Supply Chain Management

2. Supply Chain Management The work of two students : Sally Hassan Adher Noor Yousif el-ostaz Under the supervision of miss : Rasha

3. Supply Chain Management Is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption .

4. Supply chain management (SCM) is the oversight of materials, information, and finances as they 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 and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). Supply chain management flows can be divided into three main flows: The product flow The information flow The finances flow

6. Key Planning Benefits of Supply Chain Management Increase demand accuracy and order fulfillment satisfaction levels Reduce inventory levels and increased inventory turns across the network Increase profitability and productivity Integrate sales and operations planning process

7. The 7 Principles of Supply Chain Management Segment customers based on the service needs of distinct groups and adapt the supply chain to serve these segments profitably . Customize the logistics network to the service requirements and profitability of customer segments . Listen to market signals and align demand planning accordingly across the supply chain, optimal resource allocation .

8. Differentiate product closer to the customer and speed conversion across the supply chain . Manage sources of supply strategically to reduce the total cost of owning materials and services . Develop a supply chain-wide technology strategy that supports multiple levels of decision making and gives a clear view of the flow of products, services, and information . Adopt channel-spanning performance measures to gauge collective success in reaching the end-user effectively and efficiently .

9. Decisions on Three Levels

10. Flexibility, Inventories, and Customer Service

11. A supply chain • is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer.

12. Supply Chain Management • “encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. ,manufacturing operations, and across marketing, sales, product design, finance and information technology.”

13. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable.

14. Supply Chain Management • is not a business function, rather it is a new business model necessary for an organization's success and everyone in the organization needs to be involved.

15. Successful supply chain management requires cross-functional integration within the firm and across the network of firms that comprise the supply chain. It is focused the improvements in performance that result from better management of key relationships.

16. By understanding the supply chain management processes and how they should be implemented, management will better understand the value of more integrated supply chains and how this integration will lead to increased shareholder value and a sustainable competitive advantage.

17. The SCOR Supply-Chain Operations Reference model, developed by the Supply Chain Council, measures total supply chain performance. It is a process reference model for supply-chain management, spanning from the supplier's supplier to the customer's customer It includes delivery and order fulfillment performance, production flexibility, warranty and returns processing costs, inventory and asset turns, and other factors in evaluating the overall effective performance of a supply chain.

18. . The basic idea behind the SCM is that companies and corporations involve themselves in a supply chain by exchanging information regarding market fluctuations and production capabilities.

19. If all relevant information is accessible to any relevant company, every company in the supply chain has the possibility to and can seek to help optimizing the entire supply chain rather than sub optimize based on a local interest. This will lead to better planned overall production and distribution which can cut costs and give a more attractive final product leading to better sales and better overall results for the companies involved.

20. The primary objective ofsupply chain managementis to fulfill customer demands through the most efficient use of resources, including distribution capacity, inventoryand labor. In theory, a supply chain seeks to match demand with supply and do so with the minimal inventory.

21. Supply chain management problems Supply chain management must address the following problems: Distribution Strategy: number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers.

22. Trade-Offs in Logistical Activitie: • a full truckload of a product is ordered to reduce transportation costs, there will be an increase in inventory holding costs which may increase total logistics costs. It is therefore imperative to take a systems approach when planning logistical activities. These trade-offs are key to developing the most efficient and effective Logistics and SCM strategy. Information: Integration of processes through the supply chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc. # Inventory Management: Quantity and location of inventory, including raw materials, work-in-progress (WIP) and finished goods. # Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain.

23. Activities/functions • Supply chain management is a cross-function approach including managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end-consumer. As organizations strive to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other entities that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement.

24. Strategic • * Strategic network optimization, including the number, location, and size of warehousing, distribution centers, and facilities. • * Strategic partnerships with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics. • * Product life cycle management, so that new and existing products can be optimally integrated into the supply chain and capacity management activities. • * Information technology chain operations. • * Where-to-make and what-to-make-or-buy decisions. • * Aligning overall organizational strategy with supply strategy. • * It is for long term and needs resource comittement.

25. Tactical • * Sourcing contracts and other purchasing decisions. • * Production decisions, including contracting, scheduling, and planning process definition. • * Inventory decisions, including quantity, location, and quality of inventory. • * Transportation strategy, including frequency, routes, and contracting. • * Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise. • * Milestone payments. • * Focus on customer demand.

26. Operational • * Daily production and distribution planning, including all nodes in the supply chain. • * Production scheduling for each manufacturing facility in the supply chain (minute by minute). • * Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers. • * Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers. • * Inbound operations, including transportation from suppliers and receiving inventory. • * Production operations, including the consumption of materials and flow of finished goods. • * Outbound operations, including all fulfillment activities, warehousing and transportation to customers. • * Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers.

27. Developments in Supply Chain Management • . Creation Era • The term supply chain management was first coined by a U.S. industry consultant in the early 1980s. • 2. Integration Era • This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration.

28. . Globalization Era • can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents. Although the use of global sources in the supply chain of organizations can be traced back several decades . Specialization Era— Outsourced Manufacturing and Distribution began to focus on “core competencies” 5. Specialization Era—Phase Two: Supply Chain Management as a Service 6. Supply Chain Management 2.0 (SCM 2.0) Building on globalization and specialization, the term SCM 2.0 has been coined to describe both the changes within the supply chain itself as well as the evolution of the processes, methods and tools that manage it in this new "era"

29. Global supply chains pose challenges regarding both quantity and value: • Supply and Value Chain Trends • * Globalization • * Increased cross border sourcing • * Collaboration for parts of value chain with low-cost providers • * Shared service centers for logistical and administrative functions • * Increasingly global operations, which require increasingly global coordination and planning to achieve global optimums • * Complex problems involve also midsized companies to an increasing degree,

30. Components of supply chain management integration • * Planning and control • * Work structure • * Organization structure • * Product flow facility structure • * Information flow facility structure • * Management methods • * Power and leadership structure • * Risk and reward structure • * Culture and attitude

31. Theories of supply chain management • Resource-Based View (RBV) • Transaction Cost Analysis (TCA) • Knowledge-Based View (KBV) • Strategic Choice Theory (SCT) • Agency Theory (AT) • Institutional theory (InT) • Systems Theory (ST) • Network Perspective (NP)

32. Supply Chain RelationshipsSuccess Factors • High level of cooperation • Similar goals/objectives • Clear communications • Senior management support • Control of inventory • Information sharing • Recognition of mutual benefits • Controlled implementation • Joint task force • Resource commitment

33. Supply Chain Management:Generic Benefits • Reduced costs • Inventory management • Transportation • Warehousing • Packaging • Improved service • Time-based delivery • Make-to-order • Enhanced revenues • High product availability • More customized products

35. Supply Chain Management • In manufacturing the supply chain is the vehicle for the movement of raw materials and bought out goods from suppliers, through conversion and assembly into product and finished goods that are distributed to the customer.