1 Copyright © 2004, Manugistics, Inc. All rights reserved. Objectives At the end of this section you will be able to:  Understand the key pains and challenges in SCM  Understand the segmentation of SCM  Be able to start talking SCM

2 Copyright © 2004, Manugistics, Inc. All rights reserved. Supply Chain Management  Objective: The act of optimizing all activities throughout the supply chain, so that products and services are supplied in the right quantity, to the right location, at the right time, and at the optimal cost.  Definition: The supply chain includes all activities and processes to supply a product or service to the final customer. Often, the supply chain includes more than one company in a series of supplier–customer relationships. Supply chains usually include four functional components: (1) demand planning, (2) manufacturing planning and scheduling, (3) supply planning, and (4) transportation planning. BuyMakeMovestore Purchase materials and component, or finished goods Manufacturing or value-added process Transporting products between internal facilities or direct to customer Optimally determine where inventory should be placed Sell Sell at the optimal price to the customer

3 Copyright © 2004, Manugistics, Inc. All rights reserved. SCM Solution Segmentation Supply Chain Management Order Fulfillment Master Planning (Includes Inventory and Replenishment Planning) CPFR/VMI Network Design & Optimization Sales & Operations Planning Production Scheduling Warehouse Management Supply Chain Execution

4 Copyright © 2004, Manugistics, Inc. All rights reserved. Helps structure and optimize manufacturing, supply, and transportation networks through a total cost and service evaluation approach. Network Design & Optimization Location, network, and vendor analysis S&OP support, What If analysis, and capital budgeting Plant/DC rationalization; M&A rationalization of assets Multi-location, multi-constraint Master Plan for the flow of products through the supply chain to best meet customer demands in alignment with business goals; includes inventory and replenishment planning Master Planning Feasible plan recognizing simultaneous constraints (capacity, materials, handling, storage); sourcing, pre-build, product mix, and manufacturing optimization Support for hybrid environments: MTO/MTS; Process/Discrete Support for both family level and detailed SKU level planning; simulation; easy manual manipulation of plans; order pegging; S&OP support Detailed 4-walls production schedule by sequence and resource by modeling appropriate constraints and based on business objectives (e.g. ROTA, service levels, etc.) Production Scheduling Detailed resource assignments that in turn feed ERP and MES systems Detailed production sequence for optimizing bottleneck resources; synchronized flow manufacturing Ability to “repair” the schedule based on shop floor actuals or new orders; easy manual manipulation of schedule SCM Solution Segmentation Monthly process that integrates all the plans for the business (customer, sales, mktg, prod, finance) to best match supply with demand in support of overall business goals Sales & Operations Planning Getting buy-in across all the organizations Integration of people, processes, and technology Meetings tend to be unproductive and do not meet company business objectives

5 Copyright © 2004, Manugistics, Inc. All rights reserved. SCM Solution Segmentation Buy and sell-side distributed order management and procurement between buying and selling organizations; order promising and allocation Order Fulfillment Order Tracking and Order Promising, hierarchical allocation of constrained demand by customer, account manager, sales channel, etc. Order workflow and alerts including approvals process and notification of discrepancies to order dates and/or quantities outside of defined threshold Full order life cycle management and collaboration from RFQ to requisition to purchase order to delivery order and ASN Statistical forecasting and replenishment planning with real-time collaboration and event management enabling better visibility, stream-lined plans, and strengthened relationships CPFR/Vendor Managed Inventory Remove barriers of trust with regard to information sharing on demand, inventory, and market plans Heavy emphasis on collaborative promotional planning, associated lift, and ability of supply chain to support the promotion Exception driven process flagging disconnects between partners based upon agreed upon business rules and thresholds through automated alerts An solution platform enabling collaboration, visibility, and the flow of execution data between supply chain trading partners and internal constituents Supply Chain Execution Monitoring and alerting - notify key constituents/partners when issues or disconnects occur Visibility - global view of orders and information throughout trading network Business process management and workflow for resolution of issues Manages inbound and outbound warehouse transactions including warehouse location management, pick list generation and staging Warehouse Management Pick list and order staging Inventory accuracy, reconciled with inventory management system Pallet and truck load configuration

6 Copyright © 2004, Manugistics, Inc. All rights reserved. Supplier / Exporter Internal Factory Supplier Internal Factory Contract Manufacturer DC / Customers Suppliers Plants Warehouses / DC’s & Customers Transportation Considerations Tariff / Tax Considerations Transportation Considerations Tariff / Tax Considerations BEFORE Network Design & Optimization Supplier / Exporter Internal Factory Supplier Internal Factory Contract Manufacturer DC / Customers Mode Change Carrier Changes Tariff / Tax Considerations Transportation Considerations Tariff / Tax Considerations AFTER Network Design & Optimization DC / Customers NEW Network Design & Optimization What it Does