utpal's ppt on supply chain management

8/8/2019 UTPAL's PPT on Supply Chain Management

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14-1 Supply Chain Management14-1 Supply Chain Management

NSHM Knowledge Campus, Durgapur

Supply Chain ManagementSupply Chain Management

ROLL NO:- 09301456

PGPRM(RAI) + MBA(PTU)

BATCH- 002: 2ND Semester


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Supply Chain ManagementSupply Chain Management

Supply Chain: the sequence oforganizations - their facilities, functions,

and activities - that are involved in

producing and delivering a product orservice.

Sometimes referred to asSometimes referred to as value chainsvalue chains


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FacilitiesFacilities

Warehouses Factories

Processing centers

Distribution centers

Retail outlets

Offices


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Functions and ActivitiesFunctions and Activities

Forecasting Purchasing

Inventory management

Information management Quality assurance

Scheduling

Production and delivery Customer service


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Typical Supply ChainsTypical Supply Chains

PurchasingReceiving Storage Operations Storage

Production Distribution


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Typical Supply Chain for a ManufacturerTypical Supply Chain for a Manufacturer

Supplier

Supplier

Supplier

Storage

}Mfg. Storage Dist. Retailer Customer


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Supplier

Supplier}Storage Service Customer

Typical Supply Chain for a ServiceTypical Supply Chain for a Service


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Need for Supply Chain ManagementNeed for Supply Chain Management

1. Improve operations2. Increasing levels of outsourcing

3. Increasing transportation costs

4. Competitive pressures

5. Increasing globalization

6. Increasing importance of e-commerce

7. Complexity of supply chains

8. Manage inventories


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Bullwhip EffectBullwhip Effect

Tier 2Suppliers

Tier 1Suppliers

ProducerDistributorRetailerFinalFinal

CustomerCustomer

Amount ofAmount of

inventoryinventory=


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Benefits of Supply Chain ManagementBenefits of Supply Chain Management

Organization Benefit

Campbell Soup Doubled inventory turnover rate

Hewlett-Packard Cut supply costs 75%

Sport Obermeyer Doubled profits and increased sales 60%

National Bicycle Increased market share from 5% to 29%

Wal-Mart Largest and most profitable retailer in the world

PRACTICLE EXAMPLES :


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Benefits of Supply Chain ManagementBenefits of Supply Chain Management

Lower inventories Higher productivity

Greater agility

Shorter lead times Higher profits

Greater customer loyalty


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Elements of Supply Chain ManagementElements of Supply Chain Management

Deciding how to best move and store materialsLogistics

Determining location of facilitiesLocation

Monitoring supplier quality, delivery, and relationsSuppliers

Evaluating suppliers and supporting operationsPurchasing

Meeting demand while managing inventory costsInventory

Controlling quality, scheduling workProcessingIncorporating customer wants, mfg., and timeDesign

Predicting quantity and timing of demandForecasting

Determining what customers wantCustomers

Typical IssuesElement


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LogisticsLogistics

Logistics Refers to the movement of materials and

information within a facility and to incoming

and outgoing shipments of goods andmaterials in a supply chain

14 14 S l Ch M14 14 S l Ch M


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LogisticsLogistics

Movement within the facility

Incoming and outgoing shipments

Bar coding EDI

Distribution

JIT Deliveries

0

214800 232087768

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Electronic Data InterchangeElectronic Data Interchange

EDI the direct transmission ofinterorganizational transactions, computer-to-

computer, including purchase orders,

shipping notices, and debit or credit memos.

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Electronic Data InterchangeElectronic Data Interchange

Increased productivity

Reduction of paperwork

Lead time and inventory reduction Facilitation of just-in-time systems

Electronic transfer of funds

Improved control of operations

Reduction in clerical labor

Increased accuracy

ADVANTAGES :

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Efficient Consumer ResponseEfficient Consumer Response

Efficient consumer response (ECR) is asupply chain management initiative specific

to the food industry

Reflects companies efforts to achieve quickresponse using EDI and bar codes

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E-CommerceE-Commerce

E-Commerce: the use of electronictechnology to facilitate business transactions

Applications include

Internet buying and selling E-mail

Order and shipment tracking

Electronic data interchange

14 19 Supply Ch in M n gement14 19 Supply Ch in M n gement


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Advantages of E-CommerceAdvantages of E-Commerce

Companies can: Have a global presence Improve competitiveness and quality

Analyze customer interests Collect detailed information Shorten supply chain response times Realize substantial cost savings Create virtual companies Level the playing field for small companies

14 20 Supply Chain Management14 20 Supply Chain Management


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Disadvantages of E-CommerceDisadvantages of E-Commerce

Customer expectations Order quickly -> fast delivery

Order fulfillment

Order rate often exceeds ability to fulfill it

Inventory holding

Outsourcing loss of control

Internal holding costs



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Supply Chain Performance DriversSupply Chain Performance Drivers

1. Quality

2. Cost

3. Flexibility

4. Velocity

5. Customer service



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VelocityVelocity

Inventory velocity The rate at which inventory(material) goes

through the supply chain (STR ratio)

Information velocity

The rate at which information is

communicated in a supply chain



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ChallengesChallenges

Barriers to integration of organizations Getting top management on board

Dealing with trade-offs

Small businesses

Variability and uncertainty

Long lead times



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Trade-offsTrade-offs

1. Lot-size-inventory Bullwhip effect

1. Inventory-transportation costs

Cross-docking1. Lead time-transportation costs

2. Product variety-inventory

Delayed differentiation1. Cost-customer service

Disintermediation



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Bullwhip effect Inventories are progressively larger moving

backward through the supply chain

Cross-docking

Goods arriving at a warehouse from a supplier

are unloaded from the suppliers truck and

loaded onto outbound trucks

Avoids warehouse storage



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Delayed differentiation Production of standard components and

subassemblies, which are held until late in the

process to add differentiating features Disintermediation

Reducing one or more steps in a supply chain

by cutting out one or more intermediaries



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Supply Chain IssuesSupply Chain Issues

Quality control

Production planning and

control

Inventory policies

Purchasing policies

Production policiesTransportation

policies

Quality policies

Design of the

supply chain,

partnering

Operating IssuesTactical IssuesStrategicIssues



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Supply Chain Benefits and DrawbacksSupply Chain Benefits and Drawbacks

Problem PotentialImprovement

Benefits PossibleDrawbacks

Largeinventories

Smaller, more frequentdeliveries

Reduced holdingcosts

Traffic congestionIncreased costs

Long lead times Delayed differentiationDisintermediation

Quick response May not be feasibleMay need absorbfunctions

Large number ofparts

Modular Fewer partsSimpler ordering

Less variety

CostQuality

Outsourcing Reduced cost, higher quality

Loss of control

Variability Shorter lead times, betterforecasts

Able to match supplyand demand

Less variety



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PurchasingPurchasing

Purchasingis responsible for obtaining the

materials, parts, and supplies and services

needed to produce a product or provide a

service.Goal of PurchasingGoal of Purchasing

Develop and implement purchasing plans for

products and services that support operations

strategies



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Duties of PurchasingDuties of Purchasing

Identifying sources of supplyNegotiating contracts

Maintaining a database of suppliers

Obtaining goods and services

Managing supplies



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Purchasing InterfacesPurchasing Interfaces

Purchasing

Legal

AccountingOperations

Data

processing

Design

ReceivingSuppliers



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Purchasing CyclePurchasing Cycle

1. Requisition received

2. Supplier selected

3. Order is placed

4. Monitor orders

5. Receive orders

PurchasingPurchasing

LegalLegal

AccountingAccountingOperationsOperations

DataData

process-process-inging

DesignDesign

ReceivingReceiving

SuppliersSuppliers



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Centralized vs Decentralized PurchasingCentralized vs Decentralized Purchasing

Centralized purchasing Purchasing is handled by one special

department

Decentralized purchasing

Individual departments or separate locations

handle their own purchasing requirements



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SuppliersSuppliers

Choosing suppliers Evaluating sources of supply

Supplier audits

Supplier certification

Supplier relationships

Supplier partnerships



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Factors in Choosing a SupplierFactors in Choosing a Supplier

Quality and quality assurance Flexibility

Location

Price Product or service changes

Reputation and financial stability

Lead times and on-time delivery Other accounts



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Evaluating Sources of SupplyEvaluating Sources of Supply

Vendor analysis: Evaluating the sources ofsupply in terms of price, quality, reputation,

and service



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Evaluating Sources of SupplyEvaluating Sources of Supply

Vendor analysis - evaluating the sources ofsupply in terms of Price Quality Services Location Inventory policy Flexibility



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Supplier as a PartnerSupplier as a Partner

Aspect Adversary Partner Number of suppliers Many One or a few

Length of relationship May be brief Long-term

Low price Major consideration Moderately important

Reliability May not be high High

Openness Low High

Quality May be unreliable; buyer inspects

At the source; vendorcertified

Volume of business May be low High

Flexibility Relatively low Relatively high

Location Widely dispersed Nearness is important



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Supplier PartnershipsSupplier Partnerships

Ideas from suppliers could lead to improvedcompetitiveness

1. Reduce cost of making the purchase

2. Reduce transportation costs

3. Reduce production costs4. Improve product quality

5. Improve product design

6. Reduce time to market

7. Improve customer satisfaction

8. Reduce inventory costs

9. Introduce new products or services



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Thank You for beingThank You for beingvery PATIENTvery PATIENT

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utpal's ppt on supply chain management

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