FLOW OF PRESENTATION

INTRODUCTION OF SCM SCM MYTH THE EVOLVING STRUCTURE OF SUPPLY CHAIN SUPPLY CHAIN PROCESS PARTICIPANTS IN SUPPLY CHAIN SCM STRUCTURE COMPONENTS OF SCM ADVANTAGES OF SCM PHARMACEUTICAL SCM - SANDOZ

WHAT IS SCM ?
Supply chain management is the coordination of production, inventory, location, and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served.

THE DEFINITION
The systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. from Mentzer, DeWitt, Deebler, Min, Nix, Smith, and Zacharia in their article Defining Supply Chain Management in the Journal of Business Logistics (Mentzer, John T.,William DeWitt, James S. Keebler, Soonhong Min, Nancy W. Nix, Carlo D. Smith, and Zach G. Zacharia, 2001, Defining Supply Chain Management, Journal of Business Logistics,Vol. 22, No. 2, p. 18)
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THE SCM MYTH

SCM same as Logistics

TWO major differences between Logistics & SCM:

LOGISTICS Activities that occur within the boundaries of a single organization SUPPLY CHAIN MANAGEMENT Networks of companies that work together and coordinate their actions to deliver a product to market Acknowledges all of traditional logistics + includes activities such as marketing, new product development, finance, and customer service
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Focuses on activities such as procurement, distribution, maintenance, and inventory management

THE EVOLVING STRUCTURE OF SUPPLY CHAINS

Old Supply Chains versus New : FORD motors (For eg.) in 1900 followed the Old Supply chain approach called the Vertically integrated supply chains. But as the markets grew and customers became more articular about the kind of products they wanted, this model began to break down Instead of vertical integration, companies now practice Virtual Integration. Companies find other companies who they can work with to perform the activities called for in their supply chains.
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DECISION MAKING IN SCM

PRODUCTION INVENTORY LOCATION TRANSPORTATION INFORMATION
RESPONSIVENESS V\S EFFICIENCY
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COMPONENTS OF SCM
Plan development, monitoring
Plan

Source suppliers Make produce, test, package, quality level, output

Return Source

Delivery product to customers, network with service providers

Return customers return

Delivery

Make

PARTICIPANTS IN THE SUPPLY CHAIN

A simple supply chain is composed of A company The Suppliers The Customers Extended SCM contains 3 more participants Suppliers supplier Customers customer Service Providers
Ultimate Supplier Producers
Suppliers Distributors A Company Customer Retailer Ultimate Customer Consumer
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SCM STRUCTURE

CHALLENGES
Reduced Cost Increases Efficiency

Distribution Strategy -Operating Control - Mode of transport

Inventory Management Cash Flow Information

Increases Output
Responsiveness to Demand

Optimized Stock Levels

Accurate Costing & Scheduling Quality Advantage

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PHARMACEUTICAL - SCM
DEPARTMENTS INVOLVED

PLANNING PURCHASE CUSTOMER SERVICE WAREHOUSING PACKAGING AND DEVELOPMENT LOGISTICS

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CUSTOMER SERVICE
Forecasting/demand planning New product launches

PLANNING
Forecast planning Material procurement planning Production planning Dispatch planning

PURCHASE
Purchase of raw materials and packaging material and expeicients Import clearance
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PACKAGING AND DEVELOPMENT

Blister pack Bottle pack( Plastic/Glass) Alualu pack Bulk pack

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WAREHOUSING

Receipts Issues Dispatches: Data logger, tyveck cover, Pallets Inventory management

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LOGISTICS
Customs clearance Excise clearance Octroi clearance Negotiations with airlines, transporters, freight forwarders,

VENDORMANAGEMENT INVENTORY
A means of optimizing Supply Chain performance in which the manufacturer is responsible for maintaining the distributors inventory levels. The manufacturer has access to the distributors inventory data and is responsible for generating purchase orders Under the typical business model: When a distributor needs product, they place an order against a manufacturer. The distributor is in total control of the timing and size of the order being placed. The distributor maintains the inventory plan. Vendor Managed Inventory model: The manufacturer receives electronic data that tells him the distributors sales and stock levels. The manufacturer can view every item that the distributor carriers as well as true point of sale data. The manufacturer is responsible for 16 creating and maintaining the inventory plan

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