Supply Chain Management

Supply Chain Management

Physical Supply Chain

Basic
materials

Product

Delivery to
customer

Vertical Supply Chain

Open a
website

Attract
customers

Link to sales
organisation

Different Categories of Supply

Chains
Orders

Raw Material
supplier

supplies

Orders

Manufacturer

supplies

Orders

Wholesaler

Retailer

supplies

Benefits of SCM
i.

Get the right product at the right place at

the least cost
ii. Keep Inventory as low as possible and
still offer superior customer service
iii. Reduce cycle times

Goals of SCM
To cut costs
Increase profits
Improve performance in
relationships with
customers and suppliers
Develop value added
services that give a
company a competitive
edge

Supply Chain Management

Supplier
Management

Inventory
Management

Supply Chain
Management

Financial
Management

Payment
Management

Distribution
Management

Sales force
Productivity

Channel
Management

Critical Relationship of
Suppliers/Company
Cost

Quality

Suppliers/
Company

Flexibility
Speed

Fourth Strategy
Product specs
that your
suppliers must
adhere to
suppliers

Downstream part of
the value chain

Tracking of
the needs

Your
company

Reverse flow of
Information

Customer
(starting point)

Upstream parts of
the value chain

Supply Chain Design

plants

suppliers

Distribution
centres

customers

Waves of Future (Economic

Change)
Current State
Previous State

Nation state Environment

Producers Define Markets
Manufacturing dominates
Capital Investment
Independent Businesses
focus on Price
Government Control/
Regulation

Global Business
Environment
Users define Markets
Technology dominates
Capital Investment
Business Alliances
Focus on Value
De-regulation and
Privatization

Power Shift Response Trends

Strategic Alliances & value Late
chain Integration
90s
Customer satisfaction & Growth
Strategies

Mid
90s

Re-engineering & Downsizing

Early
90s

Quality & TQM

80s

Productivity
Improvement

70s

Producer-driven
Economy

50s
60s

VCM Architecture
Systems

Core
company

VCM
as a layer

knowledge

Repository

End Users

Characteristics of SCM - 1
Sourcing of raw materials or finished
goods from anywhere in the world
Centralised global business &
management strategy with hem less local
execution
On-line, real time distributed information
processing providing total supply chain
information visibility
Ability to manage information not only
within a company but across industries &
enterprises

Characteristics of SCM - 2
Seamless integration of all supply chain
processes including third party suppliers,
information systems, cost accuring
standards and measurement systems
Development & implementation of
accounting models
Reorganisation of the supply chain
organisation into high-performance teams

Factors hindering re-combinant

business models
Disparate data
models
Disparate trading
partner capabilities
Disparate process
models
Semantic
heterogeneity
Integration as trading
partner lockin

Proprietary standards
Inertia & fear of
change
Competitiveness
based on business
process differences
Point to point
interfaces

SCP Tools
Strategic planning
tools
Executive &
implementation
tools
Tactical planning
tools

Tactical Planning

Transportation &
Network
Available to Promise(ATP) Scheduling
Capable to Promise (CTP) Manufacturing
Capacity planning
Demand planning
Distribution planning
Deployment planning
Sales & operation

Enterprise Collaboration
Goals
Communicate
Coordinate
Collaborate

Supply Chain Foundation

COMMUNICATIONS

HEAD QUARTERS

E
U

INTERNET

PLANT

WAREHOUSE
ERP
PDM

SFA
MARKETING

APPLICATIONS/
FUNCTIONS

INTEGRATION

INTRANET (AT THE

ENTERPRISE)

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