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What is Supply Chain Management

What is Supply Chain Management. (SCM). SCM. Combination of Art and Science Purpose: to improve the method a company finds raw components it needs to deliver a product or service to customers. Why is it Important?. In the past manufacturers called the shots (push or mass manufacturing)

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What is Supply Chain Management

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  1. What is Supply Chain Management (SCM)

  2. SCM • Combination of Art and Science • Purpose: to improve the method a company finds raw components it needs to deliver a product or service to customers

  3. Why is it Important? • In the past manufacturers called the shots (push or mass manufacturing) • Today customers call the shots & manufactures scramble to meet demands for options / styles / features, quick order fulfillment, and fast delivery

  4. Still Why? • Manufacturing quality — a long-time competitive differentiator — is approaching parity across the board • Customers' specific demands for product delivery has emerged as the next critical opportunity for competitive advantage

  5. Raw Materials Manufacture Distribution Customer

  6. Necessary to Compete • Companies that learn how to improve management of their supply-chain will become the new success stories in the global marketplace

  7. Basic Components • Plan • Source • Make • Deliver • Return

  8. Plan • Strategic portion of SCM • Strategy for managing all resources needed to meet customer demand • Set of metrics to monitor supply chain for elimination of waste and added value

  9. Source • Choose suppliers • Develop pricing, delivery and payment processes • Metrics to monitor and improve relationship

  10. Make • Manufacturing step • Schedule activities necessary for production, testing, packaging, and delivery • Most metric-intensive level • Measure quality levels • Production output • Worker productivity

  11. Deliver • Logistics • Coordinate receipt of orders • Develop network of warehouses • Pick carriers • Set up invoice system to receive payment

  12. Return • Problem working of Supply Chain • Create network for receiving defective and excess product back • Support for customers who have problems with delivered products

  13. Five basic elements • Plan • Source • Make • Deliver • Return

  14. Challenges • Improving a process as complex as the supply-chain can be daunting • Companies are challenged with finding ways to meet ever-rising customer expectations at a manageable cost

  15. Challenges • Businesses must identify which parts of their supply-chain process are not competitive • Understand which customer needs are not being met

  16. Challenges • Establish improvement goals • Rapidly implement necessary improvements

  17. Promise • Companies that learn how to improve management of their supply-chain will become the new success stories in the global marketplace

  18. Future • Benchmarking studies show significant cost differences between organizations that exhibit best-in-class performance and those with average performance

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