Towards an Understanding

of Materials Management

MEL 426: Materials Management

(3
(3--0-2: 4 Credits)

Dr. Vipul Jain

Course Objectives
• To formulate a materials management strategy and to
appreciate the importance of operational management
for all firms,
• whether they offer services or manufacture tangible goods.
goods.

• To understand how different material management

strategies are evident in real life business communities
• Understand their main approaches to consider the complexities
involved in their supply chain operations.
operations.
Course Objectives (contd…)
• To understand the main theoretical frameworks used to study
materials management
• To become familiar with quantitative and qualitative tools necessary
to develop solutions for a variety of problems associated with
designing, modeling, analyzing and optimizing supply chain
operations..
operations
• To discuss the driving forces for global and international
trade leading to develop a decision making models on
how to plan and manage materials in a global supply
chain,
• considering the social, environmental and financial issues, which
control and provide uncertainty, which leads to inefficiency and
customer service level failures.
failures.
 Course Contents
• Introduction, Relevance of Materials Management, Need for
Integrated approach, Deterministic models: EOQ, EPQ,
Discount, backlogging, multi-
multi-item models etc., sensitivity
analysis, basic systems of inventory management, inventory
costing. Aggregate inventory models, stochastic inventory
models, service level, single period model, etc., Role of
uncertainty, Selective Inventory control. Material planning,
forecasting, Warehousing, Storage etc

• MRP
MRP-- concepts, logic, computerized models, implementation
issues, case studies. JIT-
JIT-Philosophy, logic, applications,
implementation. Vendor selection, and evaluation, Vendor
relations, consolidation of vendor base, single sourcing.
Information systems for Materials, e-
e-procurement and internet
based purchasing, e-e-commerce and materials management.
Organizational issues and evaluation of materials function
Observations…

• Owl hasn’t exactly got Brain, but he

Knows Things

• Understanding and Knowledge are vital to

the development of an academic critique

• Therefore, the initial lectures of the course

will be devoted to UNDERSTANDING
Class Format: The class format will be a mix of lectures, case discussions,
presentations etc. and Required Readings will include a mixture of textbooks
readings, cases, and articles.

Lectures Monday and 17.00-18.20 III/369 IE Lab

Thursday Hours
Labs Monday and 15.00-16.55 III/369 IE Lab
Thursday
Evaluation Scheme

Lab assignments/Case Mini Minors Major

Studies Project (2)
20 % 20 % 30 % 30 %
Key Readings
• Materials management: an executive's supply chain
guide: Stan C. McDonald
• Introduction to materials management: J.R. Tony
Arnold, Stephen N. Chapman and R.V.
Ramakrishnan
• Materials management: an integrated approach
• By P. Gopalakrishnan, M. Sundaresan
• Supply Chain Management: Strategy, Planning and
Operations: Sunil Chopra, Peter Meindl
• Bowersox D J and Closs D J, 2001, Logistical
Management, Tata McGraw Hill Edition, New Delhi
• Mohanty R P and Deshmukh S G, 2005, Supply Chain
Management: Theories and Practices, Bizztantra , New
Delhi
• Gupta Malini,2005, Supply Chain Excellence: Success
stories, SPJIMR, Mumbai
When you hear

“Materials Management”

What comes to your mind????

First thoughts
Two core ideas:
• The first is that practically every product that reaches an
end user represents the cumulative effort of multiple
organizations.
– These organizations are referred to collectively as the supply
chain..
chain

• The second idea is that while supply chains have existed for
a long time, most organizations have only paid attention to
what was happening within their “four walls.”

• Few businesses understood, much less managed, the entire

chain of activities that ultimately delivered products to the
final customer.
Definitions…basics of MM
• Materials Management as a function is responsible
– for the coordination of planning, sourcing, purchasing, moving, storing and
controlling materials in optimum manner
– so as to provide pre-
pre-decided services to the customer at minimum cost.

• Materials Management is the branch of logistics that deals with the

tangible components of a supply chain.

• Specifically, this covers the acquisition of spare parts and replacements,

quality control of purchasing and ordering such parts, and the standards
involved in ordering, shipping, and warehousing the said parts.
Definition

•It is concerned with planning, organizing and

controlling the flow of materials from their initial
purchase through internal operations to the service
point through distribution.

OR

•Material management is a scientific technique,

concerned with Planning, Organizing &Control of
flow of materials, from their initial purchase to
destination.
Materials Management
Enterprise

Finished-goods
Orders
Purchasing

Storage
Raw-material

Customers
Suppliers

Storage

goods
Transformation

Distribution
Receiving

Processes

In-process
Storage
 AIM OF MATERIAL MANAGEMENT

To get
1. The Right quality
2. Right quantity of supplies
3. At the Right time
4. At the Right place
5. For the Right cost
PURPOSE OF MATERIAL MANAGEMENT
•To gain economy in purchasing
•To satisfy the demand during period of replenishment
•To carry reserve stock to avoid stock out
•To stabilize fluctuations in consumption
•To provide reasonable level of client services
 Objective of material management
Primary
•Right price Secondary
•High turnover •Forecasting
•Low procurement •Inter-departmental
•& storage cost harmony
•Continuity of supply •Product improvement
•Consistency in quality •Standardization
•Good supplier •Make or buy decision
relations •New materials & products
•Development of •Favorable reciprocal
personnel relationships
•Good information
system
 Economy in material management

•Containing the costs

•Instilling efficiency in all activities

 Four basic needs of Material
management
1. To have adequate materials on hand when needed
2. To pay the lowest possible prices, consistent with
quality and value requirement for purchases
materials
3. To minimize the inventory investment
4. To operate efficiently
Basic principles of material management
1. Effective management & supervision
It depends on managerial functions of
• Planning
• Organizing
• Staffing
• Directing
• Controlling
• Reporting
• Budgeting
2. Sound purchasing methods
3.Skillful & hard poised negotiations
4.Effective purchase system
5.Should be simple
6.Must not increase other costs
7.Simple inventory control programme
Elements of material management
1. Demand estimation
2. Identify the needed items
3. Calculate from the trends in Consumption during last
2 years.
4. Review with resource constraints
Functional areas of material management
1. Purchasing
2. Central service supply
3. Central stores
4. The print shops
5. The pharmacy
6. Dietary
& Linen services
First thoughts
Two core ideas:
• The first is that practically every product that reaches an
end user represents the cumulative effort of multiple
organizations.
– These organizations are referred to collectively as the supply
chain..
chain

• The second idea is that while supply chains have existed for
a long time, most organizations have only paid attention to
what was happening within their “four walls.”

• Few businesses understood, much less managed, the entire

chain of activities that ultimately delivered products to the
final customer.
Supply chain is network of various business
entities and processes linking Suppliers,
Operations and Customers

Suppliers Operations Customers

Objective is to optimize the over all

performance of the entire network
Observations…
• All businesses want to hire bright people who
can make the best decision for the business as a
whole,
– Not the marketing, finance or operations decision.
• They want employees who can see big picture,
not a narrow perspectives.

• EVERY DECISION IS CROSS-

CROSS-FUNCTIONAL IN
NATURE
Why Operations Management
(OM)?
• For long-
long-run success companies must place
much important on their operations
– The 1950-
1950-1960 era was the U.S. golden era where
primary opportunities were marketing
– The 1970-
1970-1980 U.S. companies experienced a large
decline in productivity growth – international firms
began to challenge in many markets
– The 1970-
1970-1980 era saw U. S. firms lagging behind in
methods and processes
– The resurgence of American business in the 1990’s
capitalized on improved operations
Historical Development of OM
• Industrial revolution Late 1700s
• Scientific management Early 1900s
• Human relations movement 1930s to
1960s
• Management science Mid-
Mid-1900s
• Computer age 1970s
• Environmental Issues 1970s
Historical Development of OM
• Just
Just--in
in--Time Systems (JIT) 1980s

• Total quality management (TQM) 1980s

• Reengineering 1990s

• Global competition 1980s

• Flexibility 1990s
Historical Development of OM

• Time
Time--Based Competition 1990s

• Supply chain Management 1990s

• Electronic Commerce 2000s

• Outsourcing and
flattening of the world 2000s
Operations Management
V/s Supply Chain Management
(Discussion point)

• Is Operations Management a part of

Supply Chain Management????

OR
• Is Supply Chain Management a part of
Operations Management ????
Discussion point???

• Is every supply chain manager a better

Operations manager???

OR

An operations manager is a better supply

chain manager???
Materials Management
V/s Supply Chain Management
(Discussion point)

• Is Materials Management a part of Supply

Chain Management????

OR
• Is Supply Chain Management a part of
materials Management ????
Discussion point???

• Is every supply chain manager a better

Operations manager???

OR

An operations manager is a better supply

chain manager???
Materials Management
V/s Operations Management
(Discussion point)

• Is Materials Management a part of

Operations Management????

OR
• Is Operations Management a part of
materials Management ????
Discussion point???

• Is every materials manager a better

Operations manager???

OR

An operations manager is a better materials

manager???
Global Issues in Material Management

• How can operations management influence the

competitive position of a firm internationally?
• How does the choice of production location vary
based on country differences, manufacturing
technology and product features?
• What factors influence a decision to outsource
component parts to an overseas supplier?
• What is required to efficiently coordinate a
globally dispersed manufacturing system?
Issues Contd..
• Strategic alliances with suppliers
• Build trust between firm and suppliers
• Integrate suppliers in design process
• Facilitate Just-
Just-in
in--Time process management
• Just
Just--in
in--time inventory system management
• Minimize inventory holding costs
• Challenge: minimal inventory buffer may lead to
disruption if there is a cross-
cross-border supply
problem
• The role of information technology and the internet
• lower transaction costs internationally
Logistics Issues in MM

• Lead time
• Location –allocation
• Cross docking
 Observations….

E.g. If vendor gave a 5% reduction for the large material purchase

but 80% of the material buy goes in inventory.

So, to save a certain amount of money from vendor, firm losses so

much of money due to carrying cost in stock because inventory cost is
hidden cost and purchasing cost is visible cost.

Only the visible cost is an organization is captured. Many cost did

not captured, these cost are invisible cost (hidden cost) or these cost
are not directly link with the materials management so,
we need
a method in which both the visible and
invisible cost are captured.
 2. Ignoring invisible or hidden
cost
M.M. COST

Invisible Cost
Visible Cost

Storage Inv. Stock out Handling Inspection

Cost Cost Cost Cost Cost
Observations…

Carrying cost involves blocking the capital,

cost of storage, cost of detonation,

more manpower required to handle the
inventory, more losses in the form of evaporation
like petroleum types of product, perish ability
means decay with the passage of time like food,
stationary i.e. they are not as good after some
period as it was before and time will come that it
becomes used, that time is called shellfire period
e.g. in cast of medicine.
Global Manufacturing and
Materials Management

• Materials Management:
Management: the activity that
controls the transmission of physical materials
through the value chain, from procurement
through production and into distribution.
• Logistics
Logistics:: the procurement and physical
transmission of material through the supply
chain, from suppliers to customers.
Manufacturing & Materials Management
- Strategic Objectives -
• Lower costs (cost reduction) and
and,,
• Simultaneously, increase product
quality (improved quality).
• Accommodate demands for local
responsiveness (enhanced customer preference).
• Respond quickly to shifts in
customer demand (competitive leverage).
How to Satisfy Customer
***
Potential Materials Management Linkages

North America Europe Far East

Market A Market B Market C Markets

Manufacturing
Plant 1 Plant 2 Plant 3
Locations

Source
Source A Source B Source C
Locations
 Enfield Basildon
Belfast Instruments, fuel Radiators, water
Carburetors and and water gauges, pump assembly,
distributors plugs engine components

Treforest Genk
Spark plug Body panels,
insulators road wheels

Leamington Wülfrath
Foundry production Transmission
of engine parts, engine
components components

Dagenham Cologne
Final assembly Die-cast transaxle
casings, gear and
engine components
Bordeaux
Transmissions
Valencia Saarlouis
Final assembly Final assembly

Ford Fiesta’s Internal Manufacturing Network

Coordinating a Global
Manufacturing System
• Materials management (includes
logistics):
– Achieve lowest possible cost that meets
customer’s needs.
• Power of ‘Just-
‘Just-in
in--Time’:
– Economize on inventory
holding costs.
– Drawback: no buffer inventory.
Definitions…Basics..Coordination
• The definition in Webster’s dictionary is simple yet
powerful; “to work one with another.” Sounds
simple until you read the next definition in
Webster’s, “to cooperate, willingly, with an enemy.”
• Are there enemies within the supply chain of
a business?
• You might form that conclusion after observing a
day of supplier-
supplier-customer negotiations or a weekly
sales / order planning meeting.
Observations

• If collaboration is so powerful, can it be

easy? What are the impacts of
“collaboration?”
• If I don’t want to work with the “enemy,”
what other choices do I have in regards to
a business-
business- to-
to- business relationship?
Definitions….
• Cooperation is defined as “the process by which
individuals, groups and organizations come
together, interact, and form psychological
relationships for mutual gain or benefit.”
• The outcome of cooperation is proposed to be
“effective coordination or the combination of
parts to achieve the most effective or harmonious
results.
• Collaboration is proposed to be more effective
and more difficult than cooperation, which, in a
supply chain sometimes seems impossible to
achieve
 Relationship Factors
Community Collaboration

Coordination
(Cooperative)

Transaction
(Control and Compliance)

No. of Relationships
Collaboration requirements
• An absence of competition, A win-
win-win relationship.
• A defined outcome.
• Common goals and objectives (interdependence).
• A belief that others will faithfully apply effort to
achieve group goals.
• Trust, risk sharing.
• Communication, common language, ability to
communicate.
• An investment, a commitment (firm and personal).
• A collaboration oriented process, structure, jobs,
measures and technology.
 Dominance of one
Mismatch in Lack of coherent
member in taking
production cycle contracts
decisions

Different Mismatch in Lack of meetings,

Independent
organizational optimal order cooperation, technical
replenishment
culture quantity assistance

Difficulties in
Supply Chain
Coordination

Conflicting
Mismatch in Mismatch in Incompatible and old
objectives
frequency of batch sizes information systems
delivery

Independent cost Mismatch in production set Lack of information

evaluation of activities and up times sharing
processes

Various difficulties in supply chain coordination

The Role of the Organization
• Organizational linkages (interdependencies)
are more numerous and complex.
– More difficult to control costs.
• Functionally separate materials
management:
– Equal weight with other departments.
– Purchasing, production and
distribution are one basic task:
• controlling material flow from
purchase to customer.
Typical Organization Chart
***
The Relationship Between Quality and
Costs
Increases
Productivity Lowers
Manufacturing
Costs
Improves Lowers Increases
Performance Rework and Profits
Reliability Scrap Costs

Lowers
Service Costs
Lowers
Warranty and
Repair Costs Figure 16.1

“Quality is free”
free”
***
Industry Globalization Drivers
Market

•Universal
customer Needs

Gov’t Cost
•Favorable trade •Large country factor
policies differences
Global
•Compatible •Large scale economies
technical standards MFG
•Flex-mfg technologies
•Low transport costs
•Competitors use
global manufacturing

Competitive
What Is Supply Chain Management ?
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-
System-wide costs are minimized and
• Service level requirements are satisfied
 System
View

Demand
Side
Supply Side
 Some Definitions of SCM
• Supply chain management (SCM) is the
management of a network of interconnected
businesses involved in the ultimate provision of
product and service packages required by end
customers (Harland, 1996).

• Supply Chain Management spans all movement and

storage of raw materials,
materials, work-
work-in
in--process inventory,
and finished goods from point of origin to point of
consumption (supply
(supply chain).
chain).
Supply chain management flows can
be divided into three main flows:
• The product flow
• The information flow
• The finances flow
– The product flow includes the movement of goods
from a supplier to a customer, as well as any
customer returns or service needs.
– The information flow involves transmitting orders and
updating the status of delivery.
– The financial flow consists of credit terms, payment
schedules, and consignment and title ownership
arrangements.
 SCM Definition
Material Flow

Converter
Supplier Retailer
Distributor

Source
Converter Consumers
Distributor End-User
Supplier

Value-Added Services

Funds/Demand Flow

Information Flow

Reuse/Maintenance/After Sales Service Flow

 S: Supplier M: Manufacturer D: Distributor R: Retailer C: Customer

S M D R C

•The traditional supply chain involves very little interaction and cooperation
between levels other than immediate upward or downward links.

•There is a need to coordinate material, information, and financial flows between

and among all the participating entities.

•Information is distributed. Each entity has incomplete information. Information

need to be shared across organizational, functional and system boundaries.

•There is no single authority. Knowledge is distributed among members in supply

chain.

•Decision making in Supply Chain is through multiparty negotiation and

coordination.

•Learning and reasoning is needed for supply chain members to make individual
or joint decisions for operation and planning.
 An integrated supply chain

S: Supplier, M: Manufacturer
D: Distributor, R: Retailer,
C: Customer
M D

S R

• There is cooperation and interaction throughout the supply chain to

maximize
the value provided to the end consumer by the supply chain as a whole.

• The lack of isolated “links” is obvious in this new design.

• Every member of the supply chain is integrated with all others as well as
with the customer.

• There is a free flow of information between the functions.

SCM is an approach through which such integration can be achieved
Complete supply chain network

Information Capacity, Promotion plans, Delivery Schedules

Materials Raw Mat., In-process inventory, finished goods

Money Credits, Consignment, payment terms, invoice

Suppliers Manufacturers Distributors Retailers Customers

Sales, order, inventory, quality, promotions Information

Returns, repairs, recycles, servicing, disposal Materials

Consignment, payment Money

Internal and external supply chain
 Where MM and logistics stands in SCM
Enterprise Resource Planning

Production Fulfillment

Materials Warehouse Order

Sales
Management Management Management

Supply Transportatio Customer

Relationship Procurement n Distribution Service Relationship
Management Management Management

Manufacturin Inventory
Logistics Marketing
g Management

Supply chain management

Enterprise Resource Planning

Continue…
Continue…
• Materials management and logistics is the part of supply chain
operations.
operations.
• Material management as a part of logistics in some of small scale
industries..
industries
• In large enterprises, Materials management is done at the initial
stages of supply chain operations
operations..
• Materials management deals with tangible components of supply
chain..
chain
• Definition (Business dictionary)
– Planning and control of the functions supporting the complete
cycle (flow) of materials, and the associated flow of information
information..
These functions include identification, cataloging, standardization,
need determination, scheduling, procurement, inspection, quality
control, packaging, storage, inventory control, distribution, and
disposal.. Also called materials planning
disposal planning..
Abstraction of SCM network

Materials
Management

Logistics Derived
Induced (Integrated Deman
Demand demand) d

Physical
Distribution
Industry practices

• Materials management
– Due to long lead times for certain materials, the materials
management function requires planning to respond to an outage
event..
event
– Pre-
Pre-stocking of outage reserves within operating center
storerooms is needed to ensure rapid response and reduce
transportation requirements during outage events
• Logistics
– The typical utility must be prepared to provide support such as
food and lodging for both its own employees while working long
outage shifts and outside restoration crews
More about MM and supply chain
management

• The problem is to balance conflicting objectives to

minimize the total of all the costs involved
(maximize the use of the firm’s resources) and
maximize customer consistent with the goals of
the organization
organization..
• This requires some type of integrated materials
management or logistics organization responsible
for supply, production and distribution.
distribution. The name
we are giving this function is materials
management..
management
Supply Chain Objective
• The objective of every supply chain is to
maximize the overall value generated
• The value is the difference between what the
final product is worth to the customer and the
effort the supply chain expends in filling the
customer’s request
• The total profit, to be shared across all supply
chain stages, is called supply chain profitability
The Objective of a Supply Chain
• Maximize overall value created
• Supply chain value: difference between what
the final product is worth to the customer
and the effort the supply chain expends in
filling the customer’s request
• Value is correlated to supply chain
profitability (difference between revenue
generated from the customer and the overall
cost across the supply chain)
The Objective of a Supply Chain
• Example: Dell receives $2000 from a customer for
a computer (revenue)
• Supply chain incurs costs (information, storage,
transportation, components, assembly, etc.)
• Difference between $2000 and the sum of all of
these costs is the supply chain profit
• Supply chain profitability is total profit to be shared
across all stages of the supply chain
• Supply chain success should be measured by total
supply chain profitability, not profits at an individual
stage
The Objective of a Supply Chain
• Sources of supply chain revenue: the customer
• Sources of supply chain cost: flows of information,
products, or funds between stages of the supply
chain

• Supply chain management is the

management of flows between and
among supply chain stages to maximize
total supply chain profitability
Observations
• Nowadays, business decisions are dominated by
the globalization of markets and increased
competition among firms.

• Research in operations management has shifted

its focus from single-
single-firm analysis to multi-
multi-firm
analysis.

• The main characteristics of such chains are that

the firms in the chain are independent actors who
try to optimize their individual objectives.

• The decisions taken by a firm do also affect the

performance of the other parties in the supply
chain.
Integrated Supply Chain C
U
S
T

Approach O
M
E
R
S

Sales
S
U
P Distribution
P
L
I
E
Manufacturing
R
S
Purchasing

• Looks at the entire chain

• Global rather than local focus
• Integrated rather than fragmented approach
Some Observations…
• Integrating the supply chain requires an
organization to synchronize not only its own
activities but also the activities of the external
organizations
– that either supply inputs to or receive outputs from
the organization.

• In grocery retail supply chains they use the term

– FROM SEED TO STORE
 Important Observations

• In textile and apparel supply chains, the term

– From CONCEPT TO CONSUMER

• In heavy industry/manufacturing industry

– FROM MOTHER EARTH TO MOTHER EARTH
– Illustrating the full cycle from extraction,
conversion, through to customers, consumption
and recycling
Domains of logistics, supply chain
management
Decision Phases of a Supply
Chain
• Supply chain strategy or design
• Supply chain planning
• Supply chain operation
Supply Chain Strategy or Design
• Decisions about the structure of the supply chain and what
processes each stage will perform

• Strategic supply chain decisions

– Locations and capacities of facilities
– Products to be made or stored at various locations
– Modes of transportation
– Information systems

• Supply chain design must support strategic objectives

• Supply chain design decisions are long-
long-term and expensive
to reverse – must take into account market uncertainty
Enterprise
Network of independent companies possibly
in different geographical locations forming a
strategic alliance toward the common goal of
designing, manufacturing and delivering right
quality products/services to customers
– Functional perspective
– Process perspective
Functional and Process Perspective

SUPPLY CHAIN PROCESS

ORDER - TO - DELIVERY PROCESS

Procurement Manufacturing Distribution Logistics

Business Process
A structured, measured set of activities ordered
in time and space, designed to produce a
customer desired output.
– A business process could be decomposed into
several other business processes.
Business Process

Macro Micro
• SRM
• Answering a query
• Accounts Payable from a customer
• New product Development
•process • Checking the credit
• CRM Process
history of customer
• Order Mgmt
Supply Chain Process

Integrated , coordinated network of value

delivering business processes that procure raw
materials, transform them into final products,
services and delivers the product to the
customers

• Procurement
• Manufacturing/assembly
• Inbound logistics
• Warehousing
• Distribution
• Outbound logistics
 Order/ Product Flow through Supply Chain Functions

Products
Orders
Order Management Channel A
Orders

Channel B Customer
Orders

Orders
Products Product Products
Manufacturing Channel C
Distribution Products
Production
Parts
Plans
Demand
Forecast
Part Supply Supply Planning Demand Planning
Component
Requirement
 Example of a Typical Supply Chain: IBM Europe PC Supply Chain

Warehouse

Port
PC Assembly
Plant Retailers

Suppliers 1.2 Million PC/Yr. 13 Transshipment Country-wide

(International) Glasgow U.K. Points (TPs) in Europe Distribution
Centers (DCs)
 Supplier A 15-20
(MD) 6 Days Days
15-20 Processor
2 Days Days 2 Days

1-2
Days
25-30
1 Day
Supplier B Days
(FS) 6 Days 2 Days

Distribution and
KVIC Marketing

15-20
Supplier C Days 1 Day 1 Day 1-2
(GO) 5 Days
Days
Testing Lab
1 Day
3 Days

1 Day
10-15 MGIRI-IITD
Supplier D Days 1 Day
(KG) 5 Days Sales Outlet

Material Flow
5- 7
Information Flow Days
Consumer

Fig 3.2 Existing Supply Chain for Organic Foods

Some Examples of Supply Chains
in India

Automotive - Telco, ALL, Mahindra, Maruti

Chemicals - Asian Paints, Apollo tyres, Reliance
Apparel - Madura Coats, Reliance
Food - Cadbury, Parle, Amul Products, HLL
Consumer durables - HLL, P & G
Construction - L & T
Pharmaceutical - Ranbaxy, Glaxo
Electromechanical – Kirloskar, L & T
Tooling - HMT, Widia, Mico
PC/ Computer - IBM, WIPRO, HCL, Intel
Supply Chain Building
Blocks

Structural Logical IT / ITES

Informational
Structural Building Blocks
• Suppliers
• Manufacturing / Assembly Plants
• Warehouses
• Distribution Centers
• Retailers / Customers
• Logistics Network
– Inbound
– Outbound
• Customers Orders
 Logical Building Blocks

STRATEGIC

TACTICAL

OPERATIONAL

Procurement Logistics Manufacturing Distribution Logistics

Mathematical Models
• Optimization Models (LP, IP, MILP, DP)
• Stochastic Models (Markov chains, Queuing
networks, etc.)
• Statistical Models
• Game Theory
• Simulation
• Auctions and Mechanism Design
Information Building Blocks

• IT : MRP, ERP, EDI

• Internet Technologies
• E-Commerce, EE--Markets
• E-CRM
• Decision Support Software
• Standards