SUPPLY

CHAIN
MANAGEM
ENT
(SCM)
by-Vishnu K Agrahari
•MEANING OF SCM
•EVOLUTION OF SCM
•SUPPLY CHAIN v/s Logistics
•NEED FOR SCM
•HOW TO DEVELOP A GOOD
SCM
MEANING OF SCM
•A Supply Chain is a network of
• retailers,
•distributors,
•transporters,
•storage facilitators,
•suppliers
that participate in the production,
delivery, and sale of a product to
the consumer.
•The Supply Chain is typically
made up of multiple companies
who coordinate activities to set
themselves apart from the
competition.
A supply chain has three key parts:
1.SUPPLY---focuses on the raw materials
supplied to manufacturing, including how,
when, and from what location.
2.MANUFACTURING ---focuses on
converting these raw materials into finished
products.
3.DISTRIBUTION ---focuses on ensuring
these products reach the consumers through an
organized network of distributors, warehouses,
and retailers.
SUPPLIER

PURCHASING PRODUCTION DISTRIBUTION

FLOW OF INFORMATION & GOODS

CUSTOMER
Supply Chain Management
encompasses the planning and
management of all activities
involved in sourcing, procurement,
conversion, distribution, and all
logistics activities.
In essence, Supply Chain
management integrates supply and
demand management within and
across companies.
EVOLUTION OF
SUPPLY CHAIN
MANAGEMENT
 EVOLUTION
•exist since the early 1900s.
•first associated with the military
as a branch of war for movement and the
supply for armies.
•Military used Logistics models to ensure
the availability of the required material at
the right place and on right time.
•Logistics used by the military even
today.
 EVOLUTION contd…
•Got a boost after 1950 with
the production and
manufacturing sector getting
highest attention.
•Present in most
Sophisticated form today.
OBJECTIVE OF
SUPPLY
CHAIN
MANAGEMENT
•SCM act as powerful engines of
business,
• right product to the right place at
the right time and at the right price,
•Helps in reducing organizations
costs
•enhancing customer service.
In theory, a supply chain
seeks to match demand
with supply and do so with
the minimal inventory.
•liaising with suppliers to eliminate
bottlenecks
•sourcing strategically to strike a balance
between lowest material cost and
transportation
•implementing JIT (Just In Time)
techniques to optimize manufacturing
flow
•maintaining the right mix &location of
factories and warehouses to serve custmr
The primary objective of
supply chain management is
to fulfill customer demands
through the most efficient use
of resources, including
distribution capacity,
inventory and labour.
Incorporating SCM successfully
leads to a new kind of competition
on the global market
where competition is no longer of
the company versus company
form but rather takes on a supply
chain versus supply chain form.
An unusual food Supply Chain
operated by Dabbawalas in Mumbai is
noted for being extremely reliable
without using any computers or
modern technology. It has been
verified to be a six sigma supply chain.
SUPPLY CHAIN v/s LOGISTICS
 Supply Chain v/s Logistics.
Supply Chain encompasses
manufacturing and procurement and
therefore has a much broader focus as it
involves multiple enterprises, including
suppliers, manufacturers and retailers,
Logistics applies to activities within one
company/organization involving
distribution of product
HOW TO DEVELOP A GOOD
SUPPLY CHAIN
1.GOOD SUPPLY CHAIN
PARTNERS:
•The supply chain management system is based on the
idea of less control and more supply chain partners
•Supply Chain Management is supposed to build up
trust and collaboration between these supply chain
partners.
•This trust and collaboration improves the amount of
inventory that is produced and the amount of time it
takes to produce inventory.
2.CONSTANT FOLLOW UP:
•One has to make sure that the work is
being done correctly and constantly,
•follow up and make sure that the
quantity and location of inventory
including raw materials, finished goods,
and products that are in the process of
being made.
• no problems exists with direct
shipments and transportation
3.rationalize BUSINESS from an
internal point of view:
Right now is that a lot of businesses are
rationalizing their business because they
are more concerned in looking at it from
an internal point of view.
In order to implement supply chain
management, one need to approach you
things from the viewpoint of the
customer.
4.covering all of the strategic, tactical
and operational aspects -
One should be involved in the product
design coordination, building an information
technology infrastructure to support supply
chain operations, align organizational
strategy with supply strategy and also be
involved with building a strategic
partnership with suppliers
At the same time one also need to be
involved in making purchasing decisions
(such as sourcing contracts) and also
benchmarking operations against those
that are made by your competitors.
It is the daily and constant application of
Supply Chain Management duties that will
make sure that the system is continuously
working and being implemented correctly