Presented By:• Kapil Jain 2013PIE5199

Submitted to:Prof. Rakesh Jain

Enabling Technologies

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Content CPFR-Collaborative Planning, Forecasting and Replenishment

ECR-Efficient Consumer Response

VMI-Vendor Managed Inventory

ERP-Enterprise Resource Planning

SCM Software-Supply Chain Management Software

RFID-Radio Frequency Identification

CPFR-Collaborative Planning, Forecasting and Replenishment

What is CPFR ?

CPFR is a tool used to enhance the supply chain that should optimally results in lower inventories, logistic costs and create efficiency in the whole supply chain to all participants.

CPFR uses cooperative management in sharing key information about the supply chain between suppliers and retailers (sellers and buyers) who work together to satisfy the needs of the end customer.

What are the Typical Tasks Performed under CPFR ?

In more detailed description of CPFR, the four collaborative activities are divided into 8 tasks – two for each collaborative activity:

What are the Benefits of CPFR For Retailers? The benefits include better store shelf stock rates, lower inventory levels, higher sales, and lower logistics costs. This leads to higher customer satisfaction and increased profits for the retailer. The whole purpose of a retailer is to maximize profits. Maximizing profits increases the financial strength of the retailer, allowing it to invest its’ profits in different business ventures, allowing for expansion. What are the Benefits of CPFR For Manufacturer ? If a manufacturer is known for having good customer service, new clients are more likely to approach the manufacturer for new manufacturing contracts, which also increases profits.

What are the Challenges For CPFR ?

No shared targets, having a trading partner that focuses on the traditional supply chain steps, and not on the exception/review process.

Not having adequate information technology/expertise.

The lack of trust in sharing sensitive information, the lack of internal forecast collaboration, and fragmented information-sharing standards.

What are the Next Steps For CPFR ?

As the dynamics of supply chain and consumer demand patterns change, CPFR needs to adjust accordingly.

CPFR would be to include multiple Tiers to the model, where all the suppliers could communicate and share information not only with the retailer but with each other at the same time.

To increase the importance of transportation in the model by including outside logistics firms into the system of CPFR.

ECR-Efficient Consumer Response

Introduction to ECR Efficient Consumer Response (ECR) is a grocery industry management strategy designed to make the industry more efficient and responsive to consumers' needs.

ECR is a grocery industry supply chain management strategy aimed at eliminating inefficiencies, and excessive or non-value-added costs within the supply chain. Thus, delivering better value to grocery consumers.

It is designed to re-engineer the grocery supply chain away from a “push system” in which manufacturers “push” products into stores, towards a “pull system” in which products are “pulled” down the supply chain into the store by consumer-demand information captured at the point of sale.

The ultimate goal of ECR is to produce a responsive, consumer-driven system which allows distributors andsuppliers to work together in order to maximize consumer satisfaction and minimize cost.

In order to achieve the goal, ECR proposes changes in nearly all the grocery industry business practices to make them efficient.

The technologies, which are primarily electronic commerce (ecommerce) components, are used to automate these efficient business processes, as well as to enhance thecommunication and relationships between companies.

ECR is an application of ecommerce within the grocery supply chain.

The figure also demonstrates via arrows how subordinate ECR factors contribute to super-ordinate factors and, finally, to the practice of ECR overall.

ECR factors and relationships

StrategiesEfficient store assortmentEfficient product introductionEfficient promotionEfficient product replenishment

Processes

Category managementContinuous replenishment program (CRP)

Enabling technologiesBarcodes / ScannersElectronic Data Interchange (EDI)Computer-Aided Ordering (CAO)Cross-Docking/Direct Store DeliveryActivity-based costing

ECR adoption issues

ECR educationChange managementCreating Performance MeasuresLevel of program and technology implementation

In order to promote ECR implementation, there is still a need for-• investments in communication both in a technological and behavioral sense to address the reluctance in sharing information between trading partners.

• Training to address the inadequacy of skilled personnel and to develop clear road maps for the implementation process.

• Investments in IS to achieve compatibility between organizations.

• Reassessment of priorities for resources.

• Improving the strategic use of ECR to longer term business growth to overcome the problem of conflicting priorities.

VMI-Vendor Managed Inventory

Introduction to VMIDefinition and Process Description

Vendor Managed Inventory (VMI) is a concept and process for consumption-based Supply Chain Management.

It requires the supplier to maintain inventories within predefined and mutually agreed thresholds based on a min / max-range.

The supplier can freely deliver within this indicated range.

The basic requirement for a successful VMI process is a good partnership and cross company information sharing and transparency close to real-time. Therefore communication and visualization of the min / max-range, the inventories and the gross demands of the customer is elementary.

Basic Principles and Information FlowsVMI is based and controlled using the following information: Customer’s actual gross demands = planned consumption (BOM explosion of the production plan without further parameters) Actual customer inventory and daily consumption Actual in-transit inventory Actual supplier finished product inventory (optional) Agreed minimum and maximum stock levels (fixed quantities or dynamic expression as days of stock)

Processes of VMI

The Initialization Process

The Service Process

The Operative Process

Goals and Benefits

Reduced non value-added activities and administration

More secure and efficient Supply

Reduced Inventory and Transport Costs

Further Considerations Multi-Sourcing: VMI is not limited to single-sourcing. Prerequisites for using multi-sourcing are: Separation of supplier-specific inventory information Separation of planned consumption per supplier

The main focus is on direct material for series production, however other products may also be controlled by VMI.

The predictability, reliability and relative stability of the demands is important(VMI does not resolve allocation problems or very volatile demands)

All data has to be up-to-date and correct, and sent on a regular basis, e.g. daily

Flexibility agreements should be committed

Bilateral agreements regarding transport are essential (frequency, minimum lot sizes…)

VMI and Pick-Up by customer are not complimentary processes

Tracking / Alerting / Early WarningBased on all the information flows described above an alert system is necessary to provide early warning of issues requiring corrective action.

ERP-Enterprise Resource Planning

ERP is a software architecture that facilitates the flow of information among the different functions within an enterprise.

Similarly, ERP facilitates information sharing across organizational units and geographical locations.

It enables decision-makers to have an enterprise-wide view of the information they need in a timely, reliable and consistentfashion.

ERP-Enterprise Resource Planning

ERP provides the backbone for an enterprise-wide information system. At the core of this enterprise software is a central database which draws data from and feeds data into modular applications that operate on a common computing platform, thus standardizing business processes and data definitions into a unified environment.

With an ERP system, data needs to be entered only once.

The system provides consistency and visibility or transparency across the entire enterprise.

A primary benefit of ERP is easier access to reliable, integrated information.

A related benefit is the elimination of redundant data and the rationalization of processes, which result in substantial cost savings.

ERP Software Vendors SAP AG-SAP stands for Systems, Applications and Products in Data Processing.

SAP AG was founded in Germany in 1972 by five engineers who wanted to produce integrated business application software for the manufacturing enterprise.

Seven years later, the company launched its first enterprise software, R/2, which was designed around a centralized, mainframe-based database.

SAP’s client/software product, R/3, was introduced in 1992 and quickly came to dominate the ERP software market.

Some Other ERP Software Vendors

J.D. Edwards

Baan

SCM SoftwareSupply Chain Management Software

Supply Chain Management (SCM) software traditionally deals with five distinct processes: plan, source, make, deliver, and return. The SCM market is currently led by vendors who provide solutions as one component of their product portfolio, such as ERP vendors SAP, with its mySAP SCM suite, and Oracle, which offers a series of SCM solution. Oracle in particular has grown its line with the acquisition of PeopleSoft (and PeopleSoft acquisition J.D. Edwards), as well as the Oracle Retail offering, based on its purchase of Retek. Along with Oracle Retail, the company also offers the Oracle E-Business Suite SCM, PeopleSoft enterprise SCM, and JD Edwards EnterpriseOne SCM suites. The space also includes specialty vendors, whose core offerings are SCM solutions. i2 Technologies is the leading vendor in the pure-play SCM space.

Solution SetEnterprises selecting supply chain management tools and applications should consider the following key differentiating characteristics:

1. Systems Specifications2. Electronic Collaboration Solutions3. Process Integration4. Interoperability/Ease of Integration5. Standards Compliance6. Flexibility7. Customer Relationship Applications8. Industry Focus/Vertical Markets

mySAP Supply Chain Management

SAP gained its reputation as a provider of robust, full-featured ERP solutions for multi-national companies, and it has gained the same reputation in the SCM market.

As part of its mySAP Business Suite, mySAP SCM segments its functions into categories of planning, execution, coordination, and collaboration.

It also provides a set of supplier relationship and execution capabilities, which combine to offer one of the most comprehensive solutions in the market.

Oracle Supply Chain Management

Oracle has invested heavily in its applications suite and its infrastructure.

It has complemented its ERP portfolio with a solid supply chain management suite that satisfies planning and execution capabilities, as well as a good CRM portfolio and a strong vertical market focus that targets the transportation, communications, consumer packaged goods, high tech, manufacturing, and government markets.

i2 TechnologiesThe company's SCM suite include products that are designed to meet customers’ business needs around five optimizations, which are:

1. Revenue and Profit Optimization.2. Spend Optimization.3. Production Optimization.4. Fulfillment Optimization.5. Logistics Optimization.

RFID-Radio Frequency IDentification

RFID = Radio Frequency Identification.

An ADC (Automated Data Collection) Technology that:• uses radiofrequency waves to transfer data between a reader and a movable item to identify, categorize, track..• Is fast and does not require physical sight or contact between reader/scanner and the tagged item.• Performs the operation using low cost components.• Attempts to provide unique identification and backend integration that allows for wide range of applications.

Other ADC technologies: Bar codes, OCR.

RFID-Radio Frequency IDentification