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- By Santosh Karkhanis.
- santosh@karkhanisgroup.com
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- Supply Chain management is the integration of Material, information =
and
Functional flows in network of companies or organizations that
manufacture and deliver products and services from the source to the
customers
- Hau L Lee., Stanford University
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- Generally speaking, a supply chain represents all the activities
starting from the decision to create a new product or service for a
customer, and ending with the ultimate delivery, installation, and
conduct of customer service tasks (or after-sales support).
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- The broad definition encompasses
- Research
- Manufacturing
- Operations
- Marketing/Sales
- Distribution
- Quality
- Service
- Etc.
- An aligned supply chain strategy across these functions must be
developed.
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- Establishing partnerships with key customers and suppliers
- Designing standard processes or products
- Establishing an e-business supply line linking customers and suppli=
ers
- Lower total costs of ownership
- Create an enterprise-wide resource planning system to coordinate the
activities of the supply chain
- Develop a professional SCM workforce
- Establish a responsive supply base
- Maintain a return-on-assets of at least 3.0
- Lower absolute inventory levels while increasing availability
- Develop and maintain lean or agile manufacturing practices
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- The strength of any chain is the strength of a weakest link in the
chain.
- The organization should work as a synergic unit.
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- SCM starts with deciding objectives/Goals to achieve in a period.
- Visibility of the goals should be clear to everyone in the organizat=
ion.
- Demand & supply side team as well as all the supportive departme=
nts
should agree to the business goal
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- Everyone should strive to achieve the business goals.
- A good forecast about the demand pattern will give lead in SCM
application. Many statistical tools are available to forecast the
pattern.
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- Minimize non-value added activities (Minimize cross-docking, minimize
re-bundling etc.).
- Minimize response time.
- Keep lowest inventory, increase inventory turns.
- Maximize utilization of your resources (Man/Machine/Money)
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- Nearly 50% SCM implementations fail to deliver desired results. Prob=
able
reasons
- Technophobia
- Implementing partners does not have business competent. They may be
technically well competent
- SCM is considered as a stand alone activity rather than an integrat=
ed
activity
- Senior Management does not have SCM as priority
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- Technofobia
- Implementation of RFID
- Estimating Tracking Time
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- According to Gus Pagonis, the Sears Logistics Chief, the biggest iss=
ue
in supply chain management is technofobia.
- According to him, ‘Training’ is the key. He spends 35% of
his time in Training his subordinates.
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- In Supply Chain Management
- Product Flow should be
- Well-planned
- Consistent
- Reliable
- Efficient
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- Negotiate with vendor for better supply terms (Just-in-time, reliable
quality, correct size packaging, delivery point etc.). Transparency =
of
expected receipts.
- Flexibility & reliability of manufacturing process (TQM, TPM,
KANBAN, Reducing setting time etc.)
- Better inventory transparency & accuracy (RFID, WMS etc.)
- Quick & Reliable transport, appropriate packaging (ASRS etc)
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- Supply Chain Management is most powerful when it is viewed as an
embedded cross-functional capability in an organization.
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