scm paf lecture 1 & 2

8/13/2019 Scm Paf Lecture 1 & 2

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SCM


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- Flow of materials, products & Services- Flow of information

- Flow of funds

And

SCM is about integration, effective communication,coordination, speed, cost, quality and flexibility.

SCM Another View


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SCM- The APICS dictionary defines the term supply chain as either the processes from the initialraw materials to the ultimate consumption of the finished product linking across supplier-usercompanies, - Managing Supply & demand, sourcing raw materials & parts, manufacturing, warehousing &inventory, Order entry & management, Distribution & Delivery to the customer (Supply ChainCouncil)- A Supply Chain consists of all stages involved, directly or indirectly in fulfilling a customerrequest. The supply chain not only includes the manufacturer and supplier, but alsotransporters, warehouses & retailers --- Chopra and Meidl

- An integrated process where raw materials are transformed into final products thendelivered to customers. (Beamon)-Supply chain management, then, is the active management of supply chain activities tomaximize customer value and achieve a sustainable competitive advantage. It represents aconscious effort by the supply chain firms to develop and run supply chains in the mosteffective & efficient ways possible. Supply chain activities cover everything from productdevelopment, sourcing, production, and logistics, as well as the information systems neededto coordinate these activities.

- SCM is the integration of key business processes across the supply chain for the purposeof creating value for customers and shareholders.- SCM is a system of people, activities, information and resources involved in creating aproduct and then moving it to the customer.- Supply chain management (SCM) is the oversight of materials, information, and finances asthey 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 andamong companies.


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Integration


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SCM

Vendor Manufacturing

PrimaryTransport

Warehousing

Customer

Secondar yTransport

InboundTransport


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MarketingExcellence

PurchasingExcellence

ManufacturingExcellence

SCM another view


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History

Before 1960 Purchasing staff considered as clerksAfter 1960 these were considered as professionals

They were considered due to material cost went up

After 1970 it became part of Materials Mgt.In 1980, Purchasing & Materials Mgt. became Supply Chain Mgt.


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Why SCM?

- Inventory cost increasing- Logistic cost increasing

- Margins decreasing

- Quality become an issue

- Manufacturing efficiency- Customer service with value addition

- Supplier involvement in New product design & development

- Communication

- Competition

Under above circumstances in 1990, companies began to work with quality suppliers,involved them in New Product Development, cost saving, quality, processes, delivery,Business Process Reengineering, Waste elimination & other improvement areas. SCMrapidly increased in popularity as a source of competitive advantage for firms.


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Supply Chain strategy

MinimizeInventoryE.g ABC,

JIT, VMI etc.

Maximizecustomer

service, e.g quality,

speed, cost etc

MinimizeOperating

Costs


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Scope

Supplier

Purchasing

Warehouse

Inventory Management

Operations

Distribution/ Logistics/Customers

Information TechnologyQuality
http://images.google.com/imgres?imgurl=http://www.flatrockbagging.com/images/truckforklift600.jpg&imgrefurl=http://www.flatrockbagging.com/services/inventory.html&h=400&w=600&sz=85&hl=en&start=39&tbnid=p_GNp-D_zh0HtM:&tbnh=90&tbnw=135&prev=/images%3Fq%3DINVENTORY%2BMANAGEMENT%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DNhttp://images.google.com/imgres?imgurl=http://www.zebra.com/id/zebra/na/en/index/industry_solutions/applications/supply_chain_management/receiving.194.159.Image.gif&imgrefurl=http://www.zebra.com/id/zebra/na/en/index/industry_solutions/applications/supply_chain_management/receiving.html&h=159&w=194&sz=37&hl=en&start=3&tbnid=HVLLWnQDihgrEM:&tbnh=84&tbnw=103&prev=/images%3Fq%3D%2Bsite:www.zebra.com%2Brelated%2Bto%2Bsupply%2Bchain%2Bmanagement%26svnum%3D10%26hl%3Den%26lr%3D


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The RightQUALITY

The RightQUANTITY

The Right TIME

The Right PLACE

The Right SUPPLIER

The Right SERVICE

The Right PRICE

withthe

at the

Supply Chain Objectives & process

at the

withthe

and

paying


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- Extremely stiff competition- Increasing awareness exposure due to abundance of information

- Lot of choices & options

- Cost consciousness ask value for money

- More Demanding customer- Changing loyalties & preferences

- Mergers / Competition

- Pressure for quick response

- Energy crises- Law n Order

- Bhutta Culture

Today s Business Scenario


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Objectives

- Faster to market with new products & services- Better Customer service- Lower operational costs- Lower inventory costs

- Smooth flow of information- Open & honest communication- Waste elimination- Data Accuracy

- We approach i.e. Team work
http://images.google.com/imgres?imgurl=http://www.accesskent.com/YourGovernment/Departments/Purchasing/images/gr_businessmen_2.gif&imgrefurl=http://www.accesskent.com/YourGovernment/Departments/Purchasing/pur_index.htm&h=250&w=207&sz=15&hl=en&start=53&tbnid=GD0l6mDjzjeQAM:&tbnh=111&tbnw=92&prev=/images%3Fq%3Dpurchasing%26start%3D40%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN


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- Developing strong relationships with chain members- Developing high quality products at lower cost- Sharing experience with external customers- Reducing order cycle time

- Minimizing inventory- Maximizing flow- Reducing number of suppliers- Initiating small and big projects of saving

- Process re-engineering- Competitive advantage- Customer value & satisfaction

Objectives
http://images.google.com/imgres?imgurl=http://www.dgt.com.tw/english/ibu/images/untitled3.gif&imgrefurl=http://www.dgt.com.tw/english/ibu/index.htm&h=149&w=150&sz=14&hl=en&start=35&tbnid=gRflFaYOh89GwM:&tbnh=95&tbnw=96&prev=/images%3Fq%3Dsupplier%2Bevaluation%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN


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How people are reacting

- Sleeping- Observing- Waiting- Preparing

- Reacting- Adapting


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One company does allprocessing, from rawmaterial through delivery

Old View of the World


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Supply Network View of the World

Integrated networks ofcompanies process, produce anddistribute products. Every onefocuses on its core activity


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The Supply Chain NetworkingSuppliers Manufacturers Warehouses &

Distribution CentersCustomers

Material Costs

TransportationCosts

TransportationCosts

Transportation

CostsInventory CostsManufacturing Costs


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Internal IntegrationMaterials Mgt. ----- Manufacturing Mgt. ----- Distribution Mgt.

External Integration

Suppliers ----- Internal supply chain ----- Customers

-

Supply Chain Integration


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Backward (Supplier) & Forward (Customer) Integration


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Integration

-The most difficult step- If one activity fails then supply along the chain is disturbed

- Participant realization

- Team work

- One set of numbers

- Discipline in forecasting

- Change in attitude of upper management

- Visibility to all- Open communication


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Integration


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Tell me and I will forget

Show me and I will remember

Involve me and I will understand

Integration through Involvement


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Supply Managements Impact on NetIncome and the Bottom Line


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COST MACHINES EXPENSES MANPOWER REJECTION RESOURCES

OVERTIME

SALE PROFIT GROWTH MARKETSHARE RETURNS CUSTOMERS

LESS

MORE

Best supply chain should result:


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Can we compare?Improved Less Improved

EMIRATES VS PIASONY VS LUMINARNOKIA VS Q MobilesTOYOTA VS ADAM MOTORSTCS VS PAK. POSTSUI GAS VS KESCAKU VS CIVIL


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- Product Oversell- Product Withdrawal

- Product Launch/ Demand increased

- Abnormal Demand / Seasonality

- Reduced / Cancelled Orders

- Changes in Demand/supply Schedule

- Discontinuation of material by supplier- Strike / Shut down

Issues in Supply Chain


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Supply Chain Slogans

- Either bring change or be beaten by competitors- Cost Reduction- Supplier Partnership/ Agreements- process mappings & redesigning- Reduce lead time- Low inventory level- One set of numbers- Integration with IT- Data Accuracy- Vendor scheduling & performance- CI & Excellence
http://images.google.com/imgres?imgurl=http://www.letxa.com/nexradtour/forecasting.jpg&imgrefurl=http://www.letxa.com/nexradtour.php&h=768&w=1024&sz=422&hl=en&start=22&tbnid=AhwFaJofsQ4vZM:&tbnh=113&tbnw=150&prev=/images%3Fq%3DFORECASTING%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DN


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Mapping Allows You to

Visualize Your Supply Chain

scm paf lecture 1 & 2

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