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SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN MANAGEMENT. Prepared for B. Com 4 th Semester St. Xavier’s College. Concept and Definition. What is a supply chain? . Supply chain is a “process umbrella” under which products are created and delivered to customers.

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SUPPLY CHAIN MANAGEMENT

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  1. SUPPLY CHAIN MANAGEMENT Prepared for B. Com 4th Semester St. Xavier’s College IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  2. Concept and Definition IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  3. What is a supply chain? • Supply chain is a “process umbrella” under which products are created and delivered to customers. • It includes suppliers, manufacturers, distributors, retailers and customers. It also includes transporters and warehouses. • In essence, it consists of all parties involved, directly or indirectly, in fulfilling a customer’s request. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  4. What is supply chain management? • Supply chain management is the co-ordination of entities, activities, information and resources involved in moving a product or service from supplier to customer; where entities consist of manufacturers, service providers, distributors and retail outlets. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  5. In other words, supply chain management means transforming company’s “supply chain” into an optimally efficient, customer-satisfying process, where the effectiveness of the whole supply-chain is more important than the effectiveness of each individual department. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  6. What is e-supply chain management? • When the co-ordination for managing the supply chain takes place by using Internet technologies it is known as e-supply chain management. • Inter-enterprise integration is a major focus of e-supply chain management. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  7. Major Features of SCM IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  8. Supply chain management is identified by the following features: • 1. Material flow. • 2. Financial flow. • 3. Information flow. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  9. 1. Material flow. It is in the direction from supplier to customer through the chain. It involves procurement of the materials, transformation of these materials into finished products and distribution of these finished products to the customers. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  10. 2. Financial flow. It involves payment options, credit card information, credit terms, payment schedule etc. It is in the direction from customer to supplier as payment for products or services originates from customer and end at supplier. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  11. 3. Information flow. In today’s e- supply chain management flow of information is considered to be as significant as the flow of material and finance. It involves product information, demand forecasts, order status report, delivery report, customers’ communication, etc. Information is always two-way, particularly in e-business. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  12. Inter-enterprise Integration and Types of Supply Chain IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  13. Inter-enterprise integration • Enterprise integration means when different functions of an enterprise are integrated into one. But supply chain management is moving toward inter-enterprise integration. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  14. Different components of a supply chain like supplier, manufacturer, retailer, etc. are separate enterprises. These enterprises create a collaborative system for inter-enterprise integration. • In this system, each component of a supply chain has access to required information. As a result, inventory tends to zero and just-in-time (JIT) management can be introduced. So, inter-enterprise integration brings down inventory cost, as well as production and distribution costs. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  15. Types of supply chain for inter-enterprise integration • Responsive: This kind of supply chain responds quickly and accurately to customer’s needs. ATP(available to promise) is an important feature of this responsiveness. ATP systems provide real-time integrated checks throughout the entire supply chain. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  16. Adaptive: This kind of supply chain can rapidly be reconfigured to adapt to changing consumer demand. Adaptive supply chain helps the companies to respond to changing business conditions and consumer requirement. • Intelligent: It is a dynamic kind of supply chain and continuously fine-tuned to perform well. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  17. E-Supply Chain Planning IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  18. Major components of e-supply chain • Advanced scheduling and manufacturing planning: It provides detail co-ordination of all manufacturing and supply efforts based on individual customer orders. Scheduling is based on real-time analysis of changing constraints throughout the process, from equipment malfunctioning to supply interruptions. Scheduling also creates job schedules for managing the manufacturing process as well as logistics. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  19. Demand forecasting: This module supports a range of statistical tools and business forecasting techniques. It takes into account changing market scenarios and economic factors while making decisions. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  20. Transportation planning: This programme facilitates resource allocation and execution to ensure that materials and finished goods are delivered at the right time and at the right place, according to the planning schedule at a minimal cost. It considers such variable as transportation mode like railways, trucks, airlines, and availability of each mode. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  21. Distribution planning: This is integrated with demand forecasting, manufacturing schedule and transportation planning to reach the customer. This module addresses customer-specified requirements. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  22. Order commitment: It is a system that allows vendors to accurately quote delivery dates to customers by providing real-time detailed visibility into the entire fulfillment cycle. Order commitment is linked to all other modules so that accurate delivery of goods and services can be guaranteed. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  23. E-supply chain fusion IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  24. What is E-supply chain fusion? • Process of e-supply chain fusion involves the migration from existing non-integrated supply chain to more effective integrated supply chain and thereby creating a tightly woven supply chain. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  25. Four stages of supply chain fusion • Stage I - Information sharing: Well-established and effective communication channel is required at the 1st stage. For example, the consumers can interact effectively with the entire enterprise from a single store or Website. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  26. Stage II – Joint performance measurement: Key challenges include creating performance measurement and developing a clear understanding of the costs and benefits involved in supply chain integration. Collaborative planning processes are created in this stage. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  27. Stage III – Realignment of work: Through the process of collaboration decision-making is decentralized and work load is shared among the enterprises. • Stage IV – Redesigning products and processes: Products are processes are redesigned so that work becomes easier and more efficient. A major challenge is to include the entire supply chain in the interenterprise process reengineering efforts. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  28. Management issues in e-supply chain fusion • 1. Determining the right e-supply chain structure: Need for cost-efficiency does not permit to maintain a large inventory of finished products for the customers. Market demands may change and the price-structure may also undergo changes. For this reason, it is important to maintain the right kind of e-supply chain structure to ensure right product at the right time. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  29. 2. Enabling effective differentiation capabilities: Organizations develop strategies for competitive differentiation, offering customers something unique that the competition does not have. Differentiation is in terms of products and services and also in terms of performance standard. Build-to order(BTO) business models are used for this purpose. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  30. 3. Facilitating effective order-fulfillment capabilities: Accurate order-fulfillment is challenging and offers a great opportunity for reducing costs and improving customer service simultaneously. An integrated supply chain is critical to order fulfillment. Effective supply chain management configures the chain to respond to order. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

  31. 4. Determining the right infrastructure capabilities: Creation of a real-time supply chain management infrastructure is a major task for an organization. Planning, selection and implementation of SCM solutions is becoming more complex with the change of technology and with the increase of the number of business partners of a company. IT DEPT, B.COM, ST. XAVIER'S COLLEGE

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