Scribd
Upload
68 views5 pages

Supply Chain Management: Submitted by Rashmi Shekhar Pande ROLL NO. 09MFC016

This document provides an overview of supply chain management. It defines SCM as the management of interconnected businesses involved in providing products and services to customers. Effective SCM is critical for ensuring availability of products and meeting customer demand. Key aspects of SCM include inventory control and visibility, production decisions, distribution network configuration, transportation and cash flow management. Risks in the supply chain can arise from environmental, industry, organizational and domain-specific factors, as well as risks from decision makers.

Uploaded by

Shrabani Nayak
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
68 views5 pages

Supply Chain Management: Submitted by Rashmi Shekhar Pande ROLL NO. 09MFC016

This document provides an overview of supply chain management. It defines SCM as the management of interconnected businesses involved in providing products and services to customers. Effective SCM is critical for ensuring availability of products and meeting customer demand. Key aspects of SCM include inventory control and visibility, production decisions, distribution network configuration, transportation and cash flow management. Risks in the supply chain can arise from environmental, industry, organizational and domain-specific factors, as well as risks from decision makers.

Uploaded by

Shrabani Nayak
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

SUPPLY CHAIN MANAGEMENT

SUBMITTED BY

RASHMI SHEKHAR PANDE

ROLL NO. 09MFC016


Supply chain management

Supply chain management (SCM) is the management of a network of


interconnected businesses involved in the ultimate provision of product and service packages required
by end customers. Supply chain management spans all movement and storage of raw materials, work-
in-process inventory, and finished goods from point of origin to point of consumption (supply chain).

Another definition is provided by the APICS Dictionary when it defines SCM as the "design,
planning, execution, control, and monitoring of supply chain activities with the objective of creating
net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply
with demand and measuring performance globally."

Supply Chain Strategies are the critical backbone to Business Organizations today. Effective Market
coverage, Availability of Products at locations which hold the key to revenue recognition depends
upon the effectiveness of Supply Chain Strategy rolled out. Very simply stated, when a product is
introduced in the market and advertised, the entire market in the country and all the sales counters
need to have the product where the customer is able to buy and take delivery. Any glitch in product
not being available at the right time can result in drop in customer interest and demand which can be
disastrous. Transportation network design and management assume importance to support sales and
marketing strategy.

Inventory control and inventory visibility are two very critical elements in any operations for these are
the cost drivers and directly impact the bottom lines in the balance sheet. Inventory means value and is
an asset of the company. Every business has a standard for inventory turnaround that is optimum for
the business. Inventory turnaround refers to the number of times the inventory is sold and replaced in a
period of twelve months. The health of the inventory turn relates to the health of business.

In a global scenario, the finished goods inventory is held at many locations and distribution centers,
managed by third parties. A lot of inventory would also be in the pipeline in transportation, besides the
inventory with distributors and retail stocking points. Since any loss of inventory anywhere in the
supply chain would result in loss of value, effective control of inventory and visibility of inventory
gains importance as a key factor of Supply Chain Management function.

Supply chain management must address the following problems:

 Production Decisions: The strategic decisions include what products to produce, and which plants
to produce them in, allocation of suppliers to plants, plants to DC's, and DC's to customer markets.
As before, these decisions have a big impact on the revenues, costs and customer service levels of
the firm. These decisions assume the existence of the facilities, but determine the exact path(s)
through which a product flows to and from these facilities. Another critical issue is the capacity of
the manufacturing facilities--and this largely depends the degree of vertical integration within the
firm. Operational decisions focus on detailed production scheduling. These decisions include the
construction of the master production schedules, scheduling production on machines, and equipment
maintenance. Other considerations include workload balancing, and quality control measures at a
production facility.

 Distribution Network Configuration: Number, location and network missions of suppliers,


production facilities, distribution centers, warehouses, cross-docks and customers.

 Distribution Strategy:questions of operating control (centralized, decentralized or shared);


delivery scheme, e.g., direct shipment, pool point shipping, cross docking, DSD (direct store
delivery), closed loop shipping; mode of transportation, e.g., motor carrier, including
truckload, LTL, parcel; railroad; intermodal transport, including TOFC (trailer on flatcar) and
COFC (container on flatcar); ocean freight; airfreight; replenishment strategy (e.g., pull, push or
hybrid); and transportation control (e.g., owner-operated, private carrier, common carrier, contract
carrier, or 3PL).
 Trade-Offs in Logistical Activities: The above activities must be well coordinated in order to
achieve the lowest total logistics cost. Trade-offs may increase the total cost if only one of the
activities is optimized. For example, full truckload (FTL) rates are more economical on a cost per
pallet basis than less than truckload (LTL) shipments. If, however, a full truckload of a product is
ordered to reduce transportation costs, there will be an increase in inventory holding costs which
may increase total logistics costs. It is therefore imperative to take a systems approach when
planning logistical activities. This trade-offs are key to developing the most efficient and effective
Logistics and SCM strategy.
 Information: Integration of processes through the supply chain to share valuable information,
including demand signals, forecasts, inventory, transportation, potential collaboration, etc.
 Inventory Management:These refer to means by which inventories are managed. Inventories
exist at every stage of the supply chain as either raw material, semi-finished or finished goods.
They can also be in-process between locations. Their primary purpose to buffer against any
uncertainty that might exist in the supply chain. Since holding of inventories can cost anywhere
between 20 to 40 percent of their value, their efficient management is critical in supply chain
operations. It is strategic in the sense that top management sets goals. However, most researchers
have approached the management of inventory from an operational perspective. These include
deployment strategies (push versus pull), control policies --- the determination of the optimal
levels of order quantities and reorder points, and setting safety stock levels, at each stocking
location. These levels are critical, since they are primary determinants of customer service levels.
 Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across
entities within the supply chain. Supply chain execution means managing and coordinating the
movement of materials, information and funds across the supply chain. The flow is bi-directional.
 Transportation Decisions: The mode choice aspect of these decisions are the more strategic
ones. These are closely linked to the inventory decisions, since the best choice of mode is often
found by trading-off the cost of using the particular mode of transport with the indirect cost of
inventory associated with that mode. While air shipments may be fast, reliable, and warrant lesser
safety stocks, they are expensive. Meanwhile shipping by sea or rail may be much cheaper, but
they necessitate holding relatively large amounts of inventory to buffer against the inherent
uncertainty associated with them. Therefore customer service levels, and geographic location play
vital roles in such decisions. Since transportation is more than 30 percent of the logistics costs,
operating efficiently makes good economic sense. Shipment sizes (consolidated bulk shipments
versus Lot-for-Lot), routing and scheduling of equipment are key in effective management of the
firm's transport strategy.
The management components of SCM

 Planning and control


 Work structure
 Organization structure
 Product flow facility structure
 Information flow facility structure
 Management methods
 Power and leadership structure
 Risk and reward structure
 Culture and attitude

Risk in supply chain can arise from the following sources:

1. Environmental risk: All firms work in an environment. Changes to the environmental factors
like competition, political and legal framework or even in national cultures (trade unions)  may pose
a threat to the firm.
2. Industry risk: These risks arise due to changes which may affect the entire industry structure.
Say a development of a cheap alternative substitute may pose an extreme challenge to a certain
product. Technology changes often create industry risk.
3. Organizational risk: Organizations can undergo massive changes in structure, leadership,
culture, processes, technologies and people. Each change poses its own risk and needs to be
mitigated in its own way.
4. Domain specific risks: These risks may arise from the standing or planning of the top
management on strategic issues which may provide a competitive advantage to the company in the
long run. Such strategic plans often have high risk exposure and also even higher perceived pay-offs.
5. Risks from the decision maker: The decision maker in each activity in a supply chain is an
important link in a chain. His decision making capabilities and decisions have tremendous impact on
the performance of the supply chain and the overall performance of the firm.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy