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FLOW OF PRESENTATION • • • • • • • • • INTRODUCTION OF SCM SCM MYTH THE EVOLVING STRUCTURE OF SUPPLY CHAIN SUPPLY CHAIN PROCESS PARTICIPANTS IN SUPPLY CHAIN SCM STRUCTURE COMPONENTS OF SCM ADVANTAGES OF SCM PHARMACEUTICAL SCM .SANDOZ 2 .

and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served. 22. for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. “Defining Supply Chain Management. Min. location.William DeWitt. John T. 2. Nancy W. Carlo D. Smith.” Journal of Business Logistics. DeWitt. Soonhong Min. 18) 3 . Zacharia. and Zacharia in their article Defining Supply Chain Management in the Journal of Business Logistics (Mentzer.Vol. Deebler. p. THE DEFINITION “The systemic.. Smith. 2001. Nix. strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain.” —from Mentzer. No. Keebler. and Zach G. inventory. James S.WHAT IS SCM ? Supply chain management is the coordination of production. Nix.

finance. distribution.THE SCM MYTH SCM same as Logistics TWO major differences between Logistics & SCM: LOGISTICS  Activities that occur within the boundaries of a single organization SUPPLY CHAIN MANAGEMENT  Networks of companies that work together and coordinate their actions to deliver a product to market  Acknowledges all of traditional logistics + includes activities such as marketing. and inventory management . maintenance. new product development. and customer service 4  Focuses on activities such as procurement.

THE EVOLVING STRUCTURE OF SUPPLY CHAINS Old Supply Chains versus New : FORD motors (For eg.” Companies find other companies who they can work with to perform the activities called for in their supply chains. 5 . companies now practice “Virtual Integration. But as the markets grew and customers became more articular about the kind of products they wanted.) in 1900 followed the Old Supply chain approach called the Vertically integrated supply chains. this model began to break down Instead of vertical integration.

DECISION MAKING IN SCM  PRODUCTION  INVENTORY  LOCATION  TRANSPORTATION  INFORMATION RESPONSIVENESS V\S EFFICIENCY 6 .

network with service providers  Return  customers return … Delivery Make 7 . output… Return Source  Delivery  product to customers. monitoring… Plan  Source  suppliers…  Make  produce. package. quality level. test.COMPONENTS OF SCM  Plan  development.

PARTICIPANTS IN THE SUPPLY CHAIN • A simple supply chain is composed of – – A company – The Suppliers – The Customers • Extended SCM contains 3 more participants – Supplier’s supplier – Customer’s customer – Service Providers Ultimate Supplier  Producers Suppliers  Distributors A Company Customer  Retailer Ultimate Customer  Consumer 8 .

SCM STRUCTURE 9 .

Mode of transport  Inventory Management  Cash Flow  Information  Increases Output  Responsiveness to Demand  Optimized Stock Levels  Accurate Costing & Scheduling  Quality Advantage 10 .CHALLENGES  Reduced Cost  Increases Efficiency  Distribution Strategy -Operating Control .

SCM DEPARTMENTS INVOLVED • • • • • PLANNING PURCHASE CUSTOMER SERVICE WAREHOUSING PACKAGING AND DEVELOPMENT • LOGISTICS 11 .PHARMACEUTICAL .

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CUSTOMER SERVICE • Forecasting/demand planning • New product launches PLANNING • • • • Forecast planning Material procurement planning Production planning Dispatch planning PURCHASE • Purchase of raw materials and packaging material and expeicients… • Import clearance 13 .

PACKAGING AND DEVELOPMENT • • • • Blister pack Bottle pack( Plastic/Glass) Alualu pack Bulk pack 14 .

WAREHOUSING • • • • Receipts Issues Dispatches: Data logger. tyveck cover. Pallets Inventory management 15 .

The manufacturer has access to the distributor’s inventory data and is responsible for generating purchase orders Under the typical business model: When a distributor needs product.LOGISTICS • • • • Customs clearance Excise clearance Octroi clearance Negotiations with airlines. The manufacturer is responsible for 16 creating and maintaining the inventory plan . transporters. The distributor is in total control of the timing and size of the order being placed. The distributor maintains the inventory plan. freight forwarders. Vendor Managed Inventory model: The manufacturer receives electronic data that tells him the distributor’s sales and stock levels. they place an order against a manufacturer. VENDORMANAGEMENT INVENTORY • • • A means of optimizing Supply Chain performance in which the manufacturer is responsible for maintaining the distributor’s inventory levels. The manufacturer can view every item that the distributor carriers as well as true point of sale data.

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