ENGINEERING MANAGEMENT

SEMESTER PROJECT

PRESENTED BY:
SIDRA SAEED (17-IE-27)
FAIZA RAZA (17-IE-50)
MUHAMMAD JAWAD (17-IE-07)
SUPPLY CHAIN MANAGEMENT
 SUPPLY CHAIN MANAGEMENT

• A supply chain is the system of organizations, people, activities, information and

resources involved in moving a product or service from supplier to customer.

• Supply chain management (SCM) enables enterprises to source the raw materials or
components needed to create a product or service and deliver that product or service to
customers.
SUPPLY CHAIN MANAGEMENT
Examples
BASIC SUPPLY CHAIN FOR A PRODUCT
COMPONENTS IN SCM

Planning

Enabling Sourcing

Returning Making

Delivering
 COMPONENTS

 PLANNING
 Enterprises need to plan
 Manage all resources
 Design their supply chain
 Determine which metrics to use in order to ensure the supply chain is efficient,
effective, delivers value to customers, and meets enterprise goals.
 COMPONENTS

 SOURCING —Companies must choose suppliers to provide the goods and services
needed to create their product. After suppliers are under contract, supply chain
managers use a variety of processes to monitor and manage supplier relationships.
 Key processes include
 ordering
 receiving,
 managing inventory
 authorizing supplier payments.
 COMPONENTS

 MAKING —To accept raw materials, SCM

 coordinate the activities required to manufacture the product
 test for quality
 package for shipping
 schedule for delivery
 Production cost
 COMPONENTS

 DELIVERING —Often called logistics

This involves
 coordinating customer orders
 scheduling delivery
 dispatching loads
 invoicing customers
 receiving payments.
 COMPONENTS

 RETURNING —reverse flow of goods

 The supplier needs a responsive and flexible network to take
back defective, excess, or unwanted products.
 If the produce is defective it needs to be reworked or scrapped.
 If the product is simply unwanted or excess it needs to be
returned to the warehouse for sale.
 COMPONENTS

 ENABLING —To operate efficiently

 The supply chain requires a number of support processes to monitor information
throughout the supply chain and assure compliance with all regulations.
 Enabling processes include finance, HR, IT, facilities, portfolio management,
product design, sales, and quality assurance.
 IMPORTANCE OF SUPPLY CHAIN

 Identifying potential problems before they occur

 Optimizing price dynamically
 Improving the allocation of available to promise inventory
 Boosts customer service
 Reduces operating costs
 Improves financial position
 SCM BENEFITS TO ORGANIZATIONS

ORGANIZATION BENEFITS
Campbell Soup Doubled inventory turnover rate
Hewlett-Packard Cut supply costs 75%
Sport Obermeyer Doubled profits and increased sales 60%
National Bicycle Increased market share from 5% to 29%
Wal-Mart Largest and most profitable retailer in the world
 OBJECTIVES AND GOALS OF SCM

 To cut costs
 Increase Profits
 Reduced Inventory, reduced lead times, reduced warehouse cost
 Helps in Forecasting accuracy
 Right products in right quantities at right moment at minimal cost
 Improve performance in relationships with customers and suppliers
 EXTENDED SUPPLY CHAIN

 The extended supply chain includes all companies that contribute to a product.

 As an example, if a popular baseball hat is not available from the manufacturer, the normal
reaction of the store manager is to contact the manufacturer. However, if the retailer monitors
the extended supply chain, the store manager would know the manufacturer was having trouble
getting the brim. If it appears that additional brims will not be available to the manufacturer
quickly, the retailer would have time to seek a different supplier.
 The Multi-Dimensions of SCM

.
SUPPLY
CHAIN
MANAGEMENT

Activity and process

administration
 FLOWS IN SUPPLY CHAIN

INFORMATION FLOW
 Invoices
 Sales Literature
 Receipts
 Orders
 Rules and Regulations
 FLOWS

PRIMARY PRODUCT FLOW

 Materials
 Components
 Suppliers
 Services
 Finished Products
 FLOWS

PRIMARY CASH FLOW

 Payments of Products
 Suppliers
 FLOWS

REVERSE PRODUCT FLOW

 Returns for Repair

 Replacements
 Recycling
 Disposals
SUPPLY CHAIN MANAGEMENT EVOLUTION

 Six major movements in evolution in Supply Chain

 Creation Era
 Integration Era
 Globalization Era
 Specialization Era 1
 Specialization Era 2
 SCM 2.0
 CREATION ERA

• The characteristics of this era of supply chain management

include the need for large scale changes ,re engineering
,downsizing driven by cost reduction programs. And widespread
attention to Japanese management practice.
 INTEGRATION ERA

• This era of supply chain evolution is characterized by both

increasing value added and cost reductions through integration.
 GLOBALIZATION ERA

• The third movement of supply chain management development,

the globalization era can be characterized by the attention given
to global; systems of supplier relationships and the expansion of
supply chains beyond national boundaries and into other
countries.
 SPECIFICATION ERA.1

• This specialization model creates manufacturing and distribution

networks composed of several individual supply chain specific to
producer to end consumer.
 SPECIFICATION ERA.2

• There are many functions of this era:

Transportation Management
Storage and Inventory Management
Planning Development Management
Performance Management
 SCM 2.0

• SCM 2.0 is a trend in the use of the WWW, that means to

increase creativity , information sharing and collaboration among
users(end users).
• SCM 2.0 designed to rapidly deliver results with the quickly
manage the future change for continuous flexibility, value and
success.