SUPPLY CHAIN

MANAGEMENT
TOPIC -2
 CASES OF SCM
• GODREJ LOCKS- A DIV OF GODREJ & BOYCE CO.
• - REDUCED ITS ORDER-TO-DELIVERY CYCLE FROM
THREE WEEKS TO 3 DAYS

• HEWETT PACKARD
• -HAS CUT ITS CYCLE TO DELIVER TO CUSTOMER
IN INDIA FROM US BY 1/3RD, THAT ISFROM 37 DAYS
TO10 DAYS
 CONCEPT
• THE SUPPLY CHAIN ENCOMPASSES ALL
ACTIVITIES ASSOCIATED WITH THE FLOW &
TRANSFORMATION OF GOODS FROM THE RAW
MATERIALS STAGE(EXTRACTION), THROUGH TO
THE END USER, AS WELL AS THE ASSOCITATED
INFORMATION FLOWS. MATERIALS & INFORMATION
FLOW BOTH UP & DOWN THE SUPPLY CHAIN.
• SCM IS INTEGARTION OF THESE ACTIVITIES,
THROUGH IMPROVED SUPPLY CHAIN
RELATIONSHIPS, TO ACHIEVE A SUSTAINABLE
COMPETITIVE ADVANTAGE.
SCM FOR AN INDIVIDUAL FIRM

CUSTOMER
W T
T

FACT INFO FLOW

ORY

W T VENDORS/
PLANTS/
PORTS
 VALUE CHAIN OF SCM
• - CORPORATES USING SCM TO GAIN
COMPETITIVE EDGE , DUE TO ITS
VALUE ADDITION CAPABILITY IN
COST –EFFECTIVE WAYS
• SCM FOCUES ON SPEEDIER FLOW OF
GOODS, CASH, VALUE AND RELATED
INFO WITHIN THE COMPLETE SUPPLY
CHAIN PROCESS
 CONCEPTS
• PHYSICAL SUPPLY CHANNEL
• PHYSICAL DISTRIBUTION CHANNEL
• OTHER TERMS USED- VALUE NETS, VALUE STREAM, & LEAN
LOGISTICS

• REVERSE LOGISTICS CHANNEL: EG RETURN OF A

DEFECTIVE ELECTRIC TOASTER BY A CUSTOMER TO A
RETAILER
 EVOLUTION OF LOGISTICS TOWARD SUPPLY
CHAIN
• DEMAND FORECASTING PURCHASING/ MATERIALS MANAGEMENT
• PURCHASING
• REQUIREMENT PLANNING
• PRODUCTION PLANNING
• MANUFACTURING INVENTORY
• WAREHOUSING LOGISTICS SCM
• MATERIALS HANDLING
• PACKAGING
• FINISHED GOODS INVENTORY
• DISTRIBUTION PLANNING PHYSICAL DISTRIBUTION
• ORDER PROCESSING
• TRANSPORTATION
• CUSTOMER SERVICE
• STRATEGIC PLANNING
• INFORMATION SERVICES
• MARKETING/ SALES
• FINANCE
 VA
LU SUPPLIER
E

SHIPPER

QUA LI
PRODUCER

TY
CO
ST
S
TRANSPORTER

U
R
I
K
Q ESP
WAREHOUSING

C ON
S E

AV
CASH FLOW

AIL
A BI
CUSTOMER
FLOW OF GOODS

LI
TY

C
O
N
VALUE CHAIN OF SCM

MARGIN
SI
S TEN
C
Y

END USER / CUSTOMER

 PROBLEMS
• IDENTIFY THE KEY SUPPLY CHAIN ELEMENTS IN THE
FOLLOWING CASES:
• A MAJOR MULTI- SPECIALITY HOSPITAL
• AN AIRLINES OPERATOR
• A PREMIER EDICATIONAL INSTITUTE
• A NEWPAPER BUSINESS
• A MACHINE TOOL OPERATOR
• A MANUFACTURER OF SHAMPOO SACHET
• A LAW CONSULTING FIRM
SUPPLY CHAIN STRUCTUTRE
• TIER-2 SUPPLIERS
• TIER-1 SUPPLIERS
• FACTORY
• FACTORY WARE HOUSE
• DISTRIBUTORS
• RETAILERS
• CUSTOMERS
 PROBLEM
• IDENTIFY AN APPROPRIATE TYPE OF SUPPLY CHAIN FOR
EACH OF THE FOLLOWING PRODUCT CATEGORIES:
• JEWELLRY WATCHES
• TOOTH PASTE & BRUSHES
• EARTHMOVING EQUIPMENTS
• DESIGNER WEAR CLOTHES
• BICYCLES
• PASSENGER CARS
• HEAVY COMMERCIAL VEHICLES
 OUT SOURCING & 3PL
• EMPHASIS ON CORE COMPETENCY
• “ TO DO WHAT YOU ARE BEST AT AND LEAVE ALL
OTHER NON-VALUE –ADDED ACTIVITIES TO MORE
SUITED PLAYERS”

• SEEKING THE SERVICES OF EXTERNAL AGENCIES /

ORGANIZATIONS THAT COULD HANDLE NON-
VALUE ADDING SERVICES.
 ADVANTAGES OF 3PL

• 1. COST REDUCTION
• 2. MAXIMIZING REVENUES
• 3.COST CONTROL
• 4 GOOD FACILITIES
 BULLWHIP EFFECT
• REASONS:
• THE NO. OF LAYERS IN THE SUPPLY CHAIN
• DELAYS IN INFORMATION FLOW ACROSS THESE LAYERS
• VARIATIONS IN DECISION MAKING PATTERNS AT EACH LAYER
• INDEPENDENCE OF EACH MEMBER IN THE SUPPLY CHAIN

• HOW TO MINIMISE?
• -CUTTING OF SEVERAL DECISIONS CUTTING ACROSS THE SUPPLY
CHAIN
• REDUCE DELAY OF INFORMATION FLOW IN THE SUPPLY CHAIN
• REDUCING LEAD TIME OF THE BUSINESS PROCESSES