4. Content…..
• What is supply chain management?
• Key concepts in SCM
• The importance of the supply chain
• Enablers of supply chain performance
• Supply chain performance in India
5. What is supply chain management?
Suppliers Manufacturers Warehouses & Customers
Distribution Centers
Transportation Transportation
Costs Costs
Material Costs Transportation
Manufacturing Costs Inventory Costs Costs
6. • The supply chain encompasses all activities
involved in the transformation of goods from
the raw material stage to the final stage, when
the goods and services reach the end
customer
• SCM involves planning, design and control of
flow of material, information and finance
along the supply chain to deliver superior
value to end customer in an effective and
efficient manner
7.
8. Evolution of SCM
• The first revolution(1910-1920)
Supply chain
• The second revolution (1960-1970)
Supply chain
• The third revolution (1995-2000)
Supply chain
9. • First Revolution: (Ford Motor Co. 1910–1920)
Single product, that is, no product variety
Vertical integration
• Second Revolution: (Toyota Motor Co. 1960–1970)
Wide Variety
Long-term relationship with suppliers (Keiretsu)
• Third Revolution: (Dell Computers 1995–Current)
Customized products
Medium-term relationship with suppliers
Suppliers have to maintain technology and cost
leadership
10. Decisions in a supply Chain
• Design decision
• Operation decision
11. Key Concepts
• Concept of focal firm
– The firm that provides identity to the products in
terms of brand has higher stakes in the chain, and
such a firm is identified as the main entity. This
main entity is known as focal firm or central node.
• Reverse Supply Chain
– New product return
– End-life product return
12. Importance of supply chain
• Proliferation in product lines
• Shorter product life cycles
• Higher level of outsourcing
• Shift in power structure in the chain
• Globalization of manufacturing
13. Enablers of supply chain performance
• Improvement in communication and IT
• Entry of third party logistics provider
(3PL)
• Enhanced inter-firm coordination
capabilities
14. Challenges in maintaining a supply chain in
India
• Taxation structure • Poor state of logistics
drives location infrastructure
decisions
15. The Supply Chain – Another View
plan
plan sumber
sumber Make Deliver Buy
Make Deliver Buy
Suppliers Manufacturers Warehouses & Customers
Distribution Centers
Transportation Transportation
Material Costs Costs Costs Transportation
Manufacturing Costs Inventory Costs Costs
16. Supply Chain Management – Key Issues
• Overcoming functional silos with conflicting goals
Customer Service/
Purchasing Manufacturing Distribution
Sales
High
Low
Low Few inventories
change- invent-
pur- ories High service
chase overs levels
price Regional
Stable Low stocks
schedules trans-
Multipl
e portatio
Long run
vendors lengths n
SOURCE MAKE DELIVER SELL
