The document discusses supply chain management. It defines supply, supply chain, and supply chain management. It describes the elements of a supply chain including procurement, manufacturing, and distribution. It discusses supply chain integration and coordination across companies. It also outlines objectives, decisions, challenges, and approaches to supply chain management.
The document discusses supply chain management. It defines supply, supply chain, and supply chain management. It describes the elements of a supply chain including procurement, manufacturing, and distribution. It discusses supply chain integration and coordination across companies. It also outlines objectives, decisions, challenges, and approaches to supply chain management.
The document discusses supply chain management. It defines supply, supply chain, and supply chain management. It describes the elements of a supply chain including procurement, manufacturing, and distribution. It discusses supply chain integration and coordination across companies. It also outlines objectives, decisions, challenges, and approaches to supply chain management.
Learning Objectives • Supply chain concept • Supply, supply chain and supply chain management • Supply chain elements and extended supply chain • Supply chain linkages and integration • Supply chain decisions • Supply chain challenges
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Supply, Supply Chain and Supply Chain Management A Supply is the quantity of inventory/goods available (in required quantity) for use or the actual replenishment of a product or component. A Supply Chain is the link connecting set of facilities, companies, demand and supply points and service providers. Chain links suppliers and downstream customers with the flows of products, services, finances. Supply Chain Management (SCM) is the systematic and strategic coordination of all business functions within a company for the purposes of improving the long term performance of the supply chain as a whole.
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Supply Chain Management… “Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.” Source: Council of Supply Chain Management Professionals, http://cscmp.org/aboutcscmp/difinitions.asp
What SCM Does? • Manages three flows inventory, information and cash
• Manages four cycles
procurement, manufacturing, replenishment and order fulfillment
• Aligns capabilities of Suppliers and service providers
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Activities in Supply Chain • Integration of customers and suppliers to the business processes • Information flow among channel members for planning, implementation and monitoring processes • Sharing channel risks among the partners to gain a competitive advantage • Cooperation among channel members is required for effectively managing the distribution process • Integration of processes for synergistic effects • Build and maintain long term relationships with partners
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Objectives of SCM
• Improvement – cost and quality
• Shortening performance cycle
• Speed to market
• Flexibility – volumes and variety
• Demand management
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Decisions in SCM • Network • Vendors • Production • Inventory • Distribution • Information
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Performance Metrics of SCM Service – Actual against desired with quality, place and timing. Cost – Cost to customer in meeting his service and time requirements. Assets – Effectiveness of assets to meet variability of consumer demand and simultaneously creating operational efficiencies. Time – The shortest time frame to convert customer order into cash realization.
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Challenges in SCM
• Increased supply chain volatility and uncertainty
• Creating global customer and supplier network • Creating optimized supply chain configuration • Risk management in the end-to-end supply chain • Integrating and empowering existing supply chain
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Modern Approaches to SCM • Just-In Time (JIT) Inventory Management