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UNDERSTANDING SUPPLY CHAIN MANAGEMENT

Prof. Vivek Kumar

PARADIGM SHIFT
Traditional Business Practices Functional View Internal Focus Local Optimisation Vertical integration Business units as competitors Emerging Business Practices System View Customer Focus System optimisation Lateral integration Supply Chains as competitors

IMPERATIVES OF BUILDING SUPPLY CHAINS


Hyper Competition-consider each element Specialisation-core competence focus Globalisation-opportunity and threat Pace of change of technology Time compression; reduced cycle time Cost reduction; only route to survival Customer expectations Flawless performance

WHAT IS SUPPLY CHAIN?


A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and supplier, but also transporters, warehouses, retailers and customers themselves. Within each organisation, such as a manufacturer, the supply chain includes all functions involved in filling a customer request. These functions include, but are not limited to, new product development, marketing, operations, distribution, finance and customer service. Sunil Chopra and Peter Meindl

SUPPLY CHAIN MANAGEMENT


END TO END MANAGEMENT OF PRODUCTS AND SERVICES, FROM THE ORIGINATION OF RAW MATERIAL AT THE SUPPLIERS SUPPLIER, THROUGH THE FUNCTIONAL AREAS AND PROCESSES OF YOUR ORGANIZATION, TO THE END USER OF THE PRODUCT OR SERVICE- THE CUSTOMERS CUSTOMER. WORLD CLASS SUPPLY CHAIN ALIGNS SUPPLY CHAIN OPERATIONS WITH AN ORGANIZATION'S BUSINESS OBJECTIVE Supply Chain Council- Pittsburgh- USA

What is Supply-Chain Management? Defined


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.

SUPPLY CHAIN MANAGEMENT


Supply Chain Management the methods, systems and leadership that continuously improve an organizations integrated processes for product and service design, purchasing, inventory management, logistics, distribution and customer satisfaction

DEFINITION OF A SUPPLY CHAIN MANAGEMENT


SUPPLY CHAIN MANAGEMENT IS THE INTEGRATED PROCESS OF PLANNING, SOURCING, MAKING AND DELIVERING PRODUCT, FROM RAW MATERIAL TO END CUSTOMER

WHAT IS SUPPLY CHAIN MANAGEMENT?


Trading partners working together to grow business and eliminate non-value added activities from both intra and inter companies across the entire material and information flow process from the suppliers supplier to the buyers buyer to enhance consumer value and create shared benefits.

SUPPLY CHAIN MANAGEMENT KEY CONCEPTS Systems concept - the notion that materials-flow activities are so complex that they can be considered only in the context of their interaction.

SUPPLY CHAIN MANAGEMENT KEY CONCEPTS

Total-cost concept - identifies and links expenditures in order to evaluate and optimize logistical activities.

SUPPLY CHAIN MANAGEMENT KEY CONCEPTS

Trade-off concept - recognises interactions within the decision system.

ACHIEVING STRATEGIC FIT BETWEEN BUSINESS STRATEGY AND SUPPLY CHAIN STRATEGY

SUPPLY CHAIN PRINCIPAL FLOWS


Flow of Material
Flow of Information Flow of Funds

SUPPLY CHAIN DRIVERS


Facilities Transportation Inventory Information Sourcing Pricing

SUPPLY CHAIN PRACTICES


Core Competence Focus Outsourcing Partnerships Collaboration-CPFR Total Asset Visibility-TAV Velocity Management-VM Vendor Managed Inventories-VMI Prime Vendor Concept

SUPPLY CHAIN PERFORMANCE EVALUATION SCOR Time Cost Mapping

FEATURES OF WORLD CLASS SUPPLY CHAINS


AGILITY RESPONSIVENESS

LEANNESS

AGILITY
THE POWER OF MOVING QUICKLY AND EASILY NIMBLENESS

AGILITY IN SUPPLY CHAINS


THE ABILITY TO ADAPT CAPACITIES AND PROCESSES QUICKLY AND PRECISELY TO IMPROVED COST STRUCTURE AGILITY MEANS USING MARKET KNOWLEDGE AND A VIRTUAL CORPORATION TO EXPLOIT PROFITABLE OPPORTUNITIES IN A VOLATILE MARKET

INTELLECTUAL SHARPNESS

RESPONSIVENESS

REACTING READILY TO INFLUENCES SENSITIVE TO INFLUENCES

RESPONSIVENESS OF SUPPLY CHAINS


THE ABILITY TO REACT QUICKLY TO SATISFY UNANTICIPATED SITUATIONS AND DEMANDS

LEANNESS

HAVING LITTLE OR NO FAT

LEANNESS IN SUPPLY CHAINS

LEANNESS MEANS DEVELOPING VALUE STREAM TO ELIMINATE WASTE, INCLUDING TIME AND TO ENSURE A LEVEL SCHEDULE