COEP Technological University, Pune

Manufacturing Philosophy
Supply Chain Management
Submitted By-
Pranav Mahurkar 142110005
Prathamesh Sadavarte 142110011
Vinay Pandit 112010090

Under Guidance of

Dr. M. P. Khond

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❖ Introduction:

Today, there is intense competition on the worldwide market. Shorter product life
cycles and higher customer expectations have compelled companies to make investments in
and pay closer attention to their supply networks. This, in addition to ongoing developments in
transportation and communication technologies (such as mobile communication, internet, and
overnight delivery)

The supply chain and the methods for efficiently managing it have been driven to
continuously evolve by factors such as mobile communication, the internet, and overnight
delivery. The production systems' structures have recently been impacted by the strain of a
competitive market and new information technologies, necessitating:

• Shorter time to market.

• More system flexibility.
• Significant cost savings.
• An expanded quality concepts.

❖ Supply Chain:
• A supply chain is a system of organisations, people, technology, activities, information
and resources involved in moving a product or service from supplier to customer.
• A supply chain is a network of retailers, distributors, transporters, storage facilities, and
suppliers that participate in the production, delivery and sale of a product to the
consumer.
• These activities are associated with the flow and transformation of goods from the raw
materials stage to the end user, as well as the associated information and funds flows.
• Supply chain activities transform natural resources, raw materials and components into
a finished product that is delivered to the end customer.
• In simple terms, a supply chain is the link between a firm or business and its suppliers
and customers.

A conceptual model of a basic supply chain

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• The supply chain, which is also referred to as the logistics network, consists of
suppliers, manufacturing centres, warehouses, distribution centres, and retail outlets, as
well as raw materials, work-in-process inventory, and finished products that flow
between the facilities.
• A supply chain has three key parts:
o Supply: which focuses on the raw materials supplied to manufacturing,
including how, when, and from what location.
o Manufacturing: which focuses on converting these raw materials into finished
products.
o Distribution: which focuses on ensuring that the products reach the consumers
through an organised network of distributors, warehouses, and retailers.

Supply Chain Network

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❖ Supply Chain management (SCM):
Supply chain management (SCM) is the oversight of materials, information, and
finances distributed from supplier to consumer. The supply chain also includes all the
necessary stops between the supplier and the consumer. Supply chain management involves
coordinating this flow of materials within a company and to the end consumer.
The Council of Supply Chain Management Professionals defines supply chain
management as follows: “Supply chain management encompasses the planning and
management of all activities involved in sourcing and procurement, conversion, and all
logistics management activities”. Importantly, it also includes coordination and
collaboration with channel partners, which can be suppliers, intermediaries, third-party
service providers, and customers. In essence, supply chain management integrates supply
and demand management within and across companies.
Supply chain management is an integrating function with primary responsibility for
linking major business functions and business processes within and across companies into
a cohesive and high-performing business model. It includes all the logistics management
activities noted above, as well as manufacturing operations, and it drives coordination of
processes and activities with and across marketing, sales, product design, and finance and
information technology.
Supply chain management can be divided into three main flows:
• The Product flow includes moving goods from supplier to consumer, as
well as dealing with customer service needs.
• The Information flow includes order information and delivery status.
• The Financial flow includes payment schedules, credit terms, and
additional arrangements.

Supply chain management is a set of approaches utilised to efficiently integrate

suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and
distributed at the right quantities, to the right locations, and at the right time, in order to
minimise system-wide costs while satisfying service level requirements. Raw Material
Suppliers Manufacturing Retailers End Customers Information Flow Material Flow Fund
Flow

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❖ History:

Supply chain management has its origins in ancient trade routes and early
commerce, where merchants and traders developed rudimentary supply chains to
exchange goods over long distances. These early practices laid the groundwork for
modern supply chain concepts. The Industrial Revolution of the 18th and 19th centuries
brought about significant changes in manufacturing and transportation, enabling mass
production on a large scale. Innovations such as steam engines, railways, and
mechanized production processes revolutionized production methods and influenced
the formalization of supply chains.

In the early 20th century, materials management

emerged as a distinct discipline focused on optimizing the
flow of materials within organizations. Pioneers like
Frederick W. Taylor introduced principles of scientific
management, emphasizing efficiency and standardization
in production processes. Henry Ford's implementation of
assembly line manufacturing further transformed
production methods and influenced supply chain
management practices.
F. W. Taylor
Following World War II, globalization and the rise of
multinational corporations led to the establishment of global supply chains. Companies
began sourcing raw materials from distant locations, manufacturing products, and
distributing goods to international markets. Concepts like just-in-time (JIT)
manufacturing and total quality management (TQM) gained prominence as companies
sought to improve efficiency and reduce waste.

In the 1980s and 1990s, supply chain management began to formalize as a distinct
discipline within organizations. Technologies such as barcode scanning, electronic data
interchange (EDI), and enterprise resource planning (ERP) systems enabled better
coordination and communication across supply chain partners. Companies focused on
streamlining supply chain processes, optimizing inventory levels, and enhancing
collaboration with suppliers and customers.

The advent of the internet and digital technologies in the late 20th century further
transformed supply chain management practices. Supply chain software solutions, such

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 as supply chain management (SCM) systems and advanced analytics platforms, enabled
real-time visibility, demand forecasting, and decision-making. Technologies like
blockchain, artificial intelligence (AI), and Internet of Things (IoT) are being
increasingly adopted to enhance supply chain transparency, traceability, and
automation.

Today, supply chain management faces various challenges, including globalization,

supply chain disruptions, sustainability concerns, and evolving customer expectations.
Future trends in supply chain management include the adoption of sustainable and
circular economy principles, increased focus on resilience and risk management, and
continued advancements in technology, such as AI, robotics, and autonomous vehicles.

❖ Objective of Supply Chain Management

A supply chain is a global network of organisations that cooperate to improve the flows
of material and information between suppliers and customers at the lowest cost and the
highest speed. The final objective of a supply chain is customer satisfaction.

The main purpose of the supply chain is to maximise overall value generated. Value is
the difference between what the cost supply chain incurs, and the worth end product has to
the customer. Value of the commercial supply chain is correlated with its profitability
generally known as supply chain surplus.

For example, A customer purchase a personal computer from IBM at $2,000, which
indicates the revenue supply chain achieved. All the stages incur costs to make sure the
efficient transfer of funds, information, storage of the product, transportation to the final
consumer etc. The difference between the supply chain cost and revenue generated from
personal computer represent the supply chain surplus or profitability.

The objectives of supply chain management can be listed below:

• Enhancing customer service

• Expanding sales revenue
• Reducing inventory cost
• Improving on-time delivery
• Reducing order to delivery cycle time
• Reducing lead time

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 • Reducing transportation cost
• Reducing warehouse cost
• Reducing supplier base
• Expanding depth of distribution

❖ Importance of Supply Chain Management

The importance of supply chain management comes into picture if there is sharp focus
on the loss due to the absence of an effective supply chain strategy and / or the benefit due
to an effective supply chain for any firm. Basically, it refers that how good is the integration
of supply chain that matters for any firm.

The importance of having a robust supply chain management can be depicted from the
following example: Suppose, ABC is any company that manufactures the cycle chains for
a cycle manufacturing company XYZ. Another company PQR manufactures bits used in
the cycle chain manufactured by ABC. Now, in coming days, as per the market forecast,
XYZ shall need 50,000 units of cycle chain, information that is not available with ABC.
Accordingly, PQR also does not know how many bits to produce to meet ABC’s
requirement. The result would be either both ABC and PQR hold high safety stock
inventory or lose business respectively with XYZ and ABC. Now, if in this example
showing only three supply chain partners, absence of a critical information among the
partners, that is of production forecast at XYZ firm results into either a higher inventory
level or loss of future business.

The importance of supply chain management is to:

1. Reduce inventories along the chain.

2. Share better information among the partners.
3. Plan in consultation rather than in isolation.

❖ Benefits of Supply Chain Management

Supply Chain Management (SCM) offers numerous advantages to organizations across

various industries, contributing to their overall efficiency, competitiveness, and
profitability. Below are detailed explanations of the key benefits of SCM:

• Cost Reduction: Effective SCM enables organizations to identify and eliminate

inefficiencies, redundancies, and unnecessary costs throughout the supply chain. By

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 optimizing inventory levels, minimizing transportation expenses, and streamlining
processes, businesses can significantly reduce their operational costs. Moreover, by
adopting strategies such as Just-in-Time (JIT) inventory management and lean
principles, companies can minimize inventory holding costs and improve cash flow.
• Improved Customer Service: SCM plays a critical role in enhancing customer
satisfaction by ensuring timely delivery of products, accurate order fulfilment, and
consistent product quality. Through effective demand forecasting, inventory planning,
and logistics management, organizations can meet customer demands more efficiently,
reducing lead times and minimizing stockouts. Additionally, SCM facilitates better
communication and collaboration among supply chain partners, enabling faster
response to customer inquiries and concerns.
• Enhanced Collaboration: SCM fosters closer relationships and collaboration among
suppliers, manufacturers, distributors, and retailers. By sharing information, aligning
goals, and coordinating activities, supply chain partners can work together more
effectively to optimize processes, improve efficiency, and address challenges
collectively. Collaborative initiatives such as Vendor Managed Inventory (VMI) and
Collaborative Planning, Forecasting, and Replenishment (CPFR) enable better
coordination and synchronization of supply chain activities, leading to mutual benefits
for all parties involved.
• Competitive Advantage: A well-managed supply chain can provide organizations with
a significant competitive advantage in the marketplace. By delivering products faster,
more reliably, and at lower costs than competitors, businesses can attract and retain
customers, increase market share, and differentiate themselves from rivals. Moreover,
SCM enables companies to respond more quickly to changing market conditions,
emerging trends, and customer preferences, allowing them to seize opportunities and
stay ahead of the competition.
• Risk Management: Effective SCM helps organizations identify, assess, and mitigate
risks associated with supply chain disruptions, such as natural disasters, geopolitical
events, and fluctuations in demand or supply. By diversifying suppliers, developing
contingency plans, and enhancing supply chain visibility, companies can minimize the
impact of disruptions and maintain business continuity. Moreover, SCM enables
proactive risk management by facilitating early detection of potential issues and
enabling timely corrective actions to mitigate risks before they escalate.

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Some other key benefits of supply chain management are as follows-

1. Develops better customer relationship and service.

2. Creates better delivery mechanisms for products and services in demand with minimum
delay.
3. Improvises productivity and business functions.
4. Minimizes warehouse and transportation costs.
5. Minimizes direct and indirect costs.
6. Assists in achieving shipping of right products to the right place at the right time.
7. Enhances inventory management, supporting the successful execution of just-in-time
stock models.
8. Assists companies in adapting to the challenges of globalization, economic upheaval,
expanding consumer expectations, and related differences.
9. Assists companies in minimizing waste, driving out costs, and achieving efficiencies
throughout the supply chain process.
10. In addition to all the points highlighted above, it aims at leading enterprises using the
supply chain to improve differentiation, increase sales, and penetrate new markets.

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❖ Supply Chain Management Process

The Supply Chain Management (SCM) process involves a series of interconnected

activities aimed at optimizing the flow of goods, services, and information from suppliers
to customers. Each stage of the SCM process plays a crucial role in ensuring efficient
operations, reducing costs, and enhancing customer satisfaction. Below is a detailed
explanation of the SCM process, along with an example and a case study to illustrate its
implementation.

1. Planning: The planning stage of the SCM process involves forecasting demand,
determining optimal inventory levels, and developing strategies to meet customer
requirements efficiently. This stage requires collaboration among supply chain partners
to align production, procurement, and distribution plans with market demand and
business objectives. Effective planning helps minimize stockouts, reduce excess
inventory, and improve overall supply chain efficiency.
• Example: A retail company analyses historical sales data, market trends, and
customer preferences to forecast demand for its products. Based on this forecast,

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 the company develops production schedules, procurement plans, and inventory
replenishment strategies to ensure the availability of products in the right quantities
and at the right locations to meet customer demand.
• Case Study: Walmart is renowned for its advanced supply chain planning
capabilities, enabling it to efficiently manage inventory levels, reduce costs, and
meet customer demand effectively. With sophisticated forecasting models and real-
time data analytics, Walmart accurately predicts consumer demand, optimizes
inventory replenishment, and coordinates logistics operations across its extensive
network of stores and distribution centres. As a result, Walmart maintains high
product availability while minimizing excess inventory and stockouts, contributing
to its competitive advantage in the retail industry.
2. Sourcing: The sourcing stage involves selecting suppliers, negotiating contracts, and
managing relationships to ensure a reliable and cost-effective supply of raw materials,
components, and finished goods. This stage requires careful evaluation of supplier
capabilities, performance, and reliability, as well as strategic decisions regarding
sourcing locations and supplier partnerships. Effective sourcing practices help
organizations secure the best possible terms, minimize supply chain risks, and optimize
procurement processes.
• Example: An automotive manufacturer conducts supplier evaluations to assess the
quality, reliability, and cost-effectiveness of potential suppliers. After selecting
preferred suppliers, the manufacturer negotiates contracts to establish pricing,
delivery terms, and quality standards. Throughout the supplier relationship, the
manufacturer maintains open communication, monitors supplier performance, and
collaborates on continuous improvement initiatives to drive mutual success.
• Case Study: Toyota renowned Toyota Production System (TPS) exemplifies best
practices in supply chain sourcing and supplier management. Toyota works closely
with its suppliers to build long-term relationships based on trust, collaboration, and
shared objectives. By implementing principles such as Just-in-Time (JIT) production
and Total Quality Management (TQM), Toyota minimizes inventory holding costs,
reduces lead times, and ensures high product quality throughout its supply chain. This
strategic approach to sourcing has enabled Toyota to achieve operational excellence
and maintain its position as a global leader in the automotive industry.

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3. Manufacturing: The manufacturing stage focuses on production scheduling, quality
control, and process optimization to maximize efficiency and minimize waste. This stage
involves coordinating production activities, managing resources, and implementing lean
manufacturing principles to eliminate non-value-added activities and optimize
production processes. Effective manufacturing practices help organizations improve
productivity, reduce lead times, and enhance product quality.
• Example: A food processing company implements lean manufacturing principles to
streamline its production processes and reduce waste. Through techniques such as
batch optimization, standardized work procedures, and continuous improvement
initiatives, the company achieves higher throughput, lower production costs, and
improved product consistency. By aligning production schedules with customer
demand and market requirements, the company delivers products more efficiently
and effectively.
• Case Study: Boeing production of commercial aircraft exemplifies excellence in
manufacturing and process optimization. Boeing utilizes advanced manufacturing
technologies, such as robotics and automation, to streamline production processes
and enhance productivity. By implementing lean manufacturing principles and
adopting a modular assembly approach, Boeing reduces cycle times, minimizes
waste, and improves overall production efficiency. This strategic focus on
manufacturing excellence enables Boeing to meet customer demand, deliver high-
quality aircraft, and maintain its leadership position in the aerospace industry.
4. Logistics: The logistics stage encompasses transportation, warehousing, and
distribution activities to ensure timely delivery of goods to customers while minimizing
costs and lead times. This stage involves coordinating transportation modes, managing
inventory levels, and optimizing distribution networks to meet customer service
requirements. Effective logistics management helps organizations improve order
fulfilment, reduce transportation costs, and enhance supply chain visibility.
• Example: A global logistics company utilizes advanced routing algorithms and real-
time tracking systems to optimize transportation routes and schedules. By leveraging
transportation management systems (TMS) and warehouse management systems
(WMS), the company improves load planning, reduces transit times, and enhances
delivery accuracy. Through continuous monitoring and optimization of logistics

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 operations, the company achieves greater efficiency and responsiveness in meeting
customer needs.
• Case Study: UPS (United Parcel Service) is recognized for its excellence in logistics
and supply chain management. UPS operates one of the world's largest and most
sophisticated transportation and logistics networks, comprising air, ground, and sea
transportation services, as well as a vast network of distribution centers and
warehouses. Through investments in technology, infrastructure, and process
optimization, UPS delivers millions of packages worldwide each day with industry-
leading reliability, speed, and efficiency. This strategic focus on logistics excellence
enables UPS to meet the evolving needs of its customers and maintain its position as
a global leader in the logistics industry.
5. Return: The return stage involves managing product returns, repairs, and reverse
logistics processes to minimize disruptions and maintain customer satisfaction. This
stage requires effective handling of returns, warranty claims, and customer inquiries, as
well as collaboration with suppliers and partners to address product defects and quality
issues. By implementing efficient return processes, organizations can enhance customer
loyalty, reduce costs, and mitigate supply chain risks.
• Example: An electronics manufacturer implements a comprehensive returns
management system to streamline the return process and improve customer
satisfaction. Through automated return authorization, product inspection, and
refurbishment processes, the manufacturer efficiently handles product returns,
identifies root causes of defects, and implements corrective actions to prevent
recurrence. By providing timely resolution of customer complaints and ensuring
product quality and reliability, the manufacturer enhances customer trust and loyalty.
• Case Study: Dell Dell's approach to reverse logistics and returns management has
been instrumental in its success as a leading provider of computer hardware and
services. Dell offers customers a hassle-free returns process, allowing them to return
products for repair or replacement within a specified timeframe. Through efficient
reverse logistics operations and partnerships with service providers, Dell minimizes
return shipping costs, reduces cycle times, and maximizes asset recovery. This
customer-centric approach to returns management has contributed to Dell's reputation
for exceptional customer service and satisfaction.

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❖ Supply Chain Management Strategies

Supply Chain Management (SCM) strategies are critical for businesses looking to
maximize their efficiency, cut expenses, improve customer satisfaction, and obtain a
competitive edge in the market. These strategies cover a variety of techniques and
approaches meant to increase the responsiveness, flexibility, and efficiency of supply chain
operations. The following provides a thorough description of some of the most important
SCM strategies, along with examples and a case study to show how they should be applied.

1. Lean Supply Chain Management: Lean SCM is a philosophy based on the principles
of eliminating waste, optimizing processes, and maximizing value-added activities
throughout the supply chain. This strategy focuses on minimizing inventory levels,
reducing lead times, and improving overall efficiency through continuous improvement
and waste elimination efforts.
• Example: A manufacturing company implements lean principles to streamline its
production processes and reduce waste. By implementing practices such as just-in-
time (JIT) production, kanban systems, and total productive maintenance (TPM),
the company eliminates non-value-added activities, improves productivity, and
reduces costs. Through continuous improvement initiatives such as Kaizen events
and value stream mapping, the company further enhances its operational efficiency
and competitiveness.
• Case Study: Toyota Production System (TPS) Toyota's renowned Toyota
Production System (TPS) exemplifies the principles of lean SCM. TPS emphasizes
continuous improvement, waste reduction, and respect for people, enabling Toyota
to achieve high levels of productivity, quality, and efficiency in its manufacturing
operations. By implementing practices such as JIT production, standardized work
procedures, and visual management systems, Toyota minimizes waste, reduces
inventory levels, and delivers products to customers with exceptional speed and
quality. TPS has become a benchmark for lean manufacturing practices worldwide,
demonstrating the power of lean principles in achieving operational excellence and
competitive advantage.
2. Agile Supply Chain Management: Agile SCM is a strategy focused on flexibility,
responsiveness, and adaptability to rapidly changing market conditions, customer
demands, and supply chain disruptions. This strategy emphasizes collaboration,

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 communication, and innovation to enable organizations to quickly adjust their
operations and strategies in response to evolving business needs.
• Example: A fashion retailer adopts an agile SCM approach to respond quickly to
changing fashion trends and consumer preferences. By leveraging real-time market
data, customer feedback, and predictive analytics, the retailer identifies emerging
trends and adjusts its product assortment, production schedules, and inventory
levels accordingly. Through close collaboration with suppliers, manufacturers, and
distribution partners, the retailer minimizes lead times, reduces stockouts, and
maximizes sales opportunities in dynamic and fast-paced markets.
• Case Study: Zara a leading fast-fashion retailer, is known for its agile SCM
practices that enable it to respond rapidly to changing fashion trends and customer
demands. Zara's vertically integrated supply chain, decentralized decision-making,
and fast-fashion business model allow it to design, produce, and deliver new
clothing collections to stores within weeks, compared to months for traditional
retailers. By leveraging technology, data analytics, and close collaboration with
suppliers and manufacturers, Zara maintains a competitive edge in the fashion
industry, demonstrating the effectiveness of agile SCM in driving innovation, speed,
and customer satisfaction.
3. Just-in-Time (JIT) Supply Chain Management: JIT SCM is a strategy aimed at
minimizing inventory levels, reducing lead times, and synchronizing production with
customer demand. This strategy emphasizes the timely delivery of goods and materials
to meet production schedules and customer orders, thereby reducing waste, lowering
carrying costs, and improving operational efficiency.
• Example: An automotive manufacturer adopts a JIT SCM approach to optimize its
production processes and reduce inventory holding costs. By closely coordinating
production schedules with suppliers and implementing efficient logistics and
inventory management systems, the manufacturer ensures that components and
materials are delivered to the production line precisely when needed. This enables
the manufacturer to minimize excess inventory, improve cash flow, and respond
quickly to changes in customer demand, thereby enhancing overall supply chain
efficiency and competitiveness.
• Case Study: Dell Dell's direct-to-customer business model relies on JIT SCM
principles to minimize inventory levels and maximize responsiveness to customer

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 orders. Dell maintains a lean supply chain by sourcing components from suppliers
based on customer orders, assembling products on-demand, and delivering them
directly to customers within a short timeframe. By leveraging technology, data
analytics, and close collaboration with suppliers and logistics partners, Dell
minimizes inventory carrying costs, reduces lead times, and delivers customized
products to customers with exceptional speed and efficiency.
4. Vendor Managed Inventory (VMI): Vendor Managed Inventory is a strategy in which
the supplier takes responsibility for managing inventory levels at the customer's
location. Under VMI, the supplier monitors inventory levels, replenishes stock as
needed, and assumes ownership of the inventory until it is consumed by the customer.
This approach shifts inventory management responsibilities from the customer to the
supplier, allowing for tighter inventory control, reduced stockouts, and lower inventory
holding costs for the customer.
• Example: A retail store enters a VMI agreement with its key suppliers. The
suppliers regularly monitor the store's inventory levels and automatically replenish
stock based on predefined triggers, such as minimum stock levels or sales forecasts.
By outsourcing inventory management to its suppliers, the retail store minimizes
stockouts, reduces inventory carrying costs, and improves overall supply chain
efficiency.
5. Collaborative Planning, Forecasting, and Replenishment (CPFR): Collaborative
Planning, Forecasting, and Replenishment is a strategy that involves joint planning and
forecasting between supply chain partners to optimize inventory levels and improve
supply chain efficiency. CPFR promotes collaboration, information sharing, and
consensus-based decision-making among suppliers, manufacturers, distributors, and
retailers, leading to better demand forecasting accuracy, reduced stockouts, and
improved customer service.
• Example: A consumer goods manufacturer collaborates with its retail partners to
implement CPFR initiatives. The manufacturer and retailers share sales data, market
intelligence, and promotional plans to develop a consensus demand forecast for the
manufacturer's products. Based on the forecast, the manufacturer adjusts production
schedules and inventory levels, while the retailers optimize their replenishment
processes to meet customer demand more effectively. Through CPFR, supply chain

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 partners achieve higher forecast accuracy, reduce excess inventory, and enhance
overall supply chain performance.
6. Outsourcing and Offshoring: Outsourcing and Offshoring involve contracting out
certain supply chain activities or processes to external vendors or offshore locations to
leverage cost advantages, expertise, and resources. Organizations may outsource
functions such as manufacturing, logistics, or customer service to specialized service
providers or offshore partners to reduce costs, improve efficiency, and focus on core
competencies.
• Example: A technology company outsources its customer support operations to a
third-party call centre located in a low-cost offshore destination. The third-party
provider handles customer inquiries, technical support, and order processing on
behalf of the technology company, allowing it to reduce operational costs, scale
operations more flexibly, and maintain high service levels. By outsourcing non-core
functions, the technology company can focus on product development, marketing,
and strategic initiatives to drive growth and innovation.
7. Sustainable Supply Chain Management: Sustainable Supply Chain Management
focuses on integrating environmental, social, and ethical considerations into supply
chain operations to minimize negative impacts on the environment, society, and
stakeholders. This strategy involves adopting sustainable practices such as green
procurement, renewable energy usage, ethical sourcing, and waste reduction throughout
the supply chain to enhance long-term sustainability and resilience.

❖ Case Studies
1. Toyota: Toyota's adoption of JIT manufacturing revolutionized the automotive industry,
enabling the company to reduce inventory costs while maintaining high product quality
and responsiveness to customer demand.
2. Zara: Zara's agile SCM practices allow it to quickly respond to changing fashion
trends, with new designs going from concept to store shelves in a matter of weeks. This
fast-fashion model has propelled Zara to become one of the world's leading fashion
retailers.
3. Apple Inc.: Apple's vertically integrated supply chain and tight control over its
manufacturing processes have enabled the company to launch innovative products with
high quality and precision timing, maintaining its position as a market leader in
consumer electronics.

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 4. Procter & Gamble (P&G): P&G's use of VMI and CPFR with its retail partners has
enabled it to optimize inventory levels, reduce stockouts, and improve forecasting
accuracy, enhancing overall supply chain efficiency.
5. Amazon: Amazon's innovative use of technology, including advanced analytics,
robotics, and a vast network of fulfilment centres, has transformed logistics and
distribution, enabling the company to offer fast and reliable delivery to millions of
customers worldwide.

❖ Software for SCM

1. SAP S/4HANA:

o Functioning: SAP S/4HANA integrates various modules for supply chain management,
including procurement, production planning, inventory management, and logistics. It
offers real-time analytics and predictive capabilities to optimize supply chain operations.

o Application: Organizations can streamline procurement processes, optimize production

schedules, manage inventory levels effectively, and enhance visibility and control over
the supply chain.

o Indian Company Example: Marico Limited, a leading Indian consumer goods company,
implemented SAP S/4HANA. It enabled Marico to achieve real-time visibility into
inventory levels, optimize production schedules, and improve collaboration with
suppliers.

2. Oracle SCM Cloud:

o Functioning: Oracle SCM Cloud provides a comprehensive suite of applications for

supply chain planning, execution, and collaboration. It leverages advanced technologies
such as AI and ML for predictive analytics and optimization.

o Application: Businesses can forecast demand accurately, optimize inventory levels,

streamline order fulfillment processes, and collaborate with suppliers in real-time for
efficient supply chain management.

o Indian Company Example:Titan Company Limited, a prominent Indian manufacturer of

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 watches and jewelry, adopted Oracle SCM Cloud. It enabled Titan to optimize inventory
levels, reduce lead times, and enhance customer satisfaction.

3. Microsoft Dynamics 365 Supply Chain Management:

o Functioning: Microsoft Dynamics 365 SCM provides tools for demand planning,
warehouse management, transportation logistics, and supplier collaboration. It integrates
with other Microsoft products for seamless data flow and analytics.

o Application: Businesses can optimize inventory levels, streamline warehouse operations,

improve transportation management, and enhance collaboration with suppliers for agile
and efficient supply chain management.

o Indian Company Example: Future Group, one of India's largest retail conglomerates,
deployed Microsoft Dynamics 365 SCM. It helped Future Group improve supply chain
visibility and efficiency, optimize inventory, and enhance collaboration with vendors.

4. Tally.ERP 9:

o Functioning: Tally.ERP 9 is primarily an accounting and inventory management software

solution. It offers features for inventory tracking, purchase order management, invoicing,
and GST compliance.

o Application: Organizations, especially SMEs, can manage inventory levels, track sales
orders, generate invoices, and ensure compliance with taxation and regulatory
requirements.

o Indian Company Example:Patanjali Ayurved Limited, a fast-growing Indian FMCG

company, utilizes Tally.ERP 9 for managing supply chain operations. It helps Patanjali
optimize inventory levels, track sales orders, and ensure compliance with regulatory
requirements.

5. Zoho Inventory:

o Functioning: Zoho Inventory is a cloud-based inventory management solution designed

for SMEs and e-commerce businesses. It offers features for order management,
inventory tracking, warehouse operations, and multichannel selling.
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 o Application: Businesses can streamline order processing, track inventory across multiple
warehouses, manage stock levels effectively, and fulfill customer orders efficiently
across various sales channels.

o Indian Company Example: Chumbak Design Private Limited, an Indian lifestyle brand,
leverages Zoho Inventory. It helps Chumbak streamline supply chain processes, manage
inventory across warehouses, track sales orders, and fulfill customer orders efficiently.

❖ Training
1. Understanding SCM Fundamentals:

- Training Method: Instructor-led training (ILT) sessions with presentations, lectures, and
interactive discussions.

-Additional Resources: Reading materials, online courses, and video tutorials for self-paced
learning.

2. Software Familiarization:

- Training Method: Hands-on workshops with guided exercises and simulations.

- Additional Resources: Online demos, user manuals, and practice environments for
continuous learning.

3. Application and Use Cases:

- Training Method: Case studies and group discussions analyzing real-life examples of Indian
companies.

- Additional Resources: Industry reports, whitepapers, and success stories for deeper insights.

4. Functionality and Implementation:

- Training Method: Instructor-led sessions covering each software's functionalities and

implementation process.

- Additional Resources: Training manuals, implementation guides, and online forums for peer
support.

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5. Best Practices and Optimization:

- Training Method: Interactive workshops with role-playing exercises and group brainstorming
sessions.

- Additional Resources: Webinars, guest lectures, and expert panels sharing best practices and
success stories.

6. Integration and Interoperability:

- Training Method: Practical demonstrations and hands-on labs for configuring integration
settings.

- Additional Resources: Integration documentation, tutorials, and troubleshooting guides for

self-directed learning.

❖ Infrastructure Facilities:

The IT infrastructure facilitates two primary information flows:

1. Import SCM Data: Data is sent from small-sized suppliers to medium-sized enterprises. This
includes information such as expected market volume of supplied goods. The data is processed
and verified semi-automatically by the medium-sized enterprise.

2. Export SCM Data: Suppliers can view, search, and modify SCM data online or offline. This
includes downloading current and historical data like expected market volume of supplied
products from the medium enterprise’s perspective.

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❖ Information Technology in the Supply Chain

In supply chains, information acts as the crucial glue that binds everything together
efficiently. Without timely and accurate information, managers are left in the dark about
customer demands, inventory levels, and ordering timelines. This is where Information
Technology (IT) steps in.

Web-based technologies have revolutionized supply chain strategies by eliminating

information delays and reducing costs. Effective coordination of material, information, and
cash flows is essential for seamless supply chain management, with IT at its core,
incorporating tools like data recognition equipment and communication technologies.

Supply Chain Management (SCM) revolves around the exchange of products and
information among organizations. Integrated supply chains accommodate both forward
materials and backward information feedback loops.

Companies like Wal-Mart exemplify effective supply chain management through their
sophisticated use of IT. Wal-Mart monitors product sales nationwide, analyzing demand
patterns to optimize inventory levels and communicate real-time information to suppliers
for prompt order fulfilment.

The convergence of IT and supply chain management marks a new era of efficiency and
responsiveness, empowering organizations to navigate modern commerce with agility and
precision.

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➢ Supply chain IT framework.
• Role of IT
o Information gathered and analysed through IT tools is crucial for decision-
making.
o Effective IT use enhances overall supply chain performance.

o Access to relevant information enables optimized decisions across the entire

chain.
o Accurate, timely, and accessible data forms the basis for inventory, facility, and
transportation decisions.
o Information ensures visibility and guides decisions at strategic, planning, and
operational levels.
• Customer relation management

Customer Relationship Management (CRM) involves methodologies, software,

and internet tools to organize customer relationships. It's crucial for managing
interactions with customers, clients, and prospects.

o CRM helps understand customer needs and behaviours to strengthen

relationships.
o Enterprises use databases to access customer information for tailored
offerings and service reminders.
o CRM enables:
o Effective customer segmentation.
o Personalized marketing campaigns.
o Individualized customer treatment.
o Insights into buying behaviors.
o Key CRM processes:
▪ Marketing,
▪ Selling,
▪ Order management, and
▪ Call centre operations.
o Benefits of CRM systems:
o Improved quality,
o Efficiency,
o Cost reduction,
o Decision support, and
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 o Enterprise agility.
• Internal SCM
o Internal supply chain management covers all processes related to planning
and fulfilling customer orders.

o Processes within internal supply chain management include:

▪ Strategic planning
▪ Demand planning.
▪ Supply planning.
▪ Fulfilment
▪ Field service
o Strong integration between internal supply chain management and CRM
processes is crucial for effective operations.

• Suppliers' relation management

o Supplier relationship management involves managing interactions between an
enterprise and its suppliers.
o The goal is to streamline processes and make them effective.
o Maintaining control in new relationships is crucial to prevent contract
degradation.
o Without proper control, contracts can lose up to 30% of their value in the first
year.
o The SRM process involves:
▪ Identifying potential suppliers based on required qualifications.
▪ Evaluating and selecting suppliers based on various parameters.
▪ Entering agreements with selected suppliers regarding pricing, policies, etc.
▪ Identifying key suppliers based on sales volume and product demand.
▪ Regularly monitoring supplier performance.
• E-Commerce
o Electronic commerce (e-commerce) encompasses online business activities,
facilitating electronic transactions and creating virtual marketplaces.
o It involves buying and selling products or services over the internet and other
computer networks.
o E-commerce includes electronic funds transfer, supply chain management,
internet marketing, online transaction processing, electronic data interchange,
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 inventory management, and automated data collection systems.
o Modern e-commerce primarily utilizes the World Wide Web (WWW), but can
also incorporate technologies like email, mobile devices, and telephones.
o E-commerce and e-business are distinct concepts; while e-commerce focuses
on transactions, e-business employs ICT to enhance business processes.
o Mobile commerce (m-commerce) involves transactions via wireless technology,
with Japan leading in this field.
o Content delivery over wireless devices is faster and scalable, suggesting m-
commerce may surpass e-commerce, particularly in the Asia-Pacific region.
o E-commerce advantages include global market access for startups, mass
customization, and network production.
o Amazon.com exemplifies successful e-commerce, with minimal fixed assets
compared to traditional retail businesses.
o E-tailing (electronic retailing) is the most common form of business-to-consumer
(B2C) transaction, with Dell being an early adopter in 1997.
• Companies Utilizing IT in Supply Chain Management
1. Amul – Taste of India:
2. Amul, established in 1946, has evolved into India's leading food brand and holds
ISO 9001 accreditation. It played a pivotal role in initiating the dairy co-operative
movement in India, establishing the Gujarat Co-operative Milk Marketing
Federation. Presently, it encompasses 70,000 villages and 200 districts across India.
3. Amul's distribution network spans 50 sales offices nationwide, with distribution
managed through 4,000 stockists serving 500,000 retail outlets. Leveraging IT,
Amul has interconnected distributors and integrated top retailers' web pages into its
website. This facilitates distributor orders through the platform amulb2b.co.
4. By embracing e-commerce technology, Amul has automated its supply and delivery
chain practices, implementing just-in-time supply chain management. This
approach ensures timely delivery of products while minimizing inventory costs.
Through the seamless integration of IT into its supply chain operations, Amul has
achieved enhanced efficiency and responsiveness, further solidifying its position as
a cornerstone of India's food industry.

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❖ Challenges and Sustainability of SCM:

Supply chain management (SCM) is a critical component of modern business

operations, involving the coordination and management of activities involved in sourcing,
procurement, conversion, and logistics management. However, SCM faces several
challenges that can disrupt operations and impact the bottom line. Here's an in-depth
analysis of the most significant challenges in SCM, including real-time data and insights:

1. Lack of Visibility and Transparency: A recent study by the Council of Supply Chain
Management Professionals (CSCMP) found that only 6% of companies have full
visibility into their supply chains. This lack of visibility and transparency can make it
difficult to track and monitor the movement of goods, leading to inefficiencies, delays,
and increased costs.
2. Supply Chain Disruptions: According to a survey by the Business Continuity Institute
(BCI), 70% of companies experienced at least one supply chain disruption in the past
year. These disruptions can be caused by various factors, including natural disasters,
political instability, and global health crises. For example, the COVID-19 pandemic
caused widespread supply chain disruptions, with 94% of Fortune 1000 companies
experiencing supply chain disruptions due to the pandemic.
3. Cybersecurity Risks: As supply chains become more digital, the risk of cybersecurity
threats increases. A report by Accenture found that supply chain attacks increased by
78% in 2019, with the average cost of a cybersecurity breach exceeding $3.8 million.
These threats can compromise sensitive data, disrupt operations, and cause reputational
damage.
4. Increasing Complexity: As supply chains become more global and complex, managing
them becomes more challenging. According to a report by McKinsey, the average
complexity of global supply chains has increased by 60% over the past decade. This
complexity can lead to increased risks and inefficiencies, making it difficult to maintain
visibility and control.
5. Changing Regulations and Trade Policies: Changes in regulations and trade policies
can significantly impact SCM. For example, the ongoing trade tensions between the US
and China have caused significant disruptions to global supply chains. According to a
report by the World Trade Organization (WTO), the trade tensions have resulted in a
reduction in global GDP by 0.8%.

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 6. Sustainability Concerns: As sustainability becomes an increasingly important concern
for consumers and businesses, SCM must adapt to meet these demands. According to a
report by the World Economic Forum (WEF), the world's largest companies could face
up to $1 trillion in costs related to sustainability issues by 2030. To address these
concerns, companies are investing in sustainable SCM practices, such as reducing waste
and emissions, and increasing transparency in their supply chains.
7. Barriers of Supply Chain Management: The obstacles of supply chain management
include:
a. Lack of top management support
b. Non-aligned strategic and operating philosophies
c. Inability or unwillingness to share information.
d. Lack of trust among supply chain members
e. Unwillingness to share risks and rewards.
f. Inflexible organisational systems and processes
g. Cross-functional conflicts
h. Inconsistent or inadequate performance measures
i. Resistance to change.
j. Lack of training for new mindsets and skills

❖ Emerging trends in SCM

1. Big Data, Analytics, and Automation:
a. Enabling digital, agile supply chain management.
b. Predictive and prescriptive analytics, big data, algorithms, and robotics drive
greater visibility, synchronized planning, data-driven decision-making,
predictability, agility, and profitability.
2. Digital Supply Chains:
a. Essential for various trends, including risk, resilience, and security.
b. Requires sensor implementation, digital twins, cloud-based networks, and
process automation.
c. Adoption of digital capabilities crucial for competitiveness.
3. Supply Chain Risk and Resilience:
a. Requires collaboration among complex global networks.
b. Strategies include diversification, localization, and resilient supply chain design.
c. Mitigates adverse events, enhances customer service, and generates value.

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4. Artificial Intelligence and Machine Learning:
a. Key components driving system maximization and interoperability.
b. Integral to integrating people, processes, and systems.
c. Significant impact on supply chain functions and industry evolution.
5. Robotics:
a. Addressing labour shortages, supply disruptions, and demand surges.
b. Intelligent robotics transform supply chains with warehousing, transportation,
and last-mile delivery tasks.
c. Drive down costs and enhance efficiency.
6. Data Security and Cybersecurity:
a. Vulnerability of digital supply chains to cyberattacks necessitates greater
collaboration and investment in security measures.
b. Focus on safeguarding networks, devices, and personnel.
7. Circular and Sustainable Supply Chains:
a. Shift towards circular economies prioritizing responsible resource usage.
b. Imperative for sustainability and minimizing environmental impact.
8. Essential Goods Supply Chains:
a. Support essential goods producers, surplus distribution, and temperature-
controlled goods fulfilment.
b. Challenges include picking, packaging, and transporting with temperature
integrity.
9. Smart Logistics and the Internet of Things (IoT):
a. Provides near-real-time transparency and insights into product location,
movement, and conditions.
b. Enables cost reduction, service level improvement, and network optimization.
10. Logistics Vulnerability:
a. Relies on integrated, flexible transportation planning systems.
b. Enhances visibility, integration, and flexibility to adapt to real-time information.
c. Rethinking physical connections among transportation networks essential for
seamless interaction.

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 References

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operation. Pearson Education.
2. Council of Supply Chain Management Professionals (CSCMP). (2022). [Website].
https://cscmp.org/
3. The Harvard Business Review (HBR). (2022). [Website]. https://hbr.org/topic/supply-
chain
4. Y. Narahari and S. Biswas. Supply Chain Management: Models and Decision Making
5. Ram Ganeshan and Terry P. Harrison. An Introduction to Supply Chain Management
6. D. Connors, D. An, S. Buckley, G. Feigin, R. Jayaraman, A. Levas, N. Nayak, R.
Petrakian, R. Srinivasan. Dynamic modelling for business process reengineering. IBM
Research Report 19944, 1995
7. WTO
8. FTA reports
9. Institute for Supply Management. (2010) Supply Management Defined. Retrieved August
2, 2013, from http://www.ism.ws/tools/content.cfm?ItemNumber=5558.

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