SUPPLY CHAIN MANAGEMENT

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BY: PARTH GOYAL

WHAT IS SUPPLY CHAIN MANAGEMENT

" Is the strategic management of activities involved in the acquisition and conversion of materials to finished products delivered to the customer"

SupplierManagement

Schedule /Resources Conversion

Stock Deployment Delivery

CustomerManagement

Leads to Business Process Integration

Material Flow

Information Flow

• Supply chain is the system by which organizations source, make and deliver their products or services according to market demand.

• Supply chain management operations and decisions are ultimately triggered by demand signals at the ultimate consumer level.

• Supply chain as defined by experienced practitioners extends from suppliers’ suppliers to customers’ customers.

Supply Chain Structure

Information Flow

Raw Materials

RETAILERFACTORY DC RDC

SUPPLIER

Finished Goods

SUPPLY CHAIN ELEMENTS• Supply Chain Design• Resource Acquisition• Long Term Planning (1 Year ++)

Strategic

• Production/ Distribution Planning• Resource Allocation• Medium Term Planning (Qtrly,Monthly)

Tactical

• Shipment Scheduling• Resource Scheduling• Short Term Planning (Weekly,Daily)

Operational

• Supply Chain Goals

Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on – Revenue growth– Better asset utilization – Cost reduction.

SCM at adidas

Placement of Order

P.N. Generation

S.G.NDispatching by

3PLIND Generation

Delivery at Stores

STAGE I: CUSTOMER SERVICE DEPARTMENT

• This includes receiving orders and picking number generation.

• The orders are received from various customers in the format of Excel Sheets. It is converted in .txt file and then orders are imported in adiRace software.

Ordering

• There are 2 types of ordering:-• PREORDER - takes places in every 6 months i.e.

6 months prior to the season when it starts. Thus, preordering is done in January for summers and in July for winters.

• REFILL- This can be clearance or fresh refill.• Clearance, refill is done only by A+B stores and

factory outlets, • Fresh refill is done by A+ stores on daily basis.

Order is received from the customer

PN is raised by a team of Customer Service and is sent to Warehouse

Unprinted Picking Note is printed at the Warehouse

Picking and Packing takes place

SGN is raised and is sent to the H.O

Unprinted SGN is printed at the H.O.

IND process begins before the dispatch

to take place

When all the IND reaches Delhi W/H

Final Dispatch

STOCK REPORT

• This is made by the CS dept. in H.O. through the Adidas network which connects the warehouse as well. Through this, the availability of the stock is known.

• This is sent on daily basis to the customers, which is used by them for placing orders.

PRICE RUN DEPARTMENT

• This department is under the finance department. It handles the discounts given to special customers like CSD or institutional buyers. Discounts can also be given in case of new customers or in case of old stock, which needs to be cleared.

STAGE II: WAREHOUSES – SGN generation

There are 4 W/H • Hasanpur(HSP) – Fresh Stock• KhirkiDhaula (KD) – CSD/Non Carry Fwd

Gurgaon• Jamalpur (JML) – Institutions/Returned Stock,

AdiCom• Delhi W/H – Delhi Customer Billing

Warehouse at Hasanpur

WAREHOUSING

This is broadly divided into 3 areas:-• Inwarding of stock• Picking and Packing, Inventory Management• Dispatching

INWARDING

• DIR (Daily Inventory Report) is checked on daily basis from all the W/H locations, and accordingly the arrangement for stock is done at the W/H.

• Inwarding involves the incoming stock at the W/H, checking the stock and managing the discrepancies.

Documents involved in the Inwarding process

• Gate pass• Transporter’s form• Invoice/bill • Challan Inward• Inspection certificate• P.O. against every article• P.O. settlement form • Unloading Sheet• Packing List

GATE PASSTRANSPORTER’S FORM

INVOICE CHALLAN INWARD

PURCHASE ORDER INSPECTION CERTIFICATE

UNLOADING SHEET

PICKING AND PACKING

• Picking is performed after the PN is obtained from the H.O. In the AdiRace software:-

• Unprinted PN denotes that picking and packing has not yet started.

• Printed PN denotes that the process has been started.

There are 2 types of stocks

Bulk Stock: This is kept in storage and is used for replenishment of the picking boxes as and when required. This is also used in case of bulk orders. E.g. CSD or institutions.

Picking Box

HHT (Hand Held Tracker)

Usage of HHT

Picking Performed

Articles are counted

Packing with cellophanes and stretch tapes is

done

Invoice is generated

Stock is sent to dispatch area

PICKING PROCESSpicking by using HHT

PACKING PROCESS

DISPATCH PROCESS –Third party logistics

Segregation according to the permit (if required or not)

Zone –wise segregation is done (North, South, East, West)

North/South- Bluedart/TNTEast- Quick n Safe

West- TNT

Invoice details are taken from the Picking

and Packing Dept.

Cont’d

• The major transportation is carried out by Bluedart/TNT. (Since TNT has its hub over most of the places)

• Direct delivery takes place.• However, problem arises in the case of PERMIT

issues. Some states require permit before delivery, thus, stock is held.

• If there are fewer orders from any place, then also the stock is held.

DISPATCHING (DELHI/NCR )

• PN is raised at 2 times:• When the stock transfer is to be done,

according to the order.• When the stock transfer from the Delhi.• 3PL:- There are 2 of them in case of

Delhi/NCR• Mahipal – Satbari• Maps Logistics- Dwarka

Stock transfer from Gurgaon W/H (PN and SGN)

MAPS Logistics(Dwarka) Mahipal(Satbari)

Delhi W/H(IND)

Individual Stores

• Local Transportation is taken care of through MAPS Logistics and Mahipal, who transport the stock at their own hubs for further delivery.

• A person reaches the Gurgaon Warehouse from these transporters every morning and takes the stock to his hub. This stock is transferred through his vehicles further.

• The packed and labeled material is loaded and checking is done at the loading time, as to how many pieces are being transferred.

• At the gate also, checking is done. Thus, filtered checking is done to ensure that the right number of articles is being dispatched.

Filtered Checking

• At the dispatch, simultaneously, entry is done into the AdiRace, so that the logistics dept. can keep a track of when the dispatch from Warehouse is done and when it is delivered to the customer.

• They also maintain POD (Proof Of Delivery), so as to keep track of the deliveries being done. This is very helpful in case of discrepancies, as transporter has all the data about details like – who transported the stock, how many cartons were being transported, when they were picked up etc.

Proof OF Delivery (POD)

Final Analysis

• For the final analysis, the major stages of the supply chain were tracked in July’2011:

• Picking Number Generation at head office• SGN generation at Gurgaon warehouse• Invoice Generation at Delhi warehouse• Delivery from the third party logistics

Cont’d

• The total lead time was calculated. When there are more than three days taken, the process is regarded as late.

• For the window of July’2011, all the days were tracked and the average came out to be 4.1 days. However, ideal should have been 3 days.

• The issues were discussed with the industry mentor and the suggestions were given at each stage for improvement.

THANK YOU