scm mca prince dudhatra 9724949948

8/7/2019 SCM MCA Prince Dudhatra 9724949948

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30 March 2011 SCM (MCA Sem-2) 1

SUPPLY CHAIN

MANAGEMENT


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The approach of SCM encompasses all thebusiness partners in the chain.

The supply chain of a given manufacturer would

include the suppliers as well as the suppliers

suppliers. It also include the customers andcustomers customers.

Each of business unit involved in total supply

chain would have FOUR phases individually i.e.

Source, Procure, Manufacture & Deliver.The procure phase of a given business unit

overlaps with the deliver phase of the previous

business unit in the supply chain.

Introduction


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In order to produce a robust, reliable and integrated

supply chain where each component adds value to the

overall process, individual components have to be

robust, reliable and tightly integrated.

SCM tools provide appropriate responsiveness to

maximize the service levels without compromising onthe inventory levels.

The planning on the supply side has to be based on

capacity and related constraints including

transportation and logistics constraints.As the problems and concern areas of specific industry

are different, SCM tools as well as the techniques

adopted for their implementation have to be industry

specific.

Introduction (contd)


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There are examples of the same company a single

legal entity having two different sales offices in the

same city.

In spite of using the latest tools and techniques,

several mfg orgns are known to suffer on TWO counts

time to reach the customer and cost of reaching thecustomer.

With the ever-increasing competition in the market

place and the need to curtail costs, companies have to

look for ways and means of achieving better customerservice levels with lower inventory levels.

Successful implementation of SCM methodology can

result in reduction in inventories with simultaneous

improvement in on-time delivery performance.

Introduction (contd)


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It is an integrated management approach forplanning and controlling the flow of material

from suppliers through the distribution channel

to the end user Lisa M. Ellram.

SCM provides companies with a boundary-

spanning channel focus where all the steps of a

products movement, regardless of corporate,

political or geographical boundaries, from rawmaterial supply through final delivery to ultimate

user to satisfy a particular customer group are

planned and supervised D. F. Ross.

Definition ofSCM


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Supply Chain Management Scenarios

Developing and constant monitoring of supplychain management strategies have to beoptimized to suit enterprise specific requirementsand needs to be flexible enough to adopt toconstantly changing needs of the marketplace.

In order to have better demand planning,manufacturing orgns are creating channel linkupprograms.

This involves allowing the channel partners a

direct connection to the internal processes of theorgn such as stock review and order booking.

E.g. Operation Leap of Hindustan Lever, MI-Netof Marico Industries, Golden Eye of P&G.


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30 March 2011 CRM (MCA Sem-2) 7

Lack of trust between different business entities inthe supply chain resulting in obliteration of freeexchange of information.

High inventory levels at different stages of the supplychain.

High occurrence ofstock out situations resulting inloss of production and delay in deliveries causingcascading effect in terms of delays down the supplychain.

High cost of operations due to inefficient procurementand rush purchases.

Loss of business as customers move to competitorsdue to non-availability of goods when customersneed them.

Weaknesses in Supply Chain


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30 March 2011 CRM (MCA Sem-2) 8

The relation between different business entities inthe supply chain can be transformed from atransaction or case to case basis into that of apartnership program.

Companies are entering into long termagreements with their vendors instead of callingfor quotations every time.

When information systems are web-enabled, one

does not need to ask someone for information.This can be used to trigger actions on a proactivebasis to avoid stock-outs as well as situations ofexcess stocks.

Supply Chain Management Scenarios


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Logistics and Supply Chain Management

As the customers are getting more demandingand there is a constant pressure to provide rightproduct at the right cost at the right time at theright place and of the right quality companiesoffering products as well as services are focusingon improving the logistics and SCM in order toremain competitive.

A strong focus on logistics and SCM has givenDell Computers an edge in the competitivemarketplace.


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Features ofSupply Chain Management

SCM operates on the pull factor where the

customers requirements force the orgn to respond in

form of more customized product.

ICT enables orgns to become market responsive and

orient themselves to changing market scenario.

With the inclusion of business partners in the entire

chain, a virtual orgn is created that includes

suppliers, mfg orgn as well as the marketing

channels.

The resources of all the constituent elements of the

supply chain are directed towards a common

objective of providing end customers with the right

product at the right time and at the right place.


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Stages in SCM

In traditional setup, functions or depts orient theorgn setup with very little emphasis on business

processes that cut across the functional

boundaries.

As the awareness of SCM increases, orgn tendsto shift to next stage towards identification of

business processes that create value for ultimate

customers and formation of cross functional

teams.During this stage, the top mgmt has very little

information about the total costs involved in the

entire supply chain from end-to-end.


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Stages in SCM(contd)

Then enterprise wide integration of information

systems that cut across the orgnal boundaries

and include the channel partners as well.

Now, the top mgmt is fully aware of the costsinvolved in the entire supply chain from end-to-

end.

The top mgmt is also aware of the opportunities

of reducing the costs as well as cycle time ofsupply chain without affecting the performance.


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KeyDrivers ofSCM

THREE key drivers for SCM initiative i.e. MATERIAL,

MONEY & INFORMATION.

Materials blocked in form of inventory can cause

blockage of money. If info about such blockages or

possibility of such inventory build up is not available,

the concerned entity in the SCM may not be in a

position to initiate proactive actions to prevent such

situations of excess inventories as well as possible

stock outs.

It is important that all the three key drivers aremanaged through synchronization approach.

For effective SCM, periodic measurement and reporting

system for Key Performance Indicators (PKI).


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Role ofMIS in SCM

There is a common misconception that

SCM is just an extension of ERP or it is yet

another IT initiative.

MIS has an enabling role to play in

deployment of a SCM solution. MIS plays

an important role in ensuring that all thethree key drivers of SCM are managed in

perfect synchronization.


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SCM related Concepts

VMI Vendor Management Inventory. Here vendormonitors the inventory of specific items at mfglocation and also reacts to the expected off take andarranges to replenish the stocks.

3PL Third Party Logistics. Third party i.e. otherthan supplier or customer plays a role of handlingthe logistics activities.

4PL Fourth Party Logistics. It extends theapproach of third party logistics to include a fourthparty that is brought in to manage the planning andmgmt functions that are provided by the third party.


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SCM related Concepts (contd)

e-Procurement ElectronicProcurement. Itmakes use of Internet based solutions includingconcepts like reverse auctions, posting ofrequirements at specialized electronicmarketplaces.

CPFR Collaborative PlanningForecasting &Replenishment. It involves collaborative effortsby various entities in the supply chain in order to

bring about effective and efficient forecasting ofdemand and activities associated with fulfillingthe demand through replenishment basedshipments.


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scm mca prince dudhatra 9724949948

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