UNIT 1-

INTRODUCTION
- VIDHYA
- BALA MOULI
- GOKUL
- MEIVEL
-ABHISHEK
- KAVIN RAJ
FUNDAMENTALS
AND IMPORTANCE
SUPPLY CHAIN MANAGEMENT
 A supply chain is a complex
logistics system that
consists of facilities that
convert raw materials into
finished products and
distribute them to end
consumers or end
customers. Meanwhile,
supply chain management
deals with the flow of goods
in distribution channels
within the supply chain in
the most efficient manner.
FUNDAMENTALS

Key Components:
1. Supply: Sources of goods or services (suppliers, manufacturers)
2. Manufacturing: Transformation of raw materials into finished
goods
3. Distribution: Movement of goods from manufacturer to
customer (warehousing, transportation)
4. Demand: Customer orders and requirements
5. Logistics: Coordination of transportation, warehousing, and
inventory management
Supply Chain Functions:

1. Procurement: Purchasing goods or services from suppliers

2. Inventory Management: Controlling and optimizing
inventory levels
3. Production Planning: Determining production schedules
and quantities
4. Transportation: Moving goods from one location to
another
5. Warehousing: Storing goods until they are needed
6. Order Fulfillment: Processing customer orders
supply Chain Flows:

1. Just-in-Time (JIT): Producing and delivering goods

just in time to meet customer demand
2. Lean: Eliminating waste and optimizing
efficiency
3. Agile: Responding quickly to changes in demand
or supply
4. Outsourcing: Contracting with third-party
providers for specific services
Supply Chain Strategies:

1. Just-in-Time (JIT): Producing and delivering goods

just in time to meet customer demand.
2. Lean: Eliminating waste and optimizing
efficiency.
3. Agile: Responding quickly to changes in demand
or supply.
4. Outsourcing: Contracting with third-party
providers for specific services
 IMPORTANCE OF SUPPLY CHAIN
Economic Importance:
1. Cost savings: Efficient supply chain management reduces costs.
2. Revenue growth: Reliable supply chains enable businesses to meet customer
demand.
3. Competitive advantage: Effective supply chain management differentiates
companies.
Operational Importance
4. Improved quality: Supply chain management ensures quality products and
services.
5. Enhanced customer satisfaction: Timely delivery and reliable products increase
customer satisfaction.
6. Reduced risk: Supply chain management mitigates risks associated with supplier
insolvency, natural disasters, and disruptions.
Strategic Importance
1. Global market access: Supply chain management enables
businesses to expand into new markets.
2. Innovation: Collaborative supply chains drive innovation.
3. Sustainability: Supply chain management promotes environmentally
and socially responsible practices.
Customer Importance
4. Faster delivery: Efficient supply chains reduce lead times.
5. Increased product availability: Reliable supply chains ensure
products are available.
6. Personalized products: Supply chain management enables
customization.
Societal Importance
1. Job creation: Supply chain management supports employment.
2. Economic growth: Supply chain efficiency contributes to GDP
growth.
3. Environmental sustainability: Responsible supply chain practices
reduce waste and emissions.
Financial Importance
4. Improved Profitability: Effective supply chain management
increases profitability.
5. Reduced Inventory Costs: Efficient supply chain management
minimizes inventory costs.
6. Better Cash Flow Management: Supply chain management
optimizes cash flow.
DECISION PHASES
AND PROCESS
VIEW
Decision phases can be defined as the different stages
involved in supply chain management for taking an
action or decision related to some product or services.
Successful supply chain management requires decisions
on the flow of information, product, and funds that fall
into three decision phases.
The decision phases of a supply chain involve strategic,
tactical, and operational levels
 Strategic Level (Long-term, 1-5 years)
 Tactical Level (Medium-term, 1-12 months)
 Operational Level (Short-term, daily/weekly)
Strategic Level (Long-term, 1-5 years)
1. Supply Chain Design
2. Network Optimization
3. Capacity Planning
4. Sourcing and Procurement
5. Logistics and Transportation Strategy
Tactical Level (Medium-term, 1-12
months)

1. Demand Forecasting
2. Production Planning
3. Inventory Management
4. Transportation Planning
5. Warehouse Management
Operational Level (Short-term,
daily/weekly)
1. Order Fulfillment
2. Inventory Allocation
3. Shipping and Receiving
4. Warehouse Operations
5. Delivery and In-Transit Visibility
Decision Phases:
1. SUPPLY PHASE: Sourcing, procurement, and
supply chain design.
2. MANUFACTURING PHASE: Production planning,
scheduling, and quality control.
3. DISTRIBUTION PHASE: Transportation,
warehousing, and inventory management.
4. DEMAND PHASE: Demand forecasting, order
fulfillment, and customer service.
5. RETURNS PHASE: Reverse logistics, returns
processing, and warranty management.
PROCESS VIEW
 Theprocess view of supply chain management
(SCM) involves understanding the customer and
the supply chain, and then achieving strategic fit
 Upstream Processes
 Conversion Processes
 Enabling Processes
 Supporting Processes
UPSTREAM PROCESSES
1. Supplier Relationship Management (SRM)
2. Procurement
3. Supply Chain Design
4. Sourcing
5. Inventory Management
CONVERSION PROCESSES
1. Production Planning
2. Manufacturing
3. Quality Control
4. Packaging
5. Inventory Management
ENABLING PROCESSES

1. Supply Chain Planning

2. Demand Forecasting
3. Inventory Optimization
4. Logistics and Transportation Management
5. Supply Chain Visibility
Supporting Processes
 1. Customer Service
 2. Returns and Reverse Logistics
 3. Warranty Management
 4. Supply Chain Risk Management
 5. Compliance and Regulatory Managemen
Technologies Enabling Process
View:
 1. Enterprise Resource Planning (ERP)
 2.
Supply Chain Management (SCM)
software
 3.
Transportation Management Systems
(TMS)
 4.
Warehouse Management Systems
(WMS)
 5.
Artificial Intelligence (AI) and Machine
Learning (ML)
SUPPLIER AND
MANUFACTURE
SUPPLIER

 In supply chain management, a supplier is a business or individual that provides

goods, services, or raw materials to another business, which uses those inputs to
produce it deliver services.

 Suppliers play a critical role in the overall efficiency and effectiveness of the
supply chain.
Sourcing materials:
Suppliers provide raw materials, components or finished goods that are required by
the buyer to produce their own products or services.

Quality control:
Suppliers must ensure that the materials or products they provide meet specified
quality standards to avoid delays, network, or losses in the supply chain.

Timely delivery:
A key responsibility of suppliers is to deliver goods on time, ensuring that the
buyer’s production or service delivery schedules are not disrupted.
Cost management:
Suppliers contribute to the overall cost of production. Their pricing can
significantly impact the buyer’s profitability, so managing costs efficiently while
maintaining quality is crucial.

Risk management:
Supplies help manage risks related to supply disruptions, fluctuations in
material prices and compliance with regulations.
TYPES OF SUPPLIERS
 Raw material suppliers: Provide essential materials for
manufacturing processes.
 Component suppliers: Deliver parts that are assembled into finished
goods
 Service providers: Offer services such as logistics, IT, or consulting
that support the supply chain.
MANUFACTURER

 A manufacturer in supply chain management is a business or

entity responsible for transforming raw materials, components or
sub assemblies into finished goods through a production process.
 Manufacturer are a critical link in the supply chain as they create
the products that will eventually reach consumers.
Sourcing Raw Materials: Manufacturers collaborate with suppliers to
obtain the necessary raw materials or components for production. Effective
supply chain management requires efficient supplier selection, inventory
management, and logistics coordination.

Inventory Management: Manufacturers maintain adequate inventory levels

of raw materials, components, and finished goods to meet production
schedules and customer demands without overstocking, which
could increase costs.
Demand Forecasting: Accurate demand forecasting is essential for
manufacturers to produce the right quantities of products. Overproduction
can lead to excess inventory and waste, while underproduction can result in
stockouts and missed sales opportunities.

Innovation and Product Development: Many manufacturers invest in

research and development to improve their production processes or create
new products. They may collaborate with suppliers or customers in product
design and innovation.
 Unit:
1

Drivers of
Supply
Chain
Performan
ce
By:
Abhishea k.V
 Introductio
n chain performance is a critical
Supply
aspect of organizational success,
influencing the ability to m eet custom er
dem ands, m anage costs, and m aintain
operational efficiency.
The perform ance of a supply chain is
determ ined by various factors, often
referred to as the "drivers" of supply chain
perform ance.
These drivers are essential levers that
organizations can m anipulate to optim ize
their supply chain operations, enhance
custom er satisfaction, and achieve
com petitive advantage.
Understanding and eff ectively managing
these drivers allow businesses to align
their supply chain strategies with their
 Drivers of Supply
Chain
Performance

Facilitie Inventor Transportati Informatio Sourcin

s y on n g

Pricin Technolog Sustainabili Flexibilit

g y ty y
 Drivers of Supply
ChainPerformance

Inventory
Facilities Transportation
Holding too much or too little
The geographical placement and Transportation affects supply chain
inventory can impact cost efficiency
number of production facilities, performance through mode choice,
and customer satisfaction. Higher
warehouses, and distribution centers route optimization, load efficiency,
inventories improve responsiveness
can affect lead times, transportation and reliability, balancing cost and
costs, and responsiveness.
but increase holding costs, while
speed to ensure timely deliveries.
lower inventories reduce costs but
can result in stockouts.
 Drivers of Supply
Chain Performance

Information Sourcing
Pricin
Timely and accurate information flow g
within the supply Sourcing involves selecting reliable
Pricing affects supply chain
chain allows for better decision- suppliers, managing risks, monitoring
performance by influencing demand,
making and coordination across performance, and balancing local vs.
managing costs, and optimizing
different entities. Advanced global sourcing to ensure a steady,
profitability through dynamic pricing
technologies, such as real-time cost-effective supply chain.
and strategic cost control.
data sharing and analytics,
enhance supply chain visibility and
agility.
 Drivers of
Supply Chain
Performance

Technology Flexibility
Sustainability
Adoption of advanced technologies Implementing green supply chain The ability to adapt to changes and
practices, like
(e.g., ERP systems, automation, and disruptions ensures performance
reducing carbon emissions and
data analytics) can streamline stability.
waste, can improve brand
processes, reduce costs, and reputation and meet regulatory
improve visibility across the supply requirements.
chain.
Structuring
Supply
Chain
Drivers.
 Effective supply cha in ma na gement is essentia l
for gaining a competitive advantage in today’s
dynamic business la ndsca pe. Structuring supply
cha in drivers involves orga nizing the fa ctors
tha t influence performance into key categories:
design, planning, execution, relationship,
technology, and performance drivers.
Introduction to
This structured approach enables organizations
Structuring to optimize ea ch driver, enha ncing efficiency
Supply Chain a nd responsiveness. By aligning strategies with
market dema nds, compa nies ca n identify
Drivers improvement a rea s, a da pt to cha nges, a nd
crea te va lue for customers while minimizing
costs. Ultima tely, this fra mework supports
susta ina ble growth a nd innova tion in the
supply cha in.
 Structuring Supply
Chain
Driverse

Plannin Executio Relationsh Technolo

Design
g n ip gy
Drivers
Driver Drivers Drivers Drivers
s

Performan
ce
Drivers:
Structuring Supply Chain Drivers.

Design Drivers Execution Drivers

Planning Drivers
Network Configuration: Location Logistics: Transportation and
and number of suppliers, Demand Planning: Accurate distribution strategies.
forecasting and
manufacturers, and distribution demand management. Procurement: Sourcing and
centers. Product Design: Inventory Management: supplier management practices.
Designing products for Strategies for stock levels,
manufacturability and supply reorder points, and safety stock.
chain efficiency.
Structuring Supply
Chain Drivers.

Relationship Drivers Technology Drivers Performance Drivers

Information Systems: Use of
Supplier Relationships: ERP, CRM, and data Performance Indicators : Metrics to
Collaboration and analytics tools. measure supply chain efficiency,
communication with Automation: Implementing effectiveness, and responsiveness.
suppliers. robotics and AI to streamline Continuous Improvement: Practices
Customer Relationships: processes. like Lean and Six Sigma for
Understanding and ongoing enhancements.
responding to customer
needs.
SUPPLY CHAIN
MANAGEMENT
SUPPLY CHAIN
 Supply chain management (SCM) is the process of managing
the flow of goods, data, and finances from the start of a
product's life cycle to its delivery to the end customer.
 The goal of SCM is to improve efficiency, quality, productivity,
and customer satisfaction
 The Benefits of Supply Chain Management

 Improved efficiency;
SCM can help streamline the flow of goods and services, which can reduce costs and
improve productivity.
 Better customer service;
SCM can help improve customer service by providing up-to-date information on orders
and delivery times.
 Improved product quality;

SCM can help improve product quality by linking customer feedback directly to R&D
teams.
 Reduced supply chain costs;
SCM can help reduce supply chain costs by using predictive analytics to
eliminate costly guesstimating.
 Improved cash flow;
SCM can help improve cash flow by allowing companies to invoice sooner
and by reducing overhead costs.
 Greater transparency;
SCM can help provide full transparency, from design and manufacturing
through to delivery and returns.
 Improved predictability;
SCM can help businesses predict how much inventory is needed in the future.
CUSTOMER CHAIN
 CRM (customer relationship management) is the combination of practices,
strategies and technologies that companies use.
 To manage and analyze customer interactions and data throughout the
customer lifecycle.
 The goal is to improve customer service relationships and assist with
customer retention and drive sales growth.
Types of CRM

 Today, many comprehensive CRM platforms integrate all parts of the customer
relationship that the business.
 However, some CRMs are still designed to target a specific aspect of it
business.

They Types are;

Sales CRM:
 To drive sales and increase the pipeline of new customers and prospects.
 Emphasis is placed on the sales cycle from tracking leads to closing deals.
Marketing CRM:
 To build, automate, and track marketing campaigns (especially online or via
email), including identifying targeted customer segments.
 These CRMs provide real-time statistics and can use A/B testing to optimize
strategies.
Service CRM:
 Integrated dedicated customer service support with sales and marketing.
 This often features multiple contact points, including responsive online chat,
mobile, email, and social media.
Collaborative CRM:
 Encourages the sharing of customer data across business segments and among
teams to improve efficiency and communication and work seamlessly together.
Small Business CRM:
 Optimized for smaller businesses with fewer customers, to give those
customers the best possible experience.
 These systems are often much simpler, intuitive, and less expensive to
implement than enterprise CRM.
AN OVERVIEW OF SUPPLY
CHAIN MODEL AND
MODELING SYSTEM
 An overview of various supply chain models

Continuous Flow Model

- Characteristics: Continuous production and delivery
- Benefits: Reduced inventory, improved efficiency
- Industries: Manufacturing, process industries
Just-in-Time (JIT) Model
- Characteristics: Producing and delivering goods just in time
- Benefits: Reduced inventory, improved quality
- Industries: Automotive, electronics
Vendor-Managed Inventory (VMI) Model
- Characteristics: Suppliers manage customer inventory
- Benefits: Improved inventory management, reduced stockouts
- Industries: Retail, pharmaceuticals
Third-Party Logistics (3PL) Model
- Characteristics: Outsourcing logistics to a third party
- Benefits: Reduced costs, improved efficiency
- Industries: E-commerce, retail
Omnichannel Model
- Characteristics: Integrating online and offline channels
- Benefits: Improved customer experience, increased sales
- Industries: Retail, e-commerce
Hub-and-Spoke Model
- Characteristics: Centralized distribution center with spokes to customers
- Benefits: Reduced transportation costs, improved efficiency
- Industries: Logistics, transportation
Decentralized Model
- Characteristics: Multiple distribution centers near customers
- Benefits: Faster delivery, improved customer satisfaction
- Industries: E-commerce, retail.
Virtual Supply Chain Model
- Characteristics: Digital integration of supply chain partners
- Benefits: Improved visibility, reduced costs
- Industries: Technology, software
Dynamic Supply Chain Model
- Characteristics: Adaptive and responsive to changing market
conditions
- Benefits: Improved agility, reduced risk
- Industries: Fashion, consumer goods
MODELING SYSTEM IN
SUPPLY CHAIN
Modeling systems in supply chain management
involve using mathematical and analytical
techniques to represent and analyze supply chain
operations. These models help optimize supply
chain performance, mitigate risks, and improve
decision-making.
Types of Supply Chain Models:

1. Deterministic Models: Assume known demand and

supply.
2. Stochastic Models: Account for uncertainty in demand
and supply.
3. Dynamic Models: Capture changes over time.
4. Simulation Models: Mimic real-world supply chain
behavior.
5. Optimization Models: Minimize costs or maximize
efficiency.
Modelling Techniques:
1. Linear Programming (LP).
2. Mixed-Integer Programming (MIP)
3. Dynamic Programming (DP)
4. Queueing Theory
5. Simulation Modeling (Discrete-Event Simulation)
6. System Dynamics.
7. Agent-Based Modeling
Supply Chain Modelling
Applications:
1. Demand Forecasting.
2. Inventory Management.
3. Production Planning.
4. Transportation Optimization.
5. Warehouse Location and Layout.
6. Supply Chain Network Design.
7. Risk Management
Benefits of Supply Chain
Modeling:
1. Improved Forecasting Accuracy.
2. Reduced Inventory Costs.
3. Enhanced Supply Chain Visibility.
4. Increased Efficiency.
5. Better Decision-Making.
6. Reduced Risk.
7. Improved Customer Satisfaction
Software Tools for Supply Chain
Modeling:
1. Excel.
2. MATLAB.
3. Python (e.g., PuLP, Pyomo).
4. R.
5. Simulation Software (e.g., Simio, Arena).
6. Supply Chain Optimization Software (e.g., CPLEX, Gurobi).
7. Enterprise Resource Planning (ERP) Systems
THANK YOU