BA 4021 SUPPLY CHAIN MANAGEMENT 1

UNIT V- SUPPLY CHAIN INNOVATIONS

Supply Chain Integration, SC process restructuring, IT in Supply Chain; Agile Supply
Chains, Legible supply chain, Green Supply Chain, Reverse Supply chain; Supply chain
technology trends – AI, Advanced analytics, Internet of Things, Intelligent things,
conversational systems, robotic process automation, immersive technologies, Blockchain.

5.1 SUPPLY CHAIN INTEGRATION

5.1.1 Concept of Integration
An integrated supply chain can be defined as an association of customers and suppliers who,
using management techniques, work together to optimize their collective performance in the
creation, distribution, and support of an end product.
Supply chain integration involves communication between a buyer and a seller. The objective
is to establish an ongoing working relationship such that the buyer's needs are better known
and understood by the supplier. Supply chain integration often takes the form of integrated
computer systems. For example, the supplier's computer system may be set up to deliver real-
time data to the buyer's computer.
This allows the buyer to know:
The current status of all orders.
Which products are in the supplier's inventory.
The status of products being manufacturer for the buyer.
When an order or product is ready to ship.
Tracking of the shipment.

5.1.2 Elements of Supply Chain Integration

Four C's of Supply Chain Integration.
Communication
As mentioned, communication is key. Everyone involved in the supply chain needs to be well
informed, allowing them to quickly adjust their operations to meet changes in demand and
new business opportunities. This is often done using integrated computer systems, but direct
channels of communication between key people should also be in place.
Customers
The focus should always be on the final customer's needs, and what the customer values and
is willing to pay for. This requires the lead organization to have a close relationship with their
customers. The lead organization must make others in the supply chain aware of the final

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customer's needs, and how their part of the supply chain impacts the ability to meet those
needs. Everything must be focused on the final customer's needs; ultimately, they are the
ones paying the bills for everyone else in the supply chain.
Collaboration
To be effective, supply chain integration requires good relationships among all the members
of the supply chain. This is called collaboration. Each participant in the supply chain should
be interested in developing their suppliers, including providing training to improve their
product knowledge and understanding of the markets being served. They may even become
involved in joint product development projects. Supply chain integration is a collaborative
partnership.
Cooperation
The sharing of supply and demand information is critical for the success. This may include
information that is usually considered proprietary. However, without close cooperation, the
members of the supply chain will not have the information they need to be responsive to
customer needs.

5.1.3 Benefits of Supply Chain Integration

Flexibility
An integrated supply chain results in improved ability to respond to rapid changes in the
market. This is backed by a shared interest, throughout the supply chain, in getting things
right the first time.
Improved Inventory Management
There will be fewer overstocked and understocked items. Overall you'll have smaller
inventories, reducing storage costs and allowing quicker replacement of obsolete items. This
is the result of n improved ability to match inventory levels with customer demand.
Reduced Spending
In addition to reduced costs associated with inventory, costs for quality control and
inspections, administrative activities, and purchasing will all go down. Transportation costs
will even be reduced, due to optimization of loads and better forecasting.
Improved Suppliers
You'll have fewer and better suppliers. You'll have more confidence in the quality provided
by those suppliers, and in their ability to deliver orders on time.

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Case Study: Dell Computer and Fujitsu America

Dell Computer Corporation's success in the past few years and its growth relative to the
rest of the PC industry made daily headlines throughout the 1990s. Based on the premise
that bypassing resellers, building products to order, and reducing inventories would result
in a lower cost, more responsive business, Dell has grown into one of the largest forces in
the industry. Nevertheless, it is squeezed into such a narrow business niche that, from some
perspectives, its very survival seems tenuous. Dell competes with many capable and, in
some cases, lower cost competitors, has virtually no proprietary technology, and must deal
with exceedingly robust suppliers, including Intel and Microsoft.
The heart of Dell's success is its integrated supply chain, which has enabled rapid product
design, fabrication, and assembly, as well as direct shipment to customers. Inventories have
been dramatically reduced through extensive sharing of information, a prudent choice
given the risk of technological obsolescence and reductions in the cost of materials that can
exceed 50 percent a month. Even with reduced inventories, Dell's strategic use of
information has made possible a dramatic reduction in the elapsed time from order to
delivery, giving Dell a significant competitive advantage.
Component inventories are monitored weekly throughout the supply chain and, when there
are deviations from plan, the sales force steers customers, by means of discounts, if
necessary, toward configurations for which there are adequate supplies. Thus, abundant,
timely information is used to work the front and back ends of the supply chain
simultaneously.
Speed is a critical factor in the computer industry, especially in the area of inventory. In the
late 1980s, Dell measured component inventories in weeks. In 1998, they were measured in
days. They may soon be further reduced through real-time deliveries so that, as
components are used, they are automatically and immediately replaced. The reduction in
inventory not only lowers requirements for capital, it also enables rapid changeovers to
new product configurations because no old parts must be used up. Faster time to market for
new products translates into increased revenues and profits. The change in emphasis from
inventory levels to inventory velocity throughout the supply chain has been made possible,
in part, by the Internet.
In Dell's new virtual corporation, inventories are reduced by use of timely information;
emphasis on physical assets is being replaced by emphasis on intellectual capabilities; and

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proprietary business knowledge is being increasingly shared in open, collaborative

relationships. This extensive integration of the supply chain can be viewed as a shift from
vertical corporate integration to a virtually integrated corporation (Magretta, 1998).
Vertical integration was essential in the early years of computer manufacturing when the
supplier base was not well established and assemblers had little choice but to design and
build components and assemble the entire end product in house. Proprietary component
technologies were a main source of competitive advantage, although in some cases they
had little to do with creating value for the customer. As the industry matured, multitudes of
component suppliers became eager to invest and compete in terms of price and innovation.
Leveraging investments by these suppliers has freed Dell to focus on delivering complete
solutions to its customers. However, because these components are available to all PC
assemblers, it has become harder to compete in terms of end-product differentiation. Thus,
a high premium has been placed on speed and process efficiency, blurring the traditional
boundaries between supplier, manufacturer, and customer. For instance, peripherals, such
as monitors, keyboards, speakers, and mice, need not be gathered in one location prior to
shipment to the customer. Manufactured by separate suppliers and labeled with the Dell
logo, shippers gather them from all over North America, match them overnight (merge-in-
transit), and deliver them as complete hardware sets to customers as if they had come from
the same location.
Dell's virtual integration has the following characteristics:
Use of rapid, seamless communication to build direct relationships between customers,
OEM, and suppliers
A clear definition of what Dell does best (i.e., core competencies, including branding,
marketing, and selling through direct channels), with partnerships for the rest (capital-
intensive and labor-intensive component fabrication processes and services). This enables
Dell to be highly selective in its capital investments and to focus on activities that create
the most value for customers and shareholders
Selection of partners who are best in their respective fields, inviting them to become
intimate parts of the business, and holding them to the same exacting quality and
performance standards as in-house segments of the business
Use of a minimum number of suppliers, to whom Dell is highly loyal as long as they
maintain their leadership in technology, quality, cost, and delivery
Use of the Internet, not just as an add-on to the business, but as an integral part of a

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strategy to eliminate boundaries between companies and promote effective integration

Less emphasis on guarding intellectual assets and more emphasis on using assets rapidly
before they become technologically obsolete
By using a highly integrated supply chain, Dell has enjoyed many of the advantages of
vertical integration while simultaneously benefiting from the investments, innovation,
efficiencies, and specialization of highly focused suppliers. Although the Dell model does
not fit every situation, the lessons of Dell's experience can be extracted and adapted to
many other supply chain situations, even for SMEs.
By 1998, the success of the Dell model, as might be expected, was causing problems for
competitors, including Fujitsu America, which had large inventories and high shipping
costs (Washington Post, May 2, 1999). Customers had to wait 10 days for laptops, while
competitors were delivering in five. In response, Fujitsu moved its distribution centre from
Portland, Oregon, to Memphis, Tennessee, and turned distribution over to FedEx
Corporation, the parent company of Federal Express. In direct response to orders, FedEx
coordinates the shipment of components from worldwide suppliers, oversees the assembly
of PCs, and ships them out, all in three or four days. By early 1999, the cycle time on the
ground was eight to twelve hours, and the goal was to reduce it to four hours. Fujitsu has
essentially eliminated geographic proximity as an issue and has made maximum use of the
benefits of globalization, including low cost. Even with the premium price of express
shipping, this modification of the Fujitsu supply chain saved the company millions of
dollars, slashed inventories by about 90 percent, and increased profits by 25 percent. Most
important, these changes have enabled Fujitsu to compete effectively with Dell for Internet
sales directly to consumers. However, as is evident from these examples, these innovations
in supply chain integration can also impose large burdens on suppliers in terms of
responsiveness, inventories, and management of their own supply chains.

5.2 SUPPLY CHAIN RESTRUCTURING

Supply chain restructuring is the process of redesigning or reorganizing the components of a
supply chain to improve its efficiency, reduce costs, enhance agility, and increase customer
satisfaction. The goal of supply chain restructuring is to optimize the flow of goods and
services across the supply chain by reconfiguring the relationships, processes, and technology
that connect the various entities involved.

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Whenever the best supply chain practices, such as supply chain optimization and integration,
fail to achieve the desired changes, supply chain managers may require resorting to supply
chain restructuring. Supply chain restructuring is all about integrating product and process
engineering with supply chain functions.
Supply chain restructuring may involve a range of activities, including:

1. Network design: The first step in supply chain restructuring is often to redesign the
network to optimize the flow of goods and services. This may involve changing the
number and location of warehouses, transportation modes, and the allocation of resources
across the supply chain.
2. Process redesign: Supply chain restructuring may also involve redesigning the processes
involved in manufacturing, logistics, and delivery to improve efficiency and reduce costs.
This may involve the adoption of new technologies or the automation of certain tasks.
3. Supplier management: Restructuring the supply chain may also involve reviewing and
renegotiating supplier contracts to ensure that they are aligned with the company’s
strategic goals and objectives.
4. Technology adoption: The adoption of new technology, such as IoT devices, artificial
intelligence, and blockchain, can also play a significant role in supply chain restructuring.
These technologies can enable greater transparency, accuracy, and efficiency across the
supply chain.
5. Collaborative partnerships: Restructuring the supply chain may also involve forming
collaborative partnerships with other companies in the supply chain to enhance agility and
reduce costs. These partnerships may involve sharing resources, knowledge, and expertise
to optimize the supply chain for mutual benefit.

5.2.1 Supply Chain Restructuring Approaches

Supply chain process re-structuring involves making changes in one or more dimensions of
the supply chain by adopting any of the following three approaches:
1. Postpone the Point of Differentiation
According to this approach, the point of differentiation should be close enough to the end of
the value curve. It means that all changes that are made to introduce differentiation in a
product should be made near the customers at the delivery time. It is important as this may

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help in carrying out the majority of activities at the aggregate level instead of the variant
level. For example, paint companies produce paints of different varieties in different colours.
They usually postpone the point of differentiation till the far end of the value addition curve.
For example, Asian Paints offers four types of emulsion brands. All emulsions comprise a
base and a stainer. The stainer is the element that when added to the base, produces an
emulsion of the desired colour. Paints comprise 99 percent of the base and 1 percent of the
strainers. The base for all emulsions remains the same whereas the stainer is manufactured in
various colours. Strainers are available in about 150-250 shades. The process of mixing the
base with the stainer is called the tinting operation.
Now, Asian Paints has shifted its tinting operation to the retail level. It means that the retailer
produces emulsions having a particular colour in tinting machines (paint mixing machines)
only after getting an order from a customer. By doing this, Asian paints are not only changing
its Made to Stock (MTS) model to Configure to Order (CTO) model, but also saving billions
by reducing the inventory level at the variant level.
2. Alteration in the Shape of the Value-addition Curve
Most cost addition in products should be shifted to the end of the supply chain. This helps in
decreasing the level of inventory. Shifting the majority of cost addition towards the end of the
supply chain is important because if any unpredictable changes occur, the organization can
incorporate those changes with minimum cost.
3. Advancement in the Customer Ordering Point
It involves shifting the customer ordering point or customer entry point near the start of the
value-addition curve. This helps the organization move from the MTS model to the CTO
model of the supply chain. The advantage of the CTO model is that most activities can be
done against an order.

5.3 IT IN SUPPLY CHAIN

1. Integrated and Coordinated Supply Chain

A supply chain can only work efficiently when it is properly integrated and well-coordinated.
IT performs this crucial task by bringing in multiple technologies and combining them to
optimise the supply chain. These technologies make data collection possible and much easier
and more accurate. In turn, this allows precise and detailed data analysis leading to sound
business decisions.

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2. Increased Productivity
Smooth flow of information, new technologies and effective communication increase the
productivity of all entities in the supply chain. It is like a trigger for product movement.
Instead of going back and forth, IT provides the link that passes the needed information
continuously.
3. Cost Reduction
IT permits optimum utilisation of resources and assets. Old data is used to study the trends,
and technology is used to analyse it for improving performance. When resources are used
optimally, they result in cost reduction.
In a supply chain, the role of IT becomes more prominent because it motivates all parties to
use their respective resources in the most cost-efficient manner. When IT is used as it should
be, there is a dramatic fall in overall expenses.
4. Product Improvement
IT consists of tools and applications which can be used to gain early awareness. In a market
where consumers always want something new, the product will either have to evolve or it
will go out of demand. To stay in business, you must introduce product improvement and
innovation sooner rather than later. The kind and extent of product improvement can be
validated with the help of IT.
5. Supply Chain Visibility
Information makes the entire supply chain visible to supply chain managers. The manner in
which the information flows from one collaborator to the other and the impact it has on others
is used by the managers in making strategic decisions.

5.3.1 The Functional Roles of IT in Supply Chain Management

1. Transaction Execution
When information flows efficiently between the participants of the supply chain, the number
of transactions between them is reduced. IT increases the efficiency of repetitive data
exchanges. This data is usually appropriate for delivery verification, order processing, billing,
and dispatch advice.
2. Collaboration and Coordination
IT renders the flow of information. This makes for easier planning, coordination and
improved collaboration between all participants. Demand forecasts make it possible to plan

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for the future, and order tracking makes knowing the physical location of each order a reality.
Neither of these activities is possible without IT.

3. Decision Support
Good decisions cannot be pulled out of thin air. They are and should be based on data. IT is a
huge benefit in decision support. It can collect even the most complicated set of data and
convert it to easy-to-understand charts and reports. In this context, IT extends decision
support to all managers.

5.3.2 Software for Supply Chain Management

There are many tools that are used for effective supply chain management. These are
primarily categorised as:
1. Enterprise Resource Planning
Materials requirement planning, which was earlier used to distribute resources for a
manufacturing operation, resulted in enterprise resource planning (ERP), a system that links
individual IT applications into a single one. This results in the integration of the data and the
processes of the complete business.
When all operations are consolidated, information related to cash flow and material flow
starts making more sense. ERP has now become the backbone of the supply chain and
provides an integrated view of the organisation as a whole. Today, ERP has also led to the
automation of many functions so that there is minimal human intervention.
2. Electronic Data Interchange
Electronic Data Interchange (EDI) is the exchange of business data from one computer to
another. It is usually done in a standard format so that all concerned parties can use it
according to their need without having to constantly ask for it. EDI allows companies, across
the industry, to communicate with one another.
Everyone who uses EDI follows the same rules and methods. This makes for efficient
inventory management, better business relationships, and improved customer service.
3. Supply Chain Management Systems
An ideal supply chain management system will help in planning, selecting the vendor,
manufacturing, logistics, and building the customer relationship. To provide the necessary
assistance Supply Chain Planning (SCP) software and Supply Chain Execution (SCE)
software are used.
4. Customer Relationship Management

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CRM or e-CRM uses IT to assist an e-business in managing its customer base. It matches
customer needs with the product plans to increase sales.

5.4 AGILE SUPPLY CHAINS

An agile supply chain is a sophisticated set of processes that enables businesses to channel
resources more efficiently, enhance inventory management, and increase productivity. This
process allows companies to better control the production of goods and materials for
customer demand and prioritize resources for significant orders.
Organizations implement an agile supply chain to streamline and control manufacturing and
distribution, and manage inventory. The process allows companies to track the status of their
products, know when they’re needed, and adapt accordingly. Ideally, this avoids the waste
that potential overproduction or underproduction can create.
An agile supply chain puts constant emphasis on efficient processes and empowered
employees. Agile supply chains are nimble enough to respond smoothly to sudden changes in
supply and demand.
Adopting an agile model benefits the greater organization by allowing it to act quickly and
decisively. And empowers it to achieve positive business outcomes even in the face of
adverse circumstances.

5.4.1 Characteristics of an Agile Supply Chain

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An agile supply chain is a tightly controlled process that can help businesses increase
productivity and revenue and reduce extra costs. Here are the top characteristics of an agile
supply chain:

Resiliency
Resiliency is the ability to recover from problems, such as a breakdown or failure in the
entire supply chain. To manage disruptions, identify the causes, the risks involved, and the
potential consequences. Once you do, you can work on mitigation procedures and
contingency plans to ensure the supply chain remains robust.
Flexibility
There is a constant need to adapt, and companies must have a flexible approach to help them
succeed. Agile processes formulated in clear, simple, and straightforward ways enable supply
chain entities to react quickly without interruptions or delays.

5.4.2 Benefits of Having an Agile Supply Chain

Flexibility
Agile supply chain processes allow companies to react quickly without interruptions or
delays. They can move toward agile processes to adapt to new trends and customize their
supply chains to their needs. Flexibility makes it easier for supply chain entities to make
changes and better prepare for future demand in the market. It can allow companies to
respond quickly to changing customer demand in the manufacturing process, ultimately
leading to faster project completion.
Visibility
An agile supply chain promotes increased visibility of all relevant information for all
stakeholders. When real-time data is available, it’s easier to track, plan, and make decisions.A
manufacturing company’s ability to track inventory and the status of materials and goods
increases efficiency. The insights allow companies to pinpoint bottlenecks and reduce costs
by addressing problems before they become serious.
Growth
Agile supply chain management allows companies to improve quality, speed delivery times,
and control costs significantly. Supply chain agility results in a more efficient supply chain
that can reach higher levels of growth and productivity.

5.4.3 Applications of Agility throughout the Supply Chain

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Similar to agile software development, companies can use an agile supply chain to improve
operations. Here are five of the most useful applications:
Production and Scheduling
A company’s production and scheduling are essential to the supply chain. In this stage, a
manufacturing company must produce goods at an optimal pace, with the right quality, and in
the right quantities. Production involves materials, machines, and workers. This phase is a top
priority for a company because if it doesn’t produce the right amount of goods, customers
face potential shortages or even a lack of supplies. Agile processes can quickly improve the
overall output with better quality products.
Scheduling involves the coordination of deliveries and workers, as well as other resources in
the manufacturing company. A company must be able to create and manage a production
schedule that is accurate, efficient, and effective. An agile supply chain can reduce the time it
takes to complete orders, minimize waste, avoid delays in delivery times, and minimize the
possibility of losing revenue.
Procurement
Procurement involves acquiring raw materials and components that are key to making
products. It is one of the most critical stages in the supply chain as it ensures the optimal
materials and supplies based on production, forecasting, and delivery requirements. An agile
approach helps you successfully navigate procurement, allowing companies to monitor all
materials’ flow and status, which minimizes the risk of material shortages. With supply chain
agility and demand-driven planning, companies can make better decisions that lead to better
procurement to ensure continuity and efficiency.
Storage
After producing goods, they must be stored in appropriate places to avoid damage or waste.
Storage is one of the most costly stages of a supply chain. It involves warehousing, personnel,
and equipment that are responsible for the storage of goods. Companies using agile supply
chains can effectively ensure all goods are appropriately stored, reducing waste, damage, and
inefficiency. Agile supply chain management minimizes extra costs, extends supply life, and
enables a manufacturing company to reduce the necessary personnel. They will require less
space and can make better decisions to streamline and improve logistics.
Distribution
Distribution involves moving goods from one facility to another. It allows a company to
deliver supplies and products to customers and stores. The most effective way to distribute
goods is by developing an agile supply chain in which you can easily access all

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locations. With the help of an agile supply chain, companies can move products quickly,
efficiently, and effectively. It helps ensure continuous operations without interruption or
delays, enhancing the customer experience.

Forecasting
Companies must have accurate forecasts to have a productive supply chain. Precise
forecasting allows companies to gauge the need for materials and resources accurately. An
agile supply chain allows companies to track, plan, and react to demand and pricing changes
within their supply chain.

5.4.4 Tips for creating an Agile Supply Chain

Companies looking to implement an agile supply chain should be sure they understand what
it is and what it can do for them before deciding to implement it. Here are five tips to
consider:
Refine Processes
Before making any changes, companies must pinpoint the infrastructure and technology
necessary to build it. It includes identifying a problem or challenge they must address and the
necessary improvements they must make.
With this information, companies can create an action plan and implement immediate
solutions to improve supply chain performance and compete in the market.
Upgrade Technology
Companies should look at the current infrastructure and replace it with new or upgraded
technology. It is critical because it will help companies better manage their supply chain.
With modern technologies, they can streamline and automate their system to improve the
overall flow of information. Cutting-edge technology allows a company to access real-time
data, make decisions on the go, and respond quickly to unexpected changes.
Build a Strong Team
The next step is to create an agile team of supply chain partners with a wide range of skills
and expertise. This unit includes store managers, IT professionals, engineers, planners,
warehouse supervisors, and other critical positions in supply chain operations.
An agile team will be able to identify problems and solutions in the supply chain, propose
new solutions, and implement them. They will also have a unified view of all operations to
ensure continuity throughout the supply chain.

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5.5 LEAN SUPPLY CHAIN MANAGEMENT

Lean supply chain management is a comprehensive approach to improving the performance

of the entire supply chain.
Lean supply chain management (LSCM) is an approach to managing the flow of goods and
services from the source of supply to the customer. It is focused on maximizing value and
reducing waste and inefficiencies in the supply chain process. The main goal of LSCM is to
increase customer satisfaction while reducing costs and improving efficiency. It involves
understanding customer requirements, analyzing the supply chain, identifying and
eliminating waste, and developing strategies to streamline processes.
Apart from cost reduction and increased efficiency, lean supply chain management leads to
better collaboration between suppliers, manufacturers and customers
Lean supply chain involves understanding customer requirements, analyzing the supply
chain, identifying and eliminating waste, and developing strategies to streamline processes

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5.5.1 Benefits of Lean Supply Chain Management

Helps Reduce Costs
As companies look to reduce costs, they often turn to lean supply chain management to
identify areas where costs can be cut. By eliminating waste and streamlining processes,
companies can reduce their overall costs and improve their bottom line.
Improves Customer Service
Lean supply chain management can help companies better understand their customers' needs
and improve their responsiveness to those needs, and thereby increase customer satisfaction.
Leads to Increased Efficiency
Lean supply chain management helps companies identify and remove any unnecessary steps
or processes in the supply chain, leading to increased efficiency and improved operational
performance.
Improves Communication and Collaboration
Lean supply chain management can help companies improve the communication and
collaboration between suppliers, manufacturers, and customers.
Leads to Better Decision-Making
Lean supply chain management can help companies make better decisions by providing them
with data and insights into the supply chain process. By leveraging data and analytics,
companies can make informed decisions and improve their operational performance.

5.5.2 Elements of Lean Supply Chain Management

To successfully implement lean supply chain management, there are several key elements
that need to be in place. These elements include:
Customer Requirements
Companies need to understand their customers' needs and expectations in order to provide
high-quality products and services. The customer's needs should be the driving force behind
the supply chain process, and companies should use data and analytics to better understand
customer requirements.
Data and Analytics
These are essential for understanding customer requirements and improving the supply chain
process. Companies should use data and analytics to identify areas where waste can be
eliminated, processes can be improved, and customer service can be increased.

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Collaboration
Companies need to collaborate with their suppliers, manufacturers, and customers to ensure
that everyone is working together to achieve the same goal. This collaboration can help
companies identify areas where improvements can be made and ensure that everyone is
working toward the same objectives.
Technology
Companies should use technology to increase transparency and improve communication and
collaboration between suppliers, manufacturers, and customers. Technology can also be used
to track and monitor the supply chain process , helping companies identify areas where
improvements can be made.
Continuous Improvement
By continually looking for opportunities to improve, companies can ensure that their supply
chain remains efficient and effective.

5.5.3 Characteristics of a Lean Supply Chain

Visibility
Companies must have visibility into their supply chain process in order to identify areas
where improvements can be made. Visibility can be achieved through data and analytics, as
well as through collaboration with suppliers, manufacturers, and customers.
Agility
Companies must be able to quickly respond to changes in customer requirements and be able
to adjust their processes accordingly. This requires companies to have the flexibility to
quickly adapt and respond to changes.

5.6 GREEN SUPPLY CHAIN MANAGEMENT

The term sustainable or green supply chain refers to the idea of integrating sustainable
environmental processes into the traditional supply chain.
This can include processes such as supplier selection and purchasing material, product
design, product manufacturing and assembling, distribution and end-of-life management.
Instead of mitigating harmful impact of business and supply chain operations, green supply
chain involves value addition and/or value creation through the operations of whole chain.
Undeniably, reducing air, water and waste pollution is the main goal of green supply chain,

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while green operations also enhance firms’ performance in terms of less waste
manufacturing, reuse and recycling of products, reduction in manufacturing costs, greater
efficiency of assets, positive image building, and greater customer satisfaction.

Application of environmental management principles to the entire set of activities across the
whole customer order cycle, including, design, procurement, manufacturing and assembly,
packaging, logistics and distribution.
Integrating environmental thinking into supply chain management, including ecological
design of products, purchasing green materials and components, reengineering of
manufacturing steps towards eco-friendly, reverse logistics management of the product after
its useful life .
Integrating environmental consideration onto firms’ supply chain including reverse logistics.
Reducing and controlling the harmful impacts of supply chain on the environment.
Adoption of ecological design, sourcing green materials and chemicals, and provide green
trainings to employees under ethical leadership.
Green supply chain are integrating eco-friendly concept into supply chain management to
improve environmental sustainability with different green practices including, green

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purchasing, green distribution and warehousing, green transportation with usage of biofuels,
green manufacturing processes and the products’ end-of-life management.
5.6.1 Critical success factors in GSCM
There is no doubt that green supply chain is a relatively new idea, which is gaining popularity
so as to improve environmental performance in the whole chain [5, 14]. We have identified
the following six key critical success factors for putting green supply chain management into
practice to attain better environmental sustainability.
Ethical leadership/internal management
Customer management
Supplier management
Competitiveness
Societal
Regulatory

5.6.2 Green practices in Supply Chain Management

1 Green material sourcing
Green sourcing means sourcing or purchasing materials and components which have such
enviable eco-friendly characteristics as reusability, recyclability and nonuse of
hazardous/dangerous chemicals.
2 Green marketing
The actions directed to all incorporates and consumers comprise green marketing, a broad
range of marketing activities (e.g., planning, production,, process, price, promotion and after-
sale service) designed to illustrate the goal of organization to mitigate the harmful effects of
their products.
3 Green management
Green management practices (GMP) provide a firm with supplementary sources of
information that can enhance their business and environmental objectives]. Adoption of green
management practices help with improved firm image, increased efficiency, environmental
compliance improvement, cost savings, achievement of societal commitment and reduction of
carbon emissions etc..
4 Green distribution and warehousing
Green distribution and warehousing can reduce the waste and play an important role in
energy reduction and value addition of green products in warehousing significantly improve

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overall performance of organization with better corporate image. Green distribution helps
enterprises to obtain superior financial and environmental performance

5 Green manufacturing
Green manufacturing practices are to implement socially and environmentally accountable
practices to mitigate harmful effects of manufacturing and increased profitability of firms.
Green practices in production improve efficiency of processes. This practice involves the
application of the green resources, which may lead towards competitive advantage through
reduction in products’ cost and improvement in products’ quality. Lean and green
manufacturing industry both are working for eliminating waste and improving the efficiency
of manufacturing processes.
6 Ecological design
Ecological design incorporates many ideas such like using cleaner technology processes,
green raw material and components. Green design of products reduces ecological impacts of
products during their life. In addition, green design of products also supports reusing,
recycling and remanufacturing of products, which not only helps firms to improve their
environmental performance but also provide opportunity to reduce their costs.
7 Green transportation and reverse logistics
Green transportation and reverser logistics practices provide opportunity to organizations, to
improve their image and reduce their costs. Logistics overheads can be saved through
promoting transportation system’s efficiency and enhancement of customer association also
can be obtained to create more profitability]. The logistics activities integrated with
rehabilitation comprise the practice of reverse logistics (reusing, recycling, and
remanufacturing), which can produce the products that can be used again for customers.
Green logistics practice helps firms to reduce their environmental impacts with improved
quality and cost reductions.
8 Renewable energy and biofuels
Renewable energy and biofuels are required in supply chain operations so as to obtain
sustainable environmental and economic growth . The bioenergy mitigates the carbon
emissions and also improves profitability of enterprises with better image and reputation
building.

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5.7 REVERSE SUPPLY CHAIN

The reverse supply chain is a process that is almost opposite of a traditional supply chain,
meaning the product moves from a customer back to a vendor / supplier / retailer
Reverse logistics refers to the processes that happen when a product is returned to a seller or
manufacturer. .
Reverse supply chain management includes pickups, disposing or cleaning, sorting,
repackaging, restoring, and finally reshipping. By focusing on reverse logistics processes, a
business is more robust to the complete customer lifecycle – which comes with serious
benefits.

 Products that have failed, but can be repaired or reused

 Products that are obsolete but still have value
 Unsold products from retailers
 Recalled products
 Parts repaired in the field that still have value
 Items that have secondary usage, i.e. items that have another usage after they have exhausted
their original use
 Waste that must be accounted for and disposed of or used for energy production
 Containers that must be returned to their origin or some sort of consolidation facility

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5.7.1 Steps of Reverse Logistics

 The customer initiates the return, following the seller’s requirements for mailing or
physically returning the item to the seller or manufacturer.
 The item must be transported to a returns processing facility.
 The item is inspected, cleaned or repaired if necessary, and then re-sold, recycled, re-used or
landfilled.
 The customer is refunded the cost of the item or credited.

5.7.2 Five Rs of Reverse Logistics

If you are a company looking to optimize your product returns processes, you may be
wondering which areas to tackle first. Our article on the Five Rs of Returns
Management covers the five foundational components:
Returns
Recalls
Recycling
Repackaging
Repairs

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5.8 TOP TRENDS IN SUPPLY CHAIN

1. Blockchain
2. Digital Supply Chain Twins
3. Supply Chain as a Service (SCaaS)
4. Circular Supply Chains
5. Cloud-based Products
6. AI
7. IoT
8. Robots and Automation
9. 5G Networks
10. Capacity Crunch

5.8.1. Blockchain
Blockchain technology is an advanced database mechanism that allows transparent
information sharing within a business network. A blockchain database stores data in blocks
that are linked together in a chain.
It makes sense to follow the demand for an increase in supply chain visibility with the
growing popularity of blockchain. Blockchains database structure can set supply chains up
for success with end-to-end transparency. Before diving into this further, what exactly is
blockchain?
Blockchain leverages chunks or “blocks” of data, whereas normal databases store their
information in tables. These storage blocks eventually hit their capacities, and as data flows
in, new blocks are created and chained to their predecessor.
These blocks form immutable records that give users valuable transparency into all of their
transactions with accurate time stamps. That’s all well and good, but how does this tie into
the world of supply chain management?
Blockchain comes with multiple benefits that include:
• Improved materials tracking from a source, through the supply chain, to the customer.
• Reductions in paperwork and administrative processes.
• Increased transactional security and visibility with suppliers and subcontractors.
• Better fraud detection and prevention for high-value items.

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These advantages make it easy to see why a report from Research and Markets shows the
global supply chain market for blockchain growing to $3,272 million by 2026.

5.8.2. Digital Supply Chain Twins

As social distancing becomes a new norm, making decisions based on real-time supply chain
data through manual methods is less appealing. Combatting this requires more than things
like prescriptive analytics; real-time data from all physical fronts of your supply chain is
necessary to avoid costly disruptions.
Digital supply chain twins continue to be among key supply chain trends. Digital supply
chain twins faithfully recreate an entire supply chain and its processes in an easily accessible,
digital environment.
Real-time information gathered from IoT (Internet of Things) devices can give decision-
makers a crystal clear picture of everything from customer orders to individual items moving
through the chain.
It can point out production delays and their possible repercussions while notifying you of
equipment that needs repairs. However, the systems, equipment and costs associated with
creating a digital supply chain twin are big investments.
Digital twins provide huge advantages for numerous industries outside of supply chain
management, paving the way for their usage worldwide.

5.8.3. Supply Chain as a Service (SCaaS)

With value chains becoming more complex, handling all of your supply chain processes in-
house is nearly impossible. Switching from manual processes to a digital environment,
leveraging large amounts of IoT-enabled devices, analyzing data and maintenance will
become necessary things that require skilled manipulation and maintenance.
Many companies won’t have the right talent to carry out these tasks and will outsource many
of these critical processes.
The benefits of SCaaS include better customer service, increased productivity and lower
costs. SCaaS provides similar offerings with specific supply chain benefits like boosted asset
management. Flexibility is a standout advantage, with resilience and agility at the forefront of
the pandemic landscape.
We asked Kelly Barner, Managing Director at Buyers Meeting Point, about her thoughts on
the SCaaS model.

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“SCaaS provides a strategic opportunity to work with an organization whose sole focus is to
make each component of the supply chain more efficient. When individual segments are able
to focus their energy and attention on asset management, inventory rotation, etc., new types
of innovation and competitive advantage become achievable.
Relinquishing control over key pieces of your supply chain makes adopting SCaaS daunting;
change is and always will be scary. However, as you offload responsibilities, you’ll find
valuable time to innovate, improve and optimize.

5.8.4. Circular Supply Chains

Sustainability is rapidly becoming a front-runner in the world of supply chains. In the past,
linear supply chains generated waste by disposing of leftover items after creating a product.
Instead of producing an item and returning to the beginning of the chain with brand new
materials, circular supply chains recycle unused fragments back into their value chains. Long
story short, circular supply chains promote a zero-waste environment.
Customers care about the ethics of their products. Often requesting specific details about
how, with what and where manufacturing happens. Consumers aren’t the only variables here
either; governments often set boundaries that limit waste and push for reclamation.
Ethical practices and sustainable sourcing are vital components of a successful operation, and
opting for a circular chain can help push you in the right direction.
While this strategy can be difficult to implement, the circular method can cut costs
considerably.
A Research and Markets report expects the reverse logistics market to exhibit a CAGR of
5.80% during the forecast period of 2022 to 2027.

5.8.5. Cloud-based Products

Cloud systems offer similar levels of functionality and security as their on-premise
counterparts while reducing sunk costs and customization woes that plague traditional
software.
The cloud SCM market is expected to grow in 2022 and beyond. In fact, a recent Markets and
Markets report shows the cloud-based supply chain management market will grow to nearly
$45.2 billion in value by 2027.
When we spoke to Jim Tompkins, Chairman and CEO of Tompkins International, he gave us
a few reasons for this growth. The biggest reason he gave above all else was that “people are
over the fear of someone else controlling them.”

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In the past, many opponents of cloud-based software were worried about an outside party
accessing their software, especially with complete control over their uptime and security. But
as cloud-based systems gain popularity, vendors work to be reliable and trustworthy business
partners.
Since people aren’t so afraid of the cloud anymore, they can focus on the actual benefits of
this deployment.
“Now, [people are starting to think about] speed of implementation, cost of upgrades, the
overall lifecycle of the software and working in the cloud environment in a way that follows
the best practices of the developer of the product.”
Tompkins noted that companies looking to invest in an SCM solution should be ready to
adapt to their new system. Many new buyers believe a customized system must match their
business’s exact processes and requirements.
In reality, businesses should consider configuring SCM products to support their ultimate
goals, either through cloud-based flexibility or ultra-customizable on-premise solutions.
An on-premise solution allows you to customize your software to support your business
processes exactly as they stand. Configurability means your software will support your
business overall, but you may find yourself changing some processes to work better with the
technology.

5.8.6. AI
Kushal Nahata, CEO of FarEye, is focused on how software can give businesses a
competitive edge.
Stakeholders will [need to] know the status of every resource and when and where their
shipments are … In today’s time where eCommerce is disrupting the online shopping
landscape, supply chain management can be a brand differentiator.
In order to keep the customers hooked and loyal towards one brand, a lot of effort [should be
put] into upgrading the technology,”
According to Nahata, the first supply chain management trend to grow is the Internet of
Things (IoT).
“The main drivers behind the growth of IoT are the availability of cheap and reliable sensors,
internet penetration, the massive increment in data storage, processing capabilities and the
emergence of AI.

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The future of IoT will increase productivity in delivery and supply chain industries. Many
logistics experts use these new resources to enhance their supply networks, reduce costs and
generate revenues.”
He also predicts an increase in artificial intelligence to solve the many inefficiencies in
today’s supply chains.
“The supply chain has historically been like a black box for enterprises, with customers not
knowing about their goods’ condition.
Due to unpredicted freight movement, manufacturers are losing a lot of time, money and
inventory. India alone spends about $160 billion on road logistics, twice [what is spent by]
countries with efficient transportation infrastructure.”
Nahata stated that many companies are already turning to AI to optimize their supply chains,
as it easily reduces time and money spent while speeding up processes.
“Artificial intelligence can reinvent business models by revamping how you look at future
supply chain management trends. AI analyzes today’s operations patterns to predict the
possible outcomes of tomorrow’s scenarios.
It automates lower-level decision-making and balances the supply with the forecasted
demand. Managers can thus indulge their skills in high-level decision making and
strategizing.”
Artificial Intelligence and Automation
The use of artificial intelligence (AI) and automation is on the rise in many industries.
Automation, which has been around for decades, utilizes technology to minimize human
inputs and is simply a machine performing a series of tasks. Automation isn’t intelligent,
which means the tech only performs tasks that it has been explicitly programmed to perform.
Artificial intelligence (AI) on the other hand, attempts to mimic aspects of human intelligence
and can “learn” on its own to assist with more complex, challenging tasks. AI still requires
some human input, but also leverages machine learning to determine the next steps on its
own, without explicit human direction.
In a world where speed and precision are crucial for success, both AI and automation are
valuable tools that can speed up your supply chain and remain competitive in your niche. If
you don’t use them, your competitors will, and leave you behind as they enjoy greater levels
of success. And whether or not you use AI – you should be streamlining your supply chain
for the good of the business– “79% of companies with high-performing supply chains
achieve revenue growth greater than the average within their industries whereas businesses

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with optimized supply chains have 15% lower supply chain costs, less than 50% of inventory
holdings and 3X faster cash to cash cycles.”
From making improvements to your assembly line to powering digital twin technology and
everything in between, there are many ways to incorporate AI and automation into your
organization’s workflow. For supply chain management processes, consider utilizing AI-
based software for intelligent sourcing, inventory management, and even logistical routes.
You can also use AI to perform future supply chain tracking or supply chain automation.
The key is finding tasks and processes that will help you save time or energy; often, the most
suitable tasks are time-consuming or complicated. By automating these kinds of tasks, you
can spend more time on projects that only a human can do, and get an even greater return on
this investment.
Pro-tip: You can automate your supply chain by outsourcing part procurement to a digital
manufacturing company. This will enable you to make gains with faster, easier, and more
efficient sourcing and supply of mechanical parts.

5.8.7 IoT
The Internet of Things (IoT) is a network of physical objects that, powered by a wireless
network, are digitally connected and accessible from anywhere. The IoT already plays a
significant role in the supply chain — particularly when it comes to logistics — but with
increasingly diverse applications, IoT will likely continue to grow in importance. Research
indicates that there will be more than 25.4 billion IoT devices by the year 2030.
In addition to providing more oversight in operations and transportation, IoT can be used to
improve warehouse management, fleet tracking, inventory control, and even technological
and mechanical maintenance. IoT technology can even be used to create smart warehouses
and fleets that increase the efficiency and data accuracy in multiple areas of your supply
chain. The value of the IoT cannot be overstated and it’s not going away — according to
McKinsey Digital, every second, 127 devices connect to the internet for the first time.
Depending on what kinds of IoT devices you have, you can use them in conjunction with
other pieces of technology for even greater benefit. For instance, the information collected by
a sensor in one of your warehouses could provide valuable data that helps you automate other
processes, such as forecasting and asset tracking. This high level of integration is essential as
supply chains become increasingly digital.

5.8.8. Robots and Automation

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For years, we’ve all heard about how autonomous mobile robots (AMRs) transform supply
chain trends. The adoption of modern robotics in the supply chain comes with a few obvious
benefits.
These advantages make it easy to see how the global robotics market will rise to a value of
$91.8 billion by 2026 from $55.8 billion in 2021.
Instead of requiring human presence to set up new machinery at a physical location, robotics
providers can activate and integrate their product with your processes from a safe and remote
location.
Automation carries an, albeit understandable, stigma for snatching up jobs. It takes over low-
value tasks while allowing you to re-focus more on high-priority tasks and challenges.
Instead of shedding employees, managers can upskill their current workforce. This strategy
means WMS (warehouse management system) companies may see a greater effort to ensure
their systems can work with AMR systems.
We may also see a greater emphasis on automation in general for the small market segment
that has to choose between the two products.

5.8.9. 5G Networks
Now that we have 5G networks beginning to enter the world stage, how will this technology
alter the future of supply chain management? With IoT-enabled devices flooding the market,
networks that can handle huge amounts of devices are necessary.
The difference between 4G and 5G network density is staggering. 4G networks can handle
10,000 devices per square mile, while 5G supports 100 times that amount. With digital
transformations becoming mainstream, a heavy-duty network needs to be in place to ensure
that communication between processes, machinery and users is quick and seamless.
5G boosts quality and optimizes vital portions of the supply chain from logistics to
distribution and warehouse management.

5.8.10. Capacity Crunch

For the past few years, the spectre of a capacity crunch pushed the trucking industry to the
limit. There were signs that things could correct themselves in 2020, but with the advent of
the pandemic, things look grim for the near future.
As consumers turn to an online environment, delivering goods to them on time is a challenge.
There were hopes that things would slow down enough for crunched distributors to catch up,
but this isn’t the case today.

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The constant need for product transportation means an increase in revenue, but with major
logistics challenges. Among the obvious issues with near-constant demand, smaller issues
like truck maintenance become vital to head off.
A truck breaking down or going out of service can cause a devastating ripple of slow-down,
especially in times of record demand. It’s going to be more important than ever for
companies to keep track of their business processes in an agile way that can keep up with
changes in the market.
Truck manufacturers will need to invest in manufacturing software to help them automate
processes and cut costs. Shippers and trucking companies may need stronger supply chain
collaboration systems to navigate a changing landscape that has otherwise been relatively
stable in the past.

ROBOTIC PROCESS AUTOMATION (RPA)

Robotic Process Automation in Supply Chain serves to automate processes that are carried on
manually, leaving little room for errors and anomalies.
RPA tools are basically software solutions residing on virtual servers that can be executed
and shut down at the desired hour.
Automation through robots will allow organizations to recruit and train employees for
problem-solving and brainstorming work, instead of repetitive robotic tasks.
Robotics Process Automation has resulted in a 43% time reduction for tasks such as credit,
collections, billing, etc. These are tremendous gains for any enterprise, but would massively
benefit organizations looking to effectively manage their complex supply chains.
The implementation of RPA for the sake of supply chain has been slow, but looking at the
gains at stake, organizations are now turning to automation to streamline the flow of products
and gain a competitive edge with customers.

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RPA in Supply Chain Management – Use Cases

Companies across industries such as healthcare, retail, and manufacturing have traditionally
relied on technologies such as RFID (Radio Frequency Identification), ERP (Enterprise
Resource Planning), CRM (Customer Relationship Management), etc.
In the beginning phases of RPA in Supply Chain, software robots were not flexible enough to
handle the complex scenarios that sometimes sprung up as they were unintelligent and could
only automate parts of the supply chain that were straightforward and followed a set pattern.
Here are a few areas in the supply chain domain that are ready to change with RPA –
Order Processing and Payments
The order placement and processing part of a supply chain essentially consists of three
phases-
 Product selection
 Payment processing
 Order placement confirmation
There are still businesses within a set of industries today that rely on old manual paperwork
to process transactions which can be entirely digitized. Order processing and payments can be
automated such that information can be directly ingested into the company database, payment
gateways can process the desired amount, and a software solution can send out email and text
message confirmations for the placement of order. As on today, with the advent on
AI, multiple insurance companies rely on bots to automate claims processing as well & by
automating this back-office work, organizations can ensure their employees focus on quality
tasks that require human intelligence. To optimize productivity and create a smooth supply
chain, organizations will need to ensure these tasks are tightly integrated and make sure there
are no glitches from order placement to delivery.
Email Automation
Well-maintained supply chains take care of one aspect dearly. Communication. A large part
of any supply chain is maintaining proper communication with suppliers, manufacturers,
transportation service agencies, and customers. Even though concise and effective
communication is such a critical part of supply chains, it is often the one that has major need
for improvement, too.
To ensure proper collaboration between staff in different departments, email communication
needs to be set up with RPA. It is critical to lay down processes of communication when
shipments have been successfully delivered, when they are stuck midway or delayed, and

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when they need to be cancelled. Effective communication between all parties involved needs
to be ensured such that the customer gets a smooth experience.
RPA can be used to automate this communication process by triggering emails and text
messages when a specific event occurs.
Inventory Management Automation
At the core of supply chain lies inventory management. Suppliers and manufacturers always
need to be aware of their inventory levels and ensure they have enough products and spares to
meet demands. RPA can make inventory management easier by keeping a tab on inventory
levels, notifying managers when product stock levels are low, and automatically reordering
products that go below a certain threshold level.
Additionally, an RPA system can help predict the optimal inventory levels by taking into
account the historical data and sketching out patterns in demand. RPA in Supply Chain would
make the inventory management process efficient and always updated to accommodate
spikes in demand. Enhanced insights from Robotic Process Automation in Supply Chain can
lead to better decision making when it comes to restocking of inventory, thus resulting in cost
optimization at all times reducing spares. As employees are freed of the monotonous task of
maintaining records of inventory levels, they can focus on other mission critical areas of the
supply chain.
Vendor Selection
Vendor selection is usually an entirely manual process & RPA aims to change that. At the
ground level, a vendor selection process consists of several steps such as –
 Preparing a request for quotation
 Communications and discussions with vendors
 Analyzing vendor documents
 Evaluating the vendor and cross-checking their credits
 Finalizing the vendor
When RPA in Supply Chain is implemented, all of these tasks can be made more efficient,
productive, and automatic. Human intervention, then, is only required to carry out the initial
phases of specifying the project, generating a list of vendors, and engaging in face-to-face
negotiations. Apart from these instances, humans will not need to intervene in the vendor
selection process once RPA implementation is completed for an enterprise.
Shipment Status Communication
Most businesses regularly receive shipment status inquiries from customers. The manual
process looks like this- an employee would personally open each email, address the query by

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making a note of the shipment and then looking it up in the ERP software to reply back to the
customer with the exact shipment status.
However, with the introduction of RPA in this case, the complete process right from- opening
the email, making sense of what the customer needs, logging into the ERP system, to
communicating the exact status to the customer- can be automated. In such a case, human
intervention would only be necessary for some exceptional circumstances that are beyond the
handling potential of a robot.
Supply and Demand Planning
Before automation, supply and demand planning wasn’t exactly a cakewalk for the
employees in any organization. They had to seek and gather the required data, combine the
data and manage it in presentable formats, analyze exceptions to the data, and then
communicate the plan.
RPA in Supply Chain, with the help of Machine Learning and Artificial Intelligence, can
enable organizations to predict demands and be prepared to cater to the unexpected spikes in
demand. By automating a majority of tasks in the supply chain, organizations can now
eliminate the possibility of manual errors and make operations efficient, self-driven, and
smart.
To put things into perspective, it is wishful to think Robotic Process Automation can
automate an entire supply chain at this stage. Because supply chain operations also include
the front-desk operations, building and maintaining client relationships, and so on which goes
on to show that human intervention still is needed to some extent in a supply chain.
Challenges in RPA implementation for Supply Chains
According to a report published by Deloitte, there are still quite many challenges
organizations face when they begin to strategize RPA or go at it for the first time.
Here are the top 5 challenges the report highlights –
1. Process Standardization – Complex processes lead to complexity in the robot. At all
stages of the RPA journey, organizations face process standardization as a critical
challenge. Complexity in processes hike the costs of implementing RPA while
increasing operating costs and business disruption. Organizations, unfortunately,
realize that where proper documentation exists, even in those places, the processes are
not always well understood.
2. IT Support – The support and consultancy of an IT organization are vital while
strategizing RPA in supply chain. It is essential and advisable to include an IT
organization throughout the RPA implementation process.

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3. The Flexibility of Solution – RPA, at the outset, used to be considered a stagnant

automation process. It carried a notion that robots will only learn once and that they
need to be taught perfect lessons for them to perform later. Thanks to Artificial
Intelligence and Machine Learning, solution flexibility can now be added to all stages
of automation, though agility is perceived as a challenge.
4. Stakeholder Expectations – Stakeholders have now started warming up to RPA, but
it is a significant challenge to move RPA in Supply Chain up the priority ladder, and
make sure it does not amount to complete disruption.
5. Employee Engagement – Organizations that have succeeded in scaling RPA had first
engaged their employees and built buy-in to change processes org-wide. Though
things vary across organizations, there is a need for enterprises to take steps so that
employees accept RPA with minimal resistance.
RPA Use Cases in Supply Chain Management
1. Initiating purchase orders
The purchase order process can be part of a bigger procurement project, and it is usually a
tedious task for any business. It requires a lot of time and effort to manually process purchase
orders. This is where RPA comes into play. RPA has the ability to automate the entire
purchase order process from start to finish, save valuable time, eliminate human errors,
increase productivity, and make the entire process much more efficient and cost-effective for
companies.
RPA Implementation in purchase order processing includes:
 Generating automatically purchase order documents
 Submitting the order for multi-level approvals
 Automating data entry
2. Managing orders
This supply chain RPA use case concerns order processing and management. There are a lot
of customers placing wholesale orders from different points, and an efficient cloud
platform with RPA capabilities is the right solution for your online business. It will
automatically process the orders and keep the necessary data before any shipment or
invoicing. If your business is B2B, the order management process in your supply chain
should be more detailed to handle the heavy traffic of orders. All in all, any supply chain
company or department using RPA will be able to automate many processes without a hurdle.
3. Handling support requests and after-sale services

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RPA can fully automate ticket management and after-sale services. Instead of any human
intervening, RPA will efficiently perform the needed tasks. RPA technology can support the
entire support department, by minimizing ticket processing errors and saving your
representatives’ valuable time. This will be important to the business as it will become more
competitive.
4. Supply and demand planning
Anticipating and reacting to the supply and demand process can be a daunting task especially
if you just rely on human Labor. To plan the reaction to the process, you will need to analyze
reports and data from all corners of the business. RPA performs all these tasks without any
mistakes and without wasting time.
5. Enabling data transmission
This is an essential supply chain management RPA use case. Important shipments must be
transported and stored efficiently, safely, and quickly. For this to occur, data transmission
must be reliable. If not, the business will incur losses because it cannot act on the correct
information. RPA smooth out the functioning of analytics. This is accomplished by providing
insights that will help to eliminate any clerical roadblocks such as incorrect data formatting.

Implementation Steps of RPA in Supply Chain Management

When implementing RPA applications in supply chain management, there are a few steps you
have to follow:
1. Define the scope of Robotic Process Automation and its objectives
Each business has short-term and long-term goals. Incorporating RPA in your company will
assist you in achieving those objectives and reaping the benefits. The most important is
to determine the objectives and how they will be measured in terms of business success or
failure. Let’s say your sales team receives new order for a customer. After checking the
inventory stock, an RPA bot places the order to an ERP system, speeding up the whole
process. Will your company have to look at overall productivity or the technology used? It
will be up to you to come up with the right answers.
2. Choose the supply chain processes to automate
Not all supply chain processes may be suitable for RPA in the same way. Supply chain
processes can be automated in many ways, but it is important to find the right balance
between cost and efficiency.

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The first process that you should automate is the inventory management process. This way,
you will have a clear overview of what goods you have available and what needs to be
ordered.
The second process that you should automate is the order fulfilment process. This way, you
can make sure that all orders are fulfilled on time without any problems or delays.
The third process that you should automate is the transportation management process. This
way, you will know where your goods are at any time.
3. Pick the best RPA solution for your needs
There are many RPA solutions on the market. However, not all of them are good for your
specific needs. It is important that you do your research and find out what RPA solution will
best fit your needs. A good starting point for an RPA solution is to look for one that provides
you with full scalability and integration capabilities. Another important factor is that the RPA
software provides the necessary security features and compliance. Above all, it is critical to
start by defining your goals and objectives. In this way, you will be more confident with your
options and finally invest in a great solution for your company.
4. Define the processes for managing changes
The first stages of using RPA in your supply chain management are manageable. But as time
goes on, the process becomes harder. Managing changes is a difficult task for any
organization. It requires a lot of time and effort. How are you going to manage it? Well, with
the help of some key steps, you can achieve this in an efficient and effective way.
Here are some of the key steps to follow:
1. Keeping a record that will indicate the changes that occurred and the reasons as to why
they occurred
2. Responding to change quickly
3. Communicating with stakeholders about the change
4. Focusing on the desired outcome of change
Following these steps for managing change will assist the project team in making decisions
and improving the quality of services and products.
5. Establish an excellence centre within your company
The final step involves developing an RPA centre of excellence. The ultimate goal of an RPA
centre of excellence is to create a collaborative and supportive environment that helps the
organization grow, innovate, and continually improve. The centre of excellence should also
be able to deliver expertise, think strategically about the future, and position the organization
for success. This will assist team members in improving how they perform their tasks and

Dr.C.THIRUMAL AZHAGAN
 BA 4021 SUPPLY CHAIN MANAGEMENT 37

duties. It will help create a standard that every team will follow and also act as a reference
point whenever they want to remember matters about RPA.

Benefits of RPA in Supply Chain Management

RPA use cases in supply chain management provide lots of benefits to businesses. It is the
ultimate solution you need to better your business, whether it is online or offline. Those who
have used this approach can attest to many advantages. Here are some typical benefits:
1. Boosts productivity in every department
A supply chain manager keeps track of a variety of activities that can be time-consuming to
manage. RPA software and applications work faster and reduce the data workload by half,
which benefits the business as a whole. Accordingly, reduced workloads by 50% result
in increased productivity.
2. Reduces costs and generates savings
RPA systems correctly work in completing tasks, hence reducing the chances of errors and
the need for human repetition. This in return will enhance the speed at which work is
delivered and reduce the cost since the business will not have to employ more team members
to perform tasks.
3. Improves customer and user experience
Customers are king in any business, and they determine its success or failure. Hence, they
should receive enough attention and the best user experience. Since RPA systems reduce the
workload in a business, employees can focus more on customers’ needs and deliver
exceptional customer experience.
4. Achieves flexibility and speed in scaling up and down
In business, customer orders might increase at any time. This requires more employees for
production to occur. Will you have to employ more temporary workers and spend a lot?
Instead, you can just make use of RPA systems that can easily be scaled up and down
instantly to handle a large volume of work.

Dr.C.THIRUMAL AZHAGAN
 BA 4021 SUPPLY CHAIN MANAGEMENT 38

Dr.C.THIRUMAL AZHAGAN