ASPECTS YOU MUST KNOW ABOUT SUPPLY CHAIN MANAGEMENT

TO KNOW ABOUT SUPPLY CHAIN MANAGEMENT OBJECTIVES, ACTIVITES , STRATEGIES

Integration of various activities encompassed by the supply chain through

improved supply chain relationships to achieve a sustainable competitive advantage.

Supply chain: A sequence of suppliers, warehouses, operations and retail outlets, i.e., Organizations that are involved in producing and delivering a product or service.

A basic purpose of supply chain management is to control inventory by managing the flow of materials throughout the supply chain.

OBJECTIVES OF SUPPLY CHAIN MANAGEMENT

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 effort the supply chain expends in filling the customer’s request.

To achieve maximum supply chain profitability. Supply chain profitability is the total profit to be shared across all supply chain stages.

To reduce the supply chain costs to the minimum possible level.

Activities Involved in Supply Chain Management

Four major activities involved in supply chain:

management are:

1.Purchasing

2.Logistics

3.Warehousing

4.Expediting.

 

Purchasing Cycle

Series of steps that begins with a request for purchase and ends with notification of shipment received by the customer in satisfactory condition.

Outsourcing

Buying goods or services instead of producing or providing them

in-house.

JIT Purchasing

JIT purchasing involves long-term relationship with a few

suppliers.

Evaluating Sources of Supply (Vendor Analysis)

Vendor analysis is the process of evaluating vendors in terms of price, Quality, Reputation andservice.

Supplier Partnerships : Supplier partnership is crucial to the success of supply chain management.

Logistics: The movement of materials and information in a supply chain.

WARE HOUSING

Warehousing includes storing, dispersing, ordering and accounting for all kinds of materials used for production and

distribution.

 Contemporary Developments in Warehousing

Bar Coding

Electronic data interchange

Distribution requirement planning

JIT deliveries

Managing the Supply Chain

1.    Postponement

2.    Channel assembly

3.    Drop shipping and special packaging

4.    Blanket orders

5.    Invoice less purchasing

6.    Electronic ordering and funds transfer

7.    Stockless purchasing

8.    Standardisation

 

Supply Chain Strategies

Supply chain strategies include

1.Multiple suppliers

2.Few suppliers

3.Vertical integration

4.Keiretsu network

5.Virtual companies     

Benchmarking Supply Chain Management

Process Tools for Supply Chain Management

1.Make-or Buy decisions: The most basic supply chain management decision as to whether to make a given product in-house or buy it from a supplier.

2.Supplier scheduling

3.Value analysis/Value engineering

4.Supplier Certification and Evaluation

Supply Chain Dynamics

Three key points about supply chain dynamics are:

1.The supply chain is a highly interactive system.

2.There is an accelerator effect of demand changes.

3.The best way to improve the supply chain is to reduce the total replenishment time and to feedback actual demand information to all levels.

Coordination in the Supply Chain

To improve efficiency and effectiveness of a supply chain it is crucial to increase

co-ordination both across firms and within firms which are members of the supply chain.

Measuring Supply Chain Performance

Four measures of supply chain performance are:

1.Delivery

2.Quality

3.Time

4.Cost

Structural Improvement:

There are two basic ways to improve supply chains, by changing structure or infrastructure.

Structural change in a supply chain involves:

1.Vertical Integration

2.Process Simplification

3.Configuration Changes

4.Product redesign

5.Outsourcing logistics

Improvements in Infrastructure

Infrastructure changes in supply chain involves

1.Cross-functional teams

2.Partnerships

3.Set-up time reduction

4.formation systems

5.Cross-docking

Virtual Supply Chain:

 A supply chain which consists of at least one virtual company that

co-ordinates all of the activities of the supply chain.