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SCM and Its Application

An Operational Managements Assignment

Topics to Discuss
SCM and Its Application
How to Deploy SCM
Critical Success Factor

New Trends in SCM


SCM in Services v/s Manufacturing
SCM Application in Pakistan

SCM and Its Application


How to Deploy SCM and Critical Success Factor

SCM
(SCM) is the process of Producing and Managing:
Materials
Information
Finances

The ultimate goal is to reduce inventory

SCM
Supply chain management flows can be divided into
three main flows:
The product flow
The information flow
The finances flow

SCM Software
Planning Application:
Use advanced algorithms to determine the best way to fill an order.

Execution applications:
Track the physical status of goods
The management of materials
Financial information involving all parties

How to Deploy SCM

Process
Analyze the Companys current Supply Chain Process
A small cross-functional team examines all facets
Now Look in part in which the company have the most control
Manufacturing or service processes
Distribution processes
Retail capacity

And

Time and costs of sourcing


Producing
And Distribution of Product and Services

For a Manufacturer
This means investing in automation and sales and
operations planning technologies.

For a Distributor and Retailer


The priority has focused on
Supplier relationships
Warehouse management
Transportation management solutions

Critical Success Factors

Success Factors for SCM


These seven success factors for SCM projects are:
1: Set realistic goals
2: Make an effective plan
3: Find a strong executive sponsor
4: Assemble good resources
5: Stay flexible
6: Allow for testing
7: Promote user buy-in.

The Case of Wal-Mart

The key to Wal-Mart's supply chain


Wal-Mart's company is to be at the leading edge of:
Logistics
Distribution
Transportation
Technology

Wal-Mart's one-store-at-a-time, RFID and


just-in-time distribution approach
Every Wal-Mart store operates like a small company
Store managers are trained to manage
One store at a time
One department at a time
One customer at a time

Wal-Mart's one-store-at-a-time, RFID and


just-in-time distribution approach
Wal-Mart has implemented advanced logistics solutions like RFID
RFID solutions help maintain lower costs, identify out-of-stocks
and increase sales.
Distribution centers instead of warehouses, automated
replenishment and cross-docking technology also reduce inventory
carrying costs

Why SCM Fails?

Top 5 Reasons
Swift, Dramatic Order Cutbacks
Long Lead Times causing Delayed Delivery
Overemphasis on Cost Cutting
Inaccurate Demand Forecasts
Lack of Risk Management Strategies

Top Supply Chain Disasters

Nike
Trouble with new planning System Causes inventory
and order woes
Nike blamed software related issues for $ 100 million
revenue shortfall for the quarter, Stock dropped to
20%

2001

Apple
Playing a conservative inventory strategy, Apple
swamped with demand for new Power Macs and
couldn't deliver the goods on time.
At that time Apple bear the losses in millions of Dollars
and lost it market share for PCs

1995

New Trends In SCM

Supply chain technology continued to evolve


throughout 2012
Overall IT trends such as the cloud, big data and mobile are
impacting the supply chain sector just as they do other sectors.

But there are other trends specific to supply chain that came to
the forefront in 2012

Trends
Improved Customer Service Levels over Cost Cutting
Execution Moves Ahead Of Demand & Supply Planning
Resurgence of Contingency Planning
End-To-End Partner Communication & Collaborative Execution
Big Data Is Becoming Mandatory

The Case of Coca Cola


The Coca Cola Company is heavily investing nowadays in SCM
They have recently deployed a SAP-Oriented Software Gensys
The Genesys program is an integrated SAP Enterprise Resource Planning (ERP)

solution that will replace CCEs legacy systems in the processes of order to
cash, requisition to payment, and record to report.
Genesys will allow CCE to shorten cycle time in these processes and be more

productive. It will also help bring more visibility into the business and improve
decision making.

SCM in Services v/s Manufacturing

The Differences
Manufacturing
The primary difference is that most of
the cost of manufacturing labor is
involved in procuring, transporting and
manipulating physical material.

Services
while almost all service industry labor is
expended on manipulating information
and developing relationships.

The Differences
Manufacturing

Services

Manufacturing industry tries to negotiate the service industry upgrades servers and
better shipping rates and fill containers with installs new software to speed the flow of
product to reduce unit cost.

communication.

The Differences
Manufacturing
In

manufacturing

optimization

of

the

Services

organization, The main drivers of optimization in a service

supply

chain

is model are relationships and information

accomplished primarily by improving speed flow.


of delivery and reducing cost.

SCM Application in Pakistan

The Restaurant Industry


SCM Application for Service industry is very rare in Pakistan.
After a research we found out that a Multinational Company
MICROS is working for SCM application in the Restaurant industry
of Pakistan

The Challenges faced by Pakistans Best


Restaurants
The typical business challenges full-service restaurants face today
are
How to increase table turn-over
Revenue
While optimizing and streamlining the business organization
Workflows
Resource planning

The Solution
Customized to a restaurants unique business requirement, MICROS puts

together a solution that perfectly fits your business needs.


MICROSs end-to-end portfolio encompasses
Point-of-Sale System solutions
Inventory management solutions
Table management solutions
Labor management solutions
CRM/loyalty solutions
reporting tools

The Benefits:
Improved operational efficiency
Improved enterprise business intelligence and decision
support
Increased guest satisfaction and loyalty
Increased sales

Few Examples:
Currently MICROS is running in Many of the best Restaurants and Resorts of
Pakistan like:
Pearl Continental
Marriot
Sheraton
Hotel Serine
Dunkin Donuts
KFC
Mc Donalds
Pizza Hut

Thank You !
By: Arbab Siqqidui
Muhammad Ghazanfar