supply chain management

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SUPPLY CHAIN SUPPLY CHAIN MANAGEMENTMANAGEMENT

K.D.PRASADK.D.PRASADGM(Min)/(Vig)GM(Min)/(Vig)

BCCL,DHANBADBCCL,DHANBAD

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EXCELLENCEEXCELLENCE

PAR EXCELLENCE, SUPERIORITYPAR EXCELLENCE, SUPERIORITYSURPASSING OTHERS IN MERIT, SURPASSING OTHERS IN MERIT,

QUALITY, VIRTUE, GREATNESS.QUALITY, VIRTUE, GREATNESS.HIGH DEGREE PERFORMANCE.HIGH DEGREE PERFORMANCE.OUTSTANDING SKILLOUTSTANDING SKILL

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TO ACHIEVE EXCELLENCE WE MUST TO ACHIEVE EXCELLENCE WE MUST SET MEASURABLE SET MEASURABLE PARAMETERS/GOALS FOR ALL PARAMETERS/GOALS FOR ALL ACTIVITIES.ACTIVITIES.

SUPPLY CHAIN MANAGEMENT (SCM) SUPPLY CHAIN MANAGEMENT (SCM) IS TO MANAGE STRATEGICALLY AND IS TO MANAGE STRATEGICALLY AND IN INTEGRATED MANNER FLOW OF IN INTEGRATED MANNER FLOW OF MATERIALS EFFICIENTLY AND MATERIALS EFFICIENTLY AND ECONOMICALLY,ECONOMICALLY,CONT….CONT….

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FROM A CHAIN OF SUPPLIERS,FROM A CHAIN OF SUPPLIERS, TO/THROUGH ANOTHER CHAIN TO/THROUGH ANOTHER CHAIN

OF INTERNAL SUPPLIERS & OF INTERNAL SUPPLIERS & INTERNAL CUSTOMERS OF ‘THE INTERNAL CUSTOMERS OF ‘THE ENTERPRISE’ AND ENTERPRISE’ AND

FINALLY THE FINISHED PRODUCT FINALLY THE FINISHED PRODUCT IN RIGHT QUANTITY, OF RIGHT IN RIGHT QUANTITY, OF RIGHT QUALITY, AT RIGHT PRICE AND IN QUALITY, AT RIGHT PRICE AND IN RIGHT TIME TO A CHAIN OF RIGHT TIME TO A CHAIN OF EXTERNAL CUSTOMERS.EXTERNAL CUSTOMERS.

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SCMSCM

SUPPLIER

BUYER

SUPPLIERS

ENTERPRISE

CUSTOMERS

ENTERPRISE

SUPPLIERS CUSTOMER

S

SUPPLIERS’SUPPLIERS

CUSTOMERS’CUSTOMERS

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SUPPLIER-ENTERPRISE-CUSTOMER CHAINSUPPLIER-ENTERPRISE-CUSTOMER CHAININTERNAL/EXTERNAL CUSTOMER INTERNAL/EXTERNAL CUSTOMER SATISFACTIONSATISFACTION

EXTERNAL CUSTOMERSUPPLIER

CUSTOMEREXTERNALSUPPLIER

IS – INTERNAL SUPPLIERIC – INTERNAL CUSTOMER

ICIS

ISIS

ICIC

ICIC

ISIS

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SCMSCM : THE CHAIN INCLUDES : THE CHAIN INCLUDES SUPPLIER’S SUPPLIER AND SUPPLIER’S SUPPLIER AND CUSTOMER’S CUTOMER OF THE CUSTOMER’S CUTOMER OF THE ENTERPRISE.ENTERPRISE.

SCMSCM : BASIC FLOWS OF THE CHAIN ARE : BASIC FLOWS OF THE CHAIN ARE(I)(I) FLOW OF INFORMATIONFLOW OF INFORMATION(II)(II) FLOW OF MATERIALS/PRODUCTSFLOW OF MATERIALS/PRODUCTS(III)(III) FLOW OF FINANCEFLOW OF FINANCE

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THE IMPORTANT LINKS OF THE SUPPLY THE IMPORTANT LINKS OF THE SUPPLY CHAIN (S.C.) OF THE ENTERPRISE :CHAIN (S.C.) OF THE ENTERPRISE : FORECASTINGFORECASTING

LOGISTICS (IN-BOUND)LOGISTICS (IN-BOUND)

PRODUCTION CENTREPRODUCTION CENTRE

LOGISTICS (OUT-LOGISTICS (OUT-BOUND)BOUND)

ITIT

PURCHASINGPURCHASING

INVENTORYINVENTORY

MARKETINGMARKETING

FINANCEFINANCE

HRMHRM

BE FUNCTIONALLY STRONG & FULLY INTEGRATED IN THE SUPPLY CHAIN.

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EXCELLENCE IN SCM FOR EXCELLENCE IN SCM FOR ::BECOMING GLOBALLY ADMIRED BECOMING GLOBALLY ADMIRED

AND RESPECTED COMPANY.AND RESPECTED COMPANY.MARKET LEADERSHIP.MARKET LEADERSHIP.CHEAPER, BETTER & FASTER CHEAPER, BETTER & FASTER

PRODUCT THAN COMPETITOR.PRODUCT THAN COMPETITOR.HIGH CORPORATE IMAGE.HIGH CORPORATE IMAGE.

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HOW TO ACHIEVE ABOVE ?HOW TO ACHIEVE ABOVE ?1.1. RELATIONSHIP MANAGEMENT :RELATIONSHIP MANAGEMENT :

(I)(I) MAKE LOYAL CUSTOMERS – EXTERNAL AS MAKE LOYAL CUSTOMERS – EXTERNAL AS WELL AS INTERNAL.WELL AS INTERNAL.

(II)(II) EXCEED EXPECTATIONS OF CUSTOMERS.EXCEED EXPECTATIONS OF CUSTOMERS.(III)(III) BE CLOSE TO CUSTOMERBE CLOSE TO CUSTOMER(IV)(IV) BEHAVE WITH YOUR SUPPLIERS AS YOU BEHAVE WITH YOUR SUPPLIERS AS YOU

EXPECT YOUR CUSTOMERS TO BEHAVE EXPECT YOUR CUSTOMERS TO BEHAVE WITH YOU.WITH YOU.

CONT….CONT….

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(V)(V) THE CORPORATE CULTURE, THE CORPORATE CULTURE, MISSION, GOALS AND POLICIES OF MISSION, GOALS AND POLICIES OF THE ENTERPRISE HAS DIRECT THE ENTERPRISE HAS DIRECT EFFECT ON THE QUALITY OF EFFECT ON THE QUALITY OF INTEGRATION IN THE SUPPLY INTEGRATION IN THE SUPPLY CHAINCHAIN

(VI)(VI) ‘‘I AM OK, YOU ARE OK’ MUST BE I AM OK, YOU ARE OK’ MUST BE THE CULTURE IN THE ENTIRE THE CULTURE IN THE ENTIRE CHAIN.CHAIN.

(VII)(VII) EVERY LINK OF THE ‘CHAIN’ IS EVERY LINK OF THE ‘CHAIN’ IS IMPORTANT.IMPORTANT.

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2.2. INTERNET IS PALYING A INTERNET IS PALYING A HIGHLY EFFECTIVE ROLE IN HIGHLY EFFECTIVE ROLE IN MAKING SUPPLY CHAIN MAKING SUPPLY CHAIN SUCCESSFUL.SUCCESSFUL.

3.3. ELIMINATE/REDUCE MATERIALS ELIMINATE/REDUCE MATERIALS INVENTORY, WORK-IN INVENTORY, WORK-IN PROCESS INVENTORY & PROCESS INVENTORY & FINISHED GOODS INVENTORY:FINISHED GOODS INVENTORY:

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VENDOR MANAGED INVENTORY VENDOR MANAGED INVENTORY (VMI)/ SUPPLIERS’ CONSIGNMENT (VMI)/ SUPPLIERS’ CONSIGNMENT STORES NEAR WORK-PREMISES FOR STORES NEAR WORK-PREMISES FOR THE TOP ‘A’ ITEMS AND SPARE THE TOP ‘A’ ITEMS AND SPARE PARTS WHICH CONSTITUTE BULK OF PARTS WHICH CONSTITUTE BULK OF THE CONSUMPTION.THE CONSUMPTION.

CROSS-DOCKING STRATEGY FOR CROSS-DOCKING STRATEGY FOR FAST MOVING ITEMS WHERE FAST MOVING ITEMS WHERE WAREHOUSE FUNCTIONS AS WAREHOUSE FUNCTIONS AS INVENTORY CO-ORDINATION CENTRE INVENTORY CO-ORDINATION CENTRE FOR THE VARIOUS UNITS/RETAILORS.FOR THE VARIOUS UNITS/RETAILORS.

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AGREEMENTS WITH SUPPLIERS FOR AGREEMENTS WITH SUPPLIERS FOR DAILY, WEEKLY, MONTHLY SUPPLIES DAILY, WEEKLY, MONTHLY SUPPLIES ACCORDING TO CONSUMPTION.ACCORDING TO CONSUMPTION.

WHERE NECESSARY USE OF 3PL WHERE NECESSARY USE OF 3PL COULD BE CONSIDERED.COULD BE CONSIDERED.

JIT DELIVERY HAS TO BE THE JIT DELIVERY HAS TO BE THE OBJECTIVE.OBJECTIVE.

ALTERNATIVE USE/DISPOSAL OF ALTERNATIVE USE/DISPOSAL OF ‘DEAD’ STOCKS.‘DEAD’ STOCKS.

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FINISHED GOODS SHOULD MOVE FINISHED GOODS SHOULD MOVE TO THE CUSTOMER WITHOUT TO THE CUSTOMER WITHOUT ANY IDLING.ANY IDLING.

LOWER THE INVENTORY BETTER LOWER THE INVENTORY BETTER & ECONOMICAL THE FLOW IN S.C.& ECONOMICAL THE FLOW IN S.C.

IN MODERN S.C., ‘INFORMATION’ IN MODERN S.C., ‘INFORMATION’ REPLACES INVENTORY.REPLACES INVENTORY.

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4.TRANSPORTATION : A NON-4.TRANSPORTATION : A NON-VALUE ADDED ACTIVITYVALUE ADDED ACTIVITY FIND MOST ECONOMIC MODEL OF FIND MOST ECONOMIC MODEL OF

TRANSPORT CONSIDERING MODES TRANSPORT CONSIDERING MODES (TRAINS, TRUCK, SHIPS), VALUE OF (TRAINS, TRUCK, SHIPS), VALUE OF GOODS, HAZARDS EN-ROUTE & GOODS, HAZARDS EN-ROUTE & DATE OF NEED.DATE OF NEED.

DIRECT LOGISTICS IS PREFERRED. DIRECT LOGISTICS IS PREFERRED. DIRECT BUSINESS MODEL IS DIRECT BUSINESS MODEL IS SUCCESSFUL DUE TO INTERNET.SUCCESSFUL DUE TO INTERNET.

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5. LEAN MANAGEMENT/ PHILO-5. LEAN MANAGEMENT/ PHILO-SOPHY/ THINKINGSOPHY/ THINKING

‘‘LEAN THINKING – BANISH LEAN THINKING – BANISH WASTE AND CREATE WEALTH WASTE AND CREATE WEALTH IN YOUR CORPORATION’. IN YOUR CORPORATION’. JAMES WOMACK & DANIEL JAMES WOMACK & DANIEL JONES.JONES.

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APPLY ‘LEAN’ ON :APPLY ‘LEAN’ ON :DESIGNDESIGN SYSTEMSYSTEM PROCESSPROCESS

MENMEN MACHINESMACHINES MATERIALSMATERIALS

CYCLE TIMECYCLE TIME LEAD TIMELEAD TIME INVENTORYINVENTORY

TRANSPORTTRANSPORT REHANDLINGREHANDLING LAYERS IN LAYERS IN MGMT.MGMT.

ACHIEVE HIGHEST QUALITY AT LOWEST COST.

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6. PURCHASING6. PURCHASINGPURCHASING – A KEY ACTIVITY OF PURCHASING – A KEY ACTIVITY OF SCM:SCM: USE IT MORE & MOREUSE IT MORE & MORE EASY GLOBAL SOURCING WITH EASY GLOBAL SOURCING WITH

LIBERALISED TRADE REGULATIONSLIBERALISED TRADE REGULATIONS BUY QUALITY MATERIALS AT CHEAP BUY QUALITY MATERIALS AT CHEAP

RATES.RATES. PREFER F.O.B. CONTRACTS FOR PREFER F.O.B. CONTRACTS FOR

IMPORTED ITEMS TO ENSURE GENUINE IMPORTED ITEMS TO ENSURE GENUINE PRODUCTS AT LOWER PRICE.PRODUCTS AT LOWER PRICE.

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BUY PROVEN EQUIPMENT, QUALITY BUY PROVEN EQUIPMENT, QUALITY STORES AND SPARES AT MOST STORES AND SPARES AT MOST ECONOMIC RATES.ECONOMIC RATES.

ADOPT E-PROCUREMENT.ADOPT E-PROCUREMENT. POOR NIT TERMS, CONDITIONS & POOR NIT TERMS, CONDITIONS &

SPECIFICATIONS DELAY DECISIONS SPECIFICATIONS DELAY DECISIONS AND RESULT IN POOR CONTRACTS OR AND RESULT IN POOR CONTRACTS OR RETENDERING.RETENDERING.

MOST AMENDMENTS REFLECT ON MOST AMENDMENTS REFLECT ON QUALITY OF DECISIONS. RIGHT QUALITY OF DECISIONS. RIGHT DRAFTING OF CONTRACT IS REQUIRED.DRAFTING OF CONTRACT IS REQUIRED.

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PREPARE FLOWCHART OF VARIOUS PREPARE FLOWCHART OF VARIOUS ACTIVITIES IN PURCHASING & ACTIVITIES IN PURCHASING & COMPRESS THE CYCLE TIME OF EACH.COMPRESS THE CYCLE TIME OF EACH.

REVIEW SYSTEMS PERIODICALLY.REVIEW SYSTEMS PERIODICALLY. PRICE NEGOTIATIONS SHOULD BE PRICE NEGOTIATIONS SHOULD BE

DONE IN MOST EXCEPTIONAL CASES DONE IN MOST EXCEPTIONAL CASES WHEN THERE IS NO OTHER WHEN THERE IS NO OTHER ALTERNATIVE. NEGOTIATIONS AT ALTERNATIVE. NEGOTIATIONS AT TIMES MAY BE NECESSARY FOR TIMES MAY BE NECESSARY FOR PROPRIETARY/SINGLE SOURCE ITEMS.PROPRIETARY/SINGLE SOURCE ITEMS.

STRIVE FOR ‘RIGHT FIRST TIME’ IN STRIVE FOR ‘RIGHT FIRST TIME’ IN DECISION MAKING.DECISION MAKING.

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7.7. VARIOUS TECHNIQUES AS BELOW VARIOUS TECHNIQUES AS BELOW ARE ALSO USED FOR THE SUCCESS ARE ALSO USED FOR THE SUCCESS OF SUPPLY CHAIN BY ENHANCING OF SUPPLY CHAIN BY ENHANCING QUALITY, REDUCING COST & QUALITY, REDUCING COST & SPEEDING THE FLOW:SPEEDING THE FLOW:

SIX SIGMA, BENCHMARKING, TQM, SIX SIGMA, BENCHMARKING, TQM, TPM, TCM, BPO, JIT, VALUE TPM, TCM, BPO, JIT, VALUE ANALYSIS, QUALITY CIRCLES, ANALYSIS, QUALITY CIRCLES, SUGGESTION SCHEMES & LATEST SUGGESTION SCHEMES & LATEST PROVEN WORLD-CLASS PROVEN WORLD-CLASS TECHNIQUES.TECHNIQUES.

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8.8. CONTINUOUS IMPROVEMENT & CONTINUOUS IMPROVEMENT & INNOVATION HAVE ALWAYS TO INNOVATION HAVE ALWAYS TO BE IN THE MIND OF ALL THE BE IN THE MIND OF ALL THE MEMBERS OF THE CHAIN.MEMBERS OF THE CHAIN.

9.9. SUPPLY CHAIN BEGINS AND SUPPLY CHAIN BEGINS AND ENDS WITH THE CUSTOMER.ENDS WITH THE CUSTOMER.

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THANKING YOU!THANKING YOU!