Supply Chain Management

Supply chain - link between the suppliers and customers

Customer Supplier Chain - customer can be a supplier to other customer
Direct distribution such as :wholesalers, warehouses, retailers
Design and demand information flow - down-stream and up-stream
SCM- task of optimizing all activities throughout the supply chain
- focus on planning while Enterprise Resources Planning focus on execution
- plays a role in satisfying the customer
Involves following activities
1. Demand Planning - predict demand of product and services base on forecast
2. Manufacturing Planning and Scheduling -schedules manufacturing orders with
production capacity
3. Supply Planning- meets customer demand based on available inventory and
transportation resources
4. Transportation Planning -schedule , load and delivery shipments to customer
Benefits of SCM
1. Improved customer service: having the right product, available for delivery when requested,
good price
2. Reduction of costs across the supply chain and more efficient management of working capital
3. More efficient management of raw materials, WIP and finished good inventory
4. Increased efficiency in the transaction between supply chain
5. Better manufacturing resource management
6. Optimized manufacturing schedule
7. Optimal distribution of existing inventory across the supply chain
8. Enhanced customer value, often in the form of lower prices.
JUST-IN-TIME (JIT)
MANUFACTURING
Made to order
a philosophy that focused attention on eliminating waste by purcahsing or manufacturing just
enough of the right items just in time
Zero inventories

2 Principle of JIT Philosophy

•Production and supply of required number of parts when needed
•JI DOKA -utilizing the capacity of the workforce
Objectives of Just-In-Time
•Development of optimal process and be competitive
•Streamlining of operations and eliminating unwanted processes
•Continuous improvement
•Reducing the levels of waste materials, time and effort
•Increasing efficiency of production process
JIT several concepts:
•Kaizen •Reduced set up time
•Teamwork •Kanban
•Multi-functon workforce •Material Requirements Planning (MRP)
•Optimizing plant layout •Manufacturing Resources Planning
•Eliminating wastages •Involvement of people
•Plant optimization
Benefits of JIT
•Reduction of wastages
•Reduction of Work-In-Progress
•Establizing proper customer-supplier relationship
•Reduction in lead time
•Less inventory of raw materials
•Improvement in flexibility
•Lower cost and high productivity
•Enhanced customer satisfaction due to lower price owing to elimination of wastes
Benefits of JIT
•Improved employee morale owing to a perfect systems without wauting
•Improved satisfaction of shareholders due to high profit
•Reduced space requirements on account of total elimination of WIP and buffer stock of
materials, sub-assemblies and products
•Improved productivity and improved quality

Not following JIT Increase Cost

Requirements of JIT
•Practicing TQM
•Documented system
•Trustwothy suppliers who also practice TQM
•Efficient customer handling processes to know the demand just in time
•People are educted, trained and coached continuously
•Competitive people at all position in the company
 Requirements of JIT
•Proper layout of machinery and manufacturing
•Housekeeping, which reduces the confusion
•Identification of an item should be as fast as possible
•Employee should be sure about the quality of the material, and the process
•They should be able to know, when the machinery has to be taken out of service for maintenance
•They should be thorough with routine and preventive maintenance schedules of the machinery
•They should be thorough with the process
•They should be familiar with process parameters and how to inspect the materials, sub-assemblies and in-
process measurements
•The employee should know the quality requirements of the product or service
Requirements of JIT
• Support of good Information Technology infrastructure
• Reordering of materials should be automatic when the inventory level goes down. The software
should be built to automatically order parts, when the total quality of products to be delivered is
determined.
• The company needs to automate the delivery process