Building a better supply chain. Making the most of foreign factors. What is right supply chain for product.

SUBMITTED BY:-

SHIVAM KALHANS, BLR1107039026 MBA.20

Definition of supply chain management :-

A supply chain is the stream of processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. All organizations have supply chains of varying degrees, depending upon the size of the organization and the type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer.Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities, including coordinating and collaborating with channel partners, including suppliers, intermediaries, third parties and customers.

Pocket of excellence:According to the J. Paul Dittmann complexity of supply chain management makes it difficult to name a manufacturer that excels across all supply chain aspects. Its appropriate to identify the supply chain aspect in which certain manufacturers excels . For example, Dittmann, a former Whirlpool supply chain executive, believes Honeywell may be among the best in the sales and operations planning (S&OP) process. Five pillars of excellence: TalentThey have the right people in place. TechnologyThey employ leading-edge technologies. Internal collaboration. External collaboration. Change managementSupply chain projects have more complexity than others and as a result have a tendency to get off track, Dittmann says. That is why change management is so important, he says. Are they getting the job done? Strategy is one thing; execution is another. Resilient supply chain:Resilient supply chain effectively aligns its strategy, operations, management systems, governance structure, and decision-support capabilities so that it can uncover and adjust to continually changing risks, endure disruptions to its primary earnings drivers, and create advantages over less adaptive competitors.

Strategic role of foreign factories:Offshore factories:-These types of factories are established to produce low cost items which can be exported or any other use or for sale. Source factory:- these type of factories are established for low cost products but the role is totally different from offshore factory. In this managers have authority over procurement in which selection of suppliers included ,production planning ,process change ,outbound logistics ,product customization and redesign decision. Server factory:- these types of factories deals with national or regional markets .It helps to overcome tariff barriers and to reduce taxes ,logistics cost ,exposure of foreign exchange fluctuation etc.

Contributor factory:-these types of factories also deals in national and regional markets but its responsibilities are more to product and process engineering and to the development and choice of suppliers. Outpost factory:- these types of factories primary role is collection of information ,just like area where factory is located where advanced suppliers ,competitors ,research laboratories ,or customers are located. Lead factory:-these types of factories creates new process and techniques for their entire company taps into local skills and technological resources not only for collecting data for their headquarters but also to transform the knowledge that is used in the useful product and process.

Determining the strategic role:- After getting the current role of all factories then we determines the future role which played by company top level management ,for example a merger adds a new factories to their network ,the product mix changes or other factories in the companys global network becomes bigger or smaller. upgrading the strategic role:- shifting of plant according to the matrix means giving it a broader and upgraded strategic role in the companies network of factories. Top manufacturers have higher portion if their global factories in the higher source ,contribution ,and leads position that average manufacturers do .The challenges involve in upgrading a plant are substantial ,but the rewards are substantial too.

Focus on intangible benefits:- Every company has its own resons for manufacturing abroad, such as less labor cost ,capital and logistic cost these are tangible and others such as learning from foreign research centers ,customers and suppliers are intangible and its difficult to measure. Why manufacture abroad ? Major terms why companies prefer to manufacture outside of their home country :y Reduce direct and indirect cost . y Reduce logistics cost . y Reduce taxes . y Reduce capital cost . y Build alternative supply source . y Spread foreign exchange . y Overcome traffic barriers . y Provide better customer service . y Learn from foreign customers . y Learn from competitors .

Competencies acquired in three stages :Stage 1:-Improving the inside:- the way in which companies enhance their performance including improving the plants physical layout ,machinery ,work design ,and production quality ,proving employee training and education.
Stage 2:-Developing External Resources:- Moving up the matrix

from offshore ,output ,or sever roles to either source or contributor role requires developing additional competencies.
Stage 3:-Taking on a Global mandate :- Moving into a lead

position requires competencies that go beyond those needed for a companys current production operations ,it requires the ability to generate new knowledge for companies future manufacturing activities .

The nature of the demand for the product ones company supplies: Product life cycle Demand predictability Product variety Market standards Two distinct types of functions: Physical function:- Convert raw materials into finished goods. Market media function:- Ensuring that the variety of products reaching the market place matches what consumes want to buy. There are two types of products Functional products Innovative products

Campbell: In 1991, the company launched the continuous replenishment program with its progressive relations.
It established Electronic Data Interchange links with its retailers. Cambell Soup has shown how manufactures and retailers can

cooperate to cut costs throughout the systems.