Introduction To Management Information Systems Sec.

Supply Chain Management

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Table of Contents

S.N.O
1 2 3 4 5 6 7 8 9 10

Index
Supply Chain Management Goal of SCM SCM Planning Applications SCM Execution Applications SCM Push Strategies SCM Pull Strategies Bullwhip Effect Challenges In SCM Opportunities In SCM Conclusion

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Supply Chain Management

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Supply Chain Management (SCM)

Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies

Goal of SCM
The ultimate goal of effective supply chain management system is to optimize the deployment of assets to ma imize fulfillment of demand (or customer service). The ob!ective is to balance the two

SCM Planning

pplication!

Supply chain planning (SC") is the component of supply chain management (SCM) involved with predicting future re#uirements to balance supply and demand.

SCM "xecution

pplication!

$ ecution applications trac% the physical status of goods, the management of materials, and financial information involving all parties.

SCM Pu!h Strategie!

&ith a push'based supply chain, products are pushed through the channel, from the production side up to the retailer. The manufacturer sets production at a level in accord with historical ordering patterns from retailers. (t ta%es longer for a push'based supply chain to respond to changes in demand, which can result in overstoc%ing or bottlenec%s and delays (the bullwhip effect), unacceptable service levels and product obsolescence.

SCM Pull Strategie!

(n a pull'based supply chain, procurement, production and distribution are demand' driven rather than to forecast. )owever, a pull strategy does not always re#uire ma%e'to'

Supply Chain Management

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order production. Toyota Motors Manufacturing is fre#uently used as an e ample of pull production.

#ull$hip "ffect
(n bullwhip effect demand variability increases as one move up the supply chain away from the retail customer, and small changes in consumer demand can result in large variations in orders placed upstream. $ventually, the networ% can oscillate in very large swings as each organization in the supply chain see%s to solve the problem from its own perspective

Challenge! in SCM
$ panding distribution systems transcending the national boundaries and becoming global *educed inventory goals re#uire fle ible, high velocity manufacturing strategies that can enable a #uic% response when une pected changes in demand occur Many new SCM technologies li%e *+(, are in the nascent stage and for them *-( is not yet identified (ncreased demand responsiveness re#uires a .demand driven supply networ%/(transformation from push to pull operations) collaboration and closed'loop planning environment re#uires clean synchronized n data (nformation disintegration'disconnected demand, supply and financial plan ma%e it difficult to reconcile plans with reality and re'plan accordingly Comple ity' increasingly comple supply chain processes impede best practice decision ma%ing and management of data transfers. 0(T inventory' can1t afford to have errors or supply chain disruption that will cause manufacturing to halt Short product lifecycles'one has to constantly set up new supply chains. $ach product has its own supply chain2 the more finished product and

Supply Chain Management

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inventory are lying dead in your supply chain the faster you will get obsolete. +aster order cycle time'less margin for error or delay in the supply chain

Supply Chain Management

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Opportunitie! in SCM
Information Technology The internet wave and the emergence of e'business have highly influenced the traditional supply chains by enhancing co'ordination and communication between the partners. The enabling technologies li%e $,(, (ntranet, $ tranet, $lectronic mar%et places, $*", ,*", ware house management system, C*M,C"+* etc has tremendously improved the integration among the buyers and sellers. (nformation technology has removed the roadbloc%s of information sharing ma%ing the firm smarter everyday by sharing real time information regarding inventory, shipment status and other %ey information li%e product design, product availability and demand between partners. The e'supply chain will have customers and suppliers seamlessly lin%ed together, throughout the world, e changing information almost instantly. 3s a result of e'speed information sharing the companies are adopting pull strategy instead of push strategy. +ast access to relevant supply chain information can pay'off handsomely in lower product ac#uisition costs, lower procurement transaction, less inventory, higher #uality decision ma%ing, shorter lead times, profitable means of disposing unused e cess inventory and better customer services. $ffective supply chain management can impact and improve upon virtually all business processes, such as data accuracy, operational comple ity reduction, supplier selection, purchasing, and warehousing and distribution. -ther benefits include 4uic%er customer response and fulfillment rates Shorter lead time 5reater productivity and lower costs *educed inventory throughout the chain (mproved forecasting precision +ewer suppliers and shorter planning cycles More reliable and #uality information

Supply Chain Management

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Supply Chain Management Software

Supply chain management software (SCMS) is a business term which refers to a range of software tools or modules used in e ecuting supply chain transactions, managing supplier relationships and controlling associated business processes. Some common features of these softwares are as follows Customer re#uirement processing "urchase order processing (nventory management 5oods receipt and warehouse management Supplier management6sourcing

3 re#uirement of many SCMS often includes forecasting. Such tools often attempt to balance the disparity between supply and demand by improving business processes and using algorithms and consumption analysis to better plan future needs. SCMS also often includes integration technology that allows organizations to trade electronically with supply chain patterns

RFI an! SCM

(t is one of the most notable is *adio +re#uency (dentification, or *+(,. *+(, tags are essentially barcodes on steroids. &hereas barcodes only identify the product, *+(, tags can tell where the product is, where it has been, when it e pires, whatever information someone wishes to program with it. *+(, technology is going to generate mountains of data about the location of pallets, cases, cartons, totes, and individual products in the supply chain. (t will be able to produce piles of information about when and where merchandise is manufactured, pic%ed, pac%ed and shipped. (t is also be able to tell retailers about the e piration dates of their perishable items'numbers that will have to be stored, transmitted in real'time and shared with warehouse management, inventory management, financial and other enterprise systems. 3nother benefit of *+(, is that, unli%e barcodes, *+(, tags can be read automatically by electronic readers.

Supply Chain Management

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CONC%&SION
Supply chain management is about getting the right stuff to the right place at the right time, efficiently and effectively. Some of this stuff is physical stuff but !ust as important as information and financial flows. Technology plays a crucial role in modern SCM. 3n effective supply chain management has information integration as its foundation. So to ma imize efficiency and responsiveness across the supply chain firms have to move towards virtual integration strategy, where decisions, wor%, accountability, ris%s, costs and gains are moved to the position in the supply chain where the best %nowledge and incentives resides.

Supply Chain Management