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Sportstars

IMS University of Peshawar

Mumbai Dhabawala• 5000 Dhabawala• 200,000 customers• 50 percent workforce illiterate• 120 years long history• Dhabawala are not caterers• Home to work place before lunch time• Two deliveries in 8 hours• Accuracy (only one wrong delivery in 16

million tiffons)• Six sigma and ISO 9001 certified without

technology

Mumbai Dhabawala• Structure • Group Dynamics and leadership• Value added services of dhabawal• Price (350 rupees per month)• Pay for service only• 120 years history has no strike• In transit the tiffons might shift hands on

average six times• Value added services (angry and hungry

young man)

SCM explained

• For example a bottle of Aqua Fina• Ingredients (Pure water, Bottle, package and a

label worth 45 PKR)• Think about profit margin (200% 100%

50%???)• Do you think that product cost is equal to

material cost?• Thinking from a CEO perspective• So lets see what it took that bottle of water to

get into your hands …………………………………………

A product example

• First, negotiate the purchase of empty bottles• These bottles will be easier to transport if they

have their own boxes.• Shrink wrap those bottles so that they don’t

fall out of the box• Put them on pallets• To move pallets you need a forklift (driver)• You then load a truack (truck) a driver, fuel etc• Label for the bottle also, design it, transport it

to the plant, paste it. • In other words truck, driver, fuel and

insurance

A product example Aquafina

• The water bottling plant wont be free as it needs energy, employees, bottling machines

• Access to drinking water of course• Set of machines required to load the product

to truck so that it moves to DCs• (that too require F, D, I?????)• From DCs it will head to retail stores and still

another truck ()• That store will need employees to unload

products and place on shelves• It might also need a refrigerator, security

personnel or systems and insurance

Aquafina illustrated

• Not all the botlles survive the journey (cost)• 1-800 numbers (call centers)

• All the materials, boxes, people, machinery, buildings, energy, fuel, vehicles cost money

• What about people working in other functional departments

• So with the help of this simple super product we come to know that companies face challenges when they…….

Challenges

(a) Buy things(b) Make things(c) Move things(d) Sell and (e) service things

• And lets not forget companies need to do all these things using sustainable materials, energy and methods

• Whose job it is to make sure all these things happen flawlessly, with minimal effort and of course minimal cost.

• Guess it?????????

In simple words

• SCM needs to be able to do all these things, they need to give the customer

The product they want,

As often as they want,

At a reasonable price,

while managing a profit

This requires world class skills in SCM

Which in simple words mean The management of the chain of supplies

What you might be thinking that we all live in a service economy? ???????

Service economy (Hotel)

• What the hotel manufacture?• ?? Lodginbg experiences, dining experiences• To carry out these activities what is needed?

• Hotels need to buy things like???• They also make things or in this case

manufacture services such as housekeeping, massages, and special events

• Hotels also move things such as • Clean towels, foods, transporting guests and

their luggage to and from airports

Service economy (Hotel)

• Hotels even sell things, like in-room movies, match tickets, gifts, internet services

• And finally, they also provide services such as making reservations, organizing banquette events, making wakeup calls, and cleaning and pressing clothes

• Once again the fundamental skills learned in SCM can be used to manufacture services experiences as much as they aid in manufacturing products

(1) BUY IT• You are what you eat (first step in SCM,)• SC are the bones and muscles of organization• (what they eat) To have a healthy supply chain

you need healthy supplies (but if you feed it garbage???)

• Think of buying for an organization?• Lets outsource our purchasing to your mom

and dad? How would you feel?

• Purchasing considerations should go beyond costs, quality, delivery, speed, supplier flexibility

• Relationships-negotiations-analytical skills

(2) MAKE IT

• Manufacturing and operations• Mysterious concept as item are complex today

and distance involved is great

• Most people know little about manufacturing• At best they might know• Materials used • And where the item was made

• Lets figure out which issue SCM needs to consider in manufacturing a product?

Make it …….

• Look out for manufacturing facilities near your home, and how often you visit them

• RESTAURANT• Design decisions (McDonalds, Burger King

has R&D teams like Ford and Sony)• Tradeoffs in terms of Process, facility, and

Resource Decisions• (cost, quality, speed and flexibility)• High quality burgers need more time to

manufacture and ingredients are expensive• Offering more options could also become time

consuming and expensive

continued

• To be profitable restaurant owners should know, what the customer is willing to accept the standard of a burger and what could be customized for each h buyer

• This will dictate decisions related tp

1. Labor

2. Machinery

3. Inventory

4. Capacity

5. Seats etc

So manufacturing is more than material and labour costs

Continued…

• And it is only after considering design, manufacturing and resources that companies can properly explore outsourcing, off shoring, and in the case of burgers FRANCHISING

• Look manufacturing an airplane will always be intimidating but hopefully you have a better feeling about the important issues and considerations that product designers and supply chain managers must confront in delivering millions of high quality products and services to customers all over the world.

(3) MOVE IT

• Transportation and Logistics• In addition to price and quality• Point of origin and destination comes to mind• A more perceptive consume might think of the

primary mode of transportation used to deliver the product

• Even that level of thought is very limited

• It will be like saying Ghayur got from Japan to Pakistan by aero plane

Move it continued…

• Many of you who have travelled by airplane knows the steps involved in getting from one destination to other

• Think about everything you require to travel to airplane

• Ticket• Luggage• Taxi• Check your bags• Get through airport security checks• Board the airplane• Finally you are ready to fly

MOVE IT continued,….

• But if you are scheduled for a lay over• Sit in people warehouse• Travel by another plane to final destination• Taxi to reach absolute destination

• Think about work done by airport staff• This means that the malitaristic term logistics

is about so much things than transportation.

• Humans can ask questions and take decisions so as to stay abreast of the full details of the journey as they happen

• What about products????????”

MOVE it continued…..

• Products don’t have the ability to ask questions or change decisions

• Means planning and preparation aspects of logistics are even more crucial for SCMgrs

• SCMgrs can make decisions regarding packaging, containerization, documentation, insurance, storage, and import and export regulations

• Through SC we learned that every product or service has its own story.. Think of thousands of logistics stories (assignment)

(4) SELL IT and Service it

• Retail consideration• Do we as consumers buy things at

manufacturing facilities? Distribution centers?

• Typically we buy at retail stores• This means that SCM should not stop when

the product leaves manufacturer, or distribution center or even when they unload it from a truck

• Sc requires that you get the product in the hands of the customer

Continued…

• Customers want the product at the right shelf or exactly where they expect it to be

• Not on the pallet? Not in the stock, back room not in wrong place out on the floor

• Retail stores should Manufacture outstanding retail experiences

• (1) Excellent mix of competitively priced products

• (2) CLEAN SERVICESCAPE (ORGANISED)

• (3) Excellent customer service from a friendly, well infiormed, easy to find employee, fast and efficient waiting lines, payment processes, and return processes

Continued…

• Retail stores like manufacturing facilities are concerned with materials, operations and logistics

• The following issues should be taken to considerations

(1) capacity

(2) Productivity

(3) Value

Who wants to work in a retail?

Hospitals, airlines, Banks, Hotels, Restaurants, and dealers.

What do they have in all common?

Continued..

• They sell products and services directly to customers,

• Means that they aren't that different from retail stores

• They all could benefit from executives that understand capacity, productivity, value, quality management, materials management, operations and logistics

• ……………………• Three stages of globalization were also

discussed. Try to do it yourself….

Integrated Supply Chains: • That means companies need to pull their

employees and business partner out of their silos and have them develop a cohesive team with a shared set of goals and comparable set of philosophies.

• Develop a Philosophical Approach:

Similar values and desires, strength, flexibility, knowledge and healthy diet. This means that both will have similar workouts, diets, and muscular feature?

• Businesses are no different

Supply Chain Integration

• Up and until today we have been looking at supply chain management as a series of individual operational and functions and decisions,

• (a) Buy it• (b) Make it• (c) Move it• (d) Sell it and • (e) Service it• Supply chains are chains (interconnected &

interdependent)

Continued..

• But what works for one company may not work for another.

• And what works for a company today may not work for them tomorrow.

Building a Team: • Developing a winy tradition requires that team

operate as cooperative and integrated units. Players in these teams must trust each other.

• They must understand and accept their individual roles.

• More than that they need to understand that the failure of one is a failure for all.

• Success for modern supply chains is no different. Common goals, trust, acceptance and understanding of roles, and a commitment to continuous improvement. These are the keys to developing a competitive modern integrated supply chain.

Integrated SCM

• TODAYS WORLD (as against silos of functional departments)

• Today competitive companies have knocked down these walls

• Everyone’s responsibility.

• Being lean, responsive, innovative and profitable while at the same time maintaining a high level of quality.

The new CEO

• You need to understand the importance of finance accounting, marketing and information technology, because materials, money and information are the lifeblood of modern supply chains.

• Therefore modern executives should know how to design and manage supply chains at the global level.

• Managers of global integrated supply chains, that’s what the businesses, world and that’s what you need to become

WORKING TOGETHER WORKS”

• Hair and tortoise story for team building • Moral 1: Slow and steady wins the race.

• Moral 2: Fast and consistent will always beat the slow and steady. It’s good to be slow and steady, but it’s better to be fast and consistent.

• Moral 3: First, identify your core competency and then change the playing field to suit your core competency.

Continued…• Moral 4:• It is good to be individually motivated and to have

strong core competencies: but unless you’re able to work in a team and harness each others competencies, you’ll always perform below par, because there will always be situations in which you’ll do poorly and someone else will do well. Teamwork is mainly about situational leadership, letting the person with the relevant core competency in a situation take the leadership.

• An interesting finding relates to the idea that when faced with a difficult situation, you need not fight against each other rather one should fight against the situation.

Integrated supply chain -definition

SCM is the integration of key business

processes from end user through original

suppliers that provides products, services,

and information that add value for

customers and other stakeholders.

• Trade off is between cost and services

STEPS NTEGRATION OF SUPPLY CHAIN

Global Supply Chain Management

• Organizations that manufacture products, obviously rely on excellent supplier and effective and efficient logistics system.

• Manufacturing facilities are often times the hardest of these types of organizations.

• Nontheless today we see many logistics companies looking to relocate their manufacturing facilities to countries that offer cheaper labor, tax incentives and a number of other potential benefits

Continued…

• A lazy executive would see the basis savings in costs and immediately jump to the opportunity to relocate manufacturing thinking that the company would become significantly more profitable over the night

• This will be similar to you receiving the heart of a world class marathoner in a heart transplant and thinking that you would be ready to win an Olympic marathon the next day

Continued….

• Like a transplant surgeon a global supply chain manager has to understand the trauma associated wil relocating key facilities of vital operational importance

• Actually a global supply chain manager is only responsible for the transplant but for also the facility pertaining the healing process, outsourcing, and offshoring are the only things that global supply chains managers are responsible for them.

Continued…

• There are also tasks related to expanding operations in an effort to reach new markets.

• Imagine trying to extend your operations by growing one of your arms by extra two feet in one week.

• Imagine the pain, imagine the fragile state of that arm during and after growth, imagine the amount of nutrients required to facilitate that abnormal growth, is the message that outsourcing,

Socially Responsible Supply Chain Management

• Business exist to earn profits, • Social responsibility which might include

ethics, sustainability and community interactions.

• Why SCM need to study this?

• Short list of some of the bad things companies have been known to do,

• hiring children, abusing employees, having those employees working in dangerous or unhealthy conditions, depleting the earth of its natural resources, manufacturing, dangerous, unhealthy and low quality products, polluting the world through manufacturing and logistics, and also through the products they manufacture.

Continued…..

• Global supply chain managers hold the KEY to solve problems like hunger, sickness, through the effective, efficient purchasing, manufacturing and distribution of food and medicines to those struck by famine, disease, and natural disaster.

• companies that develop the most advance sustainable business practices ???

• So whether you love money, nature, people, or just create products and services we can all agree, supply chain managers are the KEY to a better world.

Business Process

• Little does the customer know that when they busy a bottle of water at the store

• They have potentially activated a global supply chain

• Lets suppose you do purchase a book online, which processes have you activated?

• Picking, Packing, Labeling and Shipping. In addition you have activated a series of processes required to restock that book.

• Ship the replacement book from the suppier, stock the book in the warehouse, pay the supplier for the book and probably dozens of other processes

continued• Over and over again these processes require

employees, motivated to carry out the process to perfection

• For example• Think about a overnight shipper that delivers

millions of packages• 1 second per package saved means

• Mcdonalds

• SCMgrs are responsible for designing, managing and improving the interconnected processes from point of origin to point of sale

Measuring Performace

• Sports is a world of measurements. Lets take a sport like basketball where players attempt to make baskets.

• Suppose I tell you a player averages 23 points per game. Is that a good players? A Bad Player? Or a great player? A good coach would know based on this limited information it will be impossible to answer that questions without certainty .

• basketball is about more than just scoring. Right?

• Players can block shots, rebound miss shots, steal the ball and assist others in scoring. They can also make a number of mistakes that benefit their opponents

• So now what if tell you that the players who averages 23 points, 9 rebounds, 12 assist andd 4 steals per game

• Is that a good player? Bad player? A great player?

• A poor coach might be tricked into answering that question. But a good coach would still realize that those statistics measure only certain aspects of effectiveness. To truly assess this player you still need more information.

• How many shots do they take? How many minutes do they play? How many positions do they change during a game? In essence a good coach wants to know how the players make use of their resources.

• Okay suppose I gave you the shots, minutes, positions,

• available rebounces and any other efficiency related data,

• would you feel comfortable making a decision about that player?

• Think before you answer. Still feeling good about this players statistics?

Continued..• Not every set of data is sufficient helping us

make good decisions• A good system of matrix needs to provide

information on the following

(a) Effectiveness• (b) Efficiency and • (c) Adapatability

• THIS is not just true for basket ball. Today humans are addicted to use of matrices that would add in making good decisions

Continued…• Such as What time is it? (wat..)• Whats the temperature? (Ther……)• Whats your grade in MBA/BBA? (A,B,C,D..)

• These number guide our actions• Can actually motivate the behavior of athletes,

employees, students and business partners

• How to know that you global supply chain is effective, efficient and adaptable?

• How to motivate employees thousands of miles away to the things customers in your company value most??

Continued…• How can you identify employees who need a

raise and promotions?• And those who need assistance? • Additional training or • Disciplinary action

• A good system of matrices can provide guidance for managers, employees, and even customers

• Quantitative skills • Psychological understanding• Operational know how, to develop the right

performance measurement tools and systems

Continued..• Like a supply chain coach SCmgrs need to

identify their best players, • Identify and improve the weaknesses of the

teams• Know which situations provide the best

opportunities• And also understand which resources are

being wasted (Junaid khan or Shoaib on bench)

• But the SCmgrs team is made up of thousands of players all over the world.

• So don’t be tricked by numbers,

Quality Management• What you want from a car?• Every one wants quality? What is your

definition of it?• Quality definition of customers changes?• Product and service elements make quality

measurement complicated

• For example• Purchasing a cell phone service such as zong

• What defines the quality• (1) the phone• (2) Available applications

Quality management(3) Number of bars in your location

(4) Your contract terms

(5) Customer service

(6) Overall cost of contract (life)

• Why Cell phone companies have poor reputations

• One thing down grades the quality score of cell phone service provider

• This is here we can make the supply chain connection,

• As your overall quality is as good as your weakest link

Continued..• Battery life, design, camera, features,

upgrades, customer service, terms of contract, battery life and so on (aspects of quality)

• Simplicity makes managing quality easier in other words

• Customer expect excellent design• Flawless manufacturing• Quick delivery and seamless transactions• As well as innovations that will make

tomorrows purchases better than today

Continued…• In essence customer demand eternal

perfection

• But if you review the list of customer desires, then you will know that no one is better equipped than satisfying the customer expectations than……

• Did you guess it ?

Supply Chains and Information technology

• Modern integrated global supply chains could be global or integrated

• Without a modern technological infrastructure• As they act as supply chain connecting tissue

and nervous system

• Technology related decisions are scary even for senior executives

• So what should SCMgrs expect their systems, software and hardware to do for their supply chains?

Continued…• For example : Buying a computers• Reasons for people buying computers• (1) entertainment• (2) to communicate with people• (3) to Purchase things• (4) to meet new people• (5) to search for information• (6) to analyze data and • (7) organize their lives

• Computers are tools to connects things in our present to the ….? And help guide us to a more promising ….?

Continued..• Supply chains are no different such as

– Research and analysis– Planning and scheduling– Purchasing– Networking and – Relationship management

Similar to decision making process that we go through when buying a new laptop companies need to consdier a number of decisions when making IT decision

– Memory– Storage– Speed

• Applications• Hardware• Operating systems• Mobility

• These can be termed as key components of organizational nervous system.

• While technologies might change but the issues of supply chain visibility, performance measurement and customer relationship management prevails.

• SCMgrs need to integrate with the folks in It, because a SC with a heallthy nervouse system cant be

• Global • Integrated and even • Responsive

• Make sure that your supply chain has the tools that will give it the lightning fast refelxes required to be a world class global competitor

Thanks