1. OBJECTIVES TO SUPPLY CHAIN
MANAGEMENT
PRESENTED BY,
ABEY THACHIL (R#111
BLESSON JOSEPH THOMAS
DENNY J OTTARACKAL
JIBIN BABU
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2. What is a Supply Chain?
A supply chain consists of the flow of products and
services from/to:
--Raw materials manufacturers
--Intermediate products manufacturers
--End product manufacturers
--Wholesalers and distributors
--Retailers and,
--End customers
Connected by agents, transportation and storage
activities, and integrated through sharing of information,
planning, and processing activities.
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3. A Generic Supply Chain
End product manufacturer
Wholesalers,
distributors
Intermediate
component mfgs.
Raw material
suppliers
Retailers
End
customers
Product & service flow
Information and planning
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4.  Typical Supply Chain for a Manufacturer
Supplier
Supplier
Supplier
Storage
} Mfg. Storage Dist. Retailer Customer
 Typical Supply Chain for a Service
Supplier
Supplier
}Storage Service Customer

5. What is Supply Chain Management?
Here are two definitions:
The design and management of seamless, value-added
process across organizational boundaries to meet the real
needs of the end customer
-- Institute for Supply Management
Managing supply and demand, sourcing raw materials and
parts, manufacturing and assembly, warehousing and
inventory tracking, order entry and order management,
distribution across all channels, and delivery to the customer
-- The Supply Chain Council
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6. Importance of Supply Chain
Management
* Firms have discovered value-enhancing and long
term benefits
* Who benefits most? Firms with:
- Large inventories
- Large number of suppliers
- Complex products
- Customers with large purchasing budgets
* Benefits
- Lower purchasing/inventory costs, higher
quality/customer service
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7. Importance of Supply Chain Mgt. –
Cont.
* Cost savings and better coordination of resources
are reasons to employ Supply Chain Management
-- Bullwhip Effect- the magnification of safety stocks and
costs based on separate forecasts and uncoordinated
planning and sharing of information along the supply chain
* Reducing the bullwhip effect occurs through:
-- Process integration- Interdependent activities can lead to
improved quality, reduced cycle time, better production
methods, better forecasts, less safety stock, etc.
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8. Important Elements of SCM
Purchasing- Supplier alliances, supplier
management, strategic sourcing
Operations- Demand management, MRP, ERP, JIT,
TQM
Distribution- Transportation management, customer
relationship management, network
design, service response logistics
Integration- Coordination/Integration activities,
global integration problems,
performance measurement 8

9. Purchasing:
•Long term relationships
•Supplier management- improved performance through-
-- Supplier evaluation (determining supplier capabilities and
performance)
-- Supplier certification (third party or internal certification to
assure product quality and service compliance)
•Strategic partnerships- successful and trusting, long-term
relationships with top-performing suppliers
Operations:
-- Demand management- match demand to available capacity
-- Linking buyers & suppliers via MRP and ERP systems
-- Use JIT to improve the “pull” of materials to reduce inventory levels
-- Employ TQM to improve quality compliance among buyers and
suppliers
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10. Distribution:
-- Transportation management- tradeoff decisions between cost &
timing of delivery/customer service via trucks, rail, water & air
-- Customer relationship management- strategies to ensure deliveries,
resolve complaints, improve communications, & determine service
requirements
-- Network design- creating distribution networks based on tradeoff
decisions between cost & sophistication of distribution system .
Integration:
-- Supply Chain Integration- when supply chain participants work for
common goals. Requires intrafirm functional integration. Based on
efforts to change attitudes & adversarial relationships
-- Global Supply Chains- advantages that accrue from sourcing from
larger global market e.g., lower cost & higher quality suppliers. May
involve operating exposure, which is risk found in foreign settings
-- Supply Chain Performance Measurement- Crucial for firms to know
if procedures are working
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11. Supply Chain Variability
Volumes
Time
Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998
Actual
Consumer
DemandRetailer Warehouse
to ShopRetailer Orders
Production Plan
Manufacturer Forecast
of Sales
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12. What Management Gets...
Volumes
Time
Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998
Consumer
Demand
Production Plan
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13. What Management Wants…
Volumes
Time
Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998
Consumer
Demand
Production Plan
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14. Objectives of Supply Chain
Management?
 Supply chain management is concerned with the
efficient integration of suppliers, factories,
warehouses and stores so that merchandise is
produced and distributed:
– In the right quantities
– To the right locations
– At the right time
 In order to
– Minimize total system cost
– Satisfy customer service requirements
–-face global competition
–Improve standardization