SUPPLY CHAIN MANAGEMENT

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SUPPLY CHAIN MANAGEMENT

• Supply chain management is the management of all
  the activities related to sourcing, procurement,
  conversion and logistic management to deliver the
  right product or services to the customers at
  right time at acceptable cost
• Organization in supply chain includes suppliers ,
  intermediaries, transportation and logistics
  providers

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Supply chain drivers

• A number of forces or Drivers have played the a
  role in the evolution of the supply chain
  management strategies few of them are given below
• 1- Technology - two technological developments
  that have influenced the structure and operations
  are Information communication technology

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Competitive factors

• The major competitive factors for supply chain
  relate to cost and availability factors
• Organizations that focus on managing the
  inventories end up with reduced inventory related
  cost and improved stock out performance due to
  faster market access and improved process
  improvements

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Business Social Environment

• Competition is severe. It has been recognised
• That instead of competition between organisation
  .competition is between supply chains now supply
  chains are more receptive to collaboration

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Policy and regulation

• Many policy and regulatory acts have a direct
• Effect on supply chain initiative e,g phasing out
• Of central tax replacing it with value added Tax
• Will have impact on distribution retailing
  strategies of Companies including warehousing
  locations

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Move from Producer centric to customer centric

• Earliest supply chain were trading supply chain
  .It involved producing goods in one location and
  moving to another location where they were sold
  or exchanged
• Customer centric area is an era of global
  competition. Tools Techniques used in customer-
  centric are totally different from
• that are used in producer centric supply chain

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Supply Chain Stages
Supplier
Manufacturer
Distributor
Distributor
Retailer
Customer
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Value Chain in a Company
Finance, Accounting , Information , Human
Resource , Technology
Service
Distribution
New product development
Marketing Sales
Operation
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Supply chain effectiveness

• Supply chain effectiveness depends upon
• Short Lead Time
• Ability to handle large variety of products
• Ability to meet high service level
• Handle supply uncertainty
• To respond to wide range of quantities demanded

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continued

• Responsiveness comes at a cost which can be
  understood by the below mentioned graph

High
Responsiveness
low
Cost
High
Low
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Demand flow strategy
collaborationstrategy
Customer service strategy
Supply chain Strategy framework
Technologyintegration strategy
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Competitive Strategy
Supply chain strategy
Marketing sales strategy
Product Development strategy
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Competitive strategy
Supply chain strategy
Effieciency
Responsiveness
Facilities
Inventory
Transportation
Information
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Facilities

• Facilities in supply chain stands for the
  locations to or from which the inventory is
  transported. Facilities and their corresponding
  capacities to perform their functions are key
  driver Centralization increases the efficiency.
  Locating the facilities near the customer may
  increase number of facilities hence
  responsiveness can be increased

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Components of facilities Decision

• Following are the components of facilities
  Decision
• 1-Location
• 2-Capacity
• 3- Operation methodology
• Product wise
• Function wise

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Logistical Infrastructure in India

• India has vast network of Roads ,Railway lines,
• Air cargo shipment system and vast coastal
  line
• Road
• 1- National Highways-65569 KM
• 2-State Highways- 1,31,899 KM
• 3- District level roads- 467763KM
• 4-Village other roads- 2650000 KM

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Important highlights
In India we are able to cover 300km on per day
basis in west Europe it is 600km/day Governme
nt has taken initiative to establish N .H.A .I
Golden Quadrilateral has initiated and it is
in advance stage- 5846 km NS-EW (North south
East west corridor is also on the anvil 7300
km Existing Drawbacks- Slow speed Traffic
congestion
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Rail Network Biggest in Asia68 of revenue of
railways comes from Freight,89 of freight is
made of transporting Coal , Cement , Fertilizer
, petroleum products , Food Grains ,Iron
oreFinished steels and Raw Materials for steel
plants
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SEA PORT NETWORK
India has a costal line 7517 KMS India has 12
major ports 95 of trade is by volume and 75 by
value Government has taken initiative to allow
100 FDI Government has setup National Maritime
Development Plan
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Out Sourcing

• Manufacturing Industries are normally faced
  with situation where they have to decide to make
  the parts in-house i,e by themself or it be
  given to some other manufacturer to make it. Such
  course of action is termed as Outsourcing.
• Outsourcing decision is taken on two important
• Parameters 1) cost saving
• 2) capacity constraint
• In the context of supply chain Management ,in
  bound
• Logistic can be out sourced another party to
  carryout the related job

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Third Party logistics

• A manufacturing Firm may take a decision to
  purchase trucks for ensuring the dispatch of
  goods/final product to customer . How ever when
  business volume increases ,company may have to
  purchase more no of trucks. At one point of time
  company may decide to engage out side parties i,e
• logistic companies who have variety of
  trucks tempos, Go down Warehouse at their
  disposal

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Logistics

• This term was used in Military for deployment of
  armaments and troops. However it is widely used
  for movements of Raw material semi-finished and
  final
• products from manufacturer to warehouse or
  distributor and finally to customer.
• Logistic is broadly classified as Inbound
  logistic outward logistic.
• Inbound implies that suppliers are arranging
  the dispatch of raw materials from their end to
  manufacturer

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Logistics-cntd

• In our country many traders manufacturer
  patronized Railway goods train as well the parcel
  van of passenger trains to move their
• products after packing them in gunny bags
• wooden boxes and crates. However
  parties/users have to go to railways goods
  shed/parcel room to get the cargo release and
  bring it their premises. It was cumbersome

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continued

• Transportation of products manufactured by
• industries was also managed by using Trucks and
  tempos depending upon Tonnage , dimensions as
  well distance to be travelled.
• we see many trucks carrying goods and
  travelling more than 2000 KM also.
• we can also observe that construction of truck
• Bodies are also modified to suit the requirment

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Logistic-continued

• Some big business organization like T.C.I, ABC
  road lines, South Eastern road line have owned
  large no trucks or took trucks on hire basis from
  individuals.
• Logistic companies have following facilities at
  their disposal
• 1 Fleet of Truck, Trailer and LCVs

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continued

• 2- Godowns
• 3- Material handling equipments like pallet-
  lifters, fork lifts, Scissor lifts etc
• 4- Racks Pallets for storage of goods
• 5- requisite manpower to perform following
  functions
• a) Receiving /collection of goods and issue
  necessary receipt normally called GRN

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continued

• 2- after receiving the good it is to be stored in
• safe location having location number so that one
  can retrieve the consignment when ever it is to
  be dispatched .
• 3- Load planning and routing another important
• function is to asses the load whether load
  has become full load meaning thereby full truck
  load for that destination otherwise routing has
  to be worked out

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Operational objectives

• Logistic Management has following major
  objectives
• 1- To deliver the consignment in committed time
• 2- to deliver the consignment in safe condition
  i,e without any damage
• 3- total cost of delivering the product should
• be to the satisfaction of customer

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Continued

• There should not be any shortage or pilferage in
  the consignment
• Communication with respect to delivery date and
  time to be sent to consignee for his/her
  availability to receive the consignment

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