1. 278. O you who believe! Be afraid of Allâh and give up what remains (due to you) from Ribâ (usury) (from now onward), if you are (really) believers And if you do not do it, then take a notice of war from Allâh and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums) And if the debtor is in a hard time (has no money), then grant him time till it is easy for him to repay, but if you remit it by way of charity, hat is better for you if you did but know.

2. Supply Chain Strategies

3. Supply-Chain Strategies
Supply-Chain Management Defined
Understanding Your Industry Model
Business Alignment
Defining Supply Chain Excellence
SCM Ground Rules
A Multi-Disciplinary Approach
Operations, Finance, IT & eOPS

4. What is Supply-Chain Management?
Supply-chain is a term that describes how organizations (suppliers, manufacturers, distributors, and customers) are linked together.
Supply-chain management is a total system approach to managing the entire flow of information, materials, and services from raw-material suppliers through factories and warehouses to the end customer.

5. Supply Chain Management Evolution
Historical operational stages:
From disconnected.
Exclusively focus on growth/cost.
Separately managed functions.
Internal performance measurements.
To integrated.
End-to-end process approach.
Customer focus, profitable growth, liquidity, functional integration.

6. OEM 1 OEM 2 T3 T3 T2 T3 T2 T1 T3 T2 T1 T3 T2 T1 T3 T2 T3
Consumer T3
Consumer
Web Site T3 T2
OEM 1
Consumer
Warehouse T3
Retailer T2 T1
Consumer T3 T2 T1
Consumer
Retailer
Consumer T3 T2 T1
OEM 2
Distributor/Retailer
Consumer
Tier 1 supplier
Consumer T3 T2
Distributor
Retailer
Tier2 and 3 Suppliers T3
Consumer
Direct Sales Force
Supply Chain of a Typical Original Equipment Manufacturer

7. Overall Strategy A Supply Chain is fully optimized when:
Bundles of well-priced products/services create unassailable levels of customer attachment (acquisition and retention).
Total supply chain costs are at the lowest level.
The supply chain contributes to profitable sales growth by creating cost/service advantages.
Worldwide effective tax rates are at the lowest level.
Capital efficiency is at the lowest level.
The supply chain is made flexible to respond to changes faster than competitors and to stratify service levels by product, customer, and geography.

8. Supply Chain Issues
The main purpose of the levels in any supply chain is to add processes to the product/service.
Another purpose is to absorb the differences between the stable supply on the upstream side and the erratic demand on the downstream(consumer) side.
The synchronization of the supply chain will optimize efficiency along the chain.

9. Matching Supply-Chains with Products
Functional
Products
Innovative
Products
Efficient
Supply-Chain
Match
Mismatch
Responsive
Supply-Chain
Mismatch
Match

10. Supply Chain Excellence
New corporate state of being:
Supply chain excellence requires effective strategies, sustained management commitment, and changes in attitude, culture, and organization. More importantly, it requires superior execution.

11. Principles For Supply Chain Excellence
Formulate a differentiated supply chain strategy by channel.
For product categories, product channels, and target customers, develop an operating strategy that, when executed, makes your supply chain different from the rest.
Focus on long- and short-term profitability, liquidity, and growth.

12. Principles For Supply Chain Excellence
Organize your business unit around major processes or channels, not functions. Traditional “silos” separates work and interrupts flows which leads to inefficiency.
Work collaboratively with customers, suppliers, partners, and third parties to change the way operations perform, viewed, and measured. Extended supply chain.

13. Principles For Supply Chain Excellence
Invest/reinvest in supply chain information technology to manage flows end-to-end. IT should support both planning, analysis, and execution.
Invest/reinvest in supply chain knowledge, people, skills, and learning. Supply chain practice is relatively new. Change is a constant, with innovations and problems always occurring. Organizations must invest in ongoing training, mentoring, education, and feedback systems.

14. Principles For Supply Chain Excellence
Operate/manage by product/channel. Think in terms of product/service bundles that are sold through potentially different channels. Supply chains should be set up and driven by the characteristics of each channel.
Outsource parts of the chain for flexibility and better asset management. In many cases, functions can be performed better by third parties.

15. Principles For Supply Chain Excellence
Think globally…build regionally…operate locally. The best performing supply chains are managed with centralized planning, regional approaches, and local operations.
The most critical principle: Execution!!! Focus on it, measure it daily or real time, and give people the authority and accountability to excel at it.

16. Supply Chain Management Approach
Three items that flow through the supply chain:
Information
Money
Materials
Three areas of decision-making:
Processes
Logistics
Two types of tools:
Information Technology
Operational Analysis

17. 12 SCM Ground Rules 1. Build in flexibility.
Supply chain capacity(push things off your books).
Move fixed to variable costs.
More flexible production methods.
Improved information flows.
Use subcontractors, co-packing, outsourcing.
Operations capability.
Management’s will to change.

18. 12 SCM Ground Rules - continued
2. Plan and measure accurately.
Total cost approach – true margins, profitability by customer segment.
Enterprise-wide planning – demand-driven and supply-aware; reduce cycle times; respond quickly(for high material cost industries).
Dashboard concept – 5 to 7 metrics in operational cost, time and response, margins, customer service.
Benchmark 1st internally, then expand

19. 12 SCM Ground Rules - continued
3. Develop logistically separate operations /supply chains where appropriate.
Entities: suppliers, manufacturers, distributors, freight forwarders, contract carriers, 3rd-party warehousing, 3rd-party logistics partners, 3rd-party maintenance, financing companies, import/export/customs brokers.
Fulfillment channels: direct-home, direct-business, retailers, value-added resellers, mass merchandisers, OEMs, service centers, integrators.
Order conduits that impact process: fax, Internet, phone, sales force, POS orders, EDI, .

20. 12 SCM Ground Rules - continued
4. Get lean by emphasizing simplicity and speed. Value Stream Map Current & Future States
Reduce uniqueness (parts, designs, suppliers, processes) and variety(transportation resources, parts suppliers).
Reduce cycle times and maximize inventory velocity. Key: information.
Understand where value is captured and eliminate non-value

21. 12 SCM Ground Rules - continued
5. Optimize Information.
Focus on Time to Benefit and Decision Support. ERP? Multiple smaller systems?
Take ownership of Customer Information. Most untapped: not articulated needs.
Replace assets with Information. E.g. inventory are moved several times before reaching final destination. Replace physical movement with digital movement of customer and product information.

22. 12 SCM Ground Rules - continued
6. Treat customers unequally: Segment and Stratify. No unnecessary excellence.
7. Operate Globally.
Economic, time, tax differences.
8. Practice Virtuality (partnering) and Collaborative Manufacturing/Management.
Virtuality – attempt to gain scale.
Requires more management, not less.

23. 12 SCM Ground Rules - continued
9. Exploit Electronic Commerce.
Collapsing supply chain levels. E.g. distribution channel.
New channel: many-to-many. Supply Web – key customers can have communities of suppliers; collaboratively plan, forecast, replenish on a real-time(or near real-time) basis.
Valued-based differentiation – add value along product, information, process. master channel managers.

24. 12 SCM Ground Rules - continued
10. Leverage People.
11. Operationalize New Product Introductions and Phaseouts.
12. Mass Customize and Postpone.
Commodities vs. highly customizable products.
Downstream flexibility.
E.g. HP printers. Automobile. Amazon.

25. Performance Measurement: Operational
1. Throughput
the rate at which money is generated by the system through sales: O2C
2. Inventory
all the money that the system has invested in purchasing things it intends to sell
3. Operating Expenses
all the money that the system spends to turn inventory into throughput 6