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What is Supply chain?

Supplier Manufacture r Distributor Retailer Customer

Consists of all parties involved, directly or indirectly, in fulfilling a customer request, include not only manufacturers & suppliers, but also transporters, warehouses, retailers & even customers.

Supply Chain Processes

Example

Supply Chain Management (SCM)

Supply chain management involves planning, design,& control of flow of material, information and finance along the supply chain to deliver superior value to the end customer in an effective & efficient manner Keys to effective SCM

information communication cooperation

Objective of Supply Chain


Objective should be to maximize the overall value generated. The value a supply chain generates is the difference between what the final product is worth to the customer and the costs the supply chain incurs in filling the customers request Reduced inventory, reduced lead times, reduced warehouse costs, helps in forecast accuracy.

Contd..

Objective is to be able to have the right products in the right quantities (at the right place) at the right moment at minimal cost.

SUPPLY CHAIN ELEMENTS


Strategic

Supply Chain Design Resource Acquisition Long Term Planning (1 Year ++)
Production/ Distribution Planning Resource Allocation Medium Term Planning (Qtrly,Monthly)

Tactical

Operational

Shipment Scheduling Resource Scheduling Short Term Planning (Weekly,Daily)

Supply Chain Goals

Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on

Revenue growth Better asset utilization Cost reduction.

Well . . . . Is This Logistics ?

Actually . . . . . This Is Logistics

Logistics
Science of managing (controlling) the movement and storage of goods (or people) from acquisition to consumption.
Goods: Raw Materials to Final products, and

everything in between.
Movement = Transportation (between locations).
Storage

= Inventory, Warehousing (at locations).

Logistics Mission

Logistics embodies the effort to deliver:

the right product in the right quantity in the right condition to the right place at the right time for the right customer at the right cost

Logistics Functions
The major logistics functions are:
1. 2. 3.

4.
5. 6. 7.

Order processing Inventory management Warehousing Transportation Material handling & storage system Logistical Packaging Information

Objectives of Logistics Management


The objective of Logistics management are: 1. Inventory reduction 2. Reliable and consistent delivery performance 3. Freight economy 4. Minimum product damages 5. Quick response

Difference between logistics and SCM

The major difference between the concept of logistic management and supply chain management is the level of information gathered, processes, analyzed and used for decision making
If we exclude this information part out of

supply chain model then we can see the logistic management part of the business.

Conclusion
Logistics typically refers to activities that occur within the boundaries of a single organization and supply chain refers to networks of companies that work together and coordinate their actions to deliver a product to market. Logistics focuses its attention on activities such as procurement, distribution, maintenance & inventory management. Supply chain management acknowledges all of traditional logistics and also includes activities such as marketing, new product development, finance and customer services.