Supply Chain Management Presentation by Amithlal S B S2, MBA

Topics
Supply Chain Management Definition of the supply chain Supply chain planning strategies

Supply chain distribution

strategies

SUPPLY CHAIN MANAGEMENT

What Is Supply Chain Management?

SUPPLY CHAIN MANAGEMENT

What is Supply Chain Mgt.?

Supply chain management is a set of

approaches used to efficiently integrate suppliers, manufacturers, warehouses, and customers 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 satisfying service-level requirements.

SUPPLY CHAIN MANAGEMENT

Why Supply Chain Mgt.?

Manufacturing strategies have run their

courses (JIT, Kanban, Lean, TQM) Effective Supply Chain Mgt. is the next logical step towards increased profits and market share

SUPPLY CHAIN MANAGEMENT

The Importance of Supply Chain Management

Millions of dollars at stake! Excess Inventory costs Excess freight charges Lost sales / Stock outages Wasted time and energy Extra staff Listings / Delistings Customer dissatisfaction - privatization Capital costs Real Estate Costs

SUPPLY CHAIN MANAGEMENT

Key Issues in Supply Chain Mgt.

Network Planning how can we recognize

the capacity of each LCBs warehouse to determine production requirements and inventory levels at the vendors facility for each product and develop transportation flows between these facilities to the LCBs warehouses in such a way as to minimize total production, inventory, and transportation costs and satisfy service level requirements?

SUPPLY CHAIN MANAGEMENT

SCM is divided by SCP to offer optimized planning, SCE to stable execution platform, CP to collaborate
Supply Chain Execution Supply Chain Planning
Optimized planning for balanced supply for varied demands
-Supply Chain Network Design -Demand Planning & Forecasting -Supply Planning -Distribution Planning -Manufacturing Planning & Scheduling

Timely execution for buying, moving, making and ordering

-Warehouse Management -Transportation Management -Inventory Management -Order Management Deliver the Right Product at the Right Place at the Right Time

Collaborative Planning
Facilitating collaboration among participants
-Design Collaboration -Demand Collaboration -Procurement Collaboration -Retailer Collaboration

Distribution Strategies

Relationships between suppliers and LCBs warehouse operators that specify delivery lead times, appointment processes, and hours for receiving. How can this relationship optimize supply chain efficiency?

SUPPLY CHAIN MANAGEMENT

The Role of Marketing Channels in Marketing Strategy

Channels provide the means by which

the firm moves the goods and services it produces to ultimate users
Facilitate the exchange process by cutting the

number of contacts necessary Adjust for discrepancies in the markets assortment of goods and services via sorting Standardize exchange transactions Facilitate searches by both buyers and sellers

SUPPLY CHAIN MANAGEMENT

10

Types of Marketing Channels

Marketing channel: system of marketing channel institutions that promotes the physical flow of goods and services, along with ownership title, from producers to consumer or business user; also called a distribution channel Marketing intermediary: wholesaler or retailer intermediary that operates between producers and consumers or business users; also called a middleman Wholesaler: marketing intermediary that takes Wholesaler title to goods and then distributes these goods further; also called a jobber or distributor

SUPPLY CHAIN MANAGEMENT

11

 Types of Marketing Channels

Consumer Goods

SUPPLY CHAIN MANAGEMENT

12

 Types of Marketing Channels

Business Goods Services

SUPPLY CHAIN MANAGEMENT

13

 Direct Selling
Direct channel: marketing channel that channel

moves goods directly from a producer to ultimate user Direct selling: strategy designed to selling establish direct sales contract between producer and final user

SUPPLY CHAIN MANAGEMENT

14

 Channels Using Marketing

Intermediaries

Producer to wholesaler to retailer to

consumer Producer to wholesaler to business user Producer to agent to wholesaler to retailer to consumer Producer to agent to wholesaler to business user Producer to agent to business user

SUPPLY CHAIN MANAGEMENT

15

 Dual Distribution: Network that Distribution

moves products to a firms target market through more than one marketing channel

Reverse Channels: Channels designed Channels

to return goods to their producers

SUPPLY CHAIN MANAGEMENT

16

Channel Strategy DecisionsMarketing Channel Selection of a

Factors which impact the selection of a

marketing channel include:

Market factors Product factors Organizational factors Competitive factors

SUPPLY CHAIN MANAGEMENT

17

Factors influencing Marketing Channel Strategies Characteristics of Short Characteristics of Long

Market factors Geographically concentrated Extensive technical knowledge and regular servicing required Large orders Product factors Complex Expensive Standardized
SUPPLY CHAIN MANAGEMENT

Channels Business users

Channels Consumers Geographically diverse Little technical knowledge and regular servicing not required Small orders Durable

Perishable

Inexpensive

18

Characteristics of Short Characteristics of Long Producer factors Channels Manufacturer has adequate resources to perform channel functions Broad product line Limited product line Competitive factors Manufacturing feels satisfied with marketing intermediaries performance in promoting products Channels Manufacturer lacks adequate resources to perform channel functions Channel control important Channel control not important Manufacturer feels dissatisfied with marketing intermediaries performance in
19

SUPPLY CHAIN MANAGEMENT

 Determining Distribution

Intensity

Distribution intensity: number of

intermediaries through which a manufacturer distributes its goods

SUPPLY CHAIN MANAGEMENT

20

 Intensive distribution: channel policy in distribution

which a manufacturer of a convenience product attempts to saturate the market Selective distribution: channel policy in distribution which a firm chooses only a limited number of retailers to handle its product line Exclusive distribution: channel policy in distribution which a firm grants exclusive rights to a single wholesaler or retailer to sell its products in a particular geographic area

SUPPLY CHAIN MANAGEMENT

21

Logistics and Supply Chain Management

Supply (value) chain: sequence chain

of suppliers that contributes to the creation and delivery of a good or service

Upstream management Downstream management

SUPPLY CHAIN MANAGEMENT

22

The Supply Chain of a Manufacturing Company

SUPPLY CHAIN MANAGEMENT

23

 Radio Frequency Identification (RFID)

Technology that uses a tiny chip with

identification information that can be read by a scanner using radio waves from a distance

Enterprise Resource Planning

Software system that consolidates data among a

firms units

Logistical Cost Control

Third party (contract) logistics firm:

company that specializes in handling logistics activities for other firms

SUPPLY CHAIN MANAGEMENT

24

Physical Distribution
A companys physical distribution

system contains the following elements:

Customer Service Transportation Inventory Control Protective packaging and materials

handling Order Processing Warehousing

SUPPLY CHAIN MANAGEMENT

25

Allocation of Physical Distribution Expenditures an example

SUPPLY CHAIN MANAGEMENT

26

 The Problem of Sub optimization

Condition that results when individual

operations achieve their objectives but interfere with progress toward broader organizational goals

Customer Service Standards

Statement of goals and acceptable

performance for the quality of service that a firm expects to deliver to its customers

SUPPLY CHAIN MANAGEMENT

27

 Transportation
Class Rate Commodity Rate Classes of Carriers

Common carriers move freight via all modes of transportation for the general public Contract carriers do not serve the general public Private carriers do not offer services for hire, but provide transportation services solely for internally generated freight

SUPPLY CHAIN MANAGEMENT

28

Major Modes of Transportation

Railroads Motor Carriers Water Carriers Pipelines Air Freight Freight Forwarders and Supplemental

Carriers Intermodal Coordination

SUPPLY CHAIN MANAGEMENT

29

 Comparison of Transport Modes

Mode Speed Depend- Frequency of Availabil- Flexibility ability in Shipments ity in in Handling Meeting Different Schedules Locations Average Low Very low High High Average Low Limited High Very high Cost

Rail Water Truck Pipeline Air

Average

Average Very low High Low Very high

Very slow Average Fast Slow High High

Very Average extensive Very limitedVery low Average Low

Very fast High

SUPPLY CHAIN MANAGEMENT

30

Inventory Control
Where is inventory held, (supplier, LCBs

warehouse, retailer) how much, and why? Is inventory held due to uncertainty in production, distribution or customer demand? Is there anything that can be done to reduce uncertainty thereby reducing inventory?

SUPPLY CHAIN MANAGEMENT

31

Warehousing
Storage warehouse Distribution warehouse

Automated Warehouse Technology

Distribution costs can be cut and customer service improved by automating warehouse systems

SUPPLY CHAIN MANAGEMENT

32

 Warehouse Locations Major logistics decision involving the number and location(s) of storage facilities Two cost categories influence the choice:
Warehousing and materials-handling costs Delivery costs from warehouse to customers

SUPPLY CHAIN MANAGEMENT

33

 Inventory Control Systems

Important since firms need to maintain

enough inventory to meet customer demand without incurring unneeded costs for carrying excess inventory Just-in-time (JIT) production Vendor-managed inventory (VMI)

Order Processing
Stock out: order for a product that is

unavailable for shipment or sale

SUPPLY CHAIN MANAGEMENT

34

Protective Packaging and Materials Handling

Materials Handling: set of activities

that move production inputs and other goods within plants, warehouses, and transportation terminals
Unitizing: process of combining individual materials into large loads for easy handling Containerization: process of combining several unitized loads into a single, wellprotected load
SUPPLY CHAIN MANAGEMENT

35

Reference:
Managing the supply chain for profitability, Dr. George

L. Harris, C.P.M., CPCM, President, and Calyptus Consulting Group, Inc. Supply Chain Management Strategy, Planning, and Operation, Person Education, Singapore, Chopra, P. Meindi, 2005. http://www.slu.edu/centers/cscms/ http://www.clm1.org http://www.goldata.com.au/ www.google.com www.wikipedia.com

SUPPLY CHAIN MANAGEMENT

36

Thank you

SUPPLY CHAIN MANAGEMENT

37

 Warehouse Management Systems (WMS) are a key part of

the supply chain and primarily aim to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, putaway and picking. The systems also direct and optimize stock putaway based on real-time information about the status of bin utilization. Capture technology, such as barcode scanners, mobile computers, wireless LANs and potentially RFID to efficiently monitor the flow of products. Once data has been collected, there is either a batch synchronization with, or a real-time wireless transmission to a central database. The database can then provide useful reports about the status of goods in the warehouse. provide a method to automatically receive inventory, process orders, and handle returns within a single overall application ""umbrella"".
back
SUPPLY CHAIN MANAGEMENT

Warehouse management systems utilize Auto ID Data

The objective of a warehouse management system is to

38

 An inventory control system is an

integrated package of software and hardware used in warehouse operations, and elsewhere, to monitor the quantity, location and status of inventory as well as the related shipping, receiving, picking and putaway processes. In common usage, the term may also refer to just the software components. upon barcodes, and potentially RFID tags, to provide automatic identification of inventory objects.
back
SUPPLY CHAIN MANAGEMENT

Modern inventory control systems rely

39

 All organizations have or can purchase the

components to build a supply chain network, it is the collection of physical locations, transportation vehicles and supporting systems through which the products and services your firm markets are managed and ultimately delivered. Network can be manufacturing plants, storage warehouses, carrier crossdocks, major distribution centres, ports, intermodal terminals whether owned by your company, your suppliers, your transport carrier, a third-party logistics provider, a retail store or your end customer. Supply Chain Network can include the many different types of trucks, trains for boxcar or intermodal unit movement, container ships or cargo planes.
back
SUPPLY CHAIN MANAGEMENT

Physical locations included in a Supply Chain

Transportation modes that operate within a

40