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Supply Chain Management : 

BY-Jyoti mazumderROLL NO-BMH-17 Supply Chain Management

Supply Chain : 

. Supply Chain All facilities, functions, activities, associated with flow and transformation of goods and services from raw materials to customer, as well as the associated information flows An integrated group of processes to “source,” “make,” and “deliver” products


SUPPLY CHAIN MANAGEMENT Value Chain Supply side- raw materials, inbound logistics and production processes Demand side- outbound logistics, marketing and sales.

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WHAT IS SUPPLY CHAIN MANAGEMENT Leads to Business Process Integration

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Supply chain is the system by which organizations source, make and deliver their products or services according to market demand. Supply chain management operations and decisions are ultimately triggered by demand signals at the ultimate consumer level. Supply chain as defined by experienced practitioners extends from suppliers’ suppliers to customers’ customers.

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Supply chain serves two functions: Physical Market mediation

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Supply chain objectives may differ from situation to situation. For functional products, cost efficiency is the critical factor. For innovative products, responsiveness is the important factor. Leanness + Agility together make up Leagility

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Supply Chain and Demand Chain Demand chain is defined as the system by which organizations manage sales and distribution of products and services to end users. Conceptually incorrect to look at demand chain separately Look at the pipe as a whole.

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SUPPLY CHAIN DRIVERS Not new. Value system of Michael Porter Why sudden interest? Demanding customers Shrinking product life cycles Proliferating product offerings Growing retailer power in some cases Doctrine of core competency Emergence of specialized logistics providers Globalization Information technology

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Supply Chain Goals Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on Revenue growth Better asset utilization Cost reduction.

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Reduce Overall Cycle Time : Improve Response Supply Chain Management Underlying Principles Compression Conformance Co-operation Communication (Planning/Manufacturing/Supply) (Forecasts/Plans/Distribution) (Cross -Functional) (Real Time Data) C

Supply Chain Processes : 

Supply Chain Processes

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Supply Chain Structure

. The steps involved : 

. The steps involved Step1- Designing the supply chain Determine the supply chain network Identify the levels of service required

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Step 2 - Optimizing the supply chain Determine pathways from suppliers to the end customer Customer markets to Distribution centers Distribution centers to production plants Raw material sources to production plants Identify constraints at vendors, plants and distribution centers Get the big picture Plan the procurement, production and distribution of product groups rather than individual products in large time periods- quarters or years

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Step 3- Material flow planning Determine the exact flow and timing of materials Arrive at decisions by working back from the projected demand through the supply chain to the raw material resources Techniques ERP

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Step 4 - Transaction processing and short term scheduling Customer orders arrive at random This is a day to day accounting system which tracks and schedules every order to meet customer demand Order entry, order fulfillment and physical replenishment

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Information flows in Supply Chain Management Information is overriding element Need for databases Master files: Information about customers, products, materials, suppliers, transportation, production and distribution data- do not require frequent processing Status files- heart of transaction processing- track orders and infrastructure status- updated daily. Essentially using the same information to make all plans right from structuring the network to processing every day supply chain tasks.

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Implementation: Points to keep in mind Recognize the difficulty of change. Prepare a blueprint for change that maps linkages among initiatives. Assess the entire supply chain from supplier relationships to internal operations to the market place, including customers, competitors and industry as a whole.


IS THE SUPPLY CHAIN WORKING? Does our manufacturing strategy increase product line flexibility while continuing to drive down overall production costs? When was the last time we measured lost sales to end customers? Do we have an efficient system to get POS data from retailers? Are we testing our products with end customers? Do we use the resulting data to adjust our forecasting and supply positions? Is the ratio of returned orders to sales increasing?

Dell’s Direct Business Model of Virtual Integration : 

Dell’s Direct Business Model of Virtual Integration Advantages of a tightly coordinated supply chain traditionally facilitated by vertical integration. Combined with focus and specialization. Leveraging on investments others have made and focusing on delivering solutions and systems to customers Fewer things to manage - fewer things go wrong Suppliers’ engineers part of Dell’s Design team Have only a few partners

Dell’s Direct Business Model of Virtual Integration : 

Dell’s Direct Business Model of Virtual Integration Share information with partners in Real time fashion. Stitch together a business with partners that are treated as if they are inside the company. Change focus from how much inventory there is to how fast it is moving Assets collect risks around them one way or the other. Limited or no testing - Eg. Sony Monitors

Dell’s Direct Business Model of Virtual Integration : 

Dell’s Direct Business Model of Virtual Integration Only three Manufacturing centers - Austin, Ireland and Malaysia. Inventory levels and replenishment needs sometimes conveyed to vendors on hourly basis. Substitute information for inventory and ship only when we have real demand from real end customers Clever segmentation - Focus on institutional markets - 70% to very large customers with annual purchases exceeding $1 million.

Dell’s Direct Business Model of Virtual Integration : 

Dell’s Direct Business Model of Virtual Integration Exit from retail business after wrong entry in 1989. Segmentation - closeness to customers and access to valuable information. Demand forecasting as a critical sales skill Help global customers, manage their total purchase of PCs by selling them a standard product Dell server loads software on customers’ computers Meet customers’ needs faster and more efficiently than any other model.

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Thank You

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