SUPPLY CHAIN MANAGEMENT

By -Namrata Rajput -Nehal Shah -Helley Joshi -Prashansa Pandey -Jasmit Jadav -Bhumika Vaishnav

Introduction
Supply Chain Management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.

RAW MATERIALS MANUFACTURER TRANSPORTATION AND WAREHOUSE

WHOLESELLER

RETAILER

CUSTOMER

GOALS
SCM is concerned with the efficient integration of suppliers, factories, warehouses and stores so that merchandise is produced and distributed. -In the right quantities -to the right location -at the right time In order to -Minimize total system cost -Satisfy customer service requirements

Historical Developments in SCM

1. 2. 3. 4. Creation era Integration Era Globalization Era Specialization Era
Outsourced Manufacturing and Distribution Supply Chain Management as a Service

5. Supply Chain Management 2.0

Activities & Functions

1. Strategic Level 2. Tactical Level 3. Operational Level

Components of SCM Integration

Planning and control Work Structure Organization structure Product flow facility structure Information flow facility structure Management methods Risk and reward structure Power and leadership structure Culture and attitude

Supply Chain Decisions

Location Decision Production Decision Inventory Decision Transportation Decision

Global SCM
Globalization Increased cross border sourcing Collaboration for parts of value chain with low-cost providers Shared service centers for logistical and administrative functions Increasingly global operations, which require increasingly global coordination and planning to achieve global optimums Complex problems involve also midsized companies to an increasing degree

Problems
Distribution Network Configuration Distribution Strategy Trade-Offs in Logistical Activities Information Inventory Management Cash-Flow

Reverse Logistics
Is the process of managing the return of goods and also referred as after market customer services.
1. Remanufacturing activity is also included in Reverse logistics 2. In this case the resources goes one step back in supply chain

Business Implications Return of unsold goods

Bull-Whip Effect
With the bullwhip effect demand order variability is amplified as one moves up the supply chain This is because demand information is distorted as it is transmitted up to supply chain Causes erratic shifts in orders up and down the supply chain.
Eg. Proctor and Gamble Pampers

Symptoms of Bullwhip Effect

Excessive inventory Poor forecast Insufficient and/or excessive capacities Unavailable products Long backlogs

Importance of SCM
Reduce inventories along the chain Lower costs Better customer service Efficient manufacturing Planning being done in consolation rather than isolation Better information sharing resulting into better trust

Summary
SCM is cutting edge business strategy that integrates internal and external logistics across many manufacturers, suppliers, distributors, retailers, transportation, providers and third party logistic firms to increase productivity and to obtain a competitive advantage for all parties involoved.