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SUPPLY CHAIN MANAGEMENT (SCM)

SUPPLY CHAIN MANAGEMENT (SCM). What is SCM?. It is an enterprise system that integrates and automates the network of business processes and relationships between a company its suppliers , customers , distributors and other business partners.

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SUPPLY CHAIN MANAGEMENT (SCM)

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  1. SUPPLY CHAIN MANAGEMENT (SCM)

  2. What is SCM? • It is an enterprise system that integrates and automates the network of business processes and relationships between a company its suppliers , customers , distributors and other business partners. • The interrelationship with suppliers, customers, distributors and other businesses that are needed to design, build & sell a product make a network of business entities, relationships & processes that is called supply chain. • SCM helps a company get the right products to the right place at right time in proper quantity at an acceptable cost.

  3. Goal of SCM • To efficiently manage the process by forecasting demand ; controlling inventory ; enhancing the network of business relationships

  4. BUSINESS PROCESS IN SUPPLY CHAIN LIFE CYCLE SCM functional processes

  5. SCM models & participants • Manufacturing business • Customer, Retailer, Distributor , Transporter, Warehouse, Supplier • Trading • Customer, Retailer, Transporter, Warehouse, Supplier • Service • Customer, consultant, Service provider Supply chain is driven by 3 main inputs namely information, funds and goods. All three inputs flow between participants in the chain. Higher the speed of this flow higher is the response of supply chain,

  6. OBJECTIVES

  7. Process view of SCM • Supply chain can also be seen as a process, made of sub process. Such a view of supply chain is known as process view of supply chain.

  8. Fig: Process view of Supply chain Cycle STAGE: Customer, Retailer Distributor Transporter Warehouse Manufacturer Supplier Customer order cycle Retail stock replacement cycle Transportation cycle Goods handling cycle Good manufacturer and delivery cycle Procurement cycle

  9. SCM means management of these cycles effectively and efficiently maximizing the value of chain.

  10. Trends in SCM • There are 3 stages in a companies implementation of SCM system • Stage one: Company concentrates on making improvements to its internal supply chain processes & its external processes and relationships with customers & suppliers. • Stage two: Company in this stage concentrates on expanding the business network of web-enabled SCM to increase operational effectiveness & efficiency in meeting business needs. • Stage three: Company begins to develop && implement collaborative SCM application using SCM software, full service extranet links & pvt and public e-commerce exchanges.

  11. STAGES IN THE USE OF SCM

  12. BENEFITS • Faster • More accurate order processing • Reduction in inventory levels • Quicker time to market • Lower transaction & materials cost • Strategic relationship with their suppliers

  13. PROBLEMS • A lack of proper demand planning knowledge, tools and guidelines is major source of SCM failure • Inaccurate demand forecast forecasts will cause major problems in production & inventory. • Lack of adequate collaboration among entities (marketing, production & inventory management departments) within a company & with suppliers, distributors & others

  14. Results of SCM • HLL saves &125 million from its supply chain in India. SCM was able to reduce its stock levels from six weeks to less than three weeks. The volume of finished goods level reduced from 25% to less than 5%.

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