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 Determining what products and/or services customers want. Customer Forecasting Design Capacity Planning Processing Inventory Purchasing Suppliers Location Logistics 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 Develop strategic objectives and tactics Integrate internal activities Integrate activities with suppliers & customers Coordinate planning & execution across the supply chain. Forming of strategic partnerships.

Quality Cost Customer service Flexibility Velocity Evaluation of Supply Chain Quality Cost Customer service Flexibility Velocity

Barriers to Integration of Separate Organizations Challenges for Supply Chain Units Barriers to Integration of Separate Organizations Getting Top Management Onboard Dealing with Trade Offs Lot 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