1. Supply Chain Management
Supply Chain: The sequence of organization’s facilities, functions, and activities that are involved in producing and delivering a product or service.

2. Need for Supply Chain Management
Improve operations
Increasing levels of outsourcing
Increasing transportation costs
Competitive pressures
Increasing globalization
Increasing importance of e-commerce
Complexity of supply chains
Manage inventories

3. Benefits of Supply Chain Management
Lower inventories
Higher productivity
Greater agility
Shorter lead times
Higher profits
Greater customer loyalty

4. Elements of Supply Chain Management
Deciding how to best move and store materials
Logistics
Determining location of facilities
Location
Monitoring supplier quality, delivery, and relations
Suppliers
Evaluating suppliers and supporting operations
Purchasing
Meeting demand while managing inventory costs
Inventory
Controlling quality, scheduling work
Processing
Incorporating customer wants, mfg., and time
Design
Predicting quantity and timing of demand
Forecasting
Determining what customers want
Customers
Typical Issues
Element

5. Logistics
The goal of logistic work is to manage the completion of project life cycles, supply chains and resultant efficiencies.
Logistics is the art and science of managing and controlling the flow of goods, energy, information and other resources like products, services, and people, from the source of production to the marketplace.
Refers to the movement of materials and information within a facility and to incoming and outgoing shipments of goods and materials in a supply chain.

6. Logistics Logistics is the time related positioning of resources."
As such, logistics is commonly seen as a branch of engineering which creates "people systems" rather than "machine systems
It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging.

7. Logistics Movement within the facility Bar coding
Incoming and outgoing shipments
EDI (Electronic Data Interchange)
Distribution
JIT Deliveries

8. Logistics: Evaluating Shipping Alternatives
A situation that arises frequently in some businesses in making a choice between quicker( expensive) shipping alternatives such as overnight or 2 day air and slower but cheaper alternatives.
The decision in such cases often focuses on the cost savings of alternatives versus the increased holding cost that result from using slower alternative.

9. Logistics: Evaluating Shipping Alternatives
Often the supplier gets paid on delivery of the product through EDI the very same time the order reaches its destination.
The Incremental Holding cost incurred by using the slower alternative is computed as follows:
Incremental Holding Cost= H ( d/365)
Where H=Annual Holding cost for the item.
d = Time savings in days and d/365 is fraction of year saved.

10. Logistics Example
Determine the shipping alternative ( with in Pakistan) for a Karachi based Montessori toy manufacturer,2 days or 5 days are best when the holding cost of the item is Rs. 100,000 per year and the 2 day shipping cost is Rs and 5 day shipping cost is
Rs. 600
Rs. 500

11. Logistics Example Solution H= Rs. 100,000 per year
Time savings = 3 using 2 days alternative
Holding cost for additional 3 days
= 100,000 X ( 3/365)
= Rs. 822.
Or Holding cost per day = Rs. 274

12. Logistics Example Alternative A
Cost savings = Rs. ( )= Rs. 222, because the actual cost of savings of Rs 222 is less than the holding cost of Rs. 274, use the 1 day option.
Cost savings = Rs. ( )= Rs. 322, because the actual cost of savings of Rs 322 is greater than the holding cost of Rs. 274, use the 5 day option.

13. Distribution Requirements Planning
Distribution requirements planning (DRP) is a system for inventory management and distribution planning.
Extends the concepts of MRPII.

14. Uses of DRP Management uses DRP to plan and coordinate: Transportation
Warehousing
Workers
Equipment
Financial flows

15. Electronic Data Interchange
EDI – the direct transmission of inter-organizational transactions, computer-to-computer, including purchase orders, shipping notices, and debit or credit memos.

16. Electronic Data Interchange
Increased productivity
Reduction of paperwork
Lead time and inventory reduction
Facilitation of just-in-time systems
Electronic transfer of funds
Improved control of operations
Reduction in clerical labor
Increased accuracy

17. Efficient Consumer Response
Efficient consumer response (ECR) is a supply chain management initiative specific to the food industry.
Reflects companies’ efforts to achieve quick response using EDI and bar codes.

18. E-Commerce
E-Commerce: the use of electronic technology to facilitate business transactions.

19. Successful Supply Chain
Trust among trading partners
Effective communications
Supply chain visibility
Event-management capability
The ability to detect and respond to unplanned events
Performance metrics