 All facilities, functions, activities, associated with flow and transformation of goods and services from raw materials to customer, as well as the associated

information flows

 An integrated group of processes to “source,” “make,” and “deliver” products


FACILITIES  Warehouses  Factories  Processing centers  Distribution centers  Retail outlets  Offices .

INTRODUCTION “ is a set of approaches used to efficiently integrate suppliers. to the right locations. and at the right time in order to minimize system wide costs while satisfying service-level requirements. warehouses.that are involved in producing and delivering a product or service. functions. manufacturers.” The sequence of organizations . Supply chain management .their facilities. and activities . and customers so that merchandise is produced and distributed at the right quantities.

SUPPLY CHAIN MANAGEMENT (SCM) Managing flow of information through supply chain in order to attain the level of synchronization that will make it more responsive to customer needs while lowering costs Keys to effective SCM • • • • information communication cooperation trust .

Storage Dist. Retailer Customer Supplier } .ILLUSTRATION : TYPICAL SUPPLY CHAIN FOR A MANUFACTURER Supplier Supplier Storage Mfg.

Improve operations NEED FOR SUPPLY CHAIN MANAGEMENT 2. Increasing globalization 6. Manage inventories .1. Competitive pressures 5. Help increase in overall efficiency 4. Help in decision making 3. Increasing importance of e-commerce 7.

COMPONENTS OF SUPPLY CHAIN MANAGEMENT Plan Source Make Deliver Return .

SUPPLY CHAIN MANAGEMENT PROBLEMS  Distribution Network Configuration  Distribution Strategy  Information  Inventory Management .

ELEMENTS OF SUPPLY CHAIN MANAGEMENT Element Customers Forecasting Design Processing Inventory Purchasing Suppliers Location Logistics Typical Issues Determining what customers want Predicting quantity and timing of demand Incorporating customer wants. delivery. mfg. and relations Determining location of facilities Deciding how to best move and store materials .. scheduling work Meeting demand while managing inventory costs Evaluating suppliers and supporting operations Monitoring supplier quality. and time Controlling quality.


LOGISTICS  Logistics  Refers to the movement of materials and information within a facility and to incoming and outgoing shipments of goods and materials in a supply chain .

LOGISTICS • • Movement within the facility Incoming and outgoing shipments • • • • Bar coding EDI Distribution JIT Deliveries 214800 232087768 0 .

SUCCESSFUL SUPPLY CHAIN  Trust among trading partners  Effective communications  Supply chain visibility  Event-management capability • The ability to detect and respond to unplanned events  Performance metrics .

our respondents expect mostly incremental improvement roles for their future supply chains .MODERN TRENDS IN SUPPLY CHAIN MANAGEMENT  Strategies for supply chains evolve toward supporting corporate strategiesalthough not fully at this time.  Organizing for supply chain management remains an elusive solution.  While major competitive advantages have been seen in some industries.

 Corporate recognition of the importance of the supply chain is growing rapidly.  Effective supply chain management is far more complex and difficult than is generally recognized .  Supply chain management today is mostly cost.and asset-focused with large potential benefits not yet addressed.

com • web enabled modules that allow collaboration between companies along the supply chain .SCM SOFTWARE  Enterprise Resource Planning (ERP) • software that integrates components of a company by sharing and organizing information and data • SAP was first ERP software • mySAP.

CREATING AN EFFECTIVE SUPPLY CHAIN 1. Form strategic partnerships . Coordinate planning and execution across the supply chain 5. Coordinate activities with suppliers with customers 4. Integrate and coordinate activities in the internal supply chain 3. Develop strategic objectives and tactics 2.

Customer service . Quality 2. Velocity 5.SUPPLY CHAIN PERFORMANCE DRIVERS 1. Flexibility 4. Cost 3.

MEASURING SUPPLY CHAIN PERFORMANCE Key performance indicators • inventory turnover • cost of annual sales per inventory unit • inventory days of supply • total value of all items being held in inventory • fill rate • fraction of orders filled by a distribution center within a specific time period .

KEY PERFORMANCE INDICATORS Cost of goods sold Inventory turns = Average aggregate value of inventory Average aggregate value of inventory = =(average inventory for item i) X (unit value item i) Average aggregate value of inventory Days of supply = (Costs of goods sold)/(365 days) .

OTHER MEASURES OF SUPPLY CHAIN PERFORMANCE  Process Control • used to monitor and control any process in supply chain  Supply Chain Operations Reference (SCOR) • establish targets to achieve “best in class” performance .

EFFECTS OF 9/11 ON GLOBAL CHAINS  Increase security measures • added time to supply chain schedules • Increased supply chain costs  24 hours rules for “risk screening” • extended documentation • extend time by 3-4 days  Inventory levels have increased 5%  Other costs include: • new people. and security systems. surveillance. communication. equipment. technologies. and training necessary for screening at airports and seaports around the world .

CHALLENGES  Barriers to integration of organizations  Getting top management on board  Dealing with trade-offs  Small businesses  Variability and uncertainty  Long lead times .

SUPPLY CHAIN ISSUES Strategic Issues Design of the supply chain. partnering Tactical Issues Operating Issues Inventory policies Quality control Purchasing policies Production planning and Production policies control Transportation policies Quality policies .

Agrawal .K.BIBLIOGRAPHY  Wikipedia  Google  Textbook of Logistics and Supply Chain Management --D.


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