Supply Chain Management

Point of origin to point of consumption

........

Presented By:

Syed Mahbubul Haque Chowdhury

Supply Chain Manager, Business Development, Gemcon Group
Executive Consultant, Advanced Insight Ltd.

IBA, University of Dhaka

July 10, 2015
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Evolution of Supply Chain Management

Further Refinement of
SCM Capabilities

SCM Formation/
Extensions

JIT, TQM, BPR,

Alliances
Inventory Management/Cost
Optimization

Traditional Mass Manufacturing

1950s
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1960s

1970s

1980s

1990s

Supply Chain Management: IBA, University of Dhaka

2000s

Beyond
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SCM in Diverse Areas

Manufacturing - most common

Service - emerging opportunities
Environment - causing restrictions
Non-profits / Government - little explored
Military - long history

Note the global evolvement into a

service-oriented economy!

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Supply Chain Management

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Objective of Supply Chain Management

Greater efficiency, lower costs
Enhance flexibility, agility
Improve customer service
Optimize the value chain

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Internal value chain: Local focus

Executive
Management

R&D

Information
Technology

Operations

Supply
Management

Logistics

Marketing

Finance

Accounting

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Human
Resource
Management

Supply Chain Management: IBA, University of Dhaka

Internal value chain: Company focus

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SCM: Linked value chain

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Decision phases in Supply Chain

Supply Chain Design
Strategic

Resource Acquisition
Long Term Planning (1 Year ++)

Production/ Distribution Planning

Tactical

Resource Allocation
Medium Term Planning (Quarterly,Monthly)

Shipment Scheduling
Operational

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Resource Scheduling
Short Term Planning (Weekly,Daily)
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Decision phases in Supply Chain

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Process view of Supply Chain

Cycle view:

Push / Pull view:

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Supply Chain Macro Process.

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Strategic Thinking: Traditional View

A valid business model must answer two
questions:
1. What is our business?
Who are our customers?
What is the real value that we offer them?

2. How can we do it better than anyone else?

Unique organizational capabilities
Almost always process based
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Supply Chain Strategy

Seeks to leverage the resources and skills of
diverse companies in the supply chain to
deliver exceptional value to the end customer.
Addresses:
How the capabilities of other chain members can
be used to create value for the end customer
How their own strategy and actions impact the
ability of the supply chain to create value for the
end customer
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Supply Chain Strategy

Rather than What is our business? the SC
strategist inquires:
What is the overall supply chains value
proposition?
How does our company uniquely help the
chain deliver on its value proposition?

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Supply Chain Strategy

Rather than How can we do it better than anyone else? the SC
strategist asks:
What valued capabilities do other members of the chain
possess?
How can we bring these complementary competencies
together in a way customers value?
What type of relationships should we maintain with other
members of the supply chain?
Are any customer-valued competencies missing? If so, who is
best positioned to develop them?
How much of the value-added process should we control?

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Aligning Competitive Strategy and

Supply Chain Strategy
Competitive strategy
Product development strategy
Marketing and sales strategy
Supply Chain strategy
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The Process of Achieving Strategic Fit

Three steps are involved.
Understanding the customer needs regarding
attributes of supply.
Understanding the supply chain attributes
(alternatives available).
Achieving strategic fit. Making decision on the
supply chain to best serve the needs of the
target segment customers.

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Efficient Vs. Responsive SCM

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The Process of Achieving Strategic Fit

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Drivers: SCM
Logistical Drivers:
Facilities
Inventory
Transportation

Cross functional Drivers:

Information
Sourcing
Pricing

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Structuring SCM Drivers

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Effect of lack of coordination on

performance

Manufacturing cost ()
Inventory cost ()
Replenishment lead time ()
Transportation cost ()
Labor cost for shipping and receiving ()
Level of product availability ()
Relationship across the Supply Chain (worsen)

Profitability ()
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Obstacles of coordination in SCM

Incentive obstacles
Information processing obstacles

Operational obstacles
Pricing obstacles
Behavioral obstacles
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SCM: Critical success factors

Cross functional
management and planning
skills
Ability to define, measure
and manage service
requirements by market
segment
Information systems

Smoooth Synchronization
of Activities
Fact-based evaluation of
performance
Fair compensetion for
services
Authentic commitment to
pertnership

Relationship management
and win win orientation
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Thank You

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