Welcome Back

1
Welcome Back
IMS University of Peshawar

• Sportstars

2
Mumbai Dhabawala

• 5000 Dhabawala
• 200,000 customers
• 50 percent workforce illiterate
• 120 years long history
• Dhabawala are not caterers
• Home to work place before lunch time
• Two deliveries in 8 hours
• Accuracy (only one wrong delivery in 16 million
  tiffons)
• Six sigma and ISO 9001 certified without
  technology

3
Mumbai Dhabawala

• Structure
• Group Dynamics and leadership
• Value added services of dhabawal
• Price (350 rupees per month)
• Pay for service only
• 120 years history has no strike
• In transit the tiffons might shift hands on
  average six times
• Value added services (angry and hungry young man)

4
SCM explained

• For example a bottle of Aqua Fina
• Ingredients (Pure water, Bottle, package and a
  label worth 45 PKR)
• Think about profit margin (200 100 50???)
• Do you think that product cost is equal to
  material cost?
• Thinking from a CEO perspective
• So lets see what it took that bottle of water to
  get into your hands

5
A product example

• First, negotiate the purchase of empty bottles
• These bottles will be easier to transport if they
  have their own boxes.
• Shrink wrap those bottles so that they dont fall
  out of the box
• Put them on pallets
• To move pallets you need a forklift (driver)
• You then load a truack (truck) a driver, fuel etc
• Label for the bottle also, design it, transport
  it to the plant, paste it.
• In other words truck, driver, fuel and insurance

6
A product example Aquafina

• The water bottling plant wont be free as it needs
  energy, employees, bottling machines
• Access to drinking water of course
• Set of machines required to load the product to
  truck so that it moves to DCs
• (that too require F, D, I?????)
• From DCs it will head to retail stores and still
  another truck ()
• That store will need employees to unload products
  and place on shelves
• It might also need a refrigerator, security
  personnel or systems and insurance

7
Aquafina illustrated

• Not all the botlles survive the journey (cost)
• 1-800 numbers (call centers)
• All the materials, boxes, people, machinery,
  buildings, energy, fuel, vehicles cost money
• What about people working in other functional
  departments
• So with the help of this simple super product we
  come to know that companies face challenges when
  they.

8
Challenges

• (a) Buy things
• (b) Make things
• (c) Move things
• (d) Sell and (e) service things
• And lets not forget companies need to do all
  these things using sustainable materials, energy
  and methods
• Whose job it is to make sure all these things
  happen flawlessly, with minimal effort and of
  course minimal cost.
• Guess it?????????

9
In simple words

• SCM needs to be able to do all these things, they
  need to give the customer
• The product they want,
• As often as they want,
• At a reasonable price,
• while managing a profit
• This requires world class skills in SCM
• Which in simple words mean The management of the
  chain of supplies
• What you might be thinking that we all live in
  a service economy? ???????

10
Service economy (Hotel)

• What the hotel manufacture?
• ?? Lodginbg experiences, dining experiences
• To carry out these activities what is needed?
• Hotels need to buy things like???
• They also make things or in this case manufacture
  services such as housekeeping, massages, and
  special events
• Hotels also move things such as
• Clean towels, foods, transporting guests and
  their luggage to and from airports

11
Service economy (Hotel)

• Hotels even sell things, like in-room movies,
  match tickets, gifts, internet services
• And finally, they also provide services such as
  making reservations, organizing banquette events,
  making wakeup calls, and cleaning and pressing
  clothes
• Once again the fundamental skills learned in SCM
  can be used to manufacture services experiences
  as much as they aid in manufacturing products

12
(1) BUY IT

• You are what you eat (first step in SCM,)
• SC are the bones and muscles of organization
• (what they eat) To have a healthy supply chain
  you need healthy supplies (but if you feed it
  garbage???)
• Think of buying for an organization?
• Lets outsource our purchasing to your mom and
  dad? How would you feel?
• Purchasing considerations should go beyond costs,
  quality, delivery, speed, supplier flexibility
• Relationships-negotiations-analytical skills

13
(2) MAKE IT

• Manufacturing and operations
• Mysterious concept as item are complex today and
  distance involved is great
• Most people know little about manufacturing
• At best they might know
• Materials used
• And where the item was made
• Lets figure out which issue SCM needs to consider
  in manufacturing a product?

14
Make it .

• Look out for manufacturing facilities near your
  home, and how often you visit them
• RESTAURANT
• Design decisions (McDonalds, Burger King has RD
  teams like Ford and Sony)
• Tradeoffs in terms of Process, facility, and
  Resource Decisions
• (cost, quality, speed and flexibility)
• High quality burgers need more time to
  manufacture and ingredients are expensive
• Offering more options could also become time
  consuming and expensive

15
continued

• To be profitable restaurant owners should know,
  what the customer is willing to accept the
  standard of a burger and what could be customized
  for each h buyer
• This will dictate decisions related tp
• Labor
• Machinery
• Inventory
• Capacity
• Seats etc
• So manufacturing is more than material and labour
  costs

16
Continued

• And it is only after considering design,
  manufacturing and resources that companies can
  properly explore outsourcing, off shoring, and in
  the case of burgers FRANCHISING
• Look manufacturing an airplane will always be
  intimidating but hopefully you have a better
  feeling about the important issues and
  considerations that product designers and supply
  chain managers must confront in delivering
  millions of high quality products and services to
  customers all over the world.

17
(3) MOVE IT

• Transportation and Logistics
• In addition to price and quality
• Point of origin and destination comes to mind
• A more perceptive consume might think of the
  primary mode of transportation used to deliver
  the product
• Even that level of thought is very limited
• It will be like saying Ghayur got from Japan to
  Pakistan by aero plane

18
Move it continued

• Many of you who have travelled by airplane knows
  the steps involved in getting from one
  destination to other
• Think about everything you require to travel to
  airplane
• Ticket
• Luggage
• Taxi
• Check your bags
• Get through airport security checks
• Board the airplane
• Finally you are ready to fly

19
MOVE IT continued,.

• But if you are scheduled for a lay over
• Sit in people warehouse
• Travel by another plane to final destination
• Taxi to reach absolute destination
• Think about work done by airport staff
• This means that the malitaristic term logistics
  is about so much things than transportation.
• Humans can ask questions and take decisions so
  as to stay abreast of the full details of the
  journey as they happen
• What about products????????

20
MOVE it continued..

• Products dont have the ability to ask questions
  or change decisions
• Means planning and preparation aspects of
  logistics are even more crucial for SCMgrs
• SCMgrs can make decisions regarding packaging,
  containerization, documentation, insurance,
  storage, and import and export regulations
• Through SC we learned that every product or
  service has its own story.. Think of thousands of
  logistics stories (assignment)

21
(4) SELL IT and Service it

• Retail consideration
• Do we as consumers buy things at manufacturing
  facilities? Distribution centers?
• Typically we buy at retail stores
• This means that SCM should not stop when the
  product leaves manufacturer, or distribution
  center or even when they unload it from a truck
• Sc requires that you get the product in the hands
  of the customer

22
Continued

• Customers want the product at the right shelf or
  exactly where they expect it to be
• Not on the pallet? Not in the stock, back room
  not in wrong place out on the floor
• Retail stores should Manufacture outstanding
  retail experiences
• (1) Excellent mix of competitively priced
  products
• (2) CLEAN SERVICESCAPE (ORGANISED)
• (3) Excellent customer service from a friendly,
  well infiormed, easy to find employee, fast and
  efficient waiting lines, payment processes, and
  return processes

23
Continued

• Retail stores like manufacturing facilities are
  concerned with materials, operations and
  logistics
• The following issues should be taken to
  considerations
• (1) capacity
• (2) Productivity
• (3) Value
• Who wants to work in a retail?
• Hospitals, airlines, Banks, Hotels, Restaurants,
  and dealers.
• What do they have in all common?

24
Continued..

• They sell products and services directly to
  customers,
• Means that they aren't that different from retail
  stores
• They all could benefit from executives that
  understand capacity, productivity, value, quality
  management, materials management, operations and
  logistics
• Three stages of globalization were also
  discussed. Try to do it yourself.

25
Integrated Supply Chains

• That means companies need to pull their employees
  and business partner out of their silos and have
  them develop a cohesive team with a shared set of
  goals and comparable set of philosophies.
• Develop a Philosophical Approach
• Similar values and desires, strength,
  flexibility, knowledge and healthy diet. This
  means that both will have similar workouts,
  diets, and muscular feature?
• Businesses are no different

26
Supply Chain Integration

• Up and until today we have been looking at supply
  chain management as a series of individual
  operational and functions and decisions,
• (a) Buy it
• (b) Make it
• (c) Move it
• (d) Sell it and
• (e) Service it
• Supply chains are chains (interconnected
  interdependent)

27
Continued..

• But what works for one company may not work for
  another.
• And what works for a company today may not work
  for them tomorrow.
• Building a Team
• Developing a winy tradition requires that team
  operate as cooperative and integrated units.
  Players in these teams must trust each other.

28

• They must understand and accept their individual
  roles.
• More than that they need to understand that the
  failure of one is a failure for all.
• Success for modern supply chains is no different.
  Common goals, trust, acceptance and understanding
  of roles, and a commitment to continuous
  improvement. These are the keys to developing a
  competitive modern integrated supply chain.

29
Integrated SCM

• TODAYS WORLD (as against silos of functional
  departments)
• Today competitive companies have knocked down
  these walls
• Everyones responsibility.
• Being lean, responsive, innovative and profitable
  while at the same time maintaining a high level
  of quality.

30
The new CEO

• You need to understand the importance of finance
  accounting, marketing and information technology,
  because materials, money and information are the
  lifeblood of modern supply chains.
• Therefore modern executives should know how to
  design and manage supply chains at the global
  level.
• Managers of global integrated supply chains,
  thats what the businesses, world and thats what
  you need to become

31
WORKING TOGETHER WORKS

• Hair and tortoise story for team building
• Moral 1 Slow and steady wins the race.
• Moral 2 Fast and consistent will always beat
  the slow and steady. Its good to be slow and
  steady, but its better to be fast and
  consistent.
• Moral 3 First, identify your core competency
  and then change the playing field to suit your
  core competency.

32
Continued

• Moral 4
• It is good to be individually motivated and to
  have strong core competencies but unless youre
  able to work in a team and harness each others
  competencies, youll always perform below par,
  because there will always be situations in which
  youll do poorly and someone else will do well.
  Teamwork is mainly about situational leadership,
  letting the person with the relevant core
  competency in a situation take the leadership.
• An interesting finding relates to the idea that
  when faced with a difficult situation, you need
  not fight against each other rather one should
  fight against the situation.

33
Integrated supply chain -definition

• SCM is the integration of key business processes
  from end user through original suppliers that
  provides products, services, and information that
  add value for customers and other stakeholders.

34

• Trade off is between cost and services

35
STEPS NTEGRATION OF SUPPLY CHAIN
36
Global Supply Chain Management

• Organizations that manufacture products,
  obviously rely on excellent supplier and
  effective and efficient logistics system.
• Manufacturing facilities are often times the
  hardest of these types of organizations.
• Nontheless today we see many logistics companies
  looking to relocate their manufacturing
  facilities to countries that offer cheaper labor,
  tax incentives and a number of other potential
  benefits

37
Continued

• A lazy executive would see the basis savings in
  costs and immediately jump to the opportunity to
  relocate manufacturing thinking that the company
  would become significantly more profitable over
  the night
• This will be similar to you receiving the heart
  of a world class marathoner in a heart transplant
  and thinking that you would be ready to win an
  Olympic marathon the next day

38
Continued.

• Like a transplant surgeon a global supply chain
  manager has to understand the trauma associated
  wil relocating key facilities of vital
  operational importance
• Actually a global supply chain manager is only
  responsible for the transplant but for also the
  facility pertaining the healing process,
  outsourcing, and offshoring are the only things
  that global supply chains managers are
  responsible for them.

39
Continued

• There are also tasks related to expanding
  operations in an effort to reach new markets.
• Imagine trying to extend your operations by
  growing one of your arms by extra two feet in one
  week.
• Imagine the pain, imagine the fragile state of
  that arm during and after growth, imagine the
  amount of nutrients required to facilitate that
  abnormal growth, is the message that outsourcing,

40
Socially Responsible Supply Chain Management

• Business exist to earn profits,
• Social responsibility which might include ethics,
  sustainability and community interactions.
• Why SCM need to study this?
• Short list of some of the bad things companies
  have been known to do,
• hiring children, abusing employees, having those
  employees working in dangerous or unhealthy
  conditions, depleting the earth of its natural
  resources, manufacturing, dangerous, unhealthy
  and low quality products, polluting the world
  through manufacturing and logistics, and also
  through the products they manufacture.

41
Continued..

• Global supply chain managers hold the KEY to
  solve problems like hunger, sickness, through the
  effective, efficient purchasing, manufacturing
  and distribution of food and medicines to those
  struck by famine, disease, and natural disaster.
• companies that develop the most advance
  sustainable business practices ???
• So whether you love money, nature, people, or
  just create products and services we can all
  agree, supply chain managers are the KEY to a
  better world.

42
Business Process

• Little does the customer know that when they busy
  a bottle of water at the store
• They have potentially activated a global supply
  chain
• Lets suppose you do purchase a book online, which
  processes have you activated?
• Picking, Packing, Labeling and Shipping. In
  addition you have activated a series of processes
  required to restock that book.
• Ship the replacement book from the suppier, stock
  the book in the warehouse, pay the supplier for
  the book and probably dozens of other processes

43
continued

• Over and over again these processes require
  employees, motivated to carry out the process to
  perfection
• For example
• Think about a overnight shipper that delivers
  millions of packages
• 1 second per package saved means
• Mcdonalds
• SCMgrs are responsible for designing, managing
  and improving the interconnected processes from
  point of origin to point of sale

44
Measuring Performace

• Sports is a world of measurements. Lets take a
  sport like basketball where players attempt to
  make baskets.
• Suppose I tell you a player averages 23 points
  per game. Is that a good players? A Bad Player?
  Or a great player? A good coach would know based
  on this limited information it will be impossible
  to answer that questions without certainty .

45

• basketball is about more than just scoring.
  Right?
• Players can block shots, rebound miss shots,
  steal the ball and assist others in scoring. They
  can also make a number of mistakes that benefit
  their opponents
• So now what if tell you that the players who
  averages 23 points, 9 rebounds, 12 assist andd 4
  steals per game
• Is that a good player? Bad player? A great
  player?

46

• A poor coach might be tricked into answering that
  question. But a good coach would still realize
  that those statistics measure only certain
  aspects of effectiveness. To truly assess this
  player you still need more information.
• How many shots do they take? How many minutes do
  they play? How many positions do they change
  during a game? In essence a good coach wants to
  know how the players make use of their resources.

47

• Okay suppose I gave you the shots, minutes,
  positions,
• available rebounces and any other efficiency
  related data,
• would you feel comfortable making a decision
  about that player?
• Think before you answer. Still feeling good about
  this players statistics?

48
Continued..

• Not every set of data is sufficient helping us
  make good decisions
• A good system of matrix needs to provide
  information on the following
• (a) Effectiveness
• (b) Efficiency and
• (c) Adapatability
• THIS is not just true for basket ball. Today
  humans are addicted to use of matrices that would
  add in making good decisions

49
Continued

• Such as What time is it? (wat..)
• Whats the temperature? (Ther)
• Whats your grade in MBA/BBA? (A,B,C,D..)
• These number guide our actions
• Can actually motivate the behavior of athletes,
  employees, students and business partners
• How to know that you global supply chain is
  effective, efficient and adaptable?
• How to motivate employees thousands of miles away
  to the things customers in your company value
  most??

50
Continued

• How can you identify employees who need a raise
  and promotions?
• And those who need assistance?
• Additional training or
• Disciplinary action
• A good system of matrices can provide guidance
  for managers, employees, and even customers
• Quantitative skills
• Psychological understanding
• Operational know how, to develop the right
  performance measurement tools and systems

51
Continued..

• Like a supply chain coach SCmgrs need to identify
  their best players,
• Identify and improve the weaknesses of the teams
• Know which situations provide the best
  opportunities
• And also understand which resources are being
  wasted (Junaid khan or Shoaib on bench)
• But the SCmgrs team is made up of thousands of
  players all over the world.
• So dont be tricked by numbers,

52
Quality Management

• What you want from a car?
• Every one wants quality? What is your definition
  of it?
• Quality definition of customers changes?
• Product and service elements make quality
  measurement complicated
• For example
• Purchasing a cell phone service such as zong
• What defines the quality
• (1) the phone
• (2) Available applications

53
Quality management

• (3) Number of bars in your location
• (4) Your contract terms
• (5) Customer service
• (6) Overall cost of contract (life)
• Why Cell phone companies have poor reputations
• One thing down grades the quality score of cell
  phone service provider
• This is here we can make the supply chain
  connection,
• As your overall quality is as good as your
  weakest link

54
Continued..

• Battery life, design, camera, features, upgrades,
  customer service, terms of contract, battery
  life and so on (aspects of quality)
• Simplicity makes managing quality easier in other
  words
• Customer expect excellent design
• Flawless manufacturing
• Quick delivery and seamless transactions
• As well as innovations that will make tomorrows
  purchases better than today

55
Continued

• In essence customer demand eternal perfection
• But if you review the list of customer desires,
  then you will know that no one is better equipped
  than satisfying the customer expectations than
• Did you guess it ?

56
Supply Chains and Information technology

• Modern integrated global supply chains could be
  global or integrated
• Without a modern technological infrastructure
• As they act as supply chain connecting tissue and
  nervous system
• Technology related decisions are scary even for
  senior executives
• So what should SCMgrs expect their systems,
  software and hardware to do for their supply
  chains?

57
Continued

• For example Buying a computers
• Reasons for people buying computers
• (1) entertainment
• (2) to communicate with people
• (3) to Purchase things
• (4) to meet new people
• (5) to search for information
• (6) to analyze data and
• (7) organize their lives
• Computers are tools to connects things in our
  present to the .? And help guide us to a more
  promising .?

58
Continued..

• Supply chains are no different such as
• Research and analysis
• Planning and scheduling
• Purchasing
• Networking and
• Relationship management
• Similar to decision making process that we go
  through when buying a new laptop companies need
  to consdier a number of decisions when making IT
  decision
• Memory
• Storage
• Speed

59

• Applications
• Hardware
• Operating systems
• Mobility
• These can be termed as key components of
  organizational nervous system.
• While technologies might change but the issues of
  supply chain visibility, performance measurement
  and customer relationship management prevails.

60

• SCMgrs need to integrate with the folks in It,
  because a SC with a heallthy nervouse system cant
  be
• Global
• Integrated and even
• Responsive
• Make sure that your supply chain has the tools
  that will give it the lightning fast refelxes
  required to be a world class global competitor

61
Thanks