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and production processes Demand side- outbound logistics, marketing and sales.
Supplier Management
Material Flow
Information Flow
Stock Deployment
Customer Management
Schedule / Resources
Conversion
Delivery
organizations source, make and deliver their products or services according to market demand. Supply chain management operations and decisions are ultimately triggered by demand signals at the ultimate consumer level. Supply chain as defined by experienced practitioners extends from suppliers suppliers to customers customers.
SUPPLY
CHAIN FACILITATED BY :
PROCESSES STRUCTURE TECHNOLOGY
MANAGEMENT
IS
Physical
Market mediation
situation to situation. For functional products, cost efficiency is the critical factor. For innovative products, responsiveness is the important factor. Leanness + Agility together make up Leagility
Raw Materials
separately
Look at the pipe as a whole.
Value chain orchestration rather than controlling the flow through the pipe A network of independent and interdependent organizations mutually and cooperatively
working together to control, manage and improve the flow of materials and information from suppliers to end users
Supply Chain Design Resource Acquisition Long Term Planning (1 Year ++)
Production/ Distribution Planning Resource Allocation Medium Term Planning (Qtrly,Monthly)
Tactical
Operational
Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on
Revenue growth
Changing Paradigm
Functional vs Process
Products vs Customers
Revenues vs Performance Inventory vs Information
Transactions vs Relationships
functional management and planning skills Ability to define, measure and manage service requirements by market segment Information systems Relationship management and win win orientation
Step 2 - Optimizing the supply chain Determine pathways from suppliers to the end customer
Customer markets to Distribution centers
Distribution centers to production plants Raw material sources to production plants Identify constraints at vendors, plants and
distribution centers Get the big picture Plan the procurement, production and distribution of product groups rather than individual products in large time periods- quarters or years
projected demand through the supply chain to the raw material resources Techniques
ERP
and schedules every order to meet customer demand Order entry, order fulfillment and physical replenishment
materials, suppliers, transportation, production and distribution data- do not require frequent processing Status files- heart of transaction processing- track orders and infrastructure status- updated daily. Essentially using the same information to make all plans right from structuring the network to processing every day supply chain tasks.
supporting function. Information however can be managed far more creatively. There are various stages of using value added information processes.
Visibility : See physical operations more effectively through information. Information can be used for effective coordination of value chain activities. Mirroring capability : In this stage, virtual activities are substituted for physical ones. A
parallel value chain is created. New customer relationships : The company can draw on the flow of information in the virtual value chain to deliver value to customers in new ways.
Dealer Management
Conventional functions
Inventory ownership and management Sales and technical support Order handling Credit
Contemporary Trends
Channels being divided into two- Fulfillment
manufacturers product from the plant to the end user through a highly efficient logistics and inventory management system
Contemporary Trends
Fulfillment channel may not take ownership of
the product but may perform these functions on a per box fee structure Franchised agents responsible for sales and sales support but will not write the order or supply the product
products together Logistics - Pros and cons of methods of transportation vs reengineering the logistics process
relationships to internal operations to the market place, including customers, competitors and industry as a whole.
production costs? When was the last time we measured lost sales to end customers? Do we have an efficient system to get POS data from retailers? Are we testing our products with end customers? Do we use the resulting data to adjust our forecasting and supply positions?
Is the ratio of returned orders to sales increasing?
Exit vs Voice
Arms length relations vs Involving dealers and
suppliers in product development Piling up vs Replenishing dealer inventory more frequently In short working together as partners to cut costs, boost efficiencies, innovate and share value
Adversarial vs partnerships
vs involving vendor in development Bargaining, holding cards close to chest vs Shared destiny, transparency
Summary
Segmentation of customers based on service needs Customization of logistics network Listen to signals of market demand and plan
accordingly. Differentiate product close to the customer Source strategically Develop a supply chain wide technology strategy Accept channel spanning performance measures
Thank You