What Is SCM ?

I. What Is SCM?
It’s important to have a clear definition supply chain when a company is trying to set its strategic objectives. For this purpose we have come out with the most accurate definition “the means by which firms engaged in creating, distributing, and selling products can join forces to establish a supply network with unbeatable competitive advantage"
• In the picture you can see the bigger picture of the supply chain.
• So Supply chain have to do with the following:
. Material flow from suppliers and their “upstream” suppliers at all levels
. Transformation of materials into semi-finished and finished products
. Distribution of products to customers and their “downstream”customers at all levels
• Depending on the situation, the supply chain may include major product elements, various suppliers,
geographically dispersed activities, and both upstream and downstream activities. It is critical to go
beyond your immediate suppliers and customers to encompass the entire chain is visualized.

II. Problems
• Distribution Network Configuration : Number and location of suppliers, production facilities,
distribution centers, warehouses and customers.
• Distribution Strategy : Centralized versus decentralized, direct shipment, Cross docking,
pull or push strategies, third party logistics.
• Information : Integration of systems and processes through the supply chain to share valuable
information, including demand signals, forecasts, inventory and transportation etc.
• Inventory Management: Quantity and location of inventory including raw materials,
work-in-process and finished goods.
• Cash-Flow: Arranging the payment terms and the methodologies for exchanging funds across entities
within the supply chain. within the supply chain. The flow is bi-directional.


III. Case Study
The chemical division of an integrated petroleum company engaged CSC to evaluate opportunities for further improvement in their existing ERP (Enterprise Resource Planning) infrastructure. The framework for the effort came from CSC’s experience with the Four Levels of Supply Chain Optimization.• The first stage of supply chain optimization is to “aggregate and leverage” known best practices
for early impact.
• In the second level of supply chain optimization, the objective is “internal integration.” Working together, executive groups.
• Next, the teams focused on customer relationship management and fulfillment.
• Other improvements included:
. Creation of enhanced customer service offerings, improving new business marketing tactics
. Creation of centralized processes powered by advanced decision support systems
The resulting alignment of business unit strategies fueled other benefits for the petrochemical and
specialties businesses including joint ventures for both business units.

A summary of the results from the effort include:
. Significant impact on top line, bottom line and balance sheet
. Overall supply chain costs down 12%
. Logistics alliances in all modes
. Outsourced barge fleet
. Reduced motor carriers
. Improved order satisfaction from 76% to 91%
. Significant revenue generation from new services – increased share with alliance partners

IV. Recommendation

• Supply chain design must be cautiously configured.
• Fit between demand pattern and supply chain
• Define strategy for asset ownership
• Practices Benchmark for best in class
• Organization :Consolidation of accountability and authority