This document discusses international logistics and supply chain management. It defines supply chains and logistics, and outlines the history and evolution of supply chain management. It describes key supply chain concepts like push and pull strategies, the bullwhip effect, and collaboration. It also examines supply chain drivers, processes, decisions, and emerging best practices. The overall document provides a comprehensive overview of modern supply chain management principles and strategies.

1. INTERNATIONAL LOGISTICS
AND
SUPPLY CHAIN
MANAGEMENT
BY
C.RAJA
V.VINEETH
R.NAVEEN RAJ
B.SREEHARINATH
VICTOR JAYAKUMAR EDWARD

2. HIGHLIGHTS
 Supply Chain definition
 Logistics definition
 History of Supply Chain
 Objectives, Importance, Measuring factors
 Principles of Supply Chain
 Decision phases in Supply Chain
 Process views
 Supply Chain Drivers
 Supply Chain Macro processes in a firm
 Key issues of Supply Chain
 Bull Whip Effect
 Operation Strategies
 Imperatives for Success
 Supply Chain collaboration
 Emerging Best Practices in SCM

3. SUPPLY CHAIN MANAGEMENT
 Also referred to as the logistics network
 Suppliers, manufacturers, warehouses, distribution centers
and retail outlets – “facilities”
and the
 Raw materials
 Work-in-process (WIP) inventory
 Finished products
that flow between the facilities.
Hence SCM is a network of all parties involved, either directly
(or) indirectly, in fulfilling a customer request.

4. Supply Chain includes
 Material flows
 Information flows
 Financial flows
LOGISTICS
 Physical Distribution Management(1976)
 Logistics is the process of
planning, implementing, controlling efficient and
effective flow and storage of goods, services and
related information from the point of origin to the
point of consumption.

5. TRADITIONAL SUPPLY CHAIN SYSTEMS
Supplier Manufacturer MDC WDC Retail Customer
plant
3rd Party Logistics
Providers (3PL)
Material Flow
Information Flow

6. SUPPLY CHAIN
Suppliers Manufacturers Warehouses & Customers
Distribution Centers
Transportation Transportation
Costs Costs
Material Costs Transportation
Manufacturing Costs Inventory Costs Costs
6

7. HISTORY OF SUPPLY CHAIN MANAGEMENT
 1960’s - Inventory Management Focus, Cost
Control
 1970’s - MRP & BOM - Operations Planning
 1980’s - MRPII, JIT - Materials Management,
Logistics
 1990’s - SCM - ERP - “Integrated” Purchasing,
Financials, Manufacturing, Order Entry
 2000’s - Optimized “Value Network” with Real-
Time Decision Support; Synchronized &
Collaborative Extended Network
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8. Supply Chain objectives
 To have the right products in the right
quantities at the right place at the right
moment at minimal cost.
 It is characterized by a sharp focus on
 Maximize the overall profit
 Better asset utilization
 Cost reduction.

9. Importance of SC
 Reduced inventories along the chain.
 Better information sharing among the partners.
 Planning being done in consultation rather than in
isolation.
 Supply chain design, planning and operation decisions
play a significant role in the success or failure of the firm
Measuring Factors of SCM
 Responsiveness
 Efficiency
9

10. Principles of SC
 Sourcing, procurement and supply management
 Component order arrival
 Production scheduling
 Receiving
 Materials management
 Forecasting, Inventory, stores management, stock
keeping
 Logistics and distribution management
10

11. DECISION PHASES IN SC
Developing Strategy / Design
Planning Supply Chain
Supply Chain Operation
11

12. Decisons in Developing a strategy or Design:
What is the chain’s configuration?
How resources will be allocated?
What process each stages will perform?
Whether to outsource or perform
in/house?

13. Decisions in Planning Supply Chain:
Forecasting the demand for the coming year
Which markets will be supplied from which locations?
The inventory policies to be followed
The timing and size of marketing and size of marketing and
pricing promotions

14. Steps in Supply Chain Operations:
Set delivery schedules of trucks
and placing orders
Set a date that the order to be filled.
Generate pick lists at a warehouse
Allocate a particular order to particular shipping
mode or shipment
Allocate inventory or production to individual orders.

15. PROCESS VIEWS
 Cycle view
 Push/pull view
Cycle View: The process is divided into a series of
cycles, each performed at the interface between two
successive stages of a supply chain.
Push/Pull view: The process in supply chain are
divided into two categories depending on whether
they are executedin response to the consumer order
or in anticipation of the customer orders.
15

16. Cycle View:
• Given the fivestages of supply chain :
• Customer Customer
order cycle
• Retailer Replenishment
Cycle
• Distributor
Manufacturing
• Manufacturer cycle
Procurement
• Supplier Cycle

17. Sub Process in each cycle:
Supplier markets
Supplier receives
product Buyer places order
order
Buyer reverse flows
to supplier or third Buyer receives Supplier supplies
party supply order

18. PUSH STRATEGIES
 Classical manufacturing supply chain strategy
 Manufacturing forecasts are long-range
 Orders from retailers’ warehouses
 Longer response time to react to marketplace changes
 Unable to meet changing demand patterns
 Supply chain inventory becomes obsolete as demand for
certain products disappears
 Increased variability (Bullwhip effect) leading to:
 Large inventory safety stocks
 Larger and more variably sized production batches
 Unacceptable service levels
 Inventory obsolescence
 Inefficient use of production facilities (factories)
 How is demand determined? Peak? Average?
 How is transportation capacity determined?
 Examples: Auto industry, large appliances, others?
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19. PULL STRATEGIES
 Demand-driven
 Coordinated with true customer demand
 None or little inventory held
 Only in response to specific orders
 Decreased lead times
 Decreased retailer inventory
 Decreased variability in the supply chain and especially at
manufacturers
 Decreased manufacturer inventory
 More efficient use of resources
 More difficult to take advantage of scale opportunities
 Examples: Dell, Amazon
19

20. PUSH/PULL STRATEGIES
 Hybrid of “push” and “pull” strategies to overcome
disadvantages of each
 Early stages of product assembly are done in a “push”
manner
 Partial assembly of product based on aggregate demand
forecasts (which are more accurate than individual product
demand forecasts)
 Uncertainty is reduced so safety stock inventory is lower
 Final product assembly is done based on customer
demand for specific product configurations
 Supply chain timeline determines “push-pull boundary”
Push-
Pull
Boundary
“Generic” Product “Customized” Product
Push Strategy Pull Strategy
Raw End
Materials Consumer
Supply Chain Timeline 20

21. CHARACTERISTICS OF PUSH, PULL AND
PUSH/PULL STRATEGIES
PUSH PULL
Objective Minimize Cost Maximize Service Level
Complexity High Low
Focus Resource Allocation Responsiveness
Lead Time Long Short
Processes Supply Chain Planning Order Fulfillment
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22. SUPPLY CHAIN DRIVERS
 LOGISTICS DRIVERS
 Facilities
 Inventory
 Transport
 CROSS- FUNCTIONAL DRIVERS
 Information
 Sourcing
 Pricing
22

23. SCM MACRO PROCESSES IN FIRM
SUPPLIER CUSTOMER
SUPPLIER INTERNAL CUSTOMER
RELATIONSHIP SUPPLY CHAIN RELATIONSHIP
MANAGEMENT MANAGEMENT MANAGEMENT
23

24. SUPPLY CHAIN MANAGEMENT – KEY ISSUES
 Overcoming functional silos with conflicting goals
Customer Service/
Purchasing Manufacturing Distribution
Sales
Low pur- Few change-
chase price overs High service
Low levels
Multiple Stable inventories
schedules Low costs
vendors
Low
transportation
costs
SOURCE MAKE DELIVER SELL
24

25. SUPPLY CHAIN MANAGEMENT – KEY
ISSUES
ISSUE CONSIDERATIONS
Network Planning • Warehouse locations and capacities
• Plant locations and production levels
• Transportation flows between facilities to minimize cost and time
Inventory Control • How should inventory be managed?
• Why does inventory fluctuate and what strategies minimize this?
Supply Contracts • Impact of Revenue sharing
• Pricing strategies
Strategic Partnering • What information and processes can be shared?
• What partnerships should be implemented and in which situations?
Outsourcing & Procurement • What are our core supply chain capabilities and which are not?
Strategies • Does our product design mandate different outsourcing approaches?
• Risk management
Product Design • How are inventory holding and transportation costs affected by product
design?
• How does product design enable mass customization?
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26. BULL WHIP EFFECT
 Inventory and back-order levels fluctuate considerably across
the supply chain even when customer demand doesn’t vary
 The variability worsens as we travel “up” the supply chain
 Forecasting doesn’t help
Multi-tier Wholesale
Suppliers Manufacturer Distributors Retailers Consumers
Sales
Sales
Sales
Sales
Time Time Time
Time
Bullwhip Effect
26

27. FACTORS CONTRIBUTING TO THE
BULLWHIP
 Demand forecasting practices
 Min-max inventory management (reorder points to bring
inventory up to predicted levels)
 Lead time
 Longer lead times lead to greater variability in estimates of
average demand, thus increasing variability and safety stock
costs
 Batch ordering
 Fixed ordering costs
 Impact of transportation costs (e.g., fuel costs)
 Sales quotas
 Price fluctuations
 Promotion and discount policies
 Lack of centralized information
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28. TAMING THE BULLWHIP
Four critical methods for reducing the Bullwhip effect:
 Reduce uncertainty in the supply chain
 Centralize demand information
 Keep each stage of the supply chain provided with up-to-
date customer demand information
 More frequent planning (continuous real-time planning the
goal)
 Reduce variability in the supply chain
 Every-day-low-price strategies for stable demand patterns
 Eliminate the bullwhip through strategic partnerships
 Vendor-managed inventory (VMI)
 Collaborative planning, forecasting and replenishment
(CPFR)
28

29. SUPPLY CHAIN MANAGEMENT OPERATIONS
STRATEGIES
STRATEGY WHEN TO CHOOSE BENEFITS
Make to Stock standardized products, Low manufacturing costs;
relatively predictable meet customer demands
demand quickly
Make to Order customized products, Customization; reduced
many variations inventory; improved service
levels
Configure to Order many variations on Low inventory levels; wide
finished product; range of product offerings;
infrequent demand simplified planning
Engineer to Order complex products, Enables response to specific
unique customer customer requirements
specifications
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30. SUPPLY CHAIN IMPERATIVES FOR SUCCESS
 View the supply chain as a strategic asset
 Dell’s innovative direct-to-consumer sales and build-to-order
manufacturing
 Create unique supply chain configurations that align with
your company’s strategic objectives
 Operations strategy
 Outsourcing strategy
 Channel strategy Supply chain configuration components
 Customer service strategy
 Asset network
 Reduce uncertainty
 Forecasting
 Collaboration
 Integration
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31. SUPPLY CHAIN COLLABORATION
 Many different definitions depending on perspective
 The means by which companies within the supply chain
work together towards mutual goals by sharing
 Ideas
 Information
 Processes
 Knowledge
 Information
 Risks
 Rewards
 Why collaborate?
 Accelerate entry into new markets
 Changes the relationship between cost/value/profit equation
31

32. SUPPLY CHAIN COLLABORATION
 The only method that has the potential to eliminate or
minimize the Bullwhip effect
Retailers
Suppliers Synchronized Manufacturer
Production
Scheduling Collaborative
Distributors/
Demand
Collaborative Wholesalers
Planning
Product
Development
Collaborative Logistics Planning
•Transportation services
•Distribution center services
Logistics Providers
32

33. BENEFITS OF SUPPLY CHAIN COLLABORATION
CUSTOMERS MATERIAL SERVICE
SUPPLIERS SUPPLIERS
• Reduced inventory • Reduced inventory • Lower freight costs
• Increased revenue • Lower warehousing costs • Faster and more reliable
• Lower order management • Lower material acquisition delivery
costs costs • Lower capital costs
• Higher Gross Margin • Fewer stockout conditions • Reduced depreciation
• Better forecast accuracy • Lower fixed costs
• Better allocation of
promotional budgets
• Improved customer service
• More efficient use of human resources
Source: Cohen & Roussel
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34. EMERGING BEST PRACTICES IN SCM
STRATEGY
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