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OPERATION

MANAGEMENT ON
SUPPLY CHAIN
MANAGEMENT OF
COCA COLA
SUBMITTED TO:-

SUBMITTED BY:-

Prof. M S Kumar

Pavan Kumar Gautam


PGFA1431

Supply Chain Management (SCM) is the management of the flow of goods and
services. It includes the movement and storage of raw materials, work-in-process inventory,
and finished goods from point of origin to point of consumption. Interconnected or
interlinked networks, channels and node businesses are involved in the provision
of products and services required by end customers in a supply chain. Supply chain
management has been defined as the design, planning, execution, control, and monitoring of
supply chain activities with the objective of creating net value, building a competitive
infrastructure, leveraging worldwide logistics, synchronizing supply with demand and
measuring performance globally.
Supply chain management is a cross-functional approach that includes managing the
movement of raw materials into an organization, certain aspects of the internal processing of
materials into finished goods, and the movement of finished goods out of the organization
and toward the end consumer. As organizations strive to focus on core competencies and
becoming more flexible, they reduce their ownership of raw materials sources and
distribution channels. These functions are increasingly being outsourced to other firms that
can perform the activities better or more cost effectively. The effect is to increase the number
of organizations involved in satisfying customer demand, while reducing managerial control
of daily logistics operations. Less control and more supply chain partners led to the creation
of the concept of supply chain management. The purpose of supply chain management is to
improve trust and collaboration among supply chain partners, thus improving inventory
visibility and the velocity of inventory movement.
Supply chain management professionals play a role in all kinds of organizations manufacturers, retailers, transportation companies, third party logistics firms, government
agencies and service firms.
Successful supply chain professionals are typically detailed-oriented with an ability to
prioritize, plan and organize. In addition, they are usually quick-learners, possess excellent
communication skills, can effectively manage relationships and work in teams, and effective
problem-solvers.

What kinds of people pursue SCM degrees?


The profiles of SCM professionals are varied, but in general, such individuals possess many
of the following traits:

good problem solving skills

ability to effectively manage time and resources

a clear vision of the big picture as well as the small details

a desire to work closely with other people

excellent communication skills

ability to think strategically about technology

a desire to take responsibility for developing and implementing their own ideas

Supply chain business process integration involves collaborative work between buyers and
suppliers, joint product development, common systems, and shared information. Operating an
integrated supply chain requires a continuous information flow. However, in many
companies, management has concluded that optimizing product flows cannot be
accomplished without implementing a process approach. The key supply chain processes
stated by Lambert (2004)are:

Customer relationship management

Customer service management

Demand management style

Order fulfillment

Manufacturing flow management

Supplier relationship management

Product development and commercialization

Returns management.
One could suggest other critical supply business processes that combine
these processes stated by Lambert, such as:

Customer service management

Procurement

Product development and commercialization

Manufacturing flow management/support

Physical distribution

Outsourcing/partnerships

Performance measurement

Warehousing management

Process of Supply Chain Management

Supplier
Management

Schedule/
Resources

Material
Flow/Inform
ation Flow

Customer
Management

Conversions

Delivery
Stock Deployment

SCM team flawlessly execute the following processes:

Planning the plan process seeks to create effective long- and short-range supply
chain strategies. From the design of the supply chain network to the prediction of
customer demand, supply chain leaders need to develop integrated supply chain
strategies.

Procurement the buy process focuses on the purchase of required raw materials,
components, and goods. As a consumer, you're pretty familiar with buying stuff!

Production the make process involves the manufacture, conversion, or assembly of


materials into finished goods or parts for other products. Supply chain managers
provide production support and ensure that key materials are available when needed.

Distribution the move process manages the logistical flow of goods across the
supply chain. Transportation companies, third party logistics firms, and others ensure
that goods are flowing quickly and safely toward the point of demand.

Customer Interface the demand process revolves around all the issues that are
related to planning customer interactions, satisfying their needs, and fulfilling orders
perfectly.

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. It is said that the ultimate goal of any effective supply chain management
system is to reduce inventory (with the assumption that products are available when needed)
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. It is said that the ultimate goal of any effective supply chain management
system is to reduce inventory (with the assumption that products are available when needed).
As a solution for successful supply chain management, sophisticated software systems with
Web interfaces are competing with Web-based application service providers (ASP) who
promise to provide part or all of the SCM service for companies who rent their service.
Supply chain management flows can be divided into three main flows:

The product flow

The information flow

The finances flow

The product flow includes the movement of goods from a supplier to a customer, as well as
any customer returns or service needs. The information flow involves transmitting orders and
updating the status of delivery. The financial flow consists of credit terms, payment
schedules, and consignment and title ownership arrangements.

There are two main types of SCM software: planning applications and execution applications.
Planning applications use advanced algorithms to determine the best way to fill an order.
Execution applications track the physical status of goods, the management of materials, and
financial information involving all parties.
Some SCM applications are based on open data models that support the sharing of data both
inside and outside the enterprise (this is called the extended enterprise, and includes key
suppliers, manufacturers, and end customers of a specific company). This shared data may
reside in diverse database systems, or data warehouses, at several different sites
and companies.

Supply chain management is facilitated by :

Processes
Structure
Technology

Supply Chain and Demand Chain

Demand chain is defined as the system by which organizations manage sales and
distribution of products and services to end users.

Conceptually incorrect to look at demand chain separately

Look at the pipe as a whole.

SUPPLY CHAIN DRIVERS

Demanding customers
Shrinking product life cycles
Proliferating product offerings
Growing retailer power in some cases
Doctrine of core competency
Emergence of specialized logistics providers
Globalization
Information technology

Supply Chain Goals

Efficient supply chain management must result in tangible business improvements. It


is characterized by a sharp focus on
Revenue growth
Better asset utilization
Cost reduction

Critical Success Factors today

Cross functional management and planning skills


Ability to define, measure and manage service requirements by market segment
Information systems
Relationship management and win-win orientation.

Coca Cola Supply Chain Process

A typical supply chain process of coca cola involves a variety of stages:

Customers

Retailers

Wholesales/distributors

Manufacturers/ Plants

Component/raw material suppliers

Bottle Plant of Coca Cola

Value Chain Process

PUTTING IN PLACE A WELL OILED SUPPLY CHAIN


Supply chain as an efficient customer satisfying process

The steps involved


Step1- Designing the supply chain
Determine the supply chain network
Identify the levels of service required
Step 2 - Optimizing the supply chain
Determine pathways from suppliers to the end customer

Customer markets to Distribution centers


Distribution centers to production plants
Raw material sources to production plants
Identify constraints at vendors, plants and distribution centers
Get the big picture
Plan the procurement, production and distribution of product groups rather than
individual products in large time periods- quarters or years .

Step 3- Material flow planning

Determine the exact flow and timing of materials


Arrive at decisions by working back from the projected demand through the supply chain
to the raw material resources
Techniques
Step 4 - Transaction processing and short term scheduling
Customer orders arrive at random
This is a day to day accounting system which tracks and schedules every order to meet
customer demand
Order entry, order fulfillment and physical replenishment.
Information flows in Supply Chain Management

Information is overriding element

Need for databases

Master files: Information about customers, products, materials, suppliers,


transportation, production and distribution data- do not require frequent
processing

Status files- heart of transaction processing- track orders and infrastructure


status- updated daily.

Essentially using the same information to make all plans right from structuring the network to
processing every day supply chain tasks.
Issues in customer management

Penetration vs Spread

Concentration is necessary to commit the necessary resources for true customer


integration

Depth of customer contact


R&D - sharing information vs developing new products together
Logistics - Pros and cons of methods of transportation vs reengineering the logistics
process

While doing my SIP in Coca Cola I will focus on to understand


the inventory,warehouse system and information flow try to find
out the solutions of these problems if possible it pertains.
Inventory and Warehouse system will include

A-B-C classification

Studying the demand and finding the best method for forecasting.

Studying the inventory problems.

Building the dynamic inventory model.

Determination of economic order quantity.

Determination of stock level.

Determination of safety stocks.

Selecting the proper system of ordering for inventory.

Ending up with the final inventory model, which will be solution for our problem
with numerical example.

Information Flow System will include

Detecting and identifying the problems and the area for improvement.

Build the information system for the company with the improvements and
modifications.

Ending up with final information flow system, which will be the solution for our
problem.

The information model deals with the integration of supply chain members and
concentrates on the flow of information among the chain members.

Information technology plays a vital role for increasing collaboration among supply
chain members. From the information point of view the effective supply chain
management must provide the right amount of relevant information to the right person
at the right time.

Information is the key to successful supply-chain management because no product


flows until information flows.

Conclusion
In order to have successful and smooth supply chain process we should focus on following
factors:

Segmentation of customers based on service needs

Customization of logistics network

Listen to signals of market demand and plan accordingly.

Differentiate product close to the customer

Source strategically

Develop a supply chain wide technology strategy

Accept channel spanning performance measures

Inventory and Warehouses system in Coca Cola

A-B-C classification

Studying the demand and finding the best method for forecasting.

Studying the inventory problems.

Building the dynamic inventory model.

Determination of economic order quantity.

Determination of stock level.

Determination of safety stocks.

Selecting the proper system of ordering for inventory.

Ending up with the final inventory model, which will be solution for our problem
with numerical example.

Supply Chain Management (SCM) is the management of the flow of goods and
services. It includes the movement and storage of raw materials, work-in-process inventory,
and finished goods from point of origin to point of consumption. Interconnected or
interlinked networks, channels and node businesses are involved in the provision
of products and services required by end customers in a supply chain. Supply chain
management has been defined as the "design, planning, execution, control, and monitoring of

supply chain activities with the objective of creating net value, building a competitive
infrastructure, leveraging worldwide logistics, synchronizing supply with demand and
measuring performance globally.
Supply Chain Management (SCM) includes all the activities that must take place to get the
right product into the right consumers hands in the right quantity and at the right time from
raw materials extraction to consumer purchase. SCM focuses on planning and forecasting,
purchasing, product assembly, moving, storage, distribution, sales and customer service.
SCM professionals are involved in every facet of the business process as they strive to
achieve a sustainable competitive advantage by building and delivering products better, faster
and cheaper.
Supply chain management professionals play a role in all kinds of organizations manufacturers, retailers, transportation companies, third party logistics firms, government
agencies and service firms.
Supply chain management, then, is the active management of supply chain activities to
maximize customer value and achieve a sustainable competitive advantage. It represents a
conscious effort by the supply chain firms to develop and run supply chains in the most
effective & efficient ways possible. Supply chain activities cover everything from product
development, sourcing, production, and logistics, as well as the information systems needed
to coordinate these activities.
The organizations that make up the supply chain are linked together through physical flows
and information flows. Physical flows involve the transformation, movement, and storage of
goods and materials. They are the most visible piece of the supply chain. But just as
important are information flows. Information flows allow the various supply chain partners to
coordinate their long-term plans, and to control the day-to-day flow of goods and material up
and down the supply chain.
Supply chain management is as much a philosophical approach as it is a body of tools and
techniques, and typically requires a great deal of interaction and trust between companies to
work. For right now, however, lets talk about three major developments that have
brought SCM to the forefront of managements attention.

The information revolution

Increased competition and globalization in todays markets

Relationship management

A firms SCM efforts start with the development and execution of a long-term
supply chain strategy. Among other things, this strategy should:

Identify what supply chains the firm wants to compete in.

Help managers understand how the firm will provide value to the supply
chain.

Guide the selection of supply chain partners, including suppliers,


subcontractors, transportation providers, and distributors.

As firms struggle to understand what supply chains they compete in, it is often
valuable to map the physical flows and information flows that make up these
supply chains. From these maps, firms can begin to understand how they add
value, and what information is needed to make the supply chain work in the
most effective and efficient way possible.
Supply chain management flows can be divided into three main flows:

The product flow

The information flow

The finances flow

The product flow includes the movement of goods from a supplier to a customer,
as well as any customer returns or service needs. The information flow involves
transmitting orders and updating the status of delivery. The financial flow
consists of credit terms, payment schedules, and consignment and title
ownership arrangements.
There are two main types of SCM software: planning applications and execution
applications. Planning applications use advanced algorithms to determine the
best way to fill an order. Execution applications track the physical status of
goods, the management of materials, and financial information involving all
parties.
Some SCM applications are based on open data models that support the sharing
of data both inside and outside the enterprise (this is called the extended
enterprise, and includes key suppliers, manufacturers, and end customers of a
specific company). This shared data may reside in diverse database.
What kinds of people pursue SCM degrees?
The profiles of SCM professionals are varied, but in general, such individuals
possess many of the following traits:

good problem solving skills

ability to effectively manage time and resources

a clear vision of the big picture as well as the small details

a desire to work closely with other people

excellent communication skills

ability to think strategically about technology

a desire to take responsibility for developing and implementing their own


ideas as systems, or data warehouses, at several different sites and
companies.

Supply Chain Process

Supplier
Management

Schedule Ss
/Resources

Material Flow
and Information
Flow

Customer
Management

Conversion

Delivery
Stock
Deployment

Integrating SCM Applications