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Opportunities and Challenges of SCM, Future of SCM Bipin Roll No: 10 MBA FT
What is Supply Chain Management?• A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers• Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.
Opportunities in SCM• Information Technology in SCM – Quicker customer response and fulfilment rates – Shorter lead time – Greater productivity and lower costs – Reduced inventory throughout the chain – Improved forecasting precision – Fewer suppliers and shorter planning cycles – More reliable and quality information
IT in SCMa. Supply Chain Management Software– Customer requirement processing– Purchase order processing– Inventory management– Goods receipt and warehouse managementb. ERP and SCMc. RFID and SCM
Opportunities in SCM• Supply Chain in Food Sector – directly into consumers – cold storage units – food processing entities – restaurants, caterers – packaging units, wholesalers or distributors
Opportunities in SCM• E-Financial Supply Chain Systems – Cross border transactions – decreasing cost of technology – speed of transaction – 24hour 365 day facility
Opportunities in SCM• SCM in Pharmaceutical industry – Outsourcing reduces the overall cost by 30 to 35 per cent – Reduces problems faced during the regulatory process – Improve manufacturing efficiencies – Reduces excess production capacity by divesting facilities – Improve net earnings and cash flow – Fast and cheaper to have discovery work outsourced as it reduces the drug development cost.
Challenges of SCM• Expanding distribution systems transcending the national boundaries and becoming global• Reduced inventory goals require flexible, high velocity manufacturing strategies that can enable a quick response when unexpected changes in demand occur• Many new SCM technologies like RFID are in the nascent stage and for them ROI is not yet identified• Increased demand responsiveness requires a “demand driven supply network” (transformation from push to pull operations) collaboration and closed- loop planning environment requires clean synchronized n data• Information disintegration-disconnected demand, supply and financial plan make it difficult to reconcile plans with reality and re-plan accordingly
Challenges of SCM• Complexity- increasingly complex supply chain processes impede best practice decision making and management of data transfers.• JIT inventory- cannot afford to have errors or supply chain disruption that will cause manufacturing to halt.• Short product life cycles- one has to constantly set up new supply chains. Each product has its own supply chain; the more finished product and inventory are lying dead in your supply chain the faster you will get obsolete.• Faster order cycle time-less margin for error or delay in the supply chain.• Information Integration• Coordination and Resource sharing• Organizational and Relationship linkage
Conclusion• Supply chain management is about getting the right stuff to the right place at the right time, efficiently and effectively.• Technology plays a crucial role in modern SCM.• An effective supply chain management has information integration as its foundation.
References– Jayashree Dubey, M.L Sai Kumar, 2007, ”Supply Chain Management” New Century Publications, Second edition– Sunil chopra, Peter Miendel, 2005, “Supply Chain Management Planning, Strategy And Operations”, Pearson Education,Third edition– Harrison, A., & van Hoek, R. 2008. Logistics Management and Strategy: Competing Through The Supply Chain. London: Prentice-Hall.– John Storey, Caroline Emberson, Janet Godsell, Alan Harrison, 2006, Supply chain management: theory, practice and future challenges, International Journal of Operations Production Management Volume: 26, Issue: 7, Pages: 754-774.– Mary J. Meixell , Vidyaranya B. Gargeya, 2005 Global supply chain design: A literature review and critique, Elsevier Ltd.– Omera Khan, Bernard Burnes, 2007, Risk and supply chain management: creating a research agenda, The International Journal of Logistics Management, Volume 18, Issue: 2 Page:197 – 21– The Journal of Supply Chain Management, ISM (Institute for supplymanagement), Quarterly publication, Issue 2, 2006.– International Journal of logistics Research and Applications, Quarterly, Taylor & Francis, Vol. 7, Issue 1, 2006.– Supply Chain Management Resources, Michigan State University, Michigan State university Libraries, Michigan.– International Journal of Value Chain management (IJVCM), Quarterly, 2006, Vol. 1, No. 2, Inderscience Publishers, www.inderscience.com.