Supply Chain Management

Dr Sherif Kamel

The American University in Cairo

Outline Definitions Supply chain process Supply chain management fundamentals Constituencies Pull v push supply chain models Supply chain management elements Key elements for the CEO Transactional v analytical IT

Definitions Supply Chain

Core business processes in an organization that create and deliver a product or service, from concept through development and manufacturing or conversion, and into a market for consumption

Supply Chain Management Methods, systems and leadership that continuously improve an

organization’s integrated processes for product and service design, purchasing, inventory management, logistics, distribution and customer satisfaction

Supply Chain Planning

Information Flows

ProductFlows

Supplier Manufacturing Distribution Retailer ConsumerProductFlows

ProductFlows

ProductFlows

Payment Flows

Supply Chain Execution

Process view of the supply chain

SCM is the coordination of material, information and financial flows between and among all the participating enterprises

Supply chain managementFundamentals Migration of control from manufacturers to customers Meeting customers demands becoming the cornerstone for global

competitiveness Firms managing their supply chain will be more successful in the

global market place, if they manage it efficiently and effectively

Constituencies Material suppliers Distributors Wholesalers Retailers Customers

Supply chain managementElements Planning systems Execution systems Performance management systems

Planning systems It is all about having the right product at the right place at

the right time To facilitate order taking and information gathering from

the customer and orchestrate the flow of information to the whole chain

RawMaterial

FinalConsumption

Procurement

Elements of supply chain planning

CustomerOrder

AdvancedScheduling

OrderCommitment

DistributionPlanning

TransportationPlanning

DemandPlanning

Enterprise Architecture

Planning systems Case: Using Point of Sale (POS), the data gathered at the retail terminal could be communicated through the

chain directly from the Retailer to the Distributor to the Manufacturer to the Raw material supplier to the Transportation provider

Planning systems involving demand forecasting and replenishment are moving from pushing a product to the market to pulling it by the customer

To promote pull-bases models, planning systems should: Gather information about customer demand effectively Accommodate fluctuations in demand Use demand information for inventory investment

Execution systems It is about facilitating the physical movement of goods and services

through a supply chain Focus on operational efficiency which depends on improving daily

operations to reduce costs and improve productivity To introduce a fully integrated business application that runs the

entire business process Optimization across functions leads to better results and enhances

the supply chain coordination

It is important to make more informed decisions and responding to changing market conditions

Utilization of data warehousing to allow for effective information auditing and analysis

Use of web-based software agents to prioritize the information to which management must pay attention

Software agents can help managers proactively monitor their business operations

Performance measurement systems

Transactional v analytical IT To effectively apply IT in managing its supply chain, a company

must distinguish between the form and function of transactional IT and analytical IT

Transactional IT Concerned with acquiring, processing and communicating raw data

about the company’s past and current supply chain operations POS systems, general ledger systems, quarterly sales reports, ERP and

eCommerce applications Analytical IT

Concerned with developing and applying systems for evaluating and disseminating decisions based on models constructed from supply chain decision databases

Production scheduling systems, forecasting systems, supply chain network optimization systems