SCM Presentation11

8/8/2019 SCM Presentation11

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Current

Status of Supply chainManagementIndustry In

India Presented by:

Prachi Das Vishwas Joshi Neetu Waghmare Sachin ShindeAshwini Pathak Ashish Chavan


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What is Supply Chain Management?

A consists of the flow of products and services from:Raw MaterialsComponents & intermediate manufacturers

Final product manufacturersWholesalers & distributors andRetailers

and storageactivities &

through information, planning andintegration activities.

supply chain

Connected by transportation

Integrated


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W ha upp Cha a ag ? (C d)


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Origin of Supply chain Industry


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BelfastCarburetors and

distributors

TreforestSpark pluginsulators

LeamingtonFoundry production

of enginecomponents

DagenhamFinal assembly

BordeauxTransmissions

EnfieldInstruments, fueland water gauges,

plugs

BasildonRadiators, water

pump assembly,engine components

Genk Body panels,road wheels

WlfrathTransmission parts, enginecomponents

SaarlouisFinal assembly

CologneDie-cast transaxlecasings, gear and

engine components

ValenciaFinal assembly

Ford Example


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SCM in INDIAWorldwide interest in SCM increased since 1980s.In India--increasing uncertainty of supply networksBcoz.

Globalization of businesses Proliferation of product variety Shortening of PLC.. Dramatic & sudden changes in

environmentDue to that.Indian organization forced to look beyond their four wallsfor collaboration with supply chain partners


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LOG ISTICS C O STESTIMATES F OR INDIA

Logistics costs constitute nearly 10% of thetotal GNP, of which nearly 40% is due to

transportation.Logistics cost for manufactured products inIndia 30% of the total expenditure, as against

15-20% globally.Almost one-third companies have no supply chain strategy.


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LOG ISTICS C O STESTIMATES F OR INDIA

SR.NO DESCRIPITIONCOST AS %

TOTAL

LOGISTIC COST1 TRANSPORATATION 35%

2 INVENTORY 25%

3 LOSSES 14%4 PACKAGING 11%

5 WAREHOUSING 9%


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Bull Whip Effect

Each organisation seek to so lve the prob lemfrom its own perspecti ve Sma ll changes in cons umer demand res ult in

large variations in orders p laced upstreamDramatic order size variationAmplification of order size variation as one

mo ves up the s upp ly chain

Supplier Manufacturer Distributor Retailer Customer

Buys 10Orders 15

Delay 2 weeksDelay 2 weeks

Orders 25

Delay 2 weeks

Orders 40


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Ca uses

L ittle or no comm unication between s upp ly chain partners.

Dela y times between order processing,demand, and receipt of prod ucts.O ver reacting to the back log orders.

Inacc u rate demand forecasts.http://www.s upp lychainon line.com/pre views/SCM101/3.htm l


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Drivers of S upp ly Chain Performance

Facilities Prod uction/Storage SitesR esponsi veness Vs Efficienc y


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AR EAS WHE R E F O CUS ISNEEDED..

A) Supply chain strategy.B) Supply chain integration..C) Inventory management

D)Information technology


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A) SUPP LY CHAIN ST R ATE GY

A set of dynamic,integrated decisionsthat one must makein order to positionones business in thecomplex

environment.


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FO CAL AREA BUSINESS O BJECTIVE SUPPLY CHAIN

O BJECTIVE

1) Customersatisfaction

M aximize Customersatisfaction

Highly reliable productReducing transportation

costExpanding depth of

distribution

2) Profitmaximization

M aximize profitIncrease turnover on

investment

Reducing inventory costLowest product cost

3) Operationalexcellence

Increasing earning pershare

Flexibility of production volume

Flexibility of product mixReducing warehouse cost


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B) SUPP LY CHAIN INTE GR ATI O N

The SC strategy cannot truly be overall businessstrategy.

It is based on trust and information sharing, sothat it can quick respond to customers demand.Effective integration is the key because if one of these links fail, the organizations performancemay suffer and may not meet expectation of itscustomers, or the service level of itscompetitors.


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C) INVENT ORY

MANAG

EMENT.Inventory management means maintenance, upkeep & assurance of adequate supply of goods inorder to met am expected pattern of distribution of demand for given financial investment.Its functionally results into:-

Ensuring balance flow of material, component tools &

equipment.Minimising damage.Minimising stockout scenario.Minimising time for ordering the consignment


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D) INF OR MATIO N TECHN OLOGY

Information technology is considered to beuseful in SCM. F or 3 most reasons

Data transferInformation retrievalMachine & process control


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Optimized supply chain confi guration


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McDona lds Examp le

What McDonald achieved through SCM?Ti el elive a Mate ial

R e ce t & c ea e i P ita ilit

Hi ta a P ct Q alit

SCM operation of McDonald in IndiaWork i it 38 i e r e t lie rs a ma i e e e t

r esta r a ts.

Distribution centers located in:

No i a & K alambo li (M mbai) i 1996

Ba alor e i 2004

Calc tta i 2007


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McDona lds Examp le (contd..)

Dyn ami dair y indus tr y Supp liers of c ee se

Tr ik aya a r icultur e Supp liers of ice berg lett uce

ista processed food p vt. Ltd Supp lier of c ick en and vegeta ble

Amr it food Supp lier of long lif e milk, d air y produ cts for froz en desser ts


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De ll assemb ly p lant

De ll web

Customers

P RODUCT FLOW

INFORMATION FLOW

DIR ECT

SHIPPIN G


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UNITS

WE B SITE

CUST O MER S

P RODUCT FLOW

INFORMATION FLOW

IN TR ANSITMERG E


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The Cha llenges

What are the cha llenges facingincreasing adoption of SCMso lutions in India?


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The main one is the lack of awareness of thebusiness potentia l of SCM so lutions in India.

The prob lem is in most peop le treating SCMas one more mod ule to be imp lementedafter E R P.

lack of cons ulting experience in the fie ld inIndia.


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O ne of the ke y cha llenges faced is thebusiness process transformation req u ired toexp loit the best practices and too ls of SCM.

Poor ph ysica l and comm unicationsinfrastr uctu re.

The next and e ven more diffic ult cha llenge isthe management of change.


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It is difficult to imp lement the entire SCMso lution at one go beca use that wo uldinvo lve p u tting a comp lex network in p lacewith e ver y sing le entit y connected to thewho le process.


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But does this mean SCM has no

future in India?Not really


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Future P rospects

Despite cha llenges, the Indian SCMind ustr y is growing at 20 % .

Many large co. like Tata, R e liance, Infos ysha ve been attracted b y the potentia l of thissector.

Large express cargo and co u rier co. BlueDart, DH L , TCI a lso started logisticso erations.


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Since this ser vice can be pro vided witho u tassets, there is growing interest amongentreprene u rs to vent ure in.

The Indian econom y is growing at 7-9%for the last co up le of years, which imp liesmore o u tpu t and more demand for specia lized logistics ser vices.


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The GO I has foc used on Infra.De ve lopment

Eg: go lden q uadri latera l project

In India 100% FDI is a llowed in logistics.


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Beneficiaries Sectors

What are the sectors that ha ve been thebiggest beneficiaries of SCMimp lementation in India?

Industries that wo uld see tremendo usbenefits inc lude the man ufact u ring sector,a u tomoti ve sector, FMC G , retai l, oi l andgas.


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SCM flavours

Even SCM so lutions come in differentf la vou rs. K LG S yste l, for instance, offers aS upp ly Chain O ptimisation (SC O ) so lution.

There is a f undamenta l difference betweenSCM and SC O .


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In SCM the cons ultants capt ure a ll theprocesses and b u ild it into the E R P s ystem.

Ever ything is hardcoded into the s ystem.Each and e ver y transaction cond ucted isbased in r ules. It does not ana lyse thedifferent options that are a vai lab le.

SCM does not do reso urce optimisation thewa y SC O so lution does.

SCO

will look at a ll the a vai lab le options andcome up with a so lution that wi ll ens u reoptimisation of the reso u rces.


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SCM Presentation11

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