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Supply Chain Management
What Is Supply Chain Management (SCM)
• A set of approaches used to efficiently integrate
– Suppliers
– Manufacturers
– Warehouses
– Distribution centers
• So that the product is produced and distributed
– In the right quantities
– To the right locations
– And at the right time
• System-wide costs are minimized and
• Service level requirements are satisfied
Plan Source Make Deliver Buy
Importance of Supply Chain Management
• Dealing with uncertain environments – matching supply and demand
• Shorter product life cycles of high-technology products
– Less opportunity to accumulate historical data on customer
demand
– Wide choice of competing products makes it difficult to predict
demand
• The growth of technologies such as the Internet enable greater
collaboration between supply chain trading partners
– If you don’t do it, your competitor will
• Availability of SCM technologies in the market
– Firms have access to multiple products (e.g., SAP, Baan, Oracle,
JD Edwards) with which to integrate internal processes
Why Is SCM Difficult
• Uncertainty is inherent to every supply chain
– Travel times
– Breakdowns of machines and vehicles
– Weather, natural catastrophe, war
– Local politics, labor conditions, border issues
• The complexity of the problem to globally optimize a supply
chain is significant
– Minimize internal costs
– Minimize uncertainty
– Deal with remaining uncertainty
McDonalds Success Story
• The first restaurant was established in 1955 in Des
Plaines, Illinois, USA.
• McDonalds is the world leading chain with 33,000
restaurants in 118 countries serving 67 million
customers each day.
• McDonald was started in India in 1996.
• It is present in 40 Indian cities with 250
restaurants and serves 650,000 customers daily.
• The strength of McDonalds India employees
amounts 9,000 people including restaurant staff.
• The company is enjoying growth of 30-40 percent
every year in India.
• It was from 1990 onwards, expert teams were in
India to check the strength of logistics industry,
reliability of transport sector & resource availability.
• Menus with religious and cultural sentiments were
designed and in six years time the company was
ready with its entire plan.
• McDonalds is known for its beef burgers free of
beef and pork in India.
• There are two categories in food ingredients
supply; Tier-I and Tier-2 suppliers.
• In Tier-I- There are 14 core suppliers-provide
processed products e.g. Vegetable and chicken
patties comes from Vista Processed foods Pvt Ltd.,
French fries, potato wedges and hashbrowns by
McCain Foods India Pvt. Ltd. and so on.
Tier-I Suppliers
rCheese Dynamix Dairy Industries Ltd., Pune
Dehydrated onions Jain Foods, Jalgaon
Iceberg lettuce Trikaya Agriculture, Pune
Chicken patty Vista Foods, Taloja
Veg. Patty, Veg. nuggets,
Pineapple/Apple pie
Kitran Foods, Taloja
Chicken (dressed) Riverdale Talegaon
Buns Cremica Industries, Phillaur
Eggless mayonnaise Quaker Cremica Pvt. Ltd., Phillaur
Sesame seeds Ghaziabad
Iceberg lettuce MeenaAgritech, Delhi
Fish fillet patties Amalgam Foods Ltd., Kochi
Iceberg lettuce Ooty Farms & Orchards, Ooty
Vegetables for the patties Finns Frozen Foods & Jain Foods (Nasik, Jalgaon)
Mutton and mutton patties Al Kabeer, Hyderabad
• In Tier-2- There are 40 suppliers, growers and
processors who provide lettuce and potato, poultry
items and coating systems that are used for coating
the chicken and vegetable patties.
• The flow of ingredients are from Tier-2 to Tier-I
suppliers who process them.
• The fleet of refrigerated trucks transport these
processed foods to the company Distribution
Centers .
• These are multi-temperature & single temperature
trucks into practice where 250 McDonalds Indian
restaurants are provided on time fast delivery.
• This is not unidirectional, it also include the
significant aspect of return logistics.
• Empty bottles and racks are available for further
processing. Plastic crates are used for buns to
ensure their quality.
• There are 4 Distribution Centers (DC) across the
country all 250 restaurants are served effectively.
• The Noida and Mumbai DCs are primary
Distribution Centers owned by the company.
• The other two DCs are in Bengaluru and Kolkata are
housed in leased properties.
• McDonalds transportation has been completely
outsourced.
• Radhakrishna Foodland Pvt. Ltd (RKFL) manages
the four DCs.
• Demand Forecasting
• Quality Assurance
• Technology

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Chapter 11. supply chain management

  • 2. What Is Supply Chain Management (SCM) • A set of approaches used to efficiently integrate – Suppliers – Manufacturers – Warehouses – Distribution centers • So that the product is produced and distributed – In the right quantities – To the right locations – And at the right time • System-wide costs are minimized and • Service level requirements are satisfied Plan Source Make Deliver Buy
  • 3. Importance of Supply Chain Management • Dealing with uncertain environments – matching supply and demand • Shorter product life cycles of high-technology products – Less opportunity to accumulate historical data on customer demand – Wide choice of competing products makes it difficult to predict demand • The growth of technologies such as the Internet enable greater collaboration between supply chain trading partners – If you don’t do it, your competitor will • Availability of SCM technologies in the market – Firms have access to multiple products (e.g., SAP, Baan, Oracle, JD Edwards) with which to integrate internal processes
  • 4. Why Is SCM Difficult • Uncertainty is inherent to every supply chain – Travel times – Breakdowns of machines and vehicles – Weather, natural catastrophe, war – Local politics, labor conditions, border issues • The complexity of the problem to globally optimize a supply chain is significant – Minimize internal costs – Minimize uncertainty – Deal with remaining uncertainty
  • 5. McDonalds Success Story • The first restaurant was established in 1955 in Des Plaines, Illinois, USA. • McDonalds is the world leading chain with 33,000 restaurants in 118 countries serving 67 million customers each day. • McDonald was started in India in 1996. • It is present in 40 Indian cities with 250 restaurants and serves 650,000 customers daily.
  • 6. • The strength of McDonalds India employees amounts 9,000 people including restaurant staff. • The company is enjoying growth of 30-40 percent every year in India. • It was from 1990 onwards, expert teams were in India to check the strength of logistics industry, reliability of transport sector & resource availability. • Menus with religious and cultural sentiments were designed and in six years time the company was ready with its entire plan.
  • 7. • McDonalds is known for its beef burgers free of beef and pork in India. • There are two categories in food ingredients supply; Tier-I and Tier-2 suppliers. • In Tier-I- There are 14 core suppliers-provide processed products e.g. Vegetable and chicken patties comes from Vista Processed foods Pvt Ltd., French fries, potato wedges and hashbrowns by McCain Foods India Pvt. Ltd. and so on.
  • 8. Tier-I Suppliers rCheese Dynamix Dairy Industries Ltd., Pune Dehydrated onions Jain Foods, Jalgaon Iceberg lettuce Trikaya Agriculture, Pune Chicken patty Vista Foods, Taloja Veg. Patty, Veg. nuggets, Pineapple/Apple pie Kitran Foods, Taloja Chicken (dressed) Riverdale Talegaon Buns Cremica Industries, Phillaur Eggless mayonnaise Quaker Cremica Pvt. Ltd., Phillaur Sesame seeds Ghaziabad Iceberg lettuce MeenaAgritech, Delhi Fish fillet patties Amalgam Foods Ltd., Kochi Iceberg lettuce Ooty Farms & Orchards, Ooty Vegetables for the patties Finns Frozen Foods & Jain Foods (Nasik, Jalgaon) Mutton and mutton patties Al Kabeer, Hyderabad
  • 9. • In Tier-2- There are 40 suppliers, growers and processors who provide lettuce and potato, poultry items and coating systems that are used for coating the chicken and vegetable patties. • The flow of ingredients are from Tier-2 to Tier-I suppliers who process them. • The fleet of refrigerated trucks transport these processed foods to the company Distribution Centers . • These are multi-temperature & single temperature trucks into practice where 250 McDonalds Indian restaurants are provided on time fast delivery.
  • 10. • This is not unidirectional, it also include the significant aspect of return logistics. • Empty bottles and racks are available for further processing. Plastic crates are used for buns to ensure their quality. • There are 4 Distribution Centers (DC) across the country all 250 restaurants are served effectively. • The Noida and Mumbai DCs are primary Distribution Centers owned by the company. • The other two DCs are in Bengaluru and Kolkata are housed in leased properties.
  • 11. • McDonalds transportation has been completely outsourced. • Radhakrishna Foodland Pvt. Ltd (RKFL) manages the four DCs. • Demand Forecasting • Quality Assurance • Technology