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SUPPLY CHAIN MANAGEMENT [SCM]

SUPPLY CHAIN MANAGEMENT [SCM]. As the name indicates, supply chain management or SCM is defined as the management or running of supply chain.

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SUPPLY CHAIN MANAGEMENT [SCM]

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  1. SUPPLY CHAIN MANAGEMENT[SCM] As the name indicates, supply chain management or SCM is defined as the management or running of supply chain. A supply chainis a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Thus, (SCM) is the method of coordinating and integratingthe flow of materials, information, and finances as they move in a process from supplier (vendor) to manufacturer to wholesaler to retailer to consumer.

  2. DIVISION OF SCM FLOWS: • The product flow - includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. • The information flow - involves transmitting orders and updating the status of delivery. • The finances flow - consists of credit terms, payment schedules, and consignment and title ownership arrangements.

  3. FUNCTIONS OF SCM: 1. Strategic Function • Where-to-make and what-to-make-or-buy decisions • Strategic network optimization, including the number, location, and size of warehousing, distribution centers, and facilities. 2. Tactical Function • Sourcing contracts and other purchasing decisions. • Production decisions, including contracting, scheduling, and planning process definition. • Inventory decisions, including quantity, location, and quality of inventory. • Transportation strategy, including frequency, routes, and contracting. • Payments • Focus on customer demand Contd…

  4. FUNCTIONS OF SCM: 3.Operational Function • Daily production and distribution planning, including all nodes in the supply chain. • Production scheduling for each manufacturing facility in the supply chain (minute by minute). • Inbound operations, including transportation from suppliers and receiving inventory. • Production operations, including the consumption of materials and flow of finished goods. • Outbound operations, including all fulfillment activities, warehousing and transportation to customers. • Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers.

  5. TYPES OF SCM SOFTWARE 1. Planning applications: It uses advanced algorithms to determine the best way to fill an order. 2. Execution applications: It tracks the physical status of goods, the management of materials, and financial information involving all parties. Note: [The above mentioned softwares use Web-based application service providers (ASP) ]

  6. Ultimate Goal of Any Effective Supply Chain Management System • To reduce inventory (stock) with the assumption that products are available when needed.

  7. After going through the above presented slides, Can we now define SCM in a simpler form?

  8. Thus, SCM is defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally."

  9. THANK YOU Presented on Nov 19th , 2009 by , RAJSEKHAR MUKHERJEE. IBMR. MBA-MSU (2009-11).

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