TOTAL QUALITY MANAGEMENT

MODULE 5

TOPIC : SUPPLY CHAIN MANAGEMENT AND

WORLD CLASS MANUFACTURING
 SUPPLY CHAIN MANGEMENT
 Supply chain management encompasses all activities
associated with the flow and transportation of goods from raw
materials to the end user, as well as the associated information
flows. Materials and information must simultaneously flow
both up and down the supply chain to leverage
strategic positioning and to improve operating efficiency.
 Supply chain management is viewed today, as a critical
business activity that is integrated with the business planning
process itself.
 Both customers and suppliers today form the integral part of
any supply chain management strategy. World wide what
most of the companies are focusing on today is creation of a
new effective value chain.
 OBJECTIVES OF SUPPLY CHAIN MANGEMENT

 1. To maximize overall value generated

 2. To look for Sources of Revenue and Cost
 3. Replenishment of the Material or Product whenever
required
 4. Cost Quality Improvement
 5. Shortening the time to Order
 6. Speedy delivery
 7. Delivery optimization
 8. Efficiency
 9.  World-class performance
 10. More awareness
 11. Demand Fulfilment
 12. Inventory Optimization
 CONTD.
 12. Inventory Optimization
 13. Business Characteristics
 14. Flexibility
 15. Transportation cost optimization
 16. Efficacy
 17. Better Distribution
 18. Cost Reduction19. Better Decision
 PROCESS TOOLS
1.Shipping Status Tools :
Supply chains can become increasingly immense and
complicated, particularly for corporations that distribute on a
global scale .
Shipping status tools are a simple way to keep track of all your
shipments. You can also schedule alerts to let you know when
the shipment is complete, or if the estimated time of delivery has
changed so that you can make necessary adjustments
2.Order Processing Tools :
From billing to order fulfillment, the order process has plenty of
areas to keep track of. To simplify things, many types of SCMS
provide a variety of order processing tools to help you stay on
top of orders.
 CONTD.
3.Lean Inventory Tools :
You never want to run out of any materials you need, but leaving
them sitting in a warehouse is inefficient and expensive. Lean
inventory takes the just-in-time (JIT) production method and applies
it to inventory management.
JIT prevents the production of excess goods by producing them only
when needed. 
4.Warehouse Management Tools :
Amazon revolutionized the way supply chains view warehouses,
including how individual companies manage their warehousing .
Because of the rising costs of warehousing and Amazon’s consistent
pressure, many companies are beginning to find that outsourcing is
the most cost-efficient solution. Outsourced warehousing gives you
different options for your supply chain, such as the option of private
or public warehousing, both of which are scalable and emphasize
efficiency to keep your supply chain running smoothly.
 CONTD.
5.Supplier Management Tools :
Businesses that have operated SCMS don’t need to be told that supplier
management can be complicated. Using our SAP programming, we’ve
made supplier management both easier and more effective .
With our supplier management tool, we’re able to track which suppliers are
making significant contributions to your current supply chain.
6.Demand Forecasting Tools
To run an effective lean inventory operation, you need to meet the ever-
changing demand for goods from clients and consumers. The most efficient
way to do this is with a demand forecasting tool .
Demand forecasting takes into account past trends to generate an accurate
estimate of future needs. 
Demand forecasting tools prevent both a shortage of stock when demand is
high, and overstocking when demand wanes.
 CONTD.
7.Analytics and Reports Tools :
After your supply chain software collects information, you need
analytics and reporting tools to tell you the most effective way to
move forward .
Analytics is one of the most important technologies in an
effective supply chain. Reports are the end result of analytics.
Analytics can lead to various types of reports, but they all have
the same purpose — to depict what the analyzed data is saying. 
8.Security Features Tools:
Supply chain managers are generally focused on the supply
chain, so security can go overlooked. But ignoring safety can
expose your business to threats. You can significantly decrease
the risk of data theft through SCMS security features
. 
 CONTD.

9.Compliance Tools:
Compliance tools in SCMS analyze suppliers to prevent you
from ordering noncompliant products. 
 SUPPLY CHAIN MANAGEMENT
FORMANUFACTURING ORGANIZATION
 CONTD.
A supply chain involves the process of moving goods from the
providers of raw materials all the way through to finished
products for the end customers. Supply chain organizations use
logistical methods that manage the entire process. The
organizational structure of the supply chain management systems
determine how they accomplish these goals .
The primary functions of a supply chain organizational structure
include increasing the efficiency and reducing the costs involved
in supply chain management. These tasks also include the
management of suppliers and vendors on either end of the supply
chain system. Workers in the supply chain organizational
structure can accomplish these goals with the implementation of
stringent quality control methods and an effective internal
auditing procedure throughout the entire supply chain.
SERVICE ORGANISATION
 CONTD.
Up till now, the discussion has focused on supply chains for
manufacturing organizations rather than supply organizations.
However, service organizations can also benefit from supply
chain management. A supply chain for a service organization is
similar to that for manufacturing organizations since external
suppliers, internal operations, and external distributors can be
needed. In the case of an e-tailer supply chain management can
be used to integrate external suppliers (usually providing better
demand forecast information to its suppliers, thus reducing
uncertainty within the chain); it has internal operations with
regard to order processing, order picking, and so on; and it can
have external distribution done by a third-party provider.
 WORLD CLASS MANUFACTURING
 World Class Manufacturing is a set of concepts, policies,
techniques, and principles for operating and managing a
manufacturing company.
 BECOMING WORLD CLASS

 World class performance comes from world class practice,

which is created by world class management.
 Quality is no longer viewed as an act of faith but as a
contributor to business results.
 In going beyond quality, the focus should provide, new
challenges and new targets and reinforce what has already
been achieved.
 CONTD.
 Quality Maturity Phases –
1- Management decides they need quality
2- Management learns/ talks about quality
3- quality begins to be seen as a reality
4- Embedding the quality process
5- CEO establishes benchmarks from external
sources and drives the organization
6- Quality process and business objectives get
integrated
 RELEVANCE OF TQM IN WORLD
CLASS MANUFACTURING
 Many small/large companies have adopted total quality
management as a way of life.
 They focus on customers needs, and structure their
organization to deliver to these needs.
 Organization culture gets changed to achieve perfect quality.
 To respond to customer’s needs, many firms have adopted
TQM ,ISO 9000 and JIT manufacturing to ensure reduced
inventory costs and flexible operations.
 WORLD CLASS SUPPLIERS
 Choosing Suppliers – While selecting, flexibility, location,
price, product.
 Service changes , reputation and financial stability re key
considerations.
 Evaluating sources of supply- must be evaluated periodically
on price, speed, responses to changes.
 Supplier audits – periodic audits of suppliers provide a means
of keeping up-to-date, suppliers production / services, quality,
delivery issues etc.
 Supplier Certification – Supplier certification examines the
policies / capabilities. If supplier exceeds the expectations, they
are certified as long term relationship suppliers and sometimes
called ‘world class suppliers’
 WORLD CLASS CUSTOMERS
 World class customers (buyers) are characterized by seven
drivers of partnering with suppliers
 1- Excellent quality
 2- Timeliness
 3- Flexibility
 4- Superior communication
 5- Continuous improvement
 6- Collaborative attitude
 7- Trust
 PRESENT GLOBAL BUSINESS CONDITIONS

 For developing business strategy it is essential to know the

factors affecting today’s global business conditions.
 i- Reality of global competition
 ii- Quality, customer service and coast challenges of the
supplier firm.
 iii- Rapid expansion of advanced production technology.
 iv- Scarcity of production resources
 v – Social- responsibility issues.
 WORLD CLASS COMPANIES IN 21st CENTURY

 Previous Decade (1990-2000)- competitive priorities were

low price, new product introduction speed, Quality, Delivery
speed, product reliability
 Present Decade (2000 onwards)- competitive priorities ‘high
quality at low price’, means of high quality, timely
availability and removal of non- value adding wastes.
Requires finding external partners, who can perform valued
function, with advanced communication and efficient
logistics.
THANK YOU