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Module I
Completeness
Move to Integrate
Solutions, not just
Products or Services
External Environment
Customers
Company
Complexity
-Simplest Ideas exploited first
-`Barriers to Entry` increasing
- Technology Rates rising
Competitiveness
-Reduced Monopolies
on technology
-Work can be done
almost anywhere
-Time and Quality
are competitive
resources
Customer Focus
New Standards emerging
- Requirements of Products
and Services and Flexibility
Competition
RELAY RACE
FUNCTIONAL ORGANIZATION
Material Flow
Purchase
Material
Control
Customer Service
Production
Distribution
Sales
Arms Length
Modified Order
S
U
P
P
L
I
E
R
S
Purchase
Transmission
Order
Assembly
Marketing
Information 4
Information 3
Information 2
Information 1
C
U
S
T
O
M
E
R
S
Information C
Information S
Material Flow
Purchase
Transmission
Assembly
Marketing
Information Flow
Fund Flow
C
U
S
T
O
M
E
R
S
Customers
Suppliers
Company
> Transportation
> Information
CHARACTERISTICS
Integrated System based working
All functions work Together to achieve SC targets
Integrated NOT Individual functions with Interfaces
Strategic Tasks NOT Operational Responsibilities
Process Oriented Horizontal Organisation built
along the 3 Flows
Material
Related Information
Financial
LOGISTICS INTERFACES
Manufacturing
Marketing
Aggregate Planning
Production
Plant Design & Layout
Job Design
Quality Control
Promotion
Product Mix
Pricing
Sales Forecast
Production Control
Production Scheduling
Plant Warehouse
Purchasing
Supply
Logistics
Chain
Warehousing & Storage
Material Handling
Transportation
Communication
Inventory Control
Operating Budget &
Control
Capital Budgeting &
Control
Plant & machinery
Finance
Customer Service
Order Processing
Product Forecast
Packaging
Warehouse Locations
Parts & Service Support
1 tier
Suppliers
Procurement
Transmission
Assembly
BSR
Depots
Dealers
Customers
2 tier Suppliers
COMPANY
Information Flows
Inbound
Logistics
External
Supply Chain
In-plant Logistics
Outbound
Logistics
Internal
Supply Chain
Financial Flows
External
Supply Chain
System Integration
Suitable ERP system
Integration of Extended Supply Chain Critical
for Organisational Success
Focus on Processes, Supplier and Customer
Chains that Enhance Competitiveness
High
Level of Service
Towards
Markets and
Production
Supply Chain
Management
Low level of
Tied-up Capital
in Inventories
Low Inventory
Carrying
Costs
Coordination
System + Communication
More Competitive
Lean Growth Oriented
Increased Shareholder Value
IN ESSENCE
SUPPLY CHAIN ACTIVITIES ARE FOCUSSED
ON
PARAMETERS OF CUSTOMER SERVICE AND
SUPPLY CHAIN ORGANIZATION HAS THE
RESPONSIBILITY, AUTHORITY & COMPETENCE
TO
MANAGE THE 3 FLOWS IN THE BEST INTEREST
OF
THE WHOLE COMPANY
RELAY RACE
Single Entity
One Objective
Seamless Integration