Introduction to supply chain management.ppthere


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Introduction to supply chain management.ppthere

  1. 1. By the end of this presentation you should be able to:           Describe the Historical background behind the concept of the supply chain. Understand the Importance of the supply chain. Define supply chain management. List supply chain types. Describe the objectives of the supply chain. Analyze supply chain components. Mention supply chain activities. Understand how to implement supply chain into action. Discuss technical challenges associated with supply chain management. Relate the role of E- Business applications on the supply chain.
  2. 2. The concept of supply chain management(SCM) appeared as a hot topic during the pervious years, especially during the decade of 90’s , which was characterized by the shift of power from the manufacturer towards the customer, using friendly technology, and shifting the process of making profit from outside the organization to the inside environment.
  3. 3.     After the Second world war ,production exceeded demand . The war emphasized the importance of reaching the right product ,at the right time and at the right amount and quality. This supply chain was referred to as “The Logistics management”. History shows that logistic capabilities have helped countries win wars, The case of the USA and allies winning the gulf war was due to the effective logistics, on the other hand the defeat of Napoleon in Russia Was due to poor logistics.
  4. 4. Every organization and firm started to understand the importance of logistic management, but the focus was always on the outbound activities, not inbound , because they believed that profit will come from outside only.
  5. 5. Before Globalization and Changing in government policy After Globalization and Changing in government policy The manufacturers were the kings(they controlled everything and the customer had to accept and take what they offered) The Customer is the king, he can demand new things and gets what he really wants. Bad relationship between the suppliers and manufacturers Good relationship between the suppliers and manufacturers Departments of the organization functioned in isolation Departments of the organization started to cooperate with each other “The element of strategic purchasing as a vital component in the corporate planning process is aimed at gaining competitive advantage .slowly but surely the importance of strategic supply management is coming out of its closet” Michael Porter
  6. 6.   It determines the competitiveness of the organization in the market. It determines its profitability. For winning the end user,companies need to take every part of its supply chain together, “the competition is now between supply chains”
  7. 7. A supply chain includes all the processes that add customer-desired value to material and bring it to the customers. This value gets added at various stages of the journey that materials takes till it reaches the customer. Supply chain encompasses all these value adding stages.
  8. 8. “SCM aims to increase sales, reduce costs, and make full use of assets by streamlining the interaction and communication of all participants along the supply chain, SCM solutions use networking technology to link suppliers, distributors, and business partners to better satisfy the end customer, while feeding real time data about the customer demand into the partners’ production and distribution process” Cisco
  9. 9. Raw supply chains.  Ripe supply chains.  Internal supply chains.  External supply chains.  Self-monitored supply chains.  Outsourced supply chain.  Production oriented supply chain.  Financial -oriented supply chain.  Market – oriented supply chain.  Value chains. 
  10. 10.  Very basic type, found in small scale industries, loosely organized , not enough cooperation between units of the organization.
  11. 11. This supply chain is more advanced than the previous one, more organized, better relations with suppliers, some amount of information flowing, but there is no other supply chain initiative appearing.  This type of food chain exists in food sector. 
  12. 12.  This type is the most common type , here the organization has implemented ERP (Enterprise resource planning),they are well-organized from the inside, but not connected to the suppliers or distributors In their fold.
  13. 13.   This type of supply chain is internally optimized , and extend well beyond the company boundaries, but the problem is that this type only concentrate on partial integration. This type is very common, especially in the automotive sector.
  14. 14. This type of supply chain is company centric not customer centric, it brings all partners together, it can achieve a considerable speed to market, but it is not because of total optimization.
  15. 15. This type of supply chain let the logistic partner take care of everything (inbound, outbound logistics relationship, information flow…. Etc. This type is very rare and can be found in some of the export houses.
  16. 16. Risks Benefits Unanticipated Costs Focus on Other Business Aspects Potential for Setbacks Minimize Overall Costs Quality Suffers Meet Customer Demand
  17. 17. This type of supply chains focuses its energy on production by optimizing the capacity and labor, Law value items are made and sold through various channels, marketing and distribution are not issues.
  18. 18. Known as cash to cash cycle it focuses on the financial goal by doing these steps: 1-Reducing the inventory and increasing inventory turnover. 2-Speed the invoicing process, reduce billing errors, speed response to overdue bills. Source :
  19. 19. This type of supply chain is triggered when a customer places an order. It is highly flexible Example: computer hardware sector.
  20. 20. This is the ultimate integration that is aimed at total optimization , it addresses theses issues: Waster disposal, improving productivity Not very common.
  21. 21.  Value is added to the basic material procured from the first tier of suppliers and pass them on the next nodes, and so on…. The key aspects to success in supply chain management Are :speed and coordenation, and realizing customer needs and satisfaction, keeping the cost down and keeping the quality up
  22. 22. The most important objective is unification of all functions and activities that are required .  The principal objectives are:  To reduce the physical supply chain.  To define supply chain responsibilities to a specific core service competency.  To decrease the time and cost of getting end user customer products in volume to markets worldwide. 
  23. 23. Information Supply •Is the key to CSM success. •Getting the right information at the right time to the right people. •Flawless , efficient CSM. •Suppliers: velocity, quality, flexibility, low cost. Production •What customers want. •Capacity •Quality •Qc •Maintenance •Scheduling. Distribution •Both in and out the manufacterer. •Reaching customer on time •Frequency of distribution. •Enhance the competitiveness.
  24. 24. Supplystock • Balance between over stocking and under stocking • The faster the better .
  25. 25. plan Source Make Deliver Return
  26. 26. Plan: Evolve a strategy, evolve metrics for performance evaluation.  Source: Choose the right supplier , control inventory, ensure smooth information flow.  Make :Converting raw to finished product, scheduling.  Deliver: all the steps to reach customers.   Return: Handling exceptions and errors .
  27. 27. Crafting project vision. The focus should be on the project vision all across departments , it will lead to success.  Managing organizational change. The organization has to change and form a Single entity ,rearrangement of relations from inside and outside.  Choosing the right implementation approach.  Gradual change VS dramatic big bang change 
  28. 28. Managing technical challenges.  Technology architecture: should be addressed according to the needs of the business , as well as system response time.  Interfacing multiple system: interfacing multiple systems is a challenge, a strong communication system is very important 
  29. 29.  Data accuracy and integrity: highlighting key data requirements early, to ensure data validation.
  30. 30. It is the latest generation of the supply chain.  Characterized by the combination between the internet and the supply chain.  Dynamic chain based on the ERP .  E-business applications effectively provide an information system that effectively links multiple companies in a chain The information hub would be a web site connected to different chains. 
  31. 31. First: E-commerce:  B2B or B2C  E-commerce tasks are:  Executing orders by customers,  Communication between the members of the chain.  Electronic order tracking  Remote sensing testing and diagnosis of problems in various parts of the supply chain.  Recording useful performance data about the supply chain.
  32. 32. Second :E-procurement It is a process by which a manufacturer procures products from suppliers.  Dynamic markets link manufacturers and suppliers , buyers and sellers into virtual dynamic markets like: Ariba, free markets…etc.  Electronic market place example: chaconnes, (software needed)
  33. 33. Theses softwares include data storage, marketplace management and monitoring tools
  34. 34. E- business thrive on effective collaboration between its employees , suppliers, franchises ,distributers ,dealers , stakeholders, and customers, by implementing group decision making in a cost effective way.  E –collaboration allows companies to share information, collaborative planning, reduce inventory cost and raise customer service level.  E- collaboration help in managing the product life cycle, exchanging information with customers, which made the supply chain operations more efficient.
  35. 35. Quick returns optimization Efficiency E-business
  36. 36. “Within 18 months , all of our suppliers will supply us on the internet or they will not do business with us” Jack Welch