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Learning Objectives :
Understanding Supply Chain Key SC decisions Cycle & Push/Pull Views of SC SC macro processes
Customer Value
Availability
Variety Quantity
Price Quality
Satisfy END CONSUMERS Service providers trucking, airfreight shipping companies, information
system providers, public warehousing firms, freight forwarders, agents and consultants Reverse Logistic Activities Product returns and recycling, warranty repairs
Supply Chain
To improve the organizations competitive position To achieve harmonious, productive working relationships with other functional areas within the organization Accomplish the purchasing and marketing objectives at the lowest possible level of administrative cost
Decision phases in SC
SC strategy configuring SC in accordance with the strategic objectives - location & capacities of individual facilities,
different modes of transportation, information systems
SC Planning operating policies that govern short term operations - Forecasting in next few years for the concerned product
in different markets, sources of supplies, whether outsourcing or in-house, inventory policies, etc.
SC Operations Fulfill customer order day to day operations - allocation of inventory or production to individual orders,
fixing transportation and delivery schedule of trucks, placing replenishment orders
Process View in SC
Cycle view
Customer order cycle Retailer Replenishment cycle Distributor Manufacturing cycle Manufacturer Procurement Cycle Supplier Differences in Cycles - Uncertainty of demand - Scale / size of order
Process View in SC
Push / Pull view
Pull Initiated by customer order
Hotel, Dell
Replenishment Cycle
Retail order trigger - retailer placing order at previous stage to replenish
product availability & cost of holding inventory his stock total of customer orders less stock available - Economies of scale, balancing
picking, packing and sipping product to retailer size of these orders are quiet large than that of customer order inventories to be updated - correct order at promised due dates at lowest possible cost delivery, payment made
Manufacturing Cycle
Order Arrival - Plant receives order from customer / distributor Production Scheduling - Production plan is made Manufacturing & Shipping - Production & despatch
on promised date, meeting quality stds, low costs
Receiving at distributor / retailer or customer - Product is received physically by wholesaler / customer &
fund is transferred
Procurement Cycle
To ensure materials are available for manufacturing as per schedule Components are supplied against fixed manufacturing plan
SC Macro Processes
CRM Customer Relationship Mgmt firm&customer
Marketing, sales, order management, etc.
Success of SC
Matching demand with supply
Customers expectations, needs w.r.t quality, qty, design, price, etc.
Inventory
Good balance between inventory cost and loss of sales
Purchasing vs SCM
Purchasing is responsible for acquisition of required materials, services and equipment. Inbound and outbound logistics along with purchasing would be referred to as SCM
Discuss
What are the advantages of moving from Make to Stock model to a Make to order or a Make to configure model?