1.6 Reasons for Developing Supply Chains ¥ Greater competitive advantage ¥ Greater value to consumers ¥ Reduces the lead time gap ¥ Faster and smaller deliveries to intermediate customers ¥ Introduces the concept of increased shareholder value > These reasons giverise to the notion that in future we wil see supply chains competing with supply chai rather than competition between organizations, 1.2 The Definition of SCM 1.1 Overview of Supply Chain Supply chain (aso called value chain or demand chain), is the network ofthe involved companies, through upstream and downstream linkages, inthe ifferent processes and activities that produce value in the form of products and services in the hands of the ultimate consumer. For ‘example, a shirt manufacturer i apart ofa supply chain that goes upstream through the weavers of fabrics to the manufacturers of fibers, and downstream through distributors and retailers tothe final consumer. Each of these organizations inthe chain is dependent upon each other. ‘There are various definitions of different edition. But in general, Supply chain management means the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole. The supply chain arrangement links 2 firm and its distributive and supplier network to end customers. ‘The integrated value-creation process must be managed from material procurement to end-customer product delivery. The integrated supply chain management shifts traditional channel arrangements from loosely linked groups of independent businesses that buy and sell inventory to each other toward a coordinated initiative to increase ‘market impact, overall efficiency, continuous improvement, anc competitiveness.DDD» 1.3 Ti sctetepproaches used to efficiently integrate Manufacturers Distribution centaremuton Centers = Becaaeeneiprowucels prodicadiand alarm Ree igre aur Ta the dent loca systemawide,costaare migimigec 1.5 History of SCM ‘anagoruon ' Transportation = Tr + 1960's- Inventory Management Focus, Cost Control Manufacturing costs = Br + 1970's-MRP & BOM -Operations Planning — W + 1980"s- RPI JIT- Materials Management, Logistics Le + 19g0’s-ScM- ERP- “integrated” Purchasing, Financials, Manufacturing, Order Entry + The cc + 2900's - Optimized “Value Network” with Real-Time Supp Decision Suppor; Synchronized & Collaborative -™M Extended Network -™ ~o 1.6 Reasons for Developing Supply Chains ¥ Greater competitive advantage ¥ Greater value to consumers ¥ Reduces the lead time gap ¥ Faster and smaller deliveries to intermediate customers ¥ Introduces the concept of increased shareholder value .¢ reasons give rise to the notion that in future, we will see supply chains competing with supply chains rather than competition between organizations.mary of SCN 23 SGoply Chan Integration : > asupplyehaineonUSN/ Pull Strategies + Hybrid of “push” and “pull” strategies to overcome disadvantages of each + Early stages of product assembI — partiat assembly 0 — Uncertainty is reduced so safety stock inventory + _ Final product assembly is done based on customer demand for specific pr ~ _leontigurations ply ane Seman: are done in a “push” inahneg le oduct based on aggregate demand forecasts (which are nore accurate than individual product demand ‘SUpply chain timeline determines “push-pull boundan > achieves “Generic” Product ‘SURELY Sine ae" BEMANG Sis Custamizer_ereduicind of the supply cain may enhance al of SCM casts) ARNE ith the Aevelonment of the operations Fe has been an increasing agement. Working sll members of Benson —————— = = -cosliitghas been embraced by Supply Chain Timeline st modeling solutions ‘anal han neh. For examnle acftware oachage 2.4 Choosing Between Push/Pull Strategies Pall High) industries where: Industries where: : ounanieunen Where do the following SSeoomeueihe! |TERMS an | nites Wen £ | computer Furniture + Automobile? 2 equipment “aireratt? 2 “Fashion? © [industries where: | industries where: | < petroteum reining? & | -nceranysion sstondud ponents | 7 Pharmncauticter S| ieetes | zee ‘Biotechnology? eDiniise’ | Sorinamne | Sadie Bevcast Books, co's Grocery! eusn } tow Beverages low Economies of Scale High Pull Push2.6 Supply Chain Collaboration 2.5 Characteriscics of Push, Pull and + Cornerstorte of effective SCM The focus of many of today’s SCM ee IES Prodict.-The only method that has the potential to eliminate or minimize the Bullwhip effect “objective, Nips 2.7 Flows in a Supply Chain Material oe | supper — = | customer | <_Zemearion Funds fens The flows resemble a chain reaction2.8 Importance of SCM = A