Question 1

a. Supply chain management can be defined as a systematic flow of materials, goods,

and related information among suppliers, companies, retailers, and consumers.
There are three different types of flow in supply chain management −

 Material flow

 Information

 Money flow

Material Flow

Material flow includes a smooth flow of an item from the producer to the consumer. This is
possible through various warehouses among distributors, dealers and retailers.

The main challenge we face is in ensuring that the material flows as inventory quickly
without any stoppage through different points in the chain. The quicker it moves, the
better it is for the enterprise, as it minimizes the cash cycle.

The item can also flow from the consumer to the producer for any kind of repairs, or
exchange for an end of life material. Finally, completed goods flow from customers to their
consumers through different agencies. A process known as 3PL is in place in this scenario.
There is also an internal flow within the customer company.

Information Flow
Information comprises the request for quotation, purchase order, monthly schedules,
engineering change requests, quality complaints and reports on supplier performance from
customer side to the supplier.

From the producer’s side to the consumer’s side, the information flow consists of the
presentation of the company, offer, confirmation of purchase order, reports on action
taken on deviation, dispatch details, report on inventory, invoices, etc.

For a successful supply chain, regular interaction is necessary between the producer and
the consumer. In many instances, we can see that other partners like distributors, dealers,
retailers, logistic service providers participate in the information network.

In addition to this, several departments at the producer and consumer side are also a part
of the information loop. Here we need to note that the internal information flow with the
customer for in-house manufacture is different.

Money Flow

On the basis of the invoice raised by the producer, the clients examine the order for
correctness. If the claims are correct, money flows from the clients to the respective
producer. Flow of money is also observed from the producer side to the clients in the form
of debit notes.

In short, to achieve an efficient and effective supply chain, it is essential to manage all three
flows properly with minimal efforts. It is a difficult task for a supply chain manager to
identify which information is critical for decision-making.

b. Identify the role of warehousing in logistics and supply chain management.

Warehousing and warehouse management are part of the logistics management system,
which in itself is part of the supply chain. Warehousing plays a vital role in the supply chain
process. A warehouse is a large, spacious place that is used for the storage or accumulation
of goods. Storing goods throughout the year and releasing when they are needed creates
time utility. Although this is viewed simply to store goods, warehousing plays a fundamental
role in the logistics system. Inbound functions assist to prepare for storage as well as
outbound functions pack and ship orders, resulting in benefits for both the business and
customers.
Storage Facility: This brings higher returns for your business. Manufacturing or the
purchasing of goods in bulk always makes sense in a business point of view.
Convenience
Distribution is an important part of any business, customers should never experience out of
stock situations. Having one central warehouse that stores all your goods feeding your
distribution process will have you constantly in control of the stock available as well as what
is needed in the near future. This is called safety stocking, ensuring your business doesn’t
run into unexpected problems such as faulty stock or shipment delays.
Additional Revenue
Owning your own storage facility could provide revenue by leasing out warehouse space.
The ability to manufacture or buy goods in bulk also allows for greater revenue returns.
These are both great ways to save money and expand your business.
Distribution
Warehousing and the placement of the warehouse can directly impact on your distribution.
The further away your storage facility or warehousing is situated from your suppliers or
manufacturers, the more your distribution costs will rise. Strategic placement of the facility
can dramatically affect your transportation costs, in turn affecting your own product.
Alternatively, some countries such as Germany use warehouses as their storage and retail
facility. These are just a few of the ways that warehousing can directly affect your business
and the supply chain within it.

c) Discuss four (4) impacts of globalisation on Supply Chain Management.

1. Reach new customers in new markets around the world – Globalization simplifies
communication between business owners, vendors, and customers and therefore
makes it easier to reach new markets and stay connected with customers no matter
where they are in the globe.
2. Expand sourcing opportunities – Globalization makes it possible for businesses to
secure a diverse selection of workers, materials, and products from regions of the
world that were previously out of reach.
3. Offer a larger selection of goods and services – Globalization increases your sourcing
opportunities which means it also increases the range of products and services that
you can provide for your customer.
 4. Grow and expand the scope of their business – Globalization makes communication
near effortless, which make it easier for markets to expand and diversify, thus
providing more opportunities for businesses owners to capitalize.
5. Save money and increase profits – more options to source from and to capitalize on
means more chances to save on spending and a greater chance of profit.

d) Depending on how you would like to see the supply chain, there are similar but different
names you may like to call the supply chain. If you view a supply chain as basically a chain of
value adding activities, you may like to call it “Value Chain”; if you perceive a supply chain as
continuous demands originated from the consumer and stretched to upstream suppliers,
you may like to call the supply chain the “Demand Chain”.
With the use of a basic Supply Chain model discuss, the above statement

Question 2
a) Define Corporate Strategy, aligning it to Supply Chain Management.
A corporate strategy entails a clearly defined, long-term vision that organizations set,
seeking to create corporate value and motivate the workforce to implement the
proper actions to achieve customer satisfaction. In addition, corporate strategy is a
continuous process that requires a constant effort to engage investors in trusting the
company with their money, thereby increasing the company’s equity. Organizations
that manage to deliver customer value unfailingly are those that revisit their
corporate strategy regularly to improve areas that may not deliver the aimed results.

b) Describe Supply Chain Risk Management Strategies and they are highly pronounced. Give
examples.
c) State and discuss the Elements of Supply Chain Management.

There are four major elements of supply chain management: integration, operations,
purchasing and distribution. Each relies on the others to provide a seamless path from
plan to completion as affordably as possible.

Element One: Integration

As with any project, planning is essential to long-term success. Part of good planning is
setting up integration, which means that everyone involved in the manufacturing process
communicates and collaborates. Instead of functioning in separate divisions, or silos,
integrated teams work together to make sure the product gets to the distribution phase.
This improved communication reduces errors that cost time and money. Since everyone
is working together, leaders can also monitor the entire operation and easily identify
areas along the supply chain that can be improved.

Element Two: Operations

As important as strategy is to keeping a strong supply chain, day-to-day operations are

the backbone of the work manufacturers do. Managers monitor the work being
performed and make sure everything remains on track. Many of today’s manufacturers
operate using lean manufacturing strategies, which means that processes are constantly
evaluated to identify where things can be done more efficiently. Whether it’s monitoring
equipment to make sure you’re getting the most out of it or cutting back work hours
when production slows down, the operations team can bring major improvements to the
supply chain.

Element Three: Purchasing

You can’t make something from nothing. The purchasing area of supply chain
management makes sure a company has everything it needs to manufacture products,
including materials, supplies, tools and equipment. This means often staying ahead of the
process so that you have everything you need on hand well before you actually need it.
Without the right purchasing personnel, you could find that you end up running out of
the materials you need, delaying production, or that you overbuy and strain the
company’s budget.

Element Four: Distribution

The supply chain ends when the product lands on store shelves where customers can buy
them or their front door (if they purchase them online). But getting products there means
having a well-planned shipping process. Most companies today use logistics software to
manage their shipments, whether they handle it on their own or source shipping to a
third-party provider. When handled correctly, products are moved expeditiously from the
warehouse to the customer.
d) Apart from maximising the value adding and minimising the total cost, outsourcing has
many other potential benefits which could form the prime motive for the decision makers.

State and discuss the benefits of outsourcing.

Outsourcing is an agreement in which one company hires another company to be
responsible for a planned or existing activity that is or could be done internally, and
sometimes involves transferring employees and assets from one firm to another.
Outsourcing is a common practice of contracting out business functions and processes to
third-party providers. The benefits of outsourcing can be substantial - from cost savings and
efficiency gains to greater competitive advantage.
On the other hand, loss of control over the outsourced function is often a potential business
risk. You should consider carefully the pros and cons of outsourcing before deciding to
contract out any activities or business operations.

Benefits of outsourcing:

1. improved focus on core business activities - outsourcing can free up your business to
focus on its strengths, allowing your staff to concentrate on their main tasks and on
the future strategy
2. increased efficiency - choosing an outsourcing company that specialises in the
process or service you want them to carry out for you can help you achieve a more
productive, efficient service, often of greater quality
3. controlled costs - cost-savings achieved by outsourcing can help you release capital
for investment in other areas of your business
4. increased reach - outsourcing can give you access to capabilities and facilities
otherwise not accessible or affordable
5. greater competitive advantage - outsourcing can help you leverage knowledge and
skills along with your complete supply chain
Outsourcing can also help to make your business more flexible and agile, able to adapt to
changing market conditions and challenges, while providing cost savings and service level
improvements.

Question 3
a) What is synchronisation and key success factors in Supply Chain Management?
b) Discuss the importance of Goals and Benchmarking in Supply Chain Management.
c) Describe Supply Chain Performance Metrics explain and explain why it is a key factor in
Supply Chain Management.
Question 4
a) Case let (Not Exceeding 250 words)

Activity: Select an industry of your choice and study and describe the interrelationship of the
various logistics functions. Your report should not exceed 250 words.

Logistics is a process of movement of goods across the supply chain of a company. However,
this process consists of various functions that have to be properly managed to bring
effectiveness and efficiency to the supply chain of the organization. Order processing

It is an important task in functions of logistics operations. The purchase order placed by a

buyer to a supplier is an important legal document of the transactions between the two
parties.

This document incorporates the description or technical details of the product to supply,
price, delivery period, payment terms, taxes, and other commercial terms as agreed.
The processing of this document is important as it has a direct relationship with the order or
the performance cycle time, which indicates the time when the order is received and when
the materials are received by the customer. The order processing activity consists of the
following steps:

 Order checking for any deviations in agrees upon or negotiated terms

 Prices, payment, and delivery terms.
 Checking the availability of materials in stock.
 Production and material scheduling for shortages.
  Acknowledging the order indicating deviations if any.
Inventory control
Inventory management is to keep enough inventories to meet customer requirements, and
simultaneously its carrying cost should be lowest.
It is basically an exercise of striking a balance between the customer service for not losing
the market opportunity and the cost to meet the same.

The inventory is the greatest culprit in the overall supply chain of a firm because of its huge
carrying cost, which indirectly eats away the profits. It consists of the cost of financing the
inventory, insurance, storage, losses, damages, and pilferage.
Warehousing.
Warehousing is the storing of finished goods until they are sold. It plays a vital role in
logistics operations of a firm. The effectiveness of an organization’s marketing depends on
the appropriate decision on warehousing.

In today’s context, warehousing is treated as switching facility rather than a storage of

improper warehousing management. Warehousing is the key decision area in logistics.

Transportation

For movement of goods from the supplier to the buyer, transportation is the most
fundamental and important component of logistics.

When an order is placed, the transaction is not completed till the goods are physically
moved to the customer’s place. The physical movement of goods is through various
transportation modes.

In logistics costs, its share varies from 65 to 70 percent in the case of mass-consumed, very
low unit-priced products.
Firms choose the mode of transportation depending on the infrastructure of transportation
in the country or region. Cost is the most important consideration in the selection of a
particular mode of transport.

However, sometimes urgency of the good at the customer end overrides the cost
consideration, and goods are sent through the fastest mode, which is an expensive
alternative.

Material handling and storage system

The speed of the inventory movement across the supply chain depends on the material
handling methods. An improper method of material handling will add to the product
damages and delays in deliveries and incidental overheads.

Mechanization and automation in material handling enhance the logistics system

productivity.
Other considerations for selection of a material handling system are the volumes to be
handled, the speed required for material movement and the level of service to be offered to
the customer.

The storage system is important for maximum space utilization (floor and cubic) in the given
size of a warehouse.

The material handling system should support the storage system for speedy movement
(storage and retrieval) of goods in and out of the warehouse.

Logistical packaging

Logistical or industrial packaging is a critical element in the physical distribution of a

product, which influences the efficiency of the logistical system. It differs from product
packaging, which is based on marketing objectives.

However, logistical packaging plays an important role in damage protection, case in material
handling and storage space economy. The utilization of load has a major bearing on
logistical packaging with regard to the packaging cost.

Information

Logistics is basically an information-based activity of inventory movement across a supply

chain. Hence, an information system plays a vital role in delivering a superior service to the
customers.

Use of IT tools for information identification, access, storage, analysis, retrieval and decision
support which is vital among the functions of logistics is helping business firms to enhance
their competitiveness.

b) Lamming (1993) proposed a nine factors model to summarise the key success factors of
the close partnership between supplier and buyer, which could be helpful as a benchmark
for supply relationship development.

Briefly, discuss the nine factors model.

REFERENCES

Bowman, Robert J. (2000). `for Asian Supply chain Good News and Bad News`, supply chain
Brain.
Sahay, B.S (2001 Supply) supply chain management in 21 st century, Macmillan india, new
Delhi.
Bowman, Robert (1st march 2005) Thinking strategically about outsourcing, 3pls can do
much more than cut costs, supply chain Brain.