Integrated Supply Chain Management & Its Barriers

Dhirajkumar Gite A 15 Rohan Powale A 63 Siddhesh Shetye B 58

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What is ISCM
An Integrated Supply Chain (ISC) is one that has full

responsibility across the corporation (including different divisions, business units and geographies) for the planning and management of all activities involved in end to end-supply chain processes, including direct sourcing and procurement, conversion/ manufacturing, and all logistics management activities.

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Integrated Supply Chain

Vendor

Retailer

Integrat ed Supply chain

Procurement

Distribution

Manufacture

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Why ISCM ?
1.Manufacturers goals
Reduce cost Reduce duplication of efforts

Reduce lead time

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Contd
Implement cost reduction program

Involve suppliers early

Reduce time to market

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Contd
2.Suppliers goals
Reduce cost Increase sales volume

Increase customer loyalty

Improve profitability

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How ISCM is developed ?

Developing an integrated supply chain strategyPhase I: Competitive Environment Evaluation
The first step is to look outward. The objective is to develop and document the

characteristics of the market place. The process used to evaluate market characteristics involves looking at and surveying vendors, customers and competitors.
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Contd
Phase II: Supply Chain Diagnostic Review
The focus is to review the supply chain operations

and to identify those areas which offer potential for improvement.

The objective is to develop a realistic method of

allocating overhead costs to products, markets and activities.

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Contd
Phase III: Supply Chain Development
Development of a supply chain strategy and tactical

plan for implementing that strategy.

The objective here is to develop a strategy for the

company, based on the work done in the first two phases which is consistent with customer desires, management focus, market characteristics and the realities of the organisation.

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Supply Chain Department

Managing Director

Supply chain Manager

Sales Manager

Production Manager

Financial Manager

Integrated Supply Chain Management Department

Planning

Marketing

Transportation

Storage

Logistic Control

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Contd
Postponement Channel assembly Drop shipping and special packaging Blanket orders Standardization Electronic ordering and funds transfer

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Integrated Supply Chain Framework

Integrated supply chain dived into two internal

and external Internal : Deals with material, inventory and warehouse management External : Resource flow from supplier to manufacturer and later to customer Information flow from customer to manufacturer to supplier
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Internal integration across supply chain

Degree of Coordination between internal functions of

trading partners in supply chain

Captures organization functions such as incoming raw

material production and shipping

Requires full system visibility both inbound and

outbound
Organizations investment towards enhancing its IT

and systems

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Companies Integration with customer

Degree of Coordination between manufacturing firm

and downstream customers

Involves all activities which include determining

customer needs and fulfilling them

Understanding customers and building strong linkage

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Companies Integration with supplier

Degree of Coordination with manufacturing firm and

upstream customers
Involves activities long term commitment and close

relationship between firms and its suppliers

It takes place through effective organization

communication and mutual trust

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Supply Chain Agents

Chain of activities involving ordering and receiving

raw material manufacturing and distribution and customer delivery

Integrated supply chain requires coordination with

customer and supplier

This coordination is achieved through cooperating

agents each performs one or more function and coordinates decision with other agents

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Contd
Agent responsible for set of functions in supply chain

who stores information locally and can access from network

Agents exists within EIA which provides distributed

information environment

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Types Of Agent
Integrated Supply chain consists of two cooperating agents each performs different functions and decisions are coordinated between two
Functional agents: Plans and controls activity in

supply chain Information agents: Supports supply chain by providing communication service

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Functional agents Order acquisition agent: Acquiring orders from customers, negotiating prices Handling customer request for order modification and cancellation
Logistic agent: Coordinates with multiple supplier and distribution centre Manages movement of product across supply chain from supplier to customer

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Transportation agent: Assignment and scheduling of transportation specified with logistic agent Scheduling agent: Takes care of scheduling activities in factory Assigns resources and start time to resources that are feasible

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Resource agent It merges functions of inventory management and purchasing Manages availability of resources so that schedule can be executed Selects suppliers with minimum cost and fast delivery

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Dispatch agent They release order and are real time floor control Coordinates with schedule agent if any change in schedule
Information agents EIA provides communication and information service to information agents It checks and maintains consistency of information It allows automatic distribution of information to these agents

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Supply Chain Agents

Order Acquisition

Dispatch

Logistic

Informatio n Agent
Resourse Scheduling

Transport

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Supply Chain Model

Employe es Trust
Response

Preference

Orders and material

Visibility Collaboratio n Market size

Supplier
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Company

Market

Customer
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ISCM Significance

The significance of this development embodies a

change of focus; away from being product-orientated to being customer-orientated, penetrating deep into the customer organization to understand the products, culture, market and organization.
This should ensure that the company is attuned to the

customer's needs and requirements.

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Opportunities in an Integrated Supply Chain

Accurate pull data Lot size reduction

Single stage control of replenishment

Vendor managed inventory

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Barriers to ISCM
Silo mentality Lack of supply chain visibility Lack of trust Lack of knowledge

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 Activities causing bullwhip effect

Demand updating
Order batching Price fluctuations Rationing and shortage gaming

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