Foundations of Global Supply Chain Management

1. Foundations of Global Supply Chain Management

2. Building Blocks of Supply Chain Management Y. NARAHARI Computer Science and Automation INDIAN INSTITUTE OF SCIENCE Bangalore – 560 012 hari@csa.iisc.ernet.in Foundations of Global Supply Chain Management September 27, 2003

3. Enterprise Network of independent companies possibly in different geographical locations forming a strategic alliance toward the common goal of designing, manufacturing and delivering right quality products/services to customers • Functional perspective • Process perspective

4. Functional and Process Perspective SUPPLY CHAIN PROCESS ORDER - TO - DELIVERY PROCESS Procurement Manufacturing Distribution Logistics

5. Business Process A structured, measured set of activities ordered in time and space, designed to produce a customer desired output. • A business process could be decomposed into several other business processes. Business Process Macro Micro • Answering a query from a customer • Checking the credit history of customer • SCP • ODP • NPDP • CRM Process • Order Mgmt

6. Supply Chain Process Integrated , coordinated network of value delivering business processes that procure raw materials, transform them into final products, services and delivers the product to the customers • Procurement • Manufacturing/assembly • Inbound logistics • Warehousing • Distribution • Outbound logistics

7. Why study Supply Chains ? • Supply chains are ubiquitous: you could consider every product or service to have its own supply chain. • Companies world-wide are spending trillions of rupees on SCM • Backbone of E-business • Wholesome mix of industrial engineering, mathematics, computer science, and management

8. Examples of Supply Chains in India Automotive - Telco, ALL, Mahindra, Maruti Aerospace - ADA, HAL Chemicals - Asian Paints, Apollo tyres, Reliance Apparel - Madura Coats, Reliance Food - Cadbury, Parle, Amul Products, HLL Consumer durables - HLL, P & G Forest Products - Papermills Construction - L & T Pharmaceutical - Ranbaxy, Glaxo Electromechanical – Kirloskar, L & T Tooling - HMT, Widia, Mico PC/ Computer - IBM, WIPRO, HCL, Intel

9. Supply Chain Building Blocks Structural Logical IT / ITEC Informational

10. Structural Building Blocks • Suppliers • Manufacturing / Assembly Plants • Warehouses • Distribution Centers • Retailers / Customers • Logistics Network • Inbound • Outbound • Customers Orders

11. Warehouse Port PC Assembly Plant Retailers Suppliers (International) 1.2 Million PC/Yr. Glasgow U.K. 13 Transshipment Points (TPs) in Europe Country-wide Distribution Centers (DCs) Example of a Typical Supply Chain: IBM Europe PC Supply Chain

12. Logical Building Blocks STRATEGIC TACTICAL OPERATIONAL Procurement Manufacturing Distribution Logistics Logistics

13. Order/ Product Flow through Supply Chain Functions Products Orders Order Management Channel A Orders Channel B Customer Orders Orders Channel C Manufacturing Product Distribution Products Products Products Production Plans Parts Demand Forecast Part Supply Supply Planning Demand Planning Component Requirement

14. Examples of Decisions • Supplier Selection (Tactical) • Plant Location (Strategic) • Product Line Selection (Strat) • Inventory Control (Tactical) • Production Scheduling (Ops) • Dynamic routing (Ops) • MTO vs MTS vs BTO (Str)

15. Mathematical Models • Optimization Models (LP, ILP, MILP, CO, DP) • Stochastic Models (Markov chains, Queuing networks, etc.) • Statistical Models • Game Theory • Simulation • Machine learning • Auctions and Mechanism Design

16. Information Building Blocks • IT : MRP, ERP, EDI • Internet Technologies • Sensor Networks • E-Commerce, E-Markets • E-CRM • Decision Support Software • Standards

17. KeyProblem in SCM Design a supply chain network that delivers high quality products to the right customers at the right time at minimum cost

18. Foundations of Global SCM This one day workshop will introduce to you the important concepts and issues involved in successful design and operation of supply chain networks

19. What is Coming…. • Srinivas Raghavan - Dynamics • Dinesh Garg - Planning • Mathirajan - Logistics • Shyam Bhaskar – Best Practices • Kameshwaran – E-Markets • Chandrashekar - Procurement • Visvanathan - SCM Automation • Narahari Y– What Next?

20. What Next? Books on SCM: • Sunil Chopra and Peter Meindl. Supply Chain Management: Strategy, Planning, and Operation. Pearson Education Asia, 2001. • David Simchi Levi, P. Kaminsky, and Edith Simchi Levi, Designing and Managing the Supply Chain, Irwin-McGrawHill, 2000 • W.J. Hopp and M.L. Spearman. Factory Physics: Foundations of Manufacturing Management, Irwin-McGrawHill, 1996 • N. Viswanadham . Analysis and Design of Manufacturing Enterprises, Kluwer, 2000 • N. Viswanadham and Y. Narahari. Performance Modeling of Automated Manuafacturing Systems, Prentice Hall, 1992

21. What Next? Papers on SCM • Journals such as Interfaces, Operations Research, Management Science, European Journal of Operational Research • Websites such as www.amrresearch.com • Our own website: http://lcm.csa.iisc.ernet.in/scm/scm.html • http://lcm.csa.iisc.ernet.in/workshop/index.html

22. What Next? Contact any of us: • Narahari hari@csa.iisc.ernet.in • Raghavan raghavan@mgmt • Mathirajan msdmathi@mgmt • Shyam Bhaskar shyam_bhaskar@dell.com • Kameshwaran kameshn@csa • Chandrashekar chandra@csa • Dinesh Garg garg@csa • Visvanathan vkvisva@hotmail.com

23. What Next? • Start working in SCM ….. • Wish you all the very best …. • See you again very soon …. December 15th and 16th, 2003 International Workshop on IT Enabled Manufacturing, Logistics, and SCM