WELCOME TO

OUR PRESENTATION
 Group-01
Group Members   Serial No.
Lima Akter Antora   005
Abdur Rahim   006
Sharifa Sadia Akter   013
Prince Khan   039
Md Jashim Uddin   044
Defining supply chain and supply chain management

 Supply chain consists of all stages involved, directly or indirectly, in

fulfilling a customer request.
 Supply chain management is the systemic, strategic coordination of
the traditional business functions and the tactics across these
business functions within a particular company and across
businesses within the supply chain, for the purposes of improving
the long-term performance of the individual companies and the
supply chain as a whole.
 Supply Chain Management

Suppliers Company Customer

Supply chain management and the traditional concept of logistics

 Traditional logistics focuses its attention on activities such as

procurement, distribution, maintenance, and inventory
management.
 Supply chain management acknowledges all of traditional logistics
and also includes activities such as marketing, new product
development, finance, and customer service
 Historical developments
 Creation era
"supply chain management" was first coined by Keith Oliver in 1982
 Integration era
era of supply-chain-management studies was highlighted with the
development of electronic data interchange (EDI) systems in the 1960s and
developed through the 1990s by the introduction of enterprise resource
planning (ERP) systems
 Globalization era
characterized by the attention given to global systems of supplier
relationships and the expansion of supply chains beyond national
boundaries and into other continents
 Historical developments
 Specialization era (phase I): outsourced manufacturing and distribution
In the 1990s, companies began to focus on "core competencies" and
specialization. They abandoned vertical integration, sold off non-core
operations, and outsourced those functions to other companies.
 Specialization era (phase II): supply-chain management as a service
This has progressed from the application service provider (ASP) model from
roughly 1998 through 2003 to the on-demand model from approximately
2003 through 2006, to the software as a service (SaaS) model currently in
focus today.
 SCM 2.0
Building on globalization and specialization, the term "SCM 2.0" has been
coined to describe both changes within supply chains themselves as well as
the evolution of processes, methods, and tools to manage them in this new
"era".
Linkages and Differences Between supply
chain and value chain

Source: Feller, A., Shunk, D., & Callarman, T. (2006)

Business-process integration
 Customer-relationship management
 Customer-service management
 Demand-management style
 Order fulfillment
 Manufacturing-flow management
 Supplier-relationship management
 Product development and commercialization
 Returns management
Business-process integration

 Customer-relationship management
Customer relationship management (CRM) is a process in which a
business or other organization administers its interactions with
customers, typically using data analysis to study large amounts of
information.
 Customer-service management
Customer relationship management concerns the relationship between
an organization and its customers.
 Demand-management style
Demand management is a planning methodology used to forecast, plan
for and manage the demand for products and services.
Business-process integration
 Order fulfillment
Order fulfillment, also called order processing and fulfillment, is the process
of receiving, packaging, and shipping a customer's order.
 Manufacturing-flow management
The manufacturing process produces and supplies products to the
distribution channels based on past forecasts.
 Supplier-relationship management
Supplier relationship management (SRM) is the process of managing
suppliers. The supplier management involves assessing company’s
relationships with external suppliers and creating a plan to improve on
those areas that need improvement.
 Business-process integration
 Product development and commercialization
Product development and commercialization is the supply chain
management process that provides structure for developing and
bringing to market new products jointly with customers and suppliers.
 Returns management
Returns management is the supply chain management process by
which activities associated with returns, reverse logistics, gatekeeping,
and avoidance are managed within the firm and across key members
of the supply chain.
 Strategic cost management in supply chain management

 Cost reduction is among the most cited objectives in supply chain

management.
 “strategic cost management” as deliberate decision making aimed at
aligning the firm’s cost structure with its strategy and with managing
the enactment of the strategy.
Supply Chain Drivers

1. Production
2. Inventory
3. Location
4. Transportation
5. Information
 Production

 Factories for making products

 Product Focus.
 Functional Focus.
 warehouses too can be built to accommodate different
approaches. There are three main approaches to use in
warehousing:
 Stock Keeping Unit (SKU) Storage.
 Job Lot Storage.
 Crossdocking.
 Inventory
 Cycle inventory to meet on-going customer demand.
 Safety inventory to protect against stock-outs.
 Seasonal inventory to meet seasonal demands.
 Supply Chain Drivers
 Location: place facilities so as to maximize performance.
 Transportation:
 Truck is fast but also more expensive.
 Airplane is fastest and most expensive.
 Electronic transport is fast and inexpensive way to move
data product.
 Information:
 TO coordinate daily supply chain activities.
 For forecasting and planning of supply chain activities.
Participants in the Supply Chain
 Producers
 Distributors
 Retailers
 Customers
 Service Providers
Using the technology in supply chain management

 Data capture and communication;

 Data storage and retrieval; and
 Data manipulation and reporting.
Aligning the Supply Chain with Business
Strategy
 Understand the Markets Your Company Serves
 Define Core Competencies of Your Company
 Develop Needed Supply Chain Capabilities
Understand the Markets Your Company Serves

Begin by asking questions about your customers:

 What kind of customer does your company serve?
 What kind of customer does your customer sell to?
 What kind of supply chain is your company a part of?
 Define Core Competencies of Your Company

The next step is to define the role that your company plays or wants to play in
these supply chains.
 What kind of supply chain participant is your company?
 Is your company a producer, a distributor, a retailer, or a service provider?
 What does your company do to enable the supply chains that it is part of?
 What are the core competencies of your company?
 How does your company make money?
Develop Needed Supply Chain Capabilities

This development is guided by the decisions made about the five

supply chain drivers:
 Production
 Inventory
 Location
 Transportation
 Information
Useful Model of Markets and Their Supply Chains
Market Performance categories
• Customer Service
• Internal Efficiency
• Demand Flexibility
• Product Development
A Framework for Performance Measurement

Source: Hugos, 2011

 Customer Service Metrics

Build to stock(A build-to-stock (BTS) situation is one where common

commodity products are supplied to a large market or customer base)
situation are: 
 Complete Order Fill Rate and Order Line Item Fill Rate
 On-Time Delivery Rate
 Value of Total Backorders and Number of Backorders
 Frequency and Duration of Backorders
 Line Item Return Rate
Popular metrics for a build-to-order (A build-to-order (BTO) situation is one
where a customized product is ordered by a customer) situation are:
 Quoted Customer Response Time and On-Time Completion Rate
 On-Time Delivery Rate
 Value of Late Orders and Number of Late Orders
 Frequency and Duration of Late Orders
 Number of Warranty Returns and Repairs
Internal Efficiency Metrics

 Inventory Value
 Inventory Turns
 Return on Sales
 Cash-to-Cash Cycle Time
Demand Flexibility Metrics

 Activity Cycle Time

 Upside Flexibility
 Outside Flexibility
 Activity Cycle Time
 Product Development Metrics

 Percentage of total products sold that were introduced in the last

year.
 Percentage of total sales from products introduced in the last year.
 Cycle time to develop and deliver a new product.
Collecting and Displaying Performance
Data
• Strategic—to help top management decide what to do.
• Tactical—to help middle management decide how to do it.
• Operational—to help people actually do it.
Operations that Enable Supply Chain
Performance
 Plan
 Source
 Make
 Deliver
The 7 R’s of supply chain management

 The Right Product – The goods, materials, or services offered

 The Right Customer – Think long-term supply chain management
 The Right Location – Ensure goods go where they should
 The Right Price – Establish competitive prices based on market data
 The Right Time – Keep your deliveries on time
 The Right Quality – Ensure the condition of your goods
 The Right Quantity – Meeting the demand
 The Bullwhip Effect
 The bullwhip effect refers to a scenario in which small changes in
demand at the retail end of the supply chain become amplified
when moving up the supply chain from the retail end to the
manufacturing end.
The Bullwhip Effect

Source: Hugos, 2011

The Bullwhip Effect

Source: Hugos, 2011

Coordination in the Supply Chain
 Demand Forecasting
 Order Batching
 Product Rationing
 Product Pricing
 Performance Incentives
The ‘Shortage’ of Bathroom Tissue:
Classic Study in Rumor(1973)
The ‘Shortage’ of Bathroom Tissue:
Classic Study in Rumor
 The Tollet Paper Shortage — a phenomenon that saw millions of
Americans strip every roll of bathroom tissue from thousands of
grocery shelves. It was a shortage full of humor, misunderstanding
and fear.
 The case of Starbucks
 Starbucks is pretty much a household name, but like many of
the most successful worldwide brands, the coffee-shop giant
has been through its periods of supply chain pain. In fact,
during 2007 and 2008, Starbucks leadership began to have
severe doubts about the company’s ability to supply its 16,700
outlets.
 The case of Starbucks
 The Path to Cost Reduction: Starbucks’ leadership had three main
objectives in mind to achieve improved performance and supply
chain cost reduction. These were to:
 Reorganize the supply chain.
 Reduce cost to serve.
 Lay the groundwork for future capability in the supply chain.
 The case of Starbucks
 Supply Chain Cost Management Results: By the time Starbucks had completed
its transformation program, it had saved more than $500 million over the course
of 2009 and 2010, of which a large proportion came out of the supply chain,
according to Peter Gibbons, then Executive Vice President of Global Supply Chain
Operations.
Thank you very much.