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Supply Chain Management decision making .pptx
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- 2. The participant willbe able to : • Understand what a supply chain is and what it does. • Identify supply chain drivers and components • Explore the difference between Logistics and SCM • Get introduced to SCM process and process view • Demonstrate Decision Phases in SCM • Acknowledge SCM Performance Measurement • Get introduced to E-business SCM Objectives
- 3. 2000’s E-business SC Business Trendsin Manufacturing 1970’s Manufacturing 1980’s Quality 1990’s Supply Chain Mang’t
- 4. A supply chainis an entire system of producing and delivering a product or service, from the very beginning stage of sourcing the raw materials to the final delivery of the product or service to end-users. It refers to the entire network of companies that work together to design, produce, deliver, and service product
- 5. Effective Supply ChainManagement has Positive effect on: Why Supply Chain Management ? Profit Quality Customer Experience Efficiency Maximize overall value created
- 6. Components of theSupply Chain
- 7. Components of theSupply Chain • Producers or manufacturers are organizations that make a product. • This includes companies that are producers of raw materials and companies that are producers of finished goods
- 8. • Distributors arecompanies that take inventory in bulk from producers and deliver a bundle of related product lines to customers. • Distributors are also known as wholesalers. Components of the Supply Chain
- 9. • Retailers stockinventory and sell in smaller quantities to the general public. • This organization also closely tracks the preferences and demands of the customers that it sells to. Components of the Supply Chain
- 10. • Any organizationthat purchases and uses a product. • A customer organization may purchase a product in order to incorporate it into another product that they in turn sell to other customers. • A customer may be the final end user of a product . Components of the Supply Chain
- 11. • It isa third-party organization that assists in the management of legally- compliant supply chain operations by providing services such as logistics, transportation, inventory control, warehousing and purchasing. Components of the Supply Chain
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- 14. The capacityof a supply chain to make products. The facilities of production are Factories and Warehouses. The trade-off between Responsiveness and Efficiency. The more excess capacity that exists, the less efficient the operation becomes Supply Chain Drivers Production What, how, and when to produce
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- 16. Inventory management,is the tracking of inventory from manufacturers to warehouses and from these facilities to a point of sale. The goal of inventory management is to have the right products in the right place at the right time. Supply Chain Drivers Supply Chain Drivers Inventory How much to make and how much to store
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- 19. Location refersto the geographical setting of supply chain facilities. The responsiveness versus efficiency trade-off : Centralize activities in fewer locations to gain economies of scale & efficiency. Decentralize activities in many locations close to customers and suppliers in order for operations to be more responsive. Supply Chain Drivers Location Where best to do what activity
- 20. Factors to beconsidered: Cost of facilities. Cost of labor. Skills available in the workforce. Infrastructure conditions. Taxes and tariffs. Proximity to suppliers and customers. Supply Chain Drivers Location Where best to do what activity
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- 22. • The movementof everything from raw material to finished goods between different facilities in a supply chain. • There are six basic modes of transport that a company can choose from: 1. Ship 2. Rails 3. Pipelines 4. Trucks 5. Airplanes 6. Electronic Transport Supply Chain Drivers Transportation How and when to move product
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- 24. The basisupon which to make decisions regarding the other four supply chain drivers. The connection between all of the activities and operations in a supply chain. Information is used for two purposes in any supply chain: 1.Coordinating daily activities related to the other four supply chain drivers: production; inventory; location; and transportation. 2.Forecasting and planning to anticipate and meet future demands. Information the basis for making these decisions Supply Chain Drivers
- 25. Transportation How and whento move product Location Where best to do what activity Production What, how, and when to produce Inventory How much to make and how much to store Information the basis for making these decisions Supply Chain Drivers
- 26. SCM vs. Logistics Bothare concerned with efficient and effective management of physical flows, and matching supply & demand SCM Logistics - Cost & + Customer services Scope Decision Level Objective Within a firm Minimizing logistics cost Entire supply chain Tactical Strategic
- 27. Product flow Cashflow Down stream Up stream Information flow The Supply Chain Flow
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- 29. •Supplier management •Procurement •Transportation •Reliable supplyof input materials. Down Stream Up Stream • Order management • Warehousing transportation • Timely product delivery • Customer satisfaction
- 30. •Material: Product, Parts •Information: Capacity, DeliverySchedules •Cash: Finance, Invoices, Credit Teams Down Stream Up Stream •Material: Returns, repairs, after-sale services •Information: Orders, point-of-sale Data •Cash: Payments There are 3 kinds of Flows in a supply Chain: Material, Information and Cash
- 31. Supply Chain ManagementPhases
- 32. Activity Instructions: 1. Trainees areto be divided into 5 groups. 2. Each group will be assigned a phase of supply chain management. 3. Each group will explain phase they worked on with examples. 4. Duration: 10 minutes for preparation. 2 minutes for presentation for each group
- 33. 1. Planning • Thisstage mainly focuses on designing a strategy that yields maximum profit. • Its aim is to set a strategy to manage all the resources required for designing products and providing services. • It focuses on developing a set of metrics. Supply Chain Management Phases
- 34. 2. Sourcing (Developing) •It mainly concentrates on building a strong relationship with suppliers of the raw materials required for production. • Prices, delivery and payment processes with suppliers are set and the metrics for controlling and improving the relationships are created. • Goods and services inventory systems are set in this stage. Supply Chain Management Phases
- 35. 3. Manufacturing (Making) •In this stage, the products are designed, produced, tested, packaged, and synchronized for delivery. • The task is to schedule all the activities required for manufacturing, testing, packaging and preparation for delivery. • This stage is considered as the most metric-intensive unit of the supply chain, where firms can test the quality levels, production output and worker productivity. Supply Chain Management Phases
- 36. 4. Deliver • Herethe products are delivered to the customer at the destined location by the supplier. • In this stage firms collaborate for the receipt of orders from customers, establish a network of inventories, pick carriers to deliver products to customers and set up an invoicing system to receive payments. Supply Chain Management Phases
- 37. 5. Return • Inthe stage, defective or damaged goods are returned to the supplier by the customer. It tends to be a problematic section of the supply chain for many companies. • The planners of supply chain need to discover a responsive and flexible network for accepting damaged, defective and extra products back from their customers and facilitating the return process for customers who have issues with delivered products. Supply Chain Management Phases
- 38. Process view ofSCM There are 2 different view to the process performed in a supply chain • Cycle View • Push / Pull View
- 39. 2. Manufacturer 4. Retailer 1.Supplier 5. Customer 3. Distributer Customer Order Cycle • Customer Arrival • Order Entry • Order fulfillment • Order Receiving Replenishment Cycle 1. Retail order Trigger 2. Order Entry 3. Order fulfillment 4. Receiving Manufacturing Cycle 1. Order Arrival 2. Production Scheduling 3. Manufacturing/ Shipping 4. Receiving Procurement Cycle 1. Selecting suppliers 2. Negotiating contracts 3. Placing orders 4. Receiving Material 1. Cycle view Here, the transition between each stage is known as a cycle.
- 40. In a Pushsupply chain strategy: The order is executed according to the anticipation of the orders of the customers. In the Pull supply chain strategy: the order is implemented according to the demand of the customers. 2. Push/Pull View of supply chain
- 41. SCM - PerformanceMeasures
- 42. SCM - PerformanceMeasures • Customer Satisfaction • Product Quality
- 43. • Non-financial Measures •Financial Measures SCM - Performance Measures
- 44. SCM - Performance Measures •Non-financial Measures: Cycle- time (lead–time): SC Lead-time – order-to-delivery Customer Service level: Order Fill Rate – Stockout Rate – Back Order Level Inventory Level: Raw Material – Work-in-Process – Finished goods – Spare Parts Resources Utilization: Manufacturing – Storage – Logistics – Human – Financial)
- 45. SCM - Performance Measures •Financial Measures Inventory holding costs. Transportation costs. Cost of raw materials and revenue from goods sold. Activity-based costs like the material handling, manufacturing, assembling rates etc. Cost of expired perishable goods. Penalties for incorrectly filled or late orders delivered to customers. Cost of goods returned by customers. Credits for goods returned to suppliers.
- 46. E-commerce Supply Chain Digitalsupply chains are dynamic and able to adapt quickly to changing circumstances. They function in real-time and are highly agile “value networks” with integrated systems and processes.
Editor's Notes
- #5 Effective Supply Chain Management drives Profits, Quality, and Efficiency in any business. Profit Driver: Modern-day supply chain management identifies scope for automation, applies AI to predict demand and supply, and optimizes inventory movement to ensure the promised inventory is available and delivered reliably to the customer, be it an internal customer or an external customer. Quality and Customer Experience Driver: Effective Supply Chain Management keeps the quality of product, reliability of delivery, and efficiency of operations at its heart. Today’s supply chains produce 50 times more data than the networks 5 years ago. Making use of this data to improve product quality, source from reliable suppliers, identify developing risks at the supplier end, manage risk to avoid disruptions, etc. are key responsibilities of supply chain management professionals today. This is vastly different from the earlier expectations of cost management and inventory keeping. Efficiency Driver: Ever since Henry Ford commercialized the assembly line, and ever since globalisations swept across supply chains and transformed systems from being vertically integrated to being interconnected with third parties, efficiency has been at the forefront of business expectations from supply chains. AI, automation, robotics, and other such technologies are pushing supply chain management into its new era.
- #12 Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer.
- #13 Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer.
- #14 If factories and warehouses are built with a lot of excess capacity, they can be very flexible and respond quickly to wide swings in product demand. Facilities where all or almost all capacity is being used are not capable of responding easily to fluctuations in demand. On the other hand, capacity costs money and excess capacity is idle capacity not in use and not generating revenue. Business efficiency refers to maximizing the time, effort and resources you put into your functional departments. Efficient operations take fewer resources to deliver similar or increased results, reducing costs and maximizing the return on the investment you make into your organization. Business effectiveness refers to the quality of the results you see from resource investments into functional departments.
- #15 Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer.
- #16 inventory أ. قائمة الجرد, موجودات مخزون, جرد السلع, جرد, عملية الجرد includes everything from raw material to work in process to finished goods that are held by the manufacturers, distributors, and retailers in a supply chain. Holding large amounts of inventory allows a company or an entire supply chain to be very responsive to fluctuations in customer demand. However, the creation and storage of inventory is a cost and
- #18 Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer.
- #19 الاقتصاد المتدرج Location decisions tend to be very strategic decisions because they commit large amounts of money to long-term plans.
- #20 الاقتصاد المتدرج Location decisions tend to be very strategic decisions because they commit large amounts of money to long-term plans.
- #21 Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer.
- #23 Economies of scale apply to a variety of organizational and business situations and at various levels, such as a business or manufacturing unit, plant or an entire enterprise. For example, a large manufacturing facility would be expected to have a lower cost per unit of output than a smaller facility, all other factors being equal, while a company with many facilities should have a cost advantage over a competitor with fewer.
- #24 Available information is used to make tactical forecasts to guide the setting of monthly and quarterly production schedules and timetables. Information is also used for strategic forecasts to guide decisions about whether to build new facilities, enter a new market, or exit an existing market.
- #26 تد
- #34 After planning, the next step involves developing or sourcing. In this stage, we mainly concentrate on building a strong relationship with suppliers of the raw materials required for production. This involves not only identifying dependable suppliers but also determining different planning methods for shipping, delivery, and payment of the product. Companies need to select suppliers to deliver the items and services they require to develop their product. So in this stage, the supply chain managers need to construct a set of pricing, delivery and payment processes with suppliers and also create the metrics for controlling and improving the relationships. Finally, the supply chain managers can combine all these processes for handling their goods and services inventory. This handling comprises receiving and examining shipments, transferring them to the manufacturing facilities and authorizing supplier payments.
- #40 Like producing winter clothing around the end of summer, predicting customers will need them soon as the winter is coming. Like: Customized gifts are the basic and best example of this. They make a product only after the order is placed.
- #46 1. Supplier The supplier procures the raw materials needed to create the products, and delivers them to a factory or manufacturing plant for assembly. In some cases, the products themselves may be assembled already, and have no need for further fabrication processes. Either way, these materials or products that are brought into the business are called inbound goods, and they will soon head towards the e-commerce warehouse. 2. Warehouse As the second step of the e-commerce logistics process, the warehouse is where inventory is stored and managed until the time comes for them to reach their new owners: your customers! Keeping track of inventory plays a significant role at this stage. Inventory management software can be used to enhance visibility into your stock in the warehouse, such as how much goods you have, where they’re located, and when to re-stock. 3. Fulfillment center Once a purchase has been made on your e-commerce store, congratulations! The products purchased then move from the warehouse to the fulfillment center, one step down the line of your supply chain, closer to your hopeful customers. A fulfillment center is where your goods are packaged and shipped, though in some cases the warehouse can serve as a fulfillment center as well. 4. Carrier The carrier in the form of a courier service such as FedEx, DHL or UPS then takes your package for delivery to the final destination. While you can handle e-commerce packaging internally, these courier services usually offer different packaging options you can choose from to keep your products safe and secure throughout the journey of e-commerce transit to your customers. 5. Customer Customers are the last actor involved in the e-commerce supply chain. Under normal circumstances, customers receive your products, enjoy them, and both of you end up satisfied. However, you must still prepare for the possibility that purchasers will return your products for whatever reason (defects, issues, and sometimes even e-commerce fraud). Reverse logistics — the process by which the purchased goods are returned to the seller — is therefore something that should be taken into account as well.