Logistics and supply chain management: description, functions and features. Supply chain management systems Organization of control in the supply chain management system

Topic 2. Supply chain modeling

Supply chain management systems (SCM) are designed to automate and manage all stages of an enterprise’s supply and to control the entire flow of goods within an enterprise. The SCM system allows you to significantly better satisfy the demand for the company's products and significantly reduce logistics and purchasing costs. SCM covers the entire cycle of procurement of raw materials, production and distribution of goods. Researchers generally identify six main areas on which supply chain management focuses: production, supply, location, inventory, transportation, and information.

The SCM system can be divided into two subsystems:

SCP - (English Supply Chain Planning) - supply chain planning. SCP is based on systems for advanced planning and scheduling. SCP also includes systems for collaborative forecast development. In addition to solving operational management problems, SCP systems allow for strategic planning of the supply chain structure: developing supply network plans, simulating various situations, assessing the level of operations, comparing planned and current indicators.

SCE - (Supply Chain Execution) - execution of supply chains in real time.

Supply Chain Management (SCM)

Supply Chain Management (SCM) is the process of planning, executing and controlling from the point of view of reducing the costs of the flow of raw materials, materials, work in progress, finished goods, services and related information from the point of origin of the application to the point of consumption (including import, export , internal and external movements), i.e. until customer requirements are fully satisfied. The essence of the concept of “supply chain management” is the consideration of logistics operations throughout the entire life cycle of products, i.e. the process of development, production, sale of finished products and their after-sales service.

Supply chain management is a business strategy that effectively manages material, financial and information flows to ensure their synchronization across distributed organizational structures.

Supply chain network structure. From an organizational point of view, The supply chain for a product consists of from several layers of suppliers who provide the material resources needed to perform basic operations from the original sources, as well as from several levels of customers who move materials to end users.

In practice, of course, there are many variations on this basic model. In some supply chains there are few levels of customers and suppliers, in others there are many; in some chains there are very simple material flows, in others the networks are complex and branched. Of course, different types of products require different supply chain structures, and, say, sand for construction requires a completely different supply chain than DVD players. Here, the important factors are the cost of the product, its size and weight characteristics, the preservation of its properties, availability, profitability, etc. Let's go back to the previous example. Sand is low cost, bulky and easily available. Therefore, it is best to have a short supply chain so that suppliers are located as close to the end consumer as possible. DVD players are compact, high-value products manufactured in specialized facilities and therefore have a longer supply chain.

Different strategies also lead to different types of supply chains, and therefore a company that favors fast delivery creates a chain that is different from a company that emphasizes low costs. Other factors that influence the structure of supply chains include the types of consumer demand, the economic situation in the country, the availability of logistics services, culture, the pace of innovation, the level of competition, market and financial conditions.

Organizations should consider all such factors and design their supply chain structures accordingly. In other words, they must decide what types of intermediaries (who will be the suppliers and customers in the chain) they will deal with, what the number of these intermediaries should be, where the warehouses should be located, what work will be performed in the logistics centers, which customers will be served from each center, modes of transport, delivery speed, etc. It is likely that at this stage the choice of the length and width of the supply chain becomes key.

The length of a supply chain is determined by the number of levels or intermediaries through which materials pass from the beginning of their production/extraction to their destination. We can approach the supply chain in terms of suppliers, wholesalers and retailers. In practice, some chains are shorter because manufacturers, for example, sell their products directly to end consumers. On the other hand, supply chains are often much longer than in the diagram because they involve many intermediaries; There may also be several stages of production, each of which is connected to the others through its own intermediaries. Likewise, exporters may use multiple logistics centers, transport companies, agents, freight forwarders, and brokers to move products between different parts of their overall journey. The width of a supply chain is the number of parallel routes along which products can move. We can think of this in terms of the number of routes reaching end consumers. Let's say Cadbury's has a wide supply chain, which means you can buy their chocolate from many retail outlets; Thornton has a narrower chain, as most of its chocolate is sold through its own stores; Pigalle et Fils has a very narrow chain - they only sell their chocolate in two stores located in Belgium. The best choice of chain length and width depends on many factors, of which three are most important: the degree of control over logistics that will satisfy the organization, the quality of services and costs. Thus, a manufacturer that delivers its products directly to consumers has a short and narrow supply chain. This provides him with control over logistics, but with this option it is often difficult to achieve both high quality customer service and low costs. Lengthening and expanding the chain leads to improved quality of service, but is accompanied by increased costs and decreased control on the part of the manufacturer. Choosing a long, narrow supply chain may introduce middlemen and reduce costs, but the manufacturer loses some control and does not improve customer service. While simultaneously lengthening and expanding supply chains allows for better service, the manufacturer loses even more control.

Several types of analysis can help managers when designing supply chains.. It is quite obvious that one of the first is the assessment of the total costs of delivering the product to the end user and the time required to complete the order. These types of analyzes can also take into account less obvious factors such as supply chain efficiency or customer satisfaction. Unfortunately, there is no single “best” solution, and ultimately you have to choose a compromise option that best suits the given goals of the logistics strategy. However, there is currently a clear trend - the desire for shorter supply chains. Organizations of all types are now increasingly realizing that they can reduce costs and improve customer service by moving materials more quickly through supply chains, which obviously can be done in shorter chains. This typically means removing a number of intermediaries and performing logistics functions in fewer parts of the overall infrastructure. Manufacturers are therefore increasingly transacting directly with their end consumers, eliminating much of the traditional layer of intermediary. In the European Union, the free movement of products means that companies can replace national warehouses with single European logistics centers. A similar example can be given in the USA, where efficient transport allows companies to carry out all types of work from one large center.

Delays and situational actions.

Postponement. An excellent example of deferral is the paint mixing service provided by one retail store. Instead of predicting which colors consumers will want to buy, the retailer waits until it is time for a specific purchase and mixes the raw ingredients into the colors the consumer wants. Other examples are painting the panels on built-in kitchen equipment in the color required by a particular customer, allowing the same piece of kitchen equipment to ultimately be available in any of the many possible colors; centralization of slow-selling products in one warehouse and final assembly and bringing products to marketable condition only after receiving an order for it.

Situational actions- the opposite approach to deferment. This means that a certain channel structure, instead of passing on the risk further, takes it upon itself. Situational actions can reduce marketing costs by:

I) savings on large-scale production;

2) receiving large orders, which reduces the costs of order fulfillment and transportation;

3) reducing the occurrence of product shortages and associated costs;

4) reducing the level of uncertainty. To reduce the need for inventories needed to support situational actions, managers in many companies resort to a competitive strategy based on reducing lead times (time-based competition). By using this type of rivalry, managers can significantly reduce the time it takes a company to produce products while reducing inventory and increasing inventory turnover, lowering the cost of ownership, and increasing customer satisfaction.

What is this connected with? Who is a logistician and what functions does he perform? This will be discussed further.

Who is a logistician?

Delivering the required products from one point to another according to the designated deadlines is a very important task. It is even more important to keep the goods intact and undamaged. It is such a specialist as a logistician who manages supply chains and controls the effective transportation and delivery of the required products. It is immediately worth noting that any profession in the field of logistics is considered very complex and difficult. So, in order to become a quality specialist in the field of supply management, you need to have a very developed thinking, know foreign languages, and have excellent organizational skills. Keeping track of a large number of different types of goods is not so easy, but doing it efficiently is even more so.

Where should a person study to be able to work as a logistician and supply chain management? What responsibilities do the specialists in question have? This will be discussed further below.

Education required for work

You can work in the logistics field with both higher and secondary education. However, the number of responsibilities, rights, as well as remuneration in this case will differ significantly.

A person with secondary vocational education can only work as a logistics assistant or manager. If it is possible to carry out full-fledged management for people who have not graduated from a university, it will be with great difficulty. It is also worth noting that not everywhere there are jobs for people without higher education. Due to the narrow focus, as well as a number of other factors, it will not be so easy for a person with only a secondary education to get the job in question.

Things are completely different with people who still have a higher education. Thus, people who have graduated from economic universities with a relevant specialty have every right to get a job in any available job. Perhaps it is worth highlighting the main educational institutions where you can get the necessary education. These are (in Moscow on Lubyanka), MIIT, MADI and the famous St. Petersburg State University. Each of these universities has a specialty called “Logistics and Supply Chain Management.”

What should a logistician know?

As mentioned above, a logistics specialist must have a very extensive knowledge base. What disciplines is the employee in question required to know well? Here are just a few of them:

Fundamentals of economic and mathematical methods.
Basics of distribution, production, warehousing, etc.
projects.
Control over transportation, unloading and loading operations.
Fundamentals of information systems and technologies.
Fundamentals of Economics.
Basics of supply planning.
Risk management in the field of logistics.
Control over logistics systems and much more.

A specialist who is responsible for supply chain management must really know a lot of things. Moreover, a worker in the field of logistics is also obliged to constantly improve himself and supplement his knowledge. This is due to the fact that technologies are constantly being modernized, and therefore it is unlikely that a logistician will be able to work for several decades with only university knowledge.

Skills required for the job

Of course, knowledge alone will not be enough for a logistician to carry out his work functions. A specialist whose tasks include supply chain logistics management must also have certain skills, abilities and character traits.

What exactly can be highlighted here?

Knowledge of several foreign languages. It is quite obvious that in work related to transportation, it is impossible to do without negotiations with foreign citizens; especially if the company is foreign.
Communication skills. Knowing several languages is not enough; you also need to be able to correctly express your thoughts and requirements. This also applies to the native language. A high-quality specialist simply must have competent, clear and precise speech.
Working with software equipment. In the age of computer technology, it is simply impossible to do without the ability to competently handle programs. This is especially true for employees whose functions include logistics management, supply chain management, transportation, etc.

It is also worth noting that a quality specialist must also have such character traits as resistance to stress, high performance, organizational functions, etc.

Responsibilities of a logistician

As already mentioned, the field of logistics is incredibly vast. A large number of workers perform a variety of functions here. However, it is still possible to highlight the most general responsibilities.

Thus, it is worth noting that in the professional environment under consideration, employees are assigned the following responsibilities:

Working with different types of people. This includes customers, suppliers, operators, etc.
Work with documentation.
Planning orders and deliveries.
Negotiations with customs.
Inventory management in supply chains.
Building routes and much more.

A logistician really has many functions. However, everything depends mainly on the available category and level of qualifications.

Where can I work?

A graduate of an educational institution with a degree in Logistics and Supply Chain Management should have almost no problems. Universities often themselves offer students options for vacant places. And due to the fact that the profession in question is incredibly relevant and in demand today, a person with the proper education will simply have a wide variety of employment opportunities open to him.

And yet, where exactly can the specialist in question work? We can highlight:

transport companies (Russian Railways, various airlines, etc.);
cargo handling;
customs services;
industrial enterprises and many other places.

Supply management and logistics are needed in almost every manufacturing plant. And this is a huge advantage of this area: a person who wants to connect his life with the work activity in question will definitely not have problems finding employment.

About the career of a logistician

What can you say about the career of the specialist in question? As in any other field of work, advanced training can only be earned by gaining the necessary experience and improving work skills.

However, there is one important feature in the field of supply chain management system. In short, it lies in the fact that there are simply a lot of opportunities for so-called self-improvement. Thus, a specialist can intensively study new foreign languages, develop his own specialized programs, improve his communication skills, make work with documentation automatic, etc. Thanks to all this, almost any specialist, even without a higher education and working as an assistant, will be able to achieve professional heights

About the rights and responsibilities of a logistician

A logistics specialist, like any other employee, has certain professional rights. What exactly can be highlighted here? This is what the employee’s special job description states:

the right to all social guarantees and benefits established by the state;
the right to timely payment of wages;
the right to demand from management all the documentation necessary for work;
the right to offer management ideas and proposals for improving the organization’s work;
the right to refuse to perform work in case of obvious violations resulting in the lack of optimal working conditions;
the right to improve the level of one’s qualifications;
the right to involve specialists from other professional fields to provide the necessary assistance (but subject to agreement with superiors).

Thus, a fairly wide range of rights is assigned to a specialist whose responsibility is supply chain management. At an enterprise, however, logisticians also have a large share of responsibility for all actions taken. In particular, it is worth highlighting that the employee is responsible for:

for offenses or crimes committed in the workplace;
for complete failure or incorrect performance of one’s own official duties;
for being at work while drunk;
for violation of established safety rules.

Pros and cons of the profession

The logistics profession has both a number of advantages and a number of disadvantages. What are the advantages of the job? This certainly includes:

Demand and relevance of the profession.
High income.
Opportunity to practice speaking a foreign language.
Constant self-improvement.

Perhaps the profession has other advantages. Only the most basic advantages were mentioned above. What are the disadvantages here?

Work in an industrial zone (of course, you can find work in a clean office; however, the very concept of supply chain management is built in such a way that the specialty is practically inseparable from production).

The profession certainly has more advantages. And this is not at all surprising: logistics is a truly prestigious and important field.

Supply Chain Management, SCM) are designed to automate and manage all stages of the supply of an enterprise and to control the entire flow of goods in the enterprise. The SCM system allows you to significantly better satisfy the demand for the company's products and significantly reduce logistics and purchasing costs. SCM covers the entire cycle of procurement of raw materials, production and distribution of goods. Researchers generally identify six main areas on which supply chain management focuses: production, supply, location, inventory, transportation, and information.

The SCM system can be divided into two subsystems:

SCP - (English) Supply Chain Planning) - supply chain planning. SCP is based on systems for advanced planning and scheduling. SCP also includes systems for collaborative forecast development. In addition to solving operational management problems, SCP systems allow for strategic planning of the supply chain structure: developing supply network plans, simulating various situations, assessing the level of operations, comparing planned and current indicators.
SCE - (English) Supply Chain Execution) - real-time supply chain execution.

Supply Chain Management (SCM)

Supply Chain Management (SCM) is the process of planning, executing and controlling from the point of view of reducing the costs of the flow of raw materials, materials, work in progress, finished goods, services and related information from the point of origin of the application to the point of consumption (including import, export , internal and external movements), i.e. until customer requirements are fully satisfied. The essence of the concept of “supply chain management” is the consideration of logistics operations throughout the entire life cycle of products, i.e. the process of development, production, sale of finished products and their after-sales service.
Supply chain management is a business strategy that effectively manages material, financial and information flows to ensure their synchronization across distributed organizational structures.

Composition of SCP systems

Company sales forecast- forecasting weekly/daily product sales;
Inventory Management- optimization planning of guarantee stock, current stock, etc., taking into account the selected inventory management model for each product category;
Replenishment management- optimization planning of supplies within the company’s logistics network, taking into account planned sales, deliveries from the manufacturer, availability of stock, transport capacity, various restrictions and business rules.

Manufacturers of SCM solutions

7Hills Business Solutions
I2 Technologies
HighJump Software
Manhattan Associates
Infor
Management Dynamics Inc
Kewill
Beroe-inc.
Kinaxis
CDC Software

Supply Chain Management (SCM) - supply chain management

At the turn of the 20th and 21st centuries. The integral paradigm of logistics has given rise to a new ideology for managing logistics processes and business as a whole --. Supply Chain Management (SCM) - supply chain management.

Fierce competition in global markets, the introduction of products with short life cycles and increased demands on product quality and logistics services have forced enterprises in many countries to focus on and invest more and more in integrated logistics and supply chain management. This, together with developing communication and transport technologies (Internet, telecommunications, “on-line” monitoring of commodity and transport flows, prompt delivery) contributed to the rapid advancement of SCM ideology in business.

“Collaborate to compete” - “collaborate to compete” - this principle is one of the fundamental ones for successful business in modern dynamic markets. As the Gartner Group aptly states, “The era of individual company competition has given way to an era of supply chain competition.” The ideology of supply chain management is causing significant changes in approaches to organizing and managing business. These changes are primarily associated with the emergence of new forms of competition based on the strategic interaction of supply chain counterparties. At the same time, the analyzed stage of economic development was characterized by an increasing penetration of integrated information technologies into business. The rapid development of corporate information systems, the Internet and mobile technologies has opened up fundamentally new opportunities and sources of increased efficiency for manufacturing, trading, service and logistics companies. The SCM concept was based on the principles of interaction between the synchronization of core business processes and planning and management models based on unified information channels with suppliers and customers throughout the supply chain.

“Supply chain management is the integration of key business processes (mainly logistics) starting from the end user and covering all suppliers of goods, services and information that add value to consumers and other stakeholders”

Until recently, the SCM concept was considered by most experts as integrated logistics, only carried out outside the focal company of the supply chain and including consumers and suppliers. This concept, in the context of logistics business processes, is aimed at solving the problems of integrated management of supply, production, distribution and coordination of the company’s logistics with resource suppliers, consumers and logistics intermediaries. The ideology of supply chain management (as the integration of all key business processes) is used today by the vast majority of leading foreign industrial and trading companies,

According to the largest analytical companies (AMR Research, Forrester Research), when implementing integrated logistics and SCM, companies receive the following competitive advantages:

* reduction in cost and order processing time from 20 to 40%;

* reduction of time to market from 15 to 30%;

* reduction in procurement costs from 5 to 15%;

* reduction of warehouse stocks from 20 to 40%;

* reduction of production costs from 5 to 15%;

* increase in profit from 5 to 15%.

SCM software applications are present as part of the add-ons of the most advanced corporate information systems, in particular ERP II / CSRP / APS classes, supporting the delivery of the necessary goods and services to the right place on time and with optimal logistics costs.

Of great importance for the coordination and communication of supply chain counterparties was the creation of a single information space, i.e. environment for integrated planning and management of interaction in the chain. The main components of a unified information space include: a planning system (Supply Chain Planning) and operational management (Supply Chain Execution). The planning system is based, as a rule, on ERP class systems, and the management system is based on APS, SCM and Workflow systems (Supply Chain Event Management). Trends in the development of information SCM technologies have been the development of E-SCM class systems based on the Internet, as well as ensuring interaction between different classes of systems used by different supply chain participants (Interoperability Tools). The main elements of E-SCM today include: E-Procure-ment, E-Fulfillment, E-Commerce, E-Collaboration.

Currently, it is the state of development of information technology that largely determines the decisions made at the stages of organizing cooperative relations, reengineering business processes and developing models for integrated planning and supply chain management.

The analyzed historical stage is characterized by the fact that in the organizational management structures of Western companies (mainly the USA and EU countries) SCM departments, departments and other structural units appeared, and, accordingly, such positions as the company’s vice president for SCM, integral managers , supply chain management coordinators and analysts, top managers for supply chain planning and control, etc.

The ideology of integration and interaction of partners in supply chains has given rise to new concepts, in particular such as “Efficient Customer Response - ECR”. “Vendor-managed Invetory -- VMI” -- “Inventory management by the supplier at the consumer”, “E-Logistics” (Electronic/Virtual logistics) and others.

The period under review is characterized by an accelerated growth in the number of logistics companies providing clients (industrial, service and trading companies) with comprehensive logistics services for warehousing, cargo handling, transportation, customs clearance, inventory management, etc. These companies (mainly formed from freight forwarding firms, public warehouses, cargo terminals) began to be called logistics operators, or ZPL providers. At the end of the 20th - beginning of the 21st century. A new type of intermediary companies has emerged - 4PL providers (supply chain system integrators), whose main functions are the development of logistics projects for companies' orders, the formation and management of integrated supply chains. An increasing number of companies in the world have begun to transfer their logistics operations and functions to 3PL and 4PL providers, i.e. use a logistics outsourcing strategy.

The term SCM (Supply Chain Management) has been used in the West for more than 15 years, but to this day there is no consensus among logistics and general management experts on the definition of this concept. Most view SCM from an operational point of view, understanding SCM as material flows. Others believe that SCM is a management concept, and finally, others mean by SCM the implementation of this concept in the enterprise.

The most common definitions of SCM are:

SCM is a set of approaches that helps effectively integrate suppliers, manufacturers, distributors and sellers. SCM, taking into account the service requirements of customers, helps ensure the availability of the right product at the right time in the right place at minimal cost.

SCM is the process of organizing planning, execution and control of the flow of raw materials, materials, work in progress, finished goods, as well as providing effective and fast service by obtaining operational information about the movement of goods. With the help of SCM, the tasks of coordinating, planning and managing the processes of supply, production, warehousing and delivery of goods and services are solved.

The supply chain involves both the organization itself and all suppliers and consumers of goods. (Fig.1)

Rice. 1. Participants of “Supply Chain Management”

The supply chain consists of many links interconnected by information, money and commodity flows. The supply chain begins with the acquisition of raw materials from suppliers and ends with the sale of finished goods and services to the customer. Some units may belong entirely to one organization, others to counterparty companies (clients, suppliers and distributors). Therefore, a supply chain always involves multiple organizations. (Fig.2)

Fig.2. Supply Chain Management cycle

1.2. Supply chain management

Each company sets itself more and more new tasks due to the rapid development of the market, tougher competition, and the requirement to improve the quality of customer service. To enhance its advantages and maintain competitiveness, a modern enterprise needs to optimize all value creation processes - from the supply of raw materials to service to the end consumer. To solve these problems, company management turns to SCM solutions.

Supply Chain Management includes the following stages:

Planning (PLAN)

In this process, sources of supply are identified, consumer demand is prioritized and generalized, inventories are planned, requirements for the distribution system are identified, as well as production volumes, supplies of raw materials, materials and finished products.

The problem of producing it yourself or buying it should be resolved at this stage. Decisions related to all types of resource planning and product life cycle management are also made at this stage. These processes balance demand and supply to develop courses of action that best meet Source, Make, Deliver requirements.

Procurement (SOURCE)

In this category, the main elements of supply management are identified, the quality of supplies is checked, the assessment and selection of suppliers is carried out, and contracts with suppliers are concluded. This also includes processes related to the receipt of materials: acquisition, receipt, transportation, similar control, placement on hold (storage). It is important to note that activities to manage the supply of goods and services must correspond to planned or current demand.

Production (MAKE)

This process includes production, execution and management of structural elements, management of production facilities (equipment, buildings, etc.), production quality, production cycles, production shift scheduling, etc. Specific production procedures are also determined: quality control, actual production procedures and cycles, packaging, storage and release of products (intra-plant logistics). All components of the process of processing the initial product into finished products must correspond to planned or current demand.

Delivery (DELIVER)

This process includes managing orders, warehouse and transportation. Order management includes creating and registering orders, selecting product configurations, creating prices, as well as creating and maintaining a customer base and managing debtors and creditors. Warehouse management involves the activities of picking and picking, packing, creating special packaging, customer labeling and shipping of goods. The transportation and delivery management infrastructure is determined by the rules for managing channels and orders, regulating goods flows for delivery, and managing delivery quality.

All these processes, inventory management, transportation and distribution must be aligned with planned or current demand.

Return (RETURN)

This process defines the structural elements of product returns (defective, surplus, requiring repair) both from made to source (make to source) and from delivery (deliver): determining the condition of the product, its placement, request for return authorization, scheduling of returns , direction for destruction and processing.

SCM processes can also be divided into two large groups: Supply Chain Planning (SCP) and Supply Chain Execution (SCE). SCP includes strategic planning of the supply chain or business processes in its individual links. SCE involves the implementation of plans and operational management of parts of the supply chain, such as transport or warehousing.

Optimizing supply chain management can solve the following problems:

Reducing the planning cycle and increasing the planning horizon by obtaining reliable and timely information;

Cost optimization due to the ability to identify strategic counterparties, the optimal selection of purchased products, as well as their suppliers, and support interaction with them in real time;

Reducing production costs through optimization of product flows and prompt organization of information exchange between contractors. Real-time communication between various supply chain participants helps prevent bottlenecks in the production process;

Reducing warehouse costs by aligning production volumes with demand. This task corresponds to the concept of supply management Just-In-Time (“just in time”);

Improving the quality of customer service is achieved through the efficiency and flexibility of the delivery process.