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Supply chain management
The document discusses supply chain management in the internet age. It covers several topics: - Supply chain management (SCM) coordinates players in the supply chain to deliver the right products at the right time, place, and price. Effective SCM reduces costs and improves customer satisfaction. - Electronic SCM (e-SCM) uses software and internet technologies to improve planning, execution, warehousing, and transportation management across the supply chain. - Radio frequency identification (RFID) provides benefits like advanced shipping notices but faces challenges in data storage, integration, and configuration. - Various companies implement different SCM strategies using IT and the internet. For example, FedEx implemented e-procurement in phases, rolling it
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Supply chain management
- 1. Submitted By – ManuSingh Baghel PGDM -1 –A Roll No. - 25
- 2. Supply chain managementin the internet age Supply chain management (SCM) is essentially information driven function, since co-ordination between various players in the chain is the key to effective management in the supply chain by working together to deliver the right products – • At the right time •At the right place •At the best price.
- 3. Effective management ofsupply chain results in – Reduced lead time Inventory and operational costs while improving efficient consumer responsiveness (ECR) Customization, ultimately leading to enhanced customer satisfaction and retention.
- 4. E-SCM: The solutionrange The major categories of SCM software are Supply chain planning and execution Warehouse management software Transportation management software
- 5. Electronic Supply Chain Management SCMprocess is composed of a wide range of interrelated sub-processes – Time dimension through which SCM activities are segmented into short term, midterm and long term activities i.e., scheduling, operational, tactical and strategic. Functional dimensions where the activities are separated by production, transportation, storage and sales, outside of the planning funnel and the SCM
- 6. Demand – supplyscenario in SCM
- 7. Challenges of theSCM – The late supplier delivery creates an unexpected volume of available capacity during a certain period. It also creates a capacity shortage in the following period, where the delayed orders will be competing for the capacity that might already be allocated to other orders. The delayed production orders may end up affecting the distribution plans. These delays in the distribution plan may force the company to break the delivery promises made to customers based on the original supply plan.
- 8. Finally, the purchasingplans for the components that were supposed to be consumed in production orders together with the supplier’s delayed components specify purchases that will arrive at the company’s docks too early, compared with the updated need.
- 9. Sourcing decisions – Materialcosts Transportation costs from supplier to facilities Production costs paid to facilities Material inventory costs Inventory costs of products in facilities Transportation costs from facilities to warehouse Inventory costs of products in warehouse Transportation costs from warehouse to customers
- 10. Models for implementingSCM – Forecasting models – these models allow prediction of demand based on past data or other parameters that are independently available. They enable planning, given lead time necessary for response. Mathematical models – Location models – help in planning the optimal location of plants and warehouses, considering the inbound and
- 11. Allocation models –help in optimally allocating commodities from source to destination in a multisource, multi-dimensional environment. Distribution network design models – these are usually comprehensive in nature, deciding between multi-stages distribution networks, location warehouses and bulk points and even sometimes the transportation made choices. Inventory models – these have key role in logistics management e.g., buffer stocks to take care of uncertainties at finished goods, warehouse and retails. Routing models – these models allow optimal routing on a transportation network from a given source to a destination. Scheduling problems – these models enables allocation of resources to particular activities.
- 12. E-SCM Portfolio –A Contemporary View Business challenges – Continuous product innovation – the open economy introduced by globalization demands the need for continuous product innovation and improvement on par with global standards Improve business agility and responsiveness – the dynamic global business environment impacts the profitability/revenue of the enterprises dramatically Winning market to gain competitive advantage – the extent of competitive advantage gained and effective use of it can answer the question of business sustenance. Achieving cost containment – offering world class services/products at competitive price
- 13. SCM – Toolfor maximizing value delivery – Decrease inventory costs by matching production to demand Reduce overall production costs by streamlining the flow of goods through the production process and improving information flow between an enterprise, suppliers and distributors. Improving customer satisfaction by offering increased speed and adaptability.
- 14. IT – EnabledSCM – Electronic data interchange – EDI Internet/extranet Electronic commerce Enterprise resource planning – ERP E- procurement Supplier relationship management – SRM Advanced planning and scheduling – APS E-logistics
- 16. Creating new businessmodels Electronic information integration – it refers to sharing of relevant information among all the partners of supply chain in the most transparent and genuine way. Electronic synchronization of planning – it is the process that synchronizes the forecasting and replenishment strategies among the partners of the supply chain. Electronic workflow coordination – it is one of the important demand of supply chain. Work flows such as financial exchange, order execution, design optimization, procurements, etc.
- 17. New business model– in recent year’s new and innovative business models have surfaced in the marketplace. Some of them are – Virtual resources Supply chain restructuring Service support Mass customization The Click – and – Mortar model for order fulfilment
- 18. Bullwhip – Effect:a solution roadmap Change in customer orders Price and promotions Manufacturing scheduling Supplier’s inability to provide at right time Unknown factors
- 20. The solution footprintsfor Bullwhip Effect – Batch order processing Logistics considerations Safety stock monitoring Creditworthiness of the customers Special purchase contract Special sales contract False order and cancellation
- 21. e- Technologies foreffective SCM Barriers to E-Technologies – The uncertain cost of implementation More pressing corporate priorities Lack of proven benefits within the industry Perceived or actual low use of the internet by customers and suppliers The key, privacy, taxation and emerging intellectual property issues
- 22. Still e- technologiesare leading towards – E – learning opportunities Knowledge management E – HR management E – business intelligence E – supply chain management Project management Professional service automation Sales force automation E – sourcing E – marketing
- 23. SCOR Model – SCORmodel consists of the best designs of supply chain. The 5 main processes of this model are – Plan Make Source Deliver Return
- 24. These are organizedat 4 different hierarchal levels – Main process Cluster categorization (make – to – order, make – to – stock and engineer – to – order) Detailed refinery Information of the international business enterprises
- 25. Built – to– order automobiles (BTO) – Knowledge management tools – Intra – enterprise KM Customer KM Supplier KM Extended inter – enterprise KM
- 26. Measurable benefits derived– Enhanced customer responsiveness More predictable forecasting Enhanced speed to market Sharing of best practises Collaborative R&D Profit sharing
- 27. What is RFID??– Radio frequency identification (RFID) is a method of automatic identification which relies on storing and remotely retrieving data using devices known as RFID tags or transponders which is a tiny object that is either attached or incorporated to a person or product. Announcement by Wall – Mart regarding RFID tags compulsion in 2003. Initiatives by the Auto-IT centre of MIT, USA.
- 28. Bottleneck in adoptingRFID – Start from the very beginning Effectively storing and managing huge data Data integration efforts Master files for the product are usually not configured for RFID mode
- 29. RFID compatible media– Web service through world wide web Global positioning systems (GPS) RFID tags Manufacturing execution systems (MES) Enterprise resource planning (ERP) Point – of – sale (POS) technology
- 31. Benefits of RFIDin SCM – Advanced Shipping Notices (ASN) Returned goods Anti – counterfeit Supply chain efficiency Improved stock management Reduction in labour costs.
- 32. SPCM cycle contains– Identification of performance exceptions Understanding the related issues and root cause Offering the alternative courses of action possible Analyzing the impact of each
- 33. Decoupled extended supplychains – The first information flow is the ordering and payment system, followed by order tracking. It is the flow from retailer to distributer and done through internet or EDI. The information is only visible to customers and finally for the returns. Semi extended supply chains – The major challenge with this strategy involves managing inventory. To be successful with it companies must carefully think through several design decisions on how to coordinate their channels.
- 34. Fully extended supplychains – The concept of famous home delivery approach is known as fully extended supply chain. In this the retailer’s supply chain is continuously linked from the supply side all the way to the customer’s front door. Centralized extended supply chains – This strategy has 3 major advantages – It eliminates the link between supplies by removing stores. It sets apart decoupled extended strategies Working from a distribution centre rather than a store allows aggregated inventory making it possible to hold less inventory while having a wide range of products and more stock.
- 35. IT in SCM– Strategic planning for IT in SCM Virtual enterprise and SCM E – commerce and SCM Infrastructure for IT in SCM Knowledge and IT management in SCM Implementation of IT in SCM
- 36. Impact of ITon SCM – Information availability and visibility Single data contract point Decision based on total supply chain information Collaboration with supply chain partners
- 37. E – SCMin Indian industries The internet application in supply chain management area can be classified into 4 areas – Product and process design E – marketplace and exchange Collaborative planning Fulfilment management
- 38. Infomediary – arevolution in agri supply chain – In the area of procurement, ITC developed an innovative method using Internet. It used the concept of infomediary – a website which provides exclusive information related to one subject area. By educating the suppliers – mostly farmers and providing needed information, ITC was able to get a lot. E – Procurement – Supply is based on exact requirements and the goods can be delivered just in time. Vendors across the world can be accessed on line anytime and production and delivery schedule are planned accordingly. Inventory levels therefore kept for a minimum lead time – sometimes even a day low only.
- 39. Research methodology – Sample – 127 computer hardware companies were selected from the membershiplist from MAIT (manufacturers association of information technology – the association of hardware, training and service sectors of the Indian IT industry) website and the centre for monitoring Indian economy (CMIE) prowess database. Questionnaire – Two sets were prepared. On was for the procurement chain and other for the distribution chain. It was focused on a number of questions related to SCM. These
- 40. Data collection –Data collection was done through a combination of e- mails, telephonic interviews and personal interviews in Chennai, Hyderabad, Pondicherry and Bangalore. Total number of responses was 38 from 6 companies. Results and analysis – The result of the survey was summarized under the following subsections – Procurement/distribution characteristics – including inventory, delivery time, etc. Transportation and warehousing Costs in supply chain
- 41. Procurement side –The usage of technological infrastructure like intranet and internet are relatively very poor in the procurement side of the computer hardware industry. Speed cargo is the mode of transportation that is used by all the nodes in the transportation link of the procurement chain. Distribution side – The outsourced service providers need to improve their services to capture the full potential of the distribution side. Most of the hardware companies are not fully satisfied with their outsourced service providers, implying that there is a lot
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- 43. Wall – Martoperations -
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- 45. Implementation of thee – procurement solution at FedEx – Phase – 1 – pilot implementation of Ariba’s e – procurement solution that include installation of e – commerce platform along with Ariba buyer technology. Phase – 2 – rollout of Ariba buyer to around 7000 IT division employees. The managers were given charges of producing the business requirements, documents and project plans. Phase – 3 – an overall plan was developed to bring out each commodity whose major supplier had electronic catalogs.
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