DHRUV PATEL (11BIE024)

HARDIK MEHTA (11BIE037)

MALAV BHATT (11BIE056)

Supply Chain is also referred to as the logistics network

Supply chain comprises of :

◦ Suppliers, manufacturers, warehouses, distribution centers and retail outlets – “facilities”

◦ Raw materials◦ Work-in-process (WIP) inventory◦ Finished products

that flow between the facilities

Suppliers Manufacturers Warehouses &Distribution Centers

Customers

Material Costs

TransportationCosts

TransportationCosts

TransportationCostsInventory CostsManufacturing Costs

Suppliers Manufacturers Warehouses &Distribution Centers

Customers

Material Costs

TransportationCosts

TransportationCosts Transportation

CostsInventory CostsManufacturing Costs

Plan Source Make Deliver Buy

A set of approaches used to efficiently integrate

◦ Suppliers

◦ Manufacturers

◦ Warehouses

◦ Distribution centers

So that the product is produced and distributed

◦ In the right quantities

◦ To the right locations

◦ And at the right time

System-wide costs are minimized and

Service level requirements are satisfied

1960’s - Inventory Management Focus, Cost Control

1970’s - MRP & BOM - Operations Planning 1980’s - MRPII, JIT - Materials Management,

Logistics 1990’s - SCM - ERP - “Integrated”

Purchasing, Financials, Manufacturing, Order Entry

2000’s - Optimized “Value Network” with Real-Time Decision Support; Synchronized & Collaborative Extended Network

Uncertainty is inherent to every supply chain

◦ Travel times

◦ Breakdowns of machines and vehicles

◦ Weather

◦ Local politics, labor conditions, border issues

The complexity of the problem to globally optimize a supply chain is significant

◦ Minimize internal costs

◦ Minimize uncertainty

◦ Deal with remaining uncertainty

Forecasts are never right

◦ Very unlikely that actual demand will exactly equal forecast demand

The longer the forecast , the worse the forecast

◦ A forecast for a year from now will never be as accurate as a forecast for 3 months from now

Aggregate forecasts are more accurate

Purchasing Manufacturing DistributionCustomer Service/

Sales

Few change-overs

Stable schedules

Long run lengths

High inventories

High service

levels

Regional stocks

SOURCE MAKE DELIVER SELL

Low pur-chase price

Multiple vendors

Low invent-ories

Low trans-portation

STRATEGY- Make to Stock◦ WHEN TO CHOOSE- standardized products,

relatively predictable demand

◦ BENEFITS - Low manufacturing costs; meet customer demands quickly

STRATEGY- Make to Order◦ WHEN TO CHOOSE- customized products, many

variations

◦ BENEFITS - Customization; reduced inventory; improved service levels

STRATEGY- Configure to Order◦ WHEN TO CHOOSE- many variations on finished

product; infrequent demand

◦ BENEFITS - Low inventory levels; wide range of product offerings; simplified planning

STRATEGY- Engineer to Order◦ WHEN TO CHOOSE- complex products, unique

customer specifications

◦ BENEFITS - Enables response to specific customer requirements

Delivery Performance◦ 16%-28% Improvement

Inventory Reduction◦ 25%-60% Improvement

Fulfillment Cycle Time◦ 30%-50% Improvement

Forecast Accuracy◦ 25%-80% Improvement

Overall Productivity◦ 10%-16% Improvement

Lower Supply-Chain Costs◦ 25%-50% Improvement

Fill Rates◦ 20%-30% Improvement

Improved Capacity Realization◦ 10%-20% Improvement

Analysis of Apple Supply Chain core processes, challenging issues and complexities of

its operations.

1. Number of Items (Stock Keeping Unit)

The results from the analysis of Apple's processes, challenging issues and complexities indicates that the success of its supply chain operations depends on how well they manage the supplier relationship.

This includes early supplier involvement in new product development, close communication and supplier performance improvement/evaluation.

The reason is that Amazon's distribution environment is mathematically solved through the optimization method.

Typically, they have determined how many facilities they should have, where serves which market, items/quantity stored in each location, how to manage transportation between warehouse-to-warehouse and warehouse to customers in order to minimize cost and increase service level.

• Global economy could affect the Company.

• Inventories can become obsolete or exceed the anticipated

demand.

• Some components are currently obtained from the single or

limited sources.

• Company depends on logistical services provided by outsourcing

partners.

Thank-U