Monday, 6 April 2020

Supply Chain Management and JIT

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Supply Chain Management and JIT


Supply or material management activities focus on the upstream portion of the supply
chain and are mainly concerned with suppliers and inbound logistics.
'Supply Chain Management' is defined as the integration-oriented skills required for
providing competitive advantage to the organization that are basis for successful supply
chains.
Supply chain is an integral part of the value chain. The supply chain consists only of the
primary activities or the operational part of the value chain. The supply chain, therefore,
can be thought of as a subset of the value chain.
Major elements in supply chain are: production, location, inventory, supply, transportation
and information.
Logistics focuses on the physical movement and storage of goods and materials. This
involves evaluating and selecting various transportation options, developing and
managing networks of warehouses when needed, and managing the physical flow of
materials into and out of the organization.
Logistics decisions are often tightly intertwined with production and inventory decisions,
particularly when businesses must decide where to hold inventory in the supply chain.
A critical part in supply chains that involve manufacturing is getting all the required parts
and raw materials in the right sequence, the right quantity, the right quality and the right
time to the manufacturing and assembly plants.
Electronic Data Interchange (EDI) is the electronic exchange of business information–
purchase orders, invoices, bills of lading, inventory data and various types of
confirmations-between organizations or trading partners in standardized formats.
E-commerce is usually defined as the conduct of business online, via the Internet. Ecommerce
means more choices, convenience and lower prices for consumers. It also provides
new ways for businesses to grow and meet customer needs, and important benefits and
cost-savings for governments and the people they serve.
Supply chain management allows all the firms in a supply chain to look beyond their own
objectives to the objective of maximizing the final customer's satisfaction.
A firm in the supply chain must initiate the attempt to form partnerships and actively
manage the supply chain. Often a firm that has a large amount of market power in the
chain will become the leader of the supply chain.
The SCOR model is based on a benchmarking process and used to measure the performance
of an existing supply chain and its related processes.
Supply chain management involves proactively managing the two-way movement and
coordination (that is, the flows) of goods, services, information, and funds from raw
material through end user.
Supply Chain Design is a strategic decision. It reflects the structure of the supply chain
over the next several years. It decides what the chain's configuration will be, how resources
will be allocated, and what processes each stage will perform.
A push/pull view of the supply chain is very useful when considering strategic decisions
relating to supply chain design. This view forces a more global consideration of supply
chain process as they relate to a customer order.
Notes Supply chain performance improves if all stages of the chain take actions that together
increase total supply chain profits. A lack of co-ordination can impact the performance.
Supply Chain Optimization is the application of processes and tools to ensure the optimal
operation of a manufacturing and distribution supply chain.
JIT is a management philosophy that strives to eliminate sources of manufacturing waste
by producing the right part in the right place at the right time. Waste results from any
activity that adds cost without adding value such as moving and storage.
A Kanban system is a pull system, in which the Kanban is used to pull parts to the next
production stage when they are needed; an MRP system (or any schedule based system) is
a push system, in which a detailed production schedule for each part is used to push parts
to the next production stage when scheduled.
In spite of the natural differences manufacturing and service, there are possible applications
and benefits of JIT techniques in service industries.


E-banking: banking transaction carried out on the internet
E-commerce: defined as the conduct of business online, via the Internet
EDI: Electronic exchange of business information
EDIFACT: Electronic Data Interchange for Administration Commerce and Transport
External Supply Chain: It includes the key suppliers and customers, portion outside firm
FTP: File Transfer Protocol
Internal Supply Chain: The portion of a given supply chain that occurs within an individual
organization
JIT: It strives to eliminate sources of manufacturing waste by producing the right part in the
right place at the right time
Kanban: It is a visual aid to convey the message that action is required
Logistics: It focuses on the physical movement and storage of goods and materials
Pull View: It processes that are initiated by a customer order
Push View: It processes that are initiated and performed in anticipation of customer orders.
SCOR Model: It is based on a benchmarking process and used to measure the performance of an
existing supply chain and its related processes
Supply Chain: This includes all the elements right from procurement of materials till end
customer
Supply Chain Management: The active management of supply chain activities to maximize
customer value and achieve a sustainable competitive advantage
VAN: Value Added Network

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