An Overview of Supply Chain Management and a look at suppy chain of Bisleri

1. Overview of
Supply Chain
Management
1
Arpit Doshi

2. Outline
 What is a Supply Chain?
 The Importance of Supply Chain
Flows
 Process View of a Supply Chain
 Examples of Supply Chains
2

3. What is Supply Chain Mgmt. ?
SCM is a business network covering from buying, making, moving, warehousing to
selling
Buying
Selling
Making
Moving
Ware
housing

4. What is a Supply Chain?
 All stages involved, directly or
indirectly, in fulfilling a customer
request
 Includes manufacturers, suppliers,
transporters, warehouses, retailers,
customers
 Within each company, the supply
chain includes all functions involved in
fulfilling a customer request (product
development, marketing, operations,
distribution, finance, customer service)
4

5. Stages of a Detergent Supply
Chain
5
Timber
Company
Paper
Manufacturer
Distributor
Packaging
Chemical
Manufacturer
P&G or Other
Manufacturer
Wal-Mart
Or Third
Party
distribut-
or
Wal-Mart
Store
Customer

6. What is a Supply Chain?
 Customer is an integral part of the supply chain
 Includes movement of products from suppliers to
manufacturers to distributors, but also includes
movement of information, funds, and products in
both directions
 Probably more accurate to use the term “supply
network” or “supply web”
 Typical supply chain stages: customers, retailers,
distributors, manufacturers, suppliers
 All stages may not be present in all supply chains
(e.g., no retailer or distributor for Dell)
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7. What is a Supply Chain?
7
Supplier Manufacturer Distributor Retailer Customer
Supplier Manufacturer Distributor Retailer Customer
Supplier Manufacturer Distributor Retailer Customer

8. Flows in a Supply Chain
8
Customer
Information
Product
Funds

9. The Objective of a Supply
Chain
1. To maximize overall value generated
2. To look for Sources of Revenue and Cost
3. Improving the visibility of the demand
4. Improving the quality
5. Minimizing the time
6. Reduces the transportation cost
7. Reduces warehousing cost
8. Expanding width/depth of distribution
9. Product Life cycle support
10. Rationalize supplier base
11. Service orientation
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10. The Objective of a Supply
Chain
 Example: Dell receives $2000 from a customer
for a computer (revenue)
 Supply chain incurs costs (information, storage,
transportation, components, assembly, etc.)
 Difference between $2000 and the sum of all of
these costs is the supply chain profit
 Supply chain profitability is total profit to be
shared across all stages of the supply chain
 Supply chain success should be measured by
total supply chain profitability, not profits at an
individual stage
10

11. Process View of a Supply
Chain
 Cycle view: processes in a supply
chain are divided into a series of
cycles, each performed at the
interfaces between two successive
supply chain stages
 Push/pull view: processes in a supply
chain are divided into two categories
depending on whether they are
executed in response to a customer
order (pull) or in anticipation of a
customer order (push) 11

12. Cycle View of Supply Chains
12
Customer Order Cycle
Replenishment Cycle
Manufacturing Cycle
Procurement Cycle
Customer
Retailer
Distributor
Manufacturer
Supplier

13. Cycle View of a Supply Chain
 Each cycle occurs at the interface between two
successive stages
 Customer order cycle (customer-retailer)
 Replenishment cycle (retailer-distributor)
 Manufacturing cycle (distributor-manufacturer)
 Procurement cycle (manufacturer-supplier)
 Cycle view clearly defines processes involved and
the owners of each process. Specifies the roles and
responsibilities of each member and the desired
outcome of each process.
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14. Customer Order Cycle
 Involves all processes directly
involved in receiving and filling the
customer’s order
 Customer arrival
 Customer order entry
 Customer order fulfillment
 Customer order receiving
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15. Replenishment Cycle
 All processes involved in replenishing
retailer inventories (retailer is now the
customer)
 Retail order trigger
 Retail order entry
 Retail order fulfillment
 Retail order receiving
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16. Manufacturing Cycle
 All processes involved in replenishing
distributor (or retailer) inventory
 Order arrival from the distributor,
retailer, or customer
 Production scheduling
 Manufacturing and shipping
 Receiving at the distributor, retailer, or
customer
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17. Procurement Cycle
 All processes necessary to ensure that materials
are available for manufacturing to occur according
to schedule
 Manufacturer orders components from suppliers
to replenish component inventories
 However, component orders can be determined
precisely from production schedules (different
from retailer/distributor orders that are based on
uncertain customer demand)
 Important that suppliers be linked to the
manufacturer’s production schedule
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18. Push/Pull View of Supply
Chains
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Procurement,
Manufacturing and
Replenishment cycles
Customer Order
Cycle
Customer
Order Arrives
PUSH PROCESSES PULL PROCESSES

19. Push/Pull View of
Supply Chain Processes
 Supply chain processes fall into one of
two categories depending on the timing
of their execution relative to customer
demand
 Pull: execution is initiated in response to
a customer order (reactive) ex. DELL
 Push: execution is initiated in anticipation
of customer orders (speculative) ex.
TOYOTA
 Push/pull boundary separates push
processes from pull processes 19

20. Supply Chain in a Firm
 All supply chain processes can be
classified into
◦ Customer relationship management
◦ Internal supply chain management
◦ Supplier relationship management
 The three macro processes manage
the flow of information, product, and
funds required to generate, receive,
and fulfill a customer request.
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21. Supply Chain Macro
Processes
21
Supplier
Relationship
Management
Internal
Supply
Chain
Management
Customer
Relationship
Management
Source
Negotiate
Buy
Supply Collaboration
Strategic Planning
Demand Forecasting
Supply Planning
Fulfillment
Field Service
Market
Price
Sell
Call center
Order Management
Supplier Firm Customer

22. Examples of Supply Chains
 Dell / Compaq/HP
 Toyota / GM / Ford
 Amazon
 Flipkart
What are some key issues in these
supply chains?
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23. Toyota
 Where should plants be located, what degree of
flexibility should each have, and what capacity
should each have?
 Should plants be able to produce for all markets?
 How should markets be allocated to plants?
 What kind of flexibility should be built into the
distribution system?
 How should this flexible investment be valued?
 What actions may be taken during product design
to facilitate this flexibility?
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24. Amazon.com
 Why is Amazon building more warehouses as it grows? How
many warehouses should it have and where should they be
located?
 What advantages does selling books via the Internet provide?
Are there disadvantages?
 Why does Amazon stock bestsellers while buying other titles
from distributors?
 Does an Internet channel provide greater value to a bookseller
like Borders or to an Internet-only company like Amazon?
 Should traditional booksellers like Borders integrate e-
commerce into their current supply?
 For what products does the e-commerce channel offer the
greatest benefits? What characterizes these products?
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25. 25

27. FACILITIES
 It has plants in Maharashtra, Kerala, Jammu &
Kashmir, Himachal Pradesh, Tamil Nadu,
Karnataka, UP, Orissa, Jharkhand and north
Bengal.
 Its current capacity is estimated at 3.50-crore
cases per annum.
 Maharashtra contributes 30 per cent of the
company’s total sales.

28. INVENTORY:
 About 50 tones of stock are dispatched in a
day.
 They stock water as inventory.
 They use computer software (IN FLOW) for
inventory management, which helps them to:
-Replenishment
–Monitoring Inventory levels
–Information on current stock levels

29. Sourcing
 Sources water from the Himalayas.
 It also sources water from rivers and
treat it.
 It sources plastics for bottle from
Manjushree Technopack Ltd, a
provider of rigid plastic(Bangalore).

30. TRANSPORTATION
 On a national level, there are 2,000 trucks- on-
call for Bisleri, while the number of trucks
averages 300 and 250 in the Mumbai and Delhi
markets.
 It also uses railways.

31. PRICING
 They provide low pricing strategy.
 They offer some discount on purchase
bundle or case of mineral water.