supply chain management 1 (1)

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SUPPLY CHAINSUPPLY CHAINMANAGEMENTMANAGEMENT



Some Gartner SCM Report 2011Some Gartner SCM Report 2011



Supply Chain Management in IndiaSupply Chain Management in India



List of Career Options in Supply ChainList of Career Options in Supply ChainManagement and LogisticsManagement and Logistics

Purchasing ManagerPurchasing Manager Strategic PlannerStrategic Planner

Purchasing Agent/Analyst/Assistant Purchasing Agent/Analyst/Assistant

Materials Analyst Materials Analyst

Procurement Specialist Procurement Specialist

Materials ManagerMaterials Manager

Procurement ManagerProcurement Manager

Supply Chain ManagerSupply Chain Manager

Commodity ManagerCommodity Manager

Supplier Relationship ManagerSupplier Relationship Manager

Inventory ManagerInventory Manager

New Product Procurement PlannerNew Product Procurement Planner

Strategic sourcing ManagerStrategic sourcing Manager

Traffic ManagerTraffic Manager

Supplier management Analyst Supplier management Analyst

Quality and procurement ManagerQuality and procurement Manager

Manger of Corporate MaterialsManger of Corporate Materials

Supplier Quality Project ManagerSupplier Quality Project Manager



Hot Recruiters of Supply Chain MangersHot Recruiters of Supply Chain Mangersand other Logistic Professionalsand other Logistic Professionals in Indiain India

Anchor Electricals Anchor Electricals

Honeywell Automation India LtdHoneywell Automation India Ltd

Larsen & Toubro LtdLarsen & Toubro Ltd

ChlorisChloris Management Services IndiaManagement Services India Pvt Pvt LtdLtd

EducompEducomp Solutions LtdSolutions Ltd

EimcoEimco EleconElecon (I) Ltd(I) Ltd

BiotronBiotron Healthcare (I) P. LtdHealthcare (I) P. Ltd

Must Garment Must Garment Pvt Pvt LtdLtd

Accenture Accenture

BiomaxBiomax Fuels LtdFuels Ltd

Four Soft LtdFour Soft Ltd

TATA STEELTATA STEEL



What is Supply Chain Management

TheThe supplysupply chainchain encompassesencompasses allall activitiesactivitiesinvolvedinvolved inin thethe transformationtransformation of of goodsgoods fromfrom thetherawraw materialmaterial stagestage toto thethe finalfinal stage,stage, whenwhen thethe

goodsgoods andand servicesservices reachreach thethe endend customercustomer..

It It InvolvesInvolves planning,planning, designdesign andand controlcontrol of of flowflowof of material,material, informationinformation andand financefinance alongalong thethesupplysupply chainchain toto deliverdeliver superiorsuperior valuevalue toto thethe endendcustomercustomer inin efficient efficient andand effectiveeffective mannermanner..



Suppliers Manufacturers Warehouses &Distribution Centers

Customers

Material Costs

TransportationCosts

TransportationCosts

Transportation

CostsInventory CostsManufacturing Costs



A set of approaches used to efficiently integrate A set of approaches used to efficiently integrate

SuppliersSuppliers

ManufacturersManufacturers WarehousesWarehouses

Distribution centersDistribution centers

So that the product is produced and distributedSo that the product is produced and distributed In the right quantitiesIn the right quantities

To the right locationsTo the right locations

And at the right time And at the right time

SystemSystem--widewide costscosts are minimized andare minimized and

Service levelService level requirements are satisfiedrequirements are satisfied

Plan Source Make Deliver Buy



Chain vs. WebChain vs. Web

Thus Supply Chain or we can say Supply Web



Evolution of Supply ChainEvolution of Supply Chain

Management Management Our aim is always to

arrange the material and machinery and to simplify

the operations so that practically no orders are necessary. Our finished inventory is in transit. So ismost of our raw material

inventory. Our production cycle is about eighty one hours from the mine to the finished machines in the freight carµ



The First Revolution (1910The First Revolution (1910--1920):The1920):TheFord Supply ChainFord Supply Chain

The Second Revolution (1960The Second Revolution (1960--1970):The1970):TheToyota Supply ChainToyota Supply Chain

The Third Revolution (1995The Third Revolution (1995--2000):The2000):TheDell Supply ChainDell Supply Chain



FORD

Ford managed to build tightly integratedchain (bulk of manufacturing was done inhouse)

They owned every part of the chain fromthe timber to the rails

Time taken from iron mine to finishedproduct- 81 hours

Only Model-T and only color-Black

Highly efficient but inflexible supply chain



TOYOTA

Company came up with ideas that allowed the finalCompany came up with ideas that allowed the finalassembly and manufacturing of key components to beassembly and manufacturing of key components to bedone in house.done in house.

Followed lean production systemFollowed lean production system

Keirestu System: (set of companies with interlockingKeirestu System: (set of companies with interlockingbusiness relationships and shareholdings)business relationships and shareholdings)

Long term relationship with all suppliers who wereLong term relationship with all suppliers who werelocated close to the plant located close to the plant

Couple of hours were reduced to couple of minutesCouple of hours were reduced to couple of minutes

Low set Low set--up time and long term relationship was the keyup time and long term relationship was the keyfeature of this revolutionfeature of this revolution

Long term relation with supplier became liability due toLong term relation with supplier became liability due toGlobalization and advancement of IT; EDIGlobalization and advancement of IT; EDI



DELLDELL

Allowed customer to customize their Allowed customer to customize theirproduct.product.

Did not believed in long term relationshipDid not believed in long term relationship

with the partnerswith the partners Medium term relationship where suppliersMedium term relationship where suppliers

were always on test were always on test

Huge use of ITHuge use of IT Very less rigid and huge flexible approach Very less rigid and huge flexible approach



Characteristic of SCM during the 3Characteristic of SCM during the 3

revolutions:revolutions:

Single Product

Very Rigid

Wide Variety

Less Rigid

Customization

Flexible

First Revolution Second Revolution Third Revolution



Key Activities in SCMKey Activities in SCM

Manufacturing

Transportation Distribution

Storage

Purchasing

SCM



Focal FirmsFocal Firms

NodesNodes

LinksLinks



Why Is SCM Difficult?

Uncertainty is inherent to every supply chainUncertainty is inherent to every supply chain

Travel timesTravel times

Breakdowns of machines and vehiclesBreakdowns of machines and vehicles

Weather, natural catastrophe, warWeather, natural catastrophe, war

Local politics, labor conditions, border issuesLocal politics, labor conditions, border issues

The complexity of the problem to globallyThe complexity of the problem to globallyoptimize a supply chain is significant optimize a supply chain is significant

Minimize internal costsMinimize internal costs Minimize uncertaintyMinimize uncertainty

Deal with remaining uncertaintyDeal with remaining uncertainty



Decisions in Supply ChainDecisions in Supply Chain

Design Decisions:Design Decisions: related to network design, selection of related to network design, selection of entities and activities at various nodesentities and activities at various nodes

Operation Decisions:Operation Decisions: Demand ForecastingDemand Forecasting

Procurement Procurement ProductionProduction DistributionDistribution InventoryInventory WarehousingWarehousing TransportationTransportation Order processingOrder processing VRM VRM Scrap DisposalScrap Disposal



Ensuring the bookis available insufficient quantity,to ensure content is

not leaked and toensure books reachthe store just intime for launch

posed substantialchallenge to supplychain manager forPenguin India



The Importance of Supply ChainManagement

Dealing with uncertain environmentsDealing with uncertain environments matching supply andmatching supply anddemanddemand

Boeing announced a $2.6 billion writeBoeing announced a $2.6 billion write--off in 1997 due to rawoff in 1997 due to rawmaterials shortages, internal and supplier parts shortages andmaterials shortages, internal and supplier parts shortages and

productivity inefficienciesproductivity inefficiencies U.S Surgical Corporation announced a $22 million loss in 1993 due toU.S Surgical Corporation announced a $22 million loss in 1993 due to

larger than anticipated inventories on the shelves of hospitals larger than anticipated inventories on the shelves of hospitals

IBM sold out its supply of its new Aptiva PC in 1994 costing it millionsIBM sold out its supply of its new Aptiva PC in 1994 costing it millionsin potential revenuein potential revenue

Hewlett Hewlett--Packard and Dell found it difficult to obtain important Packard and Dell found it difficult to obtain important

components for its PCs from Taiwanese suppliers in 1999 due to acomponents for its PCs from Taiwanese suppliers in 1999 due to amassive earthquakemassive earthquake

U.S. firms spent $898 billion (10% of GDP) on supplyU.S. firms spent $898 billion (10% of GDP) on supply--chain relatedchain relatedactivities in 1998activities in 1998



The Importance of Supply ChainManagement

Shorter product life cycles of highShorter product life cycles of high--technology productstechnology products

Less opportunity to accumulate historical data on customerLess opportunity to accumulate historical data on customerdemanddemand

Wide choice of competing products makes it difficult to predict Wide choice of competing products makes it difficult to predict demanddemand

The growth of technologies such as the Internet enable greaterThe growth of technologies such as the Internet enable greatercollaboration between supply chain trading partnerscollaboration between supply chain trading partners

If you dont do it, your competitor willIf you dont do it, your competitor will

Major buyers such as WalMajor buyers such as Wal--Mart demand a level of supply chainMart demand a level of supply chainmaturity of its suppliersmaturity of its suppliers

Availability of SCM technologies on the market Availability of SCM technologies on the market Firms have access to multiple products (e.g., SAP, Baan, Oracle,Firms have access to multiple products (e.g., SAP, Baan, Oracle,

JD Edwards) with which to integrateJD Edwards) with which to integrate internalinternal processesprocesses



Higher level of OutsourcingHigher level of Outsourcing Firms focuses on its core activities and outsource non-core activities

Bharti Tele Ventures, Indias no 1 private telecom service provider, hasoutsourced network-management services, IT services and call centeroperations.

Shift in power structure in the chainShift in power structure in the chain In every industries, the entities closer to customers are becoming moreIn every industries, the entities closer to customers are becoming more

powerful.powerful.

Less Retail shelf Space more product varietyLess Retail shelf Space more product variety

Globalization of ManufacturingGlobalization of Manufacturing

In the telecommunication and electronic industry, companies usuallyIn the telecommunication and electronic industry, companies usuallyget their chips from Taiwan, test them in Europe and finally integrateget their chips from Taiwan, test them in Europe and finally integratethem with other products in USA to sell in the international market.them with other products in USA to sell in the international market.



Enablers of Supply ChainEnablers of Supply ChainPerformancePerformance

Improvement of Communication and ITImprovement of Communication and IT

Entry of Third Party Logistics ProvidersEntry of Third Party Logistics Providers Enhanced InterEnhanced Inter--firm Coordinationfirm Coordination

CapabilitiesCapabilities



Supply Chain Challenges in IndiaSupply Chain Challenges in India

Taxation structure Drives LocationTaxation structure Drives LocationDecisionsDecisions

Poor state of logistics InfrastructurePoor state of logistics Infrastructure Dealing with Counterfeit GoodsDealing with Counterfeit Goods

Opportunistic Games Played by theOpportunistic Games Played by the

Distribution ChannelDistribution Channel



Some Cases: The Dabbawalas of Some Cases: The Dabbawalas of MumbaiMumbai

Delivers home prepared food tothe middle class office workers.

Collects 175000 lunchboxes

from 7.00 am to 9.00 am Deliver food in those boxes by

12.30 pm in respective offices.

Picks the empty boxes by 3.30pm

Boxes returned to home by 6.00pm

Error 1/6000000

Amazing na .How they do so?



Effective Coding SystemEffective Coding System

supply chain management 1 (1)

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