scm paf lecture 1 & 2
TRANSCRIPT
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SCM
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- Flow of materials, products & Services- Flow of information
- Flow of funds
And
SCM is about integration, effective communication,coordination, speed, cost, quality and flexibility.
SCM Another View
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SCM- The APICS dictionary defines the term supply chain as either the processes from the initialraw materials to the ultimate consumption of the finished product linking across supplier-usercompanies, - Managing Supply & demand, sourcing raw materials & parts, manufacturing, warehousing &inventory, Order entry & management, Distribution & Delivery to the customer (Supply ChainCouncil)- A Supply Chain consists of all stages involved, directly or indirectly in fulfilling a customerrequest. The supply chain not only includes the manufacturer and supplier, but alsotransporters, warehouses & retailers --- Chopra and Meidl
- An integrated process where raw materials are transformed into final products thendelivered to customers. (Beamon)-Supply chain management, then, is the active management of supply chain activities tomaximize customer value and achieve a sustainable competitive advantage. It represents aconscious effort by the supply chain firms to develop and run supply chains in the mosteffective & efficient ways possible. Supply chain activities cover everything from productdevelopment, sourcing, production, and logistics, as well as the information systems neededto coordinate these activities.
- SCM is the integration of key business processes across the supply chain for the purposeof creating value for customers and shareholders.- SCM is a system of people, activities, information and resources involved in creating aproduct and then moving it to the customer.- Supply chain management (SCM) is the oversight of materials, information, and finances asthey 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 andamong companies.
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Integration
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SCM
Vendor Manufacturing
PrimaryTransport
Warehousing
Customer
Secondar yTransport
InboundTransport
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MarketingExcellence
PurchasingExcellence
ManufacturingExcellence
SCM another view
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History
Before 1960 Purchasing staff considered as clerksAfter 1960 these were considered as professionals
They were considered due to material cost went up
After 1970 it became part of Materials Mgt.In 1980, Purchasing & Materials Mgt. became Supply Chain Mgt.
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Why SCM?
- Inventory cost increasing- Logistic cost increasing
- Margins decreasing
- Quality become an issue
- Manufacturing efficiency- Customer service with value addition
- Supplier involvement in New product design & development
- Communication
- Competition
Under above circumstances in 1990, companies began to work with quality suppliers,involved them in New Product Development, cost saving, quality, processes, delivery,Business Process Reengineering, Waste elimination & other improvement areas. SCMrapidly increased in popularity as a source of competitive advantage for firms.
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Supply Chain strategy
MinimizeInventoryE.g ABC,
JIT, VMI etc.
Maximizecustomer
service, e.g quality,
speed, cost etc
MinimizeOperating
Costs
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Scope
Supplier
Purchasing
Warehouse
Inventory Management
Operations
Distribution/ Logistics/Customers
Information TechnologyQuality
http://images.google.com/imgres?imgurl=http://www.flatrockbagging.com/images/truckforklift600.jpg&imgrefurl=http://www.flatrockbagging.com/services/inventory.html&h=400&w=600&sz=85&hl=en&start=39&tbnid=p_GNp-D_zh0HtM:&tbnh=90&tbnw=135&prev=/images%3Fq%3DINVENTORY%2BMANAGEMENT%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DNhttp://images.google.com/imgres?imgurl=http://www.zebra.com/id/zebra/na/en/index/industry_solutions/applications/supply_chain_management/receiving.194.159.Image.gif&imgrefurl=http://www.zebra.com/id/zebra/na/en/index/industry_solutions/applications/supply_chain_management/receiving.html&h=159&w=194&sz=37&hl=en&start=3&tbnid=HVLLWnQDihgrEM:&tbnh=84&tbnw=103&prev=/images%3Fq%3D%2Bsite:www.zebra.com%2Brelated%2Bto%2Bsupply%2Bchain%2Bmanagement%26svnum%3D10%26hl%3Den%26lr%3D -
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The RightQUALITY
The RightQUANTITY
The Right TIME
The Right PLACE
The Right SUPPLIER
The Right SERVICE
The Right PRICE
withthe
at the
Supply Chain Objectives & process
at the
withthe
and
paying
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- Extremely stiff competition- Increasing awareness exposure due to abundance of information
- Lot of choices & options
- Cost consciousness ask value for money
- More Demanding customer- Changing loyalties & preferences
- Mergers / Competition
- Pressure for quick response
- Energy crises- Law n Order
- Bhutta Culture
Today s Business Scenario
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Objectives
- Faster to market with new products & services- Better Customer service- Lower operational costs- Lower inventory costs
- Smooth flow of information- Open & honest communication- Waste elimination- Data Accuracy
- We approach i.e. Team work
http://images.google.com/imgres?imgurl=http://www.accesskent.com/YourGovernment/Departments/Purchasing/images/gr_businessmen_2.gif&imgrefurl=http://www.accesskent.com/YourGovernment/Departments/Purchasing/pur_index.htm&h=250&w=207&sz=15&hl=en&start=53&tbnid=GD0l6mDjzjeQAM:&tbnh=111&tbnw=92&prev=/images%3Fq%3Dpurchasing%26start%3D40%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN -
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- Developing strong relationships with chain members- Developing high quality products at lower cost- Sharing experience with external customers- Reducing order cycle time
- Minimizing inventory- Maximizing flow- Reducing number of suppliers- Initiating small and big projects of saving
- Process re-engineering- Competitive advantage- Customer value & satisfaction
Objectives
http://images.google.com/imgres?imgurl=http://www.dgt.com.tw/english/ibu/images/untitled3.gif&imgrefurl=http://www.dgt.com.tw/english/ibu/index.htm&h=149&w=150&sz=14&hl=en&start=35&tbnid=gRflFaYOh89GwM:&tbnh=95&tbnw=96&prev=/images%3Fq%3Dsupplier%2Bevaluation%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN -
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How people are reacting
- Sleeping- Observing- Waiting- Preparing
- Reacting- Adapting
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One company does allprocessing, from rawmaterial through delivery
Old View of the World
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Supply Network View of the World
Integrated networks ofcompanies process, produce anddistribute products. Every onefocuses on its core activity
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The Supply Chain NetworkingSuppliers Manufacturers Warehouses &
Distribution CentersCustomers
Material Costs
TransportationCosts
TransportationCosts
Transportation
CostsInventory CostsManufacturing Costs
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Internal IntegrationMaterials Mgt. ----- Manufacturing Mgt. ----- Distribution Mgt.
External Integration
Suppliers ----- Internal supply chain ----- Customers
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Supply Chain Integration
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Backward (Supplier) & Forward (Customer) Integration
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Integration
-The most difficult step- If one activity fails then supply along the chain is disturbed
- Participant realization
- Team work
- One set of numbers
- Discipline in forecasting
- Change in attitude of upper management
- Visibility to all- Open communication
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Integration
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Tell me and I will forget
Show me and I will remember
Involve me and I will understand
Integration through Involvement
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Supply Managements Impact on NetIncome and the Bottom Line
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COST MACHINES EXPENSES MANPOWER REJECTION RESOURCES
OVERTIME
SALE PROFIT GROWTH MARKETSHARE RETURNS CUSTOMERS
LESS
MORE
Best supply chain should result:
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Can we compare?Improved Less Improved
EMIRATES VS PIASONY VS LUMINARNOKIA VS Q MobilesTOYOTA VS ADAM MOTORSTCS VS PAK. POSTSUI GAS VS KESCAKU VS CIVIL
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- Product Oversell- Product Withdrawal
- Product Launch/ Demand increased
- Abnormal Demand / Seasonality
- Reduced / Cancelled Orders
- Changes in Demand/supply Schedule
- Discontinuation of material by supplier- Strike / Shut down
Issues in Supply Chain
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Supply Chain Slogans
- Either bring change or be beaten by competitors- Cost Reduction- Supplier Partnership/ Agreements- process mappings & redesigning- Reduce lead time- Low inventory level- One set of numbers- Integration with IT- Data Accuracy- Vendor scheduling & performance- CI & Excellence
http://images.google.com/imgres?imgurl=http://www.letxa.com/nexradtour/forecasting.jpg&imgrefurl=http://www.letxa.com/nexradtour.php&h=768&w=1024&sz=422&hl=en&start=22&tbnid=AhwFaJofsQ4vZM:&tbnh=113&tbnw=150&prev=/images%3Fq%3DFORECASTING%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN -
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Mapping Allows You to
Visualize Your Supply Chain