scm supply chain management (main)

8/6/2019 SCM Supply Chain Management (Main)

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Supply Chain ManagementSupply Chain Management

And Service Supply RelationshipAnd Service Supply Relationship

Submitted to:

Prof. Bawa

Submitted By:

Group 5


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What is SCM?What is SCM?

y Supply Chain encompasses all activities

associated with the flow and transformation of

goods from the raw materials stage, to the end

user .


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Typical Supply chain:Typical Supply chain:


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Different processes of SCM:Different processes of SCM:

- Raw materials supply

- Production management

-Transportation- Inventory management

- Information system management

- Order processing- Material handling

- Customer management


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Retailers

Distribution Centers

2nd Tier Suppliers

Customers

1st

Tier Suppliers

Assembly/ Mfg.

1st

Tier Suppliers

2nd Tier Suppliers2nd Tier Suppliers

SCM MODEL


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Components of Supply chain :Components of Supply chain :

y Supplier: Source of raw materials, component

parts, semi manufactured products and other

items that occur early in the supply chain-

unfinished or unsuppliable products.

y Manufacturers: Makers of products. suppliers

produce components or sub assemblies, while

manufacturers perform the task of final

assembly or product integration.


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y Distributers: Responsible for the storing

and handling the materials at receiving

docks, warehouses and retail outlets.

y Retailers:These are the manufacturers

customers;The stores that buy the actualproducts.

y Consumers:The person who actually buysthe product for consumption.


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Decision Variables in Supply Chain Management :

y Location: Of facilities and sourcing points

y Production: what to produce in which facilities

y Inventory: how much to order, when to order, safety

stocks

y Transportation: mode of transport, shipment size, routing,

and scheduling


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Vertical IntegrationVertical Integration

y Choosing between making or buying an item

y Developing the ability to produce goods or services

that are previously purchased.

y It can take the form of forward or backward

integration


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RAW

MATERIALBUYERS

STEEL DEALERS

COMPUTERSCALCULATORSSILICON

CURRENT

PRODUCTION

BACKWARD

INTEGRATION

FORWARD

INTEGRATION

AUTOMOBILE

CIRCUITBOARDS


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Bullwhip EffectBullwhip Effect

11-11

Final CustomerInitial

Supplier

Demand

A problem frequently observed in an Unmanaged supply chain

is the Bullwhip effect .It is defined as an oscillation in the

supply chain caused by demand variability.


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y Demand variability increases as one moves up the supply chain away from the

retail customer

y Small changes in consumer demand , result in large variations in orders placed

upstream.

y The network can oscillate in very large swings as each organization in the supply

chain seeks to solve the problem from its own perspective.

y Results in increased cost and poorer service.

Bull Whip Effect (Cont.)


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Causes of Bull Whip Effectof Bull Whip Effect

Demand Forecast Updating

Order Batching

Price Fluctuations

Rationing Within the Supply Chain


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Push vs. Pull SystemPush vs. Pull System

y In Push systems, work release is based on downstream

demand forecasts

Keeps inventory to meet actual demand

Acts proactively

y In Pull systems, work release is based on actual demand or

the actual status of the downstream customers May cause long delivery lead times

Acts reactively


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Push/Pull View of Supply ChainsPush/Pull View of Supply Chains

Typically, Procurement,Manufacturing and

Replenishment cyclesTypically, Customer

Order Cycle

Customer

Order Arrives

PUSH PROCESSES

(Proactive) PULL PROCESSES(Reactive)


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Mumbai Dabbawallas


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Nutan Mumbai Tiffin Box Suppliers Association Popularly dabbawala (one who carries the box)

0 % Fuel

0 % Modern Technology

0 % Investment

0 % Disputes

99.999999 % Performance

100 % Satisfaction


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Here the markings of the collection point are :

VP Vile Parle

C CooperHospital

Red color denotes the station & the dabbawala

team at the collection & delivery points.Destination markings are

10 Nariman Point

9- Dabbawala handling the Destination area

M Mittal Towers.

16- 16 th Floor.

1010

VP

9

M16

C

The color coded on Dabbas can be read in the following pattern


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Supply chain logistics and efficient reverselogistics

The concept of Multi-level coding

Time Management

Customer Relationship Management

Customer Satisfaction

Cost effectiveness


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World Market Leader in the QSR area (Quick Service

Restaurant)

100 sales items in the restaurant

200 restaurants per DC

Delivery frequency: ~3/wk, higher in urban area.

2-3 stops per route

Exclusive distributors (3PL)

McDonalds Supply Chain


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RadhakrishnaFoodlandDistribution

Centres

(Mumbai)

TrikayaAgriculture

(Iceberg

Lettuce)

VistaProcessed

Foods Pvt. Ltd.(Chicken andVegetable )

DynamixDairy

Industries (Cheese)

McDonalds

Outlet

McDonalds

Outlet

McDonalds

Outlet


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McDonaldsMcDonalds

Supply ChainSupply Chain


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McDonalds Supply Chain ChallengesMcDonalds Supply Chain Challenges

Even stronger focus on freshness and qualityEven stronger focus on freshness and quality

OnOn--going product innovationsgoing product innovations

Strong customer demand fluctuationsStrong customer demand fluctuations

based on promotionsbased on promotions

OrderOrder-- and inventory managementand inventory management

RestaurantRestaurant DCDC suppliersupplier -- raw material supplierraw material supplier

Bull Whip effectBull Whip effect

Change Management in a deChange Management in a de--centralized structurecentralized structure


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ServiceService--Supply Relationship:Supply Relationship:

Service supply relationship management is a systems

approach that recognizes the customer supplier duality

found in the delivery of services.

Three Important features of Service Supply

relationship are:I. Bidirectional optimization

II. Management of productive Capacity

III. ManagingRisk

Service Supply Relationship management incorporates

customers into knowledge management strategy of the

company.

This enhances Value and Quality of services provided.


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CustomerCustomer--Supplier Duality in ServiceSupplier Duality in Service

Supply Relationships (Hubs)Supply Relationships (Hubs)

aterial trans er In ormation trans er

Supplier

Service

esign

Service

rovider ustomer

ter i l tr ns er n orm tion tr ns er

Supplier

Service

esign

Service

rovider ustomer


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SingleSingle--Level Bidirectional ServiceLevel Bidirectional Service

Supply RelationshipSupply RelationshipService

Category

Customer Input

Output

Service

Provider

Minds Student Mind

Knowledge

Professor

Bodies Patient Tooth

Filling

Dentist


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Service

Category

Custom

er

Input

Output

Service

Provider

Input

Output

Provider

s

Supplier

Minds Patient DisturbedTreated

Therapist

PrescriptionDrugs

Pharmacy

Bodies Patient Bood

Diagnosis

Physicia

n

Sample

Test Result

Lab

Two-Level Bidirectional Service

Supply Relationship


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Sources of Value in Service SupplySources of Value in Service Supply

Relationships:Relationships:y Bi-directional Optimization

y Managing Productive Capacity

-Transfer: make knowledge available (e.g. web based

FAQ database)

- Replacement: substitute technology for server (e.g.

digital blood pressure device)

- Embellishment: enable self-service by teaching (e.g.

change surgical dressing)

y Management of Perishability.


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Impact of Service Supply Relationships:Impact of Service Supply Relationships:


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SCM FOR A RESTAURANT

Management Information Systems- When the inventory reaches the

minimum level it automatically places an order to the suppliers.

Sourcing and Procurement- Locating the suitable suppliers and obtaining

the expected quantity and quality, with price as a major influence.

Order Processing- It is the work flow associated with the picking, packingand delivery of the packed item(s) from the suppliers to the stores.


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SCM FOR A RESTAURANT

Inventory ManagementThe formal management of the timing and

quantities of goods to be ordered and stocked by the hotel in order that

demand can always be satisfied without excess expenditure. It is done

with the help of MIS.

Customer Service- Whenever a customer enters into a restaurant

and places an order care should be taken so that every item on the

menu is available. If it is not available it would imply inefficient Supply

and Inventory Management.


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FARMER

Grains

FruitsVegetables

Oil

Processing and

Packaging

Distributor

Storage

Transport

Packaging

STORES

MANAGEMENT

Inventorymanagement

Supplier relations

Supplies

Management

LAUNDRY

MANUFACTURING

Cutlery and crockery

Textile

DAIRY &

POULT

RYMilk

Butter

Cream

Poultry

Grocery stores

and wholesalers

Wholesale Market

Suppliers I,II

Supply chain in A Restaurant:

SUPPLY CHAINMANAGEMENT

{ GAUBAS

restaurant,

Bangalore }


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DHL Supply Chain:DHL Supply Chain:

I ivi al st rs rp rat st rs

DHL Offic

tral L cati Offic

r p

DHL Pack

pick p r p

L

cal

r Nati

al

/ I

t

r

ati

alDistri ti

l cal

R gi s rti g a lk packi g

R gi al H Distri ti if l cal

tr ck

A


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Cargo or Courier

Airport

Destination / Hub

cargocourier

Blue DartFlights

Destination Warehouse

Destination

truck

truck

Destination found?

yes

DHL ffice at

Destination

no

Reverse

logistics to

sender

A


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Inbound LogisticsInbound Logistics -- DHLDHL

y Procurement Services

y Raw material warehousing

y Transportation


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Outbound LogisticsOutbound Logistics -- DHLDHL

y InboundTo Manufacturing (for the client)

y In-plant Logistics


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Value Added Services :DHLValue Added Services :DHL

y Contract packing

y Comprehensive co-packing service

y Additional packing solutions, including

packaging design and packaging materials

procurement


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Inventory Management &Inventory Management &

WarehousingWarehousing -- DHLDHLy Finished GoodsWarehousing

y Main Collection offices

y Hub airport

y Main Warehouse outsideOctroi


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DistributionDistribution -- DHLDHL

y Home delivery

y In-store Logistics

y Service PartsLogistics


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OtherFacilitiesOtherFacilities -- DHLDHL

Barcode Scanning at milestone locations

Preparation of OnlineWaybills

Online booking of consignments collect

pickup

Last 99 days shipping records available throughthe website

DHL Express SMS


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DHL InnovationsDHL Innovations

y DHL SMART SENSORTEMPERATURE

y RFID technology (Radio Frequency

Identification


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IMPACT OF IT ON SUPPLY CHAINIMPACT OF IT ON SUPPLY CHAIN


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y Information processing is one of the

central functions of SCM.

y IT could make two contributions in the

SCM :x Improvement in information sharing among firms.

x Prompt problem identification and optimization.


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y Introduction of Electronic DataInterchange (EDI) -Web-EDI

y

Enterprise Resource Planning.

y The development of application software.

- Supply Chain Planning Software (SCPS.)


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Impact of internet/ eImpact of internet/ e--commerce oncommerce on

supply chainsupply chain

1. Cost efficiency

2. Changes in the distribution system

3. Customer orientation

4. Shipment tracking

5. Shipping notice

6. Freight auditing

7. Shipping documentation and labeling

8. Online shipping enquiry


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Advantage of SCMAdvantage of SCM

y Reduce total cost .

y The cost can also be reduced in relation to

the integrated advantage.

- avoiding redundant investment in

warehousing, and reducing inventory level

by information sharing.


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y The firms in the supply chain should have thenecessary abilities and should share reasonable

responsibilities (risk sharing).

y Various information, such as ordering, inventory

or customer demand, among others, should be

shared and processed properly.


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DisadvantagesDisadvantages

y Heavy investment of time, money, andresources

y Compare and negotiate with suppliers in the

terms of price, consistency, and quality.

y Outsourcing to foreign countries to save money

can cause backlash from the media, current

customers, as well as possible future customers.

y Backlash from the media, current customers, aswell as possible future customers .

y Power must be evenly distributed throughout

the supply chain.


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SCM aims to :

The right

Product

Higher

ProfitsThe right

Time

The right

Customer

The right

Quantity

The right

Store

The right

Price=++ ++ +


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Thank you!


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ReferencesReferences

y Introduction to supply chain management by

Robert B. Handfield & Ernest L. Nichols, Jr.

y Logistics Management,The Supply Chain

Imperative by VinodV. Sopley www.wikipedia.org

y www.investopedia.com

scm supply chain management (main)

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