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Lecture 24 : Principle Streams of Supply Chain — Transcript

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0:01[Music]
0:22[Music]
0:25so hello dear friends welcome back to
0:27nptl online course on Logistics and
0:29Supply Chain management
0:30so we started discussing uh the basic
0:33supply chain structure what are the
0:35different concept under Supply Chain
0:37management and then we divided this
0:39whole supply chain into three different
0:42streams right so first starting with
0:44your suppliers ending to the
0:46manufacturer second within manufacturing
0:49facilities whatever is happening how we
0:51are streamlining all those operations
0:53and third stream is from your
0:55manufacturer end to Consumer end right
0:59so uh in the the last session we
1:01finished our discussion uh on uh this uh
1:04first stream where we discussed about
1:06the procurement management sourcing
1:08management and Supply management so now
1:10today we'll start our discussion on uh
1:13the second stream which is uh uh again
1:16uh within that manufacturing facility
1:19what uh how we are streamlining the
1:21operations so again I'm drawing just for
1:24your uh uh just to recall that I'm
1:27drawing that basic structure of supply
1:29chain where we have raw material
1:31suppliers we have manufacturer here and
1:34in the end we have that distribution
1:37Network through which we are reaching to
1:39customer so today we'll start our
1:41discussion on this second stream where
1:43we will take care of your operations
1:45management how we are you know uh
1:47managing different activities under that
1:50right then we'll talk about material
1:52management how the smooth flow of
1:55material can be ensured then we'll talk
1:57about how we are converting the uh your
2:00raw materials into finished one right so
2:03then we'll move towards the third stream
2:06which is taking care of your the final
2:09distribution from your manufacturing and
2:11to the End customer right so we'll talk
2:13about the distribution management
2:15although we have discussed a lot all I
2:19think almost 18 to 19 sessions uh while
2:23discussing your third stream but still
2:25quickly we'll go through what is there
2:27if we'll talk about the complete supply
2:30chain we'll quickly go uh through that
2:32third stream as well so operation
2:36management so operation management here
2:39we need to understand the basic
2:41difference between operation management
2:43and production management right
2:45sometimes we are using this these terms
2:47interchangeably but operation management
2:50if the difference lies with the scope
2:53right we we'll talk about under
2:55production management we are talking
2:56only about how we are converting the raw
2:58material into finished one so taking
3:00care of all those activities which are
3:02required to finish that good right so
3:05that is under production management
3:06operation management can happen anywhere
3:09right whatever processes activities you
3:11are doing in HR department that is also
3:14part of operation right how you are
3:15handling those operations even if you
3:17are interacting with the customer
3:19customer relationship management it's
3:21all always again you are into operations
3:24right how you are managing the records
3:25packaging again operations distribution
3:28again operational area so when we Define
3:31operation as uh you know uh subp part of
3:35supply chain where the complete picture
3:37we can uh you know view as complete
3:39supply chain and uh as a part of that
3:42complete supply chain we are doing so
3:44many different functional uh so many
3:46different functional units are there who
3:48are doing all those operations right
3:51so it is an area of business management
3:54that is fundamental to running a
3:56successful Enterprise right so SU
3:59uccessful Enterprise how you can ensure
4:02successful when you are ensuring the
4:04smooth supply of the raw material in
4:07most efficient way right whatever
4:10products and services are demanded from
4:12the customer end you are getting that
4:15information from the market accordingly
4:17you are designing your process designing
4:20your product and then accordingly you
4:22are sourcing the partners right so this
4:25is complete operation management right
4:27so how efficiently and effectively
4:30that means with minimum cost and highest
4:32quality how you can deliver that product
4:35so you need to take care of that so you
4:37can see if a company is managing all
4:39those different it's not that only one
4:41part only manufacturing you need to
4:43ensure right even if you are doing
4:45packaging that is also equally important
4:48because it is the first phase if you are
4:50doing order fulfillment that is also
4:52equally important if you are concerned
4:54about the transportation management
4:56finding the optimal route best route
4:59with Min imum cost optimally utilizing
5:02the capacity of the container optimally
5:04utilizing the capacity of the warehouse
5:07so all comes under that so you can see
5:09if you are planned in that way how it
5:11can make difference so if you'll see
5:14what are the responsibilities of uh
5:16business operation management first
5:18thing is you need to design the
5:20process right how you will ensure the
5:23smooth Supply process not only your
5:26manufacturing process manufacturing
5:28obviously you need to design all the
5:31stages required to convert that raw
5:33material maybe if product is very simple
5:36kind of supply chain or manufacturing so
5:38maybe five or 10 stages are there till
5:40the packaging If the product is a kind
5:42of maybe you are manufacturing
5:44automobile you are manufacturing some
5:46home appliances where maybe these stages
5:49can vary from 100 stages to maybe th000
5:52stages even up to the final finished
5:54product with the packaging right so how
5:56you are designing the complete process
5:58right so that is one again if this is
6:01one manufacturing Department if I'm
6:03talking about let's talk about the
6:05process Design Within quality there
6:07should be some process how they will
6:09ensure the incoming quality uh raw
6:12material right so uh that also you will
6:15come up with the quality standards you
6:17will develop all the check sheets you
6:19will prepare those check sheets record
6:21those data and then you'll say finally
6:23lot is accepted or rejected how you will
6:26ensure the quality during the process so
6:29again you will Define your different
6:31parameters okay at the different stages
6:33critical stages you will Define and then
6:35that is also process design right so
6:37under that different functional units
6:40how you are designing the process within
6:42HR how you are designing the process how
6:45one if any new entry is coming how is
6:48supposed to you know go through through
6:50all those stages of maybe joining to the
6:52final maybe induction placement
6:55introduction and all those things that
6:57is also complete process the process
7:00flow chart of that particular functional
7:02unit right then we need to balance the
7:05resources revenues and cost now what are
7:09the customer expectations and demands
7:12that will
7:13obviously you know help you to gather
7:17what are the resources you need to
7:19gather those resources and then when you
7:21are acquiring those resources obviously
7:23there will be cost and then you will
7:25sell your product finally into the
7:27customer market so then you will be
7:29generating the revenues so you need to
7:31balance all these three points right and
7:33then continuously you need to ensure
7:36that you are evolving with your product
7:38and services design right like Phillips
7:41is always they are coming with the
7:42advertisement like Innovation and you
7:45right so that means whatever product
7:47they are selling today tomorrow they
7:48will come with better promises right so
7:51they are somehow they are changing
7:52something with the product design
7:54product features process design
7:56longivity they are ensuring the smooth
7:59you know functioning of the product they
8:01are ensuring So This Is How They are
8:03renovating every day right then you need
8:06to go with the overall operational
8:09strategy so that also if you are looking
8:11for expansion you are coming up with new
8:13model you need to set up new production
8:16line that is also a responsibility of
8:18the manager right if you are looking for
8:20maybe acquiring some other functional
8:22unit like we talked about maybe we are
8:24into assembly part we are acquiring some
8:27molding plant of some other unit right
8:30so then also you need to align the
8:32operation strategy between two
8:33organizations right then streamlining
8:36and optimizing the production obviously
8:39that is part of operation management
8:42production under production also
8:43operation management how we are
8:44converting the raw material into the
8:46finished one with minimum cost right
8:49minimum cost means improved productivity
8:51and efficiency and we should reduce the
8:53waste also when we are manufacturing the
8:55processes so under this operation
8:58management four different key concept we
9:01can uh again you know arrange these
9:04operational area into four different
9:06functional unit processes you need to
9:08Define all the processes like I defined
9:11production is one process ensuring
9:13quality is another
9:15process storing your raw material is
9:19another process packaging is another
9:22process designing is another process
9:26ensuring HRM is another process right
9:29these all are different processes within
9:31that organization and under each process
9:34you have set of activities you are doing
9:37like to ensure quality to ensure
9:39production to ensure maintenance uh
9:42timely maintenance to ensure you know
9:44the right skills human skills required
9:47then capacity how you are developing the
9:50capacity like we we we are talking about
9:53Let's uh some organization is focusing
9:56on maybe growth strategy right grow
9:58growth operation strategy so that means
10:00they are looking towards producing more
10:03obviously growth strategy they are
10:05looking in terms of some new markets
10:06they are looking in terms of some new
10:08products new offerings whatever it is
10:10but in the end they are going to enhance
10:13the capacity whatever they are producing
10:15right now maybe they want to enhance the
10:17capacity how they can enhance the
10:19capacity so that also you how you are
10:22designing expansion strategies whether
10:24you kept in mind whether there is enough
10:26space to enhance the existing capacity
10:28or sometimes whatever capacity you have
10:31you can go for double shifts you can go
10:33for triple shifts you can me this is how
10:35you are managing up to some extent but
10:37if still the demand is roolling so how
10:39you will you know uh cope up with the
10:42demand it's not that you will not you
10:44will say to the customer that now after
10:46this we are not going to deliver because
10:48expansion everyone wants expansion if
10:51the growth is coming itself from the
10:52market why don't we go for that so that
10:55capacity utilization whatever the space
10:57is how efficient ly we are utilizing the
11:00space right we have talked about
11:02warehousing utilization right we have
11:04talked about the truck carrying our
11:06inventry how we can utilize the full
11:09container capacity and then we can
11:11reduce the cost right so that is another
11:15functional unit of operation management
11:17and through this we need to ensure the
11:20smooth flow of all those activities see
11:23these activities are linked if quality
11:25control is not ensuring the raw material
11:28quality under iqc incoming quality
11:31control you cannot ensure the
11:33production right if proper HRM is not
11:37coming up with the you know the hiring
11:39process placement process who will
11:41ensure the quality who will be in the
11:43production Department who will take care
11:45of the maintenance department so these
11:47all activities you need to ensure the
11:49smooth flow of these activities right
11:51within that
11:52organization so process of operation
11:55management planning what needs to be
11:58done and what it needs to be done that
12:00we need to ensure how we'll Design This
12:03see whatever these planning phases or we
12:07are talking about the scheduling even
12:09the execution these uh all these kind of
12:13informations are coming from where from
12:15the market end from the customer right
12:17so first thing is how we are tapping our
12:19customer how we are tapping the market
12:22potential how we are recording the you
12:24know their requirements what our
12:26competitors are doing what what other
12:28Industries are doing in the same area
12:30right so that information is being
12:33supplied being processed within your R&D
12:35unit within your uh in-house
12:38manufacturing unit and then you are
12:40developing a new product new offerings
12:42or maybe you are renovating again the
12:45same product in a better way right uh so
12:48after renovating now again maybe you are
12:52changing some of the components of the
12:54raw material you are doing using right
12:56or maybe you are using different design
12:59process you need to change so that means
13:01that information need to share with
13:03everyone when you are going to do that
13:05so when you are planning to change your
13:08raw material suppliers obviously they
13:10also need to change I'm not saying that
13:12100% components will be replaced but
13:14maybe some components will be replaced
13:17by others right if you are seeking that
13:19maybe uh uh if ACV are manufacturing
13:23without inverters or with inverter AC's
13:25are coming so when invert with inverter
13:27AC's are coming that techn techology you
13:29need to ensure right so then that you
13:32need to collaborate with the those raw
13:34material suppliers who are providing
13:35those components right so then
13:37scheduling when you need to perform the
13:40each task that is another uh important
13:42function of operation management and
13:45when you are taking these decision on
13:46time obviously then only you can ensure
13:49the effective and efficient utilization
13:52of the resources right execution will
13:55consume your resources those resources
13:58may be in terms of we talked about
14:01always basic resources 5 m
14:04man
14:07money
14:09machine
14:12material and
14:15methods these are basic resources we
14:17usually talk about but yes technology
14:20other skills we are using Manpower we
14:22are using right so there are so many
14:24other inputs but these are whenever we
14:26are talking about execution that means
14:28we are consuming now resources so this
14:30is a kind of process which ensures the
14:34you know execution and carries the
14:36maximum cost right because actually we
14:38are doing that operation so let's talk
14:40about different types of operations we
14:41are doing first is manufacturing
14:43everyone is aware about what we are
14:45doing in manufacturing we are designing
14:47the prototypes then we are creating then
14:50we are commercializing after
14:51commercializing we need to deliver those
14:53goods and products Services whatever we
14:55have we have promised in the market we
14:58need to do that right so for ensuring
15:01manufacturing you need to ensure all the
15:03raw all the five Ms Right minimum those
15:06five M other than that capacity floor
15:09production floor all those things are
15:11also required right your quality tools
15:13or all description sheets documentation
15:16everything is required as resource right
15:19and those resources you will be
15:20consuming while converting your uh your
15:23raw materials into finished one services
15:26this is we talked about Services versus
15:28Manufacturing right here only basic
15:30difference is that your customer is part
15:33of your uh delivery process right so
15:36that means that in that way Services
15:38industry is very heterogeneous kind of
15:40industry where every service delivered
15:43is unique in its own way right because
15:45continuously customer intervention is
15:47there so how we can ensure that smooth
15:50and seamless experience retail itself is
15:52a kind of services industry product is
15:55coming from PNG customer is coming from
15:57somewhere else what as a retail C uh
16:00retail unit I'm doing as a retailer I'm
16:03arranging the PNG inventory in my shelf
16:06right I'm then managing the inventory
16:08when we need to replenish the inventory
16:10I'm placing the order with PNG or any
16:12intermediat if wholesaler distributor is
16:14involved in that way right so this is
16:16kind of services I'm providing that I
16:18have located my retail store near to the
16:21customer where customer can come and
16:24enjoy the products and my services of
16:26retail services right talking about
16:30Hospitality so how you are in uh
16:34directly interacting firstly with the
16:35first desk housekeeping how they are
16:38taking care of the cleanliness
16:39standardization and then sustainability
16:41all those 5S housekeeping approach we
16:43talked about
16:46series SK sits and SOS right so those 5S
16:51approach of Japanese term how we can
16:52sort how we can set in order so those
16:55things sustainable shining right
16:57cleanliness so we talked about under
16:59Hospitality Logistics again kind of
17:01services because you are not carrying
17:03any physically any product with you so
17:05if I'm shipping your product from point
17:07A to point B I'm not doing any value
17:09adding activity just I I am dropping the
17:12product at Point V so complete supply
17:14chain how we take care of the operation
17:17different functional units under that
17:19complete supply chain raw material
17:20acquisition is one operations placing
17:23order with the uh placing order and uh
17:26execution of those orders with the
17:28vendors is another uh functional unit
17:30right Inventory management is another
17:32functional unit storage house is another
17:34functional unit your manufacturing floor
17:37production floor is another functional
17:39unit distribution is another functional
17:40unit so how we can take care of the
17:42complete supply chain so strategy of
17:45operation management obviously first
17:46thing is how we can reduce the cost see
17:49these if I'll talk about first three
17:51they are very very
17:53interrelated quality if I'm saying that
17:56if you are producing less rejection that
17:59means you are very efficient with the
18:01process your process capability is very
18:04very high that means you are not
18:05producing any rejection and whenever you
18:09are processing the final product or
18:11whatever components you are integrating
18:13in that final product that also ensures
18:16the quality because your processed
18:18design is of such kind that that is
18:20ensuring the quality itself when you are
18:23ensuring the less rejection obviously
18:26productivity will improve earlier what
18:29was what we were doing let's say uh the
18:32F we'll talk about fall of rejection
18:34rate was 5% that means every 100 pieces
18:37we were producing five we were rejecting
18:40because of the faulty operation
18:43processes handling whatever we were
18:45doing during that manufacturing so now
18:47if I can reduce this to 2% so you see I
18:50simply added three more product into
18:53that now I delivering instead of 95 now
18:56I'm delivering 97 products quality
18:58products in the market and how I can
19:01ensure that whatever 100 products are
19:03manufacturing all are quality products
19:05so in that way so see productivity will
19:08be
19:09improved quality obviously and then
19:12we'll reduce the cost also this is one
19:14way how we can reduce the process
19:16rejection during manufacturing and will
19:18because if we are damaging the product
19:20that is also cost to our company and
19:22will not generate any Revenue because
19:24already we damage those process uh those
19:26components during the process right so
19:29then optimally utilizing the data see to
19:33ensure the smooth operation you need to
19:36First collect the data collect the data
19:39from the market survey Trends whatever
19:41you are doing whatever way your sales
19:43team is generating the data and then you
19:45need to figure out for that particular
19:47Market this is going to be the demand as
19:50per that demand function then you will
19:52start your operation what operation you
19:55will acquire the raw material you will
19:57convert the raw material into finished
19:58and then finally move to the market to
20:00meet that Demand right setting goals and
20:03forecasting like I told you
20:06forecasting all techniques whatever we
20:08will use we'll use that data right and
20:11then we'll set the goals accordingly
20:13enhance collaboration this is important
20:15operation management
20:17see uh if we are saying that we want to
20:20be very productive right efficiency is
20:23our main parameter so reducing cost is
20:26the primary concern if we are talking
20:28about the
20:29efficiency and then if you are putting
20:31extra packaging that means you are
20:36behaving in a wrong direction you are
20:38operating in a wrong direction because
20:40our manufacturing is uh the USP whatever
20:44we are carrying right now is the minimum
20:46cost how we can ensure the minimum
20:48packaging cost by reducing the extra
20:51packaging or maybe by but not at the
20:53cost of you know destroying that product
20:55right then Human Resource Management
20:57already I talked about how we can ensure
20:59the smooth flow of this resource which
21:02is very very important long-term asset
21:04if you are maintaining those Resources
21:06with you so this will improve the
21:09overall supply chain and internal
21:11collaboration as well because this is
21:14total integrated system one person
21:16cannot be efficient the other person is
21:18saying we are not competing on cost and
21:21then if BMW they are competing just High
21:25status product the class is totally
21:27different so then if someone is coming
21:29with the idea of maybe some engine which
21:32will you know uh be more efficient in
21:35fuel efficient in that way but
21:37compromising somewhere with the pickup
21:39or somewhere with the top speed right so
21:42that means the basic purpose of BMW or
21:44Mercedes or those kind of F1 racing cars
21:48is defeated right so we need to uh
21:51integrate collaborate with every partner
21:53and this Baseline Common Thread should
21:55be there on what particular operation
21:58strategy we are working right so second
22:00part under this is material
22:02management so material management means
22:05whatever material we are using in the
22:07manufacturing unit we need to ensure the
22:10smooth Supply and while doing that we
22:13need to ensure that Optimum stock should
22:16be ensured so that means see this is I
22:20we discussed about once I'm taking the
22:23inventory let's say this is the total
22:24inventory right now i1 is the point
22:27right so when I'll start producing the
22:30finished goods I will start depleting
22:32the inventory and there must be some
22:34Safety stock level this is Safety stock
22:37level that when I'm reaching at this
22:40point automatically my purchase store
22:42Department should give the indication
22:44who is maintaining the inventory to the
22:46purchase department so that purchase
22:48Department can place the purchase order
22:51so at this point they will again
22:53replenish the inventory it will reach at
22:55this point so this will come again down
22:58and again will be replenished so this is
23:00how we'll maintain the Safety stock even
23:02sometimes if it comes down maybe while
23:05receiving the product we need to ensure
23:06that it never touches the zero point
23:08because then the whole production line
23:11will sit ideally so while ensuring this
23:14smooth supply of the raw material one
23:17thing is time we need to ensure and cost
23:20also and quality as well right so the
23:24fight here is how much quantity we
23:27should buy now let's say I don't want to
23:30keep much inventory because that is cost
23:32to me so I'm feeding only 100 units to
23:34my raw material supplier you supply me
23:36100 units in one lot but the other
23:38person like Walmart what he is doing
23:41Walmart is supplying instead of 100 they
23:44are asking for 10,000 units so the
23:48purpose here is maybe Walmart is
23:50maintaining the inventory but the cost
23:54the negotiation power Walmart is having
23:56over the other players because they are
23:58Fe leing large order to their suppliers
24:01so they can negotiate on that they can
24:03negotiate not only on cost but quality
24:06also and the timing also when they want
24:08the delivery right so that much Market
24:11also you need to ensure when you want to
24:13be you know in that cost efficient way
24:15when you are enjoying the economies of
24:17scale right so that is the main function
24:19of material management to ensure the
24:22smooth supply of the material with the
24:23minimum cost quality time constant is
24:26there always so that your production
24:28line should not stop working so main
24:31objective already we talked about lower
24:33how we can lower the acquisition price
24:36of inventory like Walmart is negotiating
24:38with the players high inventory turnover
24:41means average sale what is average sale
24:44and average inventory you are
24:45maintaining so if it is high it is
24:47better that means sales you your holding
24:50cost is very less because frequently you
24:52are ensuring the consumption of that
24:55inventory into uh you are converting
24:57into sales right continuous supply of
25:00material consistence quality and overall
25:04whatever cost direct indirect cost is uh
25:07there when you are you know acquiring
25:10that material and favorable supplier
25:12relationships when you are because
25:14Walmart in that way is managing the good
25:17relationship with the suppliers because
25:19they are feeding large order in that way
25:21suppliers are also happy to you know
25:24lower down the cost because they can
25:26also increase their margin because
25:28number of products they are producing so
25:30these are some of the points you can go
25:32quickly right so material management how
25:35you can ensure the make or buy decisions
25:37right product Improvement on that way
25:39how you can ensure forecast is another
25:41very important Technique we are using to
25:44ensure the smooth supply of the material
25:46right so material management components
25:49MRP you might have heard we have some
25:51software like Erp which are you know
25:53helping for uh ensuring the quantity and
25:56timing of the right raw material under
25:59material requirement planning right and
26:01purchase planning so ordering cost and
26:04holding cost are two major components we
26:07need to take care when we are talking
26:08about the purchase right so economic
26:10order quantity we talk about when we
26:12should can uh place the order and how
26:14much quantity should be ordered so
26:17usually the graph is if this is the
26:19quantity you are purchasing this is the
26:21cost on the buy
26:23AIS so obviously holding cost will
26:26increase like this right if if you are
26:28holding five units that much cost will
26:30be there if you are holding 50 units
26:32that much cost will be there but
26:34ordering cost will reduce like this
26:36because if you are placing five units
26:38order and then Walmart is placing 500
26:42units so per unit cost will reduced so
26:44somewhere your economic order quantity
26:46will be this total cost where you are
26:49getting the minimum price right this is
26:51economic order
26:53quantity this is how we are calculating
26:55the economic order quantity where your
26:58holding cost and ordering cost are at
27:00equilibrium right so inventory control
27:03again we need to me uh ensure through
27:06material management how we can minimize
27:08the cost and three types of inventory we
27:11are uh keeping with us right material
27:14supply management timely delivery of the
27:17quality material that is the main Moto
27:20of material management department and
27:22quality control so major function here
27:25is incoming quality control the
27:28Department which is ensuring the raw
27:30material quality incoming quality
27:32control has to ensure that whatever
27:34material as raw material is coming to
27:36the department should be defect free so
27:39already we discussed about significance
27:41of material management cost reduction in
27:43that way how we can minimize the waste
27:46and we are not keeping extra inventory
27:48we are still ensuring the smooth Supply
27:50improved quality already I related cost
27:53quality and productivity right so then
27:56timely delivery Timely delivery when you
27:59are executing your plans and those plans
28:01are based on the forecasting based on
28:04the in information based the decisions
28:06so obviously then timely delivery can be
28:08ensured because you are timely uh
28:12informing your raw material suppliers
28:13when it is required how much quantity is
28:15required right so and then the variety
28:18of the raw material required inventory
28:20optimization how you can minimize you
28:22can Implement just in time for material
28:24management is this the basic approach we
28:26are doing efficient Supply Chain by
28:30reducing the waste reducing the cost of
28:33producing the things storing the things
28:35minimizing the inventory your supply
28:37chain will be efficient so material
28:40management best practices you can see so
28:43develop a comprehensive material
28:44management plan so that it should be
28:46shared throughout the supply chain from
28:48the distribution Network to the
28:50manufacturing n uh house and then to the
28:53raw material supplier so that all can
28:55share that one plan and then implement
28:58Inventory management best practices
29:00maintain strong relationship that will
29:03only happen when you are doing the
29:04payments on time and whatever you are
29:07you know your you are grooming your
29:09product or processes you need to help
29:11your vendor also to groom their you know
29:14product basket and ensure that uh they
29:17are supplying those minimum ORD so that
29:19they can also ensure the minimum profits
29:21for what they are doing right so
29:24continuously Monitor and analyze data so
29:27that matter we developed you need to
29:29track that Matrix and then you need to
29:31record the data how we can perform on
29:33that data and then Erp kind of software
29:36enterprise resource planning we can use
29:38those kind of technology to you know uh
29:42plan our materials so what are the
29:44challenges for material management
29:46because we are having complex supply
29:47chain it's not that easy so if we are
29:49talking about sugar industry or steel
29:51industry directly getting the ore from
29:53the core and then processing it melting
29:56it and converting into Steel Road where
29:58very simple supply chain but then then
30:01distribution network is also very simple
30:03right so all the retailers you are
30:05feeding those retailer and they are
30:06supplying to the customers but let's
30:08talk about uh automobile industry car
30:11where different products you are using
30:14you are using glass you are using rubber
30:17you are using tires you are using
30:18engines you are using so many different
30:20metal components right so uh different
30:24leather you are using so many different
30:26you are using wood Al you are using so
30:29many different components more than
30:31thousand vendors are associated with you
30:33so in that way keeping the record
30:36keeping the information data management
30:38also very big challenge for those kind
30:40of you know managing all those vendors
30:42if you are using more than 500
30:44components th000 components if you are
30:46keeping minimum three vendor for each
30:48component so directly 3,000 vendors you
30:50are managing right so cost control when
30:55you need to negotiate with the suppliers
30:57that depends on on how much you are
30:58purchasing you can you know negotiate
31:00quality control already we discussed
31:03that you need to provide the
31:04specification to your raw material
31:06suppliers so that they can supply you as
31:09per that so how they can improve the
31:12profitability cost they need to reduce
31:15Logistics cost that operation management
31:17need to reduce the logistic cost
31:19inventory carrying cost already we
31:21discussed that graph how if inventory is
31:24more holding cost is more waste cost if
31:27you are producing rejection if rejection
31:29is coming from the distribution and
31:32retail chain retail shop is sending back
31:34the material because it is defected
31:37during damaged during the transportation
31:38that also it is cost manufacturing cost
31:41of converting raw material into finished
31:43one how you can minimize that how you
31:45can be more productive right so and then
31:48reduction of working capital working
31:51capital required how you can reduce that
31:53because if you are keeping 10,000
31:55inventory 10,000 CR inventory always in
31:58your stock you can see that is something
32:00lying idle with you you are not
32:02generating any Revenue out of that
32:04because as long as you are depleting
32:05that you are refilling that so that how
32:07you can minimize that so that the
32:09working capital required can be
32:11minimized last is production Management
32:13in the second stream which talks about
32:16how quickly with quality you can produce
32:19the finished goods and services right
32:21that is produ now we are core talking
32:23about the production floor which is a
32:25responsible for converting transforming
32:27raw material into finished one by taking
32:31all those five or six M right Market
32:35here is added because it is providing
32:37you that information when and how much
32:40you need to produce and what quality
32:42what features you need to add so these
32:44are couple of the definition you can go
32:45for right what are the different uh
32:48production units so uh I'll just go
32:52through in detail I'll give you another
32:54diagram how we can uh read these types
32:56of manufacturing ing processes
32:59so uh just uh we can understand when we
33:02are talking about the manufacturing
33:06processes we can divide into three types
33:09continuous manufacturing
33:11process semicontinuous manufacturing
33:15process or intermittent
33:19process it will help you to you know
33:22understand in a better way like the
33:23diagram I have given in that uh uh PP so
33:27this will help you to understand and
33:29then in project management continuous is
33:31a kind of like steel industry continuous
33:33we are producing right sugar industry
33:36salt industry continuously we are sure
33:38about the demand we are sure about the
33:40supply so continuously day and night we
33:42are producing there is no variation
33:45right when we are talking about
33:46semicontinuous Supply semicontinuous
33:48means in between we are doing the
33:50changeovers so change over because we
33:53are coming up not with the standard
33:54product but here what is happening we
33:56are coming up with with the so many
33:58different models if you talk about
34:00automobile industry maruti Suzuki is
34:03coming up with you know all the vehicles
34:06with the petrol version maybe 10
34:09different variants are there diesel
34:11version 10 different variants are so
34:13maybe on three production line you are
34:14manufacturing these 20 models not only
34:1720 models then different colors so if
34:19you are providing five colors so just
34:21imagine 100 sorry uh yeah 20 so 100
34:27different models will be there so on
34:29three production lines you will run 100
34:31different models so that means you need
34:33to change those model in between so in
34:36between you are stopping intermittent
34:38process is either you talk about your
34:41job shop
34:42production or batch production in
34:46pharmaceutical industry you have seen uh
34:48we produce in batches where the
34:51ingredients changes but the Machinery we
34:54are using to convert those raw material
34:56into finished Remains the Same so steps
34:59also Remains the Same right so tablet if
35:02you are producing tablets so only thing
35:04is you are changing the ingredients and
35:06then through the same machine through
35:08the same recipe you are doing that job
35:10shop maybe restaurant is the best
35:12example for Job Shop where maybe
35:15different orders different recipes
35:17different equipment sometime oven is
35:19used sometime stove is used sometime
35:21some other things you are using right so
35:25that means that is Job Shop and project
35:27is a kind of big project where you know
35:31uh it's only one product we are not
35:32producing in quantity like if you are
35:35talking about road construction if you
35:37are talking about real estate industry
35:39if you are talking about ship building
35:41so those are kind of examples where we
35:44talk about you know project management
35:46so these are you can understand this
35:48manufacturing processes depending upon
35:50how much quantity we are producing so
35:53that different manufacturing processes
35:54we can Define right so OB objectives of
35:57production management ensure right
35:59quantity of goods and services to meet
36:01the customer demand maintain the right
36:04quality standard throughout the
36:06production process you need to ensure
36:08and delivery of the product services at
36:10the right time as per the customer
36:12expectation and deadlines and you need
36:14to ensure the overall profitability as
36:17well right so as production manager what
36:22are the function responsibility product
36:24and resource selection first you will
36:26select the product you will design the
36:28product as for that you will select the
36:29resources and then production planning
36:31PPC production planning and control
36:34department is there which will you know
36:36help you to identify that model one will
36:39be this much units will manufacture
36:42today model two then we Shi to model two
36:44these many units we will manufacture so
36:46PPC is helping all the production
36:48schedules when particular model should
36:50be made how much it should be made so
36:52depending upon that data it is
36:54performing and then machine maintenance
36:56and replacement how quickly you are
36:58responding to breakdowns if something is
37:00happening so that is important because
37:03that will shut down your uh production
37:05line temporarily and will you know lower
37:08the productivity so these are some of
37:10the strategy for Effective production
37:12management continuous Improvement you
37:14need to ensure it's not that one level
37:16if you have reached at this level go for
37:18the next level if you reached at this
37:20level then go for the next level this is
37:22how continuous Improvement and just in
37:24time is one example where we can Ensure
37:27the inventory smooth inventory whenever
37:29it is required without maintaining
37:32inventory within your house right total
37:35productive maintenance already talked
37:36about and Supply Chain management is
37:38important you know for Effective
37:41production management to ensure the uh
37:44smooth Supply this is a kind of example
37:46you can see if you are a furniture
37:48manufacturer so type of furniture you
37:51have producing and what are the sources
37:53required you are checking those with the
37:55market demand and then you are meeting
37:57those you know whatever standards are
38:00what type of good uh customer demands
38:03and then as per that quality durability
38:05also you can go for right so now we'll
38:08quickly go through the third scheme
38:10because already we discussed about
38:11logistics and distribution management
38:14right so we talked about when we talked
38:16about logistics management
38:18Transportation as one part warehousing
38:21second Inventory management fulfillment
38:23and distribution right fourth part so
38:25this is complete the basic
38:28objective of logistics management is to
38:30ensure the right product right time
38:32right quantity right quality right
38:34customer right at right location so that
38:38is the basic purpose of logistics
38:40management and benefits of if you are
38:43managing your Logistics in a better way
38:45so you will be high profitability will
38:48be there productivity efficiency will be
38:50there enhanced customer experience they
38:53will be more satisfied and if you are
38:55doing the inventory planning
38:58Bing cost can be reduced Transportation
39:00Planning Transportation cost can be
39:02reduced by picking the optimal routes
39:04and likewise you can be adding more into
39:08your uh profits right component of this
39:11warehouse management transportation
39:13management distribution management we
39:14have discussed in the initial sessions
39:16in detail what are softwares we are
39:18using to ensure these things right so uh
39:21warehouse management picking packing and
39:24shipping again how you are managing the
39:26inventory barcode scanning radio
39:28frequency identification automation
39:30warehouses we have automated equipments
39:33we are there uh those robots are
39:35managing the inventory during
39:37transportation management software which
39:39will help you to identify the you know
39:41the uh best route depending upon the
39:43road condition the distance you are
39:45traveling so that it will help you to
39:47minimize the overall cost so last
39:49function is your distribution management
39:52and distribution management how you are
39:54recording the order how you are
39:55Distributing that order right so so
39:57between that you need to manage the data
39:59right that is being recorded from the
40:02customer in terms of order then how you
40:04are ensuring the inventory then sale
40:07analysis also depend because log this
40:09distribution team is directly
40:11interacting with the customer market so
40:13they will be their data will be helpful
40:15to you know analyze the sales managing
40:18the stocks how quickly you can fulfill
40:20the order depending upon that only if
40:21you have predicted through your
40:23distribution Network how the demand
40:25going to behave in the next month you
40:27can again go for that right so then uh
40:32price circulation and
40:34control uh through your proper
40:37minimizing the inventory and minimizing
40:39the distribution cost centralized
40:42centralization of data this is important
40:44because this data should be centralized
40:47but should be shared throughout only
40:49that integration and collaboration
40:50through all the players can be ensured
40:53and the minimum time with minimum time
40:55distribution can happen right so these
40:58are some of the advantages of
40:59distribution management because already
41:01we talked about in detail right
41:03distribution function so challenges we
41:05don't have that much Manpower and uh
41:08skilled Manpower required these days to
41:11handle the updated uh you know automated
41:14uh warehouses inadequate capital in that
41:16way we sometimes we don't want to invest
41:20into the new technology even if it is
41:22available and for better version it is
41:24available even then uh we are you know
41:27hent to adopt that technology so these
41:30are some of the challenges right so now
41:32till now we have seen that these this
41:35supply chain can be divided into three
41:37different streams and how the first
41:39stream if you are ensuring the smooth
41:41functioning the second stream is
41:43depending upon the first stream unless
41:45they are not ensuring the supply of the
41:47raw material that cannot be processed in
41:50the second stream second stream will
41:52process the raw material on time with
41:54quality with less you know cost most
41:57efficient and effective way then only
41:59the customer experience can be enhanced
42:02to the distribution Network so these are
42:05some of the
42:06references you can go through so that's
42:09all thank you very much

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