• Value Chain• Supply side- raw materials, inbound logistics and production processes• Demand side- outbound logistics, marketing and sales.
WHAT IS SUPPLY CHAIN MANAGEMENT" Is the strategic management of activities involved inthe acquisition and conversion of materials to finishedproducts delivered to the customer" Supplier Material Flow Customer Management Management Information Flow Schedule / Conversion Delivery Resources Stock Deployment Leads to Business Process Integration
• Supply chain is the system by which organizations source, make and deliver their products or services according to market demand.• Supply chain management operations and decisions are ultimately triggered by demand signals at the ultimate consumer level.• Supply chain as defined by experienced practitioners extends from suppliers’ suppliers to customers’ customers.
• SUPPLY CHAIN INCLUDES : – MATERIAL FLOWS – INFORMATION FLOWS – FINANCIAL FLOWS
• SUPPLY CHAIN MANAGEMENT IS FACILITATED BY : – PROCESSES – STRUCTURE – TECHNOLOGY
• Supply chain objectives may differ from situation to situation.• For functional products, cost efficiency is the critical factor.• For innovative products, responsiveness is the important factor.• Leanness + Agility together make up Leagility
Supply Chain StructureSUPPLIER FACTORY DC RDC RETAILERRaw Materials Finished Goods Information Flow
Supply Chain and Demand Chain• Demand chain is defined as the system by which organizations manage sales and distribution of products and services to end users.• Conceptually incorrect to look at demand chain separately• Look at the pipe as a whole.
• But is there a pipe at all? – More a network – Not necessarily linear• Value chain orchestration rather than controlling the flow through the pipe• A network of independent and interdependent organizations mutually and cooperatively working together to control, manage and improve the flow of materials and information from suppliers to end users
SUPPLY CHAIN DRIVERS Not new. Value system of Michael Porter • Why sudden interest? – Demanding customers – Shrinking product life cycles – Proliferating product offerings – Growing retailer power in some cases – Doctrine of core competency – Emergence of specialized logistics providers – Globalization – Information technology
SUPPLY CHAIN ELEMENTS • SupplyChain Design Strategic • Resource Acquisition • Long TermP lanning (1 Year ++) • Production/Distribution PlanningTactical • Resource Allocation • MediumTermP lanning (Qtrly,Monthly) • Shipm ent SchedulingOperational • Resource Sched uling • Short TermP lanning (Weekly,Daily)
• Supply Chain Goals Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on – Revenue growth – Better asset utilization – Cost reduction.
Supply Chain Management Underlying Principles Compression (Planning/Manufacturing/Supply) Conformance (Forecasts/Plans/Distribution) Co-operation (Cross -Functional) Communication (Real Time Data)Reduce Overall Cycle Time : Improve Response