UNIT 1 suppy chain management chapter 1.pdf

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1. SUPPLY CHAIN AND LOGISTICS
MANAGEMENT (501)
UNIT: SUPPY CHAIN MANAGEMENT
PRESENTED BY
BUSHRA KHAN

2. TOPICS TO BE COVERED….
•Concept, objectives, significance
•Process view of a supply chain-cycle and push pull view
• Drivers/components of supply chain – Facilities, Inventory,
Transportation, Information, Material Handling
•Achieving tradeoff between customer service and cost

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3. CONCEPT
•SCM is the management of a network of all business processes and
activities involving procurement of raw materials, manufacturing
and distribution management of Finished Goods.








•SCM is also called the art of management of providing the Right
Product, At the Right Time, Right Place and at the Right Cost to
the Customer.
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4. •Between Supplier and till end customer there are
many many activities. If the emphasis is on particular
operation, it is called process. If emphasis is on Value-
addition, it is called
Value-chain. If the emphasis is on movement
( material, information, money) then it is called supply chain
•Supply Chain is a strategy to integrate Marketing –
Distribution – Planning – Purchase functions to manage
individual conflicts.
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5. significance
•Boost customer services
•Reduce operating costs
1.Decreases Purchasing Cost
2.Decreases Production Cost
•Improve financial position
1.Increases Profit Leverage
2.Decreases Fixed Assets
3.Increases Cash Flow
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6. Objectives
Lower
transportation
cost
Ensure right
quality
Ensuring
production
lines function
Keep cost at
acceptable
level
Ensure
revenue and
profit
Ensure mutual
success
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7. PROCESS VIEW OF SCM
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8. Push/ pull view of scm
Push view --------------- anticipation of a customer order
Pull view ---------------- In response to customer demand

As push view depends on the speculation of customer demand it tries
to push as many products into the market.

In pull process of supply chain demand is real and firms react to the
demand. It helps company to produce required number of products.

For ex. Mobile Mfg. companies assembles parts to produce mobile
phone. The process before production of the phone is Push Process but
the process after production is Pull Process, as the manufacturer is
predicting that the product will be accepted. As the customer orders for
mobile phone it will become Pull Process.(Actual demand).

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Sr .
No
Push View

Pull view
1 Execution initiated in
anticipation of customer
order

Execution initiated in
response to customer
order

2 Demand is uncertain Demand is certain
3 Speculative process Reactive process
4 High complexity Low complexity
5 Focus on resource
allocation
Focus on responsiveness
6 Long lead time Short lead time
7 Helps in supply chain
planning
Helps in order fulfilment
8 Objective is to minimize
the cost
Objective is to maximize
the service

10. Components of Supply Chain
Facilities Inventory
Transportation Information
Material
Handling
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11. Achieving trade off between customer
service and cost
•Right response
•Right Logistics
•Right Quantity
•Right value
•Right cost and trade off
•Right information
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