1. Supply Chain Management Şahver Damla Coşkunlar Statistical Simulation 08 June 20151Dokuz Eylul University

2. Contents  What is Supply Chain ?  Elements of Supply Chain  Supply Chain Development history  Supply Chain Management  Manufacturing Strategy  Supply Chain Management Flows  Supply Chain Management Activities  Supply Chain Management Technology  Firm Examples  Lean Thinking 08 June 20152Supply Chain Management

3. What is Supply Chain 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. 08 June 2015Supply Chain Management3 Up StreamDown Stream

4. 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(customer): receives the product 08 June 2015Supply Chain Management4

5. 3 Types of Supply Chain 08 June 2015Supply Chain Management5 Basic Supply Chain Enlarge Supply Chain High Level Supply Chain

6. Elements of the Supply Chain Customer: The customer starts the chain of events when they decide to purchase a product that has been offered for sale by a company. The customer contacts the sales department of the company, which enters the sales order for a specific quantity to be delivered on a specific date. If the product has to be manufactured, the sales order will include a requirement that needs to be fulfilled by the production facility. 08 June 2015Supply Chain Management6

7. Planning: The requirement triggered by the customer’s sales order will be combined with other orders. The planning department will create a production plan to produce the products to fulfill the customer’s orders. To manufacture the products the company will then have to purchase the raw materials needed. Purchasing: The purchasing department receives a list of raw materials and services required by the production department to complete the customer’s orders. The purchasing department sends purchase orders to selected suppliers to deliver the necessary raw materials to the manufacturing site on the required date. 08 June 2015Supply Chain Management7 Elements of the Supply Chain

8. Inventory: The raw materials are received from the suppliers, checked for quality and accuracy and moved into the warehouse. The supplier will then send an invoice to the company for the items they delivered. The raw materials are stored until they are required by the production department. Production: Based on a production plan, the raw materials are moved inventory to the production area.The finished products ordered by the customer are manufactured using the raw materials purchased from suppliers. After the items have been completed and tested, they are stored back in the warehouse prior to delivery to the customer. 08 June 2015Supply Chain Management8 Elements of the Supply Chain

9. 08 June 2015Supply Chain Management9 Transportation: When the finished product arrives in the warehouse, the shipping department determines the most efficient method to ship the products so that they are delivered on or before the date specified by the customer. When the goods are received by the customer, the company will send an invoice for the delivered products. Elements of the Supply Chain

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11. Supply Chain Development History 08 June 2015Supply Chain Management11  Before 1970: Traditional production (push production)  From 1970:Just in Time  1980 to 1990:ERP IT systems (Pull production) (Start of Supply Chain)  From 1990: Developing of IT systems, Lean

12. Supply Chain Management Supply chain management is a set of approaches utilized efficiently to integrate suppliers, manufacturers, warehouses, and stores so that merchandise is distributed at the right quantities, to the right locations, and at the right time, in order to minimize system-wide costs while satisfying service level requirements. 08 June 2015Supply Chain Management12

13. Supply Chain Management 08 June 2015Supply Chain Management13 Sales Produc- tion Distribu- tion Management Purcha- sing IT systems (MRP)

14. Supply Chain Management To get most profit;  Provide best customer service  Provide lowest production cost  Provide lowest inventory investment  Provide lowest distribution cost 08 June 2015Supply Chain Management14

15. Manufacturing Strategy 08 June 2015Supply Chain Management15  Specifications require  Customization  Postponement  Global or standard products

16. SCM Flows Supply chain management can be divided into three main flows:  The product flow  The information flow  The finances flow 08 June 2015Supply Chain Management16

17. SCM Flows  The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs.  The information flow involves transmitting ordersand updating the status of delivery.  The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements. 08 June 2015Supply Chain Management17

18. SCM Activities Supply Chain Management has three levels of activities that different parts of the company will focus on.  Strategic,  Tactical,  Operational. 08 June 2015Supply Chain Management18

19. SCM Activities: Strategic At this level, company management will be looking to high level strategic decisions concerning the whole organization, such as the size and location of manufacturing sites, partnerships with suppliers, products to be manufactured and sales markets. 08 June 2015Supply Chain Management19

20. SCM Activities:Tactical Tactical decisions focus on adopting measures that will produce cost benefits such as using industry best practices, developing a purchasing strategy with favored suppliers, working with logistics companies to develop cost effect transportation and developing warehouse strategies to reduce the cost of storing inventory. 08 June 2015Supply Chain Management20

21. SCM Activities:Operational Decisions at this level are made each day in businesses that affect how the products move along the supply chain. Operational decisions involve making schedule changes to production, purchasing agreements with suppliers, taking orders from customers and moving products in the warehouse. 08 June 2015Supply Chain Management21

22. Supply Chain Management Technology If a company expects to achieve benefits from their supply chain management process, they will require some level of investment in technology.  Enterprise Resource Planning (ERP)  SAP and Oracle. 08 June 2015Supply Chain Management22

23. SCM Technology Since the wide adoption of Internet technologies, all businesses can take advantage of Web-based software and Internet communications. Instant communication between vendors and customers allows for timely updates of information, which is key in management of the supply chain. 08 June 2015Supply Chain Management23

24. Firm Examples Oyak Renault Turkey Romain FranceGermany SlovakiaPoland South AfricaSpain 08 June 2015Supply Chain Management24

25. Firm Examples Vestel Electronic China, Korea, Taivan, Indonezia, Tayland, India, Malezia, Brezilia, Mexico, Poland, Checz Republic, Slovakia ve Litvania. Alarko Carrier 19 country, 256 firm from Europe and Asia 08 June 2015Supply Chain Management25

26. LEAN THINKING 08 June 2015Supply Chain Management26

27. Lean History 08 June 2015Supply Chain Management27

28. Lean Thinking “All we are doing is looking at the time line.. from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value added wastes” Quote by Taiichi Ohno 08 June 2015Supply Chain Management28

29. The Five Lean Principles 08 June 2015Supply Chain Management29

30. Value Stream 08 June 2015Supply Chain Management30

31. What is Kaizen? Kaizen: Constant improvements Two kinds of Kaizen

32. The 20 Charactiristics Of Lean  Customer  Simplicity  Waste  Process  Visibility  Regularity  Flow  Pull  Postponement  Prevention  Time  Improvement  Partnership  Value networks  Gemba  Variation reduction  Participation  Thinking small  Trust  Knowledge

33. WASTE (MUDA Japanese for waste )  Waste elimination is a means to achieving the Lean ideal  Waste prevention is at least as important as waste elimination  Value is the converse of waste.  Continually improvements  Preventing and reducing waste  Enhancement of specifically

34. The Seven Wastes (Ohno)

35. The waste of:  Overproduction  Waiting  Unnecessary motions  Transporting  Overprocessing (Inappropriate processing)  Unnecessary inventory  Defects

36. Lean Thinking To Business Processes  Order to replenishment  Order only what has been sold  Order to production  Make to order  Product development  Develop only what can be sold

37. Role Of Lean Practise  Small-batch production  Often production costs only  Reducing total costs in supply chain  Deliver at the expected time  Rapid changeover  Reduce changeover time  SMED (Single minute exchange of dies)

38. SMED Single minute exchange of dies

39. Lean Designs  Design strategies  Avoid inherent in the design  Product design  Reducing numbers of parts  Features that aid assembly, only one way  Modular designs, allows upgrading  Facility design  Modular design of equipment  Modular design of layout  Small machines

40. JIT Just in Time  The discipline of doing things just-in-time neither too early nor too late  Demand from the customer-next process  Pull scheduling  No stocks

41. THE PYRAMID OF KEY FACTORS

42. Application Methods 5SValue Stream Mapping SMEDCRM TPMKaizen KanbanPoka Yoke( No Failure) FMEA(Failure Mode & Effects Analysis) 08 June 2015Supply Chain Management42

43. References Tedarik Zinciri Yönetimi,U. E. Eymen, Kaliteofisi Yayınları No: 14 Şubat 2007 Sürekli Akış Yaratmak,M.Rother,N.Harris, 2001 Web sites www.godependable.com/supply-chain- management.asp www.productionplanning.com www.capital.com.tr http://searchcio.techtarget.com http://logistics.about.com 08 June 2015Supply Chain Management43

44. Thank You 08 June 2015Supply Chain Management44