A Critical Study of Changing Phases of SCM in FMCG Sector

MMS(Operations) Project Thesis 2011
A STUDY ON STOCKIST WITHIN MUMBAI
“A CRITICAL STUDY OF CHANGING PHASES OF SCM IN FMCG
SECTOR”
MASTER OF MANAGEMENT STUDIES
(OPERATIONS)
By:
Sudhir Kumar Singh
(Roll No. 50)
Guide By:
Prof. Vikram Shikhare
BES’s Institute of Management Studies and Research
(Affiliated to University of Mumbai)
May 2011
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BES’s Institute Of Management Studies and Research
10- Nesbit Road, Mazgaon
DECLARATION
I, Mr. Sudhir Kumar Singh,
Hereby declare that this project report is the record of authentic work carried out by me
during the academic session of MMS 4th semester 2011 and has not been submitted to any other
University or Institute for the award of any degree/diploma.
Signature of Internal Guide Signature of Student
Prof. Vikram Shikhare Sudhir Kumar Singh
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CERTIFICATE
This is to certify that the dissertation titled “A CRITICAL STUDY OF CHANGING PHASES
OF SCM IN FMCG SECTOR” is the bonafide research work carried out by Mr. Sudhir Kumar
Singh student of MMS, at BES’s Institute of Management Studies and Research (Affiliated to
University of Mumbai) during the year 2009 -2011, in partial fulfillment of the requirements for the
award of the Degree of Master of Management Studies of University of Mumbai and that the
dissertation has not formed the basis for the award previously of any degree, diploma, associate ship,
fellowship or any other similar title.
Date:
Signature of Director Signature of Guide
(Prof. Vikram Shikhare) (Prof. Vikram Shikhare)
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ACKNOWLEDGMENT
It is a pleasure to record my thanks and gratitude to the Director Prof. VikramShikhare,
Prof. MrinaliTikare and Prof. QureshMoochala who provide me the opportunity to conduct this
research. I am also thankful to all my responders and my friends whose generous help and support
enable me to complete this study with in the stipulated time period.
I am very thankful to the Course Coordinator Prof. VikramShikhare for consult and
guidance provides me which I am necessary for completing this study.
Lastly, I want to gratitude the god who provide me this opportunity and always help me in
life.
However, I take the responsibility of all my shortcomings.
Sudhir Kumar Singh
MMS-IV (Operations)
Roll No.50
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PREFACE
SCM in a nutshell focuses on these values and enable the creation of an ambience for
effective SCM. The world of SCM is progressing very rapidly indeed. There have been
technological advancements and high speed evolution that have forced organizations to restructure
their business progress. This basic objective of this research is to study impact of changing phases of
SCM for FMCG for this I had studied challenges, willingness, limitations, satisfaction level and
advantage for FMCG stockiest, so that they can apply better supply chain management solutions.
This research has been proved very beneficial for me to provide practical knowledge towards
various aspect of SCM solutions for FMCG stockiest. It was a great opportunity for me to conduct
such type of research.
Really, this project research was quite interesting, inspiring, satisfying, knowledge, gaining
and academically rewarding for me.
Sudhir Kumar Singh
MMS-IV (Operations)
Roll No.50
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TABLE OF CONTENT
PART- A.1 Executive Summary 9

A
A.2 Objectives of the study 11
A.3 Limitations 12
A.4 Research methodology 13
PART- THEORITICAL FRAMEWORK
B
B.1 Introduction to the SCM 15
B.2 Supply Chain Management Problems 16
B.3 Activities and functions of SCM 18
B.4 Strategic orientation of SCM 19
B.5 Strategic Management in Global context 21
B.6 Phases & Development in Supply Chain Management 29
B.7 Functional and Scope of SCM 43
B.8 An overview of FMCG in India 51
B.9 Implementation of SCM Practices in Indian FMCG Industry 58
PART- C.1 Literature Reviews 69
C
C.2 Questionnaire 87
PART- ANALYSIS AND INTERPRETATIONS
D
D.1 Observation and analysis 90
D.2 Findings 105
D.3 Conclusions 107
D.4 Bibliography 109
List of Tables
Tables Page no.
India’s top 10 companies in FMCG sector 53
Awareness Level towards Supply chain Management Fundamental 90
Options for a better Supply chain Solutions 91
Willingness level to accept the Supply chain Management advantage for better 92
profitability achievement
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Level the cost deficiency hinders to implement Supply chain solution 93

Level of conservative approach hinder to implement Supply chain solutions. 94
Level the unavailability hinders to implement Supply chain solutions. 95
Level of satisfaction with Supply chain solutions. 96
Observation level of the Supply chain solution is advantages for the scope of 97
business.
Option preferred as advantages in implement Supply chain solutions. 98
Level new emerging technologies are beneficial in providing better Supply chain 99
solutions
Role SCM play in the total performance 100
Level of desire to ask for supplier for much better Supply chain solution 101
Which option is most important for much better Supply chain solution 102
Level of willingness to go for outsourcing Supply chain services 103
Level of requirement for FMCG sector in comparison with othercommodity for a 104
supply chain solution
List of Charts
Charts Page no.
Awareness Level towards Supply chain Management Fundamental 90
Options for a better Supply chain Solutions 91
Willingness level to accept the Supply chain Management advantage for better 92
profitability achievement
Level the cost deficiency hinders to implement Supply chain solution 93
Level of conservative approach hinder to implement Supply chain solutions. 94
Level the unavailability hinders to implement Supply chain solutions. 95
Level of satisfaction with Supply chain solutions. 96
Observation level of the Supply chain solution is advantages for the scope of 97
business.
Option preferred as advantages in implement Supply chain solutions. 98
Level new emerging technologies are beneficial in providing better Supply chain 99
solutions
Role SCM play in the total performance 100
Level of desire to ask for supplier for much better Supply chain solution 101
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Which option is most important for much better Supply chain solution 102
Level of willingness to go for outsourcing Supply chain services 103
Level of requirement for FMCG sector in comparison with other commodity for 104
a supply chain solution
Executive Summary
Global Competitiveness today means that the customer is supreme. As the customer .is supreme,
only those enterprises are going to be successful which are able to provide goods and services to the
customer in timely, cost effective manner and also provide quality, which not only satisfies him but
delights him. If the supply chain is not properly managed, the delivery chain is automatically bound
to be affected resulting in customer dissatisfaction and finally loss of business. With the changing
scenarios, there is need for organization to survive in the fierce global competition. Companies will
have to fine tune the processes and clean out the flab like high inventories, and longer lead times in
supply chain. Effective management of supply chain provides a possible solution to handle such
issues.
Here in this report, study of leading FMCG company is reported. In particularly if we take example
of Dabur India Ltd, This company is involved in manufacturing of natural juices. The supply chain
of this company includes raw materials, manufacturing operations and the distribution network. The
product range includes natural juices, ethnic pastes, capsico sauces and lemoneez. The main
problems being faced by the company are:
 Errors in Forecasting Demand
 High inventory levels
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 Imbalance in the Distribution Network
The importance of addressing these above problems have been discussed in this report. In case of
perishable products, where the life of the product is short, an accurate forecasting, in line with
market demand becomes very important. The products under study are fast food like, natural juice,
which has a very short shelf life. Since the product is of health care nature, its salvage value is zero
once its shelf life is over. This puts heavy pressure on supply chain for an appropriate forecasting,
adequate inventory level and proper distribution network.
Another important element of supply chain is of warehousing, which plays a vital role in
consumer goods industry. The decision for set-up warehouse is a very crucial job for operation
managers, this is very important in terms of distribution & transportation cast.
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A.1- OBJECTIVES OF STUDY
 To diagnose the limitation faced by different FMCG stockiest of Mumbai city in the utilizing
the full advantage of supply chain management.
 To study the strategic advantage of supply chain management among FMCG stockiest.
 To study the willingness among different FMCG stockiest to apply better supply chain.
 To know the satisfaction level of supply chain management services among FMCG stockiest.
 To know the challenges in the field of supply chain management under changing
technological scenario.
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A.2 - LIMITATIONS
o Good results depend upon FMCG stockiest willingness to give good and fair response then we
can say concretely the result is good.
o Results of this study and findings are applicable only for Mumbai city and nearby areas. The
results may be different of this study in another place.
o One of the limitation of this study is that of time limitation due to which it is not possible to do
the detailed study.
o The sample size was taken only 50; it is difficult to say anything concretely.
o Absence of professional researcher and team was another limitation of the study.
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A.3 - RESEARCH METHODOLOGY
Research methodology is a description explanation and justification of various methods of
conducting research.
TYPE OF RESEARCH USED IN THE STUDY
MARKET RESEARCH
Market research has a broad scope and includes all aspects of the business environment. It asks
questions about competitors, market structure, government regulations, economic trends,
technological advances, and numerous other factors that make up the business environment.
Sometimes the term market research refers more particularly to the financial analysis of companies,
industries, or sectors. In this case, financial analysts usually carry out the research and provide the
results to invest advisors and potential investors.
SAMPLING
The sampling plan for the study decides the work area that is the population, which has to be
surveyed. A Brief idea about the sampling for this research consisting of its different parameters is
given below:
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TYPE OF SAMPLING METHOD USED IN THE STUDY
JUDEGEMENTAL SAMPLING
In this type of the sampling the researcher uses his judgment to select population members who are
good source for accurate information
SAMPLING UNIVERSE
The sample universe is taken Mumbai and nearby areas.
SAMPLE SIZE
In this study sample size is of 50 FMCG stockiest. Due to the shortage of time and un-availability of
expert team the research size is taken short so that the research can be done easily.
METHOD OF DATA COLLECTION
The research was carried out through survey method with the help of a QUESTIONNAIRE
consisting of closed ended question. Due to flexibility, questionnaire method is ideally suited for
collection of primary data.
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B.1 - Supply chain management (SCM) (definitions):
Supply chain management (SCM) is the management of a network of interconnected businesses
involved in the ultimate provision of product and service packages required by end customers
(Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-
in-process inventory, and finished goods from point-of-origin to point-of-consumption (supply
chain).
The definition one American professional association put forward is that Supply Chain Management
encompasses the planning and management of all activities involved in sourcing, procurement,
conversion, and logistics management activities. Importantly, it also includes coordination and
collaboration with channel partners, which can be suppliers, intermediaries, third-party service
providers, and customers. In essence, Supply Chain Management integrates supply and demand
management within and across companies. More recently, the loosely coupled, self-organizing
network of businesses that cooperates to provide product and service offerings has been called the
Extended Enterprise.
Supply Chain Management can also refer to Supply chain management software which is tools or
modules used in executing supply chain transactions, managing supplier relationships and
controlling associated business processes.
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Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring
events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can
be created and solutions can be planned.
B.2 - Supply Chain Management Problems
Supply chain management must address the following problems:
 Distribution Network Configuration: Number, location and network missions of suppliers,
production facilities, distribution centers, warehouses, cross-docks and customers.
 Distribution Strategy: Including questions of operating control (centralized, decentralized or
shared); delivery scheme (e.g., direct shipment, pool point shipping, Cross docking, DSD (direct
store delivery), closed loop shipping); mode of transportation (e.g., motor carrier, including
truckload, LTL, parcel; railroad; intermodal, including TOFC and COFC; ocean freight;
airfreight); replenishment strategy (e.g., pull, push or hybrid); and transportation control (e.g.,
owner-operated, private carrier, common carrier, contract carrier, or 3PL). Trade-Offs in
Logistical Activities
The above activities must be coordinated well together in order to achieve the least total logistics
cost. Trade-offs exist that increase the total cost if only one of the activities is optimized. For
example, full truckload (FTL) rates are more economical on a cost per pallet basis than less than
truckload (LTL) shipments. If, however, a full truckload of a product is ordered to reduce
transportation costs there will be an increase in inventory holding costs which may increase total
logistics costs. It is therefore imperative to take a systems approach when planning logistical
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activities. These trade-offs are key to developing the most efficient and effective Logistics and SCM
strategy.
 Information: Integration of and other processes through the supply chain to share valuable
information, including demand signals, forecasts, inventory, transportation, and potential
collaboration etc.
 Inventory Management: Quantity and location of inventory including raw materials, work-in-
progress (WIP) and finished goods.
 Cash-Flow: Arranging the payment terms and the methodologies for exchanging funds across
entities within the supply chain.
Supply chain execution is managing and coordinating the movement of materials, information and
funds across the supply chain. The flow is bi-directional.
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B.3 - Activities/functions of SCM
Supply chain management is a cross-function approach to manage the movement of raw materials
into an organization, certain aspects of the internal processing of materials into finished goods, and
then the movement of finished goods out of the organization toward the end-consumer. As
organizations strive to focus on core competencies and becoming more flexible, they have reduced
their ownership of raw materials sources and distribution channels. These functions are increasingly
being outsourced to other entities that can perform the activities better or more cost effectively. The
effect is to increase the number of organizations involved in satisfying customer demand, while
reducing management control of daily logistics operations. Less control and more supply chain
partners led to the creation of supply chain management concepts. The purpose of supply chain
management is to improve trust and collaboration among supply chain partners, thus improving
inventory visibility and improving inventory velocity.
Several models have been proposed for understanding the activities required to manage material
movements across organizational and functional boundaries. SCOR is a supply chain management
model promoted by the Supply Chain Council. Another model is the SCM Model proposed by the
Global Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategic, tactical,
and operational levels of activities.
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B.4 - Strategic orientations of SCM
Strategic intent:
 Strategic network optimization, including the number, location, and size of warehouses,
distribution centers, and facilities
 Strategic partnership with suppliers, distributors, and customers, creating communication
channels for critical information and operational improvements such as cross docking, direct
shipping, and third-party logistics
 Product lifecycle management, so that new and existing products can be optimally integrated into
the supply chain and capacity management
 Information Technology infrastructure, to support supply chain operations
 Where-to-make and what-to-make-or-buy decisions
 Aligning overall organizational strategy with supply strategy
Tactical intent:
 Sourcing contracts and other purchasing decisions.
 Production decisions, including contracting, scheduling, and planning process definition.
 Inventory decisions, including quantity, location, and quality of inventory.
 Transportation strategy, including frequency, routes, and contracting.
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 Benchmarking of all operations against competitors and implementation of best practices
throughout the enterprise.
 Milestone payments
 Focus on customer demand.
Operational intent:
 Daily production and distribution planning, including all nodes in the supply chain.
 Production scheduling for each manufacturing facility in the supply chain (minute by minute).
 Demand planning and forecasting, coordinating the demand forecast of all customers and sharing
the forecast with all suppliers.
 Sourcing planning, including current inventory and forecast demand, in collaboration with all
suppliers.
 Inbound operations, including transportation from suppliers and receiving inventory.
 Production operations, including the consumption of materials and flow of finished goods.
 Outbound operations, including all fulfillment activities, warehousing and transportation to
customers.
 Order promising, accounting for all constraints in the supply chain, including all suppliers,
manufacturing facilities, distribution centers, and other customers.
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B.5 - Supply chain Management (in global context)
Organizations increasingly find that they must rely on effective supply chains, or networks, to
successfully compete in the global market and networked economy.[2] In Peter Drucker's (1998) new
management paradigms, this concept of business relationships extends beyond traditional enterprise
boundaries and seeks to organize entire business processes throughout a value chain of multiple
companies.
During the past decades, globalization, outsourcing and information technology have enabled many
organizations, such as Dell and Hewlett Packard, to successfully operate solid collaborative supply
networks in which each specialized business partner focuses on only a few key strategic activities
(Scott, 1993). This inter-organizational supply network can be acknowledged as a new form of
organization. However, with the complicated interactions among the players, the network structure
fits neither "market" nor "hierarchy" categories (Powell, 1990). It is not clear what kind of
performance impacts different supply network structures could have on firms, and little is known
about the coordination conditions and trade-offs that may exist among the players. From a systems
perspective, a complex network structure can be decomposed into individual component firms
(Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate on the inputs and
outputs of the processes, with little concern for the internal management working of other individual
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players. Therefore, the choice of an internal management control structure is known to impact local
firm performance (Mintzberg, 1979).
In the 21st century, changes in the business environment have contributed to the development of
supply chain networks. First, as an outcome of globalization and the proliferation of multinational
companies, joint ventures, strategic alliances and business partnerships, there were found to be
significant success factors, following the earlier "Just-In-Time", "Lean Manufacturing" and "Agile
Manufacturing" practices.[3] Second, technological changes, particularly the dramatic fall in
information communication costs, which are a significant component of transaction costs, have led
to changes in coordination among the members of the supply chain network (Coase, 1998).
Many researchers have recognized these kinds of supply network structures as a new organization
form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global
Production Network", and "Next Generation Manufacturing System". [4] In general, such a structure
can be defined as "a group of semi-independent organizations, each with their capabilities, which
collaborate in ever-changing constellations to serve one or more markets in order to achieve some
business goal specific to that collaboration" (Akkermans, 2001).
The security management system for supply chain is described in ISO/IEC 28000 and ISO/IEC
28001 and related standards published jointly by ISO and IEC.
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PERISHABLE
GOODS
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B.6 - Phases &Developments in Supply Chain Management
Six major movements can be observed in the evolution of supply chain management studies:
Creation, Integration, and Globalization (Lavassaniet al., 2008a), Specialization Phases One and
Two, and SCM 2.0.
1. Creation Era:
The term supply chain management was first coined by an American industry consultant in the early
1980s. However the concept of supply chain in management, was of great importance long before in
the early 20th century, especially by the creation of the assembly line. The characteristics of this era
of supply chain management include the need for large scale changes, re-engineering, downsizing
driven by cost reduction programs, and widespread attention to the Japanese practice of
management.
2. Integration Era:
This era of supply chain management studies was highlighted with the development of Electronic
Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of
Enterprise Resource Planning (ERP) systems. This era has continued to develop into the 21st century
with the expansion of internet-based collaborative systems. This era of SC evolution is characterized
by both increasing value-added and cost reduction through integration.
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3. Globalization Era:
The third movement of supply chain management development, globalization era, can be
characterized by the attention towards global systems of supplier relations and the expansion of
supply chain over national boundaries and into other continents. Although the use of global sources
in the supply chain of organizations can be traced back to several decades ago (e.g. the oil industry),
it was not until the late 1980s that a considerable number of organizations started to integrate global
sources into their core business. This era is characterized by the globalization of supply chain
management in organizations with the goal of increasing competitive advantage, creating more
value-added, and reducing costs through global sourcing.
4. Specialization Era -- Phase One -- Outsourced Manufacturing and Distribution:
In the 1990s industries began to focus on “core competencies” and adopted a specialization model.
Companies abandoned vertical integration, sold off non-core operations, and outsourced those
functions to other companies. This changed management requirements by extending the supply
chain well beyond the four walls and distributing management across specialized supply chain
partnerships.
This transition also re-focused the fundamental perspectives of each respective organization. OEMs
became brand owners that needed deep visibility into their supply base. They had to control the
entire supply chain from above instead of from within. Contract manufacturers had to manage bills
of material with different part numbering schemes from multiple OEMs and support customer
requests for work -in-process visibility and vendor-managed inventory (VMI).
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The specialization model creates manufacturing and distribution networks composed of multiple,
individual supply chains specific to products, suppliers, and customers, who work together to design,
manufacture, distribute, market, sell, and service a product. The set of partners may change
according to a given market, region, or channel, resulting in a proliferation of trading partner
environments, each with its own unique characteristics and demands.
5. Specialization Era -- Phase Two -- Supply Chain Management as a Service:
Specialization within the supply chain began in the 1980s with the inception of transportation
brokerages, warehouse management, and non-asset based carriers and has matured beyond
transportation and logistics into aspects of supply planning, collaboration, execution and
performance management.
At any given moment, market forces could demand changes within suppliers, logistics providers,
locations, customers and any number of these specialized participants within supply chain networks.
This variability has significant effect on the supply chain infrastructure, from the foundation layers
of establishing and managing the electronic communication between the trading partners to the
more-complex requirements, including the configuration of the processes and work flows that are
essential to the management of the network itself.
Supply chain specialization enables companies to improve their overall competencies in the same
way that outsourced manufacturing and distribution has done; it allows them to focus on their core
competencies and assemble networks of best in class domain specific partners to contribute to the
overall value chain itself – thus increasing overall performance and efficiency. The ability to quickly
obtain and deploy this domain specific supply chain expertise without developing and maintaining
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an entirely unique and complex competency in house is the leading reason why supply chain
specialization is gaining popularity.
Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has taken
root in transportation and collaboration categories most dominantly. This has progressed from the
Application Service Provider (ASP) model from approximately 1998 through 2003 to the On-
Demand model from approximately 2003-2006 to the Software as a Service (SaaS) model we are
currently focused on today.
6. Supply Chain Management 2.0 (SCM 2.0):
Building off of globalization and specialization, SCM 2.0 has been coined to describe both the
changes within the supply chain itself as well as the evolution of the processes, methods and tools
that manage it in this new "era".
Web 2.0 is defined as a trend in the use of the World Wide Web that is meant to increase creativity,
information sharing, and collaboration among users. At its core, the common attribute that Web 2.0
brings is it helps us navigate the vast amount of information available on the web to find what we are
looking for. It is the notion of a usable pathway. SCM 2.0 follows this notion into supply chain
operations. It is the pathway to SCM results – the combination of the processes, methodologies, tools
and delivery options to guide companies to their results quickly as the complexity and speed of the
supply chain increase due to the effects of global competition, rapid price fluctuations, surging oil
prices, short product life cycles, expanded specialization, near/far and off shoring, and talent
scarcity.
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SCM 2.0 leverages proven solutions designed to rapidly deliver results with the agility to quickly
manage future change for continuous flexibility, value and success. This is delivered through
competency networks composed of best of breed supply chain domain expertise to understand which
elements, both operationally and organizationally, are the critical few that deliver the results as well
as the intimate understanding of how to manage these elements to achieve desired results, finally the
solutions are delivered in a variety of options as no-touch via business process outsourcing, mid-
touch via managed services and software as a service (SaaS), or high touch in the traditional
software deployment model.
Supply chain business process integration:
Successful SCM requires a change from managing individual functions to integrating activities into
key supply chain processes. An example scenario: the purchasing department places orders as
requirements become appropriate. Marketing, responding to customer demand, communicates with
several distributors and retailers as it attempts to satisfy this demand. Shared information between
supply chain partners can only be fully leveraged through process integration.
Supply chain business process integration involves collaborative work between buyers and suppliers,
joint product development, common systems and shared information. According to Lambert and
Cooper (2000) operating an integrated supply chain requires continuous information flow. However,
in many companies, management has reached the conclusion that optimizing the product flows
cannot be accomplished without implementing a process approach to the business. The key supply
chain processes stated by Lambert (2004) are:
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 Customer relationship management
 Customer service management
 Demand management
 Order fulfillment
 Manufacturing flow management
 Supplier relationship management
 Product development and commercialization
 Returns management
Much has been written about demand management. Best in Class companies have similar
characteristics. They include the following: a) Internal and external collaboration b) Lead time
reduction initiatives c) Tighter feedback from customer and market demand d) Customer level
forecasting
One could suggest other key critical supply business processes combining these processes stated by
Lambert such as:
 Customer service management
 Procurement
 Product development and commercialization
 Manufacturing flow management/support
 Physical distribution
 Outsourcing/partnerships
 Performance measurement
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a) Customer service management process:
Customer Relationship Management concerns the relationship between the organization and its
customers. Customer service provides the source of customer information. It also provides the
customer with real-time information on promising dates and product availability through interfaces
with the company's production and distribution operations. Successful organizations use following
steps to build customer relationships:
 Determine mutually satisfying goals between organization and customers
 Establish and maintain customer rapport
 Produce positive feelings in the organization and the customers
b) Procurement process:
Strategic plans are developed with suppliers to support the manufacturing flow management process
and development of new products. In firms where operations extend globally, sourcing should be
managed on a global basis. The desired outcome is a win-win relationship, where both parties
benefit, and reduction times in the design cycle and product development are achieved. Also, the
purchasing function develops rapid communication systems, such as electronic data interchange
(EDI) and Internet linkages to transfer possible requirements more rapidly. Activities related to
obtaining products and materials from outside suppliers requires performing resource planning,
supply sourcing, negotiation, order placement, inbound transportation, storage, handling and quality
assurance, many of which include the responsibility to coordinate with suppliers in scheduling,
supply continuity, hedging, and research into new sources or programs.
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c) Product development and commercialization:
Here, customers and suppliers must be united into the product development process, thus to reduce
time to market. As product life cycles shorten, the appropriate products must be developed and
successfully launched in ever shorter time-schedules to remain competitive. According to Lambert
and Cooper (2000), managers of the product development and commercialization process must:
 coordinate with customer relationship management to identify customer-articulated needs;
 select materials and suppliers in conjunction with procurement, and
 Develop production technology in manufacturing flow to manufacture and integrate into the best
supply chain flow for the product/market combination.
d) Manufacturing flow management process:
The manufacturing process is produced and supplies products to the distribution channels based on
past forecasts. Manufacturing processes must be flexible to respond to market changes, and must
accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in
minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times,
meaning improved responsiveness and efficiency of demand to customers. Activities related to
planning, scheduling and supporting manufacturing operations, such as work-in-process storage,
handling, transportation, and time phasing of components, inventory at manufacturing sites and
maximum flexibility in the coordination of geographic and final assemblies postponement of
physical distribution operations.
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e) Physical distribution:
This concerns movement of a finished product/service to customers. In physical distribution, the
customer is the final destination of a marketing channel, and the availability of the product/service is
a vital part of each channel participant's marketing effort. It is also through the physical distribution
process that the time and space of customer service become an integral part of marketing, thus it
links a marketing channel with its customers (e.g. links manufacturers, wholesalers, retailers).
f) Outsourcing/partnerships:
This is not just outsourcing the procurement of materials and components, but also outsourcing of
services that traditionally have been provided in-house. The logic of this trend is that the company
will increasingly focus on those activities in the value chain where it has a distinctive advantage and
everything else it will outsource. This movement has been particularly evident in logistics where the
provision of transport, warehousing and inventory control is increasingly subcontracted to specialists
or logistics partners. Also, to manage and control this network of partners and suppliers requires a
blend of both central and local involvement. Hence, strategic decisions need to be taken centrally
with the monitoring and control of supplier performance and day-to-day liaison with logistics
partners being best managed at a local level.
g) Performance measurement:
Experts found a strong relationship from the largest arcs of supplier and customer integration to
market share and profitability. By taking advantage of supplier capabilities and emphasizing a long-
term supply chain perspective in customer relationships can be both correlated with firm
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performance. As logistics competency becomes a more critical factor in creating and maintaining
competitive advantage, logistics measurement becomes increasingly important because the
difference between profitable and unprofitable operations becomes more narrow. A.T. Kearney
Consultants (1985) noted that firms engaging in comprehensive performance measurement realized
improvements in overall productivity. According to experts internal measures are generally collected
and analyzed by the firm including
 Cost
 Customer Service
 Productivity measures
 Asset measurement, and
 Quality.
External performance measurement is examined through customer perception measures and "best
practice" benchmarking, and includes 1) customer perception measurement, and 2) best practice
benchmarking. Components of Supply Chain Management are 1. Standardization 2.Postponement 3.
Customization
Theories of Supply Chain Management:
Currently there exists a gap in the literature available in the area of supply chain management
studies, on providing theoretical support for explaining the existence and the boundaries of supply
chain management. Few authors such as Halldorsson, et al. (2003), Ketchen and Hult (2006) and
Lavassani, et al. (2008b) had tried to provide theoretical foundations for different areas related to
supply chain with employing organizational theories. These theories include:
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Resource-based view (RBV)
Transaction Cost Analysis (TCA)
Knowledge-based view (KBV)
Strategic Choice Theory (SCT)
Agency theory (AT)
Institutional theory (InT)
Systems Theory (ST)
Network Perspective (NP)
Supply chain sustainability:
Supply chain sustainability is a business issue affecting an organization’s supply chain or logistics
network and is frequently quantified by comparison with SECH ratings. SECH ratings are defined as
social, ethical, cultural and health footprints. Consumers have become more aware of the
environmental impact of their purchases and companies’ SECH ratings and, along with non-
governmental organizations ([NGO]s), are setting the agenda for transitions to organically-grown
foods, anti-sweatshop labor codes and locally-produced goods that support independent and small
businesses. Because supply chains frequently account for over 75% of a company’s carbon footprint
many organizations are exploring how they can reduce this and thus improve their SECH rating.
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Components of Supply Chain Management Integration:
The management components of SCM:
The SCM components are the third element of the four-square circulation framework. The level of
integration and management of a business process link is a function of the number and level, ranging
from low to high, of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985).
Consequently, adding more management components or increasing the level of each component can
increase the level of integration of the business process link. The literature on business process re-
engineering,[7] buyer-supplier relationships,[8] and SCM[9] suggests various possible components that
must receive managerial attention when managing supply relationships. Lambert and Cooper (2000)
identified the following components which are:
 Planning and control
 Work structure
 Organization structure
 Product flow facility structure
 Information flow facility structure
 Management methods
 Power and leadership structure
 Risk and reward structure
 Culture and attitude
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However, a more careful examination of the existing literature [10] will lead us to a more
comprehensive structure of what should be the key critical supply chain components, the "branches"
of the previous identified supply chain business processes, that is, what kind of relationship the
components may have that are related with suppliers and customers accordingly. Bowersox and
Closs states that the emphasis on cooperation represents the synergism leading to the highest level of
joint achievement (Bowersox and Closs, 1996). A primary level channel participant is a business that
is willing to participate in the inventory ownership responsibility or assume other aspects of financial
risk, thus including primary level components (Bowersox and Closs, 1996). A secondary level
participant (specialized) is a business that participates in channel relationships by performing
essential services for primary participants, thus including secondary level components, which are in
support of primary participants. Third level channel participants and components that will support
the primary level channel participants, and which are the fundamental branches of the secondary
level components, may also be included.
Consequently, Lambert and Cooper's framework of supply chain components does not lead us to the
conclusion about what are the primary or secondary (specialized) level supply chain components
(see Bowersox and Closs, 1996, pg. 93). That is, what supply chain components should be viewed as
primary or secondary, how these components should be structured in order to have a more
comprehensive supply chain structure, and to examine the supply chain as an integrative one (See
above sections 2.1 and 3.1).
Reverse Supply Chain:
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Reverse logistics is the process of planning, implementing and controlling the efficient, effective
inbound flow and storage of secondary goods and related information opposite to the traditional
supply chain direction for the purpose of recovering value or proper disposal. Reverse logistics is
also referred to as "Aftermarket Customer Services". In other words, anytime money is taken from a
company's Warranty Reserve or Service Logistics budget that is a Reverse Logistics operation.
SCOPE: The scope of SCM is functional and organizational. The functional scope of SCM refers to
which traditional business functions are included or excluded in the implementation and the process
of SCM. The organizational scope of SCM concerns what kinds of inter-firm relationships are
relevant to the participating firms in the implementation and the process of SCM.
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B.7 - Functional Scope of SCM
Since process refers to the combination of a particular set of functions to get a specific output, all of
the traditional business functions should be included in the process of SCM. The supply chain
concept originated in the logistics literature, and logistics has continued to have a significant impact
on the SCM concept (Bowersox, Carter, and Monczka 1985; Dwyer, Schurr, and Oh 1987; Jones
and Riley 1985; Monczka, Trent, and Handheld 1998). In this context, Tyndall et al. (1998) propose
that "SCM logistics" is the art of managing the flow of materials and products from source to user.
SCM-or the logistics system-includes the total flow of materials, from the acquisition of raw
materials to delivery of finished products to the ultimate users, as well as the related counter-flows
of information that both control and record material movement.
According to Lambert, Stock, and Ellram (1998), however, there exist important differences between
the definition of supply chain management and the Council of Logistics Management's (1985)
definition of logistics: "Logistics is the process of planning, implementing and controlling the
efficient flow and storage of raw materials, in-process inventory, finished goods, services, and
related information from point of origin to point of consumption (including inbound, outbound,
internal and external movements) for the purpose of conforming to customer requirements." CLM
(1998) apparently agreed, since its new definition states, "Logistics is that part of the supply chain
process that plans, implements, and controls the efficient flow and storage of goods, services, and
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related information from the point of origin to the point of consumption in order to meet customers'
requirements" (emphasis added). Thus, CLM has also distinguished between logistics and supply
chain management, and acknowledged that logistics is one of the functions contained within supply
chain management.
Ross explains that the role of logistics spans from warehousing and transportation to integrating the
logistics operations of the entire supply chain, whereas SCM merges marketing and manufacturing
with distribution functions to provide the enterprise with new sources of competitive advantage
(Ross 1998). Logistics puts more emphasis on efficient movement and storage to fulfill customer
requirements. Customer value and satisfaction that help a supply chain improve competitive
advantage and profitability, however, require more than logistics (Giunipero and Brand 1996).
Top Ten Trends in SCM and Logistics:
Global supply chains displayed gains in efficiency and customer service during 2007, but many
companies took supply chain management (SCM) a few steps further by enhancing flexibility,
responding effectively to demand variation, and adopting environmentally friendly practices. As for
2008, AMR Research has identified the top ten trends in SCM and logistics for the coming year.
1. SCM and logistics technology markets will enjoy healthy growth. The average increase on
spending this year will be 12 percent.
2. Near-shoring presents a viable alternative to low-cost country off shoring. Companies are
reviewing nearby outsourcing to enhance speed. Plus, nearby outsourcing may actually be less
expensive when the hidden costs of low-cost manufacturing are factored in.
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3. Best-of-breed vendors regain some ground lost to ERP competitors. ERP may be easy, but users
still show a preference for best-of-breed.
4. SCM outsourcing alleviates the SCM talent shortage in increasingly complex global supply
chains.
5. Companies manage risk for business continuity and competitive advantage. Emphasis on supply
chain risk mitigation will grow in 2008.
6. Impressive returns on investment from current projects nudge RFID back into the spotlight. Now
that the wave of compelled adoption has passed, RFID is ready to prove its worth on its own
terms.
7. Software vendors expand their managed-services offering to deliver results.
8. S&OP technologies – not just processes – take center stage. Expect a wider adoption of sales and
operations planning (S&OP) functionality in 2008.
9. Connectivity grows in importance as companies extend their value networks.
10. What-if analysis and simulation-based tools see growing adoption.
1. SCM and logistics technology markets enjoy healthy growth. In our supply chain spending report,
twice as many companies say they will increase spending on supply chain technologies, projecting to
grow their budgets by nearly 12% for 2008 (See The Supply Chain Management Spending Report,
2007-2008). The 12% growth in supply chain technology spending will target controlling costs,
raising productivity, and improving customer service. Companies can no longer make due with their
10-15 year old SCM systems. The research shows that an application replacement cycle is in
progress as competition and globalization are driving the move to newer technologies.
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2. Near shoring presents a viable alternative to low-cost country off-shoring. AMR believes that the
trend of near shoring will continue to gather steam in 2008 for multiple reasons. Companies are
discovering hidden costs of low-cost country outsourcing ranging from the loss in their ability to be
demand driven or to manage product quality and protect their brand image. Additionally, focus will
remain on the goal of protecting domestic producers against unfair trade practices of countries like
China and encouraging US manufacturing through tax incentives, especially in this presidential
election year. Expect near-shore sourcing, manufacturing and design in the US and in the western
hemisphere to be more closely analyzed as a more cost-effective – not just faster – alternative to
low-cost country sourcing.
3. Best-of-breed vendors regain some lost ground from ERP competitors. In the same AMR
Research spending report, respondents were evenly divided on which category of vendors they will
rely on for new technologies and replacement of existing applications. ERP vendors have gained a
strong foothold in areas like demand planning and inventory management, but users still prefer best-
of-breed solutions – either packaged or custom-built – in areas like transportation management,
warehouse management, and network design, as well as for collaborative processes such as Vendor
Managed Inventory (VMI) that extend outside of the four walls of the enterprise.
4. SCM outsourcing alleviates SCM talent shortage in increasingly complex global supply chains.
When combined, several current industry factors are propelling the growth of logistics and greater
supply chain outsourcing. A decade of staff downsizing, the globalization of supply chains, the
complexity of operating today’s demand driven networks, and the rise of the offshore, low-cost,
back-office outsourcing firms have naturally produced an awareness and, frankly, a new level of
acceptance, of outsourcing. 2008 will prove to be a fertile year for outsourcing. Look for a slow
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expansion of additional supply chain services beyond the traditional transportation and warehousing
offerings.
5. Companies manage risk for business continuity and competitive advantage. Whereas cost
efficiencies, customer service improvement, inventory reductions, and other fundamental goals will
remain top priorities for supply chain organizations, emphasis on supply chain risk mitigation will
grow in 2008. Realizing that risk in global supply chains is unavoidable; companies will build a risk-
conscious culture, to ensure business continuity. Leading companies will take risk mitigation a step
further, building competitive advantage by continuously balancing risk and reward to expand their
market presence, improve their profitability, or capture bigger market share from their competitors.
6. Impressive returns on investment from current projects nudge RFID back into the spotlight.
Whereas from arm’s length the RFID solution market looks listless, closer examination shows a
different picture. Early adopters have been building hands-on experience in implementing RFID, a
better understanding of its potential value, as well as limitations, and they are becoming less
concerned about the risk of the technology obsolescence. Technology providers have been working
hard to keep pace with end user expectations. Along with ongoing tag and reader development,
enterprise software solutions have focused on easier management and distribution of RFID data
collected. Look for wider adoption of item level tracking, ranging from pharmaceutical e-pedigree to
apparel and footwear inventory management. Having demonstrated value, the use in asset tracking
and management will continue to expand. More exciting will be the adoption of RFID in emerging
markets such as India and Brazil, where companies are defining their supply chain processes from
the ground up with RFID as a foundational technology enabler.
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7. Software vendors expand their managed services offerings to deliver results. Software
implementations often fail to deliver the benefits expected because oftentimes skills within the
organization are insufficient to maximize the value that sophisticated technology can potentially
provide. To help companies reach their goals, many software vendors and service providers are
coupling domain expertise along with deep application knowledge to not only conceptualize, but
actualize the benefits their software and services can bring to an organization. The menu of managed
services runs the gamut from B2B electronic connectivity to demand planning, forecasting, and
transportation management. In fact, in some of the SaaS transportation networks and managed
services, offerings are being adopted by the more mature users, suggesting that increasingly, it does
not matter who presses the keys as long as process performance is being achieved.
8. S&OP technologies – not just processes – take center stage. Viewed as the make-or-break process
for profitably matching demand with supply, designing S&OP processes and building a supporting
organization were high on business priority lists in 2007. But now, more companies are realizing that
building S&OP excellence is constrained by their existing S&OP technologies. Look for better
definition of the S&OP technology market space and wider adoption of S&OP functionality that
enables fast what-if analysis, profitable demand and supply shaping, and structured internal and
external user collaboration and consensus building.
9. Connectivity grows in importance as companies extend their value networks. Companies are
increasingly realizing that electronic connectivity is necessary to sustain and scale up collaborative
relationships with trading partners. But cost and complexity of building this connectivity had
traditionally limited the scope of integration to just a small segment of a company’s trading
community. In 2008, we expect to see a growing acceptance of third party networks, created by
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integration hubs and Software as a Service (SaaS) providers that enable companies to more rapidly
and easily connect to a broader segment of their customer, supplier, and service provider bases. We
will also see some game-changing strategies in the B2B connectivity market that will alter pricing
structures and deployment options.
10. What-if analysis and simulation-based tools see growing adoption. Gone are the days when
users’ expected a black-box optimization engine to churn their data, model their problem and
generate a definitive optimal solution. User companies are now more interested in decision support
tools that – while still leveraging optimization techniques – can allow them to conduct scenario
planning, what-if analysis, and compare the trade-offs among multiple options. Similarly, simulation
techniques will see wider adoption as the emphasis continues to shift from the ever elusive “single
optimal solution” to better understanding of the impact of different supply chain decisions on the top
line, customer service levels, and other business priorities.
Traditional supply chain management:
Salesperson is becoming an outdated term in today's Internet economy. Before the Internet, before
Electronic Data Interchange (EDI), even before the advent of the personal computer, businesses
bought and sold raw materials and finished goods through salespeople. Fifteen years ago, your
chemical company purchased raw materials by calling up your sales representative of the supplier
you wanted to buy from. The salesperson took your order, processed the order internally, and a week
or so later your raw materials were delivered. You had a large catalog of items from each supplier
and had to manually search to find the items you needed. Most of your frequently ordered items
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were bookmarked, but to order something new usually required more time. You also did not have a
quick, easy way to compare prices and product specifications between your suppliers.
It is not that your company has not tried to keep up with technological changes and advancements in
supply chain management (SCM). You watched your information technology department deploy a
personal computer (PC) to each employee. You were on the team that oversaw the development of
an EDI system between your company and your three major buyers. When the Internet became an
industry standard, your company gave access to all employees.
However, in the early 1990s, the Internet was only seen as an information source. Most web sites
were static; they only provided information about a company and its products and a way to contact a
company. Some companies began placing their product lines on the Internet, but customers still had
to call or fax their orders. Searching for items became easier, but both the vision and the technology
to use the Internet as a business tool were absent. You prefer the personal sales call or the now-
familiar EDI technology to manage your supply chain. You do not see the Internet as a potential way
to buy and sell for your company.
Although EDI can be considered a form of B2B e-commerce, there has been much technological
development in modern B2B e-commerce and SCM that takes advantage of the relatively
inexpensive and ubiquitous nature of the Internet. The first step to understanding B2B, however, is
to take a look at business-to-consumer (B2C) transactions. This is where the business revolution
truly began.
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B.8 - An Overview of the FMCG Industry in India
What are Fast Moving Consumer Goods (FMCG)?
Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer
Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG
generally include a wide range of frequently purchased consumer products such as toiletries, soap,
cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables
such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include
pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and
chocolate bars. A subset of FMCGs are Fast Moving Consumer Electronics which include
innovative electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems
and Laptops. These are replaced more frequently than other electronic products. White goods in
FMCG refer to household electronic items such as Refrigerators, T.Vs, Music Systems, etc.
In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing industries in India.
According to the AC Nielsen India study, the industry grew 5.3% in value between 2004 and 2005.
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Indian FMCG Sector:
The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1
billion. Well-established distribution networks, as well as intense competition between the organized
and unorganized segments are the characteristics of this sector. FMCG in India has a strong and
competitive MNC presence across the entire value chain. It has been predicted that the FMCG
market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle class and
the rural segments of the Indian population are the most promising market for FMCG, and give
brand makers the opportunity to convert them to branded products. Most of the product categories
like jams, toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as well as
low penetration level, but the potential for growth is huge. The Indian Economy is surging ahead by
leaps and bounds, keeping pace with rapid urbanization, increased literacy levels, and rising per
capita income.
The big firms are growing bigger and small-time companies are catching up as well. According to
the study conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and the balance
by Indian companies. Fifteen companies own these 62 brands, and 27 of these are owned by
Hindustan Lever. Pepsi is at number three followed by Thumps Up. Britannia takes the fifth place,
followed by Colgate (6), Nirma (7), Coca-Cola (8) and Parle (9). These are figures the soft drink and
cigarette companies have always shied away from revealing. Personal care, cigarettes, and soft
drinks are the three biggest categories in FMCG. Between them, they account for 35 of the top 100
brands.
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THE TOP 10 COMPANIES IN FMCG SECTOR
S. NO. Companies
1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)
3. Nestlé India
4. GCMMF (AMUL)
5. Dabur India
6. Asian Paints (India)
7. Cadbury India
8. Britannia Industries
9. Procter & Gamble Hygiene and Health Care
10. Marico Industries
The companies mentioned in are the leaders in their respective sectors. The personal care category
has the largest number of brands, i.e., 21, inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks, and
Ponds. There are 11 HLL brands in the 21, aggregating Rs. 3,799 crore or 54% of the personal care
category. Cigarettes account for 17% of the top 100 FMCG sales, and just below the personal care
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category. ITC alone accounts for 60% volume market share and 70% by value of all filter cigarettes
in India.
The foods category in FMCG is gaining popularity with a swing of launches by HLL, ITC, Godrej,
and others. This category has 18 major brands, aggregating Rs. 4,637 crore. Nestle and Amul slug it
out in the powders segment. The food category has also seen innovations like softies in ice creams,
chapattis by HLL, ready to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. This
category seems to have faster development than the stagnating personal care category. Amul, India's
largest foods company has a good presence in the food category with its ice-creams, curd, milk,
butter, cheese, and so on. Britannia also ranks in the top 100 FMCG brands, dominates the biscuits
category and has launched a series of products at various prices.
In the household care category (like mosquito repellents), Godrej and Reckitt are two players.
Goodknight from Godrej, is worth above Rs 217 crore, followed by Reckitt's Mortein at Rs 149
crore. In the shampoo category, HLL's Clinic and Sunsilk make it to the top 100, although P&G's
Head and Shoulders and Pantene are also trying hard to be positioned on top. Clinic is nearly double
the size of Sunsilk.
Dabur is among the top five FMCG companies in India and is an herbal specialist. With a turnover
of Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur has brands like DaburAmla,
DaburChyawanprash, Vatika, Hajmola and Real. Asian Paints is enjoying a formidable presence in
the Indian sub-continent, Southeast Asia, Far East, Middle East, South Pacific, Caribbean, Africa
and Europe. Asian Paints is India's largest paint company, with a turnover of Rs.22.6 billion (around
USD 513 million). Forbes Global magazine, USA, ranked Asian Paints among the 200 Best Small
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Companies in the World Cadbury India is the market leader in the chocolate confectionery market
with a 70% market share and is ranked number two in the total food drinks market. Its popular
brands include Cadbury's Dairy Milk, 5 Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380
Million) Marico is a leading Indian group in consumer products and services in the Global Beauty
and Wellness space.
Challenges before the Indian FMCG Sector:
Markets all over the world have been on a roll in 2003 and the Indian bourses are no exception
having gained almost 60% in 2003. During this period, while there are sectors that have
outperformed this benchmark index, there are also sectors that have underperformed. FMCG
registered gains of just 33% on the BSE FMCG Index last year.
At the macro level, Indian economy is poised to remained buoyant and grow at more than 7%. The
economic growth would impact large proportions of the population thus leading to more money in
the hands of the consumer. Changes in demographic composition of the population and thus the
market would also continue to impact the FMCG industry.
Recent survey conducted by a leading business weekly, approximately 47 per cent of India's 1 +
billion people were under the age of 20, and teenagers among them numbered about 160 million.
Together, they wielded INR 14000 Cr worth of discretionary income, and their families spent an
additional INR 18500 Cr on them every year. By 2015, Indians under 20 are estimated to make up
55% of the population - and wield proportionately higher spending power. Means, companies that
are able to influence and excite such consumers would be those that win in the market place.
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The Indian FMCG market has been divided for a long time between the organized sector and the
unorganized sector. While the latter has been crowded by a large number of local players, competing
on margins, the former has varied between a two-player-scenario to a multi-player one.
Unlike the U.S. market for fast moving consumer goods (FMCG), which is dominated by a handful
of global players, India's Rs.460 billion FMCG market remains highly fragmented with roughly half
the market going to unbranded, unpackaged home made products. This presents a tremendous
opportunity for makers of branded products who can convert consumers to branded products.
However, successfully launching and growing market share around a branded product in India
presents tremendous challenges. Take distribution as an example. India is home to six million retail
outlets and super markets virtually do not exist. This makes logistics particularly for new players
extremely difficult. Other challenges of similar magnitude exist across the FMCG supply chain. The
fact is that FMCG is a structurally unattractive industry in which to participate. Even so, the
opportunity keeps FMCG makers trying.
Challenges:
The government needs to firm up its FDI plans for retail sector as some of the international
chains like Wal-Mart, Carrefour, Tesco and Home Depot are making a beeline for India.
The emergence of organized retailing in India presents both opportunities and challenges for
leading FMCG companies.
The industry must be in a position to effectively tackle price wars, improve distribution, boost
exports and sell more in villages.
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Small regional companies are flooding retail shelves across the country with their brands. The
bigger brands must learn to tackle the problem.
The industry must focus on villages as they hold the potential to grow to a market size of Rs
70,000 crore by 2010 from Rs 50,000 crore at present.
Companies must also ensure better return on their investments and spend money to introduce
new products instead of cutting prices to gain market share.
The industry needs to explore neighboring as well as African markets to achieve the full
potential that this sector.
By focusing more on the operational efficiency, the industry must try to achieve further
reduction in expense to sales ratio.
Food as well as cosmetic and personal care segment are some of the fastest growing category in
the sector and the industry must learn to leverage from this.
The industry must further try to bring down supply and distribution costs.
Further, it needs to leverage the potential presented by India's agricultural production in areas
like food and beverage in order to grow the processed foods part of the business.
According to a study the Indian food processing industry requires investments to the tune of $40
billion for upgrading technology and capital expenditure to compete in global markets.
FMCG companies must intensify their approach to target the rural markets for their growth.
The number of traditional retail stores grew rapidly, and the trend is likely to continue for the
next three years. By 2007, the number of stores is likely to be 7.8 million with bulk of the growth
coming from grocers and street corner stores.
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B.9 - Implementation of SCM Practices in Indian FMCG Industry
In recent years, the basis for global competition has changed. No longer are organizations competing
against other organizations, but rather supply chains are competing against supply chains. The
success of an organization is now invariably measured neither by the sophistication of its products
nor by the size of the market share. It is usually seen in the light of the ability, sometimes forcefully
and deliberately harnesses its supply chain and to opt for innovative approaches of supply chain
flows such as single-piece-flow, to deliver responsively to the customers as and when they demand
it.
This paper tries to identify and analyze the importance and adoption of various SCM practices in
Indian FMCG industry. The paper is based on empirical study conducted by the author in Indian
FMCG industry and various SCM practices are clubbed in different factors through Factor analysis.
Introduction:
It is rightly said that manufacturers now compete less on product and quality – which are often
comparable – and more on inventory turns and speed to market. This statement shows the beliefs
that supply chain management will increasingly be the principal determinant of the ability to
compete. Every link in it can add up to a competitive advantage. There was time when companies
looked at their supply chains – the upstream part of their value chain from the company’s
perspective as a means of focusing on their own core competencies, and of leveraging those of
vendors and lowering their cost to increase their responsiveness towards consumers . Those goals
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can not be swept away by supply chain but they will be superseded by a single super objective as to
compete on the basis of how well organization manage its supply chain – thus the competitive
advantage is shifting from the shop floor. The question arises why it is so important to optimize the
supply chain. It is so because inefficiencies in the supply chain leads to higher inventories at all
points of the chain. This adds costs related to wastages, blocked funds and risk of holding obsolete
products with chances of quality depletion.
SCM in Indian Business Scenario:
Indian organizations are still juggling among the Material Resource Planning (MRP-II), Enterprises
Resource Planning (ERP), Logistics and Supply Chain Management (SCM). However, it is quite
evident that Indian corporate sector is fast recognizing the need of SCM, which can integrate all
other practices and processes. SCM in India offers one of the fastest growth areas in revenues as well
as employment. According to ETIG, there is no reliable estimate of the market opportunities for
supply chain and its components exist in India today. Even though, ETIG estimates the Indian
market value for supply chain. Logistics at 13 percent of GDP is more than US $50 billion, a lion’s
share of which is accounted for by transportation and warehousing. India started a little late for
restructuring and reformulating the strategies related with supply chain. However, there is no doubt
that Indian industries are fast catching and gearing up for meeting the new business environment. A
study of available literature related with Indian business practices after 1991’s liberalization policies
shows that organizations are concerned about their value chain and identifying that competition is
shifting towards the efficiency and effectiveness of entire supply chain activities. The traces of SCM
adoption by Indian organizations are given as:
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Until 1990, logistics was treated as the management of transportation, inventories and
warehousing and organizations had to perform these activities individually in an efficient
manner.
Before opening of Indian market, Indian business giants were enjoying the solo play with
continuous expansion of capacities. Later on when they heard the music of competition, they
found themselves with excess capacities with huge cost burdens. This forced organizations to
control the cost factor for the survival at marketplace.
At the same time of 1990’s, Indian organizations got fascinated by Business Process Re-
engineering (BPR). Organizations treated BPR as remedy of their illness across the
organizations’ processes and functions by eliminating the non-value adding activities and
streamlining the operations with a promise of higher returns.
Later on, the emergence of Enterprises Resource Planning (ERP) gave boost to BPR. For the first
time, organizations could have an integrated view of the various ‘silos’ that existed in their
businesses, giving an opportunity to rationalize, remove duplication and speed up the processes.
Rapid growth and improvement of telecommunication networks and wide spread of information
technology tools and techniques after mid 1990s posed the biggest challenge in handling well-
informed customers. Nevertheless, these changes also provided the biggest boost to Indian
industries because organizations found themselves able to reach out vendors or suppliers on one
end, and customers to the other. Due to this revolution only, ERP-II integrated the internal
departments into a seamless organization, whereas, SCM attempts to integrate the external
factors and processes into the internal processes.
Changes can be implemented easily when tough times reign. Companies in India have been looking
at ways of cutting costs and improving process efficiencies, in their quest to become globally
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competitive through taking initiatives for supply chain management practices because SCM
recognizes that distinct functions like purchases, inventory management, distribution and production
planning work best when integrated. At the same time, supply chain management in India seems to
be following the path of more advanced industrial countries, involving not only the customers,
manufacturers, and vendors but also the third party service providers, consultants, software providers
etc.
Indian Fast Moving Consumer Goods (FMCG) Industry:
Indian Fast Moving Consumer Goods (FMCG) industry has a long history. However, the Indian
FMCG industry began to take shape only the last fifty years. Even today, the Indian FMCG industry
continues to suffer from a definitional dilemma as well as the exact estimation of market size.
Nevertheless, more than Rs. 43,000 crores( in organized sector) fast moving consumer goods
(FMCG) industry is a critical component of the Indian economy. The actual size of industry is
phenomenal, if one adds the turnover of unorganized sector. That is why, this sector has potential to
drive growth, enhance quality of life and create jobs. The Indian FMCG sector is primarily a low
margin business, where success depends on the volume. Presently, the FMCG sector is one of the
largest in the country, which accounts for more than 14.5 per cent of GDP with whooping sum of
domestic consumption capacity of nearly 20 billion U.S. Dollar. With the average growth of Indian
economy in the range of 6-8% per year will witness a consistence rise in demand and purchasing
power of Indian market. Following the trend, the FMCG sector will grow by 5-6% per year in
mature categories and 8-10% per year in upcoming categories. However, factors such as low rural
penetration, dependence on monsoon, the price sensitivity of the consumers and increased level of
competition could result in decreasing profit margins in the industry.
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The following section examines the different philosophies related to development of SCM.
Subsequent sections describe the research construct, which provides details of sample design, design
of questionnaire, survey methodology, followed by an analysis of the results and the managerial
implications of the study along with the future research directions.
Supply Chain Management: an overview since past:
The concept of supply chain management first appeared in the literature in the mid-1980 by Keith
and Webber. However, the fundamental assumptions on which SCM rests are significantly older.
The management of inter-organizational operations can be traced back to channel research in the
1960’s by Bucklin and systems integration research in the 1960’s by Forrester. According to Cooper
et.al. (1997), the term supply chain management has risen to prominence over the past ten years. La
Londe (1997) identified positions at forty-three different companies that carry ‘supply chain’ in their
titles. By now, SCM has become such a hot topic that it is difficult to pick up any periodicals on
manufacturing, marketing, distribution, customer management, or transportation without seeing an
article about SCM or its related topics.
Despite the popularity of the term supply chain management, managers and researchers have
considerable confusion over the actual meaning of the term. Some authors such as Tyndall et.al.
(1998) defined SCM in operational terms involving the flow of materials and products. Ellram and
Cooper (1990) viewed SCM as management philosophy and still others as La Londe (1997) viewed
it in terms of management process. In fact, some have questioned the existence and benefits of the
SCM phenomenon, for example, Bechtel and Jayaram (1997) asked ‘Is the concept of SCM
important in today’s business environment or is it simply a fad destined to die with other short-lived
buzzwords?’
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Research in SCM evolved along three separate paths that eventually merged into a common body of
literature, with a primary focus on integration, customer satisfaction and business results i.e. creation
or enhancement of value of the products or services. Jones and Riley (1985) stated that supply chain
management deals with the total flow of materials from suppliers through end users. Three
differences between supply chain management and classical materials and manufacturing control are
identified by Houlihan (1988) as:
 The supply chain is viewed as a single process. Responsibilities for the various segments in the
chain are not fragmented and relegated to functional areas such as manufacturing, purchasing,
distribution and sales.
 Supply chain management calls for and in the end depends on strategic decision making.
 Supply chain management calls for different perspective on inventories which are used as
balancing mechanism of last, not first, resort. A new approach to systems is required –
integration rather than interfacing.
SCM as a Management Philosophy:
The philosophy of SCM emphasized to extend the concept of partnerships into a multiform effort to
manage the total flow of goods from the supplier to the ultimate customer. Ellram and Cooper
(1990) emphasized that SCM as a management philosophy takes a systems approach to viewing the
channel as a single entity, rather than a set of fragmented parts, each performing its own function.
Langley and Holcomb (1992) suggested that the objective of SCM should be the synchronization of
all channel activities to create customer value. Mentzer et.al. (2001) proposed that SCM as
management philosophy has the following characteristics:
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 A systems approach to viewing the channel as a whole and to managing the total flow of goods
inventory from the supplier to the ultimate customer.
 A strategic orientation toward cooperative efforts to synchronize and converge intrafirm and inter-
firm operational and strategic capabilities into a unified whole and
 A customer focused orientation to create unique and individualized sources of customer value,
leading to customer satisfaction.
SCM as a Set of Activities:
For adopting the supply chain management philosophy, organization has to establish management
practices that permit them to act or behave consistently. Bowersox and Closs (1996) argued that to
be fully effective in today’s competitive environment, firms must expand their integrated behaviour
to incorporate customers and suppliers. So supply chain management activities such as mutually
sharing information, risks and rewards with chain members (Ellram and Cooper, 1990), integrated
behaviour and processes and an effort to build and maintain long term relationship are vital for
realization of the management philosophy behind SCM. Gentry and Vellenga (1996) argued that it is
not usual that all the primary activities in a value chain – inbound and outbound logistics, operations,
marketing, sales and service – are performed by any one of firm to maximize customer value. Thus,
forming strategic alliances with channel partners such as suppliers, customers, or intermediaries e.g.
logistics service providers, provides competitive advantage through creating customer value
(Langley and Holcomb, 1992).
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SCM as a Set of Management Process:
Davenport (1993) defined a process as a structured and measured activities designed to produce a
specific output for a particular customer or market. LaLonde (1997) proposed that SCM is the
process of managing relationships, information and materials flow across enterprise borders to
deliver enhanced customer service and economic value through synchronized management of the
flow of physical goods and associated information from sourcing to consumption. Ross (1998)
defined supply chain processes as the actual physical business functions, institutions and operations
that characterize the way a particular channel system moves goods and services to market through
the supply pipelines. The same idea was reflected by Cooper, Lambert, et al. (1997), a process is a
specific ordering of work activities across time and place, with a beginning, an end, clearly identified
inputs and outputs and a structure of action. Lambert et al. (1998) suggested that the key processes
would typically include customer relationship management, customer service management, demand
management, order fulfillment, manufacturing flow management, procurement and product
development and commercialization.
SCM Practices in Indian FMCG Industry:
In a low margin and high volume business like FMCG, it requires a very close attention on the
planning and operational part of the entire value chain activities because these minutes details can
change the fortune of any organization. While branding differentiates the image of the product, the
distribution system will determine the faith of the organization up to a very large extent in FMCG
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industry. The diversity of India and existence of vast untapped markets of rural areas provide the
bundle of opportunities to companies. The best price or quality product offerings combined with
heavy promotional and advertising budgets will not help the product succeed if one of the major
ingredients of the marketing mix as distribution is not properly focused. The table1 shows the types
of FMCG outlets are available across the India. Every Organization needed to serve a large
percentage of these outlets to reap the economies of the scale.
TYPES OF OUTLETS PERCENTAGE TERMS (%)
Total Outlets 100
Grocer 34.6
General Store 12.8
Food Store 7.1
Cosmetic Store 4.5
Chemist 5.9
PaanBidi 16
Others 19
Table-l: Types of Outlets in Indian FMCG Retail Industry (Source: ORG-MARG, 2003)
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The traditional basic structure of FMCG supply chain has not changed over the years. The basic
supply chain related with distribution side of FMCG industry. The competitive scenario has changed
the importance of each element of the chain operation i.e. a detailed planning and analysis of every
activity of the chain so that to make the same efficient and effective.
Despite the importance and theoretical development of SCM, there is little empirical research on
how practitioners define and incorporate SCM practices into overall corporate strategy and
functioning. Similarly, little is known about the specific practices or concerns of successful SCM
implementation in Indian FMCG organizations. This research paper investigates these issues by
means of empirical data.
Nutshell:
The clubbing of various SCM practices of Indian FMCG organizations emerged as few exclusive
factors through research study, which were different on agreement continuum and adoption
continuum from each other. The result of study revealed that supply chain partnership and supply
chain networking are considered to be dominating factors for Indian FMCG organizations. This
seems to be quite true with the rapid spread and development of IT and telecommunication tools and
techniques throughout India, which is facilitating the bi-directional flow of information and
enhanced level of coordination and collaboration. Besides that leanness or operational efficiency
factors have high degree of agreement but low level of adoption. The reasons behind the same are
basically infrastructural bottlenecks and the presence of unskilled and semi-skilled suppliers at
backend and distributors at front end of the supply chain. However, cross functionality and strategic
outsourcing are leading on adoption continuum. A truly integrated supply chain requires a huge
amount of commitment by all members of the supply chain. The focal firm might require to overhaul
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the purchasing process and integrate suppliers’ R&D teams directly into its own decision making
processes so as to leverage on it’s own core competency and partners’ core capabilities. Integrating
the purchasing and logistics processes with other key corporate processes creates a closely linked set
of manufacturing and distribution processes. It further allows focal firm to deliver products and
services to both internal and external customers in a more timely and effective manner
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C.1 - LITERATURES REVIEW
1: Lead time management in supply chains
Author: Ray, Saibal, Ph.D., University of Waterloo (Canada), 2001 ,page- 210
Abstract:
In recent years speed and cost have emerged as important competitive priorities in supply chains.
Firms are now investing substantially in lead time reduction; however, the focus of such investments
has been quite different for make-to-stock (MTS) and make-to-order (MTO) firms. The demand for
MTS items tends to be deterministic but price-sensitive, while demand for MTO items is more
variable and sensitive to both price and delivery lead time. These differences in market
characteristics require that MTS firms focus on supplying predictable demand at the lowest possible
cost while MTO firms focus on reducing the delivery lead time. Our research deals with the costs
and benefits of lead time management in supply chains, taking into account the differences in
competitive environments. In particular, we develop separate lead time management models for
profit-maximising MTS and MTO firms.
For the MTO firm, we assume that customer demand is stochastic and the mean demand rate is
decreasing in both price and a uniform guaranteed delivery lead time offered by the firm. To further
model the premium for lower delivery lead times, we assume that price is decreasing in the length of
the guaranteed delivery lead time. We also capture economies of scale by assuming the unit
operating cost to be a decreasing convex function of the demand rate. The MTO firm may invest in
increasing capacity in order to reduce delivery lead time, but must be able to satisfy customers
according to a pre-specified service level. Our analytical model for delivery lead time management
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of such MTO firms trades off the costs of investment against the resultant benefits. Our model
allows a MTO firm to determine the optimum level of the guaranteed delivery time, processing rate
and investment that maximize its profit. We show that ignoring: (i) the dependence of market price
on the lead time offered and economies of scale, when they exist, and (ii) the inherent preference of
customers for price or lead time, can lead to potentially large profit losses.
Normally MTS firms invest in developing more efficient processes that reduce operating costs.
While the process-improving investments can be of various types, we focus on investments in
reducing supplier lead time and develop models for supply lead time management for MTS firms.
We show that such investments in lead time reduction can, after accounting for all the associated
costs and benefits, result in substantial reduction of inventory costs. We examine different types of
investment and amortization schemes in supplier lead time reduction and the different cost models
they generate. We compute the cost-minimizing inventory and supply lead time levels for each type
of model. We also perform comparative statics with respect to model parameters, and find several
"apparently" counter-intuitive results.
We then assume that a MTS firm sets its price as a percentage mark-up over its total operating costs
per unit. In that case, any investment in reducing operating costs can lower price and help the firm to
gain a greater market share. For the case of investment in set-up time (cost) reduction, we are able to
formulate an integrated production-marketing model for a profit-maximizing MTS firm where price
and demand, and hence profit, are functions of the firm's operating variables. We show that when
demand depends on the operating variables in a profit maximization model, some of the best known
properties from classical inventory management no longer hold. We are also able to show that if a
MTS firm ignores the explicit dependence by either assuming demand to be constant or price to be
an independent decision variable, sub-optimality occurs and the firm can lose substantial profits. For
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the case of investment in supply lead time reduction, we are also able to formulate the profit-
maximizing problem in terms of the operating variables of the firm and to indicate how it can be
solved.
Review: In recent years speed and cost have emerged as important competitive priorities in supply
chains. Firms are now investing substantially in lead time reduction; however, the focus of such
investments has been quite different for make-to-stock (MTS) and make-to-order (MTO) firms.
2: Finding the Right Fit
Ron Cain. Journal of Commerce. New York: May 10, 2010.
Abstract:
As a result, many companies are turning to third-party logistics providers to customize solutions that
will streamline their supply chains so they can focus on core competencies. According to IBM's
Small and Medium Business Center Web site, www-304.ibm.com/businesscenter/smb/us/en/,
"Logistics companies are pressuring the cost structure of traditional wholesale distribution channels
by offering a la carte supply chain services without the constraints of a buy-and-resell business
model."
SaaS systems also deliver a near immediate return on investment, given the relatively low cost for
implementation and maintenance. "There seems to be a consensus emerging that SaaS thrives in a
cost-conscious, capex-constrained economic environment, such as we're currently experiencing,"
said Phil Wainewright, CEO of strategic consulting firm Procullux Ventures.
The use of wireless networks in the warehouse is an IT strategy that, if implemented correctly, can
have outstanding results. "In the warehouse, the productivity improvements from wireless networks
come from substituting technology for potentially error-prone human activities such as order
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processing, inventory control or picking," said supply chain expert Adam J. Fein, founder and
president of Philadelphia-based Pembroke Consulting.
Review: Many companies are turning to third-party logistics providers to customize solutions that
will streamline their supply chains so they can focus on core competencies.
3: STRATEGIC ALIGNMENT AND PURCHASING EFFICACY: AN EXPLORATORY
ANALYSIS OF THEIR IMPACT ON FINANCIAL PERFORMANCE
Christian Baier, Evi Hartmann, Roger Moser. Journal of Supply Chain Management. Tempe:
Oct 2008. Vol. 44, Iss. 4; pg. 36, 17 pgs
Abstract:
Purchasing and supply management (PSM) has become a discipline of major strategic importance
for effectively competing in today's global marketplace. Literature recognizes that the full value-
creation potential of the purchasing function can only be realized if its decisions and activities are
aligned with the organization's overall strategic orientation. Despite general agreement on this
matter, research and practice lacks knowledge on how exactly such an alignment can be achieved
and what performance implications it has. Therefore, this article empirically investigates the
alignment-performance link in PSM in a comprehensive manner. Drawing on the theory of
production competence, we suggest that the relative fit between business strategy and purchasing
strategy, labeled as strategic alignment, and between purchasing strategy and purchasing practices,
referred to as purchasing efficacy, is key to achieving superior financial performance. Results from
profile deviation analysis on data collected globally from 141 strategic business units (SBUs) with
revenues greater than US$3 billion support our hypotheses. Findings provide clear guidance to
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managers on how to design their purchasing strategies and practices to achieve maximum alignment
and thus to effectively contribute to the SBU's financial success.
Review: Purchasing and supply management (PSM) has become a discipline of major strategic
importance for effectively competing in today's global marketplace.
4: Top Retail Companies Unite to Expand Supply Chain Best Practices Review
Business Wire. New York: Apr 20, 2005. pg. 1
Abstract:
The Soleus Group is a consulting services company focused on assisting clients in achieving world-
class supply chain execution. Core offerings enable supply chain management to gain insights into
what is possible through a sharing of best practices and value-based benchmarks. The Soleus
Group's role is to provide supply chain management with insights into incremental and quantum
improvement opportunities that uniquely fit their enterprise strategies. Services include both
industry-centric and multi-industry forums for sharing experiences, performance metrics, trends, and
innovative processes. The company is headquartered in Atlanta, GA. Visit www.soleusgroup.com
for more information.
Tompkins Associates is the leading operations-focused consulting and integration firm, specializing
in end-to-end supply chain solutions. Customers look to Tompkins' expertise to develop and
implement strategies for intelligent solutions in distribution center design, warehouse strategic
planning, distribution network configuration, transportation system planning, system integration and
implementation, logistics and manufacturing outsourcing, and supply chain optimization. As
consultants and integrators for more than 30 years, [Jim Tompkins] offers a proven track record and
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deep industry expertise for solutions that reduce costs and improve overall supply chain
performance.
Review: Core offerings enable supply chain management to gain insights into what is possible
through a sharing of best practices and value-based benchmarks.
5: Title: A swift response tool for measuring the strategic fit for resource pooling: a case study
Author(s): Kobe Naesens, (Centre for Industrial Management, KatholiekeUniversiteit,
Leuven, Belgium), LudoGelders, (Centre for Industrial Management, KatholiekeUniversiteit,
Leuven, Belgium), LilianePintelon, (Centre for Industrial Management,
KatholiekeUniversiteit, Leuven, Belgium)
Abstract:
A literature review, confirmed by in-depth interviews in industry, indicated a high level of
reluctance to implement horizontal collaboration in business. One of the main reasons is the lack of a
strategic decision support framework for the implementation of horizontal collaboration. An
appropriate feasibility or fitness test could be helpful here. Two companies strategically ready to
work together should first test whether any insurmountable practices (e.g. difference in culture)
inhibit the collaboration. If such practices are present, the collaborative initiative will probably be a
waste of time and effort. This paper therefore aims to present a method to check the strategic fit.
Review: Implementation horizontal collaboration is one of the main reasons that are responsible for
lack of strategic decision support framework.
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6: Book- Logistics and Supply Chain Management, page- 345
Author- K. ShridharaBhat
Abstract:
For a company’s competitive strategy to be successful, a strategic fit must be created between its
competitive strategy and its supply chain strategies. A company’s competitive strategy defines a set
of customer need that it seeks to satisfy through its products and/or service. For example, a large
chain store may aim at providing high availability of a variety of products of reasonable quality at
low prices. On the other hands a retailer selling automobile spare parts (
Maintenance, repair and operating supplies) may offer a large number of different products through
both a catalog and a website. Such a company has a competitive strategy built around providing
customer convenience and not based on low price. Customer can either personally visit the store and
place an order for their requirement or place order through internet. The retailer delivers the products
to the customer next day at the promises.
7: Book- Supply Chain Management in the twenty-first century
Author – B.S. Sahay pages -88-89
Abstract:
A company may fail either because of a lack of strategic fit or because it’s overall supply chain
design, processes, and resources do not provide the capabilities to support the designed strategic fit.
In thinking of the major tasks of a chief executive officer (CEO), there are few greater than job of
aligning the supply chain design and all of the core functional strategies with the overall competitive
strategy to achieve strategic fit. If this alignment is not achieved, conflicts arise between different
functional goals within the firm, or between the goals of different supply chain stages. Such conflicts
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result in different functions within the firm and stages across the supply chain targeting different
customer priorities. This conflict within the firm or across the supply chain leads to conflicts during
supply chain operation.
Review: Aligning the supply chain design and all of the core functional strategies with the overall
competitive strategy to achieve strategic fit to make business success in current competitive.
8: Supply Chain Management: Modeling and Decision Making
Author: Y. Narahari and S. Biswas
Abstract:
Supply chains are now at the center-stage of business performance of manufacturing and service
organizations. In this article, we have provided a bird's eye view of major decision issues in the
design and operation of high performance supply chains. We have surveyed the use of mathematical
and simulation models can play in supply chain management. We have also outlined a current
research effort at the Indian Institute of Science in building an object oriented decision support
system for supply chain management.
Review: Mathematical and simulation models play important role in supply chain management.
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9: Title: The strategic fit of supply chain integration in the TFT-LCD industry
Author(s): D.Y. Sha, (Department of Industrial Engineering and System Management,
Chung Hua University, HsinChu, Taiwan), P.K. Chen, (Department of Industrial Engineering
and Management, College of Management, National Chiao Tung University, HsinChu,
Taiwan), Yung-Hsin Chen, (Department of Business Administration, Asia University,
Taichung County, Taiwan)
Abstract:
The purpose of this paper is to identify what kind of supply chain integration strategies can support
TFT-LCD manufacturers seeking to break through the cost constraints and complex co-operation
relationships between manufacturers, suppliers and set plants/distributors, and further satisfy the
market requirements in terms of cost, quality, delivery, and flexibility. Several different supply chain
integration strategies have been identified for operational-level improvement of TFT-LCD
manufacturing, including direct or indirect investment in suppliers; “made in-house” and “made by
resident suppliers” arrangements, “quasi-cluster” formation, and new module assembly line set-up at
set plant.
Review: Supply chain integration strategies can support TFT-LCD manufacturers seeking to break
through the cost constraints.
10: COOPERATION AND STRATEGIC FIT IN THE SUPPLY CHAIN OF THAI FRUIT
Authors: S. Vellema, L Admiraal, J.O. Naewbanij, J.S. Buurm
Abstract:
Maneuvering as an individual actor seems to be common practice in the competitive Thai fruit
sector. This paper reflects on a participatory methodology used in a multi-stakeholder process
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initiated to create linkages and to explore a possible strategic fit between different actors in the
supply chain of Thai fruit. Fundamental to the approach was the idea that understanding diversity of
interests, building new relationships, enhancing collaboration and combining individual strategies
may strengthen the integral performance of a supply chain. From our practitioners’ perspective,
robust and responsive networks of chain actors might be better equipped to create value and to deal
with market demands. Underlying this practitioners’ perspective lies the question whether individual
behavior enables small and medium enterprises to cope with the requirements of competition and
regulation or whether a focus on relations with other businesses and public agencies may enhance
their performance. An insight generated during this process was that a viable supply chain or sector
strategy requires a feasible balance between market-driven strategies, i.e. standards of food safety
and quality, and production-driven strategies, i.e. management of seasonal oversupply in specific
production regions and technology development. Consequently, resilient collaboration between
partners needs capacity to construct a strategic fit, while acknowledging individual behaviors.
Review: Fundamental to the approach was the idea that understanding diversity of interests, building
new relationships, enhancing collaboration and combining individual strategies may strengthen the
integral performance of a supply chain.
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11: Journal of International Business Studies (2005) 36, 254–269.
The performance implications of strategic fit of relational norm governance strategies in global
supply chain relationships
Author: David A Griffith and Matthew B Myers
Abstract
The search for strategic fit has become a core concept in normative models of strategy formation.
The issue of strategic fit is becoming increasingly important in global supply chain relationships as
managers and academics examine the effectiveness of culturally founded relational governance
strategies across multiple supply chain relationships. This study empirically examines the
performance implications of strategic fit of relational norm governance strategies in global supply
chain relationships between US firms and their primary Japanese and US partners. The performance
implications of fitting relational norm governance strategies (i.e., information exchange, flexibility
and solidarity) across culturally diverse partners are tested. Results indicate that firm performance is
enhanced when the relational norms of information exchange and solidarity are fit to culturally
founded norm expectations across culturally diverse relationships simultaneously. Implications for
theory and practice are discussed.
Review: Firm performance is enhanced when the relational norms of information exchange and
solidarity are fit to culturally founded norm expectations across culturally diverse relationships
simultaneously.
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12: Supply chain configuration for diffusion of new products: An integrated optimization
approach
Mehdi Amini, Haitao Li. Omega. Oxford: Jun 2011. Vol. 39, Iss. 3; pg. 313
Review:
Abstract
We develop an integrated/hybrid optimization model for configuring new products' supply chains
while explicitly considering the impact of demand dynamics during new products' diffusion. The
hybrid model simultaneously determines optimal production/sales plan and supply chain
configuration. The production and sales plan provides decisions on the optimal timing to launch a
new product, as well as the production and sales quantity in each planning period. The supply chain
configuration provides optimal selection of options and safety stock level kept at each supply chain
function. Extensive computational experiments on randomly generated testbed problems indicate
that the hybrid modeling and solution approach significantly outperforms non-hybrid alternative
modeling and solution approaches under various diffusion and supply chain topologies. We provide
insights on optimal production/sales plan and supply chain configuration for new products during
their diffusion process. Also, managerial implications relevant to effectiveness of the hybrid
approach are discussed
Review: Author consider the importance of an integrated/hybrid optimization model for configuring
new products' supply chains while explicitly considering the impact of demand dynamics during new
products' diffusion.
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13: European Journal of Operational Research. Nov 16, 2010. Vol. 207, Iss. 1; pg. 456
Author(s): HakanYildiz, R Ravi, Wayne Fairey
Abstract:
Large automotive supply chains typically involve manufacturers pulling materials from their
suppliers along the chain, usually by using round-trip truckload routes. The return trips on these
routes are used to return empty containers back to the suppliers. The mismatch between the amount
of materials and empty containers results in underutilization of the return trips. A supplier can utilize
this unused capacity by identifying a subset of promising customer routes that can be combined with
its existing supplier routes to save overall costs of the system. Such integration also leads to other
supply chain coordination benefits such as the potential of using cross docks, more frequent milk
runs and ensuing reductions in inventories. We undertake such an integrated study of the inbound
logistics from suppliers and the outbound logistics to customers at Robert Bosch LLC, a leading
automotive parts manufacturer. We identify the opportunity for significant cost savings by using a
mixed-integer programming model that matches opposite flows from and to the customers and
suppliers. We consider the problem from a supply chain coordination perspective, where Bosch
makes all the transportation arrangements for its customers and suppliers based on the centralized
optimum solution, and outline its additional benefits.
Review: Large automotive supply chains typically involve manufacturers pulling materials from
their suppliers along the chain, usually by using round-trip truckload routes.
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14: M Melo, S Nickel, F Saldanhadagama in European Journal Of Operational Research
(2009)
Abstract:
Facility location decisions play a critical role in the strategic design of supply chain networks. In this
paper, a literature review of facility location models in the context of supply chain management is
given. We identify basic features that such models must capture to support decision-making involved
in strategic supply chain planning. In particular, the integration of location decisions with other
decisions relevant to the design of a supply chain network is discussed. Furthermore, aspects related
to the structure of the supply chain network, including those specific to reverse logistics, are also
addressed. Significant contributions to the current state-of-the-art are surveyed taking into account
numerous factors. Supply chain performance measures and optimization techniques are also
reviewed. Applications of facility location models to supply chain network design ranging across
various industries are presented. Finally, a list of issues requiring further research are highlighted.
Review: I agree with author view that Facility location decisions play a critical role in the strategic
design of supply chain networks.
15: Managing Diversity in the Hotel Industry: The case of Yogyakarta, Indonesia
Author: James J. Spillane S. J
Abstract:
FMCG Sector in India is characterized by cut throat competition, which leads to brand proliferation
in various categories. In matured urban markets consumer sales promotion to differentiate one's offer
is a very common practice. In fact consumers are lured by the ever increasing budget allocated to
these activities. In such a scenario it is very essential to study how consumers make their choices in
FMCG category where there are several brands in the consideration set of the consumer. Since the
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final risk being low, consumers do not mind switching from one brand to another due to sales
promotion offers. Thus it becomes imperative to the marketer to learn about consumer preferences
with respect to sales promotion offers, what schemes do the consumers prefer for what kinds of
brands, which media they prefer to learn about the schemes, whether they prefer incentives
immediately or at a later date
Review: It is very essential to study how consumers make their choices in FMCG category where
there are several brands in the consideration set of the consumer.
16: Implementing IT in SCM—Understanding the Challenges
Author: AnkitMehrotra is Senior Lecturer at Jaipuria Institute of Management,
Abstract:
Technology offers the potential to change supply chain networks and processes to reduce non-value
adding time spent and to support alternative ways of working. An efficient supply chain network can
offer substantial improvements in productivity and in customer satisfaction by making available
online, real-time information networked around the organization, giving full supply chain visibility.
Thus, information is shared within and between the organization and decisions are made on the basis
of this shared information. The technology needed to promote and support change, be it large or
small, strategic or operational, if used appropriately offers the chance to improve supply chain, in
turn, leading to increased productivity and profitability.
Review: Technology offers the potential to change supply chain networks and processes to reduce
non-value adding time spent and to support alternative ways of working.
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17: Design of closed-loop supply chain and product recovery management for fast-moving
consumer goods; The case of a single-use camera
David B Grant, Ruth Banomyong. Asia Pacific Journal of Marketing and Logistics.Patrington:
2010. Vol. 22, Iss. 2; pg. 232
Abstract:
The purpose of this paper is to qualitatively investigate how product recovery management (PRM)
activities affected the strategic design and implementation of a closed-loop supply chain for a fast-
moving consumer good. The paper employs a case study approach with in-depth interviews and
structured observation of PRM processes at the focal company. The focal company was able to
design an efficient and effective product recovery and recycle manufacturing system by
standardizing high-quality raw materials, using a modular structure for the product and maintaining
control over the entire process and bypassing the temptation to use third-party collectors and
processors. Primary research relates to the single case study and the focal company; however, the
findings may not generally apply to other fast-moving consumer goods (FMCG). The comparison of
the focal company's processes to an extant product recovery model provides firms with a structured
way of implementing product recovery and recycling. This paper adds to our knowledge of PRM and
closed-loop supply chain design by investigating its practical application to a fast-moving consumer
good; this topic has not previously received much attention by academics and practitioners.
Review: Product recovery management (PRM) activities affected the strategic design and
implementation of a closed-loop supply chain for a fast-moving consumer good.
Page | 83
18: Floating stocks in FMCG supply chains: using intermodal transport to facilitate advance
deployment
Rommert Dekker, Eelco van Asperen and GeertenOchtman
Abstract:
The purpose of this paper is to consider the use of temporary storage offered by intermodal
transshipment points to position some stock of fast moving consumer goods in advance of demand;
this floating stock concept combines transport and inventory management. Intermodal transport is
compared with direct road transport for a supply chain.
Review: I agree with author that floating stocks combines transport and inventory management in
FMCG.
19: Applying Supply Chain Visibility - A study at a company in the paper and pulp industry
Author: FilipAdielsson; Erik Gustavsson; [2011]
Abstract:
The study has showed that the information sharing is working relatively well at the company and
they have quite good visibility in the supply chain. It can be concluded though, that increased
visibility can help reduce the inventory levels. However, the factors affecting the inventory levels are
very complex and it has been found information sharing is just one small part of the process. The
main thing that needs to be improved is the managerial support on collaboration in order to establish
routines and schedule regular meetings which enable a more efficient information sharing.
Review: The study has showed that the information sharing is working relatively well at the
company and they have quite good visibility in the supply chain. I agree with author view that
information sharing have quite visibility in supply chain.
Page | 84
20: Extranet in Development of Supply Chain
Author: Maria Leivo; [2006]
Abstract:
Extranets as they have come to be termed are revolutionizing supply chains and their management.
Companies and organizations with quite different internal information systems can now access data
from other supply chain members. Information can be shared easily and at relatively low cost. A
major benefit that flows from this greater transparency is that internal operation of the business can
become more efficient as a result.
Review: Intranets are termed as revolutionary supply chain management and their mamagement.
21: Dabur India Ltd.: Operational Excellence and Competitive
Author: Deepak Gupta, Srinivas D.
Abstract:
Dabur India Ltd. is no exception and realized it needed to perform better and make faster decisions
in order to outpace its peers in revenue and profitability growth. To meet its goals, Accenture
proposed that Dabur improve its supply chain management, sales and distribution capabilities and
use IT as a strategic enabler for its business strategy. This included migration to a nimbler
outsourcing model that would generate value through agility and support business initiatives and
maintenance of its SAP ERP system.
Review: Accenture proposed that Dabber improve its supply chain management, sales and
distribution capabilities and use IT as a strategic enabler for its business strategy.
Page | 85
C.2 - Questionnaire:
Dear Respondent,
I am Sudhir Kumar Singh student of S.Y.MMS from B.E.S. Institute of Management Studies and
Research. I am conducting a project entitled ‘A CRITICAL STUDY OF CHANGING PHASES OF
SCM IN FMCG SECTOR’. I need your cooperation which will help to draw conclusive inference.
Your opinion and suggestion shall be kept confidential and will be used for academic purpose.
Name of Stockiest:
Occupation: Designation:
Q1.What is your awareness Level towards Supply chain Management Fundamental as a
Strategy to take the advantage in supply of FMCG products?
a. Good b. Average c. Poor
Q2.How many option do you have for a better Supply chain Solution?
a. Many b. Moderate c. Minimum
Q3. What is your willingness level to accept the Supply chain Management advantage of Better
profitability achievement?
a. Higher b. Average c. Low
Q4. Up to what level the cost deficiency hinder you to implement Supply chain solution?
Page | 86
Q5. Up to what level your conservative approach hinder you to implement Supply chain
Solution?
Q6. Up to what level the unavailability hinder you to implement Supply chain solution?
Q7. Up to what level you satisfied with Supply chain solution?
Q8.what is the observation level of the Supply chain solution is advantages for the scope of
business?
Q9.Which option do you prefer as advantages in implement Supply chain solution?
a. Better time delivery b. Better Inventory management
c. Better cost Effectiveness
Q10. Up to what level new emerging technologies are beneficial in providing better
Supply chain solution?
a. Higher b. Moderate c. Low
Page | 87
Q11.In your business strategy what role SCM play in the total performance?
Q12. Level of your desire to ask for your supplier for much better Supply chain solution?
Q13.Which component do you feel is most important for much better Supply chain solution?
a. Better Inventory management b. Better location Decision
c. Better transportation Decision
Q14. Level of your willingness to go for outsourcing Supply chain services?
Q15.What is level of requirement for FMCG sector in comparison with other commodity for a
supply chain solution?
Page | 88
D.1 - OBSERVATIONS AND ANALYSIS
Awareness Level towards Supply chain Management Fundamental.
Good 50 %
Average 30 %
poor 20 %
60
50
50
40
30 Response(In %)
30
20
20
10
0
Good Average Poor
Most of the stockiest across Mumbai well aware about the Supply Chain Management fundamental
but approximately 20 % stockiest don’t aware Supply Chain Management fundamental; they follow
traditional way to deliver good to their customers. This research survey will have positive impact on
perception of stockiest regarding Supply Chain Management fundamental.
Options for a better Supply chain Solutions.
Page | 89
Many 50 %
Moderate 26 %
Minimum 24 %
Response(In %)
Minimum
24%
Many
Many Moderate
50% Minimum
Moderate
26%
On the basis of above response, most of the stockiest have many options for Supply
Chainsolutions,some have moderate level of options for supply chain solutions. But 24 % stockiest
have only few options for alternative Supply Chain Solutions. Those who have only few options for
Supply Chain feel trouble when they want to increase supply chain performance.
Willingness level to accept the Supply chain Management advantage for better profitability
achievement.
Higher 42 %
Page | 90
Average 30 %
Low 28 %
45
40
35
30
25
42 Response(In %)
20
15 30
28
10
0
Higher Average Low
Supply chain management is one of the most tools to increase total profitability. Particularly in case
of stockiest business supply chain contribution is major part of total profit. But in Mumbai 28 %
stockiest don’t belief that supply chain is major part of their total profit.
Level the cost deficiency hinders to implement Supply chain solution.
Higher 32 %
Average 48 %
Low 20 %
Page | 91
Response(In %)
Low
20% Higher
32%
Higher
Average
Low
Average
48%
Supply chain cost is major part of total cost in stockiest business, effective supply chain management
will helpful in reduction of cost and increase profit. But in survey 20 % stockiest response low for
cost deficiency hinders to implement supply chain solutions.
Level of conservative approach hinder to implement Supply chain solutions.
Higher 40 %
Average 20 %
Low 40 %
Page | 92
Response
Low Higher
40% 40%
Higher
Average
Low
Average
20%
Level the unavailability hinder to implement Supply chain solutions.
Higher 54 %
Average 28 %
Low 18 %
Page | 93
60
50
40
30
54 Response(In %)
20
28
10 18
0
Higher Average Low
Level of satisfaction with Supply chain solutions.
Good 50 %
Average 28 %
poor 22 %
Page | 94
50
50
45
40
35
28
30
22 Response(In %)
25
20
15
10
0
Good Average Poor
Satisfaction is derived from performance of business, those who have implement better supply chain
solution have better performance than those who have not implement effective supply chain
solutions. In the survey 22 % stockiest are not satisfy with their business performance they have to
implement effective supply chain solutions.
Observation level of the Supply chain solution is advantages for the scope of business.
Good 50 %
Average 28 %
Low 22 %
Page | 95
Response(In %)
Low
22%
Good
Average
Good Low
50%
Average
28%
Success of business motivates people to increase scope of business. In particularly stockiest business
track of good performance motivates stockiest to include some new product to deliver their
customers. Scope of business depends on flexibility of supply chain solution. But in survey 22 %
stockiest have low Observation of the Supply chain solution is advantages for the scope of business.
Option preferred as advantages in implement Supply chain solutions.
Better Time Delivery 48 %

Better Inventory Management 20 %
Better Cost Effectiveness 32 %
Page | 96
50 48
45
40
35
32
30
Response(In %)
25
20 20
15
10
0
BTD
BIM Response(In %)
BCE
FMCG products are perishable in nature at some extent, so delivery at time is important, some
products got perished if we keep it normal temperature so it require cryogenic store to keep it safe
for future use, it means that delivery time and inventory management is equally important. More
over better inventory management is also reduce total cost. But in survey only 20 % stockiest choose
Better Inventory Managements advantages in implement Supply chain solutions.
Level new emerging technologies are beneficial in providing better Supply chain solutions.
Higher 44 %
Moderate 34 %
Low 22 %
Page | 97
Response(In %)
Low
22%
Higher
Moderate
Higher
44% Low
Moderate
34%
Emerging technologies are beneficial in providing better Supply chain solutions, for example
tracking and tracing system. In survey 22 % stockiest responses low as emerging technologies are
beneficial in providing better supply chain solutions which shows that either they don’t aware or not
interested to use emerging technologies in their business process.
Role SCM play in the total performance.
Good 57 %
Average 28 %
Poor 18 %
Page | 98
Response(In %)
Poor
17%
Good
Average
Poor
Good
55%
Average
27%
In the business of stockiest, role of supply chain is most important because it is all about supply
chain business, but survey result shows that 18 % stockiest consider poor role of supply chain
management in their total performance.
Level of desire to ask for supplier for much better Supply chain solution.
Higher 50 %
Average 30 %
Low 20 %
Page | 99
60
50
40
30
50 Response(In %)
20
30
20
10
0
Higher Average Low
As we all know that there are number of big companies in FMCG sector eg- ITC, Pepsi, and Coca
Cola. They can provide better supply chain solutions if stockiest ask them to improve their supply
chain solutions. But in survey 20 % stockiest have low desire to ask them to improve their supply
chain solutions.
Which option is most important for much better Supply chain solution.
Better Inventory Management 48 %

Better Location Decision 28 %
Better Transportation Decision 24 %
Page | 100
48
50
45
40
35
28
30
24 Response(In %)
25
20
15
10
0
BIM BLD BTD
Inventory management, location decision and transportation decision are all equally important for
effective supply chain solutions. Result of study is satisfactory.
Level of willingness to go for outsourcing Supply chain services.
Higher 26 %
Moderate 22 %
Low 52 %
Page | 101
Response(In %)
Higher
26%
Higher
Moderate
Low
Low
52%
Moderate
22%
Stockiest don’t like to outsource supply chain solutions because their business is all about supply
chain business if they outsource supply chain solutions from third party supply chain service
provider it directly impact their total profit. But 26 % stockiest like to outsourcesupply chain
solutions.
Level of requirement for FMCG sector in comparison with other commodity for a supply
chain solution.
Higher 50 %
Moderate 28 %
Low 22 %
Page | 102
60
50
50
40
30 28
22
20
10
0
Higher Moderate Low
FMCG sector is one of the most competitive sector in today’s business world, it products are also
perishable in nature at some extent. So it re
D.2 - FINDINGS
1. People are not well aware about SCM scope because still 20% dealer is having poor awareness
level.
2. Dealer are not having much opinion as a supply chain solution services because this service sector
is not well incorporated by service sector icons In the area of Mumbai so well.
3. Willingness level to accept the supply chain management advantage of better profitability
achievement is also not very satisfactory.
Page | 103
4. Still in days globalized scenario cost play a major hindrance agent in the better SCM options by a
dealer.
5. The approach is now future looking but still 40% dealers are conservative.
6. Only few better SCM providers are available in the Mumbai region.
7. Satisfaction level is quite balances with still 22 % people are not well satisfied.
8. Dealers feel SCM may provide advantage to them and their prospects in business.
9. Timely delivery of product is most important advantage factor.
10. Dealer is technology focus and they feel that emerging technologies are beneficial to them.
11. Role of SCM as a strategy is high.
12. Level of desire to ask their supplier for better supply chain solutions is good but still 20% are not
having better mindset.
13. Inventory management is most important component felt by the dealers of the SCM.
14. Willingness for the outsourcing is not quite satisfactory.
15. FMCG dealers feel that there need urgency is quite higher in comparative to other factor.
Page | 104
D.3 - CONCLUSION
Still the FMCG dealer is not well aware they are conservative and believe in traditional SCM
practices. Their approach is now changing but cost factors and unavailability of better SCM
solutions provided hinder their chances of better SCM services accessibility.
Page | 105
As per result of the survey many stockiestsare not aware of supply chain management fundamental
as a strategy to take the advantage in the supply chain of FMCG products. This shows that FMCG
stockiest using traditional way in product distributions.
Number of supply chain options available influence the overall performance but many dealers are
not having much number of supply chain solutions because this service sector is still in growing
stage, many alternative service providers have increased by increasing the popularity of supply chain
as a strategy to make business success.
In today’s business supply chain management plays an important role which directly affects total
profitability of business, effective supply chain management is useful in total cost reduction so many
business organizations consider it as serious decision. But survey shows that few stockiest don’t
accept supply chain management advantage of better profitability achievement.
Successfultrack record of business motivates stockiests to include some new products to serve their
clients.Flexible supply chain management helps to add new product in their service. But some
stockiest have poor flexibility in their supply chain management which cause trouble to include
some new product in their service, which means scope of business is limited.
I have considered three criteria (Better time delivery, better inventory management and better cost
effectiveness) in implementing supply chain solutions, out of these three criteria better time delivery
and better inventory management are important for FMCG products. However the result of study
shows that many stockiest still consider better cost effectiveness are important criteria in
implementation of supply chain solutions.
Page | 106
In addition to above three basic criteria location and transportation decision are also important issue
in implementing and conducting better supply chain service. Most of the stockiest consider it equally
important as above three criteria.
New emerging technologies are beneficial in providing better supply chain solutions, eg. Tracking
and tracing system. But some dealer don’t think that new emerging technologies are beneficial in
providing better supply chain solutions, this is due to poor awareness of application of technologies
in supply chain service to dealer.
There are many big business organizations in FMCG sector, eg. ITC, HUL. They can cooperate their
dealer to implement effective supply chain solutions, if dealer ask them for that purpose, but survey
result shows that approximately 20 % dealer don’t like to ask their supplier to improve or implement
supply chain solutions.
So need is to create a better promotional awareness by FMCG key players to offer different
version of SCM solutions because dealer feel that they can offer better time bound delivery of
product to their customer and can manage their inventory in a better and a strategic advantage to
their business.
D.4 - BIBLOGRAPHY
1. http://proquest.umi.com/pqdweb?
index=6&did=726120021&SrchMode=1&sid=1&Fmt=2&VInst=PROD&VType=PQD&RQT=
309&VName=PQD&TS=1301036308&clientId=103388
Page | 107
index=11&did=2030017211&SrchMode=1&sid=3&Fmt=3&VInst=PROD&VType=PQD&RQ
T=309&VName=PQD&TS=1301037944&clientId=103388
index=18&did=1656528751&SrchMode=1&sid=3&Fmt=4&VInst=PROD&VType=PQD&RQ
T=309&VName=PQD&TS=1301037944&clientId=103388
index=4&did=824603231&SrchMode=1&sid=5&Fmt=3&VInst=PROD&VType=PQD&RQT=
309&VName=PQD&TS=1301039772&clientId=103388
5. http://www.emeraldinsight.com/journals.htm?articleid=1600809&show=html&
6. Book- Logistics and Supply Chain Management, page- 345
Author- K. ShridharaBhat
7. Book- Supply Chain Management in the twenty-first century
Author – B.S. Sahay pages -88-89
8. http://www.emeraldinsight.com/journals.htm?articleid=1740600
9. http://www.actahort.org/books/699/699_56.htm
10. https://www.msu.edu/~griff296/articles/2005%20JIBS%20Griffith%20Myers.pdf
did=2071604761&sid=12&Fmt=2&clientId=103388&RQT=309&VName=PQD
12. http://www.mendeley.com/research/facility-location-and-supply-chain-management-a-review/
13. http://liba.edu/index.php?option=com_content&task=view&id=152&Itemid=86
14. http://gbr.sagepub.com/content/11/2/167.abstract
Page | 108
index=1&did=1987937351&SrchMode=2&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT
=309&VName=PQD&TS=1301338238&clientId=103388
index=4&did=1963652211&SrchMode=2&sid=1&Fmt=6&VInst=PROD&VType=PQD&RQT
=309&VName=PQD&TS=1301338238&clientId=103388
17. http://www.essays.se/essay/3cf1c4a84c/
18. http://www.essays.se/essay/259ccedd5b/
19. Book: “Supply Chain Management and Logistics”
Author: Mendel, peter
20. Book: “Logistics and Supply Chain Management”
Author: Saxena, Anurag
Page | 109
Page | 110

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MMS(Operations) Project Thesis 2011

A STUDY ON STOCKIST WITHIN MUMBAI

“A CRITICAL STUDY OF CHANGING PHASES OF SCM IN FMCG

MASTER OF MANAGEMENT STUDIES

Sudhir Kumar Singh

(Roll No. 50)

Prof. Vikram Shikhare

BES’s Institute of Management Studies and Research

(Affiliated to University of Mumbai)

I, Mr. Sudhir Kumar Singh,

University or Institute for the award of any degree/diploma.

Signature of Internal Guide Signature of Student

Prof. Vikram Shikhare Sudhir Kumar Singh

fellowship or any other similar title.

Signature of Director Signature of Guide

(Prof. Vikram Shikhare) (Prof. Vikram Shikhare)

It is a pleasure to record my thanks and gratitude to the Director Prof. VikramShikhare,

enable me to complete this study with in the stipulated time period.

guidance provides me which I am necessary for completing this study.

However, I take the responsibility of all my shortcomings.

Sudhir Kumar Singh

such type of research.

and academically rewarding for me.

Sudhir Kumar Singh

PART- A.1 Executive Summary 9

Level the cost deficiency hinders to implement Supply chain solution 93

a supply chain solution

problems being faced by the company are:

 Errors in Forecasting Demand

 High inventory levels

 Imbalance in the Distribution Network

adequate inventory level and proper distribution network.

managers, this is very important in terms of distribution & transportation cast.

A.1- OBJECTIVES OF STUDY

the full advantage of supply chain management.

can say concretely the result is good.

results may be different of this study in another place.

the detailed study.

A.3 - RESEARCH METHODOLOGY

Research methodology is a description explanation and justification of various methods of

TYPE OF RESEARCH USED IN THE STUDY

questions about competitors, market structure, government regulations, economic trends,

results to invest advisors and potential investors.

TYPE OF SAMPLING METHOD USED IN THE STUDY

good source for accurate information

The sample universe is taken Mumbai and nearby areas.

METHOD OF DATA COLLECTION

collection of primary data.

B.1 - Supply chain management (SCM) (definitions):

Supply chain management (SCM) is the management of a network of interconnected businesses

in-process inventory, and finished goods from point-of-origin to point-of-consumption (supply

controlling associated business processes.

be created and solutions can be planned.

B.2 - Supply Chain Management Problems

Supply chain management must address the following problems:

 Distribution Network Configuration: Number, location and network missions of suppliers,

production facilities, distribution centers, warehouses, cross-docks and customers.

 Distribution Strategy: Including questions of operating control (centralized, decentralized or

owner-operated, private carrier, common carrier, contract carrier, or 3PL). Trade-Offs in