Good supply chain management (SCM) design, planning and operation can be a competitive advantage for a business organization. Conversely, poor supply chain design, planning, and operations are detrimental to SCM effectiveness.
BACKGROUND
HISTORICAL PERSPECTIVE
And the criticisms associated with them caused the defense forces to seriously analyze the supply chain. Recently, the Gulf War was won by the US through a brilliantly and perfectly designed supply chain that took into account the state of the earth and the problems arising from it [3].
TYPICAL SUPPLY CHAIN SYSTEM
The appropriate design of the supply chain will depend on both the needs of the customer and the roles of the stages involved. 34;Supply Chain Profitability" is the total profit to be shared across all phases of the supply chain.
SUPPLY CHAIN MANAGEMENT
THE OBJECTIVE OF SUPPLY CHAIN MANAGEMENT
DECISION PHASES IN SUPPLY CHAIN MANAGEMENT
The final step in achieving strategic fit is tailoring the responsiveness of the supply chain to the implied uncertainty of supply and demand. To achieve strategic fit, the greater the implied uncertainty, the more responsive the supply chain must be.
SUPPLY CHAIN MANAGEMENT SYSTEM IN LOCAL INDUSTRIES The concept of supply chain management (SCM) system is very recent in our
Increasing implied uncertainty of customers and supply sources is best served by increasing responsiveness from the supply chain. The main identifiable problem with the implementation of SCM system in local industries is the identification of the leading supply chain driver.
OBJECTIVES OF THE PRESENT STUDY
Among all drivers of the SCM system, one or all coordinated drivers can dominate the competitiveness, profitability and prosperity of the organization. Again, every manufacturing company wants to maximize profits by reducing the importance of one or all drivers of SCM.
DRIVERS OF SUPPLY CHAIN PERFORMANCE
A SUPPLY CHAIN DECISION MAKING FRAMEWORK FOR STRUCTURING DRIVERS
- FACILITIES
- INVENTORY
- TRANSPORTATION
- INFORMATION
The type of transportation a company uses also affects inventory and the location of facilities in the supply chain. The information is also essential to the day-to-day operations of every stage in the supply chain.
INTEGRATED SUPPLY CHAIN MANAGEMENT MODEL
INFORMATION FLOW IN AN INTEGRATED SUPPLY CHAIN
We use this paradigm here and describe the role of information and information technology in the supply chain. Several technologies have gained popularity recently due to their ability to facilitate the flow of information across the supply chain.
MANAGING THE FLOW OF MATERIALS ACROSS THE SUPPLY CHAIN
Specific benefits include (1) establishing valuable contacts throughout the supply chain, (2) gaining insight into current organizational practices, and (3) identifying opportunities for joint projects between supply chain members. Additionally, it is necessary to be able to assess the relative contribution of individual member organizations within the supply chain.
COORDINATION AND SUPPLY CHAIN RELATIONSHIPS
In an inter-organizational supply chain environment, the supply chain level represents the starting point for the balanced scorecard. Relationship management affects all areas of the supply chain and has a dramatic impact on performance.
APPLICATION OF SUPPLY CHAIN MANAGEMENT SYSTEM IN AN ORGANIZATION
The goal of supply chain management is to link all components of the supply chain so that market demand is met as efficiently as possible across the entire chain. Note that apart from the initial supplier(s) and end customer(s), the organization in a supply chain is both customer and supplier. Another very important inventory phenomenon that can occur without good supply chain management is the bullwhip effect: inventories become progressively larger as you look back through the chain from the final customer to the beginning of the supply chain.
Central to this is taking customer demand and translating it into corresponding activities at each level of the supply chain. Processing takes place in every component of the supply chain; it is the core of every organization. An important aspect of this for both the internal and external part of a supply chain is planning.
INVENTORY-RELATED COSTS
The supply side of the value chain consists of one or more suppliers, all links in the chain, and each of them can affect the efficiency - or inefficiency - of the supply chain. In addition, it is essential that planning and execution are carefully coordinated between suppliers and all members of the demand side of their chains. This is achieved by fully integrating all members of the supply chain, balancing the resources of the chain members together and optimizing the flow of goods, services and information from the source to the end customer.
If the unit price b is the same regardless of the order size Q and the demand is D, the purchasing cost is The importance of the various components of holding costs depends on the type of item, although taxes, interest and insurance are generally based on the dollar value of the inventory. Typically, annual storage costs range from 20 to 40 percent of the item's value [6].
DETERMINATION OF ECONOMIC ORDER QUANTITY (EOQ)
The optimal order quantity reflects a balance between carrying costs and ordering costs: as order size varies, one type of cost will increase while the other will decrease. However, a small order size will necessitate frequent orders, which will increase the annual ordering costs. On the other hand, the annual ordering cost will decrease as the order size increases because, for a given annual demand, the larger the order size, the fewer number of orders are needed.
Since the number of orders per year, D/Q, decreases as Q increases, annual ordering costs are inversely proportional to order size, as shown in Figure 2.7-4. Thus, given the annual demand, the ordering cost per order, and the annual storage cost per unit, the economic optimal order quantity (EOQ) can be calculated. Figure: 2.8 Inventory functions in a fixed order quantity system with a lead time exceeding the reorder cycle time.
COMPANY PROFILE
But Bangladesh Cable Shilpa Limited (BCSL), the company under this study, is not very aware of introducing the supply chain concept in the business. Hardware Store: Various types of office/hardware materials are stored securely in the main store and properly recorded in the issue and purchase register. Raw Material Storage: Different types of raw materials for the production of different types of cables are stored safely in the raw material storage and properly recorded in the issuing and purchasing register.
Spare parts warehouse: Various spare parts for emergency repair of different types of machines are safely stored in the spare parts warehouse within the specified temperature and are properly recorded in the issue and purchase register. Mechanical Workshop: Various parts and components for production machinery are manufactured in the mechanical workshop attached to the production hall. Electrical Workshop: Electrical repair and maintenance is carried out by the BCSL maintenance team in the electrical workshop attached to the production shed.
SUPPLY CHAIN DRIVERS IN BCSL
- APPLICATION OF SUPPLY CHAIN MANAGEMENT IN BCSL
- DATA COLLECTION
- NECESSARY DATA FOR DEMAND AND ASSOCIATED COSTS
- DETERMINATION OF ECONOMIC ORDER QUNTITY (EOQ) IN BCSL FOR COPPER IMPORT
- INVENTORY DECISION FOR COPPER PURCHASE IN 2005-2006
These actual in-store inventory costs are very important in determining inventory costs and total incremental costs (TIC). In this situation, the holding costs for our calculation purposes can be considered as a maximum of 11.5% (due to the strong government support for obtaining funds from the government and any additional costs in this area will be compensated by increasing the sales price of final products after prior approval of NBR). Thus, it can ultimately be assumed that the total cost of holding copper in BCSL's own store is 12% of the inventory investment.
Against all this, let's assume that the copper markup charge at the BCSL store is also 15%. In this situation, we will now try to calculate the holding cost percentage based on the dollar exchange rate. Let's assume that the storage cost is 15% of the inventory value when the dollar rate is Tk.
At the current consumption rate, this safety stock would run out in 38 days (200 MT/consumption rate 5.28 MT per day), unless replenishment occurs. If we assume this buffer stock as safety stock and if they keep this safety stock for 20 days and again if they do it for 10 days, the TICs would be.
TICs Vs Different approaches
CURRENT APPROACH OF SUPPLY CHAIN MANAGEMENT AT BCSL BCSL, has its own supply chain but not accordance with the recent integrated
SUPPLY CHAIN MEMBERS
SUPPLY CHAIN DRIVERS
- Inventory
BCSL facilities can be diversified with some modifications, changes and additions to meet the future challenges in manufacturing other types of cables because there is enough space for expansion of the current factory and the necessary land is available near the existing factory . The production capacity of the company has been increased to meet the demand up to 12,00,000 c.km/year. After manufacturing different types of products they are rolled into different drum sizes (according to product specifications) and stored in the factory delivery yard.
When the buyer arrives, the product is delivered to the given point (customer) directly from the factory delivery point. The cost of copper is the main source of inventory cost in BCSL's supply chain and has a major impact on the company's profitability. BCSL's Safety Inventory is 200 MT as per its long conventional practice since inception of the plant.
SUPPLY CHAIN MANAGEMENT
- PROPOSED INTEGRATED SUPPLY CHAIN MODEL OF BCSL
- PRESENT COSTING PROCESS OF BCSL
- INVENTORY MANAGEMENT OF BCSL Estimation of the elements of invenioly costs
- APPLICATION OF SUPPLY CHAIN MANAGEMENT IN BCSL
- BENEFITS FROM SCM
- CONCLUSIONS
- Present scenario of the company in the context of SCM application
- Contribution of SCM for the company
- Suggested future action plan of the company
- RECOMMENDATIONS FOR FUTURE WORK
This is a mistake by the company regarding the real SCM application in the company and the associated profitability. Finally, it is clear that in the current situation of the company, not all four factors are equally prominent when it comes to the application of SCM in the company in the real sense. The main advantage of SCM is the solution of problems in running the company's production system at full capacity.
The company's facility assets exist for production and as production increases to full capacity then 100%. The second substantial benefit of SCM is the implementation of the EOQ model in the inventory sector for smooth operation of the business and greater profitability. In the context of the application of the concept of SCM, it can be said that the position of the examined company has its own supply chain, but is not in accordance with the recent SCM in the true sense of the word.
It should be mentioned here that in the total duration (102 days) of the company there are 42 days for the tender. So, the tendering system according to PPR-2003 has some effects on the company's performance.
Cost associated with correspondence regarding submission of performance security by the successful tenderer
- Cost associated with preparation and issue of l)urCllaSe order (P0)
Cost items and their shares depend on the estimated value of each item. The examination fee is fixed and generally does not depend on the amount of material in each postal note. Costs associated with clearing and transporting imported copper up to BCSL shop space are shown in Table 5. Bill of post Amount Total clearing &. no & type) in MT with charges of 1k.
34;Cost F" (cost of keeping and updating record) for import of copper in 2005-2006 Necessary keeping and updating of records for imported materials included in each bill of entry have pegged the cost at the end of BCSL. Now, we can have the maintenance and updating of records cost against each bill of entry as shown in table 6. 44 It may be mentioned here that the cost of maintenance and updating of records depends on the materials presented in each bill of entry and not the amount mentioned in each PU.
