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  1. 1. Foundations of Global Supply Chain Management
  2. 2. Building Blocks of Supply Chain Management Y. NARAHARI Computer Science and Automation INDIAN INSTITUTE OF SCIENCE Bangalore – 560 012 [email_address] Foundations of Global Supply Chain Management September 27, 2003
  3. 3. Enterprise <ul><li>Network of independent companies possibly </li></ul><ul><li>in different geographical locations forming a </li></ul><ul><li>strategic alliance toward the common goal of </li></ul><ul><li>designing, manufacturing and delivering right </li></ul><ul><li>quality products/services to customers </li></ul><ul><ul><li>Functional perspective </li></ul></ul><ul><ul><li>Process perspective </li></ul></ul>
  4. 4. Functional and Process Perspective ORDER - TO - DELIVERY PROCESS SUPPLY CHAIN PROCESS Procurement Distribution Manufacturing Logistics
  5. 5. Business Process <ul><li>A structured, measured set of activities ordered in time and space, designed to produce a customer desired output. </li></ul><ul><ul><li>A business process could be decomposed into several other business processes. </li></ul></ul>Business Process Macro Micro <ul><li>SCP </li></ul><ul><li>ODP </li></ul><ul><li>NPDP </li></ul><ul><li>CRM Process </li></ul><ul><li>Order Mgmt </li></ul><ul><li>Answering a query from a customer </li></ul><ul><li>Checking the credit history of customer </li></ul>
  6. 6. Supply Chain Process <ul><li>Integrated , coordinated network of value </li></ul><ul><li>delivering business processes that procure raw </li></ul><ul><li>materials, transform them into final products, </li></ul><ul><li>services and delivers the product to the customers </li></ul><ul><ul><ul><li>Procurement </li></ul></ul></ul><ul><ul><ul><li>Manufacturing/assembly </li></ul></ul></ul><ul><ul><ul><li>Inbound logistics </li></ul></ul></ul><ul><ul><ul><li>Warehousing </li></ul></ul></ul><ul><ul><ul><li>Distribution </li></ul></ul></ul><ul><ul><ul><li>Outbound logistics </li></ul></ul></ul>
  7. 7. Why study Supply Chains ? <ul><li>Supply chains are ubiquitous: you could consider every product or service to have its own supply chain. </li></ul><ul><li>Companies world-wide are spending trillions of rupees on SCM </li></ul><ul><li>Backbone of E-business </li></ul><ul><li>Wholesome mix of industrial engineering, mathematics, computer science, and management </li></ul>
  8. 8. Examples of Supply Chains in India <ul><li>Automotive - Telco, ALL, Mahindra, Maruti </li></ul><ul><li>Aerospace - ADA, HAL </li></ul><ul><li>Chemicals - Asian Paints, Apollo tyres, Reliance </li></ul><ul><li>Apparel - Madura Coats, Reliance </li></ul><ul><li>Food - Cadbury, Parle, Amul Products, HLL </li></ul><ul><li>Consumer durables - HLL, P & G </li></ul><ul><li>Forest Products - Papermills </li></ul><ul><li>Construction - L & T </li></ul><ul><li>Pharmaceutical - Ranbaxy, Glaxo </li></ul><ul><li>Electromechanical – Kirloskar, L & T </li></ul><ul><li>Tooling - HMT, Widia, Mico </li></ul><ul><li>PC/ Computer - IBM, WIPRO, HCL, Intel </li></ul>
  9. 9. Supply Chain Building Blocks <ul><li>Structural </li></ul>Logical IT / ITEC Informational
  10. 10. Structural Building Blocks <ul><li>Suppliers </li></ul><ul><li>Manufacturing / Assembly Plants </li></ul><ul><li>Warehouses </li></ul><ul><li>Distribution Centers </li></ul><ul><li>Retailers / Customers </li></ul><ul><li>Logistics Network </li></ul><ul><ul><li>Inbound </li></ul></ul><ul><ul><li>Outbound </li></ul></ul><ul><li>Customers Orders </li></ul>
  11. 11. Example of a Typical Supply Chain: IBM Europe PC Supply Chain Suppliers (International) 1.2 Million PC/Yr. Glasgow U.K. Warehouse Port PC Assembly Plant 13 Transshipment Points (TPs) in Europe Country-wide Distribution Centers (DCs) Retailers
  12. 12. Logical Building Blocks OPERATIONAL TACTICAL STRATEGIC Procurement Distribution Manufacturing Logistics Logistics
  13. 13. Order/ Product Flow through Supply Chain Functions Order Management Channel A Channel B Customer Channel C Product Distribution Manufacturing Demand Planning Supply Planning Part Supply Orders Demand Forecast Component Requirement Parts Production Plans Products Products Orders Products Products Orders Orders
  14. 14. Examples of Decisions <ul><ul><ul><li>Supplier Selection (Tactical) </li></ul></ul></ul><ul><ul><ul><li>Plant Location (Strategic) </li></ul></ul></ul><ul><ul><ul><li>Product Line Selection (Strat) </li></ul></ul></ul><ul><ul><ul><li>Inventory Control (Tactical) </li></ul></ul></ul><ul><ul><ul><li>Production Scheduling (Ops) </li></ul></ul></ul><ul><ul><ul><li>Dynamic routing (Ops) </li></ul></ul></ul><ul><ul><ul><li>MTO vs MTS vs BTO (Str) </li></ul></ul></ul>
  15. 15. Mathematical Models <ul><ul><ul><li>Optimization Models (LP, ILP, MILP, CO, DP) </li></ul></ul></ul><ul><ul><ul><li>Stochastic Models (Markov chains, Queuing networks, etc.) </li></ul></ul></ul><ul><ul><ul><li>Statistical Models </li></ul></ul></ul><ul><ul><ul><li>Game Theory </li></ul></ul></ul><ul><ul><ul><li>Simulation </li></ul></ul></ul><ul><ul><ul><li>Machine learning </li></ul></ul></ul><ul><ul><ul><li>Auctions and Mechanism Design </li></ul></ul></ul>
  16. 16. Information Building Blocks <ul><ul><ul><li>IT : MRP, ERP, EDI </li></ul></ul></ul><ul><ul><ul><li>Internet Technologies </li></ul></ul></ul><ul><ul><ul><li>Sensor Networks </li></ul></ul></ul><ul><ul><ul><li>E-Commerce, E-Markets </li></ul></ul></ul><ul><ul><ul><li>E-CRM </li></ul></ul></ul><ul><ul><ul><li>Decision Support Software </li></ul></ul></ul><ul><ul><ul><li>Standards </li></ul></ul></ul>
  17. 17. Key Problem in SCM <ul><li>Design a supply chain network </li></ul><ul><li>that delivers high quality </li></ul><ul><li>products to the right customers </li></ul><ul><li>at the right time at minimum cost </li></ul>
  18. 18. Foundations of Global SCM This one day workshop will introduce to you the important concepts and issues involved in successful design and operation of supply chain networks
  19. 19. What is Coming…. <ul><ul><ul><li>Srinivas Raghavan - Dynamics </li></ul></ul></ul><ul><ul><ul><li>Dinesh Garg - Planning </li></ul></ul></ul><ul><ul><ul><li>Mathirajan - Logistics </li></ul></ul></ul><ul><ul><ul><li>Shyam Bhaskar – Best Practices </li></ul></ul></ul><ul><ul><ul><li>Kameshwaran – E-Markets </li></ul></ul></ul><ul><ul><ul><li>Chandrashekar - Procurement </li></ul></ul></ul><ul><ul><ul><li>Visvanathan - SCM Automation </li></ul></ul></ul><ul><ul><ul><li>Narahari Y– What Next? </li></ul></ul></ul>
  20. 20. What Next? Books on SCM: <ul><li>Sunil Chopra and Peter Meindl. Supply Chain Management: Strategy, Planning, and Operation. Pearson Education Asia, 2001. </li></ul><ul><li>David Simchi Levi, P. Kaminsky, and Edith Simchi Levi, Designing and Managing the Supply Chain, Irwin-McGrawHill, 2000 </li></ul><ul><li>W.J. Hopp and M.L. Spearman. Factory Physics: Foundations of Manufacturing Management, Irwin-McGrawHill, 1996 </li></ul><ul><li>N. Viswanadham . Analysis and Design of Manufacturing Enterprises, Kluwer, 2000 </li></ul><ul><li>N. Viswanadham and Y. Narahari. Performance Modeling of Automated Manuafacturing Systems, Prentice Hall, 1992 </li></ul>
  21. 21. What Next? Papers on SCM <ul><li>Journals such as Interfaces, Operations Research, Management Science, European Journal of Operational Research </li></ul><ul><li>Websites such as www.amrresearch.com </li></ul><ul><li>Our own website: http://lcm.csa.iisc.ernet.in/scm/scm.html </li></ul><ul><li>http://lcm.csa.iisc.ernet.in/workshop/index.html </li></ul>
  22. 22. What Next? Contact any of us: <ul><li>Narahari [email_address] </li></ul><ul><li>Raghavan [email_address] </li></ul><ul><li>Mathirajan [email_address] </li></ul><ul><li>Shyam Bhaskar [email_address] </li></ul><ul><li>Kameshwaran [email_address] </li></ul><ul><li>Chandrashekar [email_address] </li></ul><ul><li>Dinesh Garg [email_address] </li></ul><ul><li>Visvanathan [email_address] </li></ul>
  23. 23. What Next? <ul><li>Start working in SCM ….. </li></ul><ul><li>Wish you all the very best …. </li></ul><ul><li>See you again very soon …. </li></ul><ul><li>December 15 th and 16 th , 2003 </li></ul><ul><li>International Workshop on IT Enabled Manufacturing, Logistics, and SCM </li></ul>