Scm Mfm Session 1

8/4/2019 Scm Mfm Session 1

http://slidepdf.com/reader/full/scm-mfm-session-1 1/25

Introduction to Supply Chain

Management

Dr. Binaya Bhusan Jena Assoc. Prof. & CC-FMS



What we would Discuss

� Introduction of Supply Chain concepts

� What is SCM

�W

hy SCM,� Key issues in SCM

� History and Evolution of SCM

� Fashion Supply Chain

� Evolution of retail logistics



What Is a Supply Chain?

± Flow of products and services from:

� Raw materials manufacturers

� Intermediate products manufacturers

� End product manufacturers� Wholesalers and distributors and

� Retailers

± Connected by transportation and storage activities

± Integrated through information, planning, and

integration activities

± Cost and service levels



What Is Supply Chain Management?

� Supply chain management is a set of

approaches utilized to efficiently integrate

suppliers, manufacturers, warehouses, andstores, so that merchandise is produced and

distributed at the right quantities, to the right

locations, and at the right time, in order to

minimize system wide costs while satisfyingservice level requirements.



What is SCM

³Is the strategic management of activities involved in the

acquisition and conversion of materials to finished productsdelivered to the customer"





More Formal Definitions

� The design and management of seamless,value-added process across organizationalboundaries to meet the real needs of the endcustomer

Institute for Supply Management

� Managing supply and demand, sourcing rawmaterials and parts, manufacturing andassembly, warehousing and inventory tracking,

order entry and order management, distributionacross all channels, and delivery to the customer

The Supply Chain Council





The SCM Network



Important Observations

± Every facility that impacts costs need to beconsidered

� Suppliers¶ suppliers

� Customers¶ customers

± Efficiency and cost-effectiveness throughout the

system is required� System level approach

± Multiple levels of activities� Strategic ± Tactical ± Operational

Supply chain strategy linked to the DevelopmentChain

Challenging to minimize system costs and maximizesystem service levels

Inherent presence of uncertainty and risk



The Development Chain



Global Optimization

� Geographically dispersed complexnetwork

� Conflicting objectives of different facilities

� Dynamic system� Variations over time

� Matching demand-supply difficult

� Different levels of inventory and backordersRecent developments have increased risks

± Lean production/Off-shoring/Outsourcing



Global Apparel Value Chain





Globally Dispersed Manufacturing



Importance of Supply Chain Management

Firms have discovered value-enhancing and long termbenefits

± Who benefits most? Firms with: ± Large inventories

± Large number of suppliers

± Complex products

± Customers with large purchasing budgets

Firms using Supply Chain Management:

± Start with key suppliers ± Move on to other suppliers, customers, and shippers

± Integrate second tier suppliers and customers (second tier refers tothe customer¶s customers and the supplier¶s suppliers)

Cost savings and better coordination of resources are reasons toemploy Supply Chain Management

± Reduced Bullwhip Effect- the magnified reduction of safety stockcosts based on coordinated planning and sharing of information

± Collaborative planning, forecasting, and replenishment activitiesreduce the Bullwhip Effect and lead to better customer service, lower inventory costs, improved quality, reduced cycle time, better production methods, and other benefits.



Evolution of Supply Chain Management



Origins of Supply Chain Management

1950s & 1960s

� U.S. manufacturers focused on mass production techniques as their principal cost reduction and productivity improvement strategies

1960s-1970s

� Introduction of new computer technology lead to development of MaterialsRequirements Planning (MRP) and Manufacturing Resource Planning (MRPII)to coordinate inventory management and improve internal communication

1980s & 1990s� Intense global competition led manufacturers to adopt

� Supply Chain Management along with

� Just-In-Time (JIT),

� Total Quality Management (TQM), and

� Business Process Reengineering (BPR) practices

2000s and Beyond

� Industrial buyers will rely more on third-party service providers (3PLs)to improve purchasing and supply management

� Wholesalers/retailers will focus on transportation and logistics more &refer to these as quick response, service response logistics, and integrated logistics



The Foundations of SCM

Supply

Management

Supplier management, supplier evaluation,

supplier certification, strategic partnerships

Operations

Demand management, MRP, ERP, inventory

visibility, JIT (AKA lean production & ToyotaProduction System), TQM (AKA Six Sigma)

Distribution

Transportation management, customer

relationship management, distribution

network, perfect order fulfillment, globalsupply chains, service response logistics

IntegrationProcess integration, performance

measurement



SUPPLY CHAIN DRIVERS

± Not new. Value system of Michael Porter

� Why sudden interest?

� Demanding customers

� Shrinking product life cycles

� Proliferating product offerings

� Growing retailer power in some cases

� Doctrine of core competency

� Emergence of specialized logistics providers

� Globalization

� Information technology





SCM vs. Logistics� Logistics includes physical distribution, warehousing,

freight transportation (inbound and outbound frommanufacturing plants and in some industries customer service (sales order processing, inventory planning andproduction planning.

�Supply chain (for a manufacturer) includes the logisticsbusiness functions above, and also includes purchasing,sourcing, procurement, buying, manufacturingoperations, production scheduling and inventory control

and materials management, facilities location planning,the information technology to coordinate betweensuppliers, the company, and customers (wholesalers andretailers and end users.





Suggested Reference Books

� Sahay, B.S. : Supply Chain Management for Global Competitiveness

� Christopher, Martin: Marketing Logistics� Donald J Bowersox & David J Closs, Logistics Management- the Integrated Supply

Chain Process

� Frederick Reichheld and Phil Schefter, E-Loyalty: Your SecretWeapon on the Web

� Gattorna J l & Walters DW: Managing the Supply Chain

� Lambert, Stock and Ellram : Fundamentals of Logistics Management

� Turban, Lee, King and Chung: Electronic Commerce: A Managerial Perspective;

� William C. Copacino : Supply Chain Management ± The Basics and Beyond� W. Chan Kim & Renee: Knowing a winning business idea when you see one

� David Simchi Levi; Phillip Kaminski; Edith Simchi Levi, Designing and managing thesupply chain - concept strategies and case studies, second edition

� Chopra, Sunil,& Meindl, Peter : Supply Chain Management, Pearson Education

� Shah, Janat, Supply Chain Management, Pearson Education

� Sople, V.V, Logistics Management, Pearson Education

� Margaret Bruce; Christopher M Moore &G

rete Birtwistle: International RetailMarketing- a case study approach

� Ellen Diamond , second edition : Fashion retailing - a multi channel approach

� Coyle, Bardi, Langley: The management of business logistics - a supply chainperspective - 7th edition



Documents

Scm Mfm Session 1