Supply Chain Management

Compiled by : Sachin Gawali - 9117

Harsh Parikh - 9138 Manish
Singh - 9154
Monica Doshi - 9178
Rasika Raje - 9201
Neha Uchil - 9215

Presented to : Prof. Bawa Singh

 Supply Chain
Suppliers Manufacturers Distribution Centers Customers

Transportation Cost T.C. T.C.

Material Costs Manufacturing Costs Inventory Costs

Why To Implement Supply Chain?

Poor service Not 1st. in class

Poor forecasting Empty shelves

 Impact Of Both Areas On Each Other
Before Production After Production

Poor Forecasting Customer Incorrect Stock Levels

Service
Impacted High delivery Costs
Too Many Orders

Poor Data Set up Errors in delivery

Costs
Out of
Poor Paper Work Control Cash Collection Impacted
 Lack of Synergy
Customer Development:
Marketing:
Marketing:
we can sell 200 the
the promotion
promotion will
will sell
sell 400
400

Manufacturing: Finance:
they will only we have budget of 300
sell 150
 Working with Synergy
Debtor Mgmt Financial Planning

Supplier Mgmt Category Mgmt

One
Consensus
Plan

Customer Development Demand Forecasting

Manufacturing Customer Service & Distribution

 How To Measure Performance?

• Benchmarking

• Gap Analysis

• Balanced Scorecard

• SCOR Model
 Benchmarking
Benchmarking is a standard of performance, which
helps an organization to identify standards of
performance of world class organization and
implement them in their own organization.

Forms of Benchmarking:
• Internal
• External
• Quantitative
• Process
 Benchmarking - A Bird’s Eye View
World class

Goal 3

Goal 2

Goal 1
Where we are Current performance
 Benchmarking Model

Selection of Investigating Process

Planning Selection of Benchmarking Partner

Information Collection

Finding Performance Gaps

Analysis
Evaluating causes for the Gaps
 Benchmarking Model {contd…}

Fixing goals
Integration
Persuading the employees

Developing Action Plan

Implementation Implementing actions

Controlling
Companies Practicing Benchmarking
• Toyota • Xerox
• Ford • AT&T
• DuPont • Hewlett Packard
• Johnson & Johnson • IBM
• Hindustan Unilever • Citibank
• Motorola • Cannon
• RPG group • Arvind Mills
• Ranbaxy • ACC
 Gap Analysis
Gap Analysis is to find out the difference between
actual level of performance and expected level of
performance.

Activity Modeling:
• “As is”
• “To be”
 Benefits Of Benchmarking

• Better informed decisions

• Exposure to innovation & breakthroughs
• Think out of the box
• Accelerates change
 Mapping Out Time

Time
20%
Planning

Information Gathering
50%
Analysing
Performance
30%
 Complexity Drivers

• Pressure to reduce costs

• Pursuit of new markets
• Product innovations
 Differentiating Factors

• Customers

• Products

• Technology
Balanced Scorecard
What Is A Balanced Scorecard (BSC)?

A Balanced Scorecard covers 4 areas for

measurement.
• Financial
• Customer
• Operational
• Training
 Kaplan and Norton model (1996)
Operational
Adherence to plan
Forecast error

Balanced
Scorecard

In-house training
Training
Returns

hours
Transportation &
Warehousing
Cost of manufacturing
Financial
Building The Balanced Scorecard

How do you
create value?
 Cause and Effect Chain

Strategic Objective Become No 1 player

What What

Financial Measure Market share

How How

Customer Value Measure Service span offer

How How

Process Measure Services per customer

How How

Strategic Objective Availability of data

 Revised Performance System
Traditional Revised
• Balance of financial & • Focus on non-
non-financial financial performance
performance measures
measures
• Between strategic • Only between
objectives & Strategic objectives
performance
measures
 Supply Chain Service Failure
Annual order
Correctly filled Service order
orders failures

Rectified Orders Refused order

Invoice deduction Total orders Revenue per

per order rehandled order

Invoice deduction Rehandling cost Lost revenue

from sales per order sales

Rehandling cost
 Process Reference Model
Best Practices
BPR Benchmarking Analysis
Capture the Quantify the Characterize the
“as-is” state of a operational management
process and performance of practices and
derive the similar software
desired “to-be” companies & solutions that
future state. establish result in
internal targets “best-in-class”
based on performance.
“best-in-class”
results.
 SCOR Structure

Plan

Deliver Source Make Deliver Source Make Delive Source Make Deliver Source

Return Return Return

Return r
Return
Return Return Return

Supplier Customer
Your Company
Internal of Internal of
External External
Suppliers’ Customer’s
Supplier Customer
Building Block Approach
Processes Metrics
Best Practice Technology
 SCOR Model Processes (Level 1)
Plan Source Make Deliver
Develop a Procure goods Transform Provide
course of and services to product to a products
action that meet Planned finished state to meet
best meets or Actual to meet demand,
Sourcing, Demand Planned including Order
Production or Actual Management,
and Delivery Demand Transportation
requirements and
Distribution

Return
Return products, Post-delivery Customer Support
 SCOR: Customer Facing
Performance Performance Definition
Attribute Metric
Supply Chain Delivery Percentage of orders delivered on time and in
Delivery performance full to the customer
Reliability Fill rate Percentage of orders shipped within24 hours
of order receipt
Perfect order Percentage of orders delivered on time and in
fulfillment full, perfectly matched with order with no errors

Supply Chain Order fulfillment Number of days from order receipt to customer
Responsiveness lead time delivery

Supply Chain Supply chain Number of days for supply chain to respond to
Flexibility response time an unplanned significant change in demand
without a cost penalty
Production Number of days to achieve an unplanned 20%
flexibility change in orders without a cost penalty
 SCOR: Internal Facing
Performance Performance Definition
Attribute Metric

Supply Chain SC mgmt cost Direct and indirect cost to plan, source and
Cost deliver products and services
Cost of goods Direct cost of material and labor to produce a
sold product or service
Value-added Direct material cost subtracted from revenue
productivity and divided by the number of employees,
similar to sales per employee
Warranty/return Direct and indirect costs associated with
processing cost returns including defective, planned
maintenance and excess inventory
SC Asset Cash-to-cash Number of days that cash is tied up as working
Mgmt cycle time capital
Efficiency Inventory days of Number of days that cash is tied up as
supply inventory
Asset turns Revenue divided by total assets including
working capital and fixed assets
SCOR Model (Level 2)
 SCOR Model (Level 3)
S1.1 S1.2 S1.3
Schedule Receive Verify
Product Product Product
Deliveries

S1.4 S1.5
Transfer Authorize
Product Supplier
Payment
 SCOR Model (Level 4)
D1.7 D1.6 D1.5 D1.4 D1.3 D1.2 D1.1
Select Route Build Consolid Reserve Receive Process
Carriers Shipment Loads ate Inventory Enter & Inquiry &
& Rate Orders Determine Validate Quote
Shipment Delivery Order
Date

D1.8 D1.9 D1.10 D1.11 D1.12 D1.13 D1.14

Receive Pick Pack Load Ship Receive Install
Product Product product Product Product & Verify Product
from & Product
Source or Generate by
Make Shipping Customer
Docs
Raising The Bar
 References

• Supply Chain Management Book - Author - Altekar

• www.scribd.com

• www.managementparadise.com

• www.authorstream.com

• www.slideshare.com
Thank You