Supply Chain Management: Suman Lahiri Ximb 30 July 2019

Supply Chain Management
SUMAN LAHIRI
XIMB
30 July 2019
(Reference –Majority contents from B2B

Marketing - Hutt, Sharma and Speh. Not for
publication on the internet or for publication
elsewhere. )
Supply chain management
SCM is a technique for linking a

manufacturer’s operations with those of all
of its key intermediaries and customers to
enhance efficiency and effectiveness
Supply Chain Management
IMPROVE REVENUE
Make the supply chain more responsive to
demand
DECREASE COST
Integrating processes from procurement .
Manufacturing and logistics
Supply chain management
A tool for competitive advantage-
Apple, Cisco, Dell
Supply Chain
Finance
Raw Raw
Finished End
material material
goods customer
mining processing
Information
Cross Border Supply chain of an
Automation company
China/ Taiwan-
Motors/
gearbox
OEM/ End
Assembly/testing Logistics
customer
EU Country –
Drives, PLC, HMI,
Gearbox
Source-https://www.tatasteel.com/investors/integrated-report-2017-18/supply-
chain.html, accessed on 30th June 2019
Supply chain Management Goals
Waste reduction – excess inventory is wastage.
Postponement and customization is a good tactics, to
reduce waste.
Dell provides a build to order model. (demand side)
Supplier side Performance measure – inventory turn around
per hour.
 Time compression – order – to- delivery cycle time
reduction…….. Implies……… logistics +production time
reduction. Cash…to…..cash cycle time reduces for all.
 Flexible response –order handling, order configuration,
product variety, order size, etc………..customer’s unique
requirement can be handled cost effectively.
 Unit cost of reduction – ??? Efficient supply chain
means cost minimized, but this is not always possible. Eg
Honda – daily deliveries of
components……..implies……unfilled transportation
capabilities. Needs trade off
Samsung Supply Chain
Key evaluation item for new supply chain

evaluation programme - environment safety,
labour rights, eco partners
Conflict mineral management – Titanium, Global responsible

tungsten, gold, tin, etc recycling
https://www.samsung.com/us/aboutsamsung/sustainability/supply-chain/,
accessed on June 30, 2019
Supply chain managements perspective
Benefits to the final customer - supply chain reduces waste, improves cycle
time , flexible response, cost minimization…………..no of dimensions………..
Tangible benefits for the customer………….but there can be no of players…….
Different demands…….desires…….idiosyncrasies.
Raw material supplier……….Electronic component manufacturer………….radio

manufacturer……..car manufacturer……….car buyer (car has a radio).
The financial benefit perspectives –

Lower costs, higher profit margins, enhanced cash flows,, revenue growth, higher
return on assets.
Information and technology drivers ….supply chain software…….integrate

functional areas and bridge gaps………..real time data transfer……… fedex
…integrates variety of technologies…….best practices leader……. Each day…..Fed
ex India communication network processes ….. 4lakhs consumer call, tracks the
location, pick up time and delivery time of 25 lack package
Successfully applying the supply chain management
approach
Successful supply chain practices
•Good partners (trust)

•Clear objectives ( of supply chain partners).
•Strategy tied to objectives.
•Performance metrics.
•Monitor and evaluation
• Rewards/ awards
Logistics as the critical element in Supply
Chain
Distinguishing between logistic and supply chain

Managing Flows…….. Focus on product flows
(timely delivery)
Sales – marketing – logistics Integration
 Just in time systems (JIT)
 Just in time relationship
 Elements of a logistical system
https://www.wilhelmsen.com/maritime-logistics/
break-bulk--project-logistics/ , accessed on 11/8/19
https://www.stork.com/en/markets-references/reference-
projects/steam-turbine-and-generator-overhaul, accessed on
11/8/2019
Source :https://www.indiamart.com/proddetail/stacker-reclaimer-
14446296688.html, accessed on 11/8/2019
Source : https://www.americancranesandtransport.com/news/mc-industrial-to-
install-stacker-reclaimer-/112762.article, accessed on 11/8/2019
Source - http://www.sangongvalve.com/swing-check-valve/55-quick-
close-steam-extraction-check-valve.html, accessed on 11/8/2019
Source -
https://www.deltaww.com/Products/CategoryListT1.aspx?CI
D=060101&PID=218&hl=en-US&Name=C2000+Series,
accessed on 11/8/19
Logistics
Logistics management is that part of the supply

chain that plans, implements and controls the
efficient forward and reverse flow and storage of
goods, services, and related information between
the point of origin and point of consumption in
order to meet the consumer requirements. Focus
should be flow of product with timely information
driving the entire process. ( product flow in the
reverse direction is also important).
SCM integrates all business process that add value

of all the stakeholders in the chain.
Logistics
Strategic roles of Logistics
Logistic is their primary marketing tool for gaining and

maintaining competitive superiority.
Incorporate logistics planning into long term business

planning.
TATA STEEL value added service – off load steel beams in the
site in the sequence , it is needed.
Sales, Marketing and Logistics integration
Unified teams of sales, marketing, production, logistics,

information system develop integrated logistic programmes to
offer to potential customers.
Teams of specialists from each area make sales call and tailor
logistic solutions to customer problems.
DHL’s flexible same day express services for immediate collection

and delivery within a 24 hour time frame
Controllable elements in a logistics system
elements key aspects

customer service level of customer service impacts cost, market
share and profitability
Order processing Triggers the logistic process
Logistics communication Guides the activities of the system
Transportation Significant cost area
Warehousing Enhance service and lower trans cost
Inventory control Product availability and correct mix of product
packaging Product identity throughout movement,
protection an effective product density
Materials handling Speed and time. Cost generating activity.
Production planning Availability of product in correct assortment.
Done along with logistics planning
Plant and warehouse location Strategic locating can reduce costs and improve
service
Logistics
Activity based – costing ----- calculates the cost based on

each activity and traces it to a product, customer and
channel that used the activity…asses the contribution to
profitability correctly….design appropriate level of service
Total cost of ownership-----------consider the full range of

costs associated with the purchase and use of a product or
service over its complete life cycle.
Eg Initial high cost can be offset by few manufacturing
defect, lower inventory cost and lower administrative cost.
Total cost calculations –
Acquisition cost----- selling price + transportation cost+ admin cost of evaluating
suppliers+ expediting order and correcting errors in shipment and delivery
Possession cost – financing, storage, inspection, taxes, insurance, and othee internal
handling costs.
Usage costs – associated with the ongoing use of the product – installation, training,
labor, field repair , product replacement and disposal costs
B2b logistics services
Logistics service impact on the customers
Determining the level of the services………….

profitable level of the services
Logistics impact on other supply chain

participants – all the players need to act
effectively and efficiently.
B2b logistical management
Logistical facilities –strategic development of warehouses to

increase level of service or reduce transportation cost or both
Serving other supply chain members multiple warehouse with
manufacturing reps., few with distributors.
Outsourcing the warehousing functions.
Warehousing Decision – Operating cost, service level and

investment requirements
Transportation --- important link in logistical network. Single largest
logistical expense ….……..Provided by 3rd party logistic
Transportation and logistical service – (cost, average transit time and

service consistency -------transportation decisions).
cost of service (inr 0.5 ) (water) to inr 20 per ton-km (air freight))
speed of service
Inventory management -buffer to hedge uncertainty
a) production/ demand is not matched.

b) Logistical deficiencies
c) uncertainty of needs
QUALITY FOCUS – eliminate INVENTROIES
third party logistics – transportation, warehousing and/ or

information processing………( CATERPILLAR 300 FAMILY OF
PRODUCT…..5,30,0000 SPARES PART).
FUTURE Focus – The green supply chain

Supply Chain Management: Suman Lahiri Ximb 30 July 2019

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Supply Chain Management: Suman Lahiri Ximb 30 July 2019

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Supply Chain Management

(Reference –Majority contents from B2B

SCM is a technique for linking a

Key evaluation item for new supply chain

Conflict mineral management – Titanium, Global responsible

Raw material supplier……….Electronic component manufacturer………….radio

The financial benefit perspectives –

Information and technology drivers ….supply chain software…….integrate

Successful supply chain practices

•Good partners (trust)

Distinguishing between logistic and supply chain

Logistics management is that part of the supply

SCM integrates all business process that add value

Strategic roles of Logistics

Logistic is their primary marketing tool for gaining and

Incorporate logistics planning into long term business

Unified teams of sales, marketing, production, logistics,

DHL’s flexible same day express services for immediate collection

elements key aspects

Activity based – costing ----- calculates the cost based on

Total cost of ownership-----------consider the full range of

Logistics service impact on the customers

Determining the level of the services………….

Logistics impact on other supply chain

Logistical facilities –strategic development of warehouses to

Warehousing Decision – Operating cost, service level and

Transportation and logistical service – (cost, average transit time and

a) production/ demand is not matched.

QUALITY FOCUS – eliminate INVENTROIES

third party logistics – transportation, warehousing and/ or

FUTURE Focus – The green supply chain

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