13-09-2025

Introduction to Supply Chain Management

Course on

Supply Chain Management

Dr. Ayush Gautam,

(PhD- IIT Delhi, [Link] IIT Roorkee, [Link] Mechanical)

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Reference
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process?
course

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Contents Where it all began…

Evolution of SCM- Where it all began?

Definition of Supply Chain Management? Why is Supply Chain Management?

Objectives of SCM
Henry Ford, 1913: First
Supply Chain Process/ Basic components of SCM Moving Assembly Line
WWII, 1945: Mass Production 1950-60s: SCM Unknown

Manufacturing process After WWII mass production SCM was not prioritized.
Cycle view of Supply Chain designed for sequential prioritized to reduce costs by ✔ NPD took time
arrangement of workers, economies of scale as ✔ Logistics costs high
Drivers of SCM & Scope of Supply Chain Management machines, tools and parts in strategy. ✔ Poor quality
such a away that motion of ✔ Mass Production Need
all these at minimum extent ✔ Economies of Scale
What are the activities related with scope of Supply Chain possible
✔ Manufacturing time
Current issues in SCM & their Solutions drastically reduced
✔ Mass Production Boomed
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Where it all began… Where it all began…

Henry Ford, 1913: First Henry Ford, 1913: First

WWII, 1945: Mass Production 1950-60s: SCM Unknown WWII, 1945: Mass Production 1950-60s: SCM Unknown
Moving Assembly Line Moving Assembly Line

Manufacturers dealing with

✔ Awareness of MRP. increased demands outsourced
✔ Focus on Increased logistics to focus on Core
performance Competencies
✔ MRPII – MRPI +
✔ Economic service, efficiency,
Finances/General accounting
+ Demand Forecasting +
productivity
Labour Planning + Capacity ✔ Relationship oriented approach:
✔ Strategic for Manufacturers Customers & Suppliers 1980-90s: Outsourcing & Core
1970-80s: MRPI & MRPII ✔ TQM & JIT Competencies 1970-80s: MRPI & MRPII
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Where it all began… Evolution of Supply Chain

Henry Ford, 1913: First

WWII, 1945: Mass Production 1950-60s: SCM Unknown
Moving Assembly Line

1980-90s: Outsourcing & Core

1990s: ERP & EDI 1970-80s: MRPI & MRPII
Competencies
Creation Era Integration Era Globalization Era (21st Century)
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Transition Shift of Industry Five basic components of SCM

Plan Source Make Deliver Return

INDUSTRY 1.0 INDUSTRY 5.0 Planning Resources Sourcing Schedule Logistics - Responsive and
Mechanization Personalization to match supply &
INDUSTRY 2.0 vendors for production, inbound & flexible network
INDUSTRY 4.0 demand. [MRP,
 1784 Mass Production Digitalization  2020 creation of testing, outbound for receiving
 Mechanization of INDUSTRY 3.0 Production, Capacity
Automation
 Human aspect of goods/services packaging and defective and
manufacturing manufacturing Distribution, Sales]
 1870  2011 preparation for excess products &
 Mechanical  Quality standards &  Cyber-physical &  Consider
Production  1969
manufacturing sustainability aspects delivery customer support
 Steam Power
Mass Production  Computerized
 Human-centric
Objectives Devp Processes Measure
 IoT & automation
 Labor division manufacturing
 Cloud computing approach ✔ Efficient ✔ Pricing ✔ Quality levels
 First assembly line  Electronics & IT
 Robotics
✔ Less costs ✔ Delivery ✔ Production output
✔ High quality ✔ Payment ✔ Worker productivity.

Supply Chain Management

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What is Supply Chain Management? Evolution of Supply Chain- Stakeholders

The activities required by an organization to deliver goods or services to the consumer. All
processes from RM to final product.

Spices
Spice mix

Wheat
Flour / Distributor 1 Customer
Sugar Manufacturer
Sugarcane
Distributor 1 Customer
Refined Oil
Palm Oil

RM Suppliers RM Suppliers DCs, Retailer,

Manufacturer Final Product
(Tier 2) (Tier 1) Wholesaler etc

Reverse MaterialInformation
Flow
Material
Money
[Returns
Flow
Flow / Recycle/Disposals]
Flow
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Evolution of Supply Chain- Stakeholders Evolution of Supply Chain

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Why Supply Chain Management? Objectives of SCM

Poor supply chain means: Efficient supply chain means:
1. To maximize the overall value generated
2. To achieve maximum supply chain profitability
High Inventory costs = Right
Excessive Product 3. To reduce the supply chain costs to the minimum possible level
Product
Poor customer service –
Right 4. To generate synergy & transparency among the supply chain components
not delivering when Right Cost
needed Place 5. Upgrading Technology
Poor quality product – 6. To enhance company’s top and bottom through improved manufacturing
mismatch between Right Right and service capability.
requirement vs product
delivered Customer Time 7. Faster response to market and building healthy customer- supplier
responsiveness
Poor planning capabilities
Right Proper
Increased costs for tracking/managing Quality Quantity
supply chain
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Procurement Production Fulfillment

Pillars of
Drivers of SCM Shipment ( Transport & Dispatch)

SCM Inventory Management

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Cycle View of SCM

Pillars of SCM
It specifies the roles and responsibilities of each member of the
supply chain and the desired outcome for each process.
Supply Chain Verticals
Procurement Production Fullfillment
Processes -> Production Planning for FG Order management
Production schedule for FG Lot sizing/ Bulk breaking
Order Planning
Work in progress for intermidiate
Fulfilment plan
products (production lifecycle trace)
Transport planning Transport planning Transportation planning
Shipment
Supply Chain Dispatch Planning Dispatch Planning Dispatch planning
Horizontals Inventory management for raw
Inventory Inventory Management Site-wise Replenishment
materials and finished goods

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Scope of Supply Chain

Scope of Supply
Chain • Procurement
Management • Production & Manufacturing
• Inventory Management
Scope of • Logistics & Transportation
It Refers to range of Activities, Supply • Distribution & Fulfilment
Processes and Functions that Chain • Demand Forecasting
are encompassed within the • Supplier Relationship
domain of Supply Chain Typically Management
• Information Flow
Management includes- • Sustainability & Ethical
Practices
What is included in overall • Risk Management
scope of managing a supply
chain
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1. Procurement
Role of
Procurement in
Sourcing Raw material, SCM
components, goods and
services from suppliers

It encompasses activities
like-
1. Supplier selection
2. Negotiation
3. Contract Manufacturing
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Procurement Versus Purchasing Procurement

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Procurement Versus Purchasing 2. Production & Manufacturing

Managing the processes that
transform the raw material &
components into finished
goods.

It includes-
1. Production Planning
2. Production Operation
3. Quality Control
4. Manufacturing
efficiency

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What is Production Management 3. Inventory Management

Acquiring, keeping, and selling inventory, including both raw
materials and finished goods (products).
The set of interrelated management
activities which are involved in It refers to having the right stock, at the right levels, in the right
manufacturing certain product is place, at the right time, and at the right cost and price.
called Product Management.
Planning and control of industrial The practice to guarantee that there is always enough stock to
processes to ensure that they move satisfy client orders and shortages are identified early.
smoothly at the required level.

Inventory becomes revenue if it is sold.

Planning>> Organizing>> Directing>> How much inventory to keep?
Controlling the activities Where to store it?
How to manage it efficiently? Inventory ties up cash before it sells, even though it is reported
as an asset on the balance sheet.
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Types of Inventory

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Purpose of Inventory Management 4. Logistics & Transportation

• Planning and executing the

movement of goods from
suppliers to manufacturers and
from manufacturers to
To provide a To take What and how
To maintain To meet To allow
safegoard of advantage of
distributors or customers.
indepedence of variation in flexibility in large the order
operations product product variation in raw economic should be
demand scheduling material purchase order • This includes selecting
delivery time size
transportation modes, route
optimization, and managing
carriers.

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Logistics & Supply Chain Management Logistics & Supply Chain Management
Supply Chain Management Logistics Management
Scope SCM involves- Deals with-
Coordination and integration of all activities, from Movement and storage of goods,
the procurement of raw materials to the delivery of materials, and information within
finished products to customers. an organization or between
different organizations
Focus It focuses on strategic planning, decision-making, and It focuses on specific activities
optimizing the entire network of suppliers, such as transportation,
manufacturers, distributors, and customers. warehousing, inventory
management, order fulfillment,
and distribution.
Time-Horizon • Longer-term perspective • Short-term
• Strategic planning and decision-making • Day-to-day operational
• Align supply chain goals activities
• Concerns itself with immediate
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Logistics & Supply Chain Management 5. Distribution & Fulfillment

Supply Chain Management Logistics Management Ensures that customer
Integration SCM seeks to integrate all functions and activities Logistics activities are often more orders are fulfilled
along the supply chain. siloed and may function
independently within an accurately and promptly.
organization.
Objectives To achieve higher-level goals, such as To ensure the timely and cost-
• Improving customer satisfaction, effective movement of goods Ensuring the product reach
• Reducing lead times, from one point to another
• Minimizing inventory costs,
customer in timely and Cost-
• Enhancing overall supply chain resilience, and effective manner
• Driving competitive advantage
Decision • SCM involves strategic decision-making, • Logistics decisions are typically
Making Example: Supplier selection, Demand forecasting, tactical and operational in This can involve managing warehouses,
network design, inventory strategy, and risk nature. distribution centers, and order fulfillment
management, among others Example: selecting carriers,
optimizing delivery routes, and processes.
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Distribution Resource Planning Distribution Resource Planning (DRP)

Distribution Resource Planning is a systematic approach to managing
the distribution phase of the supply chain.
COO COO
CHEIF OPERATING OFFICER  (DRP) is a comprehensive approach to managing the flow of
CHEIF OPERATING OFFICER

• A Chief Operating Officer or COO is goods from manufacturers to end customers.

second-in-command in any  It is a subset of supply chain management that focuses
business. specifically
• A Chief Operatingon the distribution
Officer or COOphase.
• They design and implement is second-in-command in any
 DRP aims to ensure that the right products are delivered to
business.
business operations, establish • Theythe rightand
design placeimplement
at the right time while minimizing costs and
policies that promote company business operations,
maximizing establish
efficiency.
culture and vision, and oversee policies that promote company
culture and vision, and oversee
operations of the company and the operations of the company and the
work of executives. work of executives.
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Key components and principles of DRP 6. Demand Forecasting

 Inventory Management: Efficiently manage inventory levels across distribution
network.
COO
 Demand Forecasting:
CHEIF OPERATINGPredict
OFFICER future demand to plan production and

distribution activities.
 Order Processing: Streamline order processing workflow for timely fulfillment.
•A Transportation
 Chief Operating Management:
Officer orOptimize
COO transportation routes and methods for
cost-effective delivery. in any
is second-in-command
business.
 Warehousing and Storage: Optimize warehouse layouts and processes for
• They design
efficient and implement
storage.
business operations, establish
 Information Systems: Utilize technology for real-time visibility and data-driven
policies that promote company
decision
culture andmaking.
vision, and oversee
 Collaboration
operations of theandcompany
Coordination: andFoster
the collaboration among stakeholders for
work of executives.
streamlined operations.
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Types of Forecasts by Time Horizon Forecasting During the Life Cycle

Quantitative
 Short-range forecast methods
Introduction Growth Maturity Decline
 Usually < 3 months
 Job scheduling, worker assignments Detailed
use of
 Medium-range forecast system
Qualitative models Quantitative models
 3 months to 2 years - Executive judgment
- Time series analysis
- Market research
 Sales/production planning - Regression analysis
-Survey of sales force
Salesmethod
 Long-range forecast -Delphi

 > 2 years Design

of system Time
 New product planning Qualitative
Methods

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Qualitative
Forecasting
Methods

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7. Supplier Relationship management Supplier Relationship management

Building and maintaining SRM is often seen as a strategic part of procurement and supply chain
strong relationship with management, focusing on collaboration, communication, and long-term
suppliers relationships rather than just transactional interactions.

Key Components of SRM-

Why?? 1. Supplier Segmentation
2. Performance Management
To ensure a 3. Risk Management
consistent & reliable 4. Collaboration and Communication
supply of materials & 5. Contract Management
components 6. Supplier Development
7. Technology and Data Management
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8. Information Flow 9. Sustainability & Ethical Practices

Data related to Order
Inventory Level
Demand Forecast
Physical procurement decisions
Manufacturing decisions Supply Chain Management
includes consideration of
sustainable and ethical practices
Managing the flow of information such as:
across the supply chain
1. Responsive Sourcing
It involves the use of 2. Reducing Environmental
technology & impact
information system 3. Ensuring fair carbon practices
like ERP and SCM
Software

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10. Risk Management Current Issues/Problems in

SCM
1. Identifying Risk >> 2. Quantifying
& Prioritizing Risk >> 3. Mitigation • Coordinating the relationships between
of Risk >> 4. Speeding Recovery
Coordinating mutually supportive but separate organizations

• Raising senior management awareness of SCM

Raising as a significant competitive weapon.

Managing • Managing customer touch points

• Optimizing global supplier, production, &

Optimizing distribution networks

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Careers in SCM
HOSPITAL BRANCH CALL CENTER
DEPART M ENT
COO ADM INIST RATOR MANAGER MANAGER
STORE MANAGER
CHEIF OPERAT ING OFFICER Oversees human resource Oversees all aspects of
Oversees all aspects of Oversees staffing and
management, staffing, financial transactions at a
staffing and customer service customer service activities at
supplies, and finances at a branch
at a store. a call center.
health care facility
• A Chief Operating
Officer or COO is
LEAN

Thank You
second-in-command in BUSINESS QUALI TY
LOGISTICS WAREHOUSE PROCESS CONTROL IM PROVEM ENT
any business. MANAGER MANAGER I M PRO V EM EN T MANAGER MANAGER
• They design and Oversees the movement of
Oversees human resource ANALYST Applies techniques of Trains organizational
management, staffing, members in lean production
statistical quality control,
implement business goods throughout the supply
supplies, and finances at a
Applies the tools of lean
such asacceptance sampling and continuous
chain. production to reduce cycle
health care facility
operations, establish time and eliminate waste in and control charts, to the improvement methods
a process. firm's products
policies that promote
company culture and PLANT PROJECT SUPPLY
FACILITIES
vision, and oversee MANAGER MANAGER MANAGER CHAI N MANAGER
operations of the Oversees the workforce and
Plans and coordinates staff Ensures that the building
Manages the day-to-day
activities, such asnew-product facility design, layout,
company and the work physical resources (inventory,
development, new-technology furniture, and other equipment
aspects of purchasing, such
cquipment, and information asinvoicing and follow-up.
of executives. technology) required to
deployment, and new-facility are operating at peak
location. efficiency.
produce the organization's
product

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