Supply Chain Management

SCM - 306

LSM-306 Supply Chain Management

Master of Business Administration (Logistics & Supply Chain Management)

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

I N U

I T

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

What is SC and SCM ?

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Supply Chain (SC)

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
3

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

What is SC and SCM ?

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Contd..

Supply Chain Management (SCM) . is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores So that merchandise is produced and distributed
4

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

What is SC and SCM ?

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Contd..

. 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.

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Why need ?
LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

What makes Supply Chain and what we manage

a way to link and balance the Supply Demand

Cost effective
Supply Demand

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Evolution of Supply Chain Management

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering
Further Refinement of SCM Capabilities

SCM Formation/ Extensions JIT, TQM, BPR, Alliances Inventory Management/Cost Optimization Traditional Mass Manufacturing

1950s

1960s

1970s

1980s

1990s

2000s

Beyond
7

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Importance of SCM understood by some

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

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

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
The Supply Chain Council
8

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Importance of SCM understood by some

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

AMR Research

"The biggest issue enterprises face today is intelligent visibility of their supply chains both upstream and down" "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 " " 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 "

Forrester Research

Gartner Group

Open ended statement, Agility can be increased continuously.

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

SCM Definition
LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Material Flow

Supplier Source Supplier

Converter Converter

Distributor

Retailer

Consumers Distributor End-User

Value-Added Services Funds/Demand Flow Information Flow Reuse/Maintenance/After Sales Service Flow
10

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Supply Chain Network (SCN)

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

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 also an objective function for SCN

11

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Supply Chain Management Network

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

12

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

SCM - Network Perspective

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Suppliers

Manufacturers

Distributors

Retailers

R Supplier Supplier Supplier Distributor R R Plant R Distributor R R

c u s t o m e r s

13

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Supply Chain Network Flows

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Real-Time Access to SCM Information is Critical to Maintain Cost-Efficient Operations

14

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Current Supply Chains are Networks

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

15

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Components of SCM
LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Supplier Network or Supply Chain Enterprise Distribution Network Customers

16

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Components of SCM (2)

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

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 to the final customers.

17

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

SCM - Flows Perspective

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

18

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Supply Chain stages

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Supplier

Manufacturer

Distriubtor

Retailer

Customer

Raw Material Manufacture

Component Manufacture

Component Distribution

Sub Contractor Manufacture

OEM Producer

19

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

SCM Stages perspective

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

20

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Key Issues in Supply Chain Management

Supply Chain Development Chain
LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

21

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Key Issues in Supply Chain Management

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Chain Distribution Network Configuration Inventory Control Production Sourcing Supply Contracts Distribution Strategies Supply Supply Supply Both Supply Development Development Development Supply Both Supply

Global Optimization Y

Managing Risk and Uncertainty Y

Strategic Partnering
Outsourcing and Off shoring Product Design Information Technology Customer Value Smart Pricing

Y Y Y Y Y Y Y Y

Y Y

Y Y Y

22

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Li & Fung Limited

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering
er um s on ds ee n er um s n Co uc od r P

ign es D t t en m lop ve e D ce an i l mp Co

t uc d o Pr

r ile eta r ale

or nd e V

les ho

ial ter a m g w Ra urcin So

g din r a rw n Fo atio l ca lid Lo nso co

ry cto g Fa urcin so

s tom nce s Cu ara cle

r n de ar datio w r li Fo nso o c

ing ipp l h S tro con

ing tur c fa nu l Ma ntro Co

23

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Supply Chain Processes & Functions (2)

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

Globally Dispersed Manufacturing

An Illustration: How Li & Fung Limited Might Make a Dress Product ProductDesign Design [Hong [HongKong] Kong] QC QC& &Shipping Shipping [Hong [HongKong] Kong]

Yarn YarnSpinning Spinning [Korea] [Korea]

Weaving Weaving [Taiwan] [Taiwan] Zippers+ Zippers+ [Japan+ ]] [Japan+

Stitching Stitching [Indonesia] [Indonesia]

24

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

Supply Chain Processes & Functions

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

25

GITAM INSTITUTE OF INTERNATIONAL BUSINESS

Professor Dr. P.R.S SARMA M.B.A & Ph.D. - IITD

LSM-306 Supply Chain Management 623.925- Logistics Systems Engineering

26