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Operations as a
Transformation Process
INPUT
Material
Machines
Labor
Management
Capital
TRANSFORMATION
PROCESS
OUTPUT
Goods
Services
Feedback & Requirements
LSM-306 Supply Chain Management
Evolution of Operations and Supply
Chain Management
Craft production
process of handcrafting products or services for
individual customers
Division of labor
dividing a job into a series of small tasks each
performed by a different worker
Interchangeable parts
standardization of parts initially as replacement parts;
enabled mass production
Evolution of Operations and
Supply Chain Management
Scientific management
systematic analysis of work methods
Mass production
high-volume production of a standardized product for
a mass market
Lean production
adaptation of mass production that prizes quality and
flexibility
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What is SC and SCM ?
What is SC and SCM ?
Contd..
Supply Chain (SC)
Supply Chain Management (SCM)
.
Flow of products and services from:
Raw materials, Intermediate products,
End product manufacturers,
Wholesalers and distributors and also
Retailers
Connected by transportation and
storage activities
Integrated through information,
planning, and integration activities
Cost and service levels
What is SC and SCM ?
. at the right quantities, to the right
locations, and at the right time
in order to minimize system wide
costs while satisfying service level
requirements.
is a set of approaches utilized to
efficiently integrate suppliers,
manufacturers, warehouses, and
stores
So that merchandise is produced and
distributed
Contd..
Why need ?
What makes Supply Chain
and what we manage
a way to link and
balance the Supply
Demand
Cost effective
Supply
Demand
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Evolution of Supply Chain Management
Further Refinement of
SCM Capabilities
Importance of SCM understood by
some
The design and management of seamless, value-added
process across organizational boundaries to meet the real
needs of the end customer..
Institute for Supply Management
SCM Formation/
Extensions
JIT, TQM, BPR,
Alliances
Managing supply and demand, sourcing raw materials and
parts, manufacturing and assembly, warehousing and
inventory tracking, order entry and order management,
distribution across all channels, and delivery to the
customer
Inventory Management/Cost
Optimization
Traditional Mass Manufacturing
1950s
1960s
1970s
1980s
1990s
2000s
Beyond
Importance of SCM understood by
some
AMR Research
"The biggest issue enterprises face today is
intelligent visibility of their supply chains
both upstream and down"
Forrester Research
"Companies need to sense and proactively
respond to unanticipated variations in supply
and demand by adopting emerging
technologies such as intelligent agents. To
boost their operational agility, firms need to
transform their static supply chains into
adaptive supply networks "
The Supply Chain Council
Importance of SCM understood by
some
Gartner Group
" By 2004. 90% of enterprises that fail to apply
supply-chain management technology and
processes to increase their agility will lose
their status as preferred suppliers "
Open ended statement, Agility can be increased
continuously.
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Supply Chain Network (SCN)
SCM Definition
Material Flow
Supplier
Source
Converter
Distributor
Retailer
Distributor
End-User
Converter
Supplier
Consumers
Value-Added Services
Funds/Demand Flow
The system of organizations, people,
technology, activities, information and resources
involved in moving a product or service from
supplier to customer.
Transform natural resources, raw materials and
components into a finished product that is
delivered to the end customer.
Just-in time , cost effective
Resilience is an objective function for SCN
Information Flow
Reuse/Maintenance/After Sales Service Flow
Supply Chain Management Network
SCM - Network Perspective
Suppliers
Manufacturers Distributors
Retailers
R
Distributor
Supplier
Supplier
R
R
Plant
R
Supplier
Distributor
R
R
c
u
s
t
o
m
e
r
s
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Supply Chain Network Flows
Current Supply Chains are Networks
Real-Time Access to SCM Information is Critical to Maintain CostEfficient Operations
Components of SCM
The major components to the SCM are
Supplier Network or Supply Chain
Enterprise
Distribution Network
Customers
Components of SCM (2)
Upstream Supply Chain
Organizations first tier suppliers & their
suppliers.
Internal Supply Chain
Processes used by an organization to
transform their inputs to outputs.
Downstream Supply Chain
Processes involved in delivering the
product/service to the final customers.
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SCM - Flows Perspective
Supply Chain stages
Supplier
Raw Material
Manufacture
SCM Stages perspective
Manufacturer
Component
Manufacture
Distriubtor
Component
Distribution
Retailer
Customer
Sub Contractor
Manufacture
OEM
Producer
Key Issues in Supply Chain
Management
Supply Chain Development Chain
1/30/2015
Key Issues in Supply Chain
Management
Supply Chain Processes & Functions
Material Requirement Planning
Chain
Distribution Network Configuration
Inventory Control
Production Sourcing
Supply Contracts
Distribution Strategies
Strategic Partnering
Outsourcing and Off shoring
Product Design
Information Technology
Customer Value
Smart Pricing
Supply
Supply
Supply
Both
Supply
Development
Development
Development
Supply
Both
Supply
Global Optimization
Managing Risk and
Uncertainty
Component
Requirement
Demand Forecasting
Demand Planning
Production
Plan
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Supplier
Plant
Warehouse
Logistics
Retailer
Order Management
Supply Chain Processes & Functions
Examples of supply chain
Li & Fung SUPPLY CHAIN
