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Doc 29 Supply Chain Management

Doc 29 Supply Chain Management

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Published by: Kapildev on Nov 29, 2008
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03/11/2011

 
Syntel CQA Forum Supply Chain ManagementCQA Doc No 29
Supply Chain Management
Definition
A supply chain is a network of facilities and distribution options thatperforms the functions of procurement of materials, transformation of these materials into intermediate and finished products, and thedistribution of these finished products to customers.
Figure:
An Example of a Supply ChainMaterials flow downstream, from raw material sources through amanufacturing level transforming the raw materials to intermediateproducts (also referred to as components or parts). These are assembledon the next level to form products. The products are shipped todistribution centers and from there on to retailers and customers.
Issues in Supply Chain Management
 The classic objective of logistics is to be able to have
the right productsin the right quantities (at the right place) at the right moment at minimalcost 
. Figure translates this overall objective into four main areas of concern within supply chain management. The two middle boxes in thelower row of Fig., delivery reliability, and delivery times, are both aspects
10718260.doc Page 1 of 3
 
Syntel CQA Forum Supply Chain ManagementCQA Doc No 29
of 
customer service
, which is highly dependent on the first box,
flexibility 
, and on the last box,
inventory 
.
Figure:
Hierarchy of Objectives.
Issues in Supply Chain Management and SuggestedImprovements:-
 The central aim of supply chain management, to have the right productsin the right quantities (at the right place) at the right moment at minimalcost, is translated into the interrelated issues of customer satisfaction,inventory management, and flexibility. Customer satisfaction is to a highdegree dependent on the flexibility of the supply chain, i.e. its ability torespond to changes in demand. Flexibility is often imperfect because of long lead times, uncertainties, and unforeseen event. To counterbalancethis lack of flexibility companies will keep inventories at various levels of the supply chain. Balancing the costs of imperfect customer satisfactionand holding inventory is a classic issue of logistics and supply chainmanagement.Eight pitfalls related to inventory management are:
no supply chain metrics,
inadequate definition of customer service,
inaccurate delivery status data,
inefficient information systems,
ignoring the impact of uncertainties,
simplistic inventory stocking policies,
organizational barriers and
an incomplete view of the supply chain.Increasing globalization of supply chains causes longer lead times, whichworsen flexibility, and creates the need for more inventory. When leadtimes can no longer be shortened, an important tool for improving thesupply chain performance is that of increased coordination. There are 2 types of coordination-general coordination, which iscoordination within a plant, and multi-plant coordination, which iscoordination among several plants. For efficient coordination within asupply chain both general and multi-plant coordination is necessary. Asurvey among computer manufacturers in the USA found that only 15%of the participants where communication through the use of EDI. Thisindicates a large unrealized potential for electronic data exchange.
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