Supply chain management
-The average company spends nearly half of every dollar that it earns on production
- In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains
BASICS OF SUPPLY CHAIN
SCM – the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability
The supply chain has three main links.
1. Materials flows from suppliers and their upstream suppliers at all levels
2. Transformation of materials into semi-finished products, or the organization’s own production processes
3. Distribution of products to customers and their downstream customers at all levels
INFORMATION TECHNOLOGY’S ROLE IN THE SUPPLY CHAIN
Information technology’s primary role in SCM is creating the integrations or tight process and information linkages between functions within a firm such as marketing, sales, finance, manufacturing, and distribution – and between firms, which allow the smooth, synchronized flow of both information and product between customers, suppliers and transportation providers across the supply chain
VISIBILITY
· Supply Chain Visibility is the ability to view all areas up and down the supply chain. Changing supply chains requires a comprehensive strategy buoyed by information technology. Organizations can use technology tools that help them integrate upstream and downstream, with both customers and suppliers.
· The bullwhip effect occurs when distorted product demand information passes from one entity to the next throughout the supply chain.
CUSTOMER BEHAVIOR
· The behavior of customers has changed the way businesses complete. Customers will leave if a company does not continually meet their expectations. They are more demanding because they have information readily available, they know exactly what they want, and they know when and how they want it.
· Demand planning software generates demand forecasts using statistical tools and forecasting techniques. Companies can respond faster and more effectively to consumer demands through supply chain enhancements such as demand planning software.
· Once an organization understands customer demand and its effect on the supply chain it can begin to estimate the impact that its supply chain will have on its customers and ultimately the organization’s performance.
COMPETITION
· Supply chain planning (SCP) software uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory. SCP depends entirely on information for its accuracy.
· Supply chain execution (SCE) software automates the different steps and stages of the supply chain. This could be as simple as electronically routing orders from a manufacturer to a supplier.
SPEED
· These systems raise the accuracy, frequency and speed of communication between suppliers and customers, as well as between internal users.
· Another aspect of speed is the company’s ability to satisfy continually changing customer requirements efficiently, accurately and quickly.
SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS
SCM industy best practices include:
1. Make the sale to suppliers
2. Wean employees off traditional business practices
3. Ensure the SCM system supports the organizational goals
4. Deploy in incremental phases and measure and communicate success
5. Be future oriented
SCM Success Stories
Numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of integrated supply chains
DSSs allow managers to examine performance and relationships over the supply chain and among:
- suppliers
- Manufacturers
- Distributors
- Other factors that optimize supply chain performance
-THANK YOU-
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