Supply Chain Management

Renu Rajani

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 Supply Chain Management
• SCM – A Definition
• From Silos, to Interfaces, to Chain
• Push vs Pull
• Stages of Supply Chain
• ERP vs SCM

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SCM - Techniques
• Prioritisation
• Sequencing
• Scheduling
• Integration
• Scenario Analysis
• Optimisation – Constraint Planning

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SCM - Areas
• Distribution Network Planning
• Demand Management
– Whiplash Effect
– Event Modeling
– Collaborative Demand Planning
• Manufacturing Planning & Scheduling
• Warehouse Management
• Distribution Management
• Shipment & Transport Management
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SCM - Benefits
• Reliable Demand Management
• High Customer Service levels
• Reduced lead times
• Optimum working capital costs
• Optimum supply chain costs

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Some Cases
• An electrical eqipment manufacturer has reduced
quoting and order reengineering time by 75% and
design iterations from 2 weeks to a few minutes.
• An automobile manufacturer has reduced the time
required to engineer the basic structure of a hood
from around 2 months to one day while improving
the structural quality without increasing the weight
• A large fast moving consumer goods (FMCG)
company operates on negative working capital.

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Supply Chain Costs - Method (1)
Cost Element*
RM, Pkg Matl, WIP, FG
+ Carrying Cost of Inventory
+ Storage Cost of Inventory
+ Transportation
+ Distributor’s Margin
+ Interest Cost of AR
- Interest Saved on AP
* Measured as % of sales

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Supply Chain Costs - Method (2)
Cost Element*
Cost of Working Capital
+ Transportation
+ Warehousing
+ Distribution

* Measured as % of sales

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SCM Transformation Framework

e-COM
e-COM CRM
CRM SCM
SCM ERP
ERP EP
EP BI
BI
Consumer &
Consumer &
Packaged Goods
Packaged Goods
Data
Data Storage
Storage Networking Security Infrastructure
Infrastructure
Center Networking Security
Industrial Center
Industrial
Products
Products
DESIGN /
STRATEGISE PLAN
CONSTRUCT
IMPLEMENT RUN
Retail&&
Retail
Distribution
Distribution
SC
SC SC
SC SCDesign/
SC Design/ SC
SC SC
SC
Consulting
Consulting Planning
Planning Construction Implementation
Construction Implementation Support
Support
Logistics/
Logistics/
Transportation
Transportation • •Business • SCM Solns •GAP •Transition • •Application
Business •Transition Application
Objective MAP analysis • •Pilot
Objective Pilot
HealthCare
Care • •CSFs •Customizati •Cutover • •Networks
Health CSFs •Cutover Networks
• SCM •SCM Solns on •Roll-out
• SCM •Roll-out
Architecture Selection • Integration •Post-impl audit • Data Center
Architecture •Post-impl audit • Data Center
• •Storage
Storage

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 A CPG/Industrial products SC
Mfg Customer
R&D/Design Sales/ Demand Inbound Outbound
Procurement RM Stores Assembling Distribution Service &
/Engrg Mktg Mgmt Logistics Logistics
Testing Returns

•Load Consolidation •Carrier Selection & Mgmt

•Market Analysis •Routing & Optimization
•Sequencing, Expediting
•Engineering •Forecasting •Manufacturing •Consolidation
•Shipment Tracking
•Design •Capacity Planning, •Assembly •Cross Docking
•Routing
•Sourcing Scheduling •Configuration •Merge In-Transit
•Carrier Selection
•Prototyping •MRP, Inventory Control •Testing •Pool Distribution
•Shipment Booking &
•Packaging •Allocations •Packaging •Configuration In-Transit
Documentation
Designs •Network Design •Labeling •Shipment Tracking
•Clearances
•Freight Bill Payment •Claims Administration
•Freight Bill Payment

•Market Segmentation
•Product Development
•Sales Order Contracting
•Sales Order Processing
•Credit & Finance
•Promotions
•Trade Shows
•Contract, Negotiation
•Requisition •Facility Layout & Design
•Purchase Order •Kitting •Order Processing •Repair & Exchange
•Expediting •Kan Ban •Receiving, Stocking •Exchange, Refurbish
•Quality Control •Facility & Layout Planning •Shipment Planning •Credit
•Inspection & Test •Inventory Control & Consolidation •Defective & Refused
•Packaging •Receiving •Picking, Labeling, Packing Shipments
•Labeling •Quality Control •Quick Repl of Parts •Field Service & Support
•Landed Cost •Shipment Booking & Doc
•Finance

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Supply Chain Planning
•Recognizing constraints across the supply
chain- Mfg, Distribution, Transportation
•Focus on aggregate planning
•Multi-site MPS Planning
•Deployment Planning for Resources
•Available to Promise (ATP) Main Players:
• i2 Tech.
• Logility
• Manugistics
•Baan IRP

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Mfg Planning & Scheduling
•Recognizing detail requirements and constraints while
developing plan/schedule for material, capacity, tools, HR
•Focus on detail scheduling and sequencing
•Balance production output with market demand recognizing
constraints
•Refine Due dates

Main Players:
• i2 Tech.
• Logility
• Manugistics
•Baan/Berclain

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Distribution Planning
•Plan safety stock levels for items and their locations
•Plan replenishment frequency
•Schedule shipment taking into account demand priorities
•Recognize constraints
•Trend analysis

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Transportation Planning
•Develop detail routes
•Analyse fleet & rates by transporter Main Players:
•Tracking and Monitoring • i2 Tech.
• Freight cost and payment tracking • Logility
• Manugistics
• Multi-modal carrier tariff •SynQuest Inc.
• Performance measurement and reporting
•Sensitivity analysis for alternate routes, carriers / modes,
lowest costs

EVERY DAY COUNTS... vMoksha Technologies / December 2001

Shipment Scheduling
• Scheduling equipment and resources
• Dynamic shippable load building, consolidation and rating,
considering:
• Transport constraints
• Packaging Requirements
• Product Stacking restrictions
• Sensitivity analysis to arrive at lowest cost mode and carrier
• Consolidated corporate routing and scheduling
• Generate Shipping Documents and Tracking

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APS integrates all aspects of planning
•That are separated within APS Vendors
i2 Technologies
MRP II Bridgeware
Manugistics
– Material and capacity planning. Numetrix
Logility
– Production and distribution planning. Baan
Distinction
– Aggregation levels and horizons. Chesapeake
PeopleSoft
– Automatic planning and manual planning. Adapta/DynaSys
– Replaces iterative planning by rolling SynQuest
Paragon Management
plans. Systems
Thru-Put Technologies
STG
FYGIR
Ortems
Aliah
CAPS

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Product Lifecycle Mgmt (PLM)

The lifecycle can

be subdivided into
3 phases

“Product Lifecycle Management (PLM) enables fast, reliable collaboration for product design,
manufacturing and data management within an enterprise and with external trading partners.
Companies benefit from achieving greater control and accuracy over the product lifecycle, bringing
products to market faster and improving product designs to better fit customer needs.”
Source – SAP AG

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PLM facilitates Collaborative Product
Design and Development

PDM
Sourcing Visualization

Product Process
Planning
CPDD Modeling

CAD/ Lifecycle
CAM Support
Mfg
Planning
Source: Aberdeen Group

EVERY DAY COUNTS... vMoksha Technologies / December 2001