NATIONAL CONFERENCE ON INDUSTRIAL INNOVATIVE MANGAEMENT PRACTICES (IIMP- 2018)
ORGANIZED BY TEQIP-III
& Dr. Ambedhkar Institute of Technology Bangalore Mar-18
“Effective supply chain for effective growth”
Ponnamma T Sa ,Dr. B Ravishankarb [a] – Student, IEM Dept., BMS College Of Engineering, Bangalore India +91-94-83315660, E-Mail:
[email protected] [b] – Professor, IEM Dept. & Placement Officer, BMS College Of Engineering, Bangalore India +91-80-26622130 Ext. 4032, E-Mail:
[email protected]
Abstract In order to remain competitive in the market, firms are forced to expand their product offerings and offer high levels of customization, bringing about high uncertainty in their supply chain. Due to the economic volatility, instability in customer demand, rapid movement in raw materials, fuels and commodity prices. It essential to develop more efficient, customer centric supply chains it is essential to find innovative ways to reduce cost and enable growth. Effective supply chain management is the key driver for the success of organised industry. This paper Study an attempt is made in coming up with a mechanism for an effective supply chain that in turn leads to an effective growth. Key words: Supply chain, growth, mechanism customer satisfaction, demand
1. Introduction Supply Chain Management process plays a huge significance in running key operations for almost every organization. There is a fierce competition in today’s global markets. Due to the introduction of products with shorter life cycles, and the heightened expectations of customers have forced business enterprises to invest in, and focus attention on, their supply chains. For so many decades, supply chains have gone through a journey of their own from being so simple to recently developed algorithm based ones. In a distinctive supply chain, raw materials are procured and items are produced at one or more factories, shipped to warehouses for intermediate storage, and then shipped to retailers or customers. Consequently, to reduce cost and improve service levels, effective supply chain strategies must take into account the interactions at the various levels in the supply chain. Supply chain is also called as logistics networks. It consists of suppliers, production centres, warehouses, distributions centres and retail outlets. In addition it also includes raw materials, work-in-process inventory and finished products flowing between facilities as shown in the figure1
FIGURE 1: supply chain network
Hence supply chain can be defined as the set of approaches utilized to efficiently integrate suppliers, producers, warehouses, and stores, so that merchandise is produced and distributed at the right time, right locations, right quantities and right quality in order to reduce cost and also reduce system wide overall costs while satisfying the service level requirements. Supply chain management is an integral part of most businesses and is essential to company success and customer satisfaction.
2. Why supply chain fails? The success of business is inextricably linked to the performance of your supply chain. Supply chain includes various industries such as automotive, life sciences, airport logistics, consumer goods, and electronics. Some of the reason why supply chain fail: 1.
Lack of communication
If the right products does not reach customer at the right time with the right documentation and at the right price, the company will be unable to meet customer expectations and risk losing the account. Effective supply chain management is about communication and keeping customer pro-actively informed of any challenges, delays, or other obstacles. 2.
Natural or environmental occurrence. Firmly rooted in the external risk camp, natural or environmental disasters are one of the most difficult disruption risks. Companies must address the possibility of a natural disaster in creating and deploying their supply chain management platform. For example, a manufacturing company in Mexico must understand and account for the potential for an earthquake or drought and how these occurrences could
damage their supply and production network, as well as proper contingency plans for maintaining production levels should these events take place. 3.
Long lead times and delayed shipping
Supply chain is about supply and demand. There can be many circumstances that will lead to longer lead times and delayed shipping from suppliers. This could be caused by port strikes, delayed manufacturing, or lack of available space on their shipping lane. This type of disruptive event can impair a company’s ability to satisfy their ultimate customer, putting everyone at risk. 4.
Forecasting demand based on historical trends When the activities are not tracked and metrics are not compared in real-time, and not using historical data for forecasting sales trends, can cause havoc on the supply chain. One blip can throw off your demand forecasting for the year.
5.
Lack of industry experts Companies can spend an enormous amount of time doing extra work regarding shipment transportation when it’s not the core business. They do not have knowledgeable industry experts in ocean, air, and rail logistics in-house
6.
Little or no risk management strategy Risk is inevitable. Market trends, and demand changes are the reasons that can go haywire.
7.
Inaccurate planning and forecasting The ability to accurately plan for and forecast future demand based on past production and supply is perhaps one of the core drivers in avoiding disruption and promoting sustainable manufacturing programs.
3. Mechanism for effective supply chain Without a successful supply chain, processes could halt at the floor level and ultimately bring down the results. The continuing growth and expansion of organised retail Industry in India has opened the door for new investment opportunities as well as to make India strongest economy in the world. Effective supply chain management is the key driver for the success of organised retail industry. Retail Industry had emerged as one of the most dynamic, versatile and fast paced change industries due to entering of many new players (MNCs) in the market. The mechanism to be followed for effective supply chain management process involves five basic stages explained here:
Figure 2: Mechanism for effective supply chain
PLAN – Planning is the strategic part of supply chain management process, to find out a best possible blueprint of how to fulfil the end requirement. SCM managers should identify a list of key components like plant location & size, warehouse designing, delivery models, IT solutions’ selection etc. Supply chain management process would be incomplete if key matrices like transportation cost modelling, warehouse efficiency models etc. are not developed.
SOURCE – At this stage of supply chain management, the emphasis is on to ascertain the most reliable of suppliers for raw materials so that production process would never jeopardize. But challenging conditions do arise during operations, supply chain managers must ensure key pain points of supply cycle are always being tracked to keep the engine running. Contractual framework as well as selection of a capable supplier is one thing, but there should be a tangible system in place for the continuous development of suppliers which would boost their efficiency as well.
EXECUTE – This is the stage where well designed processes are implemented so that a perceivable shape is given to existing plans in the form of manufactured products which are ready for testing, packaging, and delivery. Results at this stage quantified so that maximum possible efficiency is achieved.
DELIVER – Supply chain when reaches this stage, the managers have a task at hand to deliver the product/service in the right quantity, at the right place and right time by employing suitable carriers. Supply chain managers should be fully equipped with modern IT tools to keep a track on warehousing networks, inventory models as well as invoicing and payment receipts.
RETURN – Returns’ handling is the last step of supply chain management process. It not only involves reviewing returned products for quality purposes but also managing their inventory. At the ground level, supply chain managers should deploy their resources supporting them with technology for faster pickups, quicker replacements etc. Returns management should be a value enhancement
measure in the eyes of supply chain managers and they must ensure every desirable measure is taken for maximum possible efficiency.
4. Conclusion Consumer’s expectations, growing ecommerce are becoming increasingly higher. It is an integrated process where every activity of supply chain should inter linked with logistic management can be operated with the help of information technology, throughout the cycle time of each step of the process so that timely action can be taken. And form effective Supply chain process which helps manufacturers, for cost benefits, time saving, effective logistic management, increases profit margin and customer satisfaction.
5. References
1.
Dr Ashok Mehatha, Dr B Ravishankar, Mrs S Maheshwari. “A macro-environmental analysis of reverse logistics Practices in India.”
2.
Kishor Goswami, Atanu Hazarika “Supply chain network of Jatropha based biodiesel industry in North East India.”
3.
Pt. Ravi Shankar Shukla, Mandavi Sahu. “Strengthening Supply Chain for Growth of Organized Retail Industry.”
4.
R. Sreedevi, Haritha Saranga. “Uncertainty and supply chain risk: The moderating role of supply chain flexibility in risk mitigation.”
5.
S. Maheshwari and Dr. B. Ravishankar (2012). “Retrogistics - Significant Opportunities and Key Challenges in India.”
