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supply chain fundamentals trainign
Supply chain management involves coordinating the flow of goods and services from suppliers to customers. The goal is to satisfy customer needs with minimum costs and delays. Key aspects of supply chain management include purchasing, manufacturing, warehousing, inventory management, and logistics. Coordinating these complex activities across different entities is challenging due to conflicting objectives. Overall integration and information sharing across the supply chain are important to improve efficiency and reduce costs.
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supply chain fundamentals trainign
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- 2. Supply Chain Management Managementof the flow of goods or services between entities in the chain to realize delivery of end products or services, satisfying customers at minimum cost. OR Set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses and stores, so that merchandise is produced and distributed in the right quantities, to the right locations at the right time in order to minimize system wide costs while satisfying service level requirements.
- 3. Supply Chain Management 1.PURCHASING 2. MANUFACTURING 3. WAREHOUSING 4. INVENTORY MANAGEMENT 5. LOGISTICS
- 5. Cash Flow Material Flow Consumer Retailer FactorySupplier SupplierDistr. Center Retailer Information Flow Returned Goods
- 6. Why is SCMdifficult? Different facilities may have different, conflicting objectives ◦ Suppliers want manufacturers to commit themselves to purchasing large quantities in stable volumes with flexible delivery dates ◦ Manufacturers want large production runs ◦ Warehouses and Distribution Centers want to reduce inventory ◦ Reduction in inventory levels increase transportation costs
- 7. Conclusion Supply chainscompete, not companies Most of the opportunities for cost reduction and value enhancement lie at the interface between supply chain partners Supply chain integration implies process integration
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- 9. Purchasing The acquisitionof goods and services needed to support the various activities of an organization, at the best possible cost and from reliable suppliers.
- 10. Purchasing Topics • Importanceof Purchasing Today • Purchasing Processes • Import Documentation • Negotiation Skills • Make – or – Buy Analysis • Ethics in Buying
- 11. Importance of purchasing: •Competition • Material cost • Lead time • Customer Demand • Quality
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- 13. Negotiation Definition andComments: The process whereby two or more parties decide what each will give and take in an Exchange between them.” (Lysons & Farrinton) “Negotiation is the process by which we search for terms to obtain what we want from somebody who wants something from us.” (Total Success Training) “Negotiation is discussing or bargaining in order to reach agreement.” (Owen)
- 14. Types of negotiation: Adversarial Negotiation Collaborative Negotiation Adversarial Negotiation (distributive or win-lose negotiation) Collaborative Negotiation (integrative or win -win negotiation)
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- 16. Why would webuy something (items, components, services) when we could provide it ourselves?
- 17. Reasons to buy: The unit cost is cheaper, We don't use it enough, We don't have space, We don't understand the technology, We don't have the skill, It's not our core business/expertise, It's expensive to set up the process,
- 18. Reasons to providein-house: The unit cost is cheaper, It's critical to the business, Retain specialist knowledge/skills, We have control over the supply, Quality issues are critical, No suitable supplier, It's part of our core business/expertise
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- 20. Manufacturing isall about converting raw material into consumer or industrial products. A firms manufacturing competency is based on Brand power Volume Variety Lead time
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- 22. Warehouse A warehouseis a commercial building for storage of goods. They are usually large plain buildings in industrial areas of cities and towns. Today warehouses are not used to store things but rather to receive, breakdown, repackage and distribute components to a manufacturing location or finished products to customers
- 23. FUNCTIONS OF AWAREHOUSE Receiving, Storing, switching, change SKU size, Allows stock rotation (FIFO, LIFO), Buffer stock for customers – retail or commercial, Command and control centre – inventory control, Enables off-the-shelf (JIT) for customers, Provides a more-local 'Market Presence'.
- 24. FUNCTIONS OFA WAREHOUSE Consolidation and Break-Bulk Assortment (Cross Docking, Mixing) Postponement (Packaging, Labelling) Stockpiling (Seasonal, Bulk-Buy) Reverse Logistics
- 25. Plant 1 Plant 2 Plant3 Consolidation Warehouse Store B Store C Store A Supply Chain Management
- 26. Plant Break-Bulk Warehouse Store B Store C StoreA Supply Chain Management
- 27. CROSS-DOCK = No storage(?) Cross-dock (frommultiple suppliers): ● goods sorted as they arrive, ● goods moved across dock and loaded onto trailers, ● benefits - optimal vehicle use and low handling costs, ● requires sophisticated planning techniques.
- 28. Cross Docking • Transferringgoods • from incoming trucks at receiving docks • to outgoing trucks at shipping docks • Avoids placing goods into storage • Requires suppliers provide effective addressing (bar codes) and packaging that provides for rapid transshipment In- coming Outgoing
- 29. Safety and Maintenance Health and safety Incidents Environment
- 30. Warehouse management System(WMS) • Computer software designed to manage the storage and movement of items throughout the warehouse.
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- 32. Inventory isone of the most expensive assets of many companies. It represents as much as 60% of total invested capital. Inventory Management
- 33. Why do wehold Inventory? Improve customer service Reduce certain costs such as ◦ ordering costs ◦ stockout costs Contribute to the efficient and effective operation of the production system
- 34. Why we donot hold Inventory? Certain costs increase such as ◦ Carrying costs, Handling cost ◦ Labor Cost ◦ Warehouse Cost ◦ Logistics Cost ◦ cost of return on investment ◦ reduced-capacity costs (Storage, warehouse) ◦ cost of production problems (Excess Inventory)
- 35. Two Fundamental InventoryDecisions How much to order of each material when orders are placed with either outside suppliers or production departments within organizations When to place the orders
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- 37. Logistics is “The processof planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from point of origin to point of consumption for the purpose of customer Satisfaction” (council of logistics management)
- 38. THE PURPOSE OFLOGISTICS SYSTEM Right quantities of the Right goods to the Right places at the Right time in the Right condition at the Right cost.
- 39. A Simple LogisticsChannel Raw materials supply point Raw materials supply point Production facility Market Customers Market Customers Market Customers Product Flow
- 40. Raw materials supply point Rawmaterials supply point Production facility Retailer Product Flow Retailer Retailer Retailer Retailer Retailer Warehouse Warehouse Raw materials supply point
- 41. Two Main Types Inbound logistics: The management of materials from suppliers and vendors into production processes or storage facilities. Outbound Logistics: The process related to the movement and storage of products from the end of the production line to the end user.
- 42. Steps toward improvingLogistics performance • Make transport a customer service activity instead of a cost • Reduce your stock pipeline to cut costs and improve service (go easy by low inventory) • Pick as soon as you can (pick once, pick right and cut the cost time and error) • Is everything you are doing is really necessary