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supply chain management


Supply chain management (SCM) is management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain.[2] Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.

More Info
									Supply Chain
Role of Information
  Technology in
   Supply Chain
• Supply chain management (SCM) is concerned
  with the flow of products and information
  between supply chain members' organizations.
• Recent development in technologies are helpful
  to coordinates the activities to manage the
  supply chain. The cost of information is
  decreased due to the increasing rate of
 Electronic commerce, commonly known as e-
commerce refers to the buying and selling of
products or services over electronic systems
such as the Internet and other computer
 It also includes the entire online process of
developing, marketing, selling, delivering,
servicing and paying for products and services.
 The amount of trade conducted electronically
has grown extraordinarily with widespread
Internet usage
•Increases the efficiency in operations

•Better customer service

•Quick process to information.

•Better customer service.

•Reduced paper work.

•Increased productivity

•Cost efficiency.

•Competitive advantage.

•   Information Sharing, Convenience, And Control
•   Higher Margins
•   Quick Comparison Shopping
•   Information Sharing, Convenience, And Control
         Business Model

The plan implemented by a company to generate
revenue and make a profit from operations. The
model includes the components and functions of
the business, as well as the revenues it generates
and the expenses it incurs.
 Business To Business - B To B
• What Does Business To Business - B To B
  Business conducted between companies, rather
  than between a company and individual

• Business To Business - B To B
  An example of a B2B company is a firm that
  makes parts that are sold directly to an
  automobile manufacturer.
    Business To Consumer - B To C
• What Does Business To Consumer - B To C
  Business conducted between companies and
  individual consumers, rather than between two

• Business To Consumer - B To C
  A retailer like Wal-Mart is an example of a B to C
     Customer To Customer - C To C
• What Does Customer To Customer - C To C Mean?
  A type of business model that facilitates interaction between
  customers. Customer to customer businesses provide
  individuals with a place to converse, exchange and interact
  with other people.

• Customer To Customer - C To C
  Many C2C businesses have online operations. Online auctions
  and classifieds such as e-bay are examples of very successful
  customer to customer business models. These sites don't look
  to directly sell goods to their members, instead the customers
  are exchanging with other customers.
Enterprise resource planning (ERP)

    Enterprise Resource Planning (ERP) is a
  system which brings all the decision making
    information from all the departments in a
   company into one single place in order to
 increase efficiency, productivity and profit of
                  the company.
• Integrates internal and external management
  information across an entire organization
• Facilitates the flow of information between all
  business functions inside the boundaries of the
  organization and manage the connections to
• It involves finance, manufacturing, sales and
  service, customer relationship management, etc

 • It is an integrated system that operates in real
   time (or next to real time), without relying on
   periodic updates.
 • A common database, which supports all
 E-procurement is the business-to-business
 purchase and sale of supplies and services over
 the Internet.
 This includes management of correspondence,
 bids, questions and answers, previous pricing,
 and multiple emails sent to multiple
 E-Procurement helps to reduce the transactional
 costs, achieving faster & automated transactions,
 helps the buyer to focus more on strategic part of
Online Sourcing/ Procurement Process
     E-Procurement Tools

In normal case of business scenario, supplier
 visits end users and buyers and provide their
 product information through Product
 catalogues. These catalogues normally contain
 product specifications, rates, validity of rates,
 discounts, minimum order quantity etc.
This is the single point entry meeting place for buyers
 and suppliers. Here buyers post their requirements
  and suppliers can quote against the requirements
posted by the buyers. Features of a e-marketplace can
   vary from plain transactional trading to enabling
  suppliers and buyers to collaborate in the areas of
      supply chain planning, product designing &
           development, knowledge sharing.
                  E-Reverse Auctions

                  English Reverse Auctions
  In this type of reverse auction buyer opens the auction
  with the price of the item and seeks lower bid. Bidders
           outbid each other by placing lower bids.
  The auction ends when no body is able to quote lesser
than the lowest quote. It is time bound bidding.

  The buyer may reserve the price above which he is not
willing to pay. In case of winner of the bid is not able to
supply the full quantity the buyer can go for second lowed
bidder to fulfill the quantity. Sometimes buyer may impose
the condition of supplying full quantity in the auction.
Now a days there is new focus on Request for Proposal
(RFP) and Request for information (RFI). So this area now
a days called e-Sourcing or RFx Model.
                     Request for Quotation (RFQ)
is a request for supplier to quote for a particular product
or service. The buyer sets the requirements and
specifications in the document. The supplier has to quote
in the prescribed format specified by the buyer.
              Request for Proposal (RFP)
is a request by a buyer for supplier for submitting the
proposal. RFP asks suppliers to propose how they would
meet the buyer’s product or service need. This approach
is largely used when the supplier is having greater
expertise than buyer.
         Request for Information (RFI)
 implies that there is no commitment from either side.
    Buyer asks for the information from supplier and
  evaluate whether they might go for particular service
            or job with a particular supplier.

           Self Service Procurement:
Self service procurement passes on the procurement
jobs to end users. Materials procured under self service
are normally non strategic, under contract and with
fixed pre negotiated prices. Self service procurement
frees the buyer from transaction procurement and
helps him to focus on strategic procurement.
Improved Process efficiencies
Manual procurement is labour intensive and time
consuming process. Switching to e-procurement
helps companies to reduce employees’ cost, paper
and redundancy and cycle times

Reduction in errors
Manual processes are always prone to errors. In
manual processes as and when the information is
transferred at many occasions it is re-written or re-
typed at various stages
Auction pay online is the best way to
increasing the value of an item in non natural
but against the market trend.
Open (little or no restriction)   Private (few bidders)
Suppliers log onto   Can place multiple   Goods
the website via a    bids for the same    delivered
password             product              according
protected access     during an event      To bidder
screens                                   convenience
Benefits of E-Auctions
 Opportunities to find unique items and
 Lower prices
 Secure bidding environment
 Bidders can be monitored
Time benefits: reduction in postage,
  paperwork, photocopying
 Convenience
 Identities of bidders are usually hidden
 Limitations of E-Auctions

Possibility of fraud
Limited participation
Auction software
Long cycle time
Monitoring time
Equipment for buyers
Order fulfillment costs
The Largest Global Shopping Portal in the World

                                        Started with online books.

               Started with online user auctions.

                                    Started with a search engine.

                                  Started with a search engine.

E-marketplaces are emerging to serve each
point of every industry's supply chain

E-markets are highly collaborative E-Business
models that organize complex business
processes between multiple participants into a
virtual commerce community

efficient transactional processes
new business relationships
new business models
new businesses

Private (sell side, buy side)
Extend the presence and reach of a company
Facilitate doing business with anyone, anytime,
Aggregation of content and facilitation of workflow
lead to significant reduction in transaction costs
Cycle times are reduced and deliveries are quicker
Improves relationship with trading partners
Market efficiencies
   Better inventory management
   Better visibility leading to predictability

 Aggregation of multiple suppliers

 Direct access to suppliers and through dynamic

 Location and tracking of new suppliers

 Provides more negotiating power

 Leads to quick response buyers

Provides reach to vast, untapped global markets
True value of products can be realized through
aggregation and participation of buyers
Enables to support JIT practices
Leads to quick response suppliers

  Distributed Negotiations
  Integrative Negotiations
            Business objects in SCM

The Business Objects Supply Chain Management application
provides visibility into performance across the supply chain that
can help you measurably improve the effectiveness of your
supply chain operations and better deliver on corporate
mandates, such as lowering costs and improving return on
working capital. Business Objects will give an integrated,
dynamic view of our sales, supply chain, and customers.
            Business Objects benefits

We can evaluate, monitor, and improve our supply
 chain performance and efficiency.

 Help to gain visibility over constantly changing operations as
  we continuously plan sourcing, manufacturing, delivery, and

 It will provide you with hundreds of prebuilt analytics that can
  answer thousands of key business questions and help to gain
  deeper business insight.
 Quickly gain deeper business insight

 Gain industry best practices

 Standardize on terminology and data

 Minimize risk and speed your implementation
  Importance of business objects
The Best Choice on the Market Today
The Business Objects suite of enterprise analytic
 applications is the most comprehensive
Product offering on the market today. With insightful
 analytics, an unparalleled framework
Supporting customized development, and an
 integrated data warehouse, Business Objects
Provides your organization with the insight you
 need to extend your competitive advantage
        E logistics :
Internet Impact to Logistics

E logistics = information liquidity

The ability to acquire and use information when it is
  needed, what is needed, and in an appropriate context.
• Assessable
• Meaningful
• Timely
• Complete
 Players in space-examples

Manugistics, Manhattan Associates, EXE technologies(SSA
  Global), Descartes, SAP etc.

 Strengths

Domain knowledge, proven solution components, customer
  base, critical mass, existing partnership

 Weaknesses

Old tech infrastructure
Global sourcing and distribution
Industry segmentation
Increasingly IT driven
Growing acceptance of outsourcing logistics
Market leaders continuously raising the bar: space
 management, inventory management, JIT,
 continuous replenishment program(CRP), vendor
 partnership, VMI etc.
Freight exchange/auction
Purchasing portal
Automated billing and settlement
Lane optimization
Automated booking
Service failure notification and resolution
Automated tracking and tracing
International trade compliance and landed cost
Product development collaboration
Pricing, revenue and profitability management
E marketing
E fulfillment
Data mining(performance management)

Logistics exchanges will bring price efficiency
 to the most segmented market
Load matching and other optimization tools
 will improve asset utilization
E logistics will greatly improve the industry’s
 information liquidity
Collaborative product development and revenue
 management tools will allow business to improve
 its return on investment
Integrated supply chain execution and collaboration
 tools will dramatically reduce business interaction
 costs and achieve a learner, quicker and more
 reliable supply chain
 Business benefits
- On-time delivery and fulfillment, lead time reduction
- Customer service improvements, increased
  collaboration and coordination
- Increased sales
 IT benefits
- Reduces time for data entry, management and
- Plug and play, easy integration with existing and third-
  party systems
- Transaction processing and monitoring
 Network effect benefits
- Lower transportation cost, improved capacity
- Flexible and responsive supply chains(co-mingling,
- Single point of connection for participants
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