| Supply Chain Management (SCM): | | | | describing everyone who contributes to a project. So if |
| Supply chain management (SCM) is the combination of | | | | you make text books, then your extended supply |
| art and science that goes into improving the way your | | | | chain would include the factories where the books are |
| Project finds the raw components it needs to make a | | | | printed and bound, but also the company that sells you |
| product or service and deliver it to customers. POME | | | | the paper, the mill where that supplier buys their stock, |
| defines that SCM is a network of facilities and | | | | and so on. It is important to keep track of what is |
| distribution options that performs the functions of | | | | happening in your extended supply chain because with |
| procurement of materials, transformation of these | | | | a supplier or a supplier's supplier could end up having |
| materials into intermediate and finished products, and | | | | an impact on you (as the old saying goes, a chain is |
| the distribution of these finished products to customers. | | | | only a strong as its weakest link). For example, a fire in |
| Supply chains exist in both Project service and | | | | a paper mill might cause the text book manufacturer's |
| manufacturing organizations, although the complexity of | | | | paper supplier to run out of inventory. If the text book |
| the chain may vary greatly from industry to industry | | | | company knows what is happening in its extended |
| and firm to firm. | | | | supply chain it can find another paper vendor. |
| Definition for supply chain management | | | | SCM for a single product, where raw material is |
| "Supply chain management is the management of | | | | procured from vendors, transformed into finished |
| upstream and downstream relationships with suppliers | | | | goods in a single step, and then transported to |
| and customers to deliver superior customer value at | | | | distribution centers, and ultimately, customers. Realistic |
| less cost to the supply chain as a whole." | | | | supply chains have multiple end products with shared |
| Explanation: | | | | components, facilities and capacities. The flow of |
| The supply chain is the network of organizations that | | | | materials is not always along an arborescent network, |
| are involved through upstream and downstream | | | | various modes of transportation may be considered, |
| linkages, in the different processes and activities that | | | | and the bill of materials for the end items may be both |
| produce value in the form of products and services in | | | | deep and large. |
| the hands of ultimate consumer.( in detail mention | | | | Traditionally, marketing, distribution, planning, |
| above) | | | | manufacturing, and the purchasing organizations along |
| Supply chain Optimization | | | | the supply chain operated independently. These |
| | | | | organizations have their own objectives and these are |
| Good design is at the heart of an effective supply | | | | often conflicting. Marketing's objective of high customer |
| chain solution. | | | | service and maximum sales dollars conflict with |
| Solutions must design team offers a wide portfolio of | | | | manufacturing and distribution goals. Many |
| expertise and services, from Logistics network | | | | manufacturing operations are designed to maximize |
| strategy, transport design, warehouse design and | | | | throughput and lower costs with little consideration for |
| simulation, through to operational improvement and | | | | the impact on inventory levels and distribution |
| inventory analysis | | | | capabilities. Purchasing contracts are often negotiated |
| International Supply Chain | | | | with very little information beyond historical buying |
| Extended Supply Chain Services | | | | patterns. The result of these factors is that there is not |
| Implementation Services | | | | a single, integrated plan for the organization---there |
| Outsourcing Projects | | | | were as many plans as businesses. Clearly, there is a |
| | | | | need for a mechanism through which these different |
| 1. 1. International Supply Chain: | | | | functions can be integrated together. Supply chain |
| International supply chain management solutions must | | | | management is a strategy through which such |
| focus on helping customers take increased control of | | | | integration can be achieved. |
| international inbound supply chain to maximize the value | | | | |
| of international and global sourcing. | | | | Supply Chain Decisions |
| - Give visibility of the upstream supply chain, and | | | | We classify the decisions for supply chain |
| enable earlier decision making | | | | management into two broad categories -- strategic |
| - Create a more agile supply chain, better able to | | | | and operational. As the term implies, strategic decisions |
| respond to changes in consumer demand | | | | are made typically over a longer time horizon. These |
| - Reduce lead times, inventories, and associated | | | | are closely linked to the corporate strategy (they |
| storage costs | | | | sometimes {\it are} the corporate strategy), and guide |
| Customer-focused solutions are built up from the | | | | supply chain policies from a design perspective. On the |
| following core services: | | | | other hand, operational decisions are short term, and |
| - Origin management, including: vendor management; | | | | focus on activities over a day-to-day basis. The effort |
| supplier collections; customs brokerage; consolidation | | | | in these type of decisions is to effectively and |
| services and value-added services | | | | efficiently manage the product flow in the |
| - Global forwarding, including: air/ocean/road/rail freight | | | | "strategically" planned supply chain. |
| forwarding and management; European managed | | | | There are four major decision areas in supply chain |
| transport | | | | management: 1) location, 2) production, 3) inventory, and |
| - Destination management, including: port and | | | | 4) transportation (distribution), and there are both |
| demurrage management; customs brokerage; | | | | strategic and operational elements in each of these |
| de-consolidation and pre-retail services; port to | | | | decision areas. |
| distribution centre transportation; direct store delivery | | | | |
| (US only) | | | | - Location Decisions |
| - Supply chain visibility and management, including: | | | | The geographic placement of production facilities, |
| purchase order management; RFID product tracking; | | | | stocking points, and sourcing points is the natural first |
| exception management; planning and forecasting; | | | | step in creating a supply chain. The location of facilities |
| inventory management. | | | | involves a commitment of resources to a long-term |
| - Global forwarding services are provided across all | | | | plan. Once the size, number, and location of these are |
| major routes. | | | | determined for a Projects material, so are the possible |
| Logistical services that are offered. | | | | paths by which the product flows through to the final |
| - Reverse Logistics for Projects | | | | customer. These decisions are of great significance to |
| - Services Logistics for Projects | | | | a firm since they represent the basic strategy for |
| - Inbound to Manufacturing | | | | accessing customer markets, and will have a |
| - Medical device distribution | | | | considerable impact on revenue, cost, and level of |
| - Distribution to stores Management | | | | service. These decisions should be determined by an |
| - Engineering Responsea.) Reverse Logistics for | | | | optimization routine that considers production costs, |
| Projects | | | | taxes, duties and duty drawback, tariffs, local content, |
| Reverse Logistics solutions help customers plan, | | | | distribution costs, production limitations, etc. Although |
| implement and control flow of materials and manage | | | | location decisions are primarily strategic, they also have |
| related information, back up the supply chain to | | | | implications on an operational level. |
| recapture values and ensure the safe disposal of | | | | - Inventory Decisions |
| goods. Items include the recovery of obsolete or | | | | These refer to means by which inventories are |
| non-operational white goods such as refrigerators, plus | | | | managed. Inventories exist at every stage of the |
| the removal of old products on delivery of new or | | | | supply chain as either raw materials, semi-finished or |
| replacement products. | | | | finished goods. They can also be in-process between |
| Services include: | | | | locations. Their primary purpose to buffer against any |
| - Roll in Management: de-installation of finished goods | | | | uncertainty that might exist in the supply chain. Since |
| at the customer's site | | | | holding of inventories can cost anywhere between 20 |
| - Returns Management: receiving, sorting, verifying and | | | | to 40 percent of their value, their efficient management |
| managing returned products | | | | is critical in supply chain operations. It is strategic in the |
| - Express Delivery: Exchange of Dead On Arrival | | | | sense that top management sets goals. However, |
| product | | | | most researchers have approached the management |
| b.) Service Logistics for Projects | | | | of inventory from an operational perspective. These |
| LOGISTICS FIRM's service and replacement parts | | | | include deployment strategies (push versus pull), control |
| service involves the management of manufacturers' | | | | policies --- the determination of the optimal levels of |
| replacement parts delivered to and from customers | | | | order quantities and reorder points, and setting safety |
| according to pre-defined service levels or warranty | | | | stock levels, at each stocking location. These levels |
| agreements on a one, two, four or eight-hour and | | | | are critical, since they are primary determinants of |
| next-day basis, 24 hours a day, seven days a week. | | | | customer service levels. |
| PROJECTS FIRM works closely with customers to | | | | - Transportation Decisions |
| overcome common issues such as: | | | | The mode choice aspect of these decisions is the |
| - Poor parts availability | | | | more strategic ones. These are closely linked to the |
| - High inventory investment | | | | inventory decisions, since the best choice of mode is |
| - Long lead times, accentuated by global sourcing | | | | often found by trading-off the cost of using the |
| - High levels of customer returns | | | | particular mode of transport with the indirect cost of |
| - Poor visibility, reporting and control | | | | inventory associated with that mode. While air |
| - Cost control of the demand chain | | | | shipments may be fast, reliable, and warrant lesser |
| Key services include: | | | | safety stocks, they are expensive. Meanwhile shipping |
| - International freight forwarding | | | | by sea or rail may be much cheaper, but they |
| - Domestic and regional inbound deliveries | | | | necessitate holding relatively large amounts of |
| - Inventory planning, forecasting, procurement and | | | | inventory to buffer against the inherent uncertainty |
| analysis | | | | associated with them. Therefore customer service |
| - Distribution centre operations | | | | levels, and geographic location play vital roles in such |
| - Outbound delivery | | | | decisions. Since transportation is more than 30 percent |
| The entire process is underpinned by a web-enabled | | | | of the logistics costs, operating efficiently makes good |
| electronic order processing and order monitoring tool. | | | | economic sense. Shipment sizes (consolidated bulk |
| | | | | shipments versus Lot-for-Lot), routing and scheduling of |
| c.) Inbound to Manufacturing | | | | equipment are key in effective management of the |
| Inbound to manufacturing is the complete end-to-end | | | | firm's transport strategy. |
| Logistics for Projects management of inventories, | | | | |
| facilities and labour associated with the inbound flow of | | | | Supply Chain Modeling Approaches |
| materials from vendors and supplier origins to | | | | Clearly, each of the above two levels of decisions |
| consumption points in manufacturers production lines. | | | | require a different perspective. The strategic decisions |
| The service encompasses: | | | | are, for the most part, global or "all encompassing" in |
| - Network, transportation and facility design | | | | that they try to integrate various aspects of the supply |
| - Inventory optimization | | | | chain. Consequently, the models that describe these |
| - Supplier management | | | | decisions are huge, and require a considerable amount |
| - Transportation management | | | | of data. Often due to the enormity of data |
| - In-plant services | | | | requirements, and the broad scope of decisions, these |
| Key to the service is integrating manufacturers' | | | | models provide approximate solutions to the decisions |
| forecasting, order management and supply chain | | | | they describe. The operational decisions, meanwhile, |
| execution processes with their component suppliers. | | | | address the day to day operation of the supply chain. |
| | | | | Therefore the models that describe them are often |
| Value is created for manufacturers and component | | | | very specific in nature. Due to their narrow |
| suppliers throughout the world by: | | | | perspective, these models often consider great detail |
| - Enabling a robust and cost-effective supply chain | | | | and provide very good, if not optimal, solutions to the |
| - Providing the necessary visibility so that the location | | | | operational decisions. |
| of all components within the supply chain is known to | | | | |
| all supply chain participants | | | | Network Design Methods |
| - Reduce inventory and investment costs | | | | As the very name suggests, there must be some |
| - Improve delivery times | | | | methods that determine the location of production, |
| - Co-ordinate multiple components more efficiently | | | | stocking, and sourcing facilities, and paths the |
| d.) Distribution to stores management | | | | product(s) take through them. Such methods tend to |
| Distributions to store services must focus on helping | | | | be large scale, and used generally at the inception of |
| retailers create efficient and flexible supply chains to | | | | the supply chain. |
| deliver product to retail outlets at high levels of service. | | | | Clearly, these network-design based methods add |
| These solutions are built from several core services: | | | | value to the firm in that they lay down the |
| reverse Logistics collections; sortation; processing; | | | | manufacturing and distribution strategies far into the |
| repair/refurbishment; value recovery; disposal and | | | | future. It is imperative that firms at one time or another |
| compliance.e.) Engineering Response | | | | make such integrated decisions, encompassing |
| Through our Engineering Response services, we | | | | production, location, inventory, and transportation, and |
| manage the materials supply chain from works | | | | such models are therefore indispensable. Although the |
| planning and inbound goods through to on-site works, | | | | above review shows considerable potential for these |
| delivering stock out to engineers, builders and | | | | models as strategic determinants in the future, they |
| construction workers in the field. | | | | are not without their shortcomings. Their very nature |
| | | | | forces these problems to be of a very large scale |
| 2. Extended supply chain services | | | | What are some emerging technologies that will affect |
| It not only provides physical Logistics for Projects | | | | the Supply Chain? |
| services but also must manage other enhanced supply | | | | The most notable is Radio Frequency Identification, or |
| chain services, improving efficiencies and reducing | | | | RFID. RFID tags are essentially barcodes on steroids. |
| costs.a.) Order Management | | | | Whereas barcodes only identify the product, RFID |
| Receipt, management, execution, sequencing and | | | | tags can tell what the product is, where it has been, |
| dispatch of orders in a timely manner.b.) Call Center | | | | when it expires, whatever information someone |
| Management | | | | wishes to program it with. RFID technology is going to |
| A Call Centre manages orders, monitors sales | | | | generate mountains of data about the location of |
| activities, provides customer services and functions as | | | | pallets, cases, cartons, totes and individual products in |
| a Help-desk.c.) Global Inventory Management | | | | the supply chain. It's going to produce oceans of |
| PROJECTS FIRM gives the customer a global view of | | | | information about when and where merchandise is |
| inventory, thus enabling informed decisions regarding | | | | manufactured, picked, packed and shipped. It's going to |
| the disposition of stock.d.) Consolidated Billing Services | | | | create rivers of numbers telling retailers about the |
| The creation of a consolidated and categorized | | | | expiration dates of their perishable items—numbers |
| invoice, based on all services performed in a specific | | | | that will have to be stored, transmitted in real-time and |
| time-period by more than one service provider, made | | | | shared with warehouse management, inventory |
| available in an agreed format.e) Freight & | | | | management, financial and other enterprise systems. In |
| Customs Solutions | | | | other words, it is going to have a really big impact. |
| | | | | Another benefit of RFIDs is that, unlike barcodes, RFID |
| 1. 2. Implementation Services: | | | | tags can be read automatically by electronic readers. |
| 2. a. Implementation and Project Management | | | | Imagine a truck carrying a container full of widgets |
| Implementation starts by defining project aims, setting | | | | entering a shipping terminal in China. If the container is |
| the targets and describing the deliverables in detail. The | | | | equipped with an RFID tag, and the terminal has an |
| major topics in implementation include business | | | | RFID sensor network, that container's whereabouts |
| processes, engineering, real estate, IT systems, | | | | can be automatically sent to Widget Co. without the |
| migration, HR, finance and legal considerations. | | | | truck ever slowing down. It has the potential to add a |
| 1. b. Quality Management | | | | substantial amount of visibility into the extended supply |
| Total Quality Management is a management strategy | | | | chain. |
| that integrates quality orientation into the whole | | | | With today's emphasize on cutting costs and |
| structure and workflow of a company by using | | | | streamlining expenses, many companies are looking to |
| methods and techniques of quality management | | | | improve their bottom lines with more effective supply |
| Corporate Policy for Quality, Health Safety | | | | chains. Unfortunately, many people involved with |
| Environment, (QHSE) is based on five corporate | | | | companies don't have a clear understanding of what a |
| values: | | | | supply chain is or how it fits into the companies overall |
| - Customer satisfaction: Providing customers and their | | | | strategy. |
| customers with excellent, high value Logistics for | | | | Technology also plays an important role in the success |
| Projects solutions | | | | of supply chain management. Even though the supply |
| - Employee motivation: Building on the know-how and | | | | chain concept pre-dates the Internet, only through the |
| stimulation of individual potential in multi-cultural teams | | | | use of web-based software and communication can it |
| - Operational excellence: Continuous improvement of | | | | truly reach its full potential. Before the Internet, |
| processes and services to fulfill or exceed | | | | companies were limited because they were not able |
| expectations | | | | to receive or to send updates, feedback, or other |
| - Corporate citizenship: Acting as a responsible | | | | important information in a timely fashion. Additionally, |
| corporate citizen in all countries | | | | companies were limited in their ability to work with |
| - Shareholder reward: Developing a sustainable | | | | global partners because of language barriers and time |
| business to provide increasing shareholder value | | | | differences. Using the Internet to handle most of the |
| Performance Management: | | | | elements involved in supply change management, |
| Performance management is a key part of the supply | | | | including procurement and communication, makes the |
| chain. Measured elements are reviewed as a system, | | | | exchange of data and the running of the supply chain |
| as each component interacts with all the other parts | | | | faster. |
| around it. Performance measuring not only records | | | | One of the biggest benefits technology has given to |
| historical performance but also provides early indication | | | | the supply chain concept is the ability for companies to |
| of any service slippage. | | | | collaborate. These collaborations are designed for the |
| | | | | mutual benefit of all parties. For example, a supplier of |
| Outsourcing Projects | | | | consumer goods may be linked up via the Internet to |
| Outsourcing involves taking over and managing | | | | one of its distributors so that when the supply gets too |
| previous in-house Logistics for Projects operations, | | | | low an order for more of those goods can be placed |
| including: | | | | automatically. In this way, the distributor never has to |
| - Distribution centers | | | | worry about running out of a product and disappointing |
| - Transport operations | | | | customers and the supplier doesn't have to worry |
| - Back-office functions | | | | about maintaining a large inventory in expectation of |
| - Supply chain management functions | | | | demand. Similar systems have also been constructed |
| - After sales services | | | | to send out multiple requests to vendors when an |
| Simple Product Supply Chain | | | | order is placed. Collaborating this way makes better |
| | | | use of existing resources and paves the way for a |
| A sequence of activities And organizations involved in | | | | larger profit margin on all sides of the equation. |
| producing And delivering a good or service is called | | | | |
| supply chain. | | | | Example Supply Chain |
| | | | | |
| The following are five basic components of SCM. | | | | |
| 1. Plan – This is the strategic portion of SCM. You | | | | 1. This flow chart shows a typical manufacturing supply |
| need a strategy for managing all the resources that go | | | | chain work flow detailing which areas of the business |
| toward meeting customer demand for your product or | | | | are involved. |
| service. A big piece of planning is needed to develop a | | | | 2. The sales department identifies a need for a |
| set of metrics to monitor the supply chain so that it is | | | | product. The sales department tell the marketing |
| efficient, costs less and delivers high quality and value | | | | department about their idea and provide any |
| to customers. | | | | supporting information / data. |
| 2. Source – Choose the suppliers that will deliver the | | | | 3. The marketing department use business analysts to |
| goods and services you need to create your product. | | | | support the project and to complete the research. |
| Develop a set of pricing, delivery and payment | | | | 4. Data and supporting evidence is passed back to the |
| processes with suppliers and create metrics for | | | | marketing department for completion of a business |
| monitoring and improving the relationships. And put | | | | plan. |
| together processes for managing the inventory of | | | | 5. A fully detailed business plan is forwarded to the |
| goods and services you receive from suppliers, | | | | Business Unit Manager / Directors. |
| including receiving shipments, verifying them, | | | | 6. This unit comprises of the senior business directors |
| transferring them to your manufacturing facilities and | | | | or managers who make a decision on the project. |
| authorizing supplier payments. | | | | 7. After approval the plan is passed back to the |
| 3. Make – This is the Project step. Schedule the | | | | analysts to prepare and implement the manufacturing |
| activities necessary for projects, testing, packaging and | | | | process. |
| preparation for delivery. As the most metric-intensive | | | | 8. Details of raw materials and components passed to |
| portion of the supply chain, measure quality levels, | | | | purchasing. |
| production output and worker productivity. | | | | 9. Purchasing work with logistics and transport to plan |
| 4. Deliver – This is the part that many insiders refer | | | | the purchase and delivery of the materials to the |
| to as logistics. Coordinate the receipt of orders from | | | | manufacturing plant. |
| customers, develop a network of warehouses, pick | | | | 10.Suppliers receive orders for product and then |
| carriers to get products to customers and set up an | | | | despatch on agreed transport on agreed dates. |
| invoicing system to receive payments. | | | | 11. Carriers approved by the business transport the |
| 5. Return – The problem part of the supply chain. | | | | raw materials and components to the manufacturing |
| Create a network for receiving defective and excess | | | | site. |
| products back from customers and supporting | | | | 12. Products are received into the warehouse and then |
| customers who have problems with delivered | | | | moved to manufacturing. |
| products. | | | | 13. Finished products are moved from manufacturing to |
| | | | | the finished goods warehouse which might be situated |
| Innovative Supply Chain Development | | | | locally or in a remote location. |
| Supply Chain Management services are delivered | | | | 14. Finished goods are put into inventory awaiting |
| across industry sectors and provide expertise, | | | | orders. The company computer system is updated. |
| knowledge and resources in terms of personnel and | | | | Product is now available to sales. |
| supply chain tools. All services are targeted at | | | | 15. Customers place orders through customer services. |
| optimizing logistical operations in both process and | | | | 16. Customer Services take orders and input them to |
| strategy, and are aligned to the client's commercial | | | | the company computer system. |
| expectations. | | | | 17. The central computer system maintains transaction |
| The services are as follows: | | | | records and provided visibility of product for sale. |
| - Strategic Logistics for Projects Consulting | | | | 18. An order is completed and a pick list sent to the |
| - Lead Logistics for Projects Provider | | | | warehouse. |
| - Consulting and providing Transport optimization: | | | | 19. A copy of the order is sent to the export |
| Route-Pro and Trans-Pro | | | | department for completion of export documentation. |
| - Consulting and providing Supply Chain Design | | | | 20. Export department manages the final despatch of |
| - Consulting and providing Transportation | | | | the product and produces any export documents. |
| - Engineering, optimization and re-engineering | | | | 21. Documents are sent to the warehouse to meet up |
| - Implementation and Project Management | | | | with the finished order. |
| - Process Management | | | | 22. The order is despatched by the warehouse. |
| - Outsourcing | | | | 23. The transport company collects the consignment |
| These solutions are built from several core services | | | | and delivers it to the customer based upon the INCO |
| including reverse Logistics for Projects: | | | | terms of carriage. |
| - Logistics for Projects network strategy | | | | 24. As stock has now been used the computer |
| - warehouse design and simulation | | | | system generates a request for new stock. |
| - Transport modeling. | | | | 25. The re-order process generates a request to the |
| What is the extended supply chain? | | | | purchasing department to place new orders with the |
| The extended supply chain is a clever way of | | | | suppliers. |