WHAT IS SUPPLY CHAIN MANAGEMENT

" Is the strategic management of activities involved in

the acquisition and conversion of materials to finished
products delivered to the customer"
Supplier
Management
Schedule /
Resources
Conversion
Stock
Deployment
Delivery
Customer
Management
Leads to Business Process Integration
Material Flow
Information Flow

Supply chain is the system by which
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 INCLUDES :


MATERIAL FLOWS

INFORMATION FLOWS

FINANCIAL FLOWS

SUPPLY CHAIN MANAGEMENT IS
FACILITATED BY :

PROCESSES

STRUCTURE

TECHNOLOGY

Supply chain serves two functions:


Physical

Market mediation

Supply chain objectives may differ from
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
Supply Chain Structure
Information Flow
Raw Materials
RETAILER FACTORY
DC RDC

SUPPLIER
Finished Goods
SUPPLY CHAIN DRIVERS

Not new. Value system of Michael Porter
Why sudden interest?
Demanding customers
Shrinking product life cycles
Proliferating product offerings
Growing retailer power in some cases
Emergence of specialized logistics providers
Globalization
Information technology
SUPPLY CHAIN ELEMENTS
Supply Chain Design
Resource Acquisition
Long Term Planning (1 Year ++)
Strategic
Production/ Distribution Planning
Resource Allocation
Medium Term Planning (Qtrly,Monthly)
Tactical
Shipment Scheduling
Resource Scheduling
Short Term Planning (Weekly,Daily)
Operational
Supply Chain Goals

Efficient supply chain management
must result in tangible business
improvements. It is characterized by a
sharp focus on
Revenue growth
Better asset utilization
Cost reduction.
Reduce Overall Cycle Time : Improve Response
Supply Chain
Management
Underlying Principles
Compression
Conformance
Co-operation
Communication
(Planning/Manufacturing/Supply)
(Forecasts/Plans/Distribution)
(Cross -Functional)
(Real Time Data)
.
The steps involved


Step1- Designing the supply chain
Determine the supply chain network
Identify the levels of service required
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
Step 3- Material flow planning

Determine the exact flow and timing of
materials
Arrive at decisions by working back from the
projected demand through the supply chain to
the raw material resources
Techniques
ERP
Step 4 - Transaction processing and
short term scheduling

Customer orders arrive at random
This is a day to day accounting system which
tracks and schedules every order to meet
customer demand
Order entry, order fulfillment and physical
replenishment
Information flows in Supply Chain Management

Information is overriding element
Need for databases
Master files: Information about customers, products,
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.
Issues in customer management

Penetration vs Spread
Concentration is necessary to commit the
necessary resources for true customer
integration
Depth of customer contact
R&D - sharing information vs developing new
products together
Logistics - Pros and cons of methods of
transportation vs reengineering the logistics
process
Implementation: Points to keep in mind

Recognize the difficulty of change.
Prepare a blueprint for change that maps linkages
among initiatives.
Assess the entire supply chain from supplier
relationships to internal operations to the market
place, including customers, competitors and
industry as a whole.
Thank You