01-0695d2 scm - introduction

8/4/2019 01-0695d2 SCM - Introduction

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INPUTS OUTPUTSOPERATIONS

PeopleBuildingsRaw materialsEquipmentsInformation

InvestmentEtc.

GoodsServicesProfitsWasteWages

Etc.

ManufactureServeSupplyTransportSell

TrainEtc.

OPERATIONS RESULTS IN OUTPUT


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DEMAND AND SUPPLY CYCLE

CUSTOMERS

SUPPLY OFPRODUCTS

DEMAND FORPRODUCTS

OPERATIONS

OTHERINPUTS

OTHEROUTPUTS

PASSED TO CREATE

PASSED TOARRANGE


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ROLE OF LOGISTICS

Internalsupplier

Internalcustomer

Operations within theorganization

External supplier External customer

MaterialsManagement

Outbound

LogisticsInbound

Logistics

Logistics
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LOGISTICS

Logistics is the function responsible for the flowof materials from suppliers into an organization,through operations within the organization, andthen out to customers.

The supply system includes the process ofplanning, implementing, and controlling theefficient, effective flow and storage of goods andservices from the organization from its place ofproduction to the place where it is required. Thissupply system is referred as LogisticsManagement.


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MATERIALS

Materials are all the things that anorganization moves to create its products.These materials can be:

Tangible (such as raw materials) and

Intangible (such as information).


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Seedling Young Tree Mature Tree Logs

Final Customer

Small roll of

Finished paper Large roll of paper

Sheets of paper Packer Wholesaler Retailer

Raw Paper Wood Pulp

Grown bygardener

Plantedby

forester

Felled by

logger

Chipped

ProcessedProcessedFinishing

Cutting

Transport Transport Transport

Purchase

SUPPLY CHAIN FOR PAPER


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EXAMPLE OF SUPPLY CHAIN

WholesalerManufacturer Retailer

Supplier

Supplier

Customer

Customer


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PROCESS OF SUPPLY CHAININTEGRATION

Deliver Source Make Deliver Source Make Deliver Source DeliverMake Source

Sub-supplier

Supplier Enterprise Customer Sub-customer

Enterprise Systems

Steel Plant DLFIndividuals,CorporateIndian OILNTPC, L&T


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SUPPLY CHAIN OF MILK

FARMMILKTANKER

COLLECTION

Supplier

Supplier

Customer

Customer

DAIRY

Supplier

BOTTLINGPLANT

Customer

supplier

Customer

SUPERMARKET

DISTRIBUTER

Customer

Customer

CustomerSupplierSupplierManthan


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SUPPLY CHAIN MANAGEMENT -DEFINITION

A supply chain consists of activities and organizationsthat materials move through on their journey from initialsuppliers to final customers.

As goods and services flow from supplier to producer tocustomer to final user, supply chain management isconcerned with the interfaces between organizations.

SCM is the management of linkages betweenorganizations.

SCM is a network of the manufacturers suppliers, andsuppliers suppliers on the one hand and customers andcustomers customers on the other hand.

This network exists to ensure a free and smooth flow ofinformation, goods, services and profits among all itsparticipants.


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OBJECTIVES OF SUPPLY CHAIN

To reduce the physical supply chain links;

To define supply chain responsibilities to acore service competency

To decrease the time and cost of gettingend user customer products in requiredquantity at the place of requirements.


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ACTIVITIES IN A SUPPLY CHAIN

InitialSupplier

3rd tierSupplier

2nd tierSupplier

1st tierSupplier

Organization

1st tiercustomer

2nd tiercustomer

3rd tiercustomer

Finalcustomer

Upstream activities

Downstream activities


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SUPPLY CHAIN AROUND A

MANUFACTURER3

rd

tierSupplier

2nd

tierSupplier

1st

tierSupplier

Manufacture

1st tiercustomer

2nd tierlcustomer

3rd tierlcustomer

MaterialSupplier

ComponentSupplier

Sub-assemblySupplier

WholesalersRetailersEndusers
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SUPPLY CHAIN STAGES

SupplierWholesaler

/ DistributorRetailer Customer

Retailer Customer

Wholesaler/ Distributer

Supplier

SupplierWholesaler/ Distributor

CustomerRetailer

Manufacturer

Manufacturer

Manufacturer


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SUPPLY CHAIN STAGES-EXAMPLEOF CONSTRUCTION ACTIVITIES

ACCRefractory,

Wholesaler/ Distributor

RetailerAnsalBuilder

RetailerUnitech,

DLF

Wholesaler/ Distributer

Supplier

Indian OilWholesaler/ Distributor

CustomerRetailer

ManufacturerL&T

Ultracement

Manufacturer

ManufacturerSaurashtra

cementHathi Cement


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MOVEMENT WITHOUT AWHOLESALER

Factories

24 routes

customers


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MOVEMENT WITH AWHOLESALER

Factories

3 routes inwards

customers

WHOLESALER

8 routes outwards

Using intermediaries simplifies the supply chain


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BENEFITS OF WELL DESIGNEDSUPPLY CHAIN -1

Best location of operations, regardless of thelocation of customers.

Concentrating operations in large facilities,

benefits of economies of scale obtained. Producers do not keep large stocks of finished

goods, as the same are kept down the supplychain nearer to customers.

Higher price discounts to wholesalers due tolarge order size.


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BENEFITS OF WELL DESIGNEDSUPPLY CHAIN - 2

Wholesaler keeps stocks of many suppliers, givingretailers a choice of goods.

Wholesalers are near to retailers and have short leadtime.

Retailers carry less stocks as wholesalers providereliable deliveries.

Retailers can have small operations, giving a responsiveservice near to customers.

Transport is simpler with fewer, larger deliveries thusreducing costs.

Organization can develop expertise in specific types ofoperations.


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ACTIVITIES OF LOGISTICS

Procurement /purchasing

Inwardtransport

Receiving Warehousing

Stock control Order picking Materials handling

Outward

transport

Physicaldistribution of

finished goods

Recycling,returns, and

waste disposal

Locations communication

01-0695d2 scm - introduction

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