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Supply Chain Management

System

By:
Naina Jyothi
Pinky Lakhani
Renju Thambi
Renju Varghese
Sandeep
Supply chain management refers to

The coordination of activities involved


in making and moving a product.
It is the network of businesses and
business processes involved in the creation and selling
of a product, from suppliers that procure raw materials
through retail outlets and customers.
The upstream portion of the supply chain includes
the organization's suppliers and the processes for
managing relationships with them.
The downstream portion consists of the organizations and
processes for distributing and delivering products to the
final customers.

The manufacturer also has internal supply chain


processes for transforming the materials and services
furnished by suppliers into finished goods and for
managing materials and inventory.
Inefficiencies in the supply chain :

could include parts shortages, underutilized plant capacity,


excessive inventory, or runaway transportation costs,
Which are caused by inaccurate or untimely information
and can waste as much as 25% of operating costs.

Uncertainties also arise because many events cannot be


foreseen—product demand, late shipments from suppliers,
defective parts or raw material, or production process
breakdowns.
Bullwhip effect
Distortion of information about the demand for a
product as it passes from one entity to the next across
the supply chain.
More accuracy from the Supply chain management
system can help in overcoming the bullwhip effect.

With Perfect information about demand and production,


a firm can implement an effective just-in time(a
japaneese concept), delivering goods in the right amount
and at the right time as they are needed.
Inaccurate information can
cause minor fluctuations in
demand for a product to be
amplified as one moves further
back in the supply chain.

Minor fluctuations in retail sales


for a product can create excess
inventory for distributors,
manufacturers, and suppliers.f
Classification of supply chain s/w

Classified into two types:


a).Supply chain planning system:
1). generate demand forecasts for a product.
2). develop sourcing and manufacturing plans for that product
3). make adjustments to production and distribution plans, and
4).share that information with relevant supply chain members.

One of the most important supply chain planning functions is


demand planning, which determines how much product a business
needs to make to satisfy all of its customers' demands.
b).Supply chain execution system:
physical flow of products
through distribution centers and warehouses
to ensure that
products are delivered to the right locations
in the most efficient manner.
Today, using intranets and extranets, all members of the supply chain can
instantly communicate with each other, using up-to-date information to adjust
purchasing, logistics, manufacturing, packaging, and schedules.
Push-based model (also known as build-to-stock)

Earlier supply chain management systems were


driven by a push-based model (also known as
build-to-stock)
in which
production master schedules are based on
forecasts or best guesses of demand for products,
and products are "pushed" to customers.

Supplier Manufacturer Distributor Retailer Customer


Pull-based model (or demand-driven model or
build-to-order):
With Web-based tools, supply chain management
follows a pull-based model (or demand-driven model
or build-to-order), in which actual customer orders or
purchases trigger events in the supply chain.

Supplier Manufacturer Distributor Retailer Customer


Concurrent supply chain system
Concurrent supply chain is where

information flows in many directions


simultaneously

among members of a supply chain network.


Ultimately, the Internet could create a "digital logistics
nervous system" throughout the supply chain to
permit simultaneous, multidirectional communication
of information about participants' inventories, orders,
and capacities.
Figurative representation of
Concurrent Supply chain System
The business value of supply chain management
systems includes:

* Streamlined supply chain and accurate


information

* Reduced supply chain costs

* Increased sales through accurate product


availability
Example

IBM® Cognos®
Suppply Chain Analytics provides ready-built
reports, analyses and metrics for key business
functions.

Cognos Customer Analytics delivers pre-built


reports, metrics, and connections to standard data
sources to help you understand sales
performance, product sales and the health of your
customer relationships. Identify your top revenue-
generating customers, your most profitable
customers and more.
* Determine whether your stock levels and
fluctuations let you meet customer demand.
* Understand yield and yield losses across all
plants or for specific operations. Analyze the
relationship between scrap, quantity, cost, and lost
profits.
* Analyze and report on time-to-delivery, quality,
and costs by plant, department or shift.
* Make better decisions about routing, material
usage and substitutions.
* Monitor and analyze product cycle time, inventory
aging and downtime.
* Evaluate buyer volume, budget distribution, and
relationships to consolidate or redistribute
purchasing.
Thank You

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