Introduction to Supply Chain Management

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Presented By: Click to edit Master subtitle style Group 2 Inderpreet Singh (16) Farhan Khan (36)

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What is a Supply Chain?

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What is a Supply Chain?

Supply Chain for a Manufacturing Organization

Suppliers A

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Suppliers B

Storag e

Mfg

Storag e

Distributor s Retailer

Suppliers C

Customer

Supply Chain for a Service Organization

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Suppliers A

Storage
Suppliers B

Service

Customer s

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What is a Supply Chain?

P&G or other manufacturer Jewel or third party DC Jewel Supermarket

Customer wants detergent and goes to Jewel

Plastic Producer

Tenneco Packaging

Chemical manufacturer (e.g. Oil Company)

Chemical manufacturer (e.g. Oil Company)

Paper Manufacturer

Timber Industry

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Flows in a Supply Chain

Information Product Funds

Custome r

Supply Chain

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The Objective of a Supply Chain

Maximize overall value created chain value: difference between what the final product is worth to the customer and the effort the supply chain expends in filling the customers request is correlated to supply chain profitability (difference between revenue generated from the customer and the overall cost across the supply chain) chain profitability is total profit to be shared across all stages of the supply chain

Supply

Value

Supply

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The Objective of a Supply Chain

Supply

chain success should be measured by total supply chain profitability, not profits at an individual stage of supply chain revenue: the customer of supply chain cost: flows of information, products, or funds between stages of the supply chain chain management is the management of flows between and among supply chain stages to maximize total supply chain profitability

Sources Sources

Supply

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Decision Phases of a Supply Chain

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Supply Chain Strategy or Design

Decisions Strategic

about the structure of the supply chain and what processes each stage will perform supply chain decisions
to be made or stored at various locations systems Locations and capacities of facilities of transportation

Products Modes

Information Supply Supply

chain design must support strategic objectives chain design decisions are long-term and expensive to reverse must take into account market uncertainty

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Supply Chain Planning

Definition

of a set of policies that govern short-term operations by the supply configuration from previous phase with a forecast of demand in the coming year

Fixed

Starts

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Supply Chain Planning

Planning Which

decisions:

markets will be supplied from which locations buildup of inventories backup locations

Planned

Subcontracting, Inventory Timing Must

policies

and size of market promotions

consider in planning decisions demand uncertainty, exchange rates, competition over the time horizon

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Supply Chain Operation

Time

horizon is weekly or daily regarding individual customer orders

Decisions Supply Goal

chain configuration is fixed and operating policies are determined is to implement the operating policies as effectively as possible orders to inventory or production, set order due dates, generate pick lists at a warehouse, allocate an order to a particular shipment, set delivery schedules, place replenishment orders less uncertainty (short time horizon)

Allocate

Much

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Process View of a Supply Chain

Cycle

view: processes in a supply chain are divided into a series of cycles, each performed at the interfaces between two successive supply chain stages view: processes in a supply chain are divided into two categories depending on whether they are executed in response to a customer order (pull) or in anticipation of a customer order (push)

Push/pull

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Cycle View of Supply Chains

Custo mer Reta iler Distrib utor Manufact urer Supp lier

Customer Order Cycle Replenishmen t Cycle Manufacturing Cycle Procurement Cycle

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Cycle View of a Supply Chain

Each cycle occurs at the interface between two successive stages order cycle (customer-retailer) cycle (retailer-distributor) cycle (distributor-manufacturer)

Customer

Replenishment Manufacturing Procurement Cycle

cycle (manufacturer-supplier)

view clearly defines processes involved and the owners of each process. Specifies the roles and responsibilities of each member and the desired outcome of each process.

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Push/Pull View of Supply Chains

Procurem Manufacturin ent, Replenishment g and cycles
Customer Order Cy cle

PUSH PROCESSES
Suppli er Manufactur er

PULL PROCESSES Custo mer Order Arrives

Custom er

Push/Pull View of Supply Chain Processes

Supply

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chain processes fall into one of two categories depending on the timing of their execution relative to customer demand execution is initiated in response to a customer order (reactive) execution is initiated in anticipation of customer orders (speculative) boundary separates push processes from pull processes

Pull:

Push:

Push/pull

Push/Pull View of Supply Chain Processes

Useful

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in considering strategic decisions relating to supply chain design more global view of how supply chain processes relate to customer orders combine the push/pull and cycle views relative proportion of push and pull processes can have an impact on supply chain performance

Can The

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The Top 25 for 2011

Gartner

Supply Chain Report

Rank

Company

Peer Opinion1 (156 voters) (25%) 2950 1909 1726 550 2267 1501 1755 711 740 857 1305 566 560 994 449 871 949 389 376 781 548 544 524 760 471

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Apple Dell P&G Research In Motion (RIM) Amazon Cisco Systems Wal-Mart Stores McDonald's PepsiCo Samsung The Coca-Cola Company Microsoft ColgatePalmolive IBM Unilever Intel HP Nestle Inditex Nike Johnson & Johnson Starbucks Tesco 3M Kraft Foods

Gartner Opinion1 (32 voters) (25%) 536 457 660 215 402 550 449 161 445 361 265 128 239 238 459 247 331 62 180 144 121 127 190 7 192

3-Year Weighted ROA2 (25%) 17.9% 6.6% 9.6% 25.1% 6.6% 10.2% 9.0% 15.3% 12.0% 9.8% 15.3% 21.4% 20.0% 12.5% 11.5% 13.6% 7.0% 22.6% 16.9% 13.0% 13.4% 10.6% 5.3% 13.2% 4.4%

Inventory Turns3 (15%) 49.3 38.9 5.6 17.7 11.2 11.8 8.5 141.8 7.8 16.9 5.3 16.6 5.1 21.1 5.3 4.5 14.3 5.5 4.4 4.7 3.6 8.6 18.3 4.6 5.9

3-Year Weighted Revenue Growth 40.9% 4.1% 2.4% 43.9% 34.0% 5.5% 3.6% 2.6% 18.8% 22.5% 7.9% 6.1% 3.0% 0.8% 5.2% 9.7% 6.7% 0.8% 10.5% 3.3% -0.3% 5.1% 8.0% 5.8% 15.6%

Composite Score5 8.50 5.14 5.13 5.10

5.07 4.82 4.40 4.35 4.11 3.98 3.96 3.72 3.62 3.60 3.53 3.37 3.28 3.05 3.05 2.72 2.38 2.35 2.34 2.25 2.03

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What Is Demand-Driven Excellence?

This model has three overlapping areas of responsibility:
Supply

management Manufacturing, logistics, supply planning and sourcing management Marketing, sales, demand planning and service management R&D, engineering and product development

Demand

Product

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25 125

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Key Findings
The

Top 5 include three mainstays Apple, Dell and P&G and two that joined the list for the first time last yearResearch In Motion (RIM) and Amazon. new companies joined the list this year: Nestle, Starbucks, 3M and Kraft Foods. key themes emerged this year among the leaders, including how they deal with volatility, their approaches to value chain network integration, their focus on sustainable execution and their abilities to orchestrate.
261-26

Four

Four

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Recommendations
Maximizing

Supply Chain Flexibility ( also a Top Requirement for Global Supply Chain Executives, According to New Survey from PRTM) supply chain processes and methodologies throughout your trading partner network. a clearly articulated, long-term value chain vision with strong, agile, and sustainable execution capabilities. your supply chain as your customers experience it.
271-27

Develop

Supplement

Measure

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The Leader in Supply Chain Solutions

Aravo

Solutions - to Optimize Supplier Lifecycle Processes Supply Chain Solutions

Averitt OHL Oracle

Transportation Management 6.1Helps Shippers Streamline Inbound and Outbound Logistics for Supply Management (ISM) USA - It is a not-for-profit organization with the mission to lead supply management in 75 countries. Recently came to India
281-28

Institute

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Thank You