This document provides an overview of supply chain management. It defines SCM as integrating management practices and information technology to optimize information and production flow among partners in a supply chain. It describes the basic components and processes of a supply chain including suppliers, manufacturers, distributors, retailers, and customers. It discusses the importance of SCM in gaining efficiencies, reducing costs, and managing complex global supply chains. It also outlines some of the key activities and objectives of SCM.

1. A PRESENTATION
BY
SHAILESH TOPNO

2. INTRODUCTION
SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENT (SCM) is
integrating management practices and
information technology to optimize information
and production flow among the processes and
business partners within a supply chain. SCM is
a management concept that integrates the
management of supply chain process.

3. WHAT IS SUPPLY CHAIN ?
 Consists of all parties involved, directly or indirectly, in
fulfilling a customer request, include not only
manufacturers & suppliers, but also transporters,
warehouses, retailers & even customers.
Supplier Manufacturer Distributor Retailer Customer

4. Basic Supply Chain Process
Manufacture
& Raw Materials
Export &
Import
Activities
Primary
Movement
Distribution
Centres
Secondary
Movement
B2B & B2C
Distribution
After-Sales
Services
Reverse Logistics
After Sales
Logistics
Suppliers Production Distribution Sales Channel
Value-Added
Services
End UserDistribution
Distribution
Logistics
Manufacturing
Logistics
Inbound
Logistics
Supply
Logistics

5.  In a supply chain, virtually all of the members serve as
both customers as well as suppliers.
 In the Li & Fung example, the Korean yarn producer and
the Japanese zipper producer are probably only suppliers
and the customer’s customers (folks like you and me) are
probably only customers.
 Every other organization in the supply chain is both
a customer and a supplier. See the figure on slide seven.
SUPPLY CHAIN

6. Supplier
Supplier
Storage
} Service Customer
Supplier
Supplier
Supplier
Storage} Mfg. Dist. Retailer CustomerStorage

7. Yarn
Zippers
Factory
1
Factory
2
Factory
3
Factory
4
Factory
5
The
Customer
(Retailer)
Yarn
Dying &
Weaving

8. WHY IS SCM SO IMPORTANT?
 TO Gain efficiencies from procurement,
distribution and logistic
 To reduce transportation costs of inventories
 To meet the challenge of globalization and longer
supply chains
 To meet the new challenges from e-commerce
 To manage the complexities of supply chains
 To manage the inventories needed across the
supply chain

9. IMPORTANT ACTIVITIES INCLUDE DETERMINING
 Transportation vendors
 Credit and cash transfers
 Suppliers
 Distributors
 Accounts payable and receivable
 Warehousing and inventory
 Order fulfillment
 Sharing customer, forecasting, and
production information

10. WHAT ARE THE MERITS AND DEMERITS OF
SCM ?
MERITS :
With the increased visibility into the supply chain
and adaptive supply chain network, you can be
more responsive. You can sense and respond quickly
to changes and quickly capitalize on new
opportunities.
By offering a common information framework that
supports communication and collaboration, SCM
enables you to better adapt to and meet customer
demands.
You can track and monitor compliance in areas as
environment, health and safety.

11. With SCM, you can low operational expenses with
timelier planning for procurement, manufacturing
and transportation. Better order, product and
execution tracking can lead to improvements in
performance and quality - and lower costs. You can
also improve margins through better coordination
with business partners.
Tight connection with trading partners keep your
supply chain aligned with current business
strategies and priorities, improving your
organization's overall performance and
achievement of goals.

12. DEMERITS :
 SCM is hard to implement in immature/informal
organizations.
 SCM can fail if both parties are not willing to share
their insights ,information throughout.
 If in an entire SCM chain even one single node is
hiding information ,this will effect the profits and
gains of the entire network which may finally
collapse. So transparency is highly required in SCM.
 Costs.
 Requires trust.
 Imbalance of power.
 Strategic challenges.

13. SUPPLY CHAIN ELEMENTS
 Supply Chain Design
 Resource Acquisition
 Long Term Planning (1 Year ++)
Strategic
 Production/ Distribution Planning
 Resource Allocation
 Medium Term Planning(Quarterly, Monthly)
Tactical
 Shipment Scheduling
 Resource Scheduling
 Short Term Planning (Weekly,Daily)
Operational

14. FUNCTIONS OF SCM
SCM
Supplier
management
Inventory
management
Distribution
management
Channel
management
Payment
management
Financial
management

15. OBJECTIVES & GOALS OF SCM
 to cut costs
 Increase profits
 Improve performance in relationships with customers
and suppliers
 Develop value added services that give a company a
competitive edge
 Objective is to be able to have the right products in
the right quantities(at the right place) at the right
moment at minimal cost
 Reduced inventory , reduced lead times , reduced
warehouse cost , helps in forecast accuracy

17. DISTRIBUTION SYSTEMS
 Trucking
• Moves the vast majority of
manufactured goods
• Chief advantage is flexibility
 Railroads
• Capable of carrying large loads
• Little flexibility though containers
and piggybacking have helped with
this

18.  Airfreight
• Fast and flexible for light loads
• May be expensive
 Pipelines
• Used for transporting oil, gas, and
other chemical products

19.  Waterways
• Typically used for bulky, low-value
cargo
• Used when shipping cost is more
important
than speed

20. DISTRIBUTION SYSTEMS

21. SUPPLY CHAIN RISK
 More reliance on supply chains means more
risk
 Fewer suppliers increase dependence
 Compounded by globalization and logistical
complexity
 Vendor reliability and quality risks
 Political and currency risks

22. IMPORTANT POINTS TO KEEP IN MIND
 Segment customers based on service needs.
 Modify the supply chain to meet these service
requirements profitably.
 Customize the logistics network.
 Delay product differentiation till the last possible
moment.

23.  Segmentation of customers based on service
needs.
 Customization of logistics network.
 Listen to signals of market demand and plan
accordingly.
 Differentiate product close to the customer.
 Develop a supply chain wide technology
strategy.
SUMMARY