SCM and Its Application

An Operational Managements Assignment

Topics to Discuss

• SCM and Its Application

• How to Deploy SCM

• Critical Success Factor

• New Trends in SCM

• SCM in Services v/s Manufacturing

• SCM Application in Pakistan

SCM and Its Application

How to Deploy SCM and Critical Success Factor

SCM

• (SCM) is the process of Producing and Managing:

• Materials

• Information

• Finances

• The ultimate goal is to reduce inventory

SCM

• Supply chain management flows can be divided

into three main flows:

• The product flow

• The information flow

• The finances flow

SCM Software

• Planning Application:

• Use advanced algorithms to determine the best way to fill an order.

• Execution applications:

• Track the physical status of goods

• The management of materials

• Financial information involving all parties

How to Deploy SCM

Process

• Analyze the Company’s current Supply Chain Process

• A small cross-functional team examines all facets

• Now Look in part in which the company have the most control• Manufacturing or service processes• Distribution processes• Retail capacity

And • Time and costs of sourcing• Producing• And Distribution of Product and Services

For a Manufacturer

• This means investing in automation and sales and

operations planning technologies.

For a Distributor and Retailer

• The priority has focused on

• Supplier relationships

• Warehouse management

• Transportation management solutions

Critical Success Factors

Success Factors for SCM

• These seven success factors for SCM projects are:

1: Set realistic goals

2: Make an effective plan

3: Find a strong executive sponsor

4: Assemble good resources

5: Stay flexible

6: Allow for testing

7: Promote user buy-in.

The Case of Wal-Mart

The key to Wal-Mart's supply chain

• Wal-Mart's company is to be at the leading edge of:

• Logistics

• Distribution

• Transportation

• Technology

Wal-Mart's one-store-at-a-time, RFID and just-in-time distribution approach

• Every Wal-Mart store operates like a small company

• Store managers are trained to manage

• One store at a time

• One department at a time

• One customer at a time

Wal-Mart's one-store-at-a-time, RFID and just-in-time distribution approach

• Wal-Mart has implemented advanced logistics solutions like RFID

• RFID solutions help maintain lower costs, identify out-of-stocks

and increase sales.

• Distribution centers instead of warehouses, automated

replenishment and cross-docking technology also reduce

inventory carrying costs

Why SCM Fails?

Top 5 Reasons

• Swift, Dramatic Order Cutbacks

• Long Lead Times causing Delayed Delivery

• Overemphasis on Cost Cutting

• Inaccurate Demand Forecasts

• Lack of Risk Management Strategies

Top Supply Chain Disasters

Nike

• Trouble with new planning System Causes

inventory and order woes

• Nike blamed software related issues for $

100 million revenue shortfall for the quarter,

Stock dropped to 20%

2001

Apple 1995

• Playing a conservative inventory strategy,

Apple swamped with demand for new Power

Macs and couldn't deliver the goods on time.

• At that time Apple bear the losses in millions

of Dollars and lost it market share for PCs

New Trends In SCM

Supply chain technology continued to evolve throughout 2012

• Overall IT trends such as the cloud, big data and mobile are

impacting the supply chain sector just as they do other

sectors.

• But there are other trends specific to supply chain that

came to the forefront in 2012

Trends

• Improved Customer Service Levels over Cost Cutting

• Execution Moves Ahead Of Demand & Supply Planning

• Resurgence of Contingency Planning

• End-To-End Partner Communication & Collaborative

Execution

• Big Data Is Becoming Mandatory

The Case of Coca Cola

• The Coca Cola Company is heavily investing nowadays in SCM

• They have recently deployed a SAP-Oriented Software Gensys

• The Genesys program is an integrated SAP Enterprise Resource Planning

(ERP) solution that will replace CCE’s legacy systems in the processes of

“order to cash,” “requisition to payment,” and “record to report.”

• Genesys will allow CCE to shorten cycle time in these processes and be

more productive. It will also help bring more visibility into the business and

improve decision making.

SCM in Services v/s Manufacturing

The Differences

Manufacturing Services

The primary difference is that most

of the cost of manufacturing labor

is involved in procuring,

transporting and manipulating

physical material.

while almost all service industry

labor is expended on manipulating

information and developing

relationships.

The Differences

Manufacturing Services

Manufacturing industry tries to

negotiate better shipping rates and fill

containers with product to reduce unit

cost.

the service industry upgrades servers

and installs new software to speed the

flow of communication.

The Differences

Manufacturing Services

In a manufacturing organization,

optimization of the supply chain is

accomplished primarily by improving

speed of delivery and reducing cost.

The main drivers of optimization in a

service model are relationships and

information flow.

SCM Application in Pakistan

The Restaurant Industry

• SCM Application for Service industry is very rare in

Pakistan.

• After a research we found out that a Multinational Company

MICROS is working for SCM application in the Restaurant

industry of Pakistan

The Challenges faced by Pakistan’s Best Restaurants

The typical business challenges full-service restaurants face

today are

• How to increase table turn-over

• Revenue

• While optimizing and streamlining the business organization

• Workflows

• Resource planning

The Solution

• Customized to a restaurant’s unique business requirement, MICROS

puts together a solution that perfectly fits your business needs.

• MICROS’s end-to-end portfolio encompasses

• Point-of-Sale System solutions

• Inventory management solutions

• Table management solutions

• Labor management solutions

• CRM/loyalty solutions

• reporting tools

The Benefits:

• Improved operational efficiency

• Improved enterprise business intelligence and

decision support

• Increased guest satisfaction and loyalty

• Increased sales

Few Examples:

Currently MICROS is running in Many of the best Restaurants

and Resorts of Pakistan like:• Pearl Continental

• Marriot

• Sheraton

• Hotel Serine

• Dunkin Donuts

• KFC

• Mc Donald’s

• Pizza Hut

Thank You !By: Arbab Siqqidui

Muhammad Ghazanfar