Supply Chain Management UNIT 1

8/8/2019 Supply Chain Management UNIT 1

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Logistic and supply chain

management

Syllabus:

Unit: 1 Introduction to supply chain Mgt. The development chain-key issues in supply chain Introduction to logistic value proposition Procurement and outsourcing strategies Outsourcing benefit and risk A framework for buy and make decisions Procurement strategies Supply contracts-strategies components Distribution strategies, direct shipment distribution Intermediate Inventory storage point strategies


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management

Syllabus:

Unit: 2 Inventory functionality & management Planning and managing inventory Managing uncertainty Inventory management policies & practices Transportation infrastructure & operation

Transport functionality Principal and participants transportation infrastructure Transportation service Strategic warehousing Warehouse decision Packaging for material handling efficiency material handling


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management

Syllabus:

Unit: 3 Supply chain integration Push-pull and push-pull system The impact of lead time-demand driven strategies Strategic alliance under supply chain frame work Third party logistics Retailer supplier partnerships- distributor integration Coordinated product and supply chain design Design for logistics supplier Integration into new product development-mass customization


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management

Syllabus:

Unit: 4 The value of information Information sharing and incentives Information for the coordination of the system Locating desired products Lead time reduction

IT & business process Goals of supply chain IT Supply chain system components Supply chain management technology standardsInformation technology infrastructure RFID Technology


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managementSyllabus:

Unit: 5 Local issue in supply chain management

Supply chain issues during natural disaster

and other calamities Supply chain issues for SMEs

Reverse logistics


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management

Suggested readings

David simchi-levi, philip kaminsky levy ravi Tata Mcgraw hilldesigning and managing the supply chain concept, strategies andcase studiesDonald J Bowersox , David j closs ,M Bixby Supply chainlogistic management Tata Mcgraw

JF Shapiro , modeling the supply chain, duxburySunil chopra Supply chain management Prentice hallRaghuram G & N Rangaraj , logistic and supply chainmanagement Mcmillan


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Men of wisdom lives in happinesswhile

Ordinary man live in search ofhappiness


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management

What is supply chain ?

Example:


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Stages of a detergent supply chain

Timber

company

Paper

Manufacturer

Chemical

manufacturer

Plastic

producer

Tenneco

packaging

P&G or

other

Wal mart or

third party DC

Wal mart

store Customer


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The difference between Logistics and

supply chain

Logistics

includes physical distribution, warehousing, freight transportation

(inbound and outbound from manufacturing plants and in some

industries customer service (sales order processing, inventory

planning and production planning.

Supply chain

(for a manufacturer)includes the logistics business functions above,

and also includes purchasing, sourcing,procurement, buying,

manufacturing operations,production scheduling and inventory

control and materials management, facilities location planning, theinformation technology to coordinate between suppliers, the company,

and customers (wholesalers and retailers and end users.


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Supply chain stages

Supplier Manufacturer Retailer

Supplier

Supplier

Manufacturer

Manufacturer

Distributor

Distributor

Distributor

Retailer

Retailer

Customer

Customer

Customer


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The stages of supply chain

A Typical supply chain may include thefollowing stages:

Customers

Retailers

Wholesalers/Distributors

Manufacturers

Components/Raw material suppliers


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The objective of a supply chain

Maximize the overall value generated.

What is the value of a supply chain?

Supply chain value is strongly correlated with supply

chain profitability also known as supply chain surplus. Effective supply chain management involves the

management of supply chain assets and product,

information and fund flows to maximize total supply

chain profitability


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Some more definition of supply chain

management

Supply chain encompasses all activities, involved

in the transformation of goods from the raw

material stage, to the final stage, when the

goods and services reaches the end customers.

It involves planning, design, and control of flow

of material, information, and finance along thesupply chain to deliver superior value to the end

customer in an effective and efficient manner


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The Evolution through revolution of supply chain

management

The developmental chain :

Three major revolution in the field of supply chain

management

The first revolution(1910-1920) The ford supplychain

Highly integrated

Fully owned

Inflexible supply chain


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The Second revolution(1960-1970) The

Toyota supply chain

The major changes:

Wide variety Less inventory holding

The great idea of Toyota:

In house manufacturing of key components and

final assembly of the products Keiretsu system

Location advantage for all the suppliers

It was widely referred as lean production systems

The Evolution through revolution of

supply chain management


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The problem with the lean system of production

was

Tight linkage prevents flexibility of movement

The supplier no more competitive and becamecomplacent

Inspite of EDI (Electronic data interchange) the

Toyota shown some rigidity, such as permanent

relationship with suppliers which became a liability

over a period of time.

This limitation on the part of Toyota lead to the third

revolution led by dell computers




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The Third revolution(1990-2000) The Dell

supply chain

The key features:

Advances in IT Flexibility and no long term relationships

Working with world class suppliers who maintains

cost leaderships and technology.

Integrating supplier electronically No demand forecast

No need to locate suppliers close to the firms since

they are connected electronically




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The progression:

Product variety front:

progressions from, single product (Ford) to wide

variety (GM and Toyota) to highly customizations(Dell)

From chain ownership front:

Vertically integrated firms to long term partnerships to

loosely held networks




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The development chain

It is the set of activities and processes associated

with new product introductions. Includes

Product design phase

The associated capabilities and knowledge thatneeds to be developed internally

sourcing decisions

Productions plans


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The development chain

The development chain includes decisions:

Product architecture

Make/Buy decisions

Supplier selection Productions plans

Early supplier involvement

Strategic partnership


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The development and supply chains

Plan/Design

Source

ProduceSupply Distribute Sell

Supply chain

Product architecture Make/Buy Early supplier involvement

Strategic Partnerships Supplier selections supply contract


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The key concepts in supply chain

Focal/Nodal/Main entity in the chain

Reverse supply chain management New product return

End of life product return

Company recall

Material and packaging return

Decision in supply chain

Design decision

Nodal and outsourced firm Selection of entity partners for outsourced activities and nature

of relationship

Decision on capacity and location of the various facility


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Design decision

Nodal and outsourced firm Selection of entity partners for outsourced activities and nature

of relationship



Design decision Nodal and outsourced firm Selection of entity partners for outsourced activities and nature

of relationship



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Operation decisions Demand forecasting Procurement planning and control

Production planning and control

Distribution planning and control

Inventory management

Transportation management

Customer order processing

Relationship management with partnership in the chain

Launch of Harry porter book (21 July 6:30 AM)

21 July 2007

(Harry porter and Deathly hallows)

A supply chain nightmare

What is the issues:


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The importance of supply chain

Proliferation in product line

Shorter PLC

High level of outsourcing

Shift in the power structure in the chain

Globalization of manufacturing


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The Enabler of Supply Chain

Improvement in communication and IT

Entry of third party logistics providers

Enhanced inter-firm coordination capabilities

Supply chain performance in India:


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Poor Logistics infrastructure

Taxation structure Drive location decisions

Challenges in Maintaining supply chain

in India :


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Supply chain challenges for the

Indian FMCG sectors Managing availability in the complex distribution set up

Working with smaller pack sizes

Entry of national players in traditional fresh productsectors

Dealing with counterfeit goods Opportunistic games played by distrubutors

Emergence of third party logistic proviers

Emergence of modern retail chains

Reservation for the small scale sectors


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Example of Indian supply chain:

Amul

Dabbawalas Mumbai


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Questions

Indian companies complain high logistics

cost make their products less competitive

in international markets. Identify products

that are likely to be significantly affectedby the poor logistics infrastructure in India

Documents

Supply Chain Management UNIT 1