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Supply Chain Management

Presentation by
Amithlal S B
S2,
MBA
Ê


 Supply Chain Management

J Definition of the supply chain
J Supply chain planning strategies
J Supply chain distribution strategies

SUPPLY CHAIN MANAGEMENT 2

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SUPPLY CHAIN MANAGEMENT 3

¦



  

 Supply chain management is a set of approaches used to

efficiently integrate suppliers, manufacturers,
warehouses, and customers so that merchandise is
produced and distributed at the right quantities, to
the right locations, and at the right time
in order to minimize system wide costs while satisfying
service-level requirements.

SUPPLY CHAIN MANAGEMENT 4

¦ 


  

 Manufacturing strategies have run their courses

(JIT, Kanban, Lean, TQM)
 Effective Supply Chain Mgt. is the next logical
step towards increased profits and market share

SUPPLY CHAIN MANAGEMENT 5

Ê



 








 Millions of dollars at stake!

 Excess Inventory costs
 Excess freight charges
 Lost sales / Stock outages
 Wasted time and energy
 Extra staff
 Listings / Delistings
 Customer dissatisfaction - privatization
 Capital costs
 Real Estate Costs

SUPPLY CHAIN MANAGEMENT 6

Œ




 

 M



 r how can we recognize the capacity
of each LCBǯs warehouse to determine production
requirements and inventory levels at the vendorǯs facility
for each product and develop transportation flows
between these facilities to the LCBǯs warehouses in such
a way as to minimize total production, inventory, and
transportation costs and satisfy service level
requirements?

SUPPLY CHAIN MANAGEMENT 7

 SCM is divided by SCP to offer optimized
planning, SCE to stable execution platform,
CP to collaborate

Supply Chain Execution

Timely execution for
buying, moving, making
Supply Chain Planning and ordering
Optimized planning for -Warehouse Management
balanced supply for varied -Transportation Management
demands -Inventory Management
-Supply Chain Network -Order Management
Design
-Demand Planning &
Forecasting Ú
  Collaborative Planning
-Supply Planning  Right Product
Facilitating collaboration
-Distribution Planning  Right Place
 Right Time
among participants
-Manufacturing Planning
& Scheduling -Design Collaboration
-Demand Collaboration
-Procurement Collaboration
-Retailer Collaboration


 r Relationships between suppliers and LCBǯs

warehouse operators that specify delivery lead
times, appointment processes, and hours for
receiving. How can this relationship optimize
supply chain efficiency?

SUPPLY CHAIN MANAGEMENT 9

Ê
 
 


 





 


 Channels provide the means by which the firm
moves the goods and services it produces to
ultimate users
J Facilitate the exchange process by cutting the number of
contacts necessary
J Adjust for discrepancies in the marketǯs assortment of
goods and services via sorting
J Standardize exchange transactions
J Facilitate searches by both buyers and sellers

SUPPLY CHAIN MANAGEMENT 10

Ê

 


 


› 

 

A  system of marketing institutions that

promotes the physical flow of goods and services, along with
ownership title, from producers to consumer or business user;
also called a distribution channel
 › 



  A
  wholesaler or retailer that operates
between producers and consumers or business users; also
called a middleman
 ¦   A  marketing intermediary that takes title to goods
and then distributes these goods further; also called a jobber
or distributor

SUPPLY CHAIN MANAGEMENT 11

 Ê › 




J 
 

SUPPLY CHAIN MANAGEMENT 12

† Types of Marketing Channels
´ Business Goods
´ Services

SUPPLY CHAIN MANAGEMENT 13

 Ú
 

J Ú
 

A
 marketing channel that moves
goods directly from a producer to ultimate user
J Ú
 
A

 strategy designed to establish direct
sales contract between producer and final user

SUPPLY CHAIN MANAGEMENT 14

 


› 



   
J Producer to wholesaler to retailer to consumer
J Producer to wholesaler to business user
J Producer to agent to wholesaler to retailer to
consumer
J Producer to agent to wholesaler to business user
J Producer to agent to business user

SUPPLY CHAIN MANAGEMENT 15

 Ú Ú


A Network that moves
 Ú Ú



products to a firmǯs target market through more

than one marketing channel

    

A
 Channels designed to return
goods to their producers

SUPPLY CHAIN MANAGEMENT 16

 




 
 Selection of a Marketing Channel
 Factors which impact the selection of a
marketing channel includeA
J Market factors
J Product factors
J Organizational factors
J Competitive factors

SUPPLY CHAIN MANAGEMENT 17

 Factors influencing Marketing Channel Strategies
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 SUPPLY CHAIN MANAGEMENT  
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SUPPLY CHAIN MANAGEMENT 19
 Ú


Ú







J Distribution intensityA number of intermediaries
through which a manufacturer distributes its
goods

SUPPLY CHAIN MANAGEMENT 20

 


 


A



channel policy in which a
manufacturer of a convenience product attempts to
saturate the market
  
 


A



channel policy in which a firm
chooses only a limited number of retailers to handle its
product line
 ?  


A



channel policy in which a firm
grants exclusive rights to a single wholesaler or retailer to
sell its products in a particular geographic area

SUPPLY CHAIN MANAGEMENT 21

 









     
A
  
sequence of suppliers
that contributes to the creation and delivery
of a good or service
J 
 
 


J Ú

 
 

SUPPLY CHAIN MANAGEMENT 22

The Supply Chain of a Manufacturing Company

SUPPLY CHAIN MANAGEMENT 23

   




Ú
J Technology that uses a tiny chip with identification
information that can be read by a scanner using radio
waves from a distance

 ?

   



J Software system that consolidates data among a firmǯs
units

 
 



J Ê 
 



 ! company that
specializes in handling logistics activities for other firms

SUPPLY CHAIN MANAGEMENT 24

 m 
 
 A companyǯs physical distribution system
contains the following elementsA
J 
  
J Ê




J 





J 

   


 


J "  

J ¦  


SUPPLY CHAIN MANAGEMENT 25

Allocation of Physical Distribution
Expenditures an example

SUPPLY CHAIN MANAGEMENT 26

 Ê  
#


J Condition that results when individual operations

achieve their objectives but interfere with progress
toward broader organizational goals

 
   

 
J Statement of goals and acceptable performance for
the quality of service that a firm expects to deliver to
its customers

SUPPLY CHAIN MANAGEMENT 27

 Ê




J  

J 


J     
' 
   move freight via all modes of
transportation for the general public
' 


   do not serve the general public
' 
   do not offer services for hire, but
provide transportation services solely for internally
generated freight

SUPPLY CHAIN MANAGEMENT 28


  
 Ê


 

J Railroads
J Motor Carriers
J Water Carriers
J Pipelines
J Air Freight
J Freight Forwarders and Supplemental Carriers
J Intermodal Coordination

SUPPLY CHAIN MANAGEMENT 29

  Comparison of Transport Modes

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SUPPLY CHAIN MANAGEMENT 30



 r Where is inventory held, (supplier, LCBǯs warehouse,

retailer) how much, and why? Is inventory held due to
uncertainty in production, distribution or customer
demand? Is there anything that can be done to reduce
uncertainty thereby reducing inventory?

SUPPLY CHAIN MANAGEMENT 31

¦!

J 
    
J Ú


  
$

¦   Ê 

' Distribution costs can be cut and customer
service improved by automating warehouse
systems

SUPPLY CHAIN MANAGEMENT 32

J ¦   


' Major logistics decision involving the
number and location(s) of storage facilities
' Two cost categories influence the choiceA
l Warehousing and materials-handling costs
l Delivery costs from warehouse to customers

SUPPLY CHAIN MANAGEMENT 33

 






J Important since firms need to maintain enough
inventory to meet customer demand without incurring
unneeded costs for carrying excess inventory
J u
%
%
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J &
%
 


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 "  

J 
 
A order for a product that is unavailable for
shipment or sale

SUPPLY CHAIN MANAGEMENT 34

m 

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J ›
 '

A set of activities that move
production inputs and other goods within plants,
warehouses, and transportation terminals
' 

#
A process of combining individual
materials into large loads for easy handling
' 


#

A process of combining several
unitized loads into a single, well-protected load

SUPPLY CHAIN MANAGEMENT 35







 Managing the supply chain for profitability, Dr. George L. Harris,

C.P.M., CPCM, President, and Calyptus Consulting Group, Inc.
 Supply Chain Management r Strategy, Planning, and Operation,
Person Education, Singapore, Chopra, P. Meindi, 2005.
 httpA//www.slu.edu/centers/cscms/
 httpA//www.clm1.org
 httpA//www.goldata.com.au/
 www.google.com
 www.wikipedia.com

SUPPLY CHAIN MANAGEMENT 36

Ê

 

SUPPLY CHAIN MANAGEMENT 37

 Warehouse Management Systems (WMS) are a key part of the supply
chain and primarily aim to control the movement and storage of
materials within a warehouse and process the associated transactions,
including shipping, receiving, putaway and picking. The systems also
direct and optimize stock putaway based on real-time information about
the status of bin utilization.

 Warehouse management systems utilize Auto ID Data Capture

technology, such as barcode scanners, mobile computers, wireless LANs
and potentially RFID to efficiently monitor the flow of products. Once
data has been collected, there is either a batch synchronization with, or a
real-time wireless transmission to a central database. The database can
then provide useful reports about the status of goods in the warehouse.

 The objective of a warehouse management system is to provide a

method to automatically receive inventory, process orders, and handle
returns within a single overall application ""umbrella"".

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SUPPLY CHAIN MANAGEMENT 38
 An inventory control system is an integrated
package of software and hardware used in
warehouse operations, and elsewhere, to monitor
the quantity, location and status of inventory as well
as the related shipping, receiving, picking and
putaway processes. In common usage, the term
may also refer to just the software components.

 Modern inventory control systems rely upon

barcodes, and potentially RFID tags, to provide
automatic identification of inventory objects.

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SUPPLY CHAIN MANAGEMENT 39

 All organizations have or can purchase the components to
build a supply chain network, it is the collection of physical
locations, transportation vehicles and supporting systems
through which the products and services your firm markets
are managed and ultimately delivered.

 Physical locations included in a Supply Chain Network can be

manufacturing plants, storage warehouses, carrier
crossdocks, major distribution centres, ports, intermodal
terminals whether owned by your company, your suppliers,
your transport carrier, a third-party logistics provider, a retail
store or your end customer.

 Transportation modes that operate within a Supply Chain

Network can include the many different types of trucks,
trains for boxcar or intermodal unit movement, container
ships or cargo planes.

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SUPPLY CHAIN MANAGEMENT 40