SCM Optimization By Leveraging Technology Aroon Mehta for IIMM-Pune

Agenda. SCM Concepts SCM Road Map SCM Technology SCM innovations SCM Illustrations SCM Open session

SCM-> ALL ABOUT LEVERAGE. Consider how to turn an aircraft. Aircrafts are steered through the use of a system of ailerons on the wings and the rudder at the tail of the aircraft. In comparison to the aircraft, the ailerons and the rudder are very small; however, leverage allows them to turn the large aircraft. In other words, putting the right combination of a little leverage on the right places allows incredible PERFORMANCE SCM’S FOUNDATION IS ON THIS SIMPLE BASE.

Products, Communications, Support , Partnering Integrating SCM’S Foundation Layer To Deliver & Optimize your company’s Services, Products, Communications, Support , Partnering Integrating .

RECAP . 4 C SCM Formula. C Customer C Competition C Cost C Connect

Highly Customer Centric . What is a Supply Chain ? Supply chains are linkages of partially discrete, yet interdependent entities-processes that collectively transform raw materials into finished products. Supply chains connect the functions of inbound activities (such as purchasing) with outbound activities (such as logistics and “place” activities). Highly Customer Centric

Highly Customer Centric Formal Definition- SCM A supply chain is a “network of facilities and activities that performs the functions of product development, procurement of material from suppliers, the movement of materials between facilities, the manufacturing of Products , the distribution of finished goods to customers, and after-market support for sustainment ” Highly Customer Centric

. SCM- KEY UNTILITIES/DP’S PLACE TIME DELIVERY

SCM’S GOALS Reduce cost Improve ROA Enhance visibility Build actionable competencies. Backend Iintegration MICRO & MACRO Transperancy Simplify the supply chain Source: Global Supply Chain Associates (GSCA) 1999

A typical Supply Chain Driven Organization A supply chain organization is a relatively enduring interfirm cooperative that uses resources from all participants to accomplish shared and independent goals of its members.

The term value chain means that at each stage of the WHY VALUE CHAIN IN SCM. The term value chain means that at each stage of the ORDER-TO-DELIVERY SYSTEM, value is added to the product or service, for customer centric norms.

SCM NW Theory Actor Bonds Resource Ties Activity Links

Competitive Advantage Firm Strategy, Structure, and Rivalry . Factor Endowments Demand Conditions Related and Supporting Industries Source: Porter 1990

Primary SCM KRA’s Primary activities are the SIX basic functions needed to physically produce a product or service, deliver and market it to buyers, and support it after the sale. Inbound logistics Outbound logistics Support function. Technology leverage. Monitoring infrastructure QOHR.

Support Function Support Activities provide inputs or infrastructure in support of primary activities. These supporting activities stretch Across the entire value chain of SCM impact each primary activity. MOST IGNORED AREA IN SCM. Leveraging IT For total value chain- a MUST

STARTUP DRIVER Challenge the Legacy & STATUS QUO as an Organization . CONCEPT # 1. STARTUP DRIVER Challenge the Legacy & STATUS QUO as an Organization not as an Individual

Creation of a virtual Organization with, . CONCEPT # 2. Creation of a virtual Organization with, Vendors, Customers, Employees as a partnering entities in a truly transparent Mode, at all levels of operations, both in Strategy & Implementation.

Transparent workflow cycle. Database driven. Escalation triggers . CONCEPT # 3 Transparent workflow cycle. Database driven. Escalation triggers Tracking metrics Redundancy removal. Lean SCM/SCP

State of the Art Technology & it’s fullest implementation. . CONCEPT # 04 SCM dependency is heavy on Real Time integrated backend systems and organization’s transperency & Requires State of the Art Technology & it’s fullest implementation.

Competencies Needed for Efficient SCM Positioning The selection of strategic and structural approaches to guide global operations Integration The establishment of what to do and how to do it creatively Agility The achievement and retention of global competitiveness and global customer success QOHR A MUST. Before SCM INITIATIVE. Measurement The internal and external monitoring of global operations Source: Michigan State University (1995)

SCM‘S IMPACT DRIVERS Cut Cost Drivers Reduce Downtime Compliance no compromise People restructuring MENTORING & MONITORING Spares/Logistics thru system’s Communication SCM revamp & IT (Real time)

Leveraging IT SCM’S Technology Map

Leveraging IT IT-BACKBONE Enterprise Portal CRM SCM ERP WITH 100 % SPREAD B2B RFID BAR CODING Leveraging IT

Re Strategizing/Reinovating TECH PATH Re Strategizing/Reinovating People Technology Processes CHALLENGES Enterprise Portal B2B ERP eCOM SCM BASIC--- INNOVATION MODEL

KEY Excellence/Innovation in SCM THE REAL/LIVE SCM@INDIA. KEY Excellence/Innovation in SCM ITC e-choupal GE-SCM MODEL TVS Logistics SAP OSS LG IIMs Program’s thru DTH satellites

SCM CHALLENGES SCM targets thru innovation Reaching to customers Innovating to exceed customer expectations Adding layer of operating convenience Affordable COST Enhancing product/services value Has a Mass level effect Models involving customers/vendors/Partners employees - WIN WIN FOR ALL STAKE HOLDERS

SCM- faq’s Manufacturing Strategy: How many plants do I need? Where should each plant be located? What products should each make? What process technologies should each have and how much of each process is needed? What part of the world should each plant serve? Source: Global Supply Chain Associates (GSCA) 1999

Scm-FAQ’S Supply Base Design / Vendor Consolidation: Outsourcing: How do I simultaneously perform supplier selection for all the parts in the same commodity group? How many suppliers is best and which suppliers should send which parts to which plants? Am I missing opportunities by sourcing one part at a time? Outsourcing: What parts of my supply chain should I keep "in-house" and what parts to outsource? What if a third party has a higher variable cost but a lower fixed cost than in-house production?

Supply Chain Structure Before Reorganization Source: Global Supply Chain Associates (GSCA) 1999

Supply Chain Structure After Reorganization Source: Global Supply Chain Associates (GSCA) 1999

All SCM’s across all industries/verticals THE REAL/LIVE SCM@INDIA. All SCM’s across all industries/verticals Start with Customers & End with Customers.

TAKE PRIDE AS AN INDIAN The BEST INDIAN SCM IN TRUE ACTION WITH NO TECHNOLOGY IS TOTALLY INTENT & DELIVERY CENTRIC

‘ Customer Ahead of Everything Else ‘. SCM AT IT’S BEST : THE DABBAWALA TIFFINS Inspiring SCM BY OUR OWN DABBAWALA @ MUMBAI. ‘ Customer Ahead of Everything Else ‘. NO TECHNOLOGY ... NO AUTOMATION... NO RFID.. NO BARCODE. JUST PURE UNDILUTED INTENT WITH COMMITTMENT.

Reccomendation “Intent will drive technology & SCM Innovation & technology will never drive the Intent at any cost. Hence build innovative intent to drive SCM at large “. Best Wishes Aroon Mehta. Head- IT Serum Institute of India Pune.

IIMM Executive Committee Thanks to the IIMM Executive Committee Wishing all the IIM members the very best to attempt with a + intent , all your Innovative Initiative in SCM Aroon Mehta aroonmehta2@gmail.com