3. Outline of supply chain management
• Introduction
• Definition
• Need of supply chain management
• Benefits of effective supply chain management
• Elements of supply chain management
• Key issues in supply chain management
4. Introduction. To supply chain management
Core functions of operation management
1. FORECASTING
2. PRODUCT DESIGN
3. LOCATION PLANNING
4. LAYOUT PLANS
5. INVENTORY MANAGEMENT
6. SUPPLY CHAIN MANAGEMENT (Main topic to be
discuss)
5. Supply chain management
• Supply chain
management consist of
two main concepts
• Supply chain
• Management
supply chain
A supply chain consist of a
series of a activities
involving many
organization through
6. Supply chain management
• Management
• Management define as
the all activities and tasks
undertaken for achieving
goals by continuous
activities like
• Planning
• Organizing
• Leading
7. • Leading
• Supply chain
management (SCM)
• SCM is also called the art
of management for
providing the Right
product at Right time on
Right place at the Right
8. Introduction ( con’t)
• Supply chain management is the handling of the entire
production flow of a good or service — starting from the
raw components all the way to delivering the final product
to the consumer. A company creates a network of suppliers
(“links” in the chain) that move the product along from the
suppliers of raw materials to those organizations that deal
directly with users.
9. Definition of supply chain management
• In commerce, supply
chain
management (SCM) is
the management of the
flow
of goods and services[2] in
cluding all processes that
transform raw materials
into final
products[3] between
10. Example of supply chain management
China Pakistan Economic
Corridor (CPEC) refers to
the network of structures
that aim at
establishing connectivity
between different regions
of the economic corridors
of the two
countries. The major
objective of the CPEC is
11. Function of supply chain management
• The five functions of supply chain management include the
following:
• Purchasing. The first function of supply chain management is purchasing. ...
• Operations. ...
• Logistics. ...
• Resource Management. ...
• Information Workflow.
12. Function of SCM CON’T
• 1. Purchasing
• The first function of supply chain management is purchasing. In
the manufacturing process, raw materials are required to
produce goods and products. It is important that these materials
are procured and delivered on time so that production can
begin. For this to occur, coordination with suppliers and delivery
companies will be required to avoid any potential delays.
13. Function of SCM CON’T
• Operations
• Demand planning and forecasting are usually required before
materials can be procured, as the demand market will dictate how
many units to be produced and how much material is required for
production. This function is important in supply chain management
as organizations must accurately forecast demand to avoid having
too much or too little inventory that will lead to losses in revenue.
Therefore, demand planning and forecasting must be tied in with
inventory management, production, and shipping to avoid such
mistakes.
14. Function of SCM CON’T
• Logistics
• Logistics is the part of supply chain management that
coordinates all aspects of planning, purchasing, production,
warehousing, and transportation so that the products will reach
the end-consumer without any hindrances. It is helpful to have
adequate communication between multiple departments so that
products can be shipped to customers quickly and at the lowest
cost.
15. Function of SCM CON’T
• Resource Management
• Production consumes raw materials, technology, time, and
labor. Resource management ensures that the right resources
are allocated to the right activities in an optimized manner. This
will ensure that an optimized production schedule is created to
maximize the efficiency of the operations.
16. Function of SCM CON’T
• Information Workflow
• Information sharing and distribution is what keeps all of the
other functions of supply chain management on track. If the
information workflow and communication are poor, it could
break apart the entire chain. Many disruptions that arise in
supply chains can be prevented by increased visibility and
communication
17. Need of supply chain management
• Supply chain management is important because it can help achieve several business
objectives. For instance, controlling manufacturing processes can improve product quality,
reducing the risk of recalls and lawsuits while helping to build a strong consumer brand.
• Managing contractual obligations to ensure a continuous supply and avoid a service
company’s delivery disruptions
• Company need supply chain management to establish stream-lined supply chain
management Process on order to realize the very best value from value from their
spending through suppliers analysis of cost risk and performance
18. Need of SCM (CON’T )
• CORPORATION of the world relay on supply chain
management when fulfilling their business and IT goals
each year
• SCM Helps Sustains Human Life – Humans depend on supply chains to
deliver basic necessities such as food and water. Any breakdown of these
delivery pipelines quickly threatens human life.
• Corporation of the world relay on supply chain to fulfilling their business and IT
goals each year
19. Benefits of effective supply chain
management
• Important benefits of supply chain management
• Better collaboration with suppliers.
• Better quality control.
• Shipping optimisation.
• Reduced inventory and overhead costs.
• Improved risk mitigation.
• Stronger cash flow.
• A more agile business.
• Better visibility and data analytics.
20. Benefits of SCM
• Better collaboration with suppliers
• Suppliers that understand the business’s
cost constraints and objectives can be
particularly important for businesses with
tight margins. Wing It Cosmetics’ Gahir
says that manufacturers selling to retail
outlets that expect a 40-50% markup on
the factory gate price can face a profits
squeeze if raw material prices are too
high. She recommends when negotiating
with suppliers, retail-facing businesses
should aim for a "golden ratio" of no more
than 25% for raw material prices as a
percentage of retail sales.
21. Benefits of SCM (CON’T
• Better quality control
• Supply chain quality
management is the processes through
which companies assess, monitor,
and proactively manage the quality of
products and processes in the supply
chain. It is used to create a more
consistent supply chain, reduce cycle
and lead times, and improve on-time
delivery.
22. Benefits of SCM (CON’T
• Shipping optimisation
• Logistics costs are set to rise significantly,
potentially impacting small businesses
across the UK. Reducing the number of
separate distribution channels and making
use of logistics specialists could reduce
your distribution costs relative to your
competitors, helping you to maintain
stronger cash flow and profits. “Having too
many suppliers with independent shipping
and delivery streams has been the biggest
source of inefficiency,” says Gahir. “We’ve
responded to this by looking at storage
and shipping aggregators.”
23. Benefits of SCM (CON’T
• Reduced inventory and overhead
costs
• An efficient supply chain can reduce
the need to maintain inventory,
therefore cutting overhead costs
associated with storage and security.
However, a very lean inventory
increases pressure on distribution
networks and reduces resilience to
supply chain shocks. So it’s important
to identify your optimal inventory
level.
24. Benefits of SCM (CON’T
• Improved risk mitigation
• In general, the further along a supply
chain issue is detected, the more
expensive it is to fix. That’s why supply
chain management, which offers visibility
of the supply chain from end-to-end, is so
important.
• For this reason, around 50% of supply
chain leaders own all of the six "links"
frequently associated with supply chain
management: product development;
demand planning; supply planning;
sourcing and procurement; manufacturing;
and logistics and distribution
25. Benefits of SCM (CON’T
• Stronger cash flow
• Running an efficient supply
chain that is based on good
supplier relationships,
maintains strict quality and
stock control, and keeps a
watchful eye on costs and
prices can greatly benefit a
business’s liquidity
by improving cash flow.
26. Benefits of SCM (CON’T
• more agile business
• “A good supply chain enables us to
adapt to opportunities,” says Eccles.
For example, Employment4Students
identified a process inefficiency in a
client’s business. Eccles explains:
“We realised we had a couple of
suppliers whose software could help
and managed to get a process in
place really quickly, which they
adopted and found really helpful. So,
if you’ve got good suppliers, they can
help you unlock new opportunities.”
27. • Better visibility and data analytics
• Business managers can keep in constant
touch with suppliers using mobile phone
apps, conferencing platforms and shared
dashboards. Software tools can also help
to manage stock levels efficiently, track
distribution channels and monitor
business performance. Having real-time
data metrics at your fingertips will enable
you to put in place contingency plans to
enable your business to ride out storms
and take advantage of opportunities as
they arise.
28. Element of supply chain management
• Integration, operations, purchasing and distribution are the four elements
of the supply chain .
30. Elements of supply chain management
• Integration
• Communicating and collaborating with
all parties is a business strategy that
eliminates errors and saves money.
Integrating each division with one
another combines expertise and
builds teams. Manager duties become
more efficient and successful when
teams are integrated into the
sequence of processes, as it is easier
to monitor overall operations and
identify areas for future improvement.
31. Elements of supply chain management
• Operations
• Supply chain operations are the backbone of
the supply chain process, ensuring your
employees have consistent work. Managers
monitor day-to-day operations to ensure that
various supply chain phases stay on
track. Many companies today have adopted
lean manufacturing strategies, in which all
processes are consistently evaluated to
determine which parts of your operations may
become more efficient. By monitoring
equipment to ensure efficiency or knowing
when to decrease manpower, the operations
team can make major improvements to the
supply chain system.
32. Elements of supply chain management
• Purchasing
• Knowing ahead of time what your supply chain
process will look like within your company is a
crucial aspect. It is important to know exactly
what goods to purchase within your company,
whether it is materials, supplies, tools, or
equipment. Hiring qualified purchasing
personnel and ensuring that your employees
understand inventory management are critical
components of a strong supply chain. This
ensures that your company does not run short
on materials, causing production to be
significantly delayed.
33. Elements of supply chain management
• Distribution
• The final step in the supply chain is when
your product is received by customers,
either from store shelf or through direct
shipping. For products to reach their final
destination, supply chain distribution must
be well planned. Implementing logistics
software into your company for
employees to learn or outsourcing a third-
party logistics (3PL) company will ensure
products are handled properly so that
they may reach customers quickly which
is the goal of a distributor.
34. Key issues in supply chain management
• Supply chain managers face issues on a daily basis, and almost
all require direct attention and a quick response. These
problems can vary in severity and complexity
• The main issues are
1. Managing customer expectations
2. Managing suppliers
3. Maintaining quality and sustainability
36. • 1. Managing customer expectations
• One of the challenges of effective supply chain management is
managing customer expectations. Supply Chain Managers are
service providers. They provide services for indirect
procurement requests, project and manufacturing requests, and
outside customer requests. Consequently, Supply Chain
Managers need to deploy efficient workflows to make sure
requests are fulfilled on time, every time.
37. • Along with managing customer expectations comes managing
suppliers. Good relationships with your suppliers are key to
managing your supply chain effectively. In an ideal world, you’ll
proactively engage with suppliers through Supplier Relationship
Management.
• It’s up to you to know how many suppliers are needed, how to handle
delays, and how to receive orders. And each step requires clear
thinking and a unique process that slots in with your business’s
overall spend culture. On top of these duties, you’re also responsible
for finding suppliers with consistent and reliable service, and at a
price that doesn’t hurt your bottom line.
38. • 3. Maintaining quality and sustainability
• One of the challenges of global supply chains is the concern about
the quality and sustainability of products that are made in other
countries. This is particularly true when components of a product
need to meet regulatory standards.
• Quality is a critical factor in maintaining your company’s reputation.
It ensures the materials you receive meet the specifications requested
and that they’re fit for purpose. In addition, you need to ensure
ethical sourcing and do your part to reduce your impact on the
environment.
39. • 4. Access to data
• In a modern-day supply chain, access to your supply chain data
is one of the most important requirements. Access to data can
help you manage your supply chain more effectively. Without
this, you can’t begin to make educated improvements to your
supply chain or reduce risk.
40. • 5. Risk mitigation
• Mitigating risk can be challenging for any supply chain
manager. While risk is a broad topic, there are some common
supply chain risks that supply chain managers should keep top
of mind
