understanding scm

5/19/2018 Understanding Scm

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LSM-306 Supply Chain Management

Operations as aTransformation Process

INPUT

Material

Machines

Labor

Management

Capital

TRANSFORMATION

PROCESS

OUTPUT

Goods

Services

Feedback & Requirements

Evolution of Operations and Supply

Chain Management

Craft production process of handcrafting products or services for

individual customers

Division of labor dividing a job into a series of small tasks each

performed by a different worker

Interchangeable parts standardization of parts initially as replacement parts;

enabled mass production

Evolution of Operations and

Supply Chain Management

Scientific management

systematic analysis of work methods

Mass production

high-volume production of a standardized product for

a mass market

Lean production

adaptation of mass production that prizes quality and

flexibility


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What is SC and SCM ?

Supply Chain (SC)

Flow of products and services from:

Raw materials, Intermediate products,

End product manufacturers,

Wholesalers and distributors and also

Retailers

Connected by transportation and

storage activities

Integrated through information,

planning, and integration activities

Cost and service levels

What is SC and SCM ? Contd..

Supply Chain Management (SCM).

is a set of approaches utilized toefficiently integrate suppliers,manufacturers, warehouses, andstores

So that merchandise is produced anddistributed

What is SC and SCM ? Contd..

. at the right quantities, to the right

locations, and at the right time

in order to minimize system wide

costs while satisfying service level

requirements.

Why need ?

Supply Demand

a way to link andbalance the Supply Demand

Cost effective

What makes Supply Chain

and what we manage


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Evolution of Supply Chain Management

1950s 1960s 1970s 1980s 1990s 2000s Beyond

Traditional Mass Manufacturing

Inventory Management/Cost

Optimization

JIT, TQM, BPR,

Alliances

SCM Formation/

Extensions

Further Refinement of

SCM Capabilities

Importance of SCM understood bysome

The design and management of seamless, value-added

process across organizational boundaries to meet the real

needs of the end customer..

Institute for Supply Management

Managing supply and demand, sourcing raw materials and

parts, manufacturing and assembly, warehousing and

inventory tracking, order entry and order management,

distribution across all channels, and delivery to the

customer

The Supply Chain Council

Importance of SCM understood by

some AMR Research

"The biggest issue enterprises face today is

intelligent visibility of their supply chains

both upstream and down"

Forrester Research

"Companies need to sense and proactively

respond to unanticipated variations in supply

and demand by adopting emerging

technologies such as intelligent agents. To

boost their operational agility, firms need totransform their static supply chains intoadaptive supply networks "

Importance of SCM understood by

some

Gartner Group

" By 2004. 90% of enterprises that fail to apply

supply-chain management technology and

processes to increase their agility will lose

their status as preferred suppliers "

Open ended statement, Agility can be increased

continuously.


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SCM Definition

Source

Supplier

Supplier

Distributor

Distributor

Retailer

End-User

Converter

Converter Consumers

Information Flow

Funds/Demand Flow

Value-Added Services

Material Flow

Reuse/Maintenance/After Sales Service Flow

Supply Chain Network (SCN) The system of organizations, people,

technology, activities, information and resources

involved in moving a product or service from

supplier to customer.

Transform natural resources, raw materials and

components into a finished product that is

delivered to the end customer.

Just-in time , cost effective

Resilience is an objective function for SCN

Supply Chain Management Network SCM - Network Perspective

Supplier

Supplier

Supplier

Distributor

Plant

Distributor

R

R

R

R

R

R

c

u

s

t

o

m

e

r

s

Suppliers Manufacturers Distributors Retailers


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Supply Chain Network Flows

Real-Time Access to SCM Information is Critical to Maintain Cost-

Efficient Operations

Current Supply Chains are Networks

Components of SCM

The major components to the SCM are

Supplier Network or Supply Chain

Enterprise

Distribution Network

Customers

Components of SCM (2) Upstream Supply Chain

Organizations first tier suppliers & their

suppliers.

Internal Supply Chain

Processes used by an organization to

transform their inputs to outputs.

Downstream Supply Chain

Processes involved in delivering the

product/service to the final customers.


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SCM - Flows Perspective Supply Chain stages

Raw Material

Manufacture

Component

Manufacture

Component

Distribution

Sub Contractor

Manufacture

OEM

Producer

Supplier Manufacturer Distriubtor Retailer Customer

SCM Stages perspectiveKey Issues in Supply Chain

ManagementSupply Chain Development Chain


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Key Issues in Supply Chain

Management

Chain Global OptimizationManaging Risk and

Uncertainty

Distribution Network Configuration Supply Y

Inventory Control Supply Y

Production Sourcing Supply Y

Supply Contracts Both Y Y

Distribution Strategies Supply Y Y

Strategic Partnering Development Y

Outsourcing and Off shoring Development Y

Product Design Development Y

Information Technology Supply Y Y

Customer Value Both Y Y

Smart Pricing Supply Y

Supply Chain Processes & Functions

Demand PlanningMaterial Requirement Planning

Demand Forecasting

Supplier Plant Warehouse Logistics Retailer

Production

Plan

Component

Requirement

Order Management

Supply Chain Processes & FunctionsExamples of supply chain

Li & Fung SUPPLY CHAIN

understanding scm

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