The Competition Is Not Between Individual Firms, But Between Supply Chains

THE COMPETITION IS NOT BETWEEN INDIVIDUAL FIRMS,BUT BETWEEN
SUPPLY CHAINS.
 SUPPLY CHAIN MANAGEMENT (SCM)
INTEGRATES VARIOUS EXISTING BODIES
OF KNOWLEDGE AND CONCEPTS TO
FORM A HOLISTIC STRATEGIC
PERSPECTIVE OF MANAGEMENT OF
OPERATIONS, STRETCHING ACROSS
INTER-ORGANIZATIONAL BOUNDARIES
 SCM RESULTS IN EXPANSION OF
OPERATIONS (PRODUCTION)
MANAGEMENT DISCIPLINE THROUGH
INTERNALIZATION AND
EXTERNALIZATION.
• INPUT SIDE: PURCHASING AND ITS
INTERFACE WITH SUPPLIES
• PRODUCTION: INTERFACE WITH
PURCHASING, WAREHOUSING,
MARKETING AND DISTRIBUTION
• OUTPUT SIDE: PHYSICAL DISTRIBUTION
AND IT INTERFACE WITH CUSTOMERS
 SUPPLY CHAIN MANAGEMENT IS THE
PROCESS OF PLANNING, IMPLEMENTING
AND CONTROLLING THE OPERATIONS OF
SUPPLY CHAIN AS FLUENTLY AS
POSSIBLE.
 SUPPLY CHAIN MANAGEMENT SPANS ALL
MOVEMENT AND STORAGE OF RAW
MATERIALS, WORK IN PROGRESS
INVENTORY AND FINISHED GOODS FROM
POINT OF ORIGIN TO POINT OF
CONSUMPTION
 SUPPLY CHAIN MANAGEMENT
ENCOMPASSES THE PLANNING AND
MANAGEMENT OF ALL ACTIVITIES
INVOLVED IN SOURCING, PROCUREMENT,
CONVERSION AND LOGISTIC
MANAGEMENT ACTIVITIES.
 SUPPLY CHAIN MANAGEMENT ALSO
INCLUDE COORDINATION AND
COLLABORATION WITH CHANNEL
PARTNERS, WHICH CAN BE SUPPLIERS,
INTERMEDIARIES, THIRD PARTY SERVICE
PROVIDERS AND CUSTOMERS.
 SUPPLY CHAIN MANAGEMENT
INTEGRATES SUPPLY AND DEMAND
MANAGEMENT WITHIN AND ACROSS
COMPANIES.
 SCM IS A NETWORK OF FACILITIES AND
DISTRIBUTION OPTIONS THAT PERFORMS
THE FUNCTION OF PROCUREMENT OF
MATERIALS, TRANSFORMATION OF THESE
MATERIALS INTO INTERMEDIATE AND
FINISHED PRODUCTS, DISTRIBUTION OF
THESE FINISHED PRODUCTS TO
CUSTOMERS.
 SCM DIRECTS AND TRANSFORMS A FIRM’S
RESOURCES IN ORDER TO DESIGN,
PURCHASE,PRODUCE AND DELIVER HIGH
QUALITY GOODS AND SERVICES.
 There is a direct and meaningful connection
between company financial performance and
the supply chain.
 The better we understand the connection
and implement supply chain initiatives
focused on improving company financials the
stronger our companies will be.
 RAW SUPPLY CHAINS
 RIPE SUPPLY CHAINS
 INTERNAL SUPPLY CHAINS
 EXTENDED SUPPLY CHAINS
 SELF-MONITORED SUPPLY CHAINS
 OUTSOURCED SUPPLY CHAINS
 PRODUCTION ORIENTED SUPPLY CHAINS
 FINANCIAL ORIENTED SUPPLY CHAINS
 MARKET ORIENTED SUPPLY CHAINS
 VALUE CHAINS
 RAW SUPPLY CHAINS: DEPARTMENTAL

SILOS WITH BETTER CORDINATION. EG.
SMALL SCALE INDUSTRIES.
 RIPE SUPPLY CHAINS: ORGANISED
ACTIVITIES AND IMPROVED RELATIONSHIP
WITH MINIMAL SUPPLY CHAIN
INITIATIVES.
 INTERNAL SUPPLY CHAINS: MOST
COMMONLY FOUND, WITH
SOPHISTICATED RESOURCE PLANNING
AND CORDINATION, BUT WITHOUT WELL
CORDINATED SUPPLIER INVOLVEMENT.
 EXTENDED SUPPLY CHAINS : EXTENDS
BEYOND THE COMPANY’S BOUNDARIES
TO INCLUDE SUPPLIERS, BUT WITH FOCUS
ON TOP SUPPLIERS, RESULTING IN
PARTIAL INTEGRATION.
 SELF MONITORED SUPPLY CHAINS :
BASED ON “COMPANY CENTRIC “
RELATIONSHIP WITH ALL PARTNERS.
 OUTSOURCED SUPPLY CHAINS : THIRD
PARTY SERVICE PROVIDER RELATIONSHIP.
 PRODUCTION ORIENTED SUPPLY
CHAINS: THIS HAS ONE POINT AGENDA:
PRODUCE TO OPTIMIZE THE CAPACITY
AND LABOUR.
 FINANCIAL ORIENTED SUPPLY CHAIN:
“CASH TO CASH CYCLE”.
 MARKET ORIENTED SUPPLY CHAINS:
BUILT TO ORDER SUPPLY CHAIN
TRIGGERED ON THE PLACEMENT OF
ORDER BY THE CUSTOMER.
 VALUE CHAINS : IS THE ULTIMATE
INTEGRATION THAT IS AIMED AT TOTAL
INTEGRATION AND NOT OPTIMIZATION IN
PARTS.
 SCM INVOLVES THE FOLLOWING
ACTIVITIES :
 PLANNING: BASED ON TACTICAL AND

STRATEGIC DECISION MAKING
PROCESSES.
 SOURCING: SOURCING
DECISIONS,INVENTORY MANAGEMENT
AND CONTROL DECISIONS.
 “MAKE” : MANUFACTURING AND
CONVERTING RAW MATERIAL INTO
FINISHED PRODUCT.
 DISTRIBUTION : DELIVERY AND LOGISTIC
ACTIVITIES
 RETURN : HANDLING EXCEPTIONS AND
ERRORS. THIS ACTIVITY IS PART OF THE
SERVICE OFFERING OF THE SUPPLY CHAIN.
 CORDINATION, INTEGRATION AND
INVOLVEMENT IS KEY IN SCM ACTIVITIES.
 LOGISTICS: The process of Planning,
Implementing and Controlling the efficient,
cost effective flow of raw materials, in-
process inventory, finished goods and related
information from the point of origin to the
point of consumption for the purpose of
conforming to customer requirements.
REVERSE LOGISTICS: The process of
Planning, Implementing and Controlling the
efficient, cost effective flow of raw materials,
in-process inventory, finished goods and
related information from the point of origin
to the point of consumption for the purpose
of recapturing value or proper disposal.
“Remanufacturing” “Refurbishing””Processing
returned merchandise””recycling programs”.
 Common Reverse Logistics Activities
 Material Reverse Logistics Activities
 PRODUCTS: Return to Supplier
 Resell
 Sell via Outlet
 Salvage
 Recondition
 Refurbish
 Remanufacture
 Reclaim Materials
 Recycle
 Landfill
 PACKAGING :Reuse
 Refurbish
 Reclaim Materials
 Recycle
 Salvage
 1. FORECASTING
 2. AGGREGATE PLANNING
 3. INVENTORY PLANNING
 4.SCHEDULING
 1. SCM GOAL DEFINITION:
 -IMPROVE SERVICE TO CUSTOMERS
 -REDUCE INVENTORY
 -INCREASE SPEED TO MARKET.
 -REDUCE COST.
 2.UNDERSTANDING THE PERFORMANCE
OF THE SUPPLY CHAIN:
 -AUDIT
 -COLLECTION OF DATA
 -BENCHMARK
 -CREATION OF A MODEL.
 3. DEVELOPMENT OF VENDOR SUPPLY

CHAIN STRATEGY:
 -RATIONALIZE VENDORS.
 -DEFINE RELATIONSHIP (WIN-WIN)
 -IMPLEMENTATION OF STRATEGY.
 4. CONTINUOUS IMPROVEMENT OF
SUPPLY CHAIN:
 -PERFORMANCE INDICATOR.
 - MEASUREABLE INDICATOR.
 -IMPROVEABLE INDICATOR.
 1. MANUFACTURING COST INCREASES.
 2. INVENTORY COST INCREASES.
 3. REPLENISHMENT LEAD TIME INCREASES.
 4. TRANSPORTATION COST INCREASES.
 5. SHIPPING AND RECEIVING COST
INCREASES.
 6. LEVEL OF PRODUCT AVAILABILITY
DECREASES.
 7.RELATIONSHIP ACROSS SUPPLY CHAIN
DECREASES.
 UNDERSTANDING SCM:
 PROCUREMENT FUNCTIONS IN SCM.
 INVENTORY MANAGEMENT IN SCM.
 LOGISTICTICS MANAGEMENT IN SCM.
 CONTRACT MANAGEMENT IN SCM.
 UNDERSTANDING SCM IN FMN PLC.
 PURCHASING ACTIVITIES IN FMN PLC.
 INVENTORY MANAGEMENT ACTIVITIES IN
FMN PLC.
 LOGISTICS ACTIVITIES IN FMN PLC.
 UNDERSTANDING THE CONFIGURATION
OF PURCHASING FUNCTIONS:
 1. Different organizational structures and
possible configuration of activities.
 2. Capacity
 3. Process
 4. Flow of activities.
 5. Human resources.
 6. Information systems.
 UNDERSTANDING PURCHASING
ACTIVITIES / FUNCTIONS, NECESSITATES
UNDERSTANDING THE EFFECT OF THE
FOLLOWINGS ON GOODS AND SERVICES:
 1. PRICE
 2.PLACE.
 3.QUANTITY.
 4.QUALITY.
 5. TIME
 DIFFERENTIATION BETWEEN NORMAL
AND COMPANY CONSUMER
PURCHASING ACTIVITIES:
 1. The Quantity involved.
 2. Negotiating power.
 3. Amount of money spent.
 4. Relative size of Consumer and Supplier.
 MAIN FUNCTIONS OF PURCHASING
ORGANIZATION.
 1. Provide flow of materials and services for
Organization operations.
 2. Maintain stock levels and manage waste to a
minimum.
 3. Find and develop competitive Suppliers.
 4. procure qualitative goods at lowest possible
price.
 5. Standardize articles purchased for repeat
activity.
 IMPORTANCE OF PURCHASING
ACTIVITIES:
 1. PRICE DECISIONS: Accounts for great
percentage of final product.
 2. The lead Time : Accounts for final
competitive value of product/service.
 3. Quality and specification of purchased
goods: Directly affects the Company results.
 PURCHASING CYCLE : (DOBLER et al )
 - Purchase requisition is dispatched to
Purchasing Department.
 - Purchased requisition is cross-checked in
Purchasing department.
 - Purchase enquiries are sent out.
 - Quotations or tenders are received.
 - Evaluation of received offers are made.
 Approval of procurement recommendation.
 Placement of orders.
 CHALLENGES IN PURCHASING
ACTIVITES:
 - Continual changes in environment.
 - Cycles of abundance and scarcity.
 - Constant variations in price.
 - Constant variations in leadtime.

The Competition Is Not Between Individual Firms, But Between Supply Chains

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THE COMPETITION IS NOT BETWEEN INDIVIDUAL FIRMS,BUT BETWEEN

 RAW SUPPLY CHAINS: DEPARTMENTAL

 PLANNING: BASED ON TACTICAL AND

 3. DEVELOPMENT OF VENDOR SUPPLY

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