Introduction of supply chain management

Presented By:

Eng . Sameh Said

Agenda

• Introduction of operation management.•Operation management (definition and solution role).• Definition of supply chain management.• Problem face allocation of supply chain.• Integration of supply chain in organization.

Definition of Operation Management Operations management (OM) is the business function that plans,

organizes, coordinates, and controls the resources needed to produce a company’s goods and services.

Defined the role of operation management?The role of operations management is to transform a company’s inputs into the finished goods or services

DIFFERENCES BETWEEN MANUFACTURING AND SERVICE ORGANIZATIONS.

Historical Development of Operations Management

1700

1900-1960

Industrial Revolution

Change production to use machine power instead of human power

Scientific Management- Management science (improve techniques to solve operation problem)- Human relation focus (role of human element in job design)- Computer (processing a large amount of data)

1980-1995

TQM&JIT Technique

Supply Chain Management

E- Commerce

Operation Management Across The Organization

- The systemic, strategic coordination of the traditional business functions and the tactics across these business functions.

Defining Supply Chain

Customer

Information

Product

FundsSupplier

Supply chain refers to the flow of materials, information, payments, and services from raw material suppliers, through factories and warehouses (Value Chain), to the final consumer (Demand Chain). It includes tasks such as purchasing, payment flow, materials handling, production planning & control, logistics & warehousing, inventory control, and distribution. When it is managed electronically it is referred to as an e-supply chain.

The objective of applying supply chainObjective is to be able to have the right products in the right quantities (at the right place) at the right moment at minimal cost

Supply Chain Management (SCM)To plan, organize, coordinate and optimize all the supply chain’s activities

Supply chain problem

The bullwhip effect refers to erratic shifts in orders up and down the supply chain because of poor demand forecasting or variation of order size.

Causes- Little or no communication between supply chain partners

- Delay times between order processing, demand, and receipt of products

Uncertainties exist in delivery times– Machine failures– Road conditions– Shipments

The Dynamic solution of the Supply Chain O

rde

r S

ize

Time

CustomerDemand

CustomerDemand

Retailer OrdersRetailer OrdersDistributor OrdersDistributor Orders

Production PlanProduction Plan

What Management Gets... O

rde

r S

ize

Time

CustomerDemand

CustomerDemand

Production PlanProduction Plan

What Management Wants…V

olu

mes

Time

Production PlanProduction PlanCustomerDemand

CustomerDemand

Information sharing among supply chain partners (c-commerce) sometimes referred to as the collaboration supply chain is one method to overcome problems in the flow. Others are:

• Optimal Inventory Levels

• Supply Chain Coordination and Collaboration

• Supply Chain Teams

• Performance Measurement and Metrics

• Various IT-Assisted Solutions – wireless technology

– optimal shipping plans

– strategic partnerships with suppliers

– just-in-time

Supply Chain Solutions

Essentials of the Supply Chains

Reduce uncertainty (demand forecast-delivery time)and risks in the supply chain

Reduce uncertainty (demand forecast-delivery time)and risks in the supply chain

positively affecting inventory levels, cycle time, business processes, and customer service

positively affecting inventory levels, cycle time, business processes, and customer service

Increase profitabilityand competitiveness

Increase profitabilityand competitiveness

Integration of supply chain management

Management Focus

Busin

ess

Impact

Plan

Best Practice

- Plan a Strategy for managing all the resources that go toward meeting customer demand for the product or service which is depend on the type of organization and nature of products.

A Framework for Structuring Drivers

Efficiency Responsiveness

Facilities Transportation Inventory Information

Supply chain structure

Drivers

Management Focus

Bu

siness

Imp

act

Plan

Source

Best Practice

Integration of supply chain management is continued

Source - Choose the suppliers that will deliver the goods and services to create the product or service. Develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring

and improving the relationships

Management Focus

Busin

ess

Impact

Plan

Source

Best Practice

Make

Integration of supply chain management is continued

Make - This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery optimization knowhow of planning, schedule and sequencing which is mean productivity optimization

Integration of supply chain management is continued

Management Focus

Busin

ess

Impact

Plan

Best Practice

Source

Make

Deliver

Deliver - Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments

Busin

ess

Impact

Plan

source

Current Best Practice

Make

Deliver

Return

Management Focus

Integration of supply chain management is continued

Return - Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products (product recall by batch)