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Integrated Supply Chain Management
&Its Barriers
11/15/20131
Dhirajkumar Gite A 15
Rohan Powale A 63
Siddhesh Shetye B 58
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What is ISCM
An Integrated Supply Chain (ISC) is one that has full
responsibility across the corporation (including different
divisions, business units and geographies) for the planning
and management of all activities involved in end to end-supply
chain processes, including direct sourcing
and procurement, conversion/ manufacturing, and all logistics
management activities.
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Integrated Supply Chain
11/15/20133
Vendor
Procurement
ManufactureDistribution
RetailerIntegrat
ed
Supply
chain
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Why ISCM ?
1.Manufacturers goals
Reduce cost
Reduce duplication of efforts
Reduce lead time
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Contd
11/15/20135
Implement cost reduction program
Involve suppliers early
Reduce time to market
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Contd
2.Suppliers goals
Reduce cost
Increase sales volume
Increase customer loyalty
Improve profitability
11/15/20136
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How ISCM is developed ?
Developing an integrated supply chain strategy-
Phase I: Competitive Environment Evaluation
The first step is to look outward.
The objective is to develop and document the
characteristics of the market place.
The process used to evaluate market characteristicsinvolves looking at and surveying vendors, customers
and competitors.
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Contd
Phase II: Supply Chain Diagnostic Review
The focus is to review the supply chain operations
and to identify those areas which offer potential forimprovement.
The objective is to develop a realistic method of
allocating overhead costs to products, markets andactivities.
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Contd
Phase III: Supply Chain Development
Development of a supply chain strategy and tactical
plan for implementing that strategy.
The objective here is to develop a strategy for the
company, based on the work done in the first two
phases which is consistent with customer desires,
management focus, market characteristics and the
realities of the organisation.
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Supply Chain Department
11/15/201310
ManagingDirector
Sales ManagerFinancialManager
LogisticControl
Supply chainManager
ProductionManager
StorageTransportationPlanning Marketing
Integrated Supply Chain Management Department
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Contd
11/15/201311
Postponement
Channel assembly
Drop shipping and special packaging
Blanket orders
Standardization
Electronic ordering and funds transfer
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Integrated Supply Chain Framework
Integrated supply chain dived into two internal
and external
Internal :
Deals with material, inventory and warehousemanagement
External :
Resource flow from supplier to manufacturerand later to customer
Information flow from customer to
manufacturer to supplier11/15/201312
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11/15/201313
Internal integration across supply chain
Degree of Coordination between internal functions oftrading partners in supply chain
Captures organization functions such as incoming raw
material production and shipping
Requires full system visibility both inbound andoutbound
Organizations investment towards enhancing its ITand systems
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11/15/201314
Companies Integration with customer
Degree of Coordination between manufacturing firm
and downstream customers
Involves all activities which include determiningcustomer needs and fulfilling them
Understanding customers and building strong linkage
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Companies Integration with supplier
Degree of Coordination with manufacturing firm and
upstream customers
Involves activities long term commitment and closerelationship between firms and its suppliers
It takes place through effective organization
communication and mutual trust
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Supply Chain Agents
Chain of activities involving ordering and receivingraw material manufacturing and distribution and
customer delivery
Integrated supply chain requires coordination withcustomer and supplier
This coordination is achieved through cooperating
agents each performs one or more function andcoordinates decision with other agents
11/15/201316
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Contd
11/15/201317
Agent responsible for set of functions in supply chainwho stores information locally and can access from
network
Agents exists within EIA which provides distributedinformation environment
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Types Of Agent
Integrated Supply chain consists of two cooperatingagents each performs different functions and decisionsare coordinated between two
Functional agents: Plans and controls activity in
supply chain Information agents: Supports supply chain by
providing communication service
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11/15/201319
Functional agents
Order acquisition agent:
Acquiring orders from customers, negotiating prices Handling customer request for order modification and
cancellation
Logistic agent: Coordinates with multiple supplier and distribution
centre
Manages movement of product across supply chain
from supplier to customer
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Transportation agent:
Assignment and scheduling of transportation specifiedwith logistic agent
Scheduling agent:
Takes care of scheduling activities in factory
Assigns resources and start time to resources that are
feasible
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11/15/201321
Resource agent
It merges functions of inventory management and
purchasing
Manages availability of resources so that schedule
can be executed
Selects suppliers with minimum cost and fast delivery
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Dispatch agent
They release order and are real time floor control
Coordinates with schedule agent if any change inschedule
Information agents
EIA provides communication and information serviceto information agents
It checks and maintains consistency of information
It allows automatic distribution of information to these
agents
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Supply Chain Agents
11/15/201323
OrderAcquisition
Logistic
Scheduling
Transport
Resourse
Dispatch
Informatio
n
Agent
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Supply Chain Model
11/15/201324
Ordersand
materialResponse
Trust
Visibility
Collaboration
Preference
Market
size
Employe
es
SupplierCompany Market Customer
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ISCM Significance
The significance of this development embodies a
change of focus; away from being product-orientated
to being customer-orientated, penetrating deep into
the customer organization to understand the products,
culture, market and organization.
This should ensure that the company is attuned to the
customer's needs and requirements.
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Opportunities in an Integrated Supply Chain
Accurate pulldata
Lot size reduction
Single stage control of replenishment
Vendor managed inventory
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Barriers to ISCM
Silo mentality
Lack of supply chain visibility
Lack of trust
Lack of knowledge
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Activities causing bullwhip effect
Demand updating
Order batching
Price fluctuations
Rationing and shortage gaming
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11/15/201329