Supply Chain Management Md. Tamzidul Islam Faculty, BBS Md. Tamzidul Islam Faculty, BBS

Future of Supply chain

W hat is Supply Chain? Supply Chains refers to networks of companies that work together and coordinate their actions to deliver a product/service to market… H ow many suppliers/companies work to deliver ONE Boeing 787 Aircraft?

Supply Chain process in a company is a system/network of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to supplier or customer or consumer W hat is Supply Chain? Leaf Farmers: 30,000 WMs & Spares Total Supplier: 47 Leaf Factory Sales Warehouses Distributors Cigarette Factory Leaf Export Retail Company Consumers Supplier Companies

W hy does it matter for business?

Definition of SCM The management of upstream and downstream relationships with suppliers & customers to deliver superior customer value at less cost to the supply chain as a whole. (Christopher, M. 1998) A network of connected & interdependent organisations mutually & cooperatively working together to control, manage and improve the flow of materials and information from suppliers to end users. (Aitken, J., 1998)

Functions of SCM ? Buying Selling Making Moving Ware housing Ware housing SCM is a business network covering from buying, making, moving, warehousing to selling

Service Level & Inv. Costs

Zone of Indifference Zone of Perfection. Zone of Improvement ENLARGED VIEW OF PORTION “A” Explanation: 1.In ‘zone of improvement ’, as service level goes up by increasing stocks and incurring in extra expenditure for giving better service, the gains obtained due to better sales outweigh the costs incurred. 2.In ‘zone of indifference’, the gains and costs are more or less balanced. 3.In ‘zone of perfection’, as service levels are raised to near to 100%, the costs outweigh the gains but in modern competitive environment, this may become a necessity for survival

Supplier Selection Factors influence Supplier Selection: Price Replenishment Lead Time On time Performance Supply Flexibility Delivery Frequency/Minimum Lot Size Supply Quality Transportation Cost Information Coordination Capability Design Collaboration Capability Supplier Viability Environmental impact

Factors influencing network design Customer needs that are meet – Response time – Product variety – Product availability – Customer experience – Time to market – Order visibility – Returnability Cost of meeting customer needs

Quick Exercise: Background You are responsible for managing the supply chain of a reasonable sized garment company producing both knit and woven products. You produce a wide variety of products ranging from T-shirt to sweater, Jackets etc. The product is produced and packaged at a single plant in Gazipur, BD. Raw materials come from all over the world (main sources include India, Sri Lanka, Egypt, Indonesia and China) Raw materials are usually transported by ship to Chittagong and then by Truck to your plant Packaging suppliers are local and transportation is by road You distribute your product in the Europe. All distribution takes place by water and then followed by local distribution center. You have one distribution centre in the UK and one in France Your main customers are two large UK based retailers and one operating across Europe

1.Design a suitable Supply Chain network for your Company. 2.Brainstorm and identify different factors that will influence while designing this supply chain network. Quick Exercise

Supply Chain Risk Management

Examples Supply Risk

Examples Process Risk

Examples Demand Risk

Examples Environmental Risk

Examples of Control Risk

Supply Chain Risk Profiling

Quick Exercise: Background You are responsible for managing the supply chain of a reasonable sized garment company producing both knit and woven products. You produce a wide variety of products ranging from T-shirt to sweater, Jackets etc. The product is produced and packaged at a single plant in Gazipur, BD. Raw materials come from all over the world (main sources include India, Sri Lanka, Egypt, Indonesia and China) Raw materials are usually transported by ship to Chittagong and then by Truck to your plant Packaging suppliers are local and transportation is by road You distribute your product in the Europe. All distribution takes place by water and then followed by local distribution center. You have one distribution centre in the UK and one in France Your main customers are two large UK based retailers and one operating across Europe

Quick Exercise: Tasks 1. Brainstorm 5 possible risks in this supply chain 2. Assess their likelihood and impact 3. Create a risk profile 4. Prioritise and define courses of action

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