SUPPLY CHAIN MANAGEMENT

PARTICIPANTS INTRODUCTION SUPPLY CHAIN MANAGEMENT

LEARNING OBJECTIVES >INTRODUCTION TO SUPPLY CHAINS >SUPPLY CHAIN MANAGEMENT >COMPONENTS OF SUPPLY CHAIN >SUPPLY CHAIN PROCESSES >SUPPLY CHAIN FLOWS >PIT FALLS IN SUPPLY CHAIN MGMT

INTRODUCTION TO SUPPLY CHAINS

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INTRODUCTION TO SUPPLY CHAINS Unilever ice cream

A TYPICAL SUPPLY CHAIN

WHY SUPPLY CHAIN MANAGEMENT CHANGES IN USER REQUIREMENTS CHANGES IN PRODUCT/ SERVICE SEASONALITY THE RIGHT PRODUCT IN RIGHT QUANTITY AT RIGHT TIME AT THE RIGHT PLACE

MANAGING SUPPLY CHAIN IS A COMPLEX PROCESS AN EFFICIENT AND RELIABLE SUPPLY CHAIN IS BUSINESS WINNER IT CONSIST OF A LOT OF INTER AND INTRA COMPANY ACTIVITIES IT’S A RELAY WHY SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN MANAGEMENT The term supply chain refers to the entire network of companies that work together to design, produce, deliver, and service products. “The integration of key business processes from end user through original suppliers that provides products, services, and information and add value for customers and other stakeholders."

COMPONENTS OF SUPPLY CHAIN Suppliers. Source of raw materials, component parts, semi- manufactured products, and other items that occur early in the supply chain - unfinished or non-consumable products. Manufacturers. Makers of products. Suppliers produce components or subassemblies, while manufacturers perform the task of final assembly or product integration. Distributors. Responsible for the storing, and handling of materials at receiving docks, warehouses, and retail outlets. Retailers. These are the manufacturer's customers - the stores that buy the actual products. Consumers. This is you - the person who actually buys the product for consumption.

COMPONENTS OF SUPPLY CHAIN Majority of the companies use these Components: Stereo manufacturing Company A A X Y Z 1 2 Part Suplier-1 Part Suplier-1 Part Suplier-1 Distributors Retailers Consumers assembled, packaged, labeled

SUPPLY CHAIN IN SERVICES Supply chains also exist for services, For example, a commercial bank has a supply chain, Inventory is represented by each bank teller's capacity, or time to serve customers. A major challenge for banks is to effectively manage this availability of its teller resources. Trucking and logistics companies. Capacity is available only for specific period of times. Are you Involved In a SC? In What capacity? Is Anyone Else Involved in the Supply Chain?

OTHER PLAYERS Logistics providers. Transporting products. Operating strategically placed warehousing or distribution operations. Sometimes, logistics providers offer multiple integrated services. Contract manufacturers. Provide subcontract manufacturing for manufacturers. Information-based service providers. Software or other information technologies providers Information-based service providers may include IT firms, which provide and manage systems for individual firms and for overall supply chains. Financial institutions. Includes banks and other financial institutions, freight payment and billing, inventory financing, and inter-firm transaction management.

SUPPLY CHAIN PROCESSES Purchasing. Activities related to the purchase of all goods and services. Order processing. Fill customers' orders, such as order receipt, order picking, and order shipment. Demand planning. Forecasts, actual sales, and current inventory levels. Inventory mgmt. Forecasting, proper positioning of stock, and the active observation of product age and availability. Warehousing. The holding of goods with an emphasis on moving product into, through, and out of warehouses in a timely manner. Transportation. Movement of products from one specific destination to another. Customer service. Includes all sales or after-sales related activities.

PURCHASING Component parts, Raw materials, Operating suppliers, Support equipment, Process equipment, Services Focus on: Total Cost of ownership Exploiting the Capabilities of Information Technology Supplier Relationships Consolidation of Suppliers

ORDER PROCESSING Customer places order Order received by manufacturer Order processed Credit checked and verified Order picked and packed Order shipped to customer Order received by customer and placed in inventory Focus on: Reduction of order Cycle Time Use of Electronic Data Interchange (EDI)

DEMAND PLANNING Forecasting Production Planning Material planning Product Supply Product Demand Number of units of a specified product to be produced Time intervals over which production will occur Availability of materials and machines to produce the number of units required within the specified time frame Main Concerns:

INVENTORY MANAGEMENT Inventory levels Customer Service Level Inventory has a cost & low customer service levels have consequences. Techniques: Just-in-Time (JIT) Vendor-Managed Inventory (VMI) Continuous Replenishment Program (CRP)

WAREHOUSING Movement Storage Information transfer

TRANSPORTATION

FLOWS

FUTURE FOCUS Departmental silos Finger pointing Conflicting Objectives Inefficient SC SC unresponsive to customer needs Create Value not just save money Use of inf. Technology in: Redefining SC structure. Designing new product Reaching new customer segments

PITFALLS OF POOR SC DESIGN –Inefficient Process Design –Inadequate or Wrong Information Flow –Inappropriate Performance Measures

PITFALL RESULTS

Develop a Supply Chain Wide Technology Strategy CENTRAL WAREHOUSE REGIONAL WAREHOUSE WORKSHOP STORES CUSTOMERS

Develop a Supply Chain Wide Technology Strategy