Supply Chain - Redefined

Click here to load reader

  • date post

    13-Apr-2017
  • Category

    Business

  • view

    357
  • download

    0

Embed Size (px)

Transcript of Supply Chain - Redefined

  • SCM - RedefinedBy Zubin Poonawalla

  • SCM - REDEFINEDThe supply chain is the network of organizations that are involved through upstream & down stream linkages, in different processes & activities that produce value in the form of products & services in the hands of the ultimate customer.

    Supply Chain may be defined as flow of materials through procurement, manufacturing, distribution, sales & disposal.

    *

  • Dynamics of Material Flow

    SupplierPlantRSLogisticsRetailer

    *

  • SCM - FLOW

    MATERIALMONEYINFORMATIONProcurementManufacturingDistributionCustomer

    *

  • Supply Chain Relationship

    *

  • What is SCM ?

    BuyingSellingMakingMovingWarehousing

    SCM is a biz network covering fm buying, making, moving, warehousing to selling

    *

  • Traditional SCM

    *

  • SCM Facilitate Specialization

    Intermediaries provide Exchange efficiencies

    Connectivity is King for product delivery when and where

    Intermediaries

    Customer

    Producer

    *

  • Cost

    Reduced inventories

    Reduced waste

    Reduced total system costs

    Service

    Establishment of a collaborative framework

    Near real time information flow Reduced variation & increased quality Business growth opportunitiesPreferred source for new opportunitiesExpanded benefits to other customers

    Supply Chain Benefits

    *

  • The Three Ts

    *

  • Transactional Efficiency

    Critical Data to improve:Multiple handlingTransit damageProcess delaysExcess freightDelaysE-2-E cycle-timeWarehouse feesInventory turnsYieldLate Deliveries Perceived ValueIntrinsic ValueThe Supply Chain Iceberg

    *

  • Supply Chain Decisions

    OPERATIONALTACTICALSTRATEGICProcurementDistributionManufacturingLogistics

    *

  • SCM FOCUS / LEARNINGSSERVICE COSTFLOW OF INFORMATION / MATERIAL AND CASHINPUTS & OUTPUTS

    *

  • ELEMENTS OF SCMINVENTORY MANAGEMENTWAREHOUSINGTRANSPORTATION

    *

  • ShortageExcessThe stock of material lying with you for which payments are made but which are yet to be delivered to the customers & paid for by them.

    Material stocked to meet the expected demand in the market.

    An idle resource which locks the capital.

    What is inventory

    *

  • ShortageExcessWhy inventories are necessary

    To satisfy the customer demands without time lag.To cover time required for procurement of material.To cater to fluctuations in demand.Seasonal demand of products.Production constraints of suppliers.To retain supplier goodwill.

    *

  • Inventory ExerciseWORK OUT INVENTORY NORMS BASED ON SERVICE FREQUENCY, SALES & DEMAND VARIABILITY & TRANSIT TIME VARIABILITYConsider sales qty. 300 CLDS per month, Demand variability 20 %, Supply variability of + / - 2 Days & Service frequency of 1/ week

    *

  • Service Level & Inventory Costs

    *

  • ENLARGED VIEW OF PORTION AExplanation:In zone of improvement, as service level goes up by increasing stocks & incurring in extra expenditure for giving better service, the gains obtained due to better sales outweigh the costs incurred.In zone of indifference, the gains & costs are more or less balanced. In zone of perfection, as service levels are raised to near to 100%, the costs outweigh the gains but in modern competitive environment, this may become a necessity for survival

    *

  • Scientific Replenishment System

    *

  • The Use of Safety StockInventory on HandInventory on HandStock outTimeStock out is avoidedTimeSafety Stock

    *

  • ABC Analysis Based on principle of management by exception. Unit value is not a consideration. Analysis is based on total consumption value of items in predetermined time span. Criticality/importance of item is not a consideration All the items are divided in three categories. Decisions are based on 80 : 20 rule.

    *

  • ABC Analysis ExerciseClassifying inventory according to some measure of importance & allocating control efforts accordingly.

    A - very importantB - mod. importantC - least important

    *

  • DECISION PARAMETERS FOR ABC ANALYSIS

    ADEQUACY OF STOCKS

    FREQUENCY OF STOCK CHECKING

    LOCATION IN WAREHOUSE

    *

  • FSN AnalysisBased on speed of movement of material:-Some materials have regular & high volume demand & move Fast (F),Some material hve intermittent & unpredictable demand & hence move Slow (S) And a few items have practically no takers & hence keep on lying in stores for long period of time & categorized as Non moving (N).

    FAST MOVINGSLOW MOVINGNON MOVING

    *

  • What is Inventory & why do we need inventory ?

    How do we avoid non moving & slow moving inventory?

    How do we classify & analyze inventory?

    INVENTORY FOCUS / LEARNINGS

  • ELEMENTS OF SCMINVENTORY MANAGEMENTWAREHOUSINGTRANSPORTATION

    *

  • ELEMENTS OF WAREHOUSINGLOCATIONLAYOUTIDENTIFICATIONMATERIAL HANDLING

    *

  • Layout principles

    Ease of receipts, storage & issues.Uninterrupted movement of material, men & equipment.Optimum utilization of space.Ease of locating the material. Safety. & Security.Better supervision.FlexibilityBuilding. : Preferably single storied, enough height, proper lighting & ventilation, protection against hazards like fire & lightening.

    *

  • Tagging. Labeling. Writing, painting, engraving, stamping, etching, color coding on the part/case/box. Bar coding.

    Identification of Material

    *

  • IMPROVED STORAGE SYSTEM EXERCISE

    *

  • Features of a good warehouse

    Place for everything & everything in its place.FMFO First Manufactured & First Out principle.Maintenance of prompt & correct records.Fast & courteous service to customers.Minimum damages to the material.Protection against pilferage.Regular verification & inspection of material.Regular inventory taking & reconciliation.Maintaining inventory within specified norms.

    *

  • Learning's from the topic

    How do we keep our warehouse in more orderly manner ? ( Understanding Location & layout of the warehouse )What activities we must do in the warehouse to ensure proper identification & tracing of the materialHow can we reduce our labour cost in the warehouse. What mechanization we can do in our warehouse?How can we ensure better material movement inside the warehouse?

    *

  • ELEMENTS OF SCMINVENTORY MANAGEMENTWAREHOUSINGTRANSPORTATION

    *

  • Logistics Management

    'Logistics is the process of strategically managing the procurement, movement & storage of materials (& related information flows) through the organisation & its marketing channels

    *

  • Objectives of Transport Management

    Cost OptimizationImproved serviceTransportation/logistics as a competitive differentiator. Time to market

    *

  • CARRIER SELECTIONOUTSOURCING v/s OWN VEHICLEVEHICLE TYPE ( SIZE )CUSTOMERS PER VEHICLE & TRIPS PER VEHICLE( ROUTING )

    *

  • Carrier Selection & Routing

    The practical meaning of the 4 Cs of selecting transportation services

    CompetitionCostComparisonCompromise

    *

  • Your responsibility is to assist in defining

    Right Product in the Right Quantity fm the Right Source to the Right Destination in the Right Condition at the Right Time for the Right Cost.

    *

  • Transport Costs

    Fixed costVariable costVehicle cost ( Depreciation )License feeInsurance costDriver salaryInterest costRoad taxAdministration CostLabour cost ( Laoding & Unloading )Fuel, Consumables & Oil cost

    *

  • Factors Affecting Carrier Decision

    Carrier makes investment to maximize return on assets.For this he has to consider following costs

    Vehicle-Related Cost : This is fixed cost in short term incurred for purchasing or leasing the carrier.

    Fixed Operating Cost : This includes any cost associated with terminals, Road Tax, & labor.

    Trip-Related Cost : This includes the price of labor & fuel incurred for each trip independent of the quantity transported & depends on the length & duration of the trip.

    Quantity Related cost : This includes loading / Unloading cost & part of fuel cost that varies with the quantity being transported.

    Overhead cost : This includes, planning & scheduling cost, IT cost.

    *

  • Routing & Scheduling In Transportation

    This refers to the selection of customers to be visited by the particular vehicle & the sequence in which they will be visited.

    For the Cos to be successful, they have to do the routing & schedulingin such a way that they reduce the cost of transportation at the same time make the deliveries fast & meet the promised level of responsiveness to the customers.

    To achieve this, the objective is to minimize cost by:-Decreasing the number of vehicles, Reducing total distance traveled, Reducing total travel time & Reducing service failures (delays)

    *

  • Routing & Scheduling In Transportation

    The objective of the supplier is to

    Pick the items needed & to load them on trucks for deliveryDecide which vehicle will deliver to which customers & the route that each truck will take.Ensure that no vehicle is overloaded at the same time try to load all the vehicles fully.To do this, the technique th