1. Operations Management Course code: MGT-3603
International Islamic University Chittagong Dhaka Campus
Operations Management Course code: MGT-3603
Supply Chain Management
Submitted to
Md. Akter Kamal
Assistant professor of Management
IIUC, Dhaka Campus
Submitted by
Farhin Tabassum
Id No. B121855
Batch No. 34B1

2. Supply Chain Supply Chain:
the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service
Sometimes referred to as value chains

3. Facilities
The sequence of the supply chain begins with basic suppliers and extends all the way to the final customer
Warehouses
Factories
Processing centers
Distribution centers
Retail outlets
Offices

4. Functions and Activities
Supply chain functions and activities
Forecasting
Purchasing
Inventory management
Information management
Quality assurance
Scheduling
Production and delivery
Customer service

5. Supply Chain Management
Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies.

6. Supply Chain Structure
Information Flow
Raw Materials
RETAILER
FACTORY DC
RDC
SUPPLIER
Finished Goods

7. Key SCM Issues
The goal of SCM is to match supply to demand as effectively and efficiently as possible
Key issues:
Determining appropriate levels of outsourcing
Managing procurement
Managing suppliers
Managing customer relationships
Being able to quickly identify problems and respond to them
Managing risk

8. Trends in SCM Trends affecting supply chain design and management:
Measuring supply chain ROI
“Greening” the supply chain
Re-evaluating outsourcing
Integrating IT
Managing risks
Adopting lean principles

9. Global Supply Chains Global supply chains Complexities
Product design often uses inputs from around the world
Some manufacturing and service activities are outsourced to countries where labor and/or materials costs are lower
Products are sold globally
Complexities
Language and cultural differences
Currency fluctuations
Political instability
Increasing transportation costs and lead times
Increased need for trust amongst supply chain partners

10. Management Responsibilities
Aspects of management responsibility:
Legal
Being knowledgeable about laws and regulations of the countries where supply chains exist
Obeying laws and operating to conform to regulations
Economic
Supplying products and services to meet demand as efficiently as possible
Ethical
Conducing business in ways that are consistent with the moral standards of society

11. Management Responsibility: Strategic
Certain strategic responsibilities have a major impact on the success of both supply chain management and the business itself:
Supply chain strategy alignment
Network configuration
Information technology
Products and services
Capacity planning
Strategic partnerships
Distribution strategy
Uncertainty and risk reduction

12. Management Responsibility: Tactical and Operational
Forecasting
Sourcing
Operations Planning
Managing inventory
Transportation planning
Collaborating
Scheduling
Receiving
Transforming
Order fulfilling
Managing inventory
Shipping
Information sharing
Controlling

13. Procurement
The purchasing department is responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service.
The goal of procurement
Develop and implement purchasing plans for products and services that support operations strategies

14. Duties of purchasing Identifying sources of supply
Negotiating contracts
Maintaining a database of suppliers
Obtaining goods and services
Managing supplies

15. E-Business E-business
The use of electronic technology to facilitate business transactions
Applications include
Internet buying and selling
Order and shipment tracking
Electronic data interchange
Product and service promotion
Provide information about products and services

16. Advantages of E-Business
Companies can:
Have a global presence
Improve competitiveness and quality of service
Analyze customer interests
Collect detailed information about clients’ preferences
Shorten supply chain response times
Reduce or eliminate the role of ‘traditional’ retailers and/or intermediaries
Realize substantial cost savings
Also allows the:
Creation of virtual companies
Leveling of the playing field for small companies

17. Disadvantages of E-Commerce
Customer expectations
Order quickly  Quick delivery
Demand variability creates order fulfillment problems
Sometimes Internet demand exceeds an organization’s ability to fulfill orders
Inventory
Outsourcing order fulfillment
Loss of control
Build large warehouses
Internal holding costs

18. Supplier Management Choosing suppliers Supplier audits
Supplier certification
Supplier relationship management
Supplier partnerships
CPFR (collaborative planning, forecasting, and replenishment)
Strategic partnering

19. CPFR (collaborative planning, forecasting, and replenishment)
Focuses on information sharing among trading partners
Forecasts can be frozen and then converted into a shipping plan
Eliminates typical

20. CPFR Process Front-end agreement Joint business plan Sales forecast
Order forecast collaboration
Order generation/delivery execution

21. Inventory issues in SCM
Inventory location
Centralized inventories
Decentralized inventories
Inventory velocity
The speed at which goods move through a supply chain
The bullwhip effect
Inventory oscillations that become increasingly larger looking backward through the supply chain

22. The Bullwhip Effect
Variations in demand cause inventory fluctuations to fluctuate and get out of control
Inventory fluctuation can be magnified by
Periodic ordering
Reactions to shortages
Forecast inaccuracies
Order batching
Sales incentives and promotions
Liberal product return policies
Results in
Higher costs
Lower customer satisfaction

23. Logistics
Refers to the movement of materials and information within a facility and to incoming and outgoing shipments of goods and materials in a supply chain
Logistics
Movement within the facility
Incoming and outgoing shipments
Bar coding
EDI
Distribution
JIT Deliveries

24. Movement Within a Facility

25. Creating an Effective Supply Chain
It begins with strategic sourcing
Analyzing the procurement process to lower costs by reducing waste and non-value-added activities, increase profits, reduce risks, and improve supplier performance
There must be
Trust
Effective communication
Information velocity
Supply chain visibility
Event management capability
Performance metrics

26. Challenges Barriers to integration of organizations
Getting top management on board
Dealing with trade-offs
Small businesses
Variability and uncertainty
Long lead times

27. Trade-Offs Lot-size-inventory trade-off
Large lot sizes yield benefits in terms of quantity discounts and lower annual setup costs, but it increases the amount of safety stock (and inventory carrying costs) carried by suppliers
Inventory-transportation cost trade-off
Suppliers prefer to ship full truckloads instead of partial loads to spread shipping costs over as many units as possible. This leads to greater holding costs for customers
Cross-docking
A technique whereby goods arriving at a warehouse from a supplier are unloaded from the suppliers truck and loaded onto outbound truck, thereby avoiding warehouse storage

28. Trade-Offs Lead time-transportation costs trade-off
Suppliers like to ship in full loads, but waiting for sufficient orders and/or production to achieve a full load may increase lead time
Product variety-inventory trade-off
Greater product variety usually means smaller lot sizes and higher setup costs, as well as higher transportation and inventory management costs
Delayed differentiation
Production of standard components and subassemblies which are held until late in the process to add differentiating features

29. Trade-Offs Cost-customer service trade-off
Producing and shipping in large lots reduces costs, but increases lead time
Disintermediation
Reducing one or more steps in a supply chain by cutting out one or more intermediaries

30. Operations Strategy
Effective supply chains are necessary for organizational success
Requires integration of all aspects of the chain
Supplier relationships are a critical component of supply chain strategy
Lean operations and six sigma are being employed to improve supply chain success

31. Critical Issues Strategic importance Technology management
Cost
Quality
Agility
Customer service
Competitive advantage
Technology management
Benefits
Risks
Purchasing function
Increased outsourcing
Increased conversion to lean production
Just-in-time deliveries
Globalization