Contents

Supply Chain Management

Management of Business Logistics
Demand Management & Customer Service
Procurement and Supply Chain
PPRA Rules
Managing Inventories
Warehouse Management
Transportation Management
Use of Information Technology for Managing Supply Chain
SCOR Model

Learning Objectives

Familiarization with concept & Techniques of SC

Strengthen knowledge of SC
Knowledge that can be used in Work Environment
Knowledge which provide basis for further study leading
to National/ International Certifications
i.e. Certified Supply Chain Manager (CSCM) by
International Supply Chain Education Alliance (ISCEA)
and Certified in Production & Inventory Management
(CPIM) by The Association for Operations Management
(APICS)

Reference Book
The Management of Business Logistics:
A Supply Chain Perspective
By Coyle, Bardi & Langley

What is Supply Chain

Integration of Activities/PROCESS
Starts from Suppliers.Supplier
To Customers..Customer
Always focus on Customer

What is Supply Chain

Its Management of network of
interconnected businesses involved in
supply of Product or Service.
It starts from Procurement of Raw
Material, Work in Progress Inventory and
Transportation of Finished Goods from
point of origin to point of consumption.

APICS Definition of Supply Chain

Design, planning, execution, control, and
monitoring of supply chain activities with
the objective of creating net value, building
a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply
with demand and measuring performance
globally."

What is Supply Chain

An Effective SC ensures high level of
Customer Service at optimum level of
working capital & cost.
An Efficient SC that ensures products are on
the shelf, available for sale
..when shopper come to buy.

THE BASIC SUPPLY CHAIN

Manufacturing Plan & Control
BUSINESS PLAN
SALES & OPERATIONS PLAN
MASTER PRODUCTION SCHEDULE (MPS)

Material Requirement Plan (MRP)

Purchase

Production Activity Control (PAC)

Physical Supply
Material Mgt
Up-Stream
Customer
Inbound Logistics

Physical Distribution
Down-Stream Customer
Outbound Logistics

Product Flow
Cash Flow
Information

Tech Terms
Business Plan: Org goals of sale, reasons to attain and plan
E.g. Unilever

Sales & Operations Plan: Individual goals/targets for individual

products/SBU. E.g. Milk, yog, butter etc.

Master Production Schedule: What we have & what we want to

do based on order/demand.

Material Requirement Plan (MRP): What ingredients

/components we require for production.

Production Activity Control (PAC): Individual production

priority/order

Supply Chain Management:

Introduction
Supply chain management now part of the
business vocabulary.
Impact of global marketplace drastically
changed the landscape of business.
Change was rapid and continuous in the
1990s.
Doing business in the comfort zone was no
longer synonymous with success.
10

The Changing Business Landscape:

Five Driving Forces
The Empowered
Consumer
Power Shift in the Supply
Chain
Deregulation
Globalization
Technology
11

The Changing Business Landscape:

Five Driving Forces
The Empowered Consumer
Impact on logistics is more direct.
Informed consumers have low tolerance for
poor quality in products and services.
Changing demographics commands 24/7
service.
Increased customer service increases the
importance of logistics and supply chains.
12

The Changing Business Landscape:

Five Driving Forces
Power Shift in the Supply Chain
Large retailers more demanding and
commanding.
Focus upon distribution costs and their
impact on everyday low prices.
Changing logistics and supply chain
strategies resulted from shifts in the
balance of economic power.
13

The Changing Business Landscape:

Five Driving Forces
Deregulation
Changing economic controls empowered creativity
and competition.
Changes in transportation fewer or no economic
controls over rates and services.
Change in financial institutions blurred traditional
differences and increased competition.
Change in the communications industry also resulted
in more competition.
Changes in the utility industry allows more
competition.
14

The Changing Business Landscape:

Five Driving Forces
Globalization
Global marketplace concept
Global network sourcing, manufacturing,
marketing, Warehousing and distribution
Global alternatives have blossomed
No geography --- access available to the world
Supply chain challenges
McDonald challenges
15

The Changing Business Landscape:

Five Driving Forces
Technology
Information Age provides new and
unrestricted access to the place aspect of
business.
My time, my place
Warehouse technology has changed
dramatically with computer devices in use
from the office space to the forklifts.
16

The Changing Business Landscape:

The Supply Chain Concept
Development of the Concept
Total systems cost - remains an important element
of logistics analysis.
Outbound logistics - was the initial focus with
higher value finished goods.
Inbound logistics deregulation allowed new
focus on coordination of inbound and outbound
movements.
Value chain analysis integrated logistics activities.
Terminology growing as supply chain concept
matures.
17

Figure 1-1
A View of Business Logistics in a Firm

18

Figure 1-2
Integrated Logistics Management

19

Figure 1-3
Generic Value Chain

20

The Changing Business Landscape:

The Supply Chain Concept
Business Case for Supply Chain Management: Why so
much attention on supply chain management?
ECR and Best-in-class studies (see next two slides)
Complexity of the supply chain
Extended enterprise concept
Two-way flow of:
Products
Information
Cash
Inventory visibility
21

Figure 1-5: Comparison of Average Throughput

Time of Dry Grocery Chain before and after ECR
Implementation

22

Revenue %

Figure 1-6: Total Supply Chain

Management Cost --- All Sectors

23

Figure 1-7:
Integrated Supply Chain

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The Changing Business Landscape:

The Supply Chain Concept
Characteristics of Supply Chain Management
Inventory
Visibility
Pull systems
Landed Cost
Companies must realize that their strategies
may affect the landed cost.
Coordination of supply chain activities may
lower the landed cost.
25

The Changing Business Landscape:

The Supply Chain Concept
Characteristics of Supply Chain
Management
Real-time two way information flows
Customer service
levels must be tailored to each customer
not all customers require the same service

Supply chain relationships

Collaborative planning
Share risks and rewards
26