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SCM and Its Application
An Operational Managements Assignment
Topics to Discuss
• SCM and Its Application
• How to Deploy SCM
• Critical Success Factor
• New Trends in SCM
• SCM in Services v/s Manufacturing
• SCM Application in Pakistan
SCM and Its Application
How to Deploy SCM and Critical Success Factor
SCM
• (SCM) is the process of Producing and Managing:
• Materials
• Information
• Finances
• The ultimate goal is to reduce inventory
SCM
• Supply chain management flows can be divided
into three main flows:
• The product flow
• The information flow
• The finances flow
SCM Software
• Planning Application:
• Use advanced algorithms to determine the best way to fill an order.
• Execution applications:
• Track the physical status of goods
• The management of materials
• Financial information involving all parties
How to Deploy SCM
Process
• Analyze the Company’s current Supply Chain Process
• A small cross-functional team examines all facets
• Now Look in part in which the company have the most control• Manufacturing or service processes• Distribution processes• Retail capacity
And • Time and costs of sourcing• Producing• And Distribution of Product and Services
For a Manufacturer
• This means investing in automation and sales and
operations planning technologies.
For a Distributor and Retailer
• The priority has focused on
• Supplier relationships
• Warehouse management
• Transportation management solutions
Critical Success Factors
Success Factors for SCM
• These seven success factors for SCM projects are:
1: Set realistic goals
2: Make an effective plan
3: Find a strong executive sponsor
4: Assemble good resources
5: Stay flexible
6: Allow for testing
7: Promote user buy-in.
The Case of Wal-Mart
The key to Wal-Mart's supply chain
• Wal-Mart's company is to be at the leading edge of:
• Logistics
• Distribution
• Transportation
• Technology
Wal-Mart's one-store-at-a-time, RFID and just-in-time distribution approach
• Every Wal-Mart store operates like a small company
• Store managers are trained to manage
• One store at a time
• One department at a time
• One customer at a time
Wal-Mart's one-store-at-a-time, RFID and just-in-time distribution approach
• Wal-Mart has implemented advanced logistics solutions like RFID
• RFID solutions help maintain lower costs, identify out-of-stocks
and increase sales.
• Distribution centers instead of warehouses, automated
replenishment and cross-docking technology also reduce
inventory carrying costs
Why SCM Fails?
Top 5 Reasons
• Swift, Dramatic Order Cutbacks
• Long Lead Times causing Delayed Delivery
• Overemphasis on Cost Cutting
• Inaccurate Demand Forecasts
• Lack of Risk Management Strategies
Top Supply Chain Disasters
Nike
• Trouble with new planning System Causes
inventory and order woes
• Nike blamed software related issues for $
100 million revenue shortfall for the quarter,
Stock dropped to 20%
2001
Apple 1995
• Playing a conservative inventory strategy,
Apple swamped with demand for new Power
Macs and couldn't deliver the goods on time.
• At that time Apple bear the losses in millions
of Dollars and lost it market share for PCs
New Trends In SCM
Supply chain technology continued to evolve throughout 2012
• Overall IT trends such as the cloud, big data and mobile are
impacting the supply chain sector just as they do other
sectors.
• But there are other trends specific to supply chain that
came to the forefront in 2012
Trends
• Improved Customer Service Levels over Cost Cutting
• Execution Moves Ahead Of Demand & Supply Planning
• Resurgence of Contingency Planning
• End-To-End Partner Communication & Collaborative
Execution
• Big Data Is Becoming Mandatory
The Case of Coca Cola
• The Coca Cola Company is heavily investing nowadays in SCM
• They have recently deployed a SAP-Oriented Software Gensys
• The Genesys program is an integrated SAP Enterprise Resource Planning
(ERP) solution that will replace CCE’s legacy systems in the processes of
“order to cash,” “requisition to payment,” and “record to report.”
• Genesys will allow CCE to shorten cycle time in these processes and be
more productive. It will also help bring more visibility into the business and
improve decision making.
SCM in Services v/s Manufacturing
The Differences
Manufacturing Services
The primary difference is that most
of the cost of manufacturing labor
is involved in procuring,
transporting and manipulating
physical material.
while almost all service industry
labor is expended on manipulating
information and developing
relationships.
The Differences
Manufacturing Services
Manufacturing industry tries to
negotiate better shipping rates and fill
containers with product to reduce unit
cost.
the service industry upgrades servers
and installs new software to speed the
flow of communication.
The Differences
Manufacturing Services
In a manufacturing organization,
optimization of the supply chain is
accomplished primarily by improving
speed of delivery and reducing cost.
The main drivers of optimization in a
service model are relationships and
information flow.
SCM Application in Pakistan
The Restaurant Industry
• SCM Application for Service industry is very rare in
Pakistan.
• After a research we found out that a Multinational Company
MICROS is working for SCM application in the Restaurant
industry of Pakistan
The Challenges faced by Pakistan’s Best Restaurants
The typical business challenges full-service restaurants face
today are
• How to increase table turn-over
• Revenue
• While optimizing and streamlining the business organization
• Workflows
• Resource planning
The Solution
• Customized to a restaurant’s unique business requirement, MICROS
puts together a solution that perfectly fits your business needs.
• MICROS’s end-to-end portfolio encompasses
• Point-of-Sale System solutions
• Inventory management solutions
• Table management solutions
• Labor management solutions
• CRM/loyalty solutions
• reporting tools
The Benefits:
• Improved operational efficiency
• Improved enterprise business intelligence and
decision support
• Increased guest satisfaction and loyalty
• Increased sales
Few Examples:
Currently MICROS is running in Many of the best Restaurants
and Resorts of Pakistan like:• Pearl Continental
• Marriot
• Sheraton
• Hotel Serine
• Dunkin Donuts
• KFC
• Mc Donald’s
• Pizza Hut
Thank You !By: Arbab Siqqidui
Muhammad Ghazanfar