BUSINESS PROCESS

A business process is a set of co-ordinated tasks and

activities conducted by both people and equipment which
lead to accomplish a specific organizational goal.
ERP

Enterprise resourse planning helps to manage company-

wide business processes using a common database and
shared management reporting tools.

FUNCTIONAL AREAS

Finance/Accounting
Human resources
Manufacturing
Supply chain Management
Project management
Customer-relationship management
Access control
Data Services
Supply Chain Management (SCM)

• Supply Chain Management involves the set of

approaches that efficiently integrates
– Suppliers
– Manufacturers
– Warehouses
– Distribution centers

• So that the product is produced and distributed

– In the right quantities
– To the right locations
– And at the right time
 Definition of SCM

“ Supply chain management (SCM) is the management of a

network of interconnected businesss, involved in the ultimate
provision of product and service packages required by end
customers.Supply chain management spans all movement
and storage of raw materials, work-in-process inventory, and
finished goods from point of origin to point of consumption ”

Suppliers Manufacturer Distributors Retailers Consumers

 Representation of SCM

Purchasing
goods and
raw material

Receiving
raw
materials

Transportation

Scheduling
production

Manufacturing
goods

Distribution
Advantages

Faster response to changes in supply and demand.

Increased customer satisfaction

Compliance with regulatory requirement

Improved cash flow

 Advantages cont……

 Transport is simpler with fewer, larger deliveries

thus reducing costs.
 Wholesalers are near to retailers and have short lead
time
 Higher Margins

 Greater synchronization with business priorities

Best Practices in SCM
Why Is SCM Difficult?
• Uncertainty is inherent to every supply chain
– Travel times
– Breakdowns of machines and vehicles
– Weather, natural catastrophe, war
– Local politics, labor conditions, border issues

• The complexity of the problem to globally optimize a

supply chain is significant
– Minimize internal costs
– Minimize uncertainty
– Deal with remaining uncertainty
• Trade-Offs in Logistical Activities:

All the activities must be well coordinated in order to achieve the lowest total logistics cost.
Trade-offs may increase the total cost if only one of the activities is optimized.
For example, full truckload (FTL) rates are more economical on a cost per pallet basis than less than
truckload (LTL) shipments. If, however, a full truckload of a product is ordered to reduce transportation
costs, there will be an increase in inventory holding costs which may increase total logistics costs. It is therefore
imperative to take a systems approach when planning logistical activities. These trade-offs are key to
developing the most efficient and effective Logistics and SCM strategy.
•Information: Integration of processes through the supply chain to
share valuable information, including demand signals, forecasts,
inventory, transportation, potential collaboration, etc.

•Inventory Management: Quantity and location of inventory, including

raw materials, work-in-progress (WIP) and finished goods.

•Cash-Flow: Arranging the payment terms and methodologies for

exchanging funds across entities within the supply chain.
Supply Chain Management – Key Issues
The supply chain management issues concern activities at
various levels of decision making that are:

The strategic level : The decision making at this level is made

with long term objectives and with long lasting effects; including
decisions regarding location of manufacturing plant, distribution
warehouses and the structure of the distribution channel.

The tactical level: Decision making at this level is concerned with

purchasing and production functions, inventory policies and
transportation strategies. These decisions will be usually updated
on an annual basis.

The operational level: Decision making at operational level will

concern day to day management of activities such as scheduling,
routing and vehicle loading etc.
Inventory Control

• How should inventory be managed?

• Why does inventory fluctuate and what strategies minimize this?

Supply Contracts

• Impact of volume discount and revenue

sharing
• Pricing strategies to reduce order-
shipment variability
 Distribution

•Selection of distribution strategies (e.g., direct ship vs. cross-docking)

• How many cross-dock points are needed?
• Cost/Benefits of different strategies

Outsourcing & Procurement

Strategies

•What are our core supply chain capabilities and which are not?
• Does our product design mandate different outsourcing
approaches?
• Risk management
•Product design:

 This is concerned with the design of the product and its impact on total cost of
the product.It is possible that the design determines the strategies to be
followed regarding inventory or transportation. The design may also determine
the length of the product life cycle and the extent of uncertainty associated with
demand for this product
 
•Information technology and decision support systems:
 The technology allows acquisition of vast quantity of data, information and
their subsequent processing in accordance with selected decision criteria.

•Customer value: The key issue is the definition of customer value in an age of

increasing consumer power. How will supply chains will be designed to provide
value to the customers and how will firms define value?
 Forecasts

• Forecasts are never right

– Very unlikely that actual demand will exactly equal
forecast demand

• The longer the forecast horizon, the worse the

forecast
– A forecast for a year from now will never be as
accurate as a forecast for 3 months from now

• Aggregate forecasts are more accurate

– A demand forecast for all CV therapeutics will be more
accurate than a forecast for a specific CV-related
product