History of Logistics and Supply Chain [Infographic]

Here’s a detailed look at the histoty of Logistics and Supply Chain Management.

Also, read all our posts on Supply Chain.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thanks to Ben Benjabutr at http://www.scm-operations.com/ for sharing this Infographic.

 

Supply Chain SCOR Model for SME’s

This is our first ERP Guest Blog – something new for us, so please let us know if you like it( or not)

Supply chain management concept was born during the intense competition in textile industry in the 80’s. First supply chain analysis was conduct in USA and the result revealed that total lead-time was 66 weeks from raw material to consumer (40 weeks were spent in the warehouse or in transit). Since then, every company realizes that it’s not the competition between one company and other companies anymore. It’s the competition between one supply chain and other supply chains. Large business enterprises only seek the strongest members to join their supply chain and small and medium business enterprises (SMEs) are usually left out.

Many SMEs try to improve their capabilities by implementing supply chain management concepts but they find it quite a challenging task due to the lack of solid implementation method.

The SCOR Model or Supply Chain Operation Reference Model was created by Supply Chain Council, a US-based non-profit organization. The primary purpose was to establish common framework that every member in the supply chain can understand. The Supply chain process is defined as PLAN, SOURCE, MAKE, DELIVER and RETURN. Implementation plan consists of 4 stages as below,

Analyze Basis of Competition
The starting point of supply chain implementation is to understand the overall business environment. There are 3 sources of information, namely your current performance, customer’s requirements and performance of your competitors/peers. The output of is stage is “SCORCARD”, the dashboard displaying your current level of key performance indicators (KPIs) and desired level of KPIs.

Configure Supply Chain
One of the most prominent areas for improvement is to look at the current structure of your distribution network or how materials flow from suppliers to customers. A geographic map with locations of customers/suppliers/warehouse is constructed. Then, the different scenarios of your distribution network will be established to achieve the right balance between distribution costs and service/market coverage.

Align Performance, Levels, Practices and Systems
Business process improvement is the key of this stage. The SCOR Model provides ready-to-use business processes that are applicable to both Multi-National Companies (MNCs) and SMEs alike. What you have to do is to check how each process is performed and find the way to improve each process. The general idea of process improvement is to add additional processes, combine many processes into one, eliminate unnecessary processes and rearrange the sequence of processes.

Implement Supply Chain Processes and Systems
At the end of the day, you should be able to make a summary of what you want to do to improve the distribution network and business process. That is not the end, the SCOR Model also provides “Best Practice” or “Tried and True Improvement Idea”. This ranges from something like demand planning, supplier relationship management, manufacturing process improvement, implementation of enterprise resource planning (ERP) and so on. The list of best practices in a SCOR Model is very extensive. Then you should try to prioritize improvement plans that work for you.

Final thoughts, the SCOR Model is not the silver bullet but it’s the gateway to supply chain improvement. What you can do is to implement the SCOR Model and carry out improvement plans that don’t require a big investment. The more productive way to implement SCOR Model is to do analysis by yourself, summarize the findings and let consulting companies propose improvement ideas or help you with implementation of more complex best practices.

Guest post by Ben Benjabutr, more details can be found on his SCM Operations blog.

SCM=(APS+DM) + (SCV+SRM) + (WMS+TMS+ATP)

Obviously the equation from the last post SCM = SCP + SCV + SCE was not detailed enough for some readers – hence an even longer equation.

SCM=(APS+DM) + (SCV+SRM) + (WMS+TMS+ATP)

For the experts even this won’t be long enough -and if you do need more then let me know and I’ll recommend some places for you to seek.

We still break Supply Chain Management into three parts, planning, visibility and execution. Let’s delve a little deeper.

SCP=APS + DM

APS

Supply Chain Planning(SCP) contains mostly Advanced Planning and Scheduling (APS) and demand management planning. The system takes into account short- to long-term planning horizons and uses advanced mathematical algorithms to optimise and simulate the business processes from demand planning to production planning/scheduling to distribution planning to transportation planning. The application works as an umbrella covering the organisation’s entire supply chain and manufacturing processes.

DM

Demand Management Planning consists of a range of planning modules including promotions, forecasting, events such as product launches. There may be a number of  forecasts and budgets in a large organisation e.g. a sales budget and an operational budget may be different. Collaboration and forecast consensus tools are included in order to bring together these different budget views

SCV=SCV + SRM

SCV

Supply Chain Visibility(SCV) contains all the collaboration, analytics, monitoring, business intelligence, and cross-functional aspects across the supply chain and ties together the point-solutions into a coherent whole. There are analytics and optimisation tools embedded in this group as well as functionality to handle ‘events’ (good and bad) within the supply chain.

SRM

Few companies work in a vacuum, and very few are still vertically integrated to the point of not having suppliers. So Supplier Relationship Management(SRM) is a set of modules to help a company procure products, ERP hooks for fulfilment and manufacturing, reconciling deliveries and paying suppliers.

SCE=WMS + TMS + ATP

The execution element covers the physical goods, their transport and keeping a check on what you exactly have when you correspond with a customer.

WMS

Warehouse management systems cover warehouse configuration, bin location and product setup, inventory control, tracking, quality control, picking, packing and shipping. There may be a range of automated and manual processes built that manage stock, as well as the control of robots that can locate and retrieve products.

TMS

The Transport Management System includes applications to enable to create profiles for all your contracts, carriers, and trade lanes for inter-modal and multi-leg moves via your own and 3PL systems. It supports regional as well as international transportation movements.

ATP

In summary – if you place the order, can you supply? Available-to-promise (ATP) systems work across multiple databases,and systems and integrate with demand and replenishment systems to calculate whether an order placed now can be supplied. It needs access to a range of data and other systems, often with suppliers.

Tools and Resources

Download the ERP Checklist for more functional SCM details and time saving checklists

ERP Supply Chain Solutions

SCM = SCP + SCV + SCE

Supply Chain is probably the most mathematical of the ERP functional areas. Its right that we should represent it then as an equation. But what does it mean?

As enterprises get bigger and business globalisation becomes the norm, the need to orchestrate your supply chain with that of your suppliers and customers increases.

What is SCM?

SCM is the management of multiple business processes starting from product planning and ending with delivery. A SCM system helps organisations develop processes that integrate their manufacturing activities with logistics.

What is SCP?

Supply Chain Planning(SCP) contains mostly Advanced Planning and Scheduling (APS) and demand planning. The system takes into account short- to long-term planning horizons and uses advanced mathematical algorithms to optimise and simulate the business processes from demand planning to production planning/scheduling to distribution planning to transportation planning. The application works as an umbrella covering the organisation’s entire supply chain and manufacturing processes.

What is SCV?

Supply Chain Visibility(SCV) contains all the collaboration, analytics, monitoring, business intelligence, and cross-functional aspects across the supply chain and ties together the point-solutions into a coherent whole.

What is SCE?

Supply Chain Execution(SCE) contains domains such as Warehouse Management Systems( WMS) which are closer to execution than planning in nature.

Different industries need different capabilities in  their Supply Chains – and some SCM packages will be stronger than others. You can buy an SCM system from a different vendor than the ERP system.

Tools and Resources

Download the ERP Checklist for more functional SCM details and time saving checklists