internal supply chain mgt

8/2/2019 Internal Supply Chain Mgt

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Internal Supply ChainManagement


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A supply chain is a system of organizations, people, technology, activities,

information and resources involved in moving a product or service from supplier tocustomer. 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. Supply chains link value chains.


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Issues in Supply Chain Management

The classic objective of logistics is to be able to have the right products in the right quantities

(at the right place) at the right moment at minimal cost Four main areas of concern within supply chainmanagement.

Figure:

Hierarchy of Objectives.


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Figure: Hierarchy of Supply Chain Decisions.


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Decisions made on the strategic level are of course interrelated. For example

decisions on mode of transport are influenced by decisions on geographical placement

of plants and warehouses, and inventory policies are influenced by choice of suppliers

and production locations. Modeling and simulation is frequently used for analyzing these

interrelations, and the impact of making strategic level changes in the supply chain.

On the tactical level medium term decisions are made, such as weeklydemand forecasts, distribution and transportation planning, production planning, and

materials requirement planning. The operational level of supply chain management is

concerned with the very short term decisions made from day to day. The border

between the tactical and operational levels is vague. Often no distinction is made, as

will be the case in this thesis.

On the strategic level long term decisions are made. According to Ganeshan

and Harrison these are related to location, production, inventory, and transportation.

Location decisions are concerned with the size, number, and geographic location of thesupply chain entities, such as plants, inventories, or distribution centers. The production

decisions are meant to determine which products to produce, where to produce them,

which suppliers to use, from which plants to supply distribution centers, and so on.

Inventory decisions are concerned with the way of managing inventories throughout the

supply chain. Transport decisions are made on the modes of transport to use.


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The Council of Supply Chain Management Professionals (CSCMP) defines

Supply Chain Management as follows: Supply Chain Management encompasses the

planning and management of all activities involved in sourcing and procurement,

conversion, and all logistics management activities.


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A typical supply chain begins with ecological and biological regulation of natural

resources, followed by the human extraction of raw material, and includes several

production links (e.g., component construction, assembly, and merging) before moving onto several layers of storage facilities of ever-decreasing size and ever more remote

geographical locations, and finally reaching the consumer.


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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.[3]

It includes delivery and order fulfillment performance, production flexibility, warranty and

returns processing costs, inventory and asset turns, and other factors in evaluating the overalleffective performance of a supply chain.

The Global Supply Chain Forum (GSCF) introduced another Supply Chain

Model. This framework[4] is built on eight key business processes that are both cross-

functional and cross-firm in nature. Each process is managed by a cross-functional team,including representatives from logistics, production, purchasing, finance, marketing and

research and development. While each process will interface with key customers and

suppliers, the customer relationship management and supplier relationship management

processes form the critical linkages in the supply chain.

The American Productivity & Quality Center (APQC) Process Classification

Framework (PCF) SM is a high-level, industry-neutral enterprise process model thatallows organizations to see their business processes from a cross-industry viewpoint.

The PCF was developed by APQC and its member companies as an open standard to

facilitate improvement through process management and benchmarking, regardless of

industry, size, or geography. The PCF organizes operating and management processes

into 12 enterprise level categories, including process groups, and over 1,000 processes

and associated activities.


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Supply chain management (SCM) was developed[5] to express the need to integrate the

key business processes, from end user through original suppliers. Original suppliers

being those that provide products, services and information that add value for

customers and other stakeholders. 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

.

The primary objective ofsupply chain management is to fulfill

customer demands through the most efficient use of resources, includingdistribution capacity, inventory and labor.


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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 toother 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.


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Theories of supply chain management

Currently there is a gap in the literature available on supply chain management

studies: there is no theoretical support for explaining the existence and the boundaries of

supply chain management.A

few authors such asH

alldorsson, et al. (2003), Ketchen andHult (2006) and Lavassani, et al. (2009) have tried to provide theoretical foundations for

different areas related to supply chain by employing organizational theories. These

theories include:

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)

Materials Logistics Management (MLM)

Just-in-Time (JIT)Material Requirements Planning (MRP)

Theory of Constraints (TOC)

Total Quality Management (TQM)

Agile Manufacturing

Time Based Competition (TBC)

Quick Response Manufacturing (QRM)

Customer Relationship Management (CRM)


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>Reduced inventories along the chain>Better information sharing among the partners

>Planning being done in consultation rather than in isolation

IMPORTANCEOF SUPPLY CHAIN MANAGEMENT

PRINCIPLES OF SUPPLY CHAIN MANAGEMENT

Planning lays down the strategy for managing and handling all resources that

are used in providing the service or product that company is involved.

Sourcing involves studying supplier competencies and selective one, based on

one or more criteria.

Manufacture --- use of the metric system enabling managers to measure quality ,

output of production and productivity of workers.

Deliver--- process must synchronize activities of partner business involved in thetransportation of good.

Return --- often the trickiest component in supply chain management is

establishing an efficient system for returns of defective goods.


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THANK YOU!!!!

Jessica C. GarciaBSBAOM 4

internal supply chain mgt

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