Scm
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The document provides an overview of supply chain management (SCM). It defines SCM as the flow of materials from suppliers to customers. Key aspects of SCM discussed include procurement, manufacturing, distribution, inventory management, warehousing, and transportation. The document also summarizes SCM software like SAP and Oracle, which help plan and manage supply chain operations.
Scm
- 1. Presented By- Shahidul Asif 06 Shabib Raihan 13 Tanjil Amin 31 Sadman Prodhan 47 Salman Hossain Khan 56
- 2. Supply Chain Management Supply Chain is the flow of materials from supplier to customer through- • Procurement • Manufacturing • Distribution • Sales & Disposal Supply chain activities transform raw materials and components into a finished product that is delivered to the end customer.
- 3. •Developed in 1980s. •Supply chain management (SCM) is the process of- -Planning, -Implementing, -Controlling the operations of the supply chain as efficiently as possible. Supply Chain Management
- 4. Dynamics of Material Flow Supplier Plant RS Logistics Retailer
- 5. SCM FLOWS MATERIAL MONEY INFORMATION Procurement Manufacturing Distribution Customer
- 6. Supply Chain RelationshipSupply Chain Relationship
- 7. What is SCM ?What is SCM ? BuyingBuying SellingSelling MakingMaking MovingMoving Ware housing Ware housing SCM is a business network covering from buying, making, moving, warehousing to selling
- 9. Supply Chain Decisions OPERATIONAL TACTICAL STRATEGIC Procurement DistributionManufacturing Logistics
- 10. Cost Reduced inventories Reduced waste Reduced total system costs Service Establishment of a collaborative framework Near real time information flow Reduced variation and increased quality Business growth opportunities Preferred source for new opportunities Expanded benefits to other customers Supply Chain Benefits
- 11. The 3 Ts Key Ingredients For Improving Supply Chain Efficiencies Timeliness Velocity Acceleration Trust Collaboration Empowerment Sharing Information(eg. open schedules) Accountability Understanding the process Transparency Ability to see the real situation The Three T’s
- 12. Transactional Efficiency Critical Data to improve: Multiple handling Transit damageProcess delays Excess freight Delays End-to-end cycle-time Warehouse fees Inventory turns Yield Late Deliveries Perceived Value Intrinsic Value The Supply Chain “Iceberg”
- 13. SCM FOCUS / LEARNINGS • SERVICE COST • FLOW OF INFORMATION, MATERIAL AND CASH • INPUTS AND OUTPUTS
- 14. ELEMENTS OF SCM • INVENTORY MANAGEMENT • WAREHOUSING • TRANSPORTATION
- 15. Shortage Excess 1. The stock of material lying with producer for which payments are made but which are yet to be delivered to the customers and paid for by them. 2. Material stocked to meet the expected demand in the market. 3. An idle resource which locks the capital. What is inventory
- 16. Shortage Excess Why inventories are necessary 1. To satisfy the customer demands without time lag. 2. To cover time required for procurement of material. 3. To cater to fluctuations in demand. 4. Seasonal demand of products. 5. Production constraints of suppliers. 6. To retain supplier goodwill.
- 17. FSN Analysis Based on speed of movement of material. 1. Some materials have regular and high volume demand and move ‘Fast’ (F), 2. some material have intermittent and unpredictable demand and hence move ‘Slow’ (S) 3. and a few items have practically no takers and hence keep on lying in stores for long period of time and categorized as ‘Non moving’ (N). FAST MOVING SLOW MOVING NON MOVING
- 18. ELEMENTS OF SCM • INVENTORY MANAGEMENT • WAREHOUSING • TRANSPORTATION
- 19. ELEMENTS OF WAREHOUSING • LOCATION • LAYOUT • IDENTIFICATION • MATERIAL HANDLING
- 20. Warehousing principles • Ease of receipts, storage and issues. • Uninterrupted movement of material, men and equipment. • Optimum utilization of space. • Ease of locating the material. • Safety. & Security. • Better supervision. • Flexibility • Building. : Preferably single storied, enough height, proper lighting and ventilation, protection against hazards like fire and lightening.
- 21. ELEMENTS OF SCM • INVENTORY MANAGEMENT • WAREHOUSING • TRANSPORTATION
- 22. Logistics Management 'Logistics is the process of strategically managing the procurement, movement and storage of materials (and related information flows) through the organization and its marketing channels
- 23. Objectives of Transport Management 1. Cost Optimization 2. Improved service 3. Transportation/logistics as a competitive differentiator. 4. Time to market
- 24. CARRIER SELECTION OUTSOURCING Vs. OWN VEHICLE VEHICLE TYPE ( SIZE ) CUSTOMERS PER VEHICLE & TRIPS PER VEHICLE ( ROUTING )
- 25. Carrier Selection and Routing • The practical meaning of the 4 C’s of selecting transportation services 1. Competition 2. Cost 3. Comparison 4. Compromise Sources Destinations
- 26. SCM Key Performance Measures FMFO Deliveries during the month FMFO Adherence % = ---------------------------------------------------------- Total deliveries made during the month. FMFO= First manufactured first out Orders Delivered On Time & Full Commitment % ( OTIF ) = ----------------------------------------------------- Orders Received in a month OTIF= On time in full delivery Transport cost + Labor Cost + storage cost SCM COST / TN = --------------------------------------------------------------------- Total sales
- 27. •Product Attributes •Planning •Request For Quotation •Availability •Purchase Order •Order Confirmation •Call-Off •Order Status •Inventory Status •Product Quality •Usage •Inventory Change •Product Performance •Delivery Message •Goods Receipt •Invoice •Credit/Debit Note •Business Acknowledgement •Information Request •Complaint •Complaint Request Plan Make DeliverSource Utility SCM Process categorized according to the Supply- Chain Council’s, Supply-Chain Operations Reference (SCOR) model Supply Chain Model Foundation
- 28. Bullwhip Effect Occurs when slight demand variability is magnified as information moves back upstream
- 29. Bullwhip Effect Factors contributing to the Bullwhip Effect: • Forecast Errors • Lead Time Variability • Batch Ordering • Price Fluctuations • Product Promotions • Inflated Orders Methods intended to reduce uncertainty, variability, and lead time: • Vendor Managed Inventory (VMI) • Just In Time replenishment (JIT) • Strategic partnership
- 30. Causes of Bullwhip Effect • Demand Signal Processing (frequent updates of forecasts; only next echelon orders considered) • Order Batching (to realise logistic Economies of scale + Reducing order processing costs) • Price Fluctuations (resulting in over-reactions) • Supply Rationing (Proportionate rationing; unrestricted order acceptance + free return policy)
- 31. Counter-Measures for BWE • Avoid multiple demand forecasts – Order based on ultimate customer demand – Use EDI+POS+VMI – Choose a good forecasting method (PLC has a major say) – Move from decentralized DM to centralized planning (visibility+control is better) – Remove layers in channel if possible • Eg: HP, Apple, IBM, P&G/Walmart
- 32. Counter-Measures for BWE • Break order batches Increase frequency of ordering (OP costs reduced by EDI) Resort to standardization to minmize OP costs Use 3PL to make small batch replenishments economical Aggregate across retail outlets to utilize FTL EoS Reduce safety stocks by cutting lead times Eg: 3PL using Fedex, P&GStabilize prices EDLP (P&G) Special purchase contracts • Eliminate shortage gaming Allocate based on past sales (Sun) Share capacity and information (HP, Motorola) Limit flexibility wrt time (HP, Seagate)
- 33. SCM and Information System Data warehousing:- • copying of data from various sources, both inside and outside the enterprise, into an environment ready for analytical and informational processing
- 34. Electronic Data Interchange • EDI is the computer-to-computer exchange of business documents between retailers and vendors • Merchandise sales, Inventory On Hand, Orders • Advanced shipping notices, • Receipt of merchandise, Invoices for payment
- 35. Standards: UCS (Uniform Communication Standard) VICS (Voluntary Inter-industry Commerce Solutions) Transmission system: Intranet: local area network (LAN) that employs Internet technology Extranet: collaborative network that uses Internet technology to link businesses with suppliers, customers, etc. Electronic Data Interchange
- 36. EDI Security • There are implications of security failures (loss of data, loss of public confidence), but retailers have security policy objectives: Authentication – system assures person on other end of session is who it claims to be Authorization - that person has permission to carry out request Integrity – info arriving is the same that was sent
- 37. SAP Business Suite (A SCM software) Supply Chain Management ● The SAP® SCM application is a part of the SAP® Business Suite. It functions with a technology platform called SAP® NetWeaver, which enables a company to reduce costs in IT while joining technologies into a single platform. This platform helps companies to process information and data in an organizational leveling order to monitor processes and generate coordination in the supply chain.
- 38. Planning with SAP ERP & SCM SAP ECC ERP SAP SCM (includes SAP BW)Core Interface (CIF) • Demand Planning • Supply Network Planning and optimization • Production Planning with capacity considerations • ATP • CTP • Detailed Scheduling • Deployment • Transportation planning • Vehicle routing and scheduling • Mater data •Materials •Locations •Partner •Plants •Info records • Transactional data • Customer orders • Production orders • Purchasing orders • Execution Basic Components of SAP SCM
- 39. Planning at Supply Chain Level SAP ECC 1 SAP SCM SAP ECC 2 SAP ECC n - Each SAP ECC component covers one or more locations In the network - Planning may be done centrally
- 41. Substitute Technologies Supply Chain Management ply Chain Management ● Oracle® SCM is an open integrated solution that ensures companies’ efficiency by predicting demand fluctuation, organizing and planning operations on the supply chain, and providing industry-specific solutions. Some of the solutions that this program offers are: Advanced procurement, logistics and transportation management, order fulfillment, manufacturing operations management, product life- cycle management, supply chain planning, and optimization.
- 43. Oracle® SCM Vs. SAP® SCM ● Oracle – Broad enterprise application – Less services in package – Certain services not provided – Less customized ● SAP – Better technology – More services in package – More technical support – More customized
- 44. Oracle® SCM Vs. SAP® SCM ● Oracle – Lower cost – Requires less time to set up – Accommodates more than 1000 users – Licensing and updating is free – More user friendly ● SAP – Higher cost – Requires more time to set up – Accommodates 25 to 1000 users – Licensing and updating is not free – Less user friendly
- 45. Cost Comparison
- 46. Thanks to all