Supply Chain Management -4

Supply Chain Management

"Efficiency is doing things right. Effectiveness is doing the right thing.

Sources : 1.

Today’s companies are looking for ways to reduce costs and improve shareholder value. They’re hoping to improve their supplier relationships to bring better, cheaper products to market — faster. Moreover, these companies are striving to develop the specific characteristics that set leading supply chains apart.

Think about the margin-generating processes and high-cost areas of your value chain:
product development
supply chain planning
Now think about the challenges posed by these aspects of your business:
eliminating excess inventory
improving on-time delivery performance
maximising the value of electronic procurement
The most progressive companies are tackling their challenges on many fronts by changing their go-to-market strategies. Many of these companies are:
collaborating with trading partners to increase top-line revenue growth.
optimising their value chains to reduce costs.
embracing business process outsourcing.
self-funding projects for rapid ROI.
IBM can help. Our clients buy our experience, assets and expertise to help them develop those characteristics. IBM’s supply chain management services focus on the margin-generating processes and high-cost areas of our clients’ value chains. These areas include product development, supply chain planning, procurement and logistics. We deliver value-based, industry-oriented offerings that contribute to operational improvements and financial gains.
SCM addresses our clients’ challenges through seven service areas:
Supply Chain Strategy
Supply Chain Planning
Product Lifecycle Management
Supply Chain Enterprise Applications
Asset management
What is Supply chain management?
A supply chain is the group of components (suppliers, distribution points, transportation providers) necessary to bring your product from its raw material state to the end user.Supply chain management is the term used for controlling and regulating your supply chain.
A simple supply chain model consists of four components:
» Supplier: supplies the raw materials
» Manufacturer: produces the product
» Warehouse or Distribution Center: stores and
ships the product
» End User: receives the product

Help Improve Sales Analysis and Forecasting with Better Demand Planning
Without insight into historical trends and upcoming events, predicting customer behavior isn’t much better than making an educated guess. How can manufacturers and distributors avoid a hit-and-miss approach and make use of the facts to accurately forecast needs? With the right tools, you can look to the data inside your systems to help.
Applications designed specifically for demand planning provide automated tools for mining applicable data deep within your systems, and delivering it to those who need it in a familiar format they can use right away. Your decision makers can then plan based on your company’s demand history, current or upcoming events and promotions, insight from customer data, and input from trading partners.
When integrated with your enterprise resource planning (ERP) system, demand planning applications can help you:
Compare calculated forecasts to actual results over time for trend analysis.
Focus on “hot spots” to prepare for what’s coming into high demand.
Share forecast information securely via the Web through role-based portals.
Reduce operating costs.
Streamline production.
The end result: lower inventory costs, fewer stock outages, faster time to market, and happier customers.
Dynamics for Supply Chain Management
Production and distribution-based companies rely on collaboration with a wide network of relationships with customers, vendors, business partners, and others. The business climate can change daily, constantly presenting new challenges. Technology and expertise from Microsoft makes it possible for you to operate efficient distribution processes, capitalize on well-managed relationships, recognize and react quickly to changing conditions, and expand into new opportunities.
Increase efficiency and reduce the costs of distribution
Distribution can be a complex and costly process. You might receive supplies from vendors, store them as part of your inventory, and/or ship goods in response to customer orders. To be profitable, you need to maintain optimal staffing levels, avoid tying up funds in inventory, and operate with a high degree of precision and economy. Microsoft solutions can help you run more cost-effective and efficient distribution operations, so you can consistently honor your customer commitments.
Make business relationships productive
Vendors, suppliers, business partners, and other parties in your supply chain can affect your degree of success. While you want to make it easy for them to do business with you, you also want to be firmly in control and make sure your suppliers live up to their agreements and deliver the best quality of goods and services. Software, tools, and industry insight from Microsoft can help you generate the full value of business relationships, and use them to advance your objectives.
Grow your business into new markets
As your business matures, you may wish to open distribution centers, warehouses, or sales offices in other locations, hire more staff for field sales and service, and branch out into new market areas. Microsoft can help support you in mitigating the risk of business growth, so you can continue to run your operation efficiently and profitably as you expand. Microsoft technology can provide an integrated, highly-manageable distribution management infrastructure with the flexibility to adapt to changing business requirements with great immediacy.

"Efficiency is doing things right. Effectiveness is doing the right thing.

About Supply Chain -3

"Efficiency is doing things right. Effectiveness is doing the right thing.
Supply Chain Management is as equally misunderstood as Purchasing. Imagine a physical chain that links all relevant actors from the final clients of a business to the last suppliers of the organization via the various elements of the business itself – there you have your supply chain. On top of this chain you have a smaller chain which is itself linked with the bigger one in many places – this is the IT part of the supply chain which carries the information related to the physical flows in the supply chain.

As we work in ever more decentralized organizations with more and more specialist service providers within and outside the organizations – linked one after another – the control of the physical and information flows of a supply chain become absolutely critical to your ability to effectively steer your business and satisfy your clients.

In essence Supply Chain Management is about bringing a maximum amount of flexibility to a business, allowing it to easily modify its structure and organization and to enter in whatever configuration required into new markets and regions, but also to withdraw from such and to adapt wherever and whenever required at a high speed and a low cost. If your control of the supply chain is very good, you will be able to use this ability in a proactive way to gain a significant competitive advantage in speed, productivity and adaptability.

A recent US based study says that tomorrow, the success of a company will depend more on it’s ability to build and coordinate an extended enterprise (which is a network based on Supply Chain architecture) than on its brands. (to be continued …..)

In the extended enterprises of tomorrow, Supply Chain, together with Purchasing, will play a key role. Put in a very simplistic way, People in Supply Chain will be the architects of the extended enterprises. They will be responsible for ensuring that the information flow and the physical flow, as well as the “connectors” between all members of such networks and their clients and suppliers are clearly defined and managed for maximum effect.

When these responsibilities are combined with the typical profiles that will work in such areas – very international, business understanding, communicators and leaders – it becomes apparent that People in Purchasing and Supply Chain are set to become the entrepreneurs and General Managers of tomorrow’s modern business organizations.

Supply Chain Management Systems-2

"Efficiency is doing things right. Effectiveness is doing the right thing.
Many managers initially thought that simply implementing a Supply Chain Management (SCM) system would be enough to keep their inventories stocked with the raw materials needed to keep production flowing smoothly. However, implementation of these systems and software has helped most of those managers to realize how unrealistic their initial expectations were. The system itself can easily become overwhelmed by all of the variables involved in supplier-buyer relationships, which is why managers need to take additional steps to ensure that their SCM system stays on top of the situations.
Thought Leaders on the Supply Chain Risk Management Less from Japan’s Turmoil
The supply chain impact from terrible damage from the massive earthquake and tsunami in Japan continue to grow, with plant closures both in Japan and in the West due to part shortages stemming from the factory shutdowns in Japan itself, among other problems.

China has already rejected the entry of a major cargo ship into one of irs ports due to evidence of radiocavity, perhaps from the ship passing too close by to the still trouble nuclear reactors in the Fukushima area.
Supply chain analysts forecast new global challenges
Deloitte has issued a new report identifying 10 disruptive and emerging technologies that are expected to play a crucial role in how businesses will operate globally over the next 18 months.

“With 2011 well underway, CIOs should be evaluating the progress made on their New Year’s resolutions and taking full advantage of technologies that have the ability to dramatically improve and advance their business operations and decision-making,” said Mark White, principal, Deloitte Consulting LLP and a co-author of the report. “We have evaluated, industry-wide, what is working and what is not when it comes to IT and have identified 10 technologies that are likely to transform the enterprise over the next 18 months.”

Supply Chain Management-1

What is Supply Chain Management?

Resources are Plenty-Know how to manage, rather manipulate.

Increased sophistication in customer requirements and greater competition, have pushed the industry towards higher and higher levels of efficiency in an effort to meet customer needs and cut costs. One of the results of this drive has been the outsourcing of goods and services to third parties, in a way that has inexorably bonded the supply chains of operators, contractors and suppliers.

The question today is whether increased efficiency in the way individual companies are run is going to provide the industry with the performance improvements it seeks, or whether a new approach is needed which takes into account the whole Supply Chain.

Supply Chain Management is about managing the flow of information, materials, services and money across any activity, in a way which maximises the effectiveness of the process. It is about introducing new tools or revising well-known techniques in an effort to ask ourselves: “Is this the right thing to do” rather than “Is this the best way we can continue to do the same thing”. This is a continuous process, not a one-time fix.

In short, successful Supply Chain Management will reduce the costs of both clients and suppliers, while sustaining or improving added value and margins. Consequently, companies that have effective supply chains are most successful.

“A company that fails to manage its supply chains at a strategic level is unlikely to meet its business objectives effectively.”

No Chain is stronger than its weakest Link
What are the supply Chain Management activities provided by LOGIC?

“Efficiency is doing things right. Effectiveness is doing the right thing.”

“The LOGIC methodology will achieve a step change in the way the industry looks at Supply Chain Management.”

Richard Reynolds.” – Head of Procurement – Aker Oil & Gas Technology
Supply Chain Management Assessments:

This diagnostic process is designed to help you identify areas of improvement in your supply chain practices. The process is underpinned by the LOGIC SCM Methodology, the only industry recognised approach and questions will be asked from three different perspectives:

* What are your current practices?
* Do you consider these to be the best practices?
* What is the size of the gap between current and best practice?

More importantly, the assessment is an opportunity for the companies to create an internal ‘team for change’ which can absorb the tools and techniques available and become a self generating catalyst for continuous improvement.

“The presence of LOGIC provided focus and speed. More importantly we now have a highly effective, highly duplicatable process.”

John Lee – Operations Manager – Wood Group Engineering
What can supply chain Methodology do for you?

developing Practical Stategy

The Methodology has been designed with input from Shell and Ernst & Young. LOGIC’s actviites are designed within a short period of time to:


Give you the skills to champion the methodology in your own organisation;

Encourage you and your organisation to adopt a more strategic approach to supply chain management


Conduct a quick review of your supply chains and rank them based on their potential for contributing to your company’s current business plans

Identify and implement any ‘quick wins’, e.g. simpler ways of buying low value goods/services, making purchasing policies and practices consistent

Initiate project-based reviews of your key supply chains using cross-functional teams and the approach advocated in the LOGIC methodology.

Building on your success, create an internal ‘team for change’ which can absorb the tools and techniques available and become a self generating catalyst for continuous improvement