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Supply chain is the system by which organizations source, make and deliver their products or services according to market demand
Travel times Breakdowns of machines and vehicles Weather, natural catastrophe, war Local politics, labor conditions, border issues
Supply chain objectives may differ from situation to situation. For functional products, cost efficiency is the critical factor. For innovative products, responsiveness is the important factor. Leanness + Agility together make up Leagility
Selecting a Supplier
In selecting a supplier, a number of factors must be analyzed:
Forecasting demand
Demand planning and sales forecasting is critical function for Manufacturers, distributors, retailers, & other supply chain members Effective demand planning and sales forecasting across the supply chain can bring a host of benefits in SCM It can help improve labor productivity, reduce the head count, cut inventories, speed up product flow and increase revenues and profits Forecasts can be long term , short term or aggregate Forecasts methods vary depending on type of Industry vertical Accurate forecasts is essential for FMCG type of Industry, while for other types like made to order heavy Engg Industry this is planned with simple techniques
goods:
raw materials production parts maintenance, repair and operating supplies (MRO)
services:
consulting services utilities workers health care benefits
Number of units of a specific product to be produced Time intervals over which production will occur Availability of equipment, materials and work force Cost effective inventory and resource management.
Material Handling
Moving of goods between incoming transport, storage, processes and outgoing transport The set of activities that move production inputs and other goods within plants, warehouses and transportation terminals. The task for the materials handling manager is to find the methods, the routes, the layouts and the right components to minimize handling.
Inventory management
Objectives of inventory management:
minimize costs:
working capital carrying costs scrap and rework
independent demand: influenced by market conditions dependent demand: derived from the production of parent items. A Independent demand
B C
Dependent demand E
Distribution
Distribution is the activity that is concerned with receiving parts or finished goods, storing them until they are required and then delivering them to the customer. Functions of distribution:
inventory management order processing warehousing: materials handling Transportation trucks railroads water airways pipelines
Methods of transport:
Customer service
Customer service issues include:
accurate understanding of customers needs and wants the ability to deliver necessary customer service levels variations between plans and their actual implementation effective communications with the customers