Supply Chain Management

Session 1 Supply Chain Management Overview

Learning Objectives
What is Supply Chain Management How it differs from traditional Purchase and Materials function How it gained momentum from Purchase and Materials General Supply Chain Model for Manufacturing and Service Industry Summary

What is Supply Chain Management

Total systems Approach to Manage the entire Flow of Information, Materials & Services through Factories & Warehouses to the End Customers Information Sharing, Process Specialization & Integrated Approach for a Proper Business Forecast by Avoiding Customer Surprises & by Avoiding Postponement from Vendors to Customers

How it Differs from Traditional Purchase and Materials Function

Materials Management is Concerned with the Flow of Materials to Manufacturing Departments from Suppliers End Learning How Much to Set, When to Set, From Where to Set and at What Price & Quality & last but not the Least, Continuity of Supply

How it Gained Momentum from Purchase & Materials

Reduce cost of Making the Purchase Reduce Transportation Cost Reduce Production Cost Improve Product Quality Reduce Lead-Time Collaborative Approach Between Vendor & Customer Business Partner Relationship

General Supply Chain Model for Manufacturing and Service Industry

LEGAL ACCOUNTS

Purchase is the Link between the Organization its Suppliers

IT

PURCHASE

R&D

OPERATIONS SUPPLIERS

DESIGN

Summary
A Systems Approach for the End-to-End Processes Avoiding Surprises at any Point of Time but at Bare-Minimum Operational & Holding Cost Role of Supply Chain Creates a Platform for Business Partner Relationship Between Customers & Vendors

Supply Chain Management

Session 2 Scope and Relevance

Learning Objectives
Activities Involved along with Objectives How to Overcome Traditional Approach 21st Century Supply Chain Activities to Initiatives Latest techniques used TQM, JIT, ReEngineering Summary

Activities involved along with objectives

Reduce Supply Chain Cost to Minimum Possible Level Maximize Overall Value Generated Achieve Maximum Supply Chain Profitability Improve Customer Satisfaction Reduce Inventory Carrying Cost

How to Overcome Traditional Approach

Avoid Overstocking Prevent Postponement & Delay in Shipment Effective Coordination between Internal Customers for External Dissatisfaction Quality Management Sourcing to Delivery

21st Century Supply Chain Activities to Initiatives

Firms Collaborative Approach to Leverage Strategic Positioning to Improve Operating Efficiency Information, Service, Product, Knowledge & Financials are the Key Drivers to Set SCM in Practice. Rapid Emergence of SCM is Driven by Quick Response, Globalization & Holistic Approach to act as a Benchmark for Proper Positioning.

Latest Techniques Used TQM, JIT, Re-Engineering

TQM A management Philosophy that takes as its Central Focus to Improve Quality of Products & Services for Creating Firms Image in the Market. JIT Another Management Tool to Improvise on Less Inventory & Making Goods Available at Appropriate Location Re-Engineering A Business Strategy to Allocate & Relocate as Per Situation

Summary
Arrange Quality Material on Time
Focus on Business Partner relationship to Avoid Overstocking Emphasis on Value Creation Positioning by Way of Differentiation

Supply Chain Management

Session 3 Role and Importance of Suppliers

Learning Objectives
Role of Supply Chain Manager Objectives of Supply Chain Manager Supplier Management and its Functions Summary.

Role of Supply Chain Manager

Set up Planning Premises in developing a set of metrics to monitor efficiency, cost Quality & Value to the Customers Choose Suppliers that will deliver goods & Services company needs to create a product Schedule activities which are necessary for Production, Testing, Packaging & Delivery Create Network for receiving defective & excess products back from customers who have problems with delivered Products

Objectives of Supply Chain Manager

Reduce cost of making the purchase Reduce transportation Cost Reduce Production Cost Improve Product Quality Improve Product Design Reduce Inventory Costs Improve Customer Satisfaction Introduce New Products or Processes

Supplier Management and its Functions

Assess all relevant quantitative Costs Assess all Qualitative Costs Review capabilities of Current Suppliers Evaluate new Suppliers Make & Implement Decisions Supplier Scheduling Value Analysis & Value Engineering

Summary
Focus on Proper Supplier Network Qualitative & Quantitative for effective supplies Value Analysis & Value Engineering for proper Supplier Evaluation Improve Customer Satisfaction through proper Network Management

Supply Chain Management

Session 4 Basic Buying Process

Learning Objectives
Objectives of Inventory Management and Control. Scope and Importance of Inventory Management. Roles and Responsibilities of Supply Chain Manager. Summary

Objective of Inventory Management & Control

Planning Material to avoid Stock outs & Shortages From Retail point it is Velocity of Buying & Selling Centralized Inventory Management helps effective Co-ordination & Communication When to Order, from where, how much, at what price & at what location Understand criticality of safety stocks combined with uncertainty

Scope & Importance Of Inventory Manager

Improve accuracy of Forecasts Reduce Number of back orders Economies of Scale in Manufacturing, Purchasing & Transportation Balancing Supply & Demand Provide Protection & act as a buffer Inventories influence firms financial performance by understanding ROI, Net Profit Margin and Return on Asset Managed

Role & Responsibility Of Supply Chain

Make or Buy/Make Buy Decisions Supplier Scheduling Value Analysis/Value Engineering Supplier Evaluation Evaluating scope for new Suppliers Cross Co-ordination amongst different departments Managing Quality and healthy relationship with Suppliers

Summary
Centralized Inventory Management helps SCM Managers for effective Planning Balancing Demand & Supply

Healthy Relationship with Suppliers

Cross Function Co-ordination to improve accuracy

Supply Chain Management

Session 5 Managing Supply Chain

Learning Objectives
Procurement Process. Relevance of procurement for Manufacturing & Services. Importance of quality as an interface. Logistics interface for managing supply chain. Summary.

Procurement Process
Ask for Quotations Negotiations Vendor Audit Sampling Quality Approval Trial Order Business Partner Relationship

Relevance of Procurement for Manufacturing & Services

Lean Supplies Zero Defect & JIT Supplies Continuous Improvement Exploring New Opportunities for R & D Business Partner Relationship

Importance Of Quality as Interface

Always Remember the GIGO Principle (Garbage In Garbage Out) Quality First, Customer Always Supplier Development using Kaizen & Total Quality Management Principles

Logistics Interface for Managing Supply Chain

Integration of Information, Transportation, Inventory, Warehousing & Packaging Geographically Allocating Raw-Material, Work-In-Progress from Suppliers to Manufacturing Sites Commitment to Continuous Improvement Adds Value to facilitate Sales to meet Customer Demand

Summary
Integration through Logistics help Supplier Chain manager to take quick & effective decisions Business Partner Relationship for Continuous Improvement Value addition for exceeding Customer demand for Branding

Supply Chain Management

Session 6 SCM - Strategies.

Learning Objectives
Out Sourcing and Value Chain Management. Multiple, Few, Vertical, Keiretsu and Virtual Companies. Strategic Focus on Supply Chain Management. Role of Purchasing in Supply Chain Management. Summary

Out Sourcing & Value Chain Management

Support Future Growth & Business Directions Reduce Cost Focus on Core Competencies Greater Economies Of Scale, Process Efficiencies & Enhance domain Expertise Value Chain includes Production, R & D, Materials, Marketing, Human Resources, Information Systems & firms Infrastructure

Multiple, Few, Vertical, Keiretsu & Virtual Companies

Manufacture same products at multiple locations Manufacture same Products at few locations Continuous building of process capabilities irrespective of locations Creating Virtual Company as one of the SBU

Strategic Focus On Supply Chain Management

Integration through Strategic Business Units Business Environment by understanding Strengths & Weakness of the Market as well as Organization Impact Of Technology & Use OF MIS Reporting responsibility at the CEO level

Role Of Purchasing In Supply Chain

Inbound Logistics ( Receive, Store & Disseminate Inputs) Operations ( Machinery, Assembling, Packing) Out bound Logistics ( Collecting, Storing & Physically distributing Finished Goods to Customers) Sales & Marketing activities with Advertising, Distribution, Sales Promotion Procurement of Raw Materials, Consumables Technical Development for Product and Process Design

Summary
Manufacture products at location which will give better ROI In bound & Out bound Logistics acts as key differentiator to manage Supply Chain Integration to be taken on top priority to avoid miss communication between internal Customers for external disatisfaction

Supply Chain Management

Session 7 Bench Marking SCM

Learning Objectives
Quality. Cost. Lead Time Strategic Location. Shortages. Summary

Quality
Conformance to the given requirements Fitness for Use Its a journey & Not the final destination Material to be procured for right Quality as per the specifications given by technical department

Cost
Material to be procured at a price which has to justify Not to Compromise on price which might give unfavorable results Rejection of goods should not be at the cost of poor inputs Create value addition and not cost addition

Lead Time
Integration of Cross Function Coordination and Suppliers-Top Priority Supplier Scheduling & Re-scheduling keeping in mind variations in demand forecasting Sufficient lead time to be given to Suppliers to avoid surprises

Strategic Location
Manufacture products where costs are low Avail Tax benefits Monitor smooth flow of materials and avoid delays due to poor Transportation Allocate sufficient resources for enhancing Productivity to deliver the best results from that Strategic Location

Shortages
Poor Planning Create Shortages Non availability of Product triggers customers to become butterfly

Organization invites competition due to Shortages

Supply Chain Managers should be alert to avoid any kind of Shortages for Raw Materials or Finished Goods

Summary
Quality should be treated on top priority Relationship with Suppliers can reduce purchasing cost

J.I.T. philosophy to be adopted to avoid shortages vi a vi excess stocking Strategic Location to evaluate where and when to manufacture

Supply Chain Management

Session 8 SCM Process Tools

Learning Objectives
Make / Buy Or Make-Buy Decisions. Supplier Scheduling. Value Analysis and Value Engineering. Supplier Certification. Summary.

Make/Buy or Make-Buy Decision

Lower Cost as it is In-House Production Facilitating Specialized Investments Product Technology Improved Scheduling Advantages of Buy: Strategic Flexibility Lower Cost

Supplier Scheduling
Based on Demand Forecasting Location wise arranging Raw-materials, Spares & Components

Understanding Lead time of each Supplier

Avoiding excess stocks at Go downs & Ware Houses Avoiding Shortages at Plant level

Value Analysis/ Value Engineering

From Suppliers point of view this is mostly done at the corporate level Supply Chain Manager involves various Permutation Combinations to evaluate decision making Make/Make-Buy decisions are based on Value Analysis/Value Engineering Decision for adding/Deleting suppliers are taken due to Value Analysis

Supplier Certification
Approval from Quality Control & Quality Assurance to be done for certifying Supplier Various Conditions and Legalities involved during certification process Suppliers to adhere to the said norms Periodic Audit undertaken to check any malpractices

Summary
Business Decisions are taken by conducting Value Engineering/Value Analysis Make/Buy or Make-Buy decisions based on various parameters Supplier Scheduling based on Strategic Locations Certification of Suppliers is a must for avoiding any mishaps in long run

Supply Chain Management

Session 9 SCM Business Strategy

Learning Objectives
Co-ordination/Interaction/Feedback. ABC Analysis. Vendor Auditing and Rating. Measurement of Vendors. Structural Importance CROSS DOCKING. Summary.

Co-ordination/Interaction/ Feedback
Co-ordinate between Materials Function, Logistics Function & Supply Chain Management Function Interaction with Integration of Resources to avoid Surprises Feed back from plant locations to Centralized Purchase function using IT platform

ABC Analysis
Adequate Quality, Prompt Deliveries & Favorable Vendor Relations ABC Analysis Involves how much to store for Critical items where lead time is more ABC Analysis also helps SCM Managers to work out cost allocations for Inventory Management ABC Analysis guides Finance department for resource/fund allocation

Vendor Auditing/Rating
To avoid sub standard products Vendor has to be audited by Commercial & Technical Team Vendor registration form has to be filled All relevant norms like facilities, machinery Equipments, Promoters background, Site Location, Cleanliness along with Plant visit & Financial Analysis of the Vendor

Measurement Of Vendors
Reputation of Vendor Buyer should ask list of major customers where the vendor is perusing Business Ethical Standards & delivery Promises Technological Competency along with the desire to invest for Good Manufacturing Practices

Structural ImportanceCross Docking

It is an Innovation in transportation System Suppliers Shipments are taken fro various docks at the Warehouse when they arrive & are later transferred from truck to another dock Provides economy of full truck load shipments which also reduces ware house Inventory

Summary
No appointment of Vendor to be done with out Auditing Reputation of Vendor is a must ABC Analysis helps Supply Chain Managers to take quick Decisions Cross Docking helps to minimize Ware house Inventory

Supply Chain Management

Session 10 Best SCM Practices to Improve Supply Chain Process.

Learning Objectives
15 Steps to transform Purchase Into Strategic Sourcing

15 Steps
Develop Plan of Action to integrate Individual Purchasing Units Understand different Business & Corporate Cultures Identify External & Internal factors that could work the efforts Determine Annual Spending by way of Budget Ascertain Percentage spend under Strategic Sourcing Calculate Saving Potential through Development of New Procurement Organization

Cont:
Establish Personal & Team Credibility Survey all Existing Procurement Related Systems Create a Business Case Develop a Strategic Vision Statement & Schedule Evaluate Existing Procurement Staffing Skills Enumerate Role of A Supplier

Cont:
Involvement Of Senior Management Implementation Of Strategic Plan Formulating Metrics to track results achieved by the new Procurement Organization

Supply Chain Management

Session 11 5 S Tools for SCM

Learning Objectives
Lean Supply Strategies 5 S Tools Summary.

Lean Supply Strategies

Lean Supply implies Supply Chain is appropriate for lean production which is nothing but Waste elimination in Process Introduction of the Concept Of Lean Supply & 5 S is helpful in measuring the rejections at a given point

5 S 5 Ss are lean concepts derived

from Japanese Words like

Seiri (Sort) Seiton ( Set In Order) Seiso ( Shine or Purity) Seiketsu(Standardize) Shitsuke (Sustain)

5 S
Sort: Remove all but the necessary Materials, Equipment & Supplies Set In Order: Arrange Product & Equipment so it is easy to find & easy to use in the Context of Supply Chain Shine: Keep Everything Clean Standardize: Integrate first three S Sustain: Discipline Starts with the Leadership

Summary
Treat Suppliers as Points of Flexibility Evaluate Internal Processes & Structures Eliminate Communication Gap Give Importance on monitoring Supplier Events Benefits by way of Cost, Time & Quality

Supply Chain Management

Session 12 Role Of IT in SCM

Learning Objectives
Importance of IT systems for SCM Effective time and Cost Management. IT Diagram and its connectivity. Summary.

Importance Of IT Systems in SCM

Effective Information Technology helps firm to ensure meeting the needs of the Customers Helps in Vendor Management, Sales Forecasting, Customer Services for Decision Support Systems Order Processing System is the nerve Centre Of SCM which is supported by IT

Effective Time & Cost Management

Consolidation Of Spending Order what is required & understand the Re-Order Level using JIT Principle IT helps to establish a comprehensive Supplier Management Program IT helps to track on line Status of the Entire Logistics, Distribution & Transportation

IT Diagram & Its Connectivity

A Complete Diagram to be drawn with Explanation

Summary
IT has created a platform to streamline SCM activities IT helps for Decision Support Systems IT gives an landmark to avoid overspending IT helps for stocking what is required & helps Re-Order Level

Supply Chain Management

Session 13 Six Elements of Superior Design of SCM

Learning Objectives
Global Supply Chain Management Summary

Global Supply Chain Management

Wrong Decision in SCM can result in huge loss on Global front A simplified description of Five Stage Segments of Organizational Performance : a) Business Situation b) Business Strategy c) Design Elements d) Culture e) Business Results

Business Situation
Environmental Scanning Of Business Goals, Competitive Positioning, Employee, Suppliers & Share holders

Understanding & Defining the gap

Proper Assessment for the future

Focusing on what is required

Business Strategy
Choice that determine how company resources interact with the Market What and Where to Manufacture Pears Soap World wide is manufacturing base is India Cost effectiveness, Strategic Supplier Identification & Business Partner Relationship is key differentiating factor

Design Element
Understanding the Design Process Ensure Holistic Thinking Important elements are tasks, People, Information, Decision Making, Rewards and Structure Helps Organizations take quick & Effective Decisions

Culture
How to Shape Vision & Mission Statement Operational Behavior play important role in shaping the future of the Organization Certain Companies Award businesses only to low bidder as their culture is price driven Certain Companies give thrust on innovation & pay high price to the Supplier

Business Results
The most important avenue is Bottom line Out put of the Organization can be measured on the basis of Cost, Market Share, Profits, Sales & Innovation Constantly Changing Business Environment demands the Organizations to recreate Continuously

Summary
Organization to take a Holistic View Construct new dimensions of Business to grow Deliver what the Market wants & Change to the required level of Operations Constantly view & Review Business Models & Change according to the circumstances

Supply Chain Management

Session 14 Importance of Logistics, Distribution and Transportation

Learning Objectives
Role of Logistics. Role of Distribution. Role of Transportation. Internal Logistics & Distribution along with IT. Summary.

Role Of Logistics
Logistics involves Integration Of Information, Transportation, Inventory, Ware housing, Material Handling & Packaging Operational Responsibility is geographical positioning of Raw-Materials, WIP & FG where required at the lowest possible Cost

Role Of Distribution
Efficient Movement of Finished Products from end of prediction line to the consumer Activities undertaken in the execution of physical distribution of goods to the end user Acts as a link between the end to end users

Role Of Transportation
It involves two major functions like a) Physical Movement of Products b) Product Storage Main Aim Of transport Principle is Economy of Scale & Economy of distance

Internal Logistics & Distribution along with IT

Internal Logistics & Distribution are well connected for proper flow of Information Helps Decision Making faster Create Platform for Effective Transportation Avoid Communication Gap

Summary
Distribution, Logistics & Transportation are the pillars of Supply Chain Management To strengthen the Scope of Supply Chain Management IT related Systems can act as spinal Cord for Tracking

Supply Chain Management

Session 15 Role of SCM in Revenue Management

Learning Objectives
Re-order Level Analysis Safety Stock Analysis. J.I.T. along with Quality. Time and Revenue Management. Summary.

Re-Order Level Analysis

Control is Provided by Continuous Monitoring of Inventory Withdrawals & Inventory Levels Economic Order Quantity is Justified on the basis of Stock Movement, Market Demand & Buffer Stocks

Safety Stock Analysis

Safe Guard Stock out Situations when demand is uncertain Re-Order Level, Economic Order Quantity, Safety Stock & Stock Out Situation is the Key Differentiating Factor of Supply Chain Manager Hold Reserve Stock Level as cushioning

J.I.T. along with Quality

Inventory Accuracy can be Managed using JIT Principle Marrying with the Vendors can help Supply Chain Managers to rely upon for JIT along with Superior Quality Quality Up gradation can be thought over as suppliers treat them as Partners in Progress

Time & Revenue Management

Goods are made available on time by avoiding delay in Shipments with desired Quality Cash Flow can be maintained by implementing stringent norms right at the grass root levels to avoid Overdraft Accounts & Finance Should guide the SCM team for managing resources under strict Supervision

Summary
Avoid Stock Out Situations Create Business Partner Relationship Focus on Stringent Quality & delivery norms Stress upon Safety Stocks for Critical Inputs Manage Cash Flow to avoid Overdraft

Supply Chain Management

Session 16 CASE STUDIES