SUPPLY CHAIN MANAGEMENT

Introduction – Supply Chain

A sequence of organizations – their facilities, functions, and activities – that are involved in producing and delivering a product of service.

A value chain is another name for a supply chain.

Introduction – Supply Chain Management

Supply Chain Management is primarily concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed in the right quantities, to the right locations and at the right time, and so as to minimize total system cost subject to satisfying customer service requirements.

Its the strategic coordination of the supply chain for the purpose of integrating supply and demand management.

Need For Supply Chain Management

Improve operations

Increasing levels of outsourcing

Increasing transportation costs

Competitive pressures

Increasing globalization

Increasing importance of e-commerce

Complexity of supply chains

Manage inventories

Benefits Of Effective Supply Chain Management

SCM provides strategies and methods for integrating separate organizations.

Lower inventories.

Lower cost.

Higher productivity.

Greater agility.

Shorter lead times.

Higher profits .

Greater customer loyalty.

Elements of Supply Chain Management

Customer

Forecasting

Design

Capacity Planning

Processing

Inventory

Purchasing

Suppliers

Location

Logistics

• Determining what products and/or services customers want.

• Predicting the quantity and timing of customer demand.

• Incorporating customers, wants, manufacturability and time to market • Matching supply and

demand.

• Controlling quality, scheduling work.

• Meeting demand requirements while managing the costs of holding inventory.

• Evaluating suppliers & making timely purchases for production

• Managing supply and supplier relations

• Determining the best location for the facility

• Deciding the best way to move information & materials

Logistics

The part of supply chain involved with the forward and reverse flow of goods, services, cash, and information.

The movement of materials, services, cash and information in a supply chain.

Logistic Types

Logistics types Movement within the faculty Incoming and Outgoing shipments

Traffic management Distribution requirements planning (DRP) 3-PL (Third party logistics) Reverse logistics

Gate keeping Avoidance

Steps In Creating Effective Supply Chain

Integrate internal activities

Integrate activities with suppliers & customers

Forming of strategic partnerships.

Evaluation of Supply Chain

Quality Cost Customer service Flexibility Velocity

Challenges for Supply Chain Units

Barriers to Integration of Separate Organizations

Getting Top Management Onboard

Dealing with Trade OffsLot size-Inventory trade Off.

Inventory- transportation cost trade-Off.

Lead time-transportation cost trade-off.

Cost-customer service trade-off

Variability and Uncertainty

Response Time

Purchasing

Responsibility •Responsible for obtaining the materials, parts, supplies and services needed to produce a product or provide a service.

Importance •Cost of Goods purchased•Quality of goods & Services•Timing of deliveries of goods & services.

Goal •Develop and implement purchasing plans for products & services that support operations strategies.

Duties •Identifying sources supply•Negotiating contracts.•Maintaining database of suppliers

Purchasing Interface

Purchasing

Operations

Legal

Accounting

Data Processing

Design

Receiving

Suppliers

Purchasing Cycle

Requisition

received

Supplier selected

Order is placed

Monitor orders

Receive orders

Supplier Management

Choosing Suppliers

Suppliers Audit

Supplier Certification

Supplier Partnerships

Supplier Relationships