Introduction
to SCM
MODULE 1
MEC702
LOGISTICS AND SUPPLY CHAIN MANAGEMENT
LOGISTICS AND SUPPLY CHAIN MANAGEMENT 1
Syllabus
• Objectives of a Supply Chain Management, Stages of Supply Chain, Value
Chain Process, Cycle view of Supply Chain Process, Key Issues in SCM, Logistics
& SCM, Supply Chain Drivers / Decisions and Obstacles, Supply Chain
strategies, Strategic Fit, Best practices in SCM, Obstacles of Streamlined SCM.
• Supplier Selection, Supplier Quality Audits, Contract Management, Non-
Disclosure Agreement (NDA), Make and Buy Decision while in-out sourcing.
LOGISTICS AND SUPPLY CHAIN MANAGEMENT 2
Strategic Fit
• Strategic Fit may be defined as matching resources and capabilities but in
Procurement it means requiring that both the competitive and supply chain
strategies of a company have aligned goals. To provide the highest level of
service as a procurement organization, strategic fit must be achieved.
• Achieving Strategic Fit can be as easy as understanding…
• Customer Requirements & Uncertainties
• Procurement’s Capabilities
• Procurement Responsiveness
LOGISTICS AND SUPPLY CHAIN MANAGEMENT 3
BOEING
SUPPLY
CHAIN
LOGISTICS AND SUPPLY CHAIN MANAGEMENT 4
Best Practices in SCM
Set up a supply chain council
Establish a supply chain structure
Leverage technology
Create alliances
Focus on the total cost of ownership
Strategically source suppliers
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Best Practices in SCM
Move contract management to the supply chain
Optimize inventory for reduced cost
Establish regular reviews
Set control and risk levels
Mature Your Transportation Company
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Obstacles of Streamlined SCM
• Increasing variety of products
• Decreasing product life cycles
• Increasingly demanding customers
• Fragmentation of supply chain ownership
• Globalization
• Difficulty executing new strategies
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Toyota is one of the largest
automobile manufacturers in
the world, producing about 10
million vehicles per year.
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Just In Time
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Lean Manufacturing
Lean manufacturing is a
production method aimed
primarily at reducing times
within the production
system as well as response
times from suppliers and to
customers.
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Agile Manufacturing
Agile manufacturing is a term
applied to an organization that
has created the processes, tools,
and training to enable it to
respond quickly to customer
needs and market changes
while still controlling costs and
quality.
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Poka-yoke (Error Proofing / Fool Proofing)
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Kaizen (Continuous Improvement)
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