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Agenda
1. Traditional SCM vs e-SCM 2. Inventory Management 3. Role of Inventory Management in SCM 4. Impact of e-SCM in Inventory Management 5. Methods for effective inventory Management. 6. Tools used for managing inventory 7. Case Study - Domino Pizza 8. Problems 9. Possible Solution 10.Conclusion 11.References
Supply chain management (SCM) is the process of coordinating and optimizing the flow of all products or service, information and finances among all players of the supply chain, from raw material provider to the end consumer. ESupply chain is a system which manage inventories based on electronic Web technologies using internet. Difference between SCM & e-SCMThe main difference between traditional and modern supply chain management approaches is in how the activities in the processes are interconnected.
http://www.jgbm.org/page/12%20Fu-Hung%20Chiu.pdf
Inventory Management
Inventory management is the process that identify the amount and the position of the goods that a firm used in their product
http://www.barcodesinc.com/articles/what-is-inventory-management.htm
Inventory management helps a business achieve several goals: satisfy demand but ensuring commensurate product availability and minimize costs by capitalizing on economies of scale
http://clarisseporto.wordpress.com/2012/02/15/the-relationship-between-inventory-management-and-supply-chainmanagement/
Components arrives as they are needed. Shorten Lead Times Integrate all supplier with SCM System Reduce holding cost Reduce wastage.
Inventory Planning Appropriate Forecasting Supplier Assistance Lead time should be appropriate Monitor inventory levels Inventory Management Systems (e.g ERP inventory Modules like Procure to Pay and Order to Cash)
http://smallbusiness.chron.com/top-ten-ways-manage-inventory-11099.html
Developed by Ford.W Harrison in 1913. It identify the order size. It minimize total ordering cost and holding cost. Underlying Assumptions:
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Ordering Cost is Constant. Rate of demand is known Lead time is fixed Only one product is involved.
Re-Order Point
It identifies a certain point when to order inventory. It help orgainsation to avoid running out of stock. Reorder point can be identify by two method
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Safety Stock
Additional Inventory to meet average demand during lead time. It protects companies from any uncertainty in demand and lead time. Balance the cost of stockout against the holding cost of extra inventory.
CASE STUDY
http://www.retailsolutionsonline.com/doc/supply-chain-management-helps-dominos-deliver-0002
Problems
Issues in maintaining stock. Issues of vendor Ordering. Orders requirement of Outlets. Not following a safety stock procedure. Expire product inventory Issues.
Possible Solutions
Implement a e-SCM system. Formulate Inventory System. Formulate Ordering System. Generate safety stock. Forecast requirement of inventory. Integrate store inventory system with sales.
Conclusion
Effective E-SCM techniques can play vital role in managing the business efficiently and it also provide opportunity to create better business relations with outside suppliers and departments within the organisation.
References:
EOQ: http://en.wikipedia.org/wiki/Economic_order_quantity Methods to manage: http://smallbusiness.chron.com/top-ten-ways-manage-inventory11099.html Reorder Point http://docs.oracle.com/cd/A60725_05/html/comnls/us/inv/roplan.htm http://en.wikipedia.org/wiki/Reorder_point Saftey Stock: http://accountingexplained.com/managerial/inventorymanagement/safety-stock http://www.businessdictionary.com/definition/safety-stock.html Case Study: http://www.retailsolutionsonline.com/doc/supply-chain-managementhelps-dominos-deliver-0002
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