Supply Chain Management

Change in expectation
As recently as the 1990s, the average time required for a company to process and deliver merchandise to a customer from warehouse inventory ranged from 15 to 30 days, sometimes even longer. The frequent occurrence of service failures that characterized the past is increasingly being replaced by a growing managerial commitment to zero defect or what is commonly called six-sigma performance. Perfect orders delivering the desired assortment and quantity of products to the right location on time, damage-free, and correctly invoicedonce the exception, are now becoming the expectation. All of this fundamental change in business enterprise structure and strategy is primarily being driven by information technology.

The Supply Chain Revolution

What managers are experiencing is supply chain revolution and a related logistical renaissance. During the last decade of the 20th century, channel strategy and structure began to shift radically. Traditional distribution channel arrangements moved toward more collaborative practice that began with the rapid advancement of computers and information transfer technology and then accelerated with the advent of digital business transformation. The connectivity potential of the Internet served to facilitate a new vision.

Integrated Supply Chain Framework

SCM & LOGISTICS

Supply chain management consists of firms collaborating to leverage strategic positioning and to improve operating efficiency. For each firm involved, the supply chain relationship reflects a strategic choice. A supply chain strategy is a channel arrangement based on acknowledged dependency and collaboration. logistics is the work required to move and position inventory throughout a supply chain. As such, logistics is a subset of supply chain and occurs within the broader framework of a supply chain. Logistics is the process that creates value by timing and positioning inventory. Logistics is the combination of a firms order management, inventory, transportation, warehousing, materials handling, and packaging as integrated throughout a facility network

Supply Chain Management

The system of suppliers, manufacturers, transporter, distributors, and vendors that exists to transform raw materials to final products and supply those products to customers.

A Supply Chain
P&G or other manufacturer Wall Mart or Third party DC Wall Mart Supermarket

Customer wants detergent and goes to Wall Mart

Plastic Producer

Techno Packaging

Chemical manufacturer (e.g. Oil Company)

Chemical manufacturer (e.g. Oil Company)

Paper Manufacturer

Timber Industry

Difference between Materials management & SCM

SCM
End-to-End Process

MM
Limited to a company only

Offer immense scope of Cost Reduction

Offer limited scope of cost reduction

Offer immense scope of Service improvement It is latest technique

Offer limited scope of Service improvement It is old fashioned