GROUP-2: SUPPLY CHAIN MANAGEMENT (SCM) -

AN OVERVIEW

PRESENTED BY:-
VIVEK KUMAR (M16-17)
YASH PATHAK (M16-18)
 CONTENTS
• Introduction to supply chain management (SCM)
• Supply Chain Model
• Stages firms go through in adopting SCM
• SCM: A tool for competitive advantage
• Successfully applying the SCM approach
• Logistics v/s Supply Chain Management (SCM)
• Managing Flows
• Strategic role of Logistics
• Controllable Elements in a Logistics System
• Calculating Logistics Costs
• B2B Logistical Service
• B2B Logistical Management
• Common elements of Logistics Service
• Case Study: Trans-Pro Logistics Inc.
• Short video: 5-6 mins.
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 WHAT IS SUPPLY CHAIN MANAGEMENT?

“Supply chain management (SCM) is the integration of business

processes from end user through original suppliers that provides
products, services, and information that add value for customers.”
- Council of Supply Chain Management Professionals (CSCMP)

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 ABOUT SUPPLY CHAIN MANAGEMENT
• Supply chain includes a variety of firms, ranging from those that process
raw materials to make component parts to those engaged in wholesaling.
Included also are organizations engaged in transportation, warehousing,
information processing, and materials handling.
• Supply chain functions include sourcing, procurement, product design,
product scheduling, manufacturing, order processing, inventory
management, materials handling, warehousing, and customer service.

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 SUPPLY CHAIN MODEL

Source: Supply Chain Management (6th Edition)_Sunil Chopra, Peter Meindl & D.V. Kalra

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 STAGES FIRMS GO THROUGH IN ADOPTING SCM

Source: Business Marketing Management: B2B (9th Edition)_Michael D. Hutt & Thomas W. Speh

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 SCM: A TOOL FOR COMPETITIVE ADVANTAGE
SCM Goals: Benefits to the final customer:

1) Waste reduction 1) Waste reduction

2) Time compression 2) Improves cycle time

3) Flexible response 3) Flexible response

4) Unit cost reduction 4) Minimizes cost

Information & Technology Drivers: Financial Perspective Benefits:

1) SCM software applications 1) Lower Costs
2) SAP or Oracle 2) Higher profit margins
3) Enhanced cash flow
4) Revenue growth
5) Higher rate of return on assets
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 SUCCESSFULLY APPLYING THE SCM APPROACH

• Understand how their suppliers work and develop deep knowledge of the
degree of efficiency and effectiveness that particular suppliers demonstrate
• Turn supplier rivalry into an opportunity by rewarding quality, innovation,
and cost-reduction initiatives
• Actively supervise suppliers and help them improve their operational
capabilities
• Continuously and intensively share information with suppliers
• Conduct joint improvement activities to advance mutual goals

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 LOGISTICS V/S SUPPLY CHAIN MANAGEMENT

S.No. Basis for Comparison Logistics Supply Chain Management

The process of integrating the movement The coordination and management of the
1 Meaning and maintenance of goods in and out the supply chain activities are known as
organization is Logistics. Supply Chain Management.

2 Objective Customer Satisfaction Competitive Advantage

The concept of Logistics has been evolved Supply Chain Management is a modern
3 Evolution
earlier. concept.

How many organizations

4 Single Multiple
are involved?

Logistics Management is a fraction of Supply Chain Management is the new

5 One in another
Supply Chain Management. version of Logistics Management.

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 MANAGING FLOWS
• Product flow
• Information flow
• Intelligence flow- Product, Customer, Market Requirements
• Cash flow

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 STRATEGIC ROLE OF LOGISTICS

• Sales-Marketing-Logistics Integration
• Just-in-Time Systems
• Total-Cost Approach

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 CONTROLLABLE ELEMENTS IN A
LOGISTICS SYSTEM

• Customer service
• Order processing
• Logistics communication
• Transportation
• Warehousing
• Inventory control
• Packaging
• Materials handling
• Production planning
• Plant and warehouse location
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 CALCULATING LOGISTICS COSTS

• Activity-Based Costing
• Total Cost of Ownership

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 B2B LOGISTICAL SERVICE
• Logistics Service Impacts on the Customer
• Determining the Level of Service
• Logistics Impacts on Other Supply Chain Participants

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 B2B LOGISTICAL MANAGEMENT

• Logistical Facilities:
Serving Other Supply Chain Members
Outsourcing the Warehousing Function
• Transportation:
Transportation and Logistical Service
Transportation Performance Criteria
Cost of service
Speed of service
Service consistency
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 B2B LOGISTICAL MANAGEMENT

• Inventory Management:
Quality Focus: Eliminate Inventories
Inventory in Rapidly Changing Markets
• Third-party Logistics:
Warehousing function
Transportation function
Entire logistics process from production scheduling to delivery
of finished products to the customer
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 COMMON ELEMENTS OF LOGISTICS SERVICE

• Delivery time
• Delivery reliability
• Order accuracy
• Information access
• Damage
• Ease-of-doing business
• Value-added services

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 CASE STUDY: MANAGING LOGISTICS AT
TRANS-PRO LOGISTICS INC.

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 ABOUT TRANS-PRO LOGISTICS INC.
• Tran-Pro Logistics Inc. is a large industrial distributor of power transmission equipment – bearings,
gears, v-bels, and the like.
• Founded to meet the varied transportation needs of progressive companies and logistics providers
both in the United States and around the world.
• Specializes in expedited, truckload freight movement.
• Accomplished with a network of "best of breed" carriers. Their trucks move with team drivers, when
required, capable of round the clock travel.
• They have become the "solution of choice" for airfreight forwarders, airlines, and other expedited
cartage companies and shippers.
• This experience, along with state-of-the-art technology, fleet of top of the line road hardware, and
"around the world" partnerships, has made TransPro Logistics, Inc. the choice of airfreight
forwarders, expeditors, and other discerning shippers.
• From the smallest piece of airfreight to the largest piece of oversized cargo, one can trust TransPro
Source: http://www.transprologistics.com/
Logistics,
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Inc. to do the job right. Group-2_B2B Marketing PPT_SCM 19
 TRANS-PRO: AREAS OF SERVICE
• Expedited Team OTR Transportation
• Standard OTR Transportation / Solo Service
• Service to Mexico
• LTL Services
• Rail / Intermodal Transportation
 Value Rail
 Truck Rail
 Truck Rail Express
• Ocean Freight
• Local Pick up & Delivery
• Warehousing
• Specialized equipment
•Source:
Value-added Services
http://www.transprologistics.com/
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 MANAGING LOGISTICS AT TRANS-PRO
• The company’s management, cognizant of the criticality of effective inventory
management, developed an incentive scheme for its 50 branch managers to minimize
inventories.
• Each month, average inventory in warehouse was measured and the branch managers were
assessed a penalty for inventory levels that exceeded $2.5 million.
• For each increment of dollars above the threshold figure, the manager would be docked 1
percent of his or her salary – a very strong incentive to carefully control inventory levels!
• In addition, Trans-Pro also demanded that customer service be absolutely outstanding. The
goal was to deliver an order within 24 hours of receiving it.
• As might be expected, the managers did a superlative job in managing average monthly
inventories. Rarely were any of the branches in excess of the mandated maximum level.
• Customer service levels approached 98 percent - that is, 98 percent of all orders were
delivered within the 24-hour time period.
Source: Business Marketing Management: B2B (9 Edition)_Michael D. Hutt & Thomas W. Speh
th

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 THANK YOU FOR YOUR PATIENCE !!

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