Module 1

Introduction and Strategic View

INTRO TO SCM

GROUP 1~ AGUS WIYONO

~ EVI JUNIATI

~ ZULKIFLI

~ AKHMAD MUWAFIQUR RAKHMAN

~ BUDI MARIONO

~ IBNU KHOIRUL

DISUSUN OLEH EVI JUNIATI

Chapter 1

Role of Supply Chain Management

Content…..

• What is supply chain management?• Key concepts in SCM• The importance of the supply chain• Enablers of supply chain performance• Supply chain performance in India

What is supply chain management?Suppliers Manufacturers Warehouses &

Distribution CentersCustomers

Material Costs

TransportationCosts

TransportationCosts

TransportationCostsInventory CostsManufacturing Costs

• The supply chain encompasses all activities involved in the transformation of goods from the raw material stage to the final stage, when the goods and services reach the end customer

• SCM involves planning, design and control of flow of material, information and finance along the supply chain to deliver superior value to end customer in an effective and efficient manner

Evolution of SCM

• The first revolution(1910-1920) Supply chain

• The second revolution (1960-1970) Supply chain

• The third revolution (1995-2000) Supply chain

• First Revolution: (Ford Motor Co. 1910–1920)Single product, that is, no product varietyVertical integration

• Second Revolution: (Toyota Motor Co. 1960–1970)Wide VarietyLong-term relationship with suppliers (Keiretsu)

• Third Revolution: (Dell Computers 1995–Current)Customized productsMedium-term relationship with suppliersSuppliers have to maintain technology and cost

leadership

Decisions in a supply Chain

• Design decision• Operation decision

Key Concepts

• Concept of focal firm– The firm that provides identity to the products in

terms of brand has higher stakes in the chain, and such a firm is identified as the main entity. This main entity is known as focal firm or central node.

• Reverse Supply Chain– New product return– End-life product return

Importance of supply chain

• Proliferation in product lines• Shorter product life cycles• Higher level of outsourcing• Shift in power structure in the chain• Globalization of manufacturing

Enablers of supply chain performance

• Improvement in communication and IT• Entry of third party logistics provider

(3PL)• Enhanced inter-firm coordination

capabilities

Challenges in maintaining a supply chain in India

• Taxation structure drives location decisions

• Poor state of logistics infrastructure

The Supply Chain – Another View

planplan sumbersumber Make Make Deliver Deliver Buy Buy

Suppliers Manufacturers Warehouses &Distribution Centers

Customers

Material Costs

TransportationCosts

TransportationCosts Transportation

CostsInventory CostsManufacturing Costs

Supply Chain Management – Key Issues

• Overcoming functional silos with conflicting goals

PurchasingManufacturingDistributionCustomer Service/Sales

Few change- overs

Stable schedules

Long run lengths

High inventories

High service levels

Regional stocks

SOURCE MAKE DELIVER SELL

Low pur-chase price

Multiple vendors

Low invent-ories

Low trans-portation