Agus HermantoGanggas CahyonoAgung SulistijoSony MardiantoRiyanti Ridzki Dewi The Science of Better, Faster, and Cheaper

Content

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What is Supply Chain Management?

• Supply Chain Management is also a process management involves

Inter-organizational Cross-functional

• Managing flow of information through supply chain in order to attain the level of synchronization that will make it more responsive to customer needs while lowering costs

Benefit of SCM• Reduce uncertainty along the chain• Proper inventory levels in the chain• Minimize delays• Eliminate rush (unplanned) activities• Provide superb customer service• Major contributor of success (ever

survival)

Integrated Planning Cycle

Demand Planning

Capacity Planning

Shop Scheduling

Order Scheduling

Annual Business Planning

Dispatch

Transportation Planning

Inventory Planning

Order Promising

New Product Development

Customer and Market Management

Production Control

Quality Control

Transportation Scheduling

Scope of Supply Chain Management

ProfitabilityAnalysis

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Bullwhip Effect andInformation Sharing

• Flow of information to and from all participating entities

• Information sharing between retailers and their suppliers

– Bullwhip effect refers to erratic shifts in orders up and down supply chain

– Distorted information leads to:

• Inefficiencies

• Excessive inventories

• Missed production schedules

• Ineffective shipments

• Poor customer service

Key (popular) issues in SCM

• Supply chain integration and strategic partnership– Coordinating different stages of the supply chain– Value of information and information sharing

• Information technology (ERP) and decision support systems

• Outsourcing and procurement strategies• Managing product variety

– Product postponement– Component commonality and modularity

Key (popular) issues in SCM

• Supply chain integration and strategic partnership– Coordinating different stages of the supply chain– Value of information and information sharing

• Information technology (ERP) and decision support systems

• Outsourcing and procurement strategies• Managing product variety

– Product postponement– Component commonality and modularity

Content

Efficiency improvement in manual warehouses through ERP systems implementation and redesign of the

logistics processes

Traceability is one of the basic requirements for firm to achive high

quality management level.

One of the most effective ways toward traceability is the implementation ERP

ERP is an integrated aplication program for enterprise business organization, management and supervision

Sale & Distribution

Human Resource

MaterialManagement

Manufacturing

Financial &Accounting

Project Management

ERP Databases

3 main issues related design and management of the logistic processes

High traceability level have to reached to efficiency deal with perishable good

Optimization of warehouse fill rates Reduction of order lead time

Allocation policies

Shared storage Dedicated storage

Class-based storage

Implementation of ERP followed by DTSFunctionalities of DTS :

Congruency and synchronicity of data

Automatic and univocal store unit identification

ReliabilityRapidity in checking dataUser friendlinessLow investment and maintenance

costs

A posible technical solution is RFDTD--- quite expensive

An effective improvement efficiency- ERP plus ad hoc application optimization techniques

Content

Journal 2 : Outsourcing

• The review of literature is organized based on the outsourcing decision framework by Tibor Kremic, Oya Icmeli Tukel and Walter O Room in 2003.

• The purpose are to review outsourcing literature with the objective of identifying those references that may provide guidance for managers and researchers, and the studies in the literature are analyzed based on their content.

• The aim itself is to categorized and identifying relationship among studies which are not apparent when the studies are considered.

Motivation

• Three major categories of motivation for outsourcing: cost, strategy, politic.

Cost driven outsourcing• Efficiency• Save indirect cost• Better cost control• To shift fixed cost into variable cost

Outsourcing Strategy

Strategy driven outsourcing• Core competences

the issues which encourage the motivation of outsourcing:– Resources– Restructuring– Rapid organizational growth– Changing technology

• Flexibilitythe issue is the need for greater flexibility to manage demand swing

Political driven outsourcing

The issues are may be more social than economic. Other factors that drive outsourcing by public organization include the agendas of– Elected officials– Public opinion– National or international trend

Benefit & RisksBenefit• Cost saving• Capital infusion• Transfer fixed cost to variable• Quality improvement• Increase speed• Greater flexibility• Access to latest

technology/infrastructure• Access to skills and talent• Augment staff• Increase focus on core

functions• Get rid of problem function• Copy competitors• Reduce politic pressures

scrutiny• Legal compliances• Better

accountability/management

Risk• Unrealized saving or hidden cost• Less flexibility• Poor contract or selection of

partner• Loss skill, knowledge, corporate

memory and difficulty in reacquiring a function

• Loss control• Power shift to supplier• Supplier problems• Losing customers, opportunities

of reputation• Uncertainty/changing

environment• Poor morale• Loss synergy• Create competitor• Conflict of interest• Security issues• False sense of irresponsibility• Legal obstacles• Skill erosion

Factors that may impact outsourcing decision

Content

Journal Synthesis

• Supply chain (SC) is a set activities that procure materials and services, transforming them into intermediate goods and final products, and delivering the products through distribution system.

• SC provides a major opportunity to reduce costs and increase contribution margin.

ERP as Supply Chain Integration

• ERP system can be the basis for cross functional and supply chain integration

• ERP system will track transaction from their origin at the customer to order entry, through operations and accounting until the transaction completed

• To improve efficiency the company should implement ad hoc application optimization technique

Outsourcing as a Supply Chain strategy

• Because such a huge portion of revenue is devoted to the supply chain, an effective strategy is vital. One of strategy is OUTSOURCING.

• In SC economics, we consider outsourcing as strategy. Outsourcing is transferring a firm’s activities that have traditionally been internal to external suppliers.

• When outsourcing does work , it can deliver tremendous value. In profit organization, cost reduction as a primary objective, but in non-profit is politically driven.

Relationship

Managing Information

SystemERP System

ADD VALUE

Outsourcing

1. Efficient2. Reduce Cost and

increasing margin profit3. Accurate and Real time4. Minimize input error

(traceable)5. Reduce manual work

(paperless)

Content

Summary

• SC is crucial issue in business recently.

Company with efficient SCM can winning the

competition.

• One of strategy SC is implementation ERP.

• Management can implement ERP for

managing outsourcing, since we know that

outsourcing can reduce cost and as

strategy.

Thank You

Property of ManSaa Corp.

ERP Concept

Sale & Distribution

Human Resource

MaterialManagement

Manufacturing

Financial &Accounting

Project Management

Central Databases

ERP Architecture

ERP Benefits

• Process Improvements

– eliminate redundant transactions and multiple reconciliations.

– More efficient job rotation process

– More efficient staff and succession planning

• Information Technology

– Reduced support costs.

– Reduced infrastructure costs.

• Strategic Direction

– Improved resource allocation

– More flexible organization.

– Better future decision making

• Related initiatives

– Better focus, reduced spending