The document provides an overview of supply chain management (SCM). It defines SCM as the flow of materials from suppliers to customers. Key aspects of SCM discussed include procurement, manufacturing, distribution, inventory management, warehousing, and transportation. The document also summarizes SCM software like SAP and Oracle, which help plan and manage supply chain operations.

1. Presented By-
Shahidul Asif 06
Shabib Raihan 13
Tanjil Amin 31
Sadman Prodhan 47
Salman Hossain Khan 56

2. Supply Chain Management
Supply Chain is the flow of materials from supplier
to customer through-
• Procurement
• Manufacturing
• Distribution
• Sales & Disposal
Supply chain activities transform raw materials and
components into a finished product that is delivered
to the end customer.

3. •Developed in 1980s.
•Supply chain management (SCM) is the
process of-
-Planning,
-Implementing,
-Controlling
the operations of the supply chain as
efficiently as possible.
Supply Chain Management

4. Dynamics of Material Flow
Supplier Plant RS Logistics Retailer

5. SCM FLOWS
MATERIAL
MONEY
INFORMATION
Procurement Manufacturing Distribution Customer

6. Supply Chain RelationshipSupply Chain Relationship

7. What is SCM ?What is SCM ?
BuyingBuying
SellingSelling
MakingMaking
MovingMoving
Ware
housing
Ware
housing
SCM is a business network covering from buying,
making, moving, warehousing to selling

8. Traditional SCM

9. Supply Chain Decisions
OPERATIONAL
TACTICAL
STRATEGIC
Procurement DistributionManufacturing Logistics

10.  Cost
 Reduced inventories
 Reduced waste
 Reduced total system costs
 Service
 Establishment of a collaborative framework
 Near real time information flow
 Reduced variation and increased quality
 Business growth opportunities
 Preferred source for new opportunities
 Expanded benefits to other customers
Supply Chain Benefits

11. The 3 Ts
Key Ingredients
For Improving
Supply Chain
Efficiencies
Timeliness
Velocity
Acceleration
Trust
Collaboration
Empowerment
Sharing
Information(eg. open schedules)
Accountability
Understanding the process
Transparency
Ability to see the real situation
The Three T’s

12. Transactional
Efficiency
Critical Data to improve:
Multiple handling
Transit damageProcess delays
Excess freight
Delays
End-to-end
cycle-time
Warehouse fees Inventory turns
Yield
Late Deliveries
Perceived Value
Intrinsic Value
The Supply Chain “Iceberg”

13. SCM FOCUS / LEARNINGS
• SERVICE COST
• FLOW OF INFORMATION, MATERIAL AND CASH
• INPUTS AND OUTPUTS

14. ELEMENTS OF SCM
• INVENTORY MANAGEMENT
• WAREHOUSING
• TRANSPORTATION

15. Shortage
Excess
1. The stock of material lying with producer for which
payments are made but which are yet to be delivered to
the customers and paid for by them.
2. Material stocked to meet the expected demand in the
market.
3. An idle resource which locks the capital.
What is inventory

16. Shortage
Excess
Why inventories are necessary
1. To satisfy the customer demands without time lag.
2. To cover time required for procurement of material.
3. To cater to fluctuations in demand.
4. Seasonal demand of products.
5. Production constraints of suppliers.
6. To retain supplier goodwill.

17. FSN Analysis
Based on speed of movement of material.
1. Some materials have regular and high volume demand and move
‘Fast’ (F),
2. some material have intermittent and unpredictable demand and
hence move ‘Slow’ (S)
3. and a few items have practically no takers and hence keep on lying
in stores for long period of time and categorized as ‘Non moving’
(N).
FAST MOVING SLOW MOVING NON MOVING

18. ELEMENTS OF SCM
• INVENTORY MANAGEMENT
• WAREHOUSING
• TRANSPORTATION

19. ELEMENTS OF WAREHOUSING
• LOCATION
• LAYOUT
• IDENTIFICATION
• MATERIAL HANDLING

20. Warehousing principles
• Ease of receipts, storage and issues.
• Uninterrupted movement of material,
men and equipment.
• Optimum utilization of space.
• Ease of locating the material.
• Safety. & Security.
• Better supervision.
• Flexibility
• Building. : Preferably single storied,
enough height, proper lighting and
ventilation, protection against
hazards like fire and lightening.

21. ELEMENTS OF SCM
• INVENTORY MANAGEMENT
• WAREHOUSING
• TRANSPORTATION

22. Logistics Management
'Logistics is the process of strategically managing
the procurement, movement and storage of materials
(and related information flows) through the
organization and its marketing channels

23. Objectives of Transport Management
1. Cost Optimization
2. Improved service
3. Transportation/logistics as a competitive
differentiator.
4. Time to market

24. CARRIER
SELECTION
OUTSOURCING
Vs. OWN VEHICLE
VEHICLE TYPE
( SIZE )
CUSTOMERS PER
VEHICLE & TRIPS
PER VEHICLE
( ROUTING )

25. Carrier Selection and Routing
• The practical meaning of the 4 C’s of selecting
transportation services
1. Competition
2. Cost
3. Comparison
4. Compromise
Sources Destinations

26. SCM Key Performance Measures
FMFO Deliveries during the month
FMFO Adherence % = ----------------------------------------------------------
Total deliveries made during the month.
FMFO= First manufactured first out
Orders Delivered On Time & Full
Commitment % ( OTIF ) = -----------------------------------------------------
Orders Received in a month
OTIF= On time in full delivery
Transport cost + Labor Cost + storage cost
SCM COST / TN =
---------------------------------------------------------------------
Total sales

27. •Product
Attributes
•Planning
•Request For
Quotation
•Availability
•Purchase Order
•Order
Confirmation
•Call-Off
•Order Status
•Inventory Status
•Product
Quality
•Usage
•Inventory
Change
•Product
Performance
•Delivery
Message
•Goods Receipt
•Invoice
•Credit/Debit Note
•Business
Acknowledgement
•Information Request
•Complaint
•Complaint Request
Plan Make DeliverSource Utility
SCM Process categorized according to the Supply-
Chain Council’s, Supply-Chain Operations Reference
(SCOR) model
Supply Chain Model Foundation

28. Bullwhip Effect
Occurs when slight demand variability is magnified as information
moves back upstream

29. Bullwhip Effect
Factors contributing to the Bullwhip Effect:
• Forecast Errors
• Lead Time Variability
• Batch Ordering
• Price Fluctuations
• Product Promotions
• Inflated Orders
Methods intended to reduce uncertainty,
variability, and lead time:
• Vendor Managed Inventory (VMI)
• Just In Time replenishment (JIT)
• Strategic partnership

30. Causes of Bullwhip Effect
• Demand Signal Processing
(frequent updates of forecasts;
only next echelon orders
considered)
• Order Batching (to realise
logistic Economies of scale +
Reducing order processing
costs)
• Price Fluctuations (resulting in
over-reactions)
• Supply Rationing
(Proportionate rationing;
unrestricted order acceptance +
free return policy)

31. Counter-Measures for BWE
• Avoid multiple demand forecasts
– Order based on ultimate customer
demand
– Use EDI+POS+VMI
– Choose a good forecasting method (PLC
has a major say)
– Move from decentralized DM to
centralized planning (visibility+control is
better)
– Remove layers in channel if possible
• Eg: HP, Apple, IBM, P&G/Walmart

32. Counter-Measures for BWE
• Break order batches
Increase frequency of ordering (OP costs
reduced by EDI)
Resort to standardization to minmize OP costs
Use 3PL to make small batch replenishments
economical
Aggregate across retail outlets to utilize FTL EoS
Reduce safety stocks by cutting lead times
Eg: 3PL using Fedex, P&GStabilize prices
EDLP (P&G)
Special purchase contracts
• Eliminate shortage gaming
Allocate based on past sales (Sun)
Share capacity and information (HP, Motorola)
Limit flexibility wrt time (HP, Seagate)

33. SCM and Information System
Data warehousing:-
• copying of data from various sources, both
inside and outside the enterprise, into an
environment ready for analytical and
informational processing

34. Electronic Data Interchange
• EDI is the computer-to-computer exchange
of business documents between retailers
and vendors
• Merchandise sales, Inventory On Hand, Orders
• Advanced shipping notices,
• Receipt of merchandise, Invoices for payment

35. Standards:
UCS (Uniform Communication Standard)
VICS (Voluntary Inter-industry Commerce Solutions)
Transmission system:
Intranet: local area network (LAN) that employs Internet
technology
Extranet: collaborative network that uses Internet
technology to link businesses with suppliers,
customers, etc.
Electronic Data Interchange

36. EDI Security
• There are implications of security failures (loss of
data, loss of public confidence), but retailers have
security policy objectives:
Authentication – system assures
person on other end of session is who
it claims to be
Authorization - that person has
permission to carry out request
Integrity – info arriving is the same that
was sent

37. SAP Business Suite (A SCM software)
Supply Chain Management
● The SAP®
SCM application is a part of the SAP®
Business Suite. It
functions with a technology platform called SAP®
NetWeaver, which
enables a company to reduce costs in IT while joining technologies
into a single platform. This platform helps companies to process
information and data in an organizational leveling order to monitor
processes and generate coordination in the supply chain.

38. Planning with SAP ERP & SCM
SAP
ECC
ERP
SAP SCM
(includes SAP BW)Core Interface (CIF)
• Demand Planning
• Supply Network Planning and
optimization
• Production Planning with capacity
considerations
• ATP
• CTP
• Detailed Scheduling
• Deployment
• Transportation planning
• Vehicle routing and scheduling
• Mater data
•Materials
•Locations
•Partner
•Plants
•Info records
• Transactional data
• Customer orders
• Production orders
• Purchasing orders
• Execution
Basic Components of SAP SCM

39. Planning at Supply Chain Level
SAP
ECC 1
SAP
SCM
SAP
ECC 2
SAP
ECC n
- Each SAP ECC component covers one
or more locations
In the network
- Planning may be done
centrally

40. SAP®
SCM Functions

41. Substitute Technologies
Supply Chain Management
ply Chain Management
● Oracle®
SCM is an open integrated solution that ensures companies’
efficiency by predicting demand fluctuation, organizing and planning
operations on the supply chain, and providing industry-specific
solutions. Some of the solutions that this program offers are:
Advanced procurement, logistics and transportation management,
order fulfillment, manufacturing operations management, product life-
cycle management, supply chain planning, and optimization.

42. Oracle®
SCM Benefits

43. Oracle®
SCM Vs. SAP®
SCM
● Oracle
– Broad enterprise
application
– Less services in
package
– Certain services not
provided
– Less customized
● SAP
– Better technology
– More services in
package
– More technical
support
– More customized

44. Oracle®
SCM Vs. SAP®
SCM
● Oracle
– Lower cost
– Requires less time to
set up
– Accommodates more
than 1000 users
– Licensing and
updating is free
– More user friendly
● SAP
– Higher cost
– Requires more time
to set up
– Accommodates 25
to 1000 users
– Licensing and
updating is not free
– Less user friendly

45. Cost Comparison

46. Thanks to all