Supply Chain Management Presentation SCM

8/6/2019 Supply Chain Management Presentation SCM

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Presented by:

Animesh Verma074003



Brief over viewy In 1986 the council of logistics management (CLM), the

leading edge professional organization with a currentmember ship of over 13,000 defined logistics managementas:

The process of planning, implementing, and controlling theefficient, cost-effective f low and storage of goods, services, andrelated information, from point of origin to point of

consumption, for the purpose of conforming to customerrequirements.

y

Components of anI

ntegrated Logistics Systemy Physical Supply: links suppliers to operations process

y Internal Operations: manages in-process material flow

y Physical Distribution: links operations process tocustomers



Entry of the SCM

y From some of the statements it appears that SCMis logistics taken across inter organizationalboundaries

y A philosophy that describes how organizationsshould manage their supply chains to achievestrategic advantage

y

The objective is to synchronize requirements of the final customer with the flow of materials andinformation along the supply chain. The goal is toeliminate variability and reach a balance between

high customer service and low cost



Why the Confusion?y Confusion over the terms supply chain and logistics

management has grown over the last decade.

y Research would indicate that today the two terns areoften used interchangeably, while others feel strongly that there are distinct differences.

y The combination of these viewpoints has led to the

nebulous grey area where the global transportindustry, among others, often finds itself today.



SCM and LM Together Forever

y The bottom line is: terms supply chain and logisticsmanagement are inextricably intertwined.

y While different enough to be recognized as individualterms or processes, the two are so tightly interwoventhat they should not be considered separately.

y

Logistics and Supply Chain functions can and dofrequently overlap.

y So what are those different enough and thoseintertwined threads ?



Viewpoints over SCM and LM

y Logistics has a narrower focus on activities involvingproduct distribution and the strategic coordination of flows between marketing and production.

y In the case of the global transport industry this would

translate into the relationship between transportation anddistribution.

y While focus of supply chain, on the other hand,additionally encompasses

y

manufacturing,y purchasing and

y Procurement

y which by their very nature enhance the focus by includingthird party suppliers, manufacturers and retailers.



Is this sufficient??y E ven with these differences it is clear that logistics

areas often cut across supply chain functions and v ice v

ersa.y But do really V ICE V ERSA???

y To get into a more clear image of this complexinterconnection, definitions of SCM and LM might

clear the in depth interconnection.



Defining Supply Chain Management

y Complexity and structure of supply chains vary depending on the industry and the organizations size,

y In a nutshell it can be said that supply chain

management encompasses the entire process from rawmaterials to the final customer.

y Effective SCM involves oversight and management of suppliers, buyers, vendors, customers, and any others

on whom the organization depends on to deliver aproduct or service.



Still defining SCM

y As consumer expectations around service speed andquality, cost, and choice continue to rise, an organization will compete to try and meet consumer demand.

y

Successful SCM organizes the process to make this happenin a way that also keeps costs low while turning a profit.

y Competitive pressures are intense in the global transport world, and SCM has had to keep up. Technology hasevolved to expedite communications as well the f low of

information.y On board computers and GPS systems for vessels and

vehicles, and electronic transmissions for orders andshipping information are just two examples of technologiesthat have raised the competitive bar and impacted SCM.



Three Levels of SCM Decision Making

y SCM processes and technology work to ensure thesupply chain is operating efficiently at the lowest cost

with optimum customer satisfaction.

y To this end, decisions are made at three distinct levels:1. Strategic: At the strategic level, organizations focus

on high level decisions that impact the entireorganization. Decisions often revolve around

manufacturing site size and/or location, supplierpartnerships, sales markets, or the products orservices to be manufactured or delivered.



SCM level contdy Once we are through with strategy the upcoming

levels are:

2. T

actical: Tactical level decision making focuses onmeasures to generate cost benefits like adopting bestpractices, or creating a purchasing strategy withselected suppliers.

3. Operational: Decisions at this level are made on a

daily basis and impact how products/services movethrough the supply chain. Examples includeproduction schedule changes or warehouse productmovement.



Defining Logistics Management

y Logistics Management can be defined in plain speak as themovement of products from beginning to end, andencompasses the activities involved along the way.

y This includes the planning, implementing and control of the flow (both forward and backward) and storage of goods, services, and related information between the pointof origin and the point of consumption to meet customerrequirements.

y Logistics management begins with the creation of

strategies to maintain the most cost effective service levels.y As supply chains continue to change and evolve with

regards to specific product lines to impact service levels,customer and market segments, so do the logisticsstrategies.



Three Levels of LM Decision Making

y To develop a successful logistics management strategy decisions must be made on three distinct levels:

1. Strategic: Any successful strategy requires a review of how logistics management contributes to the

organizations high level SCM objectives.2. Structural: The logistics strategy should examine the

structural issues of the logistics organization, such as theoptimum number of warehouses and distributioncenters, or what products should be produced at aspecific manufacturing plant.

3. Implementation: When deciding how to implementlogistics management strategies company-wide, plans foran information system, new policy and procedureimplementations, and a change management plan mustbe considered.



SCM Vs. Logistics

yLogistics is the management of the flow of physical materials.

y In the context of marketingchannels, physical distribution and

logistics have traditionally beenused interchangeably, with theunderstanding that only finishedgoods are part of distribution andthe proper concern of a marketingchannel manager.

yThis, and many other ideas aboutchannel logistics, has changedradically since the 1980s.

yLogistics has metamorphosedinto the concept of S u ppl y C hain

Management ( S CM ), which in turnhas come to implicate every element of the Value-Added Chain.

yGoing backward, or upstream,this means channel logisticsencompasses not only inventoriesof finished goods but also work inprocess (W IP) and raw materials.

yIndeed, SCM at its fullest goesback not only to the factory floorbut also to the suppliers of the

su ppliers of the su ppliers.



Supply

Chain forMilk

Products



The Case for SCM

y If one studies the term Supply Chain Management from ahistorical perspective, it would appear SCM has become themore commonly used term, particularly with new and oldindustry associations alike including or changing their name to

include the words supply chain.y To add fuel to the fire that SCM is the brighter star to that of logistics, Ken Ackerman, a noted logistics writer, has gone as faras to question the relationship between the growing popularity of supply chain concepts and logistics. He challenged thedifferences between the two and even questioned if it was time

for the former (supply chain management) to replace the latter(logistics).y Companies increasingly rely on SCM as a key competitive

weapon. Impressive results, including dramatic reductions incycle time and accelerated cash flows, have been noted as aresult of effective supply chain management.



The Case for Logistics

y Many global transport organization activities resideunder the logistics management umbrella, including

warehousing, inventory management, private (i.e., in-house truck fleets) and purchased transportation suchas air, water, highway or rail.

y Logistics Management is an increasingly important

part of competitive positioning from the perspective of the global transport industry. To stay competitive,exporters must make the right amount of product andservices available in the right place at the right time.



What we require LM or SCM???y Organizations Require Both Logistics and SCM to

Succeed

y

Logistics management is concerned with themovement of goods and services from suppler toconsumer. SCM shares this concern, but additionally is responsible for the flow of information and fundsfrom supplier to consumer.

y Perhaps this is why many in the industry believe thatas long as there is a matrix-type relationship betweenthe two, it should be up to the individual organizationto decide what emphasis works best to meet its needs.



19

Logistics andSupply ChainManagement

The Importance of Logistics in Channels

In v entory Management in

Marketing

Channels

In v entory HoldingCosts

ReducingIn v entory

Pseudo In v entory Reduction

Real In v entory Reduction

Fulfilment andTransportation

Documentation

Critical Supply Chain Elements

Supply ChainManagement

Efficient ConsumerResponse

Changes inMerchandising

Category Management

Physical Efficiency v ersus Market

Responsi v eness



The Verdicty The verdict is clear.

y Given common concerns between the two, as well as

the clear overlaps seen time and time again as logisticsand SCM cross paths, it should be expected that SCMand logistics will both remain intrinsically intertwinedand essential to organization success.

y

So, analyse your need and problem and give preferenceto two

y But still for final success use BOTH!



Q uestions???

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Supply Chain Management Presentation SCM