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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.

SCM can be defined as “design, planning, execution,

control, and monitoring of supply chain activities with
objective of crating net value, building a competitive
infrastructure, leveraging worldwide logistics,
synchronizing supply with demand, and measuring
performance globally.”
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SUPPLY-CHAIN MANAGEMENT

ORDER PLANNING &

CUSTOMERS PROCESSING FORECASTING SUPPLIERS

PROCUREMENT
ACCOUNTING INTRANET

PRODUCTION

LOGISTICS
SHIPPING INVENTORY DISTRIBUTORS
SERVICES
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• SCM software includes tools or modules used to execute

supply chain transactions, manage supplier relationships
and control associated business processes.
• SCM is the integration of key business processes across
the supply chain for the purpose of adding value for
customers and stakeholders.
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Development in SCM
• Creation Era:
• The term SCM was coined by a US industry consultant
in the early 1980s. However the concept of a SCM was
of great importance long before, in the early 20th
century.
• Integration Era:
• This era of SCM studies was highlighted with the
development of Electronic Data Interchange (EDI)
systems in the 1980s and developed through the 1990s
by introduction of Enterprise Resource planning
(ERP) systems.-value adding and cost reduction
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Continue…
• Globalization Era:
• The globalization era characterized by the attention
given to global systems of supplier relationships and the
expansion of supply chains over national boundaries and
into other continents. Ex: oil industry
• Specialization Era-Phase One:
• In the 1990s industries began to focus on “core
competencies” and adopted a specialization model.
• Companies sold off non core operations and outsourced
those functions to other companies.
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Benefits of SCM
• Customer service management
• Procurement (globally)
• Product development and commercialization (based on
product life cycle)
• Manufacturing flow management process (JIT)
• Physical distribution of products.
• Outsourcing
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COMPONENTS OF SCM
• Lambert and Cooper identified the following
components:
• Planning and control
• Work structure
• Organization structure
• Product flow facility structure
• Information flow facility structure
• Risk and reward structure
• Culture and attitude
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KNOWELDGE MANAGEMENT SYSTEM

• KMS refers to a system for managing knowledge in
organizations for supporting creation, capture, storage
and dissemination of information.
• Ex: an engineer could know the metallurgical
composition of an alloy that reduces sound in gear
systems. Sharing this info organization wide can lead to
more effective engine design.
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Features of KMS
• Purpose: a KMS will have an explicit KM objective of
some type such as collaboration, sharing good practice
or the like.
• Context: It is meaningfully organized, accumulation and
embedded in a context of creation and application.
• Processes: KMS developed to support and enhance
knowledge intensive processes, tasks or projects ex:
creation, construction, identification, capturing,
acquisition, etc.
• Participants: Users can play the roles of active,
involved participants in knowledge networks and
communities fostered by KMS.
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• KMS exist to help biz, to create and share information.

These are typically used in a business where
employees create new knowledge to make further
commercial opportunities. Ex: lawyers, accountants and
management consultants.
• KMS are built around systems which allow efficient
categorization and distribution of knowledge. Ex: ppt,
word processing documents etc.
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BENEFITS OF KMS
• Sharing of valuable organizational info throughout
organizational hierarchy.
• Can avoid reinventing the wheel, reducing redundant
work.
• May reduce training time for new employees
• Retention of Intellectual Property after the employee
leaves if such knowledge can be codified.
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Enterprise Resource Planning

• Enterprise resource planning (ERP) is a cross-
functional enterprise system that serves as a
framework to integrate and automate many of
the business processes that must be accomplished
within the manufacturing, logistics, distribution,
accounting, finance, human resource functions of
a business.

• ERP software is a family of software modules

that supports the business activities involved in
these vital back office processes.
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Enterprise Resource Planning

Production Integrated
Planning Logistics
Sales Customer/
Distribution, Employee Accounting
Order and Finance
Management Human
Resources
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Enterprise Resource Planning

• ERP is being recognized as a necessary ingredient for
the efficiency, agility, and responsiveness to customers
and suppliers that an e-business enterprise needs to
succeed in the dynamic world of e-commerce.
• Companies are finding major business value in
installing ERP software in two major ways:
1. ERP creates a framework for integrating and
improving their back-office systems that results in
major improvements in customer service, production,
and distribution efficiency.
2. ERP provides vital cross-functional business
processes and supplier and customer information flows.
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Customer Relationship Management

Retention
Marketing and and Loyalty
Fulfillment Programs
Sales Customer Store Front
TeleSales and Field
Customer Service
Service and
Support

Contact Management
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Customer Relationship Management

• Customer relationship management (CRM): A cross-
functional e-business application that integrates and automates
many customer serving processes in sales, direct marketing,
account and order management, and customer service and
support.
• CRM systems also create an IT framework that integrates all of
these processes with the rest of a company’s business operations.
CRM systems consist of a family of software modules that
perform the business activities involved in such front office
processes.
• CRM software provides the tools that enable a business and its
employees to provide fast, convenient, dependable, and
consistent service to its customers.
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Customer Relationship Management

• Business benefits of CRM are many. Ex. includes:
1. Allows a business to identify and target their best
customers; those who are the most profitable to the business, so
they can be retained as lifelong customers for greater and more
profitable services.
2. Enables real-time customization and personalization of
products and services based on customer wants, needs, buying
habits, and life cycles.
3. Also used to keep track of when a customer contacts the
company, regardless of the contact point.
4.Enables a company to provide a consistent customer
experience and superior service and support across all the
contact points a customer chooses.
.
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Enterprise Collaboration System

• Enterprise collaboration systems (ECS): The use of
groupware tools and the Internet, intranets, extranets,
and other computer networks to support and enhance
communication, coordination, collaboration, and
resource sharing among teams and workgroups in an
internetworked enterprise.
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Tools for Enterprise Collaboration

Enterprise
Collaboration
System

Electronic Electronic Collaborative

Communications Conferencing Work
Tools Tools Management
<asynchronous> <synchronous> Tools
•E-Mail •Data Conferencing •Calendaring
•Voice Mail, I Phone •Voice Conferencing •Task and Project Mgt
•Web Publishing •Videoconferencing •Workflow Systems
•Faxing •Discussion Forums •Knowledge Mgt
•Electronic Meetings •Document Sharing
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Tools for Enterprise Collaboration

• Electronic communications tools: Software that helps
you communicate and collaborate with others by
electronically sending messages, documents, and files in
data, text, voice, or multimedia over the Internet,
intranets, extranets, and other computer networks.
• Electronic conferencing tools: Software that helps
networked computer users share information and
collaborate while working together on joint assignments,
no matter where they are located.
• Work Management Tools: Collaborative Software that
helps people accomplish or manage joint work
activities.
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Business Process Reengineering

• Business Process Reengineering (BPR) is a

management approach aiming at improvements by
means of elevating efficiency and effectiveness of the
processes that exist within and across organizations.
• It is a fundamental and radical approach by either
modifying or eliminating non-value adding activities.
(Wikipedia)
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Business Process Reengineering

Definition
• BPR first introduced in 1990 in a Harvard Business
Review article by Michael Hammer:
• Hammer/Champy
– Reengineering the Corporation (1993)
• Provided this definition:
– “Reengineering is the fundamental rethinking and
radical redesign of business processes to achieve
dramatic improvements in critical, contemporary
measures of performance, such as cost, quality,
service, and speed.”
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Ford Motor Company

• Accounts Payable function

• 500 people
• Most work on mistakes between

Purchase
Orders

Receiving
Invoices
Documents
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Ford (cont)
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Ford (cont)
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End Please..!