Chain

• Suppliers - They are organizations that provide goods and/or services
to a purchasing organization (a manufacturer or a distributor). It is
often used synonymously with vendors but may also refer to an
internal company resource.
• Manufacturers - They are the companies engaged in the original
production and assembly of products, equipment or services. They
sometime refer to companies that purchase such products or services
manufactured or assembled in accordance with company
specifications.
• Distributors - Those are the external entities that sell for suppliers or
manufacturers directly and often collects all payments from customers
and maintains an inventory of the supplier's or manufacturer's
products.
• Other Elements - Elements of supply chain management consist of
customers, forecasting, design, processing, inventory, purchasing,
location and logistics.
 Processes of Supply Chain
Management
• Demand Planning and Forecasting - Accurate demand forecasting
is considered one of critical success factors in supply chain
management. Supply chain software systems often utilize
sophisticated mathematical models for predicating future demand from
historical data. The accuracy of the demand forecasting is largely
dependent on how abnormal data is treated in the demand forecasting.
Demand forecasting is an ongoing process. Supply chain management
systems can generate alerts at the frequencies of user preference,
whether it's on a weekly, or monthly basis.
• Procurement - This is the process of choosing the suppliers that will
deliver the goods and services you need to manufacture or assembly
your products or to create your services. It involves price negotiation,
receiving, and verifying the shipments. Supply chain management
systems can be integrated with industry-specific B2B exchanges to
automate the procurement processes.
• Manufacturing and Assembly - Raw components are assembled into
final products or raw materials are manufactured into finished goods.
Manufacturing involves the activities of production, testing, packaging
and preparation for delivery.
• Distribution - Products or services are delivered to consumers.
Distribution involves warehousing, delivering, invoicing and payment
collection.
• Return - Return and refund are important parts and also the problem
parts of supply chain management. Supply chain management
systems should have infrastructure in place for receiving defective and
excess products back from customers
 Advantages and
Disadvantages
Advantages of SCM
1. Reduce overhead charges
2. Eliminates paperwork
3. Increase the speed of transactions
4. Facilitate Real-time data exchange
5. Increase revenue
6. Makes distribution more customer friendly
7. Receive regular forecasts for execution of production and sales plans
8. Analyze different supply line models and subsequently optimize them
9. Automate warehouse inventory management
10.Connect elements of market analysis and friendly interface relations
with suppliers
11.Economies of scale and scope
12.Concentration to core competence
13.Lead time reduction
14.Flexibility to customers

Disadvantages
1. Supply chain management is tailored to specific industry and particular
company.
2. Systems are often tightly integrated a limited few suppliers and trading
partners.
3. The purposes of SCM is more of collaboration than price negotiation.
4. The cost of implementation is higher.
5. Many mistakes are done at first.

6. Has an internal resistance to change.

7. It’s hard to gain trust from your suppliers and partners.

 Top 10 SCM Providers
1 SAP
2 Oracle
3 Infor
4 Manhattan
Associates
5 i2 Technologies
6 JDA Software
7 RedPrairie
8 IBS
9 Epicor
10 Aldata
 What is E-SCM?
The e-Supply Chain
High speed, low cost, communication and collaboration with your
customers and suppliers are critical success factors to more effectively
manage your supply chain. Then, the e-Supply Chain is very likely in your
future. The very essence of Supply Chain Management is effective
information and material flow throughout a network of customers and
suppliers. The potential for improved productivity, cost reduction and
customer service are enormous. Of course, the benefits are based on
effectively employing the right processes and supporting information
technology. This is a higher priority than ever before. Providing the right
amount of relevant information to those who need to know it, when they
need to know it is, in fact, effective Supply Chain Management from an
information point of view.

Good supply chain practitioners know that information should be

passed on only to those who need to know it, in the form they need to have
it. Demand information, inventory positions, order-fulfillment, supply
management and a whole host of other information exchange activities will
change how we sell products, supply products and make and receive
payments for goods and services. The e-Supply Chain will have customers
and suppliers seamlessly linked together, throughout the world, exchanging
information almost instantly. The velocity of relevant information flow will be
so fast that, as a result, responding to the inevitable changes in expected vs.
actual customer demand will mandate demand-driven manufacturing and
supporting processes that provide for faster changes in the actual material
flow to match demand. Fast access to relevant supply chain information can
pay-off handsomely in lower costs, less inventory, higher quality decision-
making, shorter cycle times and better customer service. One of the biggest
cost savings is in the overhead activity associated with lots of paperwork and
its inherent redundancies. The non-value added time of manual transaction
processing can instead be focused on higher revenue creation activities
without proportional increases in expense. The result in cycle time
compression, lower inventories, decision-making quality, reduced overhead
costs, among other benefits makes e-Supply Chain Management a highly
desirable strategy. Supply chain processes can be more streamlined and
efficient than could have been imagined just a few years ago. For many
companies, more effective Supply Chain Management is where the profit and
competitive advantages will emerge and be sustained.
Developing an e-Supply Chain Strategy
E-Supply Chain Management significantly changes the way in which
business does business. As a result, management needs to change how they
view and serve markets. Yesterday’s methods are no longer sufficient,
especially for those companies seeking to increase market share. As more
and more companies evolve new supply chain models, management is
compelled to take the right actions or risk being left behind. Supply Chain
Management systems will be substantially altered in terms of strategy,
process, and system. Mistakes here could prove very costly in the near-and
longer terms. e-Supply Chain Management has redefined and will continue to
redefine how companies will compete for customers. While the internet
offers some exciting opportunities to improve Supply Chain Management
effectiveness by lowering costs and increasing the speed of order-to-delivery,
it is by no means the first step on the right path to having highly competitive
e-Supply Chain capabilities.
 What are some emerging
technologies that will affect the
Supply Chain?
The most notable is Radio Frequency Identification, or RFID. RFID tags are
essentially barcodes on steroids. Whereas barcodes only identify the product,
RFID tags can tell what the product is, where it has been, when it expires,
whatever information someone wishes to program it with. RFID technology is
going to generate mountains of data about the location of pallets, cases,
cartons, totes and individual products in the supply chain. It's going to
produce oceans of information about when and where merchandise is
manufactured, picked, packed and shipped. It's going to create rivers of
numbers telling retailers about the expiration dates of their perishable items
—numbers that will have to be stored, transmitted in real-time and shared
with warehouse management, inventory management, financial and other
enterprise systems. In other words, it is going to have a really big impact.

Another benefit of RFIDs is that, unlike barcodes, RFID tags can be read
automatically by electronic readers. Imagine a truck carrying a container full
of widgets entering a shipping terminal in China. If the container is equipped
with an RFID tag, and the terminal has an RFID sensor network, that
container’s whereabouts can be automatically sent to Widget Co. without the
truck ever slowing down. It has the potential to add a substantial amount of
visibility into the extended supply chain.
 Conclusion
SCM is now a days one of the greatest emerging technological
implication. Supply chain management (SCM) is a concept that has flourished
in manufacturing, originating from Just-In-Time (JIT) production and logistics.
Today, SCM represents an autonomous managerial concept, although still
largely dominated by logistics. SCM endeavors to observe the entire scope of
the supply chain. All issues are viewed and resolved in a supply chain
perspective, taking into account the interdependency in the supply chain.
SCM offers a methodology to relieve the myopic control in the supply
chain that has been reinforcing waste and problems. Construction supply
chains are still full of waste and problems caused by myopic control.
Comparison of case studies with prior research justifies that waste and
problems in construction supply chains are extensively present and
persistent, and due to interdependency largely interrelated with causes in
other stages of the supply chain. The characteristics of the construction
supply chain reinforce the problems in the construction supply chain, and
may well hinder the application of SCM to construction. Previous initiatives to
advance the construction supply chain have been somewhat partial.
The generic methodology offered by SCM contributes to better
understanding and resolution of basic problems in construction supply
chains, and gives directions for construction supply chain development. The
practical solutions offered by SCM, however, have to be developed in
construction practice itself, taking into account the specific characteristics
and local conditions of construction supply chains.