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Supply Chain management

Numan khan

Supply Chain
It is a system of organizations, people, technology ,activities ,information and resources involved in moving a product or service from supplier to the end customer. It does include everyone which has any stake in that product or service which is provided to the customer. The basic idea behind SCM is that the companies and corporations involve themselves in SCM to exchange ideas and information about the fluctuations and production capabilities.

Supply Chain Management


It is the management of a whole system in which we have interconnected businesses involved in the procurement of raw materials, making of the product (provision) , the product or services required by the end customers in a supply chain Supply chain is a dynamic system and as it involves constant flow of information ,product , and funds between different stages.

Primary Focus and Purpose


The people believe that customer is the integral part of the supply chain The primary purpose of the supply chain is to satisfy customer needs and in the process generating profits for it self. Supply chain begins with a customer order and end when a satisfied customer paid for his or her purchase.

Stages of supply chain

A typical supply chain may involved variety of stages ,It involves : Customers Retailers Wholesalers/Distributors Manufacturers Components/Raw materials suppliers Supply chain could have involved one player at each stage Each stage need not be presented in a supply chain.(depends on customers needs and role of stages involves).

Supply Chain Goals

Efficient supply chain management must result in tangible business improvements. It is characterized by a sharp focus on
Revenue growth Better asset utilization Cost reduction.

Supply Chain Risks


More reliance on supply chains means more risk Fewer suppliers increase dependence

Compounded by globalization and logistical complexity


Vendor reliability and quality risks

Political and currency risks

Components of SCM

Plan this is a strategic portion of SCM In this the company needs to making a strategy managing all the resources that go towards customers demand for the product or service. A big deal of SCM is to develop such a network that monitors supply chain and that is cost less, efficient, and provide high value to the customers.

Components of SCM

Source ( what Should be the source) Must choose the suppliers who are providing raw materials for their products and services Supply chain managers create a set of pricing, delivery and payment processes and create a matrix for monitoring and improving relation ships. Then put together all the sources of inventory including shipments ,transferring them to manufacturing facilities and authorizing the suppliers payment.

Components of SCM

Make This is the manufacturing step, here the SC managers schedule activities regarding production, testing and packaging and preparation for delivery. This is more intensive step where quality ,production output and worker productivity are measured.

Components of SCM

Deliver This is the part where many SCM insiders refer to as logistics. Here companies coordinate the receipt of orders from customers ,develop a network of ware houses ,pick carries to get the product to the customers and setup an invoicing to receive payments.+

Components of SCM

Return This is the problematic phase of the supply chain for many companies. For this purpose supply chain managers have to create such flexible and responsive environment for which they get back the defective and excess products from their customers .

Flows of SCM

The Product Flow It includes the movement of goods from a supplier to a customer as well as any customer returns or service needs The Information flow Involves transmitting orders and updating the status of delivery The Financial Flow Consists of credit terms, payment schedules and consignments and title ownership arrangements

Elements of supply Chain

Customers: Order for the product Planning : the requirement of customer sales product triggered here ,the planning department will create a production plan and then for the production they will need raw materials which they will obviously purchase the raw materials Purchasing : the purchasing department when receives a list of raw materials then they will send the list to the selected suppliers to deliver the necessary materials to manufacture that product.

Elements of supply Chain

Inventory The raw materials are received ,checked for the accuracy and quality and then moved into the ware house. The suppliers then send the invoice for the items they delivered The raw materials or items are store until they are required by the production department

Elements of supply Chain

Production The production will then started here and the raw materials will then be converted to finished goods via manufacturing process Then the finished goods are then stored back before the delivery to the customer Transportation The goods are delivered then through proper shipment and then invoice sent to the customer for the delivered products

Structure of supply chain


SUPPLIER FACTORY DC RDC RETAILER

Raw Materials

Finished Goods Information Flow

Why supply Chain management?


Globalization Multinational companies and strategic alliances etc JIT (Just in Time ) Dramatic fall in Communication Costs

Benefits of SCM

Reduced inventory Reduced Distribution costs Reduced time to market Reduced market risks through effective coordination and communication Increase in on time deliveries Factory effectiveness Increase customers Increase direct links with other countries ,states.