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8/4/2019 01-0695d2 SCM - Introduction
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INPUTS OUTPUTSOPERATIONS
PeopleBuildingsRaw materialsEquipmentsInformation
InvestmentEtc.
GoodsServicesProfitsWasteWages
Etc.
ManufactureServeSupplyTransportSell
TrainEtc.
OPERATIONS RESULTS IN OUTPUT
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DEMAND AND SUPPLY CYCLE
CUSTOMERS
SUPPLY OFPRODUCTS
DEMAND FORPRODUCTS
OPERATIONS
OTHERINPUTS
OTHEROUTPUTS
PASSED TO CREATE
PASSED TOARRANGE
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ROLE OF LOGISTICS
Internalsupplier
Internalcustomer
Operations within theorganization
External supplier External customer
MaterialsManagement
Outbound
LogisticsInbound
Logistics
Logistics
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LOGISTICS
Logistics is the function responsible for the flowof materials from suppliers into an organization,through operations within the organization, andthen out to customers.
The supply system includes the process ofplanning, implementing, and controlling theefficient, effective flow and storage of goods andservices from the organization from its place ofproduction to the place where it is required. Thissupply system is referred as LogisticsManagement.
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MATERIALS
Materials are all the things that anorganization moves to create its products.These materials can be:
Tangible (such as raw materials) and
Intangible (such as information).
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Seedling Young Tree Mature Tree Logs
Final Customer
Small roll of
Finished paper Large roll of paper
Sheets of paper Packer Wholesaler Retailer
Raw Paper Wood Pulp
Grown bygardener
Plantedby
forester
Felled by
logger
Chipped
ProcessedProcessedFinishing
Cutting
Transport Transport Transport
Purchase
SUPPLY CHAIN FOR PAPER
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EXAMPLE OF SUPPLY CHAIN
WholesalerManufacturer Retailer
Supplier
Supplier
Customer
Customer
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PROCESS OF SUPPLY CHAININTEGRATION
Deliver Source Make Deliver Source Make Deliver Source DeliverMake Source
Sub-supplier
Supplier Enterprise Customer Sub-customer
Enterprise Systems
Steel Plant DLFIndividuals,CorporateIndian OILNTPC, L&T
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SUPPLY CHAIN OF MILK
FARMMILKTANKER
COLLECTION
Supplier
Supplier
Customer
Customer
DAIRY
Supplier
BOTTLINGPLANT
Customer
supplier
Customer
SUPERMARKET
DISTRIBUTER
Customer
Customer
CustomerSupplierSupplierManthan
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SUPPLY CHAIN MANAGEMENT -DEFINITION
A supply chain consists of activities and organizationsthat materials move through on their journey from initialsuppliers to final customers.
As goods and services flow from supplier to producer tocustomer to final user, supply chain management isconcerned with the interfaces between organizations.
SCM is the management of linkages betweenorganizations.
SCM is a network of the manufacturers suppliers, andsuppliers suppliers on the one hand and customers andcustomers customers on the other hand.
This network exists to ensure a free and smooth flow ofinformation, goods, services and profits among all itsparticipants.
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OBJECTIVES OF SUPPLY CHAIN
To reduce the physical supply chain links;
To define supply chain responsibilities to acore service competency
To decrease the time and cost of gettingend user customer products in requiredquantity at the place of requirements.
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ACTIVITIES IN A SUPPLY CHAIN
InitialSupplier
3rd tierSupplier
2nd tierSupplier
1st tierSupplier
Organization
1st tiercustomer
2nd tiercustomer
3rd tiercustomer
Finalcustomer
Upstream activities
Downstream activities
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SUPPLY CHAIN AROUND A
MANUFACTURER3
rd
tierSupplier
2nd
tierSupplier
1st
tierSupplier
Manufacture
1st tiercustomer
2nd tierlcustomer
3rd tierlcustomer
MaterialSupplier
ComponentSupplier
Sub-assemblySupplier
WholesalersRetailersEndusers
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SUPPLY CHAIN STAGES
SupplierWholesaler
/ DistributorRetailer Customer
Retailer Customer
Wholesaler/ Distributer
Supplier
SupplierWholesaler/ Distributor
CustomerRetailer
Manufacturer
Manufacturer
Manufacturer
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SUPPLY CHAIN STAGES-EXAMPLEOF CONSTRUCTION ACTIVITIES
ACCRefractory,
Wholesaler/ Distributor
RetailerAnsalBuilder
RetailerUnitech,
DLF
Wholesaler/ Distributer
Supplier
Indian OilWholesaler/ Distributor
CustomerRetailer
ManufacturerL&T
Ultracement
Manufacturer
ManufacturerSaurashtra
cementHathi Cement
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MOVEMENT WITHOUT AWHOLESALER
Factories
24 routes
customers
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MOVEMENT WITH AWHOLESALER
Factories
3 routes inwards
customers
WHOLESALER
8 routes outwards
Using intermediaries simplifies the supply chain
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BENEFITS OF WELL DESIGNEDSUPPLY CHAIN -1
Best location of operations, regardless of thelocation of customers.
Concentrating operations in large facilities,
benefits of economies of scale obtained. Producers do not keep large stocks of finished
goods, as the same are kept down the supplychain nearer to customers.
Higher price discounts to wholesalers due tolarge order size.
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BENEFITS OF WELL DESIGNEDSUPPLY CHAIN - 2
Wholesaler keeps stocks of many suppliers, givingretailers a choice of goods.
Wholesalers are near to retailers and have short leadtime.
Retailers carry less stocks as wholesalers providereliable deliveries.
Retailers can have small operations, giving a responsiveservice near to customers.
Transport is simpler with fewer, larger deliveries thusreducing costs.
Organization can develop expertise in specific types ofoperations.
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ACTIVITIES OF LOGISTICS
Procurement /purchasing
Inwardtransport
Receiving Warehousing
Stock control Order picking Materials handling
Outward
transport
Physicaldistribution of
finished goods
Recycling,returns, and
waste disposal
Locations communication