SUPPLY CHAIN SUPPLY CHAIN MANAGEMENTMANAGEMENT

ENTERPRISE RESOURCE PLANNINGENTERPRISE RESOURCE PLANNING

Presented by:

Priti ChopraRahul ChoudharyRajeev SharanRajshree SoniSanya Singh

Supply Chain ManagementSupply Chain Management SCM spans

the design, planning, execution, control monitoring of supply activities with the objective of creating net

value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.

A SCM system provides real-time visibility into operations integrates these activities through improved supply chain relationships, to achieve a sustainable competitive advantage.

A Supply chain management module in ERP deals with the planning and execution issues involved in managing a supply chain. The components of SCM are:

Demand planning: (forecasting)

Demand collaboration: (collaborative resolution process to determine forecasts)

Order promising: (When can one promise a product to a customer taking account lead times and constraints)

Strategic network optimization: (what plants and DC's should serve what markets for what products) (monthly - yearly)

Production and distribution planning: (Coordinate the actual production and distribution plans for a whole enterprise) (daily)

Production scheduling: (For a single location create a feasible production schedule) (minute by minute)

Transportation planning: (For multiple supply, manufacturer, distributor and warehousing points in a network)

Transportation execution: (Enactment of long term plans on a per shipment basis, typically performed by focused organizations called forwarders)

Tracking and Measuring: (An ever increasing aspect of supply chain management designed to highlight potential against the planned and possible process improvements)

Plan of reduction of costs and management of the performance 

A supply chain module essentially has three main parts, the supply, manufacturing and distribution:

The supply side concentrates on how, where from and when raw materials are procured and supplied to manufacturing.

Manufacturing converts these raw materials to finished products and

Distribution  ensures that these finished products reach the final customers through a network of distributors, warehouses and retailers(Retailer Definition).

The chain can be said to start with the suppliers of suppliers and ends with the customers of customer.

Supply Chain Illustration

KEY ELEMENTS : SCM MODULE IN ERP. KEY ELEMENTS : SCM MODULE IN ERP.

1. Supply Chain Planning: The determination of a set of policies and procedures that govern the operation of supply chain. Planning includes the determination of marketing channels, promotions, respective quantities and timing, stock and replenishment policies and production policies.

2. Supply Chain Execution: Execution-oriented software applications for effective procurement and supply of goods and services across a supply chain. It includes manufacturing warehouse and transportation execution systems, and systems providing visibility across the supply chain.

KEY ELEMENTS : SCM MODULE IN ERP. KEY ELEMENTS : SCM MODULE IN ERP.

3. Supply Chain Monitoring: The ability to review supply chain activities in real time, whether to identify the current status of individual activities or review overall performance.

4. Supply Chain Measurement: Measurement is comparison of the actual activity against targets. This is often used with scorecards of benchmarks so that unusual or undesirable variances can be identified and investigated.

Internal Supply Chain - Internal Supply Chain - Linear Flows Along the ProcessLinear Flows Along the Process

Key:Key: Information, Funds, KnowledgeInformation processingMaterial processing

Procurement Planning

Receive Make/Convert SCM ERP Distribute

Deliver

OrderMgt.

Requirements

Capabilities

Invoice

Payment

Requirements

Capabilities

Invoice

Delivery

To Suppliers To Customers

External Supply Chain - External Supply Chain - Flows Across NetworkFlows Across Network

MfgERP

Customer

Raw Mat’lSupplier

SCM-ERP

Raw Mat’lSupplier

Raw Mat’lSupplier Component

Mfg

ComponentMfg

SCM-ERP

Distr.Retailer

Distr.Retailer

...and back through Reverse Logistics

SCM:SUCCESSFUL IMPLEMENTATION CHECK-LIST

1. A clearly defined process-flow chart of the organization specifying who the owners in each functional area.

2. Commitment to the project from management to ensure the rest of the organization, and especially users, will make this happen.

3. An understanding of the financial aspect and expected ROI for the project.

4. A good understanding of what resources are required, in terms of infrastructure, to see the project through.

MODULES : SCM,SCP & SCE MODULES : SCM,SCP & SCE SCM :

links suppliers to databases that show forecasts, current inventory, shipping, or logistics timeframes within the customer organization.

By giving those suppliers such access, they can better meet their customers’ demands.

For example, the supplier can adjust shipping to ensure that their customers have the inventory necessary to meet their customers’ needs. Suppliers can download forecasts into their own manufacturing systems to automate their internal processes as well.

SCP(supply chain planning ) is the software that produces the numbers for production, inventory, etc. based on input about customer sales and forecasts.

SCE (supply chain execution)is the automated process that deals primarily with routing pieces of information to the appropriate systems, departments, and vendors.

It all goes back to that interface into the data warehouse. That data, mined effectively, can produce information and knowledge to streamline the organization.

MODULES : SCM,SCP & SCE MODULES : SCM,SCP & SCE

ERP-SCM : Function IntegrationERP-SCM : Function Integration

ERP applications help in the effective SCMERP applications help in the effective SCMin the following ways……….

Share data:

They can create opportunities to share data across supply chain members, which can help managers in making better decisions.

They also provide wider scope to managers of the supply chain by making available much broader information .

Real-time information:

ERP systems can provide real-time information, which can be of great help in supply chain decisions.

For example ordering raw materials can be based on the inventory details provided by the ERP systems.

Supply Chain Management in Supply Chain Management in Apparel IndustryApparel Industry

Procurement channels in the Clothing Procurement channels in the Clothing Retail SectorRetail Sector

Manufacturing their own products: The clothing is produced in factories

owned by the retailers themselves.

Sub-contracting: Retailers forward designs and cuts to contracting

manufacturers to produce the clothing on the retailers´ behalf.

Finished product purchase: Finished products designed and produced by

manufacturers will be purchased directly at the manufacturer or through

wholesalers or buying syndicates.

More flexibility in buying-‘non-replenishment’ approach-Zara, Esprit,

and Mango

Business models in the Clothing SectorBusiness models in the Clothing Sector

► There are six main types of business models:

Independent multi-brand stores

Specialised Chains: These vertically integrated chains can be split in the

following three categories depending on their business strategies:

a) Private Label - H&M, C&A, and Zara

b) Mono Brand fashion - Benetton, Esprit, and Lacoste

c) Category killers – Palmers

Business models in the Clothing SectorBusiness models in the Clothing Sector

Department Stores- Shoppers’ Stop

Hyper and supermarkets- M.K.Retail

Traditional manufacturers - Gardeur AG

Other distribution channels - factory outlets and mail order companies

including sub-channels like catalogue, e-commerce (internet), and TV sales

Changing Environment & the Retail Changing Environment & the Retail Market Market

More and more retailers adopt the emerging non replenishment

approach.

More competition exists through emerging distribution channels like e-

commerce, factory outlets, and discounters.

Cost pressure is caused by declining prices and emerging distribution

channels.

Costumers are better informed and expect more service.

Changing Environment & the Retail Changing Environment & the Retail Market Market

Thus retailers:

Increase imports from low cost countries, especially global procurement for basic and low cost fashion.

Offer more collections in a year to satisfy customer demands and expectations. Decrease the product life cycle of clothing and increase the number of

collections. Improve logistic processes to be more flexible as these collections are usually

produced in smaller batch sizes.

The high-priority objectives are the reduction of costs, increase of sales, and the improvement of customer service. An efficient use of new technologies, and especially EPC/RFID.

Clothing Supply ChainClothing Supply Chain

Clothing Supply ChainClothing Supply Chain1. From the clothing manufacturer to the distribution center

2. Direct store delivery (DSD)

3. Distribution Centre

a) Receiving area

b) Reconditioning processes

c) Cross Docking processes

d) Warehousing of clothing

e) Outgoing area

4. Retail store – back store

5. Sales floor

6. Store-to-store transfers

7. Point of sale (POS)

Clothing Supply ChainClothing Supply Chain

► Return logistics in the Clothing Supply Chain apply when: Customers return clothing because of complaints Companies start product recalls, or

Items could not be sold on the sales floor.

Clothing Supply ChainClothing Supply Chain

8. Costumer Returns in Store

9. Backstore

10. Distribution Center

11. Manufacturer

Consequences of weaknesses in the supply chainConsequences of weaknesses in the supply chain

EPC/RFID opportunities in SCMEPC/RFID opportunities in SCM

Radio frequency identification is a technology that could provide more

opportunities and application areas than other Auto-ID technologies. The main

advantages are:

The high reliability of the technology, also in extreme environmental

conditions such as heat or cold.

The non required line of sight between tag and reader.

The possibility to read or write multiple tags at the same time (bulk readings).

The increase of automation in data capture, which will lead to higher

efficiency

Expected RFID benefitsExpected RFID benefits

RFID Capabilities

RFID Capabilities (cont.)

Supply Chain for Denim

Jeans

Supply Chain for Denim

Jeans (cont.)

Source: Adapted from Garrison Wieland for “Wal-Mart’s Supply Chain,” Harvard Business Review 70(2; March–April 1992), pp. 60–71.

Relationship between Facilities and Functions along the Wal-Mart Supply Chain

Amazon.com

A Warehouse Management

System

SCM SoftwareSCM Software

Enterprise Resource Planning (ERP)

software that integrates components of a company by sharing and

organizing information and data

SAP was first ERP software

mySAP.com

web enabled modules that allow collaboration between companies

along the supply chain

Linking Supply Chain with SAPLinking Supply Chain with SAP

Measuring Supply Chain PerformanceMeasuring Supply Chain Performance

► Key performance indicators

Inventory turnover

cost of annual sales per inventory unit

Inventory days of supply

total value of all items being held in inventory

Fill rate

fraction of orders filled by a distribution center within a specific

time period

Key Performance IndicatorsKey Performance Indicators

Inventory turns Inventory turns ==Average aggregate value of inventoryAverage aggregate value of inventory

Cost of goods soldCost of goods sold

Average aggregate value of inventory Average aggregate value of inventory ==

==(average inventory for item (average inventory for item ii)) X (unit value item X (unit value item ii))

Days of supply Days of supply ==(Costs of goods sold)/(365 days)(Costs of goods sold)/(365 days)

Average aggregate value of inventoryAverage aggregate value of inventory

For Branding & Distribution 100% Web Enabled Application Centralised Data Server FIT : FINISH IN TIME

A perfect enterprise solution for Apparel Business

“FIT-SCM”

Key Features of “FIT-SCM” Style & Album Generation with Grouping features Catalogue launching and closing functionalities for distributors On-line booking and indenting of orders to the sales office Faster & Quicker access to all orders and status from all parts

of the country Price List creation & Territory based tax setup Digital On-line catalogue for Dealers & Distributors Daily production inward data synchronization from FIT-SCM

Detailed ware house management on web Exclusive tracking on all products in stock across the network Automated dispatches based on user priorities and in FIFO methods Sales Invoicing and Scheme Billing for both Distributors and On-line claim vouchers for executives and dealers towards

expenditure Budget VS Expenditure with expense group heads for territory and

distributors. Automated overhead allotment to territories for territory costing and

analysis.

Key Features of “FIT-SCM”

All branding quotations, approvals, supplier invoices, payments through system

Statement of Receivables and Payables with provision for Debit / Credit Notes and customer claims.

Instant messaging system for the nation wide network of executives, dealers and employees.

A fully loaded web-enabled query reporting system for the entire modules of “FIT-SCM

Executives targets and actual updates on monthly basis Branding Kits inventory management across the nationwide network

Key Features of “FIT-SCM”

Various functionalities of “FIT-Various functionalities of “FIT-SCM”SCM”

Executives targets and actual updates on monthly basis Branding kits inventory management Basic functionalities of unique digital cataloguing, Order on web, Customer relation including status updates, Sales monitoring, Employee reporting, Automated FIFO based despatch, Invoicing, Complete branding functions Territory based costing Overhead monitoring functionalities e.t.c.

E-SMARTX

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