SUPPLY CHAIN MANAGEMENT PPTS FOR BBA AND MBA STUDENTS

SUPPLY CHAIN MANAGEMENT

1. SCM , PHYSICAL DISTRIBUTION & LOGISTICS Pooja Gupta

2. Physical distribution  is the group of activities associated with the supply of finished product from the production line to the consumers. The physical distribution considers many sales distribution channels, such as wholesale and retail, and includes critical decision areas like customer service, inventory, materials, packaging, order processing, and transportation and logistics. You often will hear these processes be referred to as  distribution , which is used to describe the marketing and movement of products.

3. Components of Physical Distribution (1) Order Processing: A company receives orders from other companies, middlemen, or directly from customers through mail, e-mail, fax, phone, or salesmen. Order processing is an importation component of the distribution system. It is considered as a key to customer service and satisfaction. Order processing mainly includes: 1. Receiving order 2. Recording order 3. Filing order 4. Executing order or assembling of products for dispatch

4. (2) Warehousing: In today’s context, production is made in expectation of demand. Therefore, products are to be stored or preserved safely for the future demand. And also, all the production is not sold directly. Warehousing plays an important role for balancing demand and supply. For example, most of the agricultural products are produced seasonally, but have demand throughout the year.Warehousing embraces storage plus a broad range of functions, such as assembling, breaking the bulk, dispatching as per need of middlemen, sorting/classification, providing market intelligence, preparing product for reshipping, etc. Warehousing involves more activities. (3) Transportation: Transportation is one of the core components of distribution system. It consists of moving or transferring products from producers to final users. Transportation involves two parties, carriers and shippers. Carriers are those companies that provide transportation facilities to others, such as the Western Railway, Indian Airline, Indian Shipping Companies, and many other private carriers provide transportation services by road, rail, water, air and underground pipes.

5. (4) Organisational Responsibility for Physical Distribution: Physical distribution is an important decision in today’s marketing management. It involves a wide range of activities. Therefore, an effective coordination of various activities, such as order processing, warehousing, transportation, inventory control, etc., is indispensable to contribute in overall success of marketing strategies. (5) Inventory Management: Inventory refers to stock of goods meant for the future sales. It can also be said as reservoir of goods held in anticipation of sales. Demand is fluctuating and exact prediction is not possible. So, the primary purpose of holding inventory is to meet market demand continuously. The firm always maintains adequate stocks of products to meet customer orders immediately. It is considered as a link between ordering and production. Inventory management supports demand creation and consumer satisfaction.

6. Supply Chain Management (SCM) Supply chain management is the management of the flow of goods and services and includes all processes that transform raw materials into final products.  It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace. It is science and art of managing and controlling the flow of goods, energy, information and other resources. It is management of flow of resources between the point of origin and the point of destination in order to meet some requirements. It involves the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing etc.

7. Functional Areas/Components of SCM Procurement/ purchasing Transportation decisions Warehouse decisions Inventory management decisions Material handling decisions Order size decisions Order processing decisions

8. Role of logistic in SCM Order Processing: The major role of logistics in the supply chain begins with order processing as the company accepts the order from the customer. Effective logistics tends to manage the entire workflow that starts from order placement to delivery. Nowadays, the order processing activity is technical-centric which is crucially dependent on the size of the business as it focuses on fulfilling the customer orders.  Transportation : Logistics manages the movement of goods from suppliers to manufacturers, warehouses, distribution centers, and ultimately to customers. This involves selecting the appropriate mode of transportation (road, rail, air, sea) based on factors like cost, speed, and the nature of the goods. Inventory Management : Logistics oversees the storage and distribution of inventory throughout the supply chain. This includes managing inventory levels to meet demand while minimizing holding costs, as well as ensuring the availability of products at various points in the supply chain.

9. Warehousing : Logistics coordinates the storage of goods in warehouses or distribution centers. This involves optimizing warehouse layouts, implementing efficient storage systems, and managing inventory levels to facilitate the timely movement of goods. Order Fulfillment : Logistics is responsible for processing orders, picking products from inventory, packaging them, and preparing them for shipment to customers. This process involves coordinating with various stakeholders to ensure orders are fulfilled accurately and on time. Packaging: During transport and handling, the products or goods can be subjected to breakage or spillage so good packaging is necessary to prevent any kind of mishap. The role of logistics management is to ensure that the products are safely transferred in large volumes from point A to point B. The necessary measures should be taken to avoid regulatory issues and make transportation cost-effective in the logistics industry. 

10. Demand Forecasting: Logistics demand forecasting is an effective way to anticipate the requirement for products or goods in the supply chain management process. The scheduling and planning of processes are important to manage the uncontrollable conditions or circumstances of the market. Therefore, forecasting models help businesses to make informed decisions by predicting customer demands and fulfilling the orders in the shortest time span. Therefore, the use of modern technology with advanced analytics and powerful databases can take your organization to the next leap.  Supply Chain Visibility : Logistics provides visibility into the supply chain by tracking the movement of goods in real-time. This allows stakeholders to monitor inventory levels, track shipments, and identify potential bottlenecks or delays, enabling proactive management of the supply chain. Cost Optimization : Logistics plays a crucial role in cost optimization by identifying opportunities to reduce transportation costs, minimize inventory carrying costs, and streamline supply chain processes. This involves implementing efficient routing strategies, consolidating shipments, and negotiating favorable contracts with suppliers and carriers.

11. Customer Service : Logistics contributes to customer satisfaction by ensuring timely delivery of products and providing accurate tracking information. By optimizing delivery routes and transit times, logistics helps meet customer expectations for fast and reliable service. Risk Management : Logistics addresses risks in the supply chain by identifying potential disruptions, such as natural disasters, transportation delays, or supplier issues, and implementing strategies to mitigate these risks. This may involve developing contingency plans, diversifying suppliers, or establishing alternative transportation routes. Material Handling: It is necessary that logistics companies should store and protect the materials throughout the process of manufacturing, warehousing, and distribution. Handling the materials efficiently can ensure that the products or goods are reaching safely to the customers with ever-rising shipping costs.

12. Benefits Cost Reduction : SCM enables organizations to optimize their supply chain processes, reduce inventory carrying costs, minimize transportation expenses, and eliminate inefficiencies. By streamlining operations and improving coordination with suppliers and partners, organizations can lower overall costs. Improved Efficiency : SCM helps organizations improve the efficiency of their supply chain processes by reducing lead times, increasing throughput, and eliminating bottlenecks. By implementing best practices and leveraging technologies like automation and data analytics, organizations can enhance productivity and operational performance. Enhanced Visibility : SCM provides organizations with greater visibility into their supply chain operations, allowing them to track the movement of goods, monitor inventory levels, and identify potential issues in real-time. Enhanced visibility enables proactive decision-making, better inventory management, and improved responsiveness to changes in demand or supply.

13. Better Inventory Management : SCM helps organizations optimize their inventory levels by synchronizing supply with demand, reducing excess inventory, and minimizing stockouts . By adopting inventory management techniques such as just-in-time ( JIT ) inventory and demand forecasting, organizations can improve inventory turnover rates and reduce carrying costs. Increased Flexibility : SCM enables organizations to build agile and flexible supply chains that can quickly adapt to changes in market conditions, customer preferences, or supplier capabilities. By fostering collaboration with suppliers and partners and implementing responsive supply chain strategies, organizations can better respond to fluctuations in demand and supply. Enhanced Customer Service : SCM enables organizations to improve customer service by ensuring timely delivery of products, reducing lead times, and enhancing order accuracy. By optimizing transportation routes, expediting order processing, and providing accurate tracking information, organizations can meet customer expectations for fast and reliable service.

14. Increases Output: One of the main benefits of supply chain management is the communication improvement. This adds up to the coordination and collaboration with shipping and transport companies, vendors, and suppliers. Increases Your Business Profit Level: When you place your business open to the new technologies and an improved collaboration within the different areas, you can be sure that this will ultimately increase your business profit level.

15. Risk Mitigation : SCM helps organizations mitigate risks in the supply chain by identifying potential disruptions and implementing strategies to minimize their impact. By diversifying suppliers, developing contingency plans, and establishing robust risk management processes, organizations can protect against disruptions such as natural disasters, geopolitical events, or supplier issues. Competitive Advantage : SCM can provide organizations with a competitive advantage by enabling them to differentiate themselves through superior supply chain performance. By optimizing their supply chain processes, organizations can reduce costs, improve efficiency, and deliver higher value to customers, thereby gaining a competitive edge in the marketplace.

16. Boost Cooperation Level: When we're talking about the most successful businesses right now, one of the things they all have in common is the communication. In fact, when there is a lack of communication, your vendors and distributors have no idea about what's going on. So, this is definitely one of the main advantages of supply chain management. Plus, when you also open your doors and embrace technology, you can also take advantage of the fact that people don't even need to share the same space in order to be a true communication. No More Delays In Processes: One of the main benefits of supply chain management is the fact that through communication, you can actually lower any delays in processes. Since everyone is aware of what they're doing as well as what others are doing, this will mitigate any late shipments from vendors, logistical errors in distribution channels, and hold-ups on production lines.

17. Logistics Management Distribution Management It mainly focuses on control and management of flow and storage of goods and services or products into and out of company. It mainly focuses on activities related to movement of end product at each and every step starting from production line to customer. It simply handles distributing products i.e. supply chain activities. It simply handles physical movement of product and deliver right goods to right customer on time at correct place. Logistic management is more efficient and is responsible for fulfilling customer demands. Transport management is less efficient and is responsible for maintaining stable prices. It deals with packaging, flow of information, material handling, production, transportation, inventory management, etc. It deals with order processing, customer service, inventory control, packaging and materials, etc. and is important part of business cycle for both distributors and wholesalers.

18. Logistics Management Distribution Management Types of logistic includes supply, distribution. production and reverse logistics. Types of distribution includes supplying distribution, carriers, cargo planes, sales and distribution, etc. Process of logistic management includes planning, implementing, controlling efficient, effective forward and reserve flow as well as storage of goods and services. Process of distribution management includes analyzing and planning movement of goods or products. Its main objective is to meet fulfill customer demand on time and in cost-effective manner. Its main objective is to deal with physical placement of necessary goods to large number of customers that are living at different locations. Its benefit includes increase customer service, create visibility into supply chain, increases efficiency, saves cost. Its benefit includes increase improving enterprise time management, easy inventory monitoring, saves cost, etc.

19. BASIS FOR COMPARISON LOGISTICS MANAGEMENT SUPPLY CHAIN MANAGEMENT Meaning The process of integrating the movement and maintenance of goods in and out the organization is Logistics. The coordination and management of the supply chain activities are known as Supply Chain Management. Objective Customer Satisfaction Competitive Advantage Evolution The concept of Logistics has been evolved earlier. Supply Chain Management is a modern concept. How many organizations are involved? Single Multiple One in another Logistics Management is a fraction of Supply Chain Management. Supply Chain Management is the new version of Logistics Management.

20. Aspect Supply Chain Management ( SCM ) Physical Distribution Logistics Scope Broad, encompasses the entire supply chain from procurement to delivery to end customers Subset of SCM , focuses primarily on the outbound flow of goods from warehouses to customers Subset of SCM, encompasses the movement and storage of goods within the supply chain Focus Holistic approach, emphasizes integration and collaboration across the entire supply chain Primarily concerned with the distribution of finished goods to customers Focuses on the transportation, warehousing, and handling of goods throughout the supply chain Activities Includes strategic planning, procurement, production, inventory management, transportation, warehousing, distribution, and customer service Primarily involves order processing, inventory management, warehousing, transportation, and order fulfillment Involves transportation management, warehouse management, inventory management, order processing, and distribution

21. Aspect Supply Chain Management ( SCM ) Physical Distribution Logistics Goal Optimizing overall supply chain performance, from sourcing to delivery, to maximize customer value and competitive advantage Efficiently delivering products to customers while minimizing costs and meeting service levels Ensuring the timely and cost-effective movement of goods to meet customer demand Timeframe Long-term strategic perspective, focusing on building relationships with suppliers and customers Short to medium-term perspective, focusing on meeting immediate customer demands Short-term operational perspective, focusing on executing day-to-day logistics activities

22. Aspect Supply Chain Management ( SCM ) Physical Distribution Logistics Integration Emphasizes integration across all functions of the supply chain, including suppliers, manufacturers, distributors, and customers Integrates activities within the distribution function, coordinating with other supply chain functions such as procurement and manufacturing Integrates transportation, warehousing, and inventory management activities to facilitate the smooth flow of goods Information Flow Emphasizes the flow of information as well as goods, leveraging technology for real-time visibility and collaboration Relies on information systems for order processing, inventory management, and tracking shipments Relies on information systems for route optimization, tracking shipments, and managing warehouse operations Strategic Importance Strategic function critical for achieving competitive advantage and long-term business success. Tactical function focused on optimizing the distribution process to meet customer requirements. Operational function essential for executing day-to-day logistics activities and ensuring smooth supply chain operations.

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