Operations Management

Supply Chain Management and Logistics.

Project by: NAMES Abhishek Agarwal Aditya Tendolkar Swapnil Desai Anirudha Mulay Anshu Bhandari Anuj Bajaj Roll No. 07005 07008 07010 07016 07021 07023

What Is Supply Chain Management?

What Is Supply Chain Management?

Supply chain management is a set of approaches used to efficiently integrate suppliers, manufacturers, warehouses, and customers so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time in order to minimize system wide costs while satisfying service-level requirements.

What is Logistics?
Logistics can be defined as a process of planning, implementing and controlling the efficient flow and storage of goods, services and related information as they travel from point of origin to point of consumption. It includes transportation, warehousing, purchasing and distribution.

The Importance of SCM

Millions of rupees at stake! Excess Inventory costs Excess freight charges Lost sales / Stock outages Wasted time and energy Extra staff Customer dissatisfaction Capital costs Real Estate Costs

Benefits of SCM
Reduced inventory throughout the chain. Greater productivity and lower costs. Fewer suppliers and shorter planning cycles. Improved quality and products that are more technologically advanced. Enhanced inter-operational communication and cooperation. Shortened repair times and enhanced equipment readiness. More reliable financial information.

Components of SCM

Types of SCM
Push based supply chain.

Pull based supply chain.

Push System
Orders

Product

External Demand

Manufacturer

Retailer

Pull System

Product

External Demand

Manufacturer

Retailer

Elements of SCM
Strategic Purchasing Supply Management
Communication Supplier Base Reduction Long-term relationship Supplier selection Supplier involvement Trust and commitment

Elements of SCM (Cont.)

Logistics Integration
Internal integration External integration

Supplier Network Co-ordination

Functions of SCM
Market mediated functions Matching of products to consumers wants.
Physical functions Converting RM to parts, components and finished goods and transporting all of them from one point in supply chain to the other.

Reinventing the SCM

For customer satisfaction.

It entails coordination and configuration of process that is necessary to make product available in a timely, reproducible and satisfactory manner.

Reinventing the SCM involves

Customer oriented objective planning. Delineation of Supply Chain Sub Processes. Disintegration of SCM Sub Process. Integration of the Sub Processes of SCM to deliver more customer value.

Area of Change Strategy for Reengineering the Supply Chain

Focus
Process

What customer want us to sell

Reduce non value adding activities

Lead time/inventory reduction

People Top level commitment with a SCM An inquisitive management An inquisitive work force Multi-skilled work force Technology Positive attitudinal change Invest in technology

IT a key (computers, communication)

SCM: An Integrated Approach

It Involves:
Location Decisions Production Decisions Inventory Decisions Transportation (Distribution) Decisions

E-business and SCM

What is E-business?
A market place where businesses are using Internet technologies and network computing to securely transform: Their internal business processes (via intranet) Their business relationships (via extranet) The buying and selling of goods, services and information (via e-commerce)

e-SCM
A marriage between SCM and e-business can be termed as e-SCM.
It includes supply chain transactions that involves flow of information, product and funds with the supply chain intermediaries.

Components of e-SCM
Supply Chain replenishment.

E-procurement.
Collaborative planning. Collaborative product development. E-logistics

Advantages of e-SCM
More collaborative, timely product development. Reduction in channel inventory and product obsolescence. Reduction in communication costs and customer support costs. New channel capabilities. More customization.

Disadvantages of e-SCM
Large investment in IT and IT enabled services that are required for e-SCM. Inventory aggregation leading to high transportation costs.

For customized products, there is a problem of short response time.

Case Study: Dell Computers

Delivering customized PCs directly to the end user according to their needs and at the earliest. Earlier through phone and then through internet. Tie-up with Sony for monitors. Tie-up with logistics companies like UPS and FedEx.

Thank You