Basics of Supply Chain

Management

Shri C. Sankaranarayanan
Your Supply Chain

Your Customers
Suppliers
Company

Products

Information

Funds
End to End Process

• Right Product

• Right Quality

• Right Cost

• Right Time
 SCM & CRM

Supply Chain Management

Supplier Distributor Retailer Customer

Manufacturer

Customer Relationship Management

New Definition

Supply Chain
is
People
What Determines Effectiveness?

Collaboration
The ability of people to work
together across
Departmental and Company
boundaries
What You Can Take Away?
• How do I ensure ideas
get implemented?

• How do I bring other

people with me?

• How do I make my
supply chain process
more effective?
Challenges for 2010?
• Implementation of lean
manufacturing with key suppliers

• Monitoring and ensuring

suppliers meet quality and
delivery requirements

• Ensuring quality when dealing

with off-shore suppliers

• Finding the right suppliers

Finding the Right Suppliers

• Common strategy

• Supply chain strategy

• Commodity plans

• Sourcing teams
Company Strategy

• Customers & Markets

• New Products

• Core Competencies

• Organization structure
Supply chain Strategy

• Customer service

• Manufacturing/outsourcing

• Strategic sourcing

• Transportation,
Distribution and Logistics
Strategic Sourcing

Alignment of

Supply chain strategy

with Company strategy

Risk/Value Matrix
HIGH
Bottleneck Strategic (Critical)

RISK
Routine Leverage

LOW
LOW VALUE HIGH
Risk/Value Matrix
Material Classification
HIGH
Bottleneck Strategic (Critical)
• Low Spend • Significant P&L impact
• No customer impact • Key customer impact
• Unique specs • Limited supply base

RISK
Routine Leverage
• Industry standard spec • High COGs
• Many producers • Does not differentiate
• Low cost to switch • Many producers

LOW
LOW VALUE HIGH
Risk/Value Matrix
Specific Actions
HIGH
Bottleneck Strategic (Critical)
• Contingency plans • Process improvement
• Develop competition • Sr. mgmt involved
• Increase Technical • Increase market knowledge
understanding
RISK
Routine Leverage
• Minimize admin cost • Active negotiation & sourcing
• Re-engineer out • Watch market changes
• Explore new methods

LOW
LOW VALUE HIGH
Risk/Value Matrix
Strategic Approaches
HIGH
Bottleneck Strategic (Critical)
• Ensure supply availability • Develop partnerships
• Develop alternates • Joint develop programs

RISK
Routine Leverage
• Simplify acquisition • Maximize buying power
process

LOW
LOW VALUE HIGH
Commodity Plans
Short term – 1 to 2 years

Focused on
• How many/which suppliers
• Total Cost
• Material Availability
• Supplier Quality
Commodity Plans
Short term – 1 to 2 years

Focused on
• How many/which suppliers
• Total Cost
• Material Availability
• Supplier Quality