MALABAR COLLEGE OF ARTS AND SCIENCE, MOODADI

DEPARTMENT OF MANAGEMENT STUDIES

BBA 6-SUPPLY CHAIN MANAGEMENT
MODULE -1
Definition
GSCF defines SCM as: “Supply Chain Management is the integration of key
business. processes from end user through original suppliers that provides products, services,
and information that. add value for customers and other stakeholders“.

Key Objectives Of Supply Chain Management (SCM)

1. Improving Efficiency
2. Improving Quality
3. Optimising Transportation and Logistics
4. Reducing Costs
5. Enhancing Customer Satisfaction
6. Improving Distribution
7. Maintaining Better Coordination

Key benefits of SCM

1. Increased Customer Satisfaction:Customer satisfaction is one of a facility’s primary objectives,
particularly in e-commerce. Supply chain management plays a key role in customer satisfaction,
ensuring companies are able to fulfil promises to customers and deliver products in a timely manner.
2. Benefits of Supply Chain Management and Inventory Management:Inventory management is critical for
warehouse operations to run smoothly. When done effectively, inventory tracking can improve inventory accuracy
and inventory visibility.
3. Improved Quality Control:Quality control is an incredibly important part of supply chain management. Supply
chain professionals should incorporate regular audits of their vendors and raw materials into their supply chain
management process to ensure a consistent level of product quality.
4. Lower Costs:While overhead and operating costs are an unavoidable part of operating a business, it’s the objective
of supply chain professionals to lower costs and increase returns. Without effective supply chain management,
your facility will experience an increase in costs
5. Optimised Distribution:Distribution is one of the most important facets of supply chain management.
Organisations that excel in distribution increase profitability of their operations by leveraging “best of breed”
logistics practices and proper material handling technologies for their facilities.
6. Improved Labor Optimisation: Labour is one of the most pressing concerns for modern warehouses. The number
of available jobs is at a record high, with more people leaving the warehousing industry than entering it.
 Supply chain management process

1. Planning and demand management:Forecasting customer demand is the first step in

building an efficient supply chain that ensures product availability. Typically, a demand
forecast starts with collecting and analysing previous sales data to project future sales.

2. Procurement:Procurement (also known as sourcing or supply management) refers to

finding and purchasing the materials you need to meet your demand forecasts.

3. Production planning:Your production strategy covers everything you need to do to turn

materials into finished goods. That includes subtasks like manufacturing, quality control, and
packaging.

4. Inventory management:The finished goods become your inventory once they’re ready to
sell.In short, inventory management involves knowing exactly how much of each product you
have and where your products are. It ensures a healthy balance between having enough
product on hand without sitting on excess inventory.

5. Delivery and order fulfilment:Lastly, you have delivery and order fulfilment, which is
the process of getting purchased items into the hands of your customers. For in-person
customers, this step is simpler. It includes processing the order and payment and packaging
the product.

SCM – PROCESS FLOW

Supply chain management can be defined as a systematic flow of materials, goods, and
related
information among suppliers, companies, retailers, and consumers.
Types
• Material flow
• Information/Data flow
• Money flow
Material Flow
Material flow includes a smooth flow of an item from the producer to the consumer. This is
possible through various warehouses among distributors, dealers and retailers.The main
challenge we face is in ensuring that the material flows as inventory quickly without any
stoppage-through different points in the chain. The quicker it moves,the better it is for the
enterprise, as it minimises the cash cycle.
Information Flow
Information/data flow comprises the request for quotation, purchase order, monthly
schedules, engineering change requests, quality complaints and reports on supplier
performance from customer side to the supplier. For a successful supply chain, regular
interaction is necessary between the producer and the consumer. In many instances, we can
see that other partners like distributors, dealers, retailers, logistic service providers participate
in the information network.
Money Flow
On the basis of the invoice raised by the producer, the clients examine the order for
correctness. If the claims are correct, money flows from the clients to the respective producer.
Flow of money is also observed from the producer side to the clients in the form of debit
notes.
SCM – Flow Components
Transportation
Transportation or shipment is necessary for an uninterrupted and seamless
supply. The factors that have an impact on shipment are economic
uncertainty and instability, varying fuel prices, customers’ expectations,
globalisation, improvised technologies, changing transportation industry
and labor laws.
Warehousing
Warehousing plays a vital role in the supply chain process. In today’s
industry, the demands and expectations of the customers are undergoing a
tremendous change. We want everything at our door step – that too with
efficient price. We can say that the management of warehousing functions
demands a distinct merging of engineering, IT, human resources and
supply chain skills
Sourcing and Procurement
Sourcing and procurement are a vital part of the supply chain
management. The company decides if it wants-to perform all the exercises
internally or if it desires to get it done by any other independent firm. This
is commonly
referred as the make vs buy decision.
Returns Management
Returns management can be defined as the management that invites the
merger of challenges and opportunities for inbound logistics. A cost-
effective reverse logistics program links the available supply of returns
with the product information and demand for repairable items are-captured
materials. We have three pillars that support returns management
processes. These are as follows:
Speed:
Visibility
Control:
Post-Sales Service
Now that the ordered shipment is over, what is the next step? The post
sales service in supply chain tends to be an increasingly essential factor as
businesses offer solution instead of products. The post sales services
comprise selling spare parts, installing upgrades, performing inspection,
maintenance and repairs, offering training & education and consulting.
Supply Chain Management Strategy
Supply chain management (SCM) involves the movement of products and
services from suppliers to distributors. SCM involves the flow of
information and products between and among supply chain stages to
maximise profitability. The major functions involved in SCM are the
procurement of raw materials, product development, marketing,
operations, distribution, finance, and customer services. Customers are an
integral part of SCM.
7 Elements of Supply Chain Strategy
1.It's a multi-year road map - When people talk about strategy, they
often say something like, "We want to reduce costs by 5%" or "we will do
whatever it takes to achieve 95% service level". So, the strategy should be
a plan that takes many years to implement the project to achieve long-term
business results, not just a set of "KPIs".
2. Start with customer needs - We believe many organisations
incorporate customer satisfaction surveys into a customer service strategy
formulation process which is a very good sign.
3. Include internal assessment SWOT analysis seems to be a standard
method for an internal assessment. Anyway, you will be able to understand
your own deficiencies much better if you do the business process analysis,
even a simpler one.
4. Think about evolving technology Technology is the enabler for new
processes and practices.
5. Track domestic and foreign competitors When your competitors offer
some new products/services, these will eventually become the new
customer's requirements. Then, we need to track competitors' movements
so we can determine what customers might purchase in the future.
6. Consider megatrends - The technology outside the supply chain
management area changes more rapidly, so we should track the technology
outside the supply chain world too like lean manufacturing and six sigma.
7. It must be accepted across the company A good strategy is not merely
the action plans by each functional area, but a plan that is negotiated and
agreed
upon the team so people can take action and make decisions in the same
direction.
Value through the Supply Chain.
Maintaining a competitive advantage is a balance between providing great
value for customers and doing it in such a way that your costs remain
competitive. If you cut-costs too much, you destroy your ability to service
the customer. And service is the key ingredient behind-customer retention.
If your costs are too high, then your-competition may gain an advantage in
properly balancing costs with customer value. It should be noted that the
value-chain encompasses all activities from design of products and
services all the way through to the support of customers after they buy the
product.

Participants in the Supply Chain

 Producers
 Distributors
 Retailers
 Customers
 Service Providers:These are organizations that provide services to
producers, distributors, retailers, and customers. Service providers
have developed special expertise and skills that-focus on a particular
activity needed by a supply chain.
 Franchisers:Franchisers are owners of business systems and
processes who grant one or more third parties (franchisees) the right
to use their business systems or processes, as well as trademarks or
trade names to produce and market goods(or services) according to
uniform specifications in exchange for a one-time franchise fee plus
a percentage of sales revenue (royalty).
 Logistics providers.:These entities provide a variety of services on
behalf of other participants in the supply chain to move the goods
between the participants. Logistics providers may take temporary
custody of the goods, but do not take title to the goods.
SCM Decision and Skills
Supply chain management (SCM) involves making decisions to ensure that the
right product reaches the right customer at the right time. Supply chain
managers need a combination of hard and soft skills to make decisions,
including
 Decision-making: The ability to make decisions on the fly to avoid
interruptions that can cost time and money
 Problem-solving: The ability to think on your feet and find quick
solutions
 Adaptability: The ability to be ready for unexpected changes and
redirect your course of action.
 Communication: The ability to exchange meaningful information with
others, both verbally and in writing
 Influence: The ability to influence and inspire teams and stakeholders.
 Strategic vision: The ability to have a strategic vision for the supply
chain that aligns with the company's long-term objectives

END