SUPPLY CHAIN MANAGEMENT

 NAME-DIKSHA PATIAL
 CLASS-MBA(4sem)
 ROLL-NO-1710
 SUBMITTED TO- Mr.
Sachin Sharma
MEANING OF SUPPLY CHAIN MANAGEMENT

Supply chain management is the management of the flow of

goods and services and includes all processes that transform
raw materials into final products. It involves the active
streamlining of a business's supply-side activities to maximize
customer value and gain a competitive advantage in the
marketplace. SCM represents an effort by suppliers to
develop and implement supply chains that are as efficient and
economical as possible. Supply chains cover everything from
production to product development to the information systems
needed to direct these undertakings.
The concept of Supply Chain Management
(SCM) is based on two core ideas:

 The first is that practically every product that reaches an

end user represents the cumulative effort of multiple
organizations. These organizations are referred to
collectively as the supply chain.
 The second idea is that while supply chains have existed
for a long time, most organizations have only paid
attention to what was happening within their “four walls.”
Few businesses understood, much less managed, the entire
chain of activities that ultimately delivered products to the
final customer. The result was disjointed and often
ineffective supply chains.
OBJECTIVE OF SUPPLY CHAIN MANAGEMENT

 1. Solving supplier’s problems and beyond his level.

 2. Customer service performance improvement.
 3. Reduction of pre & post production inventory.
 4. Minimizing variance by means of activities like
standardization, variety reduction, etc.
 5. Minimum total cost of operation & procurement.
 6. Product Quantity control.
 7. Achieving maximum efficiency in using labour, capital
& plant through the company.
 8. Flexible planning and control procedures
 ESSENTIAL FEATURES OF SUPPLY CHAIN
MANAGEMENT

 Inventory management- For a smooth, efficient supply chain, your

business must effectively manage inventory. Raw materials and
supplies, finished goods and spare or additional parts must be stored
properly, in the right quantities at the right time.

 Order and billing management-It’s no secret that robust order and

billing management is of the utmost concern to your supply chain. Your
SCM software solution should be able to create orders and bill clients
from one centralized location, all from within the solution.
 Value flow- A supply chain has a series of value creating
processes spanning over entire chain in order to provide added
value to the in small lots.
 Supplier collaboration -The right supplier collaboration tools
can make for a very smooth supply chain. These tools allow
suppliers, employees and customers to collaborate from
disparate locations in real time, ensuring that every key player
is involved in problems or issues as they occur.
Various flows of supply chain management

 Information flow- Information/data flow comprises the

request for quotation, purchase order, monthly schedules,
engineering change requests, quality complaints and reports
on supplier performance from customer side to the supplier.
From the producer’s side to the consumer’s side, the information
flow consists of the presentation of the company, offer,
confirmation of purchase order, reports on action taken on
deviation, dispatch details, report on inventory, invoices, etc.
 Value flow- A supply chain has a series of value creating
processes spanning over entire chain in order to provide added
value to the end consumer. At each stage there are physical
flows relating to production, distribution; while at each stage,
there is some addition of value to the products or services. Even
at retailer stage though the product doesn’t get transformed or
altered, he is providing value added services like making the
product available at convenient place in small lots
 Cash flow-On the basis of the invoice raised by the producer,
the clients examine the order for correctness. If the claims are
correct, money flows from the clients to the respective producer.
Flow of money is also observed from the producer side to the
clients in the form of debit notes.
Key Issues of Supply Chain Management

 Globalization-First, to reduce costs across the supply chain,

enterprises are moving manufacturing operations to countries
which offer lower labor costs, lower taxes, and/or lower costs
of transport for raw materials.
Second, as companies expand sales into global markets,
localization of existing products requires a significant change in
the supply chain as companies adapt their products to different
cultures and preferences. There is an inherent risk of losing
control, visibility, and proper management over inventory ,
especially if enterprise applications are not integrated. This
requires managing diverse structures of data across
geographies effectively. ral countries for different parts of
their products.
 Fast-changing Markets- According to EduCBA, consumer
behavior is affected by cultural, social, personal, and
psychological factors that are quickly being changed by
technology and globalization. Social media is creating new
pressures for consumers to conform while putting pressure on
enterprises to utilize these sources of information to respond to
changing preferences in order to stay interesting and relevant.
Finally, innovation presents a challenge in forecasting demand
for new products. The constant innovation necessitated by fast-
changing markets also means enterprises will constantly have to
anticipate demand for new products. Enterprises need to create
and maintain an agile supply chain that can respond well to
spikes and dips in demand and production needs.
 Quality and Compliance- Aside from influencing consumer
behavior, social media highlights the importance of having
high-quality products. According to research conducted by
eMarketer, reading reviews, comments, and feedback is the top
social media activity that influences online shopping behavior.
Furthermore, social media has not only raised consumers’
expectations of product quality, but has also amplified the
damages caused by product recalls. Thus, enterprises are under
increasing pressure to create high-quality products and to
create them consistently. They can do so by addressing quality
at every level of the supply chain, such as raw materials
procurement, manufacturing, packaging, logistics, and product
handling.
Benefits of Supply Chain Mangement

 1. Higher Efficiency Rate: When your business is able to

incorporate supply chains, integrated logistics, and product
innovation strategies, you'll be in a great position to not only
predict demand as well as to act accordingly. And this is,
without any doubt, one of the main supply chain management
benefits.
 2. Increases Output: One of the main benefits of supply chain
management is the communication improvement. This adds up
to the coordination and collaboration with shipping and
transport companies, vendors, and suppliers.
 3. Increases Your Business Profit Level: When you place your
business open to the new technologies and an improved collaboration
within the different areas, you can be sure that this will ultimately
increase your business profit level.
 4. Boost Cooperation Level: When we're talking about the most
successful businesses right now, one of the things they all have in
common is the communication. In fact, when there is a lack of
communication, your vendors and distributors have no idea about
what's going on. So, this is definitely one of the main advantages of
supply chain management. Plus, when you also open your doors and
embrace technology, you can also take advantage of the fact that
people don't even need to share the same space in order to be a
true communication.
 5. No More Delays In Processes: One of the main benefits of supply
chain management is the fact that through communication, you can
actually lower any delays in processes. Since everyone is aware of
what they're doing as well as what others are doing, this will mitigate
any late shipments from vendors, logistical errors in distribution
channels, and hold-ups on production lines.
 6. Enhanced Supply Chain Network: It's not easy to maintain a
sustainable supply chain management system. According to some of
its advocators, one of the best ways to do it is by using a combination
of lean practices (like waste removal, for example) with agile. By
combining all the information gathered on the different sectors of
your business will allow you to have an enhanced supply chain
network.