📌Customer supplier chain

- Refers to the flow of products or services between customer and supplier.

- Involves a series of interactions that occur as goods and services are produced, distributed,
and delivered to the end customer.

SUB PROCESS

External Internal Internal External

Supplier Supplier Supplier Supplier

-external supplier provides the raw materials

-internal supplier provides services or product
-internal customer are those individuals who buys the finished product that within the company
-external customers are the buyers outside the company.

ADVANTAGES
- Helps controlling the quality of the process and the finished product
- Helps the management to understand its own organization and operation better
- Facilitates immediate feedback
- The management can easily identify areas of problem
- It improves the communication within the org.

📌Supply Chain management

- Optimizing all activities throughout the supply chain so that the products or services are
supplied in the right quantity, right quality, to the right customer, at the right time at the optimal
cost.
-Supply Chain Management plays an important role in satisfying the customers.

Supply chain
-series of links and shared processes that exist between customer and supplier.

Demand of information

Supplier Customer

Flow of product

SUPPLY CHAIN MAN involve the FF:

-Demand planning
to predict the demand of products or services based on forecast
-Manufacturing and scheduling planning
Process optimally schedules manufacturing orders with production capacity.Performed by
material requirements planning and capacity requirements planning to create optimized and
constrained production plans.
- Supply planning
A planning process that meets customer demands based on available inventory and
transportation resources. It includes distribution requirements planning, which determines the
need to replenish inventory.
- Transport planning
To optimally schedule load and deliver shipments
to customers while considering constraints such as delivery rate, mode of transportation.

(*supply chain management focused on planning)

BENEFITS OF SCM
Effective Supply Chain Management is the key to a competitive business advantage. The eight
major benefits of effective Supply Chain Management can be summarized as follows:
(1) Improved customer service
(2) Reduction of costs across the supply chain and more efficient management of working
capital.
(3) More efficient management of raw materials, WIP and finished good inventory.
(4) Increased efficiency in the transactions between supply chain partners.
(5) Better manufacturing resource management.
(6) Optimized manufacturing schedules.
(7) Optimal distribution of existing inventory across the supply chain.
(8) Enhanced customer value, often in the form of lower prices.

📌JUST-IN-TIME
- Also known as the zero inventories program, this means that no surplus inventory of materials,
sub-assemblies or products exist at any time in the organization.
-JIT means the materials are arrived just in time, they are assembled and delivered just in time.
- Just-In-Time manufacturing is defined as “a philosophy that focuses attention on eliminating
waste by purchasing or manufacturing just enough of the right items Just-In-Time .

(Explanation *Some feel that it is extremely difficult to do such a thing since it is difficult to
foresee the demand. They also feel that the customer cannot wait for the actual manufacturing
of the product, if it is made to order. However, Toyota in Japan has been practicing this concept
successfully for many years. Therefore, it is definitely possible to practice Just-In-Time
manufacturing.)

Objectives of JUST-IN-TIME
•Development of optimal process and be competitive
•Streamlining of operations and eliminating unwanted process
•Continues improvement
•Reducing the levels of wasted materials, efforts, and time
•Increasing efficiency of production process

JUST-IN-TIME can be practiced by defining and implementing several concept such as:
•Manufacturing resource planning
•Material requirement planning
•Multi-function workforce
•Eliminating wastes
•Team work
•Kaizen
• Optimizing plant layout
• Reduced set up time
•Kanban
•Involvement of people
•Plant optimization

Benefits of JUST-IN-TIME
• Reduction of wastes
• Reduction of Work-In-Progress (WIP)
• Establishing proper customer-supplier relationship
• Reduction in lead-time
• Less-inventory of raw materials
• Improvement in flexibility
• Lower cost and high productivity
• Enhanced customer satisfaction due to lower price owing to elimination of wastes
• Improved employee morale owing to a perfect system without waiting
• Improved satisfaction of shareholders due to high profit
• Reduced space requirements on account of total elimination of WIP and buffer stock of
materials,
sub-assemblies and products
• Improved productivity and improved quality

Not following JIT Increases Cost

•Stocking inventories for years means a lot of money is blocked and a high rate of interest has
to be paid.
(*IF the material received is a year older, precautions have to be taken for storing, handling, and
security.
*Therefore, the company has to make additional space for storage. No material has a shelf life
of many years. Therefore, during storage the material may deteriorate which will further add to
the cost of manufacture of the products and the cost of the end product. The demand will
naturally come down, if the end product is sold at a higher price. If the demand is low, profit
cannot be earned. *The organization has to sell the stocked product at a lower price than the
original.)

Why practice JUST-IN-TIME

• More prosperity
• More profits
(*Practicing JIT is required in a TQM organization and the organization should facilitate
practicing JIT. The organization should plan to get materials JIT, assemble it immediately and
deliver it to customers thereafter. In this manner, a lot of money will be saved for the
organization.)

Requirements of JIT
The most fundamental requirement for JIT manufacturing are all those that will lead to reduction
of lead time before starting a particular job. Some of them are:
•Practicing TQM
• Documented system
• Trustworthy suppliers who also practice TQM
• Efficient customer handling processes to know the demand just in time
• People are educated, trained and coached continuously
•Competitive people at all positions in the company
• Machinery, which are maintained periodically and updated continuously
• Proper operating environment for machinery and people
•Excellent system of support and infrastructure
• Proper layout of machinery and manufacturing
• Housekeeping, which reduces confusion
•Identification of an item should be as fast as possible
• Employee should be sure about the quality of the material, and the process
• They should be able to know, when the machinery has to be taken out of service for
maintenance
• They should be thorough with routine and preventive maintenance schedules of the machinery
• They should be thorough with the process
• They should be familiar with process parameters and how to inspect the materials,
subassemblies and in-process measurements.
• The employee should know the quality requirements of the product or service
• Support of good Information Technology infrastructure.
• Reordering of materials should be automatic when the inventory level goes down. The software
should be built to automatically order parts, when the total quantity of products to be delivered is
determined.
• The company needs to automate the delivery process

(*All these will help in reducing the bottlenecks in practicing JIT strategy. Above all, it requires
the determination of the top management to practice JIT, in the interest of the organization.)