secb group2 scm e business final

7/29/2019 SecB Group2 SCM e Business Final

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Supply-Chain Management

Integration and Globalization in the Age ofe-Business

GROUP NO: 2 (SEC B)

ABHISHEK GARG (12062)

BHIMAJI C AGNIHOTRI (12072)

KAMALESH C. J (12082)

NANDINI SUDHEER (12092)

SANDEEP HANEEFA (12102)

SULGADLE MANJUNATH SHIVASHANKAR (12112)


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A Schematic of Supply Chain


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Efficient & Effective management of materials, information, and

funds across the entire supply chain Businesses don't compete; supply chains compete,

Bullwhip effect due to channel partners forecasting

Catalysts to initiate change management to deal with supply

chain Power shift from manufacturers to retailers

Internet and associated e-Business initiatives

Risk of short product lives & uncertain demand

Introduction-SCM


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SCM has identified 12 distinct management categories

Inventory and Forecasting

Marketing and Channel restructuring

Service and Aftersales Support

Reverse Logistics and Green Issues

Location

Transportation and Logistics Outsourcing and Logistics Alliances

Product Design and New Product Introduction

Information and Electronic Mediated Environments

Metrics and Incentives

Sourcing and Supplier Management

Global Issues

Key components of supply-chain management


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Inventory and Forecasting

Includes techniques for inventory management and demand forecasting

Uncertainty

Unpredictable customers

Competitors plans

Unreliable partners : Suppliers, Transportation providers, logistics

providers.

Failing the customer erodes brand equity Inventory helps reducing costs, improving customer service and financial

hedging

Inventory differs to each and every person

For a manufacturer: raw materials

Within manufacturing process: raw materials in converted to finished

good inventory

In production: work-in-process


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Contd.,

Six key functions of Inventory

Pipeline needed simply to move products within the supplychain

Cycle inventory that results from batch processes

Decoupling it allows two different within factory or different

factories to produce at different rates Anticipation inventory is produced in anticipation of

seasonal demand

Hedging fluctuating market prices

Safety buffer against unforeseen changes in demand orsupply


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Marketing and Channel Restructuring

Focus on downstream partners

Distribution channel Supply chain partners who resellproducts

It covers the relationship management, negotiations and even

the legal dimension.

It affects the availability of products at retail level ECR and QR have focused on managing the channel as they

strive to mitigate bullwhip effect

Bullwhip effect It refers to a trend of larger and larger swings

in inventory in response to changes in demand.


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Bullwhip effect


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Contd.,

Factors causing bullwhip effect: Demand signal processing,Rationing game, Order batching and manufacturer price

variations.

To overcome bullwhip effect, many initiatives have been

undertaken

Electronic data interchange

Vendor managed inventory

Coordinated planning, forecasting, replenishment


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Reason for poor after sale-

Few Resources

Little Senior Management attention

Weak Training of people

Very Important aspect but overlooked many times Managing inventory is not a simple inventory Management problem.

Consequences of poor after sales-

Reputation of company

Market Share

Service and Aftersales Support


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Emerging Dimensions of SCM

Very critical issue in digital age.

Environment friendly way to deal with Product recovery

Reverse Logistics and Green issues


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Out of all most critical and takes longest time horizon.

Base to set physical structure of SCM(Transportation, Logistics, inventory

etc)

Factors to choose location-

Labor availability

Labor cost

Taxes

Duties

Transportation cost

Government incentives

Location


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All issues related to physical flow of goods through the supply-

chain including transportation, warehousing and material

handling

Assumptions: Location decisions done for

Factory, distribution centre, retail outlets

Addresses important issues related to transportationmanagement like

Mode of transportation

Vehicle routing

Dynamic fleet management with GPS

Merge in transit

Transportation and Logistics


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Topics of warehousing and distribution like cross docking,vendor hubs covered

Material handling technologies for storing, sorting and

retrieving products

Deterministic models and stochastic models used

Continued


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Concept of Supplier Hubs:

Supplier hubs are warehouses operated by a logistics firm that

consolidates the inventories of many component suppliers and then

delivers those components to a manufacturer for assembly

Supplier hubs are managed by third parties

Large firms take benefit of outsourced logistics services

Outsourcing and Logistic Alliances


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Deals with design issues for mass customization, delayeddifferentiation and modularity

Postponed Product Differentiation:

Products destined for world markets would be customised at thefactory to suit local market tastes

However worldwide inventory management would be a

nightmare

Product Design and New Product Introduction


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Using postponement, the product is redesigned to customize it

for local markets in the distribution channel

Some companies are beginning to consider design for the

environment(DFE) and design for disassembly(DFD)

DFE and DFD often lead to more material, product cost and

complexity in inventory control and inventory cost

Continued


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SCM is concerned with the flow of products and informationbetween supply chain members

How IT and internet help :

Lower supply chain costs

Lower inventory costs Higher service levels

Integrative ERP software SAP, Oracle

Supply chain planning tools Manugistics, i2s Rhythm, SAPs

APOAvailable as SaaS through web portals

Information and Electronic Mediated Environments


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These can aid SCM in :

Computing freight costs, compares transportation mode rates,

analyse cost and service effectiveness of carrier

Demand forecasting, replenishment & manufacturing tools foraccurate planning and scheduling of activities

Transportation Network optimization for streamlining the

bidding and award process

Ability to track product using RFID etc.

IT and e-commerce


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Conducting business in a paperless environment

Companies are able to automate the process of moving

documents electronically between suppliers and customers

High transaction costs between partners can be reduced

Easy daily forecasting and reduction in inventory as point-of-sale

data from retailer can be shipped often


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Refer to measurement of engineering and organizational

processes

Overall performance of supply chain need to be measured

Firms track service measures like item-order fill rates, order-to-

delivery cycle time, order defects

Costs of providing customer service - inventory holding

costs/transportation costs

Metrics and Incentives


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Lots

INV

Little

Poor SERVICE Good

Two metrics are combined service and inventory

Customers and financial analysts are satisfied by this

Many operational factors contribute to this, including fast cycle

times, good customer information, uniformly accurate forecasts

Qualitative way of representing performance

A B

C D


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Concerned with procuring components and management of

suppliers

Make or Buy decisions

Location of a firms suppliers

Recent trends

Firms posting part specifications on internet and suppliers bidingfor the job

Firms reducing the number of suppliers to a sole source

Determining number of suppliers and best way to structure

supplier relationships holds the key

Sourcing and supplier management

A B

D


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Covers issues related to cross border distribution and sourcing

Outsourcing from low cost countries (LCC)

Some global factors like currency exchange rate, duties and

taxes, customs issues, government regulations

Global issues

A B

C


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Review corporate strategy Is sourcing decision consistent with mission, values and

principles

Review functional strategy focusing on operationsCost, quality, delivery and flexibility

Develop total landed cost model

Analyze risk factors that arise with an LCC decision

Steps for effective LCC decisions

B

C D


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SCM is a large and growing field

All the factors that are discussed are linked by the integrated

nature of the problems at hand

Effective supply chain helps in reducing the unit costs

Internet plays a major role in the evolution of new supply chain

practices

Conclusion

B

C D

secb group2 scm e business final

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