M.Nouman

Presented to:Sir, Mubashar AzamSupply Chain Management

Muhammad Ali Jinnah University

The system of suppliers, manufacturers, transportation, distributors, and vendors that exists to transform raw materials to final products and supply those products to customers.

That portion of the supply chain which comes after the manufacturing process is sometimes known as the distribution network.

Introduction to Supply Chain Management

Supply Chain Management (SCM) is an essential element to operational efficiency.

SCM can be applied to customer satisfaction and company success.

Supply chain management touches major issues, including the rapid growth of multinational corporations and strategic partnerships.

Supply chain management helps streamline everything from day-to-day product flows to unexpected natural disasters.

Importance of Supply Chain Management

Procurement and supply management involves buying the goods and services that enable an organization to operate.

Types of Purchases.1- Merchant Buyers2- Industrial buyers3- Manual Purchasing4- Electronic Procurement (e-Procurement)

Centralized & Decentralized Purchasing

Purchasing issues in Supply Chain Management

Purchase specification forms the heart of the procurement. Purchase specifications serve a number of purposes, among them to:

Purchase specifications can be classified into two broad categories –simple and complex Simple Specifications:

Simple specifications require less resources and time to develop than complex specifications. Complex Specifications:

Complex or detailed specifications are descriptions that tell the seller exactly what the buyer wants to purchase.

Development of Specifications

Choosing the right supplier involves much more than scanning a series of price lists. Your choice will depend on a wide range of factors.

Product and process technologies Quality & Cost Reliability & Capacity Order System and Cycle Time Location & Services.

SUPPLIER SELECTION PROCESS

Outsourcing: The process of having

suppliers provide goods and services that were previously provided Internally.

Outsourcing involves substitution—the replacement of internal capacity and production by that of the supplier.

Forward integration:

Forward integration is a business strategy that involves a form of vertical integration.

Backward integration:

Backward Integration is involved with the purchase of, merger with, suppliers up the supply chain.

Sourcing & The Make or buy Decisions

Types of Buyer-Supplier RelationshipsTransactional Relationships: An absence of concern One of a series of independent

deals Costs, data and forecasts are not

shared . Price is the focus of the

relationship A minimum of purchasing time

and energy is required to establish prices

Transactional purchases lend themselves to e-procurement .

Collaborative & Alliance Relationships:

External collaboration with business partners and customers is key to innovation.

Collaborative and alliance relationships tend to result in lower total costs and improve performance of the supply chain.

Activity/Attribute Transactional CollaborativeAlliance

Continuum of Buyer-Seller Relationships

CommunicationCompetitive Adv.ConnectednessContinuous Impr.Contributions to NPDDifficulty of ExitDurationExpeditingFocusLevel of Integration

High pot. for problems Systematic approachLow HighIndependence InterdependenceLittle A focusFew Many – ESILow Difficult – high impactShort LongReactive ProactivePrice Total costLittle or none High or total

Logistics Management

The process of planning, implementing and efficiently control the flow of materials, storage, in-process inventory, finished products and relevant information from the point of origin to point of consumption, at the lowest possible cost.

Series of activities that must be met to achieve the objectives.

It is an information system. It can be as large or as small as the

company wants. All activities are equally important.

Logistic Chain

Logistics 5 RightsRight

Product

Right Place

Right Time

Right Condition

Right Cost

Total Quality Management (TQM) Total Quality Management (TQM) is an

approach that seeks to improve quality and performance which will meet or exceed customer expectations.

Customer focus Leadership Involvement of people Process management System management Continual improvement Factual approach to decision making Mutually beneficial supplier relationships

Supply chain quality management based on the TQM principles