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Objective. Introduction about Supply Chain management. Supply chain at tactical level. Supply chain management software. Proposed work.
INDUSTRIAL AND PRODUCTIO ENGG., SJCE
SJCE Page 2 . DEFINITION OF A SUPPLY CHAIN MANAGEMENT : Supply Chain Management is a set of synchronized decisions and activities utilized to efficiently integrate suppliers. that is the visibility of each one of the activities of the Supply Chain by each one of the partners. and at the right time. Generalized Supply Chain Model Relationship Management Material Flow Information Flow INDUSTRIAL AND PRODUCTIO ENGG.. warehouses. transporters. Reducing costs.Objective : • • • • • • • Minimizing the time required for converting orders into cash. Improving quality. retailers. in order to minimize system-wide costs while satisfying customer service level requirements. to the right locations. Improving services. Minimizing the total Work-In-Process (WIP) in the Supply Chain. and customers so that the right product or service is distributed at the right quantities. Improving pipeline visibility. Improving visibility of demand by each one of the partners. manufacturers. The objective of Supply Chain Management (SCM) is to achieve sustainable competitive advantage.
individual components of the Supply Chain aim at maximizing their shareholder value by maximizing the Return on Investment (ROI) of their investors. and the time they are stored again before being delivered to customers. to control their quality. This strategic objective can be translated into several short. baring exceptional cases. Page 3 INDUSTRIAL AND PRODUCTIO ENGG. 1. if necessary. • The times needed to perform the activities required to complete a process can be reduced gradually through the mapping of the project process and the analysis of each one of the activities.and medium-term objectives at the tactical level. This scheduling activity should cover simultaneously all the activities that is buying. store them until they are used. Also. making. At the same time. Minimizing the time required converting orders into cash: This objective is much more than reducing the production cycle. It also includes the time finished products are stored and prepared to be shipped to retailers. As a consequence. Due to the complexity of the scheduling problems and the fact that each order is scheduled as soon as it arrives in the Supply Chain. the transportation time. each partner should accept the rules derived from the co-operation arrangements decided at the strategic level. re-scheduling of existing tasks should be avoided. SJCE .SUPPLY CHAIN AT THE TACTICAL LEVEL: A decision made by any partner of the Supply Chain disseminates among the whole Supply Chain. storing and selling activities. to handle and.. ROI is the ratio of profit to capital employed over one year. THE TACTICAL OBJECTIVES IN A SUPPLY CHAIN: The global objective of a Supply Chain is customers’ satisfaction. It includes the time required to get raw material and components. Minimizing the time required to convert orders into cash requires scheduling each order as soon as it arrives in the Supply Chain. a global information system is necessary to allow all the partners to be informed in real time of the state of the system and the decisions made anywhere in the system. The goal of these rules is to make sure that each one of the partners is prepared to adjust itself to any decision that complies with these rules. It means that such a decision requires adjustment decisions from the other partners. moving.
Mapping of the project process 2.. but more to move them upstream or downstream in the chain to keep the advantages of inventories while transferring the related costs to other partners or subcontractors.I. which often resulted in transferring inventories to subcontractors. SJCE Page 4 . and thus to reduce the total WIP. since inventories favour productivity. Minimizing the total Work-In-Process (WIP): • In the past. Each one of them was trying to increase its own efficiency instead of working to increase the global efficiency of the system.P. The philosophy behind the Supply Chain paradigm is totally different: the goal is to improve the efficiency of the whole system. the relationships between the partners of the production chains were more adversarial than co-operative. The goal of each partner was not to decrease inventories. • • • • INDUSTRIAL AND PRODUCTIO ENGG.• Reengineering is an abrupt approach that is hard to apply. A real time approach has been proposed that both minimizes the completion time and controls the W. It is still the case in production systems working on a master-slave basis: the "master" builds his success at the expense of the "slaves". This was quite common in the auto industry where auto makers used to ask subcontractors to deliver parts or subsystems "Just-InTime".
two problems remain sensitive when a new Supply Chain is designed. are of utmost importance. this allows close monitoring over product movements. These are: • • The removal of the psychological barriers that incite people and organizations to hold back information. Nowadays. including the instants these pieces of information should be sent and their format. Theoretically. inventories. The selection of information to be sent to each partner.. market changes. etc. information can be sent from the place it is generated to any other place in the Supply Chain in real time. SJCE Page 5 . Improving pipeline visibility: The evolution of the computer systems from central mainframe to local workstations has drastically changed the way information is delivered. However. Improving visibility of demand: INDUSTRIAL AND PRODUCTIO ENGG.3. 4. Technical barriers in information systems have been virtually removed. logistics.
The goal when improving the visibility of demand is to move the demand penetration point that is the point of the Supply Chain where the demand is known. quality insurance and total quality. allows measuring the efficiency of the activities performed to improve quality. It could be gradual (Kaizen) or drastic (reengineering). and hence made it impossible to evaluate the true profitability of these product types or services. 9002 and 9003 aim at establishing quality standards that guarantee the level and invariability of quality. as downstream as possible. Total quality is a never-ending effort to improve quality. Accounting techniques have evolved dramatically (and INDUSTRIAL AND PRODUCTIO ENGG. Reducing costs: For years. Three main aspects should be considered when talking about quality. Quality insurance is often supported by the ISO (International Standard for Organization). • 6. ISO 9004 provides a guide for the management of quality system while ISO 9001. 5. These are quality mastery. • Quality Mastery: Quality mastery involves evaluating the product or service characteristics’ fit with the specifications provided by the designers or the customers. Quality Insurance: • The goal of quality insurance is to guaranty the required quality level for services and products. Total Quality: • Total quality requires a special management. Quality mastery implies the ability to measure quality which. SJCE Page 6 . Tools are available to know with a reasonable probability the customers’ demands even before it emerge in their brains. Improving quality: • Quality is often defined as "the set of properties and characteristics of a product or a service that allows it to meet requirements that are explicitly or implicitly expressed by the customer”. in turn. called Total Quality Management (TQM) that involves each employee in the organization in the improvement of quality.. the so-called analytical accounting relied upon arbitrary allocation of indirect costs to product types or services.
A more abrupt approach which consists in changing drastically the manufacturing process (reengineering). which is the most important characteristic of Supply Chains. Improving services: Factors that improve customer service are the reduction of time from customers’ orders to deliveries and the improvement of the quality INDUSTRIAL AND PRODUCTIO ENGG. the approach when evaluating costs should be horizontal instead of vertical. These are: • • A gradual approach. These incremental costs should be evaluated for each activity of the project and even for each customer segment. i. These are: • Costs should be attached to projects instead of departments. • Two approaches are used to reduce the incremental costs of a project. similar to the Kaizen approach applied to improve quality. due to the new project-oriented paradigm. Only incremental costs should be considered.positively) during the past few years.e.. SJCE Page 7 . 7. Two basic rules are taken into account when evaluating the costs in a Supply Chain.
managing supplier relationships and controlling associated business processes. between the supplier and customer. INDUSTRIAL AND PRODUCTIO ENGG. Such tools often attempt to balance the disparity between supply and demand by improving business processes and using algorithms and consumption analysis to better plan future needs. 2. While functionality in such systems can often be broad – it commonly includes: 1. at lower cost and faster rate. SJCE Page 8 .of product / service documentation. A requirement of many SCMS often includes forecasting. SCMS also often includes integration technology that allows organizations to trade electronically with supply chain partners. The above tactical objectives of results in improved flow of material and information. Also improving quality. Customer requirement processing Purchase order processing Inventory management Goods receipt and Warehouse management Supplier Management/Sourcing 5. reducing cost and improving customer service. 3.. 4. reception of customers and information about the Supply Chain. Proposed work: To minimize the Work In Process [WIP] in supply chain management by improving the efficiency of the whole system. this is done by utilizing various methodologies and software of Supply Chain Management [SCM]. Supply Chain Management Software: Supply chain management software (SCMS) is a business term which refers to a WHOLE range of software tools or modules used in executing supply chain transactions.