Supply Chain Management Notes PDF

Lesson 1: Supply Chain Management A supply chain is the network of all the activities involved in delivering a finished product/service Supply chain defined as a group of interconnected participating companies that add value to products or services Supply Chain Management is the vital business fu...

Lesson 1: Supply Chain Management A supply chain is the network of all the activities involved in delivering a finished product/service Supply chain defined as a group of interconnected participating companies that add value to products or services Supply Chain Management is the vital business function that coordinates all of the network links, oversees each touchpoint of a company's product or service Components of a Supply Chain Management Planning– plan and manage all resources required to meet customer demand for a company’s product or service Sourcing– choose suppliers to provide the goods and services needed to create the product Manufacturing- organize the activities required to accept raw materials, manufacture the product, test for quality, package for shipping and schedule for deliver Delivery and logistics– coordinate customer orders, schedule deliveries, dispatch loads, invoice customers and receive payments Returning– create a network or process to take back defective, excess, or unwanted products Alternate view of supply chain Value Chain - the supply chain as a chain of value adding activities Demand Chain - the supply chain as continuous demands originating from the consumer and stretching to upstream suppliers Four intrinsic flows of a supply chain 1. Material flow- Involves the flow of raw materials at the beginning of the supply chain to the finished products at the end 2. Information flow- Involves demand, forecasting, production and scheduling, and design and new product information flows among others; information can run both directions– upstream and downstream 3. Finance flow- Involves the flow of monetary resources 4. Commercial flow- The transactional commercial flow concerns with the material flow having to change ownership from the supplier to the buyer repeatedly until the end of the supply chain Types of supply chain models 1. Continuous flow model– one of the more traditional supply chain methods, often best for mature industries 2. Agile model– best for companies with unpredictable demand or customer order products 3. Fast model– emphasizes the quick turnover of a product with a short life cycle 4. Flexible model– a model that makes sure production can easily be ramped up or wound down(seasonality) 5. Efficient model– utilizing equipment and machinery in the most ideal ways in addition to managing inventory and processing orders most efficiently 6. Custom model– this is often the case for highly specialized industries with high technical requirements such as an automobile manufacturer Agile Supply Chain Model  Lesson 2: Building blocks of Supply Chain Management Supply Chain Management It encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. Supply Chain Composition The supply chain includes every step that is involved in getting a finished product or service to the customer What are the process views of a supply chain? What are the building blocks of the supply chain? Process view 1. Cycle view: supply chain consisting series of cycles, each performed at the interface between two successive stages 2. Push/pull view: pull processes are initiated and performed on the forecast of customer orders. Level 1: Strategic The most critical element is the customer value alignment. The key questions here are: What would be the Supply Chain structure and capabilities that will be required to meet customer service needs in an optimal way? How can you leverage your Supply Chain to create value for your customer, partners and your organization? Level 2: Structural There are two key elements in the structural layer of a Supply Chain strategy: Network optimization: What should be the best Supply Chain network configuration to meet channel and customer service requirements. Channel design: What level of operational integration needs to be achieved among the channel members? Level 3: Operational There are three key elements in the operational layer of a Supply Chain strategy: Sourcing, production and inventory management: How should the company source inputs, manufacture products and deploy inventory to match supply and demand at the right cost? Facilities and Transportation operations: What type of distribution and will transportation optimize service, investment and cost? Integrated Planning: What is the most optimal and best in class way to plan end to end Supply Chain operations in collaboration with all the partners? Level 4: Foundational Supporting elements Technology: What type of technology infrastructure is needed to manage and plan the end to end Supply Chain? Processes: What processes and procedures need to be in place for flexible, effective operations? People: What type of skills, capabilities and organizational structure are required to achieve service and operating objectives? Performance Management: What infrastructure, measures and incentives need to be in place to ensure ongoing peak performance? Lesson 3: Supply Chain Operations Reference (SCOR) model SCOR model framework for performance analysis and enhancement across the supply chains a tool employed by manufacturing and service industries to analyze, benchmark, and improve the processes of supply chain management developed in 1996 by management consulting firm PRTM, now part of the Association for Supply Chain Management (ASCM), formerly known as APICS Advantages of Integrating SCOR Reduced inventory Enhanced customer service Streamlined supply chain processes Refined organizational supply chain Improved operational flexibility PLAN includes processes that relate to demand and supply planning The sub-processes are: 1. leveraging resources with requirements 2. designing business rules related to inventory, capital assets, logistics, compliances to regulatory standards, etc. 3. communication plans for the supply chain 4. defining standards to improve and measure supply chain efficiency SOURCE All processes to procure raw materials, stocks, make-to-order, and engineered to ordered goods or services to meet the real or anticipatory demand The sub-processes are: 1. scheduling procurement and deliveries 2. identifying, selecting, and establishing supplier networks 3. order placement, fulfillment, and authorizing payments 4. inventory management 5. managing supplier agreements and supplier relationships 6. assessing supplier performance 7. monitoring material acquisition and sourcing infrastructure MAKE All the processes related to production of make-to-stock, make-to order and engineer products Focuses on: 1. scheduling production activities 2. managing work-in-process, equipment, facilities and the production network DELIVER Includes all processes related to outbound logistics from moving the product from the place of manufacture to the customer Includes processes such as: 1. order management from receiving order enquiry to delivery 2. developing quotes and ring shipment 3. logistics- warehousing, shipments, delivery and invoicing 4. product life cycle management 5. finished inventory management 6. managing compliances related to sales, imports and exports RETURN Includes all processes to handle the returns of materials purchased to the suppliers and returns of finished goods from the customers Focuses on: 1. applications of return policies developed by the organizations 2. authorization and scheduling returns 3. receiving, verifying, and reverse logistics of products 4. replacement and reserve logistics 5. regulatory compliances and asset management 6. after sales customer support and follow up