SCM Presentation11
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Transcript of SCM Presentation11
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Current
Status of Supply chainManagementIndustry In
India Presented by:
Prachi Das Vishwas Joshi Neetu Waghmare Sachin ShindeAshwini Pathak Ashish Chavan
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What is Supply Chain Management?
A consists of the flow of products and services from:Raw MaterialsComponents & intermediate manufacturers
Final product manufacturersWholesalers & distributors andRetailers
and storageactivities &
through information, planning andintegration activities.
supply chain
Connected by transportation
Integrated
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W ha upp Cha a ag ? (C d)
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Origin of Supply chain Industry
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BelfastCarburetors and
distributors
TreforestSpark pluginsulators
LeamingtonFoundry production
of enginecomponents
DagenhamFinal assembly
BordeauxTransmissions
EnfieldInstruments, fueland water gauges,
plugs
BasildonRadiators, water
pump assembly,engine components
Genk Body panels,road wheels
WlfrathTransmission parts, enginecomponents
SaarlouisFinal assembly
CologneDie-cast transaxlecasings, gear and
engine components
ValenciaFinal assembly
Ford Example
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SCM in INDIAWorldwide interest in SCM increased since 1980s.In India--increasing uncertainty of supply networksBcoz.
Globalization of businesses Proliferation of product variety Shortening of PLC.. Dramatic & sudden changes in
environmentDue to that.Indian organization forced to look beyond their four wallsfor collaboration with supply chain partners
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LOG ISTICS C O STESTIMATES F OR INDIA
Logistics costs constitute nearly 10% of thetotal GNP, of which nearly 40% is due to
transportation.Logistics cost for manufactured products inIndia 30% of the total expenditure, as against
15-20% globally.Almost one-third companies have no supply chain strategy.
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LOG ISTICS C O STESTIMATES F OR INDIA
SR.NO DESCRIPITIONCOST AS %
TOTAL
LOGISTIC COST1 TRANSPORATATION 35%
2 INVENTORY 25%
3 LOSSES 14%4 PACKAGING 11%
5 WAREHOUSING 9%
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Bull Whip Effect
Each organisation seek to so lve the prob lemfrom its own perspecti ve Sma ll changes in cons umer demand res ult in
large variations in orders p laced upstreamDramatic order size variationAmplification of order size variation as one
mo ves up the s upp ly chain
Supplier Manufacturer Distributor Retailer Customer
Buys 10Orders 15
Delay 2 weeksDelay 2 weeks
Orders 25
Delay 2 weeks
Orders 40
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Ca uses
L ittle or no comm unication between s upp ly chain partners.
Dela y times between order processing,demand, and receipt of prod ucts.O ver reacting to the back log orders.
Inacc u rate demand forecasts.http://www.s upp lychainon line.com/pre views/SCM101/3.htm l
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Drivers of S upp ly Chain Performance
Facilities Prod uction/Storage SitesR esponsi veness Vs Efficienc y
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AR EAS WHE R E F O CUS ISNEEDED..
A) Supply chain strategy.B) Supply chain integration..C) Inventory management
D)Information technology
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A) SUPP LY CHAIN ST R ATE GY
A set of dynamic,integrated decisionsthat one must makein order to positionones business in thecomplex
environment.
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FO CAL AREA BUSINESS O BJECTIVE SUPPLY CHAIN
O BJECTIVE
1) Customersatisfaction
M aximize Customersatisfaction
Highly reliable productReducing transportation
costExpanding depth of
distribution
2) Profitmaximization
M aximize profitIncrease turnover on
investment
Reducing inventory costLowest product cost
3) Operationalexcellence
Increasing earning pershare
Flexibility of production volume
Flexibility of product mixReducing warehouse cost
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B) SUPP LY CHAIN INTE GR ATI O N
The SC strategy cannot truly be overall businessstrategy.
It is based on trust and information sharing, sothat it can quick respond to customers demand.Effective integration is the key because if one of these links fail, the organizations performancemay suffer and may not meet expectation of itscustomers, or the service level of itscompetitors.
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C) INVENT ORY
MANAG
EMENT.Inventory management means maintenance, upkeep & assurance of adequate supply of goods inorder to met am expected pattern of distribution of demand for given financial investment.Its functionally results into:-
Ensuring balance flow of material, component tools &
equipment.Minimising damage.Minimising stockout scenario.Minimising time for ordering the consignment
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D) INF OR MATIO N TECHN OLOGY
Information technology is considered to beuseful in SCM. F or 3 most reasons
Data transferInformation retrievalMachine & process control
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Optimized supply chain confi guration
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McDona lds Examp le
What McDonald achieved through SCM?Ti el elive a Mate ial
R e ce t & c ea e i P ita ilit
Hi ta a P ct Q alit
SCM operation of McDonald in IndiaWork i it 38 i e r e t lie rs a ma i e e e t
r esta r a ts.
Distribution centers located in:
No i a & K alambo li (M mbai) i 1996
Ba alor e i 2004
Calc tta i 2007
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McDona lds Examp le (contd..)
Dyn ami dair y indus tr y Supp liers of c ee se
Tr ik aya a r icultur e Supp liers of ice berg lett uce
ista processed food p vt. Ltd Supp lier of c ick en and vegeta ble
Amr it food Supp lier of long lif e milk, d air y produ cts for froz en desser ts
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De ll assemb ly p lant
De ll web
Customers
P RODUCT FLOW
INFORMATION FLOW
DIR ECT
SHIPPIN G
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UNITS
WE B SITE
CUST O MER S
P RODUCT FLOW
INFORMATION FLOW
IN TR ANSITMERG E
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The Cha llenges
What are the cha llenges facingincreasing adoption of SCMso lutions in India?
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The main one is the lack of awareness of thebusiness potentia l of SCM so lutions in India.
The prob lem is in most peop le treating SCMas one more mod ule to be imp lementedafter E R P.
lack of cons ulting experience in the fie ld inIndia.
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O ne of the ke y cha llenges faced is thebusiness process transformation req u ired toexp loit the best practices and too ls of SCM.
Poor ph ysica l and comm unicationsinfrastr uctu re.
The next and e ven more diffic ult cha llenge isthe management of change.
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It is difficult to imp lement the entire SCMso lution at one go beca use that wo uldinvo lve p u tting a comp lex network in p lacewith e ver y sing le entit y connected to thewho le process.
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But does this mean SCM has no
future in India?Not really
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Future P rospects
Despite cha llenges, the Indian SCMind ustr y is growing at 20 % .
Many large co. like Tata, R e liance, Infos ysha ve been attracted b y the potentia l of thissector.
Large express cargo and co u rier co. BlueDart, DH L , TCI a lso started logisticso erations.
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Since this ser vice can be pro vided witho u tassets, there is growing interest amongentreprene u rs to vent ure in.
The Indian econom y is growing at 7-9%for the last co up le of years, which imp liesmore o u tpu t and more demand for specia lized logistics ser vices.
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The GO I has foc used on Infra.De ve lopment
Eg: go lden q uadri latera l project
In India 100% FDI is a llowed in logistics.
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Beneficiaries Sectors
What are the sectors that ha ve been thebiggest beneficiaries of SCMimp lementation in India?
Industries that wo uld see tremendo usbenefits inc lude the man ufact u ring sector,a u tomoti ve sector, FMC G , retai l, oi l andgas.
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SCM flavours
Even SCM so lutions come in differentf la vou rs. K LG S yste l, for instance, offers aS upp ly Chain O ptimisation (SC O ) so lution.
There is a f undamenta l difference betweenSCM and SC O .
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In SCM the cons ultants capt ure a ll theprocesses and b u ild it into the E R P s ystem.
Ever ything is hardcoded into the s ystem.Each and e ver y transaction cond ucted isbased in r ules. It does not ana lyse thedifferent options that are a vai lab le.
SCM does not do reso urce optimisation thewa y SC O so lution does.
SCO
will look at a ll the a vai lab le options andcome up with a so lution that wi ll ens u reoptimisation of the reso u rces.
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