Supply Chain Management

Supply Chain: The sequence of organizations their facilities, functions, and activities that are involved in producing and delivering a product or service.

key Elements of SCM .

Retaile r Custom er . Storag e Dist.Typical Supply Chain for a Manufacturer Suppli er Suppli er Suppli er } Storag e Mfg.

Complexity of supply chains 8.Increasing transportation costs 4.Increasing globalization 6.Increasing levels of outsourcing 3.Manage inventories .Need for Supply Chain Management 1.Improve operations 2.Competitive pressures 5.Increasing importance of e-commerce 7.

more frequent deliveries Benefits Reduced holding costs Quick response Fewer parts Simpler ordering Possible Drawbacks Traffic congestion Increased costs May not be feasible May need absorb functions Less variety Long lead times Delayed differentiation Disintermediation Large number of Modular parts Cost Quality Variability Outsourcing Reduced cost. higher Loss of control quality Shorter lead times.Supply Chain Benefits and Drawbacks Problem Large inventories Potential Improvement Smaller. better Able to match supply Less variety forecasts and demand .

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  .

Materials Movement Work center Work center Work center Work center Storage Storage Storage RECEIVING Shipping .

Purchasing  Purchasing is responsible for obtaining the materials. parts.  . and supplies and services needed to produce a product or provide a service.

Duties of Purchasing  Identifying sources of supply  Negotiating contracts  Maintaining a database of suppliers  Obtaining goods and services  Managing supplies  .

Supplier selected 3.Monitor orders 5.Receive orders  Legal Operations Accounting Purchasing Data processing Design Receiving Suppliers .Order is placed 4.Requisition received 2.Purchasing Cycle 1.

Suppliers  Choosing suppliers  Evaluating sources of supply  Supplier audits  Supplier certification  Supplier relationships  Supplier partnerships  .

Factors in Choosing a Supplier  Quality and quality assurance  Flexibility  Location  Price  Product or service changes  Reputation and financial stability  Lead times and on-time delivery  Other accounts  .

Inventory Meaning  Inventory is sum total of all material resources invested in business.  Inventory can be in following forms:  Raw-Materials  Work-in-Process  Finished Goods  .

Inventory Control Techniques  ABC Analysis  HML Analysis  VED Analysis  FSN Analysis  GOLF Analysis  SDE Analysis  XYZ Analysis .

warehousing   Meaning  Warehousing is a continuous value chain  Its is responsible for contributing in the value process.  .

Functions of warehouse  Store the material properly  Remove the material when required  Deliver the material to the right place  Keep the records perfectly in discipline  Avoid keeping surplus material  Verification of stocks & regular interval  Co-ordination & co-operation  .

.distribution  Meaning  The distribution channel represents the channel through which saleable materials or services reach customers.  Typical distribution channels include wholesale. retail & direct sales.

Uses of DRP  Management uses DRP to plan and coordinate:  Transportation  Warehousing  Workers  Equipment  Financial   flows .