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Foundations of Global Supply Chain Management Foundations of Global Supply Chain Management

Building Blocks of Supply Chain Management Y. NARAHARI Computer Science and Automation INDIAN INSTITUTE Building Blocks of Supply Chain Management Y. NARAHARI Computer Science and Automation INDIAN INSTITUTE OF SCIENCE Bangalore – 560 012 [email protected] iisc. ernet. in Foundations of Global Supply Chain Management September 27, 2003

Enterprise Network of independent companies possibly in different geographical locations forming a strategic alliance Enterprise Network of independent companies possibly in different geographical locations forming a strategic alliance toward the common goal of designing, manufacturing and delivering right quality products/services to customers u Functional perspective u Process perspective

Functional and Process Perspective SUPPLY CHAIN PROCESS ORDER - TO - DELIVERY PROCESS Procurement Functional and Process Perspective SUPPLY CHAIN PROCESS ORDER - TO - DELIVERY PROCESS Procurement Manufacturing Distribution Logistics

Business Process A structured, measured set of activities ordered in time and space, designed Business Process A structured, measured set of activities ordered in time and space, designed to produce a customer desired output. u A business process could be decomposed into several other business processes. Business Process Macro • • • SCP ODP NPDP CRM Process Order Mgmt Micro • Answering a query from a customer • Checking the credit history of customer

Supply Chain Process Integrated , coordinated network of value delivering business processes that procure Supply Chain Process Integrated , coordinated network of value delivering business processes that procure raw materials, transform them into final products, services and delivers the product to the customers t Procurement t Manufacturing/assembly t Inbound logistics t Warehousing t Distribution t Outbound logistics

Why study Supply Chains ? n Supply chains are ubiquitous: you could consider every Why study Supply Chains ? n Supply chains are ubiquitous: you could consider every product or service to have its own supply chain. n Companies world-wide are spending trillions of rupees on SCM n Backbone of E-business n Wholesome mix of industrial engineering, mathematics, computer science, and management

Examples of Supply Chains in India Automotive - Telco, ALL, Mahindra, Maruti Aerospace - Examples of Supply Chains in India Automotive - Telco, ALL, Mahindra, Maruti Aerospace - ADA, HAL Chemicals - Asian Paints, Apollo tyres, Reliance Apparel - Madura Coats, Reliance Food - Cadbury, Parle, Amul Products, HLL Consumer durables - HLL, P & G Forest Products - Papermills Construction - L & T Pharmaceutical - Ranbaxy, Glaxo Electromechanical – Kirloskar, L & T Tooling - HMT, Widia, Mico PC/ Computer - IBM, WIPRO, HCL, Intel

Supply Chain Building Blocks Structural Logical IT / ITEC Informational Supply Chain Building Blocks Structural Logical IT / ITEC Informational

Structural Building Blocks n n n n Suppliers Manufacturing / Assembly Plants Warehouses Distribution Structural Building Blocks n n n n Suppliers Manufacturing / Assembly Plants Warehouses Distribution Centers Retailers / Customers Logistics Network u Inbound u Outbound Customers Orders

Example of a Typical Supply Chain: IBM Europe PC Supply Chain Warehouse Port PC Example of a Typical Supply Chain: IBM Europe PC Supply Chain Warehouse Port PC Assembly Plant Suppliers (International) 1. 2 Million PC/Yr. Glasgow U. K. Retailers 13 Transshipment Country-wide Points (TPs) in Europe Distribution Centers (DCs)

Logical Building Blocks STRATEGIC TACTICAL OPERATIONAL Procurement Logistics Manufacturing Distribution Logistics Logical Building Blocks STRATEGIC TACTICAL OPERATIONAL Procurement Logistics Manufacturing Distribution Logistics

Order/ Product Flow through Supply Chain Functions Products Order Management Channel A Orders Channel Order/ Product Flow through Supply Chain Functions Products Order Management Channel A Orders Channel B Orders Customer Orders Manufacturing Parts Part Supply Products Product Distribution Production Plans Component Requirement Channel C Products Demand Forecast Supply Planning Demand Planning

Examples of Decisions Supplier Selection (Tactical) t Plant Location (Strategic) t Product Line Selection Examples of Decisions Supplier Selection (Tactical) t Plant Location (Strategic) t Product Line Selection (Strat) t Inventory Control (Tactical) t Production Scheduling (Ops) t Dynamic routing (Ops) t MTO vs MTS vs BTO (Str) t

Mathematical Models Optimization Models (LP, ILP, MILP, CO, DP) t Stochastic Models (Markov chains, Mathematical Models Optimization Models (LP, ILP, MILP, CO, DP) t Stochastic Models (Markov chains, Queuing networks, etc. ) t Statistical Models t Game Theory t Simulation t Machine learning t Auctions and Mechanism Design t

Information Building Blocks IT : MRP, EDI t Internet Technologies t Sensor Networks t Information Building Blocks IT : MRP, EDI t Internet Technologies t Sensor Networks t E-Commerce, E-Markets t E-CRM t Decision Support Software t Standards t

Key Problem in SCM Design a supply chain network that delivers high quality products Key Problem in SCM Design a supply chain network that delivers high quality products to the right customers at the right time at minimum cost

Foundations of Global SCM This one day workshop will introduce to you the important Foundations of Global SCM This one day workshop will introduce to you the important concepts and issues involved in successful design and operation of supply chain networks

What is Coming…. t Srinivas Raghavan - Dynamics t Dinesh Garg - Planning t What is Coming…. t Srinivas Raghavan - Dynamics t Dinesh Garg - Planning t Mathirajan - Logistics t Shyam Bhaskar – Best Practices t Kameshwaran – E-Markets t Chandrashekar - Procurement t Visvanathan - SCM Automation t Narahari Y– What Next?

What Next? Books on SCM: n Sunil Chopra and Peter Meindl. Supply Chain Management: What Next? Books on SCM: n Sunil Chopra and Peter Meindl. Supply Chain Management: Strategy, Planning, and Operation. Pearson Education Asia, 2001. n David Simchi Levi, P. Kaminsky, and Edith Simchi Levi, Designing and Managing the Supply Chain, Irwin-Mc. Graw. Hill, 2000 n W. J. Hopp and M. L. Spearman. Factory Physics: Foundations of Manufacturing Management, Irwin-Mc. Graw. Hill, 1996 n N. Viswanadham. Analysis and Design of Manufacturing Enterprises, Kluwer, 2000 n N. Viswanadham and Y. Narahari. Performance Modeling of Automated Manuafacturing Systems, Prentice Hall, 1992

What Next? Papers on SCM n Journals such as Interfaces, Operations Research, Management Science, What Next? Papers on SCM n Journals such as Interfaces, Operations Research, Management Science, European Journal of Operational Research n Websites such as www. amrresearch. com n Our own website: http: //lcm. csa. iisc. ernet. in/scm. html n http: //lcm. csa. iisc. ernet. in/workshop/index. html

What Next? Contact any of us: n n n n Narahari@csa. iisc. ernet. in What Next? Contact any of us: n n n n [email protected] iisc. ernet. in Raghavan [email protected] Mathirajan [email protected] Shyam Bhaskar [email protected] com Kameshwaran [email protected] Chandrashekar [email protected] Dinesh Garg [email protected] Visvanathan [email protected] com

What Next? Start working in SCM …. . n Wish you all the very What Next? Start working in SCM …. . n Wish you all the very best …. n See you again very soon …. n December 15 th and 16 th, 2003 International Workshop on IT Enabled Manufacturing, Logistics, and SCM