Transcript SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN MANAGEMENT
• Supply chain management is the management
of all the activities related to sourcing,
procurement, conversion and logistic
management to deliver the right product or
services to the customers at right time at
acceptable cost
• Organization in supply chain includes suppliers
, intermediaries, transportation and logistics
providers
Supply chain drivers
• A number of forces or Drivers have played the
a role in the evolution of the supply chain
management strategies few of them are given
below
1- Technology - two technological
developments that have influenced the
structure and operations are Information &
communication technology
Competitive factors
• The major competitive factors for supply chain
relate to cost and availability factors
• Organizations that focus on managing the
inventories end up with reduced inventory
related cost and improved stock out
performance due to faster market access and
improved process improvements
Business & Social Environment
• Competition is severe. It has been recognised
That instead of competition between
organisation .competition is between supply
chains now supply chains are more receptive
to collaboration
Policy and regulation
• Many policy and regulatory acts have a direct
Effect on supply chain initiative e,g phasing out
Of central tax replacing it with value added Tax
Will have impact on distribution & retailing
strategies of Companies including
warehousing locations
Move from Producer centric to customer centric
• Earliest supply chain were trading supply
chain .It involved producing goods in one
location and moving to another location
where they were sold or exchanged
• Customer centric area is an era of global
competition. Tools & Techniques used in
customer- centric are totally different from
that are used in producer centric supply chain
Supply Chain Stages
Supplier
Manufacturer
Distributor
Distributor
Retailer
Customer
Value Chain in a Company
Finance, Accounting , Information , Human
Resource , Technology
New product
development
Marketing
& Sales
Operation
Distribution
Service
Supply chain effectiveness
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Supply chain effectiveness depends upon
Short Lead Time
Ability to handle large variety of products
Ability to meet high service level
Handle supply uncertainty
To respond to wide range of quantities
demanded
continued
• Responsiveness comes at a cost which can be
understood by the below mentioned graph
High
Responsiveness
low
High
Cost
Low
Demand
flow
strategy
collaboration
strategy
Supply chain
Strategy framework
Technology
integration
strategy
Customer
service
strategy
Competitive Strategy
Product
Development
strategy
Supply chain
strategy
Marketing&
sales strategy
Competitive strategy
Supply chain strategy
Effieciency
Facilities
Responsiveness
Inventory
Transportation
Information
Facilities
• Facilities in supply chain stands for the
locations to or from which the inventory is
transported. Facilities and their
corresponding capacities to perform their
functions are key driver Centralization
increases the efficiency. Locating the facilities
near the customer may increase number of
facilities hence responsiveness can be
increased
Components of facilities Decision
Following are the components of facilities
Decision
1-Location
2-Capacity
3- Operation methodology
a) Product wise
b) Function wise
Logistical Infrastructure in India
• India has vast network of Roads ,Railway lines,
Air cargo shipment system and vast coastal
line
Road—
1- National Highways-65569 KM
2-State Highways- 1,31,899 KM
3- District level roads- 467763KM
4-Village& other roads- 2650000 KM
Important highlights
In India we are able to cover 300km on per day basis in west & Europe
it is 600km/day
Government has taken initiative to establish N .H.A .I
Golden Quadrilateral has initiated and it is in advance stage- 5846 km
NS-EW (North south &East west corridor is also on the anvil – 7300 km
Existing Drawbacks- Slow speed Traffic &congestion
Rail Network – Biggest in Asia
68% of revenue of railways comes from Freight,
89% of freight is made of transporting Coal , Cement ,
Fertilizer , petroleum products , Food Grains ,Iron ore
Finished steels and Raw Materials for steel plants
SEA PORT NETWORK
India has a costal line 7517 KMS
India has 12 major ports
95% of trade is by volume and 75% by value
Government has taken initiative to allow 100% FDI
Government has setup National Maritime Development
Plan
Out Sourcing
• Manufacturing Industries are normally faced with
situation where they have to decide to make the
parts in-house i,e by themself or it be given to some
other manufacturer to make it. Such course of
action is termed as Outsourcing.
• Outsourcing decision is taken on two important
Parameters 1) cost saving
2) capacity constraint
In the context of supply chain Management ,in bound
Logistic can be out sourced another party to carryout
the related job
Third Party logistics
• A manufacturing Firm may take a decision to
purchase trucks for ensuring the dispatch of
goods/final product to customer . How ever when
business volume increases ,company may have to
purchase more no of trucks. At one point of time
company may decide to engage out side parties i,e
logistic companies who have variety of trucks &
tempos, Go down & Warehouse at their disposal
Logistics
• This term was used in Military for deployment of
armaments and troops. However it is widely used for
movements of Raw material semi-finished and final
products from manufacturer to warehouse or
distributor and finally to customer.
Logistic is broadly classified as Inbound logistic &
outward logistic.
Inbound implies that suppliers are arranging the
dispatch of raw materials from their end to
manufacturer
Logistics-cntd
• In our country many traders & manufacturer
patronized Railway goods train as well the
parcel van of passenger trains to move their
products after packing them in gunny bags &
wooden boxes and crates. However
parties/users have to go to railway’s goods
shed/parcel room to get the cargo release and
bring it their premises. It was cumbersome
continued
• Transportation of products manufactured by
industries was also managed by using Trucks
and tempos depending upon Tonnage &,
dimensions as well distance to be travelled.
we see many trucks carrying goods and
travelling more than 2000 KM also.
we can also observe that construction of truck
Bodies are also modified to suit the requirment
Logistic-continued
• Some big business organization like T.C.I, ABC
road lines, South Eastern road line have
owned large no trucks or took trucks on hire
basis from individuals.
• Logistic companies have following facilities at
their disposal
1 Fleet of Truck, Trailer and LCVs
continued
2- Godowns
3- Material handling equipments like palletlifters, fork lifts, Scissor lifts etc
4- Racks & Pallets for storage of goods
5- requisite manpower to perform following
functions –
a) Receiving /collection of goods and issue
necessary receipt normally called GRN
continued
• 2- after receiving the good it is to be stored in
safe location having location number so that
one can retrieve the consignment when ever it
is to be dispatched .
3- Load planning and routing another important
function is to asses the load whether load has
become full load meaning thereby full truck
load for that destination otherwise routing
has to be worked out
Operational objectives
• Logistic Management has following major
objectives
• 1- To deliver the consignment in committed
time
• 2- to deliver the consignment in safe
condition i,e without any damage
• 3- total cost of delivering the product should
be to the satisfaction of customer
Continued
• There should not be any shortage or pilferage
in the consignment
• Communication with respect to delivery date
and time to be sent to consignee for his/her
availability to receive the consignment