Supply Chain Management Presented by- Upendra kumar Roll no-46 MBA 3rd Sem
The Supply ChainIt encompasses all activities associated with the flow and transformation of goods and services from the raw material stage through to the end user as well as associated information flow.It consist of four fundamental processa) Acquiring customers ordersb) Procuring materials and components from the suppliersc) Producing or manufacturing productsd) Filling customers demand
Supply Chain ManagementIt focuses on managing the flow of goods and services and information through the supply chain in order to attain the level of synchronization that will make it more responsive to customer needs while lowering total costs.Synchronization requires close coordination, cooperation and communication plus timing among supply chain members in order to be effective.
Material Flow Material Flow Supplier Material Flow CustomerManagement Management Information FlowSchedule / Stock Conversion DeliveryResources Deployment
• SUPPLY CHAIN INCLUDES : – MATERIAL FLOWS – INFORMATION FLOWS – FINANCIAL FLOWS
Supply Chain StructureSUPPLIER FACTORY DC RDC RETAILERRaw Materials Finished Goods Information Flow
Importance of SCM• Getting products to customers faster than the competitor will improve a companys competitive position. To remain competitive, companies must seek new solutions to important Supply Chain Management issues such as modal analysis, supply chain management, load planning, route planning and distribution network design.• Faster product availability is key to increasing sales.• "If you can be there first, you are likely to get more orders and more market share." The ability to deliver a product faster also can make or break a sale. "If two alternative [products] appear to be equal and one is immediately available and the other will be available in a week, which would you choose?
IT and SCM• Information is the essential link between all supply chain processes and activities including suppliers, producers, distributors, retailers and customers. Computer and IT allows real time , on-line communication throughout the supply chain.IT can provide following function to improve Supply chain management• Centralized coordination of information flow• Integration of transportation, distribution, ordering and production• Direct access to both domestic and global transportation and distribution channel.• Locating and tracking the movement of every item in supply chain• Intercompany and Intracompany information access• Data Interchange• Instantaneous updating of inventory level in real time.
Application of IT in SCM• E- Business• Electronic Data Interchange• Bar Code• E-Procurement• E-Market places
E-BusinessIt is replacement of physical processes with electronic ones. In E-Business, transactions are conducted via a variety of electronic media including e-mail, electronic fund transfer, electronic publishing, image processing, electronic bulletin boards, shared database, bar code, voice mail, CD ROM and Internet.
Features of E-Business• Cost saving and lower transaction cost• Reduction or elimination of the role of intermediaries and even retailers and services providers• Shortening supply chain transaction times for ordering and delivery• Increase visibility of company• Greater choices and more information to customers• Instant accessibility to services.
Electronic data Interchange• EDI is computer to computer exchange of business documents. It describes the capability and practices of communicating information between two organizations electronically instead of by traditional forms- courier or fax.• EDI links supply chain member together for order purchasing, accounting, production and distribution• It provides quick access to information, allows better customers services, reduces paperwork, allow better communication, increase productivity, improves tracking and expediting, reduces labor cost for printing and handling papers and reduces telephone and fax transmission cost.
Bar Code• Computer readable codes are attached to items flowing through the supply chain including products, containers and packages.• Bar code contains identifying information about the item. It might include product description, item number, its source destination, special handling procedures, cost, order number etc. when it scanned it provides critical information to supply chain members about its location in supply chain.• It also creates Point-of-sale data an instantaneous computer record of the sale of a product. It instantly transmitted throughout the supply chain to update inventory record. It is important for suppliers, producers and distributors.
E-Procurement• It is the part of Business-to-Business (B2B) commerce being conducted on internet, in which buyer make a purchases directly from suppliers through their websites by using software packages, e hubs and trading exchange.• It speed up the purchase order and transaction process from companies, lower transaction cost associated with purchasing, lower prices for goods and services and faster ordering and delivery times.
E-Market places• It is initiated by Weirton Steel Corporation in 1996 called MetalSite. E-market places are being found by industry specific companies and suppliers to provide a ground on net where companies can streamline supply chains and find new partners. It is projected that 35% of B2B internet trade was done by e-market places by 2005.• Delphi Automotive system corporation, largest auto supplier in US who joined e-market in 2000 and save $70 million by purchase parts and materials by this platform.
Warehouse Management System• It is sophisticated, highly automated system to run day to day operations of distribution center and keep track of inventories.Features of WMS• Transportation management• Order management• Yard management• Labor management• Warehouse optimization
• Transportation management:- it is to track inbound and outbound shipments, to consolidate and build economical loads, and to select the best carrier based on cost and service.• Order management:- it enables to add, modify or cancel orders in real time.• Yard management:- controls activities at the facility dock and schedules dock appointment to reduce bottleneck.• Labor management:- plans, manages and reports the performance level of warehouse personnel.• Warehouse optimization:- optimizes the warehouse placement of items called “slotting”, based on demand, product groupings and the physical characteristics of the item.
Vendor management inventory• In this management manufacturers, instead of distributors generate orders. Under VMI manufacturers receive data electronically via net about distributors sales and stock levels. Manufacturers can see which items distributors carry, as well as several years of point-of-sale data, expected growth, promotion, new and lost business and inventory goals and use this information to create and maintain forecast and inventory plan.• Due to shifting of responsibility from distributor to manufacturers they have lower stockouts and also have the right product at the right time.