supply chain management

1. Supply Chain
Management

2. Content
• Supply Chain Management Definition
• Integrated Supply Chain Framework
• Logistics Management
• Overview of Logistics
• Logistics Work

3. Supply Chain Management-History in
perspective
• Colonization by European powers-India, Sri
Lanka, African countries & etc.
• Reason: SCARCITY if raw materials-
Cotton, Food grains, precious metals,
oil, coal and etc..
• Securing supply chains for raw materials
needed to sustain Industrial revolution
• New markets for finished goods.
• Colonization gave both administrative
control over the sourcing and over the
market.

4. Supply Chain Management-Definition
• A supply chain is a sequence of organizations - their facilities,
functions and activities - that are involved in producing and
delivering a product or service.
• Supply chain management deals with linking the organizations within
the supply chain in order to meet demand across the chain as
efficiently and low cost as possible.
• It is one of the oldest disciplines in management that had been
subconsciously used in the history of Mankind.

5. Supplier
Supplier }Storage
Supplier
Mfg. Dist. Retailer
Customer
Storage
Supply Chain Management simplified flow
(contd…)
Supplier
Supplier }Storage
Supplier
Mfg. Dist. Retailer
Customer
Storage

6. Supply Chain Management (contd…)
• Why is supply chain management so important?
• To gain efficiencies from procurement, distribution and logistics
• To make outsourcing more efficient
• To reduce transportation costs of inventories
• To meet competitive pressures from shorter development times, more new products, and demand for more customization
• To meet the challenge of globalization and longer supply chains
• To meet the new challenges from e-commerce
• To manage the complexities of supply chains
• To manage the inventories needed across the supply chain
• Why is supply chain management difficult?
 Different organizations in the supply chain may have different, conflicting objectives
• Manufacturers: long run production, high quality, high productivity, low production cost
• Distributors: low inventory, reduced transportation costs, quick replenishment capability
• Customers: shorter order lead time, high in-stock inventory, large variety of products, low prices

7. Integrated Supply Chain Framework
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D2
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Procurem
ent
Customer
Accomodati
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Manufactu
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R1
R2
R3
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BIDIRECTIONAL FLOW OF INFORMATION, SERVICES, FINANCIAL &
KNOWLEDGE, UNIDIRECTIONAL FLOW OF MATERIALS, PRODUCT

8. Conceptual Supply Chain
Management Diagram (simplified)

9. LOGISTICS MANAGEMENT
• Logistics is the management of the flow of goods/ materials/
services from point of origin to the consumer in order to meet
some requirements, of customers or corporations.
• Also defined as getting products/ services where they are needed at
the right time. (Right Time, right place and right quantity)
• Logistics is part of Supply Chain Management but alone does not
comprise Supply Chain Management.

10. LOGISTICS MANAGEMENT (Contd…)
Logistics
Order
Management
Inventory
Management
Transportation
Warehousing,
Packaging &
Material
Handling
• Logistics is the combination of:
• Order Management
• Inventory Management
• Transportation
• Warehousing, Material Handling
and Packaging.

11. LOGISTICS MANAGEMENT (Contd…)
• It is also defined as the
responsibility to design and
administer systems to control
movement and geographical
positioning of raw materials or
work-in-progress (unfinished
goods) or finished goods at the
lowest total cost.
• Marketing, Manufacturing and
International commerce
depend on Logistics
Management.
• Dependence of other faculties
on Logistics

12. LOGISTICS MANAGEMENT
• Goal of Logistics is to
support:
• Procurement
• Manufacturing
• Customer requirement and
satisfaction.
• Operational Requirement
• Product Innovation (R&D)
Logistics
Procurement
Customer
satisfaction
Operational
requirement
Manufacturing

13. LOGISTICS WORK MANAGEMENT
1. Order Processing
2. Inventory Management.
3. Transportation
4. Warehousing, Material
Handling & Packaging
5. Facility Network
Facility
Network
Order
Processing
Inventory
ManagementTransportation
Warehousing,
Packaging &
MH

14. LOGISTICS WORK MANAGEMENT (contd…)
1. Order Processing:
a. Foremost starting point of
logistics process.
b. Receiving & processing orders
from customers via mail, email,
mobile apps, telephones or
hard copy forms.
c. Processing of orders involve
managing customer
requirement, initial order
receipt, delivery, invoicing &
collection
• Order Processing via app

15. LOGISTICS WORK MANAGEMENT (contd…)
2. Inventory Management:
a.Processed goods at depot/
warehouse which are ready for
customers.
b.Inventory strategy is to achieve
desired customer satisfaction with
minimum inventory commitment.
c.Inventory Cost: Are huge and
risky and leads to huge losses.

16. LOGISTICS WORK MANAGEMENT (contd…)
2. Inventory Management (contd):
d. 80/20 Rule: Less than 20% of all the products marketed account for
80% of the total profit.
e. Product stocking plan or Raw material stocking plan at a particular
depot/ warehouse has direct impact on profitability.
f. It is best to stock materials based upon their requirement location.

17. LOGISTICS WORK MANAGEMENT (contd…)
3. Transportation:
a.It is defined as the geographical
movement & positioning of
inventory.
b.It has high visibility and higher
costs than all other works and
hence it is the most focussed
area for financial control.

18. LOGISTICS WORKS MANAGEMENT (contd…)
3. Transportation (contd…):
c. The following are the factors for
transportation management:
Total Costs (including labour, fuel
and rent and maintenance).
Speed (movement speed of in-
transit inventory).
Consistency/ Dependability
(variation in time required to
perform a specific movement over
a number of shipment)

19. LOGISTICS WORK MANAGEMENT (contd…)
4. Warehousing, Material Handling &
Packaging:
a.Warehouse is the local/ regional
depot where the goods are stocked or
stored.
b.Within warehouse, material handling
is the major activity.
c.Products must be received, moved,
stored, sorted, assembled and packed
to meet order requirement.
d.WMS: Warehouse management
system-used to manage all activities in
warehouses.

20. LOGISTICS WORK MANAGEMENT (contd…)
5. Facility Network Design:
a.Deals with strategic placement of warehouses and facilities and overall network design for
efficient business operation.
b.Requires determining the optimized number of warehouses and facilities over a given
geographical location to peform logistics works at minimal total cost.
c. Facilities can consists
of: Manufacturing plants
Warehouses
Retail stores

21. Fictional Facilities Network Of e-Commerce
• Legends:
• Retail Outlet
• Warehouse