CAT – 1

PART – A
1. DEFINE LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Logistics refers to the overall process of managing how resources are acquired,
stored, and transported to their final destination. ... The term is now used widely
in the business sector, particularly by companies in the manufacturing sectors, to refer
to how resources are handled and moved along the supply chain.
Logistics refers to the overall process of managing how resources are acquired,
stored, and transported to their final destination. ... The term is now used widely
in the business sector, particularly by companies in the manufacturing sectors, to refer
to how resources are handled and moved along the supply chain.

2. Objectives of supply chain management

The primary purpose of the supply chain is to fulfill demand, drive customer value,
improve responsiveness, facilitate financial success and build a good network.
Most primary goals of efficient supply chain management should be – faster delivery,
Higher efficiency, and an accelerated cash flow.

3. Scope of supply chain management

Supply Chain Management includes managing supply and demand, sourcing raw
materials and parts, manufacturing and assembly, warehousing and inventory
tracking, order entry and order management, distribution across all channels, and
delivery to the customer.

4. Supply chain network of any manufacturing company

Supply Chain Network Design (SNDC) also known as 'strategic supply chain
planning' is the process for building and modelling the supply chain to understand the
costs and time to bring goods and services to market within an organisations available
resources.

5. Inbound and outbound logistics

Inbound logistics brings supplies or materials into a business, while outbound
logistics deals with moving goods and products out to customers. Both focus
heavily on the transporting of goods. But inbound is all about receiving, while
outbound focuses on delivery.

6. Best practices of SCM

 Recruit & Develop Supply Chain Professionals. ...
 Align the Supply Chain Team. ...
 Establish Alliances with Suppliers. ...
 Purchase Supplies in Volume to Reduce Costs. ...
 Diversify Supplier Relationships to Avoid Delays. ...
 Improve Demand Forecasting. ...
 Optimize Inventory Management.
7. Characteristics of good measure
 RELIBILITY. RELIBILITY
 VALIDITY. ...
 PRACTICIBILITY. ...
 USABILITY. ...
 MEASUREABILITY.

8. Drivers of supply chain performance

Five supply chain drivers, Production, Inventory, Location, Transportation, and
Information, influence the performance of the supply chain. Companies can develop
and manage these drivers to emphasize the ideal balance between responsiveness and
efficiency, depending on your business and financial requirements.

9. Fmcg company’s outsourcing decision

many FMCG industries were faced with challenges in the competitive environment to
be competitive in the market and produce products at the minimum cost as possible
yet meeting customer specification without affecting the quality and delivery
schedule. Thus, outsourcing could be an alternative to solve most of the problems
faced by many FMCG industries

10. Functions of logistics management

 Order processing.
 Materials handling.
 Warehousing.
 Inventory control.
 Transportation.
 Packaging.

PART – B
11. A. achieving efficiency and effectiveness objectives requires a set of standards to
compare with actual performance

1. FIND DEPENDABLE SUPPLIERS

While choosing suppliers, the cost is not the only factor. What’s more important is to
select suppliers who are reliable. This allows you to fulfill your responsibility in
delivering the best quality to your customer.

It is important to do thorough research to identify those who have a strong reputation for
maintaining high standards for quality, customer-care, packaging and practice ethical
ways of doing business.

2. INVEST IN EMPLOYEE DEVELOPMENT

Any SCM worker will vouch for the fact that operating an efficient and streamlined SCM
is like running an obstacle course on a daily basis. The dawn of each new day brings its
own set of problems to be solved, especially with expensive, fragile or perishable goods.
 Staff development strategies involve not only a formal training curriculum, but also on-
the-job training, coaching, mentoring, rotation through multiple assignments and training
based on scenario modeling. All of this helps employees to understand not just how
processes work, but also the impact of them on the business.

3. CONTINUOUS IMPROVEMENT
Having established a stable SCM is not the end of the road. An integral part of having an
effective SCM is to keep monitoring and evaluating all the time.

Constantly looking for ways to improve and innovate ensures in accruing more significant
cost benefits, increases speed to market and deliver the highest standards of customer
service. In a constantly changing world, continuous improvements need to be constant.

Never stop looking to find ways to improve!

4. LEVERAGE NEW TECHNOLOGIES

The technology that exists today plays a huge role in strengthening SCM. For example,
implementing a good Warehouse Management System (WMS) is what helps successful
companies to streamline their SCM.

Companies that wish to achieve a high level of SCM should also consider investing in
transport management software. The use of computerized shipping and tracking systems
helps to integrate all operations from one panel.

5. IMPROVE RETURNS MANAGEMENT

A solid SCM strategy has an efficient returns management system, as it is equally
important to give returns as much attention as shipping out stock.

A solid returns management enables you to efficiently re-process or re-manufacture, as

the case may be, in order to service customers quickly and efficiently.

Do not underestimate the value of a robust returns management process. It goes deeper
than helping your company run more efficiently. It can have a huge impact on customer
perception and trust in the brand, the company, and its products.

A satisfactory product return experience can lead to increases in a customer’s future

purchases and referrals and, in turn, the profit they yield for the company.

Supply chain efficiency vs Effectiveness

A well-functioning supply chain is not only effective, but also efficient. Efficiency is all
about the extent to which a process uses resources in the best way possible to ensure the fast,
smooth running of systems. Effectiveness, however, is the level to which a specific process
gives the kinds of desired results expected from it. 
An efficient supply chain is one that can make the most optimum use of its resources
including financial, human, technological or physical. This results in reducing operational
costs for materials and packaging and reduces time wastage.

An effective supply chain is one that meets or exceeds the actual demands placed on it by its
key stakeholders and this can include customers, partners, suppliers or vendors.

Ways to Improve Supply Chain Efficiency

Fortunately, there has never been a better time to start collecting thanks to recent innovations
that make data more accessible than ever. Better still, these new tools address the kinds
of bottlenecks that lead to inefficient and unsustainable supply chains.

ii. supply chain management perspectives in managerial decisions with example

Organizations are increasingly facing intensifying global competition, rapid technological
advances, and more demanding customer expectations (Vokurkar et al., 2002). Accordingly,
these differences affect the management philosophy in the organizations. The dynamics of
faster product development set new expectation standards and traditional managerial
attributes are being revised to improve firm’s competitiveness in this new environment. It is
suggested in the literature that traditional competition of company versus company is
changing toward a business model where supply chains compete against supply chains
(Prajogo and Olhager). Therefore, managers and academic researchers have realized that a
more integrated approach to conducting business is necessary.

Management perspectives have complex and dynamic structures. In this manner, four
management perspectives are considered in this study. The first one is system perspective. A
system functions by acquiring inputs from the external environment and than transforms the
inputs and discharges outputs back to the environment. This is the system perspective of
organizations.

These are the basis for system perspective. In other words, the supply chain management is
accepted as a process which is a specific ordering of work activities across time and place,
with a beginning, an end, clearly identified inputs and outputs, and a structure for action.
Another view in the supply chain process is lean approach. They are; striving for perfection
in delivering value to customers; only producing what is pulled from the customer just-in-
time and concentrate only on those actions that create value flow; focusing on the elimination
of waste in all operational processes, internally and externally that arise from overproduction,
waiting, transportation, inappropriate processing, defects and unnecessary inventory;
recognizing that all participants in the supply chain are stakeholders and we must add value
for everyone in the environment; developing close, collaborative, reciprocal and trusting
(win-win), rather than arms-length and adversarial (win-lose) relationships with suppliers;
working with suppliers to create a lean and demand driven logistics; reducing the number of
suppliers and work more intensively with those given a preferred long-term relationship;
creating a network of suppliers to build a common understanding and learning about waste
reduction and operational efficiency in the delivery of existing products/services. supply
chain management is far more than just order fulfilment as it has been viewed in the system
approach. It encompasses all the processes from product generation through end-of life
recycling and disposal. The traditional, linear, functional view of the supply chain shows
materials, information, and finances flowing toward the customer with the focus on order
fulfilment between each player in the supply chain.

b. i. evolution of supply chain management

ii. critical importance of supply chain management

The Importance of Supply Chain Management

It is well known that supply chain management is an integral part of most businesses and is
essential to company success and customer satisfaction. 

Boost Customer Service

 Customers expect the correct product assortment and quantity to be delivered.

  Customers expect products to be available at the right location. (i.e., customer
satisfaction diminishes if an auto repair shop does not have the necessary parts in
stock and can’t fix your car for an extra day or two).
 Right Delivery Time – Customers expect products to be delivered on time (i.e.,
customer satisfaction diminishes if pizza delivery is two hours late or Christmas
presents are delivered on December 26).
 Right After Sale Support – Customers expect products to be serviced quickly. (i.e.,
customer satisfaction diminishes when a home furnace stops operating in the winter
and repairs can’t be made for days)

Reduce Operating Costs

 Decreases Purchasing Cost – Retailers depend on supply chains to quickly deliver

expensive products to avoid holding costly inventories in stores any longer than
necessary. For example, electronics stores require fast delivery of 60” flat-panel
plasma HDTV’s to avoid high inventory costs.
 Decreases Production Cost – Manufacturers depend on supply chains to reliably
deliver materials to assembly plants to avoid material shortages that would shutdown
production. For example, an unexpected parts shipment delay that causes an auto
assembly plant shutdown can cost $20,000 per minute and millions of dollars per day
in lost wages.
 Decreases Total Supply Chain Cost – Manufacturers and retailers depend on supply
chain managers to design networks that meet customer service goals at the least total
cost. Efficient supply chains enable a firm to be more competitive in the market place.
For example, Dell’s revolutionary computer supply chain approach involved making
each computer based on a specific customer order, then shipping the computer
directly to the customer. As a result, Dell was able to avoid having large computer
inventories sitting in warehouses and retail stores which saved millions of dollars.
Also, Dell avoided carrying computer inventories that could become technologically
obsolete as computer technology changed rapidly.

Improve Financial Position

 Increases Profit Leverage – Firms value supply chain managers because they help
control and reduce supply chain costs. This can result in dramatic increases in firm
profits. For instance, U.S. consumers eat 2.7 billion packages of cereal annually, so
decreasing U.S. cereal supply chain costs just one cent per cereal box would result in
$13 million dollars saved industry-wide as 13 billion boxes of cereal flowed through
the improved supply chain over a five year period.
  Decreases Fixed Assets – Firms value supply chain managers because they decrease
the use of large fixed assets such as plants, warehouses and transportation vehicles in
the supply chain. If supply chain experts can redesign the network to properly serve
U.S. customers from six warehouses rather than ten, the firm will avoid building four
very expensive buildings.
 Increases Cash Flow – Firms value supply chain managers because they speed up
product flows to customers. For example, if a firm can make and deliver a product to
a customer in 10 days rather than 70 days, it can invoice the customer 60 days sooner.

Societal Roles of SCM

Ensure Human Survival

 SCM Helps Sustains Human Life – Humans depend on supply chains to deliver
basic necessities such as food and water. Any breakdown of these delivery pipelines
quickly threatens human life. For example, in 2005, Hurricane Katrina flooded New
Orleans, LA leaving the residents without a way to get food or clean water. As a
result, a massive rescue of the inhabitants had to be made. During the first weekend of
the rescue effort, 1.9 million meals and 6.7 million liters of water were delivered.
 SCM Improves Human Healthcare – Humans depend on supply chains to deliver
medicines and healthcare. During a medical emergency, supply chain performance
can be the difference between life and death. For example, medical rescue helicopters
can save lives by quickly transporting accident victims to hospitals for emergency
medical treatment. In addition, the medicines and equipment necessary for treatment
will be available at the hospital as a result of excellent supply chain execution
 SCM Protects Humans from Climate Extremes – Humans depend on an energy
supply chain to deliver electrical energy to homes and businesses for light, heat,
refrigeration and air conditioning. Logistical failure (a power blackout) can quickly
result in a threat to human life. For example, during a massive East Coast ice storm in
January 1998, 80,000 miles of electrical power lines fell resulting in no electricity for
3,200,000 Montreal, Quebec residents. Due to extreme cold, 30 died and 25% of all
Quebec residents left home to seek heated shelter. In addition, economic costs
included $3 billion in lost business, $1 billion in home damage and $1 billion in
government expenditures.

Improve Quality of Life

 Foundation for Economic Growth – Societies with a highly developed supply chain
infrastructure (modern interstate highway system, vast railroad network, numerous
modern ports and airports) are able to exchange many goods between businesses and
 consumers quickly and at low cost. As a result, the economy grows. In fact, the one
thing that most poor nations have in common is no or a very poorly developed supply
chain infrastructure.
 Improves Standard of Living – Societies with a highly developed supply chain
infrastructure (modern interstate highway system, vast railroad network, numerous
modern ports and airports) are able to exchange many goods between businesses and
consumers quickly and at low cost. As a result, consumers can afford to buy more
products with their income thereby raising the standard of living in the society. For
instance, it is estimated that supply chain costs make up 20% of a product’s cost in the
U.S. but 40% of a product’s cost in China. If transport damage is added in, these costs
make up 60% of a product’s cost in China. The high Chinese supply chain cost is a
major impediment to improving the standard of living for Chinese citizens.
Consequently, China has embarked on a massive effort to develop its infrastructure
 Job Creation – Supply chain professionals design and operate all of the supply
chains in a society and manage transportation, warehousing, inventory management,
packaging and logistics information. As a result, there are many jobs in the supply
chain field. For example, in the U.S., logistics activities represent 9.9% of all dollars
spent on goods and services in 2006. This translates into 10,000,000 U.S. logistics
jobs.
 Opportunity to Decrease Pollution – Supply chain activities require packaging and
product transportation. As a by-product of these activities, some unwanted
environmental pollutants such as cardboard waste and carbon dioxide fuel emissions
are generated. For example, paper and paperboard accounted for 34% of U.S. landfill
waste in 2005. Only 50% of the 84 million tons of paper and paperboard waste were
recycled. Also, carbon dioxide emissions from transportation accounted for 33% of
total U.S. CO2 emissions in 2005. As designers of the network, supply chain
professionals are in a key position to develop more sustainable processes and
methods.
 Opportunity to Decrease Energy Use – Supply chain activities involve both human
and product transportation. As a by-product of these activities, scarce energy is
depleted. For example, currently transportation accounts for 30% of world energy use
and 95% of global oil consumption. As designers of the network, supply chain
professionals have the role of developing energy-efficient supply chains that use
fewer resources.

Protect Cultural Freedom and Development

 Defending Human Freedom – Citizens of a country depend on military logistics to

defend their way of life from those who seek to end it. Military logisticians
 strategically locate aircraft, ships, tanks, missiles and other weapons in positions that
provide maximum security to soldiers and other citizens. Also, superior logistics
performance yields military victory. For example, the B-2 Stealth Bomber is able to
deliver bombs to target without being detected by enemy radar.
 Protects Delivery of Necessities – Citizens of a country depend on supply chain
managers to design and operate food, medicine and water supply chains that protect
products from tampering. Sophisticated packaging techniques, state of the art
surveillance cameras, global positioning systems and RFID inventory tracking are
some of the methods used to deter terrorists from accessing these vital logistics
systems.

12. A. i. explain the term value chain

The value chain is a process in which a company adds value to its raw materials
to produce products eventually sold to consumers. The supply chain represents all
the steps required to get the product to the customer.

ii. what rationale would you offer in support of the idea of using a 3 PL?
Evaluating 3PL (third-party logistics) utilization in SCM (supply chain management),
in which it is assumed that shippers may enjoy advantages derived from four
contributory sources of 3PL specialization: scale, know-how, searching ability, and IT
skills. It is also supposed that shippers may particularly benefit from 3PL when facing
uncertain business environments.

How to select right 3PL?

1. Do your research. Whether you're selecting your first 3PL or changing providers,
look for a company with proven processes, the right resources, and the ability to
integrate with your systems.
2. Establish a partnership. Today's sophisticated logistics solutions require a high
level of communication and data sharing. Find a 3PL you trust, with a compatible
culture and values. Your partner should take time to understand your supply chain
priorities.
3. Look for a range of offerings. The more help you obtain from a single provider,
the more seamless and scalable your supply chain will be. With a range of
capabilities, a 3PL can customize a solution to meet your needs.
4. Ensure your 3PL has robust technology. Your provider should offer advanced
technology solutions. You may not need such sophisticated systems right now, but
your business is always evolving.
 5. Aim for scalability. A shared-space environment is a key advantage of
outsourcing. The provider balances the needs of multiple customers so they can meet
peak requirements without investing in permanent space, equipment, or labor. They
also can scale operations to accommodate business needs.
6. Determine customization capabilities. An experienced 3PL can help you leverage
postponement strategies to optimize inventory and deliver excellent service. Building
to order instead of to stock allows you to cut production and inventory carrying costs.
7. Find a provider that commits to continuous improvement. Providers committed
to service excellence and quality management pay careful attention to solution design
and utilize proven processes to achieve desired results.
8. Find a provider that offers omnichannel expertise. Omnichannel retail is now
mainstream. Select a provider that understands the nuances of omnichannel commerce
and how to deliver the optimal customer experience. Look for an experienced partner
with proven performance, a repeatable business model, and experience with your
industry or business type.
9. Choose a partner that maintains a network of locations. An effective 3PL takes
a strategic approach to network configuration and helps you determine the right
distribution center locations for optimal efficiency for your current and future
business. They'll have a network of conveniently located facilities—and the ability to
open new locations to meet your specific needs.
10. Seek stability. When you partner with a 3PL, you entrust them with your brand,
so it is important to find a company with a long history of proven success. Look for a
financially stable partner that continues to invest in facilities, systems, equipment, and
human resources necessary for optimal logistics solutions.

SPECIFIC ATTRIBUTES IN SELECTING 3PL

1. Logistics Capabilities

A prospective third-party logistics service provider must be competent in the specific

service areas that meet your company’s needs. Just because a provider is a rock star in one
place, it’s not a foregone conclusion that they can service your firm properly. Also, they
should have a set of abilities that can satisfy both your short-term and future
requirements. For instance, EDI-capability may not be a requirement for you today, but
what if it does become required for you in 12-24 months? Do you want to unwind all the
onboarding and integration work invested in a new relationship?

2. Focus on Customer Satisfaction

These elements can be challenging to ascertain early on but do your homework. Virtually all
companies claim to have excellent customer service, but how do you know? You ask their
customers. Ask for references, preferably from companies in similar industries and needs.
Good customer service is no accident. If the customer service is consistently excellent, it’s
likely a result of a well-documented and repeated process that will continue over the years.
Another yield of good process execution is safety. It is uncommon for a logistics provider to
achieve excellent results in customer service and poor outcomes in safety or vice versa. You
can deduce that a safe logistics provider probably provides good customer service.

3. Commitment to Technology

When you’re selecting a third-party logistic service provider, consider technology that

works for you and with you. The 3PL’s technology should simplify and streamline your
processes, automating your most tiresome tasks. It’s essential to ask the 3PL these questions:
In addition to the third-party’s fulfillment services, their scalable technology should include a
cloud-based warehouse management system and electronic data interchange (EDI)
capabilities. Technology should help you with automation, processing orders, inventory
management, tracking orders, and managing e-commerce returns. Find a 3PL committed to
staying on the cutting edge of technology because the last you want to worry about when
managing your business is whether the technology can support your growth.

4. Safety Record

Due to the ever-changing landscape of safety regulations, you must select a carrier with a
strong safety record. A review of safety ratings and statistics is available to the public here.
Also, see how we value safety.

5. Adaptability

Not all businesses are the same. While a 3PL might have a full range of logistics and
fulfillment services, your business might not need access to all of them right now or ever. The
right 3PL understands the importance of creating a custom plan specific to your business
needs and vision. As you grow and your needs change, your 3PL partner will be there to help
accommodate your business’s expansion.

6. Company Stability

if one high-liability event occurs and your provider cannot withstand the fallout, the liability
often shifts, in effect, to you, the shipper. You can ease this concern if the provider’s “word,”
name, and reputation have remained intact through decades of market turbulence and
economic uncertainty.

7. Company Reputation

In a new business arrangement, you can rest assured that the relationship will be tested at
some point. Often, the test will reveal the service provider’s leadership and character at this
juncture.

Before it is too late, investigate whether the provider will respond with integrity and honor.
Time will reveal whether the firm has a good, bad, or ugly reputation with customers,
suppliers, and employees.
8. Inventory Management

A well-managed inventory can make a big difference to the success and growth of your
company. A good 3PL offers an integrated warehouse management system (WMS). A
sophisticated WMS can display real-time inventory for all your items, sync inventory with
your online store, and reorder inventory to avoid items going out of stock. Quality load
tracking and inventory tracking software can significantly impact your business’s
efficiency through instant alerts and notifications about pickup and delivery. With the right
3PL partner, expect critical inventory operations to be streamlined and enjoy the ability to
identify potential issues before they become a problem.

9. E-commerce Product Fulfillment

With all the competition in e-commerce, find a 3PL that backs up its e-commerce fulfillment
services with reliability and proven results. You don’t have to be limited to what you’re doing
today. Find a provider who will offer more than 70 pre-built integrations to different
shopping carts, marketplaces, and ERP systems. Look for an affordable e-commerce
fulfillment services provider who treats your customers like their own. Everyone wants
their customers to stay happy.

10. Location

Are you limiting your business’ potential by only operating out of one region? The right
third-party logistics companies have access to many locations through an expansive network
of fulfillment centers. The ability to tap into a network of fulfillment centers and distribution
warehouses in major cities allows you to reduce the cost of shipping and significantly trim
the transit time for orders. A 3PL can provide nationwide coverage and a range of logistics
services to expand your business’s reach.

Specific terms should be included in 3PL contract

o Pricing of services

o Price increases

o Service levels

o Processing procedures

o Terminating an agreement and renewal of agreement

o Warranty of service

o Damages

o Inventory

o Intellectual property
 o IT services and reporting

b. i. amazon supply chain model

six crucial elements come into play:

 Warehousing
 Delivery
 Technology
 Manufacturing
 Pricing
 Global Reach

1. Warehousing

This is a critical part of the Amazon supply chain, hence the vast number of warehouses and
distribution centers, all located near large cities. Currently, Amazon has 175 fulfilment
centers (warehouses) worldwide with the majority located across North America and Europe.
Efficiency is critical, and so each warehouse is optimized internally with five unique storage
areas for maximum productivity. These are:

 Library Prime Storage: Books and magazines

 Case Flow Prime Storage: Broken case and high demand products
 Pallet Prime Storage: Full case and high demand products
 Random Storage: Small items and modern demand products
 Reserve Storage: Low demand and irregular shaped products
Take a tip from Amazon: While you may not have the budget nor the need for multiple
warehouses or fulfilment centers, you can still streamline your warehousing or other storage.
If you are fulfilling orders yourself, divide your inventory into easily accessible sections so
that all your stock is to hand. If you use third-party fulfilment, including Amazon FBA,
ensure you keep inventory topped up consistently to avoid running out of stock and
disappointing customers.

2. Delivery

This on-time, fast delivery is a significant factor in the Amazon supply chain and is one of the
biggest differentiators between Amazon and other online retailers.
Amazon offers a host of delivery options:

 Prime (1-2 hours, Same Day, One-Day and Two-Day Options)

 Hub & Locker Delivery
 Amazon Key (In-Home / In-Car / In-Garage Options)
 Amazon Scout Robot (Currently in test mode)
 Hub Counter with local retail partners
  Designated Day Delivery (to group orders together)
 No-Rush Shipping (6-day shipping with a discount incentive)
 Release Date Deliveries (Pre-order Option)
Take a Tip from Amazon: Offering a variety of delivery options allows you to satisfy a
broader range of customers, thereby putting you in a position to achieve more orders. Drones,
planes, and lockers may be out of reach; however, a simple strategy of offering tracked, next
day and expedited shipping options alongside standard delivery will attract customers.

3. Technology

Amazon has never been afraid of technology. In fact, tech is at the heart of Amazon’s success
allowing its supply chain to work smarter and cut down on costs over the long term. the most
highly anticipated technological advancement is the expected introduction of Amazon Prime
Air Drone Delivery. Still in development, once launched, drones will deliver small packages
to customers in less than 30 minutes. Customers will require an Amazon-branded landing mat
and live within 15 miles of the nearest drone-enabled fulfilment center to qualify for this
delivery option in future.
Take a Tip from Amazon: Commissioning a robot might be taking it to the extreme for your
ecommerce business, but utilizing technology is undoubtedly within reach of most. Look at
your business and work out which parts you can automate – for example, is your product
research time-consuming? Is there some software you can use to speed up the process? What
about your inventory management and shipping processes? Do you hand-write labels still –
can you upgrade to a faster printer? There are many aspects of running an ecommerce
business that can potentially be sped up using technology – and not necessarily a robot!

4. Manufacturing

Amazon discovered pretty quickly that it would be to its advantage to start manufacturing and
white-labelling some of the more popular products selling on the marketplace. A somewhat
cheeky, but genius, move by Amazon, it can provide cheaper product options to customers
while increasing its own profits. Currently, Amazon sells its own branded product
lines ranging from pet products to household goods, and its inventory continues to grow.
By manufacturing its own products, Amazon keeps everything in-house, from production to
customer delivery – a sure-fire way to keep costs down and rocket the profits!
Take a Tip from Amazon: If you haven’t investigated creating your own product or brand
yet then now is the time. Sales of own-branded (private-label) products have grown
exponentially and are one of the best ways to eliminate competition, particularly when selling
on Amazon. You will have control not only of the product, its quality and aesthetics but also
how you price the product which allows you to be in control of your profits.

5. Pricing

Remaining cost-effective is a crucial part of the Amazon supply chain. Cleverly, Amazon

differentiates its customer base by segmenting its Prime and standard customers and offering
different delivery options to each, at varying prices.
So, for example, Prime members may pay more for the cost of the product but have the
benefit of receiving ‘free’ and super-fast delivery. In contrast, standard shoppers only have
the option of standard or slower delivery.
Take a Tip from Amazon: In a nutshell, simply make sure that you do not have excess
inventory taking up space and tying up capital. If you have a slow-selling line, put a strategy
in place to get rid of it as you will have money tied up in that stock. Likewise, don’t over-
order unnecessarily. Track your sales and restock according to demand rather than stock-
piling products.

6. Amazon’s Global Reach

Amazon’s European Fulfilment Network (EFN) gives the Amazon supply chain even more
power throughout the world. By operating 11 online marketplaces throughout North America,
Europe and Asia, Amazon offers sellers an easy way for international business growth and
the introduction of your brand to millions of potential customers.
Each of these Amazon marketplaces represents a massive ecommerce opportunity for sellers,
who get to tap into customers who not only trust the Amazon buying experience but who also
are very loyal. One of the most significant benefits for sellers is the chance to leverage the
Amazon brand without all the upfront costs associated with brand recognition. And of course,
this is a winning scenario for Amazon.
Now the Amazon Supply Chain has a considerable reach ensuring Amazon’s global footing.
Take a Tip from Amazon: You must scale your ecommerce business effectively, and one
way of doing this is to expand your reach with the products you have rather than continuously
adding new products to your inventory. One high demand product sold globally can be highly
lucrative. Once achieved, you can rinse and repeat with a second product.
ii. components of logistics management

PLANNING
Proper planning is necessary to make sure that all aspects of the process are coordinated
and implemented.  Planning and analysis are used to create systems for logistics and
support of the system. A detailed plan must be implemented in order to make sure the
flow of goods is not interrupted, and all items get to where they need to go…on time.   
INVENTORY CONTROL
Inventory levels must be kept so that customer requirements are met.  At the same time,
carrying costs should be low so the company does not have too much inventory on hand,
which can be a delicate balance.  Inventory levels that are too high affect margins and the
business as a whole.  

PACKAGING AND HANDLING

A large part of logistics is keeping track of materials, equipment, supplies, and packaging
materials so that goods are preserved and stored correctly. This includes repair parts,
computer resources, and mobile facilities. All of these components must be managed so
that the logistics process runs smoothly.   
TRANSPORTATION
The transportation aspect of logistics management is the most complex and costly. The
distribution of goods whether it be intermodal, truck, air, rail, or ocean requires planning
and support throughout the entire cycle.  When a customer places an order, it is not
complete until those goods have reached the customer’s door. International shipping
brings another layer of complexity to the transportation equation.  Tax codes, customs
clearance , and payment options must all be determined before the product even leaves the
warehouse.   
The advent of eCommerce has made it imperative to get orders delivered to customers as
fast as possible.  Accounting for over $500 billion  in sales in the U.S. in 2018, this
industry will continue to grow, and it will be up to logistics managers to figure out how to
best manage it. Transportation can represent 50 percent or more  of a logistics budget,
meaning that finding the best and quickest service for the lowest cost is an important
piece of the transportation component.
INFORMATION
The flow of information throughout the logistics management process is necessary,
especially in this technology-driven society.  Data-driven logistics will continue to drive
the future of the industry. The use of data enables logistics managers to anticipate demand
more accurately and alter the capacity to meet it.   More logistics companies will rely on
data visualization techniques, algorithms, and analytics to provide faster service to
customers.  
The logistics industry has been experiencing a lot of change over the last few years with
eCommerce.  Advances in the industry will continue to shape the components of logistics
management.  

CAT - 2

PART – A
1. BULLWHIP EFFECT ON INVENTORY
The bullwhip effect can lead to excessive inventory investments throughout
the supply chain when the parties involved attempt to protect themselves
against demand variations. It can also lead to an accumulation of inventory
at the manufacturer's end that will further increase supply chain costs.

2. List out the phases in global network design.

Phase I:  define a supply chain strategy / design
Phase II:  define the regional facility configuration
Phase III:  select a set of potentially desirable sites
Phase IV:  choose the locations

3. Examine the nature and scope of warehouses

 Warehouse is a location provided with adequate facilities, where bulk
shipments are received from production centers, which are then broken into
small order size for shipment to the customers as per their requirement.
Generally, warehouse is structure or building design keeping in mind raw
material and finished goods it is going to store. Therefore, warehouse
management should be able to: Receive the purchase goods and entered upon
the stock register.

4. What are the key decisions used for designing a distribution network?
There are two key decisions when designing a distribution network: 1. Will
product be delivered to the customer location or picked up from a
preordained site? 2. Will product flow through an intermediary (or
intermediate location)?

5. Appraise the importance of value addition in supply chain.

Value chains help increase a business's efficiency so the business can
deliver the most value for the least possible cost. The end goal of a value
chain is to create a competitive advantage for a company by increasing
productivity while keeping costs reasonable.

6. Develop the distribution network for Manufacturer storage with direct

shipping.
MANUFACTURER STORAGE WITH DIRECT SHIPPING In this
option, product is shipped directly from the manu- facturer to the end
customer, bypassing the retailer (who takes the order and initiates the
delivery request). This op- tion is also referred to as drop shipping. All
inventories are stored at the manufacturer.

7. What are the different types of warehouse layout?

There are three main types of warehouse layout flows that companies use to
organize the way their warehouse operates: U-shaped, I-shaped, and L-
shaped

8. Examine the role of network design in a supply chain

Supply chain network design is the process of building and modeling a
supply chain to better understand the costs and time associated with
bringing goods to market with the resources and locations available
 9. OEM COMPANY WAREHOUSE DECISION
An original equipment manufacturer (OEM) provides the components in
another company's product, working closely with the seller of the finished
product, known as the value-added reseller (VAR).

10. Explain the impact of the Amazon Online sales of books compared to
traditional method of sales with respect to the Cost and service Factors of
the Distribution network.
The combination of sophisticated information technology, an extensive network of
warehouses, multi-tier inventory management, and excellent transportation makes
Amazon's supply chain the most efficient among all the major companies in the world. Those
efficiencies have made the current shop-from-home world possible.

PART – B
11. FACTORS AFFECT THE SIZE OF WAREHOUSE
  layout and design affect warehouse efficiency and productivity.
Principles to Consider While Designing Your Warehouse Layout

Considering the principles below can help you design an efficient layout and streamline
warehouse operations. Here are some of the most crucial factors to consider:
Budget Considerations

Before starting with the design of your warehouse layout, it is essential to assess all your
business requirements, review associated budgets, and then plan the layout accordingly.
During this process, you might come across some layout designs that are more
comprehensive and expensive than others, but it is recommended that you consider the most
suitable and cost-efficient solution for your warehouse.

Space Available

Effectively utilizing the warehouse space available can help improve inventory visibility,
reduce travel time, and increase overall operational efficiency. When designing your
warehouse layout, it is crucial to allocate maximum space to storage and inventory processing
purposes while minimizing space for office areas, empty pallets, charging stations, etc.
Additionally, how you decide to allocate space will impact shelving designs, installation
capacity, and placement of goods inside your facility.

Flow

Ensuring the uninterrupted flow of goods, personnel, and equipment is vital to consider in the
design layout for the smooth functioning of your warehouse. You can avoid inefficient routes
and disruptions by strategically planning your warehouse layout design so as to facilitate each
operation in a sequential manner.

Accessibility

While planning your warehouse layout, it is crucial to ensure easy accessibility to all the
areas and products in your facility. The layout should be designed in a way that makes it easy
for personnel to navigate throughout the facility while conveniently locating and picking
items without having to move other products. As a result, your productivity can be enhanced
and orders can be fulfilled at a faster rate.

Equipment

The use of different types of equipment in your warehouse, such as lifting & packing tools,
pallet racks, or conveyors, can influence the layout design. By identifying the equipment
needed, you can evaluate and design the most suitable layout according to your requirements
and boost the productivity of your facility.

Throughput

Throughput in a warehouse refers to the number of products that are processed and moved
through various warehouse processes such as receiving, putaway, storage, picking, packing,
and shipping. By collecting and analyzing this data, you can design a layout to ensure an
efficient flow of goods and accommodate the necessary equipment for your warehouse.
Personnel

Knowing the number of people required, their current levels of training and shift timings, and
other related factors can help you design your warehouse layout in a way that doesn’t limit
your workforce’s productivity. Also, the layout must be planned in a manner that can safely
accommodate new employees and their needs in the future.

Authority Guidelines

While designing your warehouse layout, it is critical to comply with the guidelines provided
by the local authorities. Abiding by these guidelines not only ensures the safety of your
workers, equipment, or other valuable assets but also helps you avoid fines and legal
problems for your business.

B. various functions of a warehouse from logistics and supply chain perspectives.

1. Storage
The primary function of a warehouse is to provide storage space for equipment, inventory or
other items. It offers appropriate facilities to the enterprises for storing their goods when they
aren’t called for a sale. This helps prevent wastage of stock and ensure its protection and
safety. Such goods may be held from the time of their production or purchase till their use or
consumption.
The storage may be of two types-

(i) Planned Storage: It refers to the carefully estimated storage required to meet the regular
customer demand.

(ii) Extended Storage: It refers to the storage requirement above the planned storage.
Various factors can cause it, a few of them being –

2. Safeguarding of Goods
A warehouse offers protection to goods from loss, theft, or damage due to unfavourable
weather conditions like heat, wind, dust and moisture, etc.
A warehouse can make particular arrangements for different products catering to their nature.
For example, it can hire security staff to prevent theft, arrange cold storage facility for
perishable goods, use insecticides for preservation, install fire-fighting apparatus to avoid any
fire accidents.

If all of these cases are considered prudently and addressed carefully, a warehouse can
significantly cut down losses due to spoilage of goods and wastage during storage.

3. Movement of Goods
It consists of the following-

 Inbound activity– It means unloading of goods received by the warehouse.

 Transfer to storage– It refers to transferring the goods from the inbound area
to the storage area. 
 Order selecting–It means choosing the item in the storage corresponding to
the order to be shipped and moving it to the shipment area. 
  Outbound activity– Lastly, we have ‘outbound activity’, which means
inspecting and loading the goods for shipment.
The movement of goods inside a warehouse must be as seamless as possible to ensure
uninterrupted orders. Hence, the infrastructure of the warehouse, as well as the software
systems used by it, should be upgraded regularly.

4. Financing
Financing is another one of the diverse functions of a warehouse. Warehouse financing is a
type of inventory financing that involves a loan provided by a financial institution to a
manufacturer, company, or processor. In this case, goods, inventory, or commodities are
deposited in a warehouse and used as collateral for the loan.

When goods are transferred to any warehouse, the depositor gets a receipt, which acts as
evidence about the deposit of goods. The warehouse can also issue a certificate in favour of
the owner of the goods, which is called ‘Warehouse-keeper’s warrant’. This is a document of
title and can be passed on by simple endorsement and delivery. So while the goods are in the
custody of the warehouse-keeper, the owner can procure loans from banks and other financial
institutions, pledging this warrant as security. 

5. Value-added Services
A value-added service goes beyond conventional warehousing. Such services help optimise
the supply chain management, generate higher value, and deliver products efficiently to
customers. They include bundling, customisation, re-branding, re-packaging, processing, etc.
A few of them are discussed below–

 Processing:  It refers to the process that certain goods go through to make them
consumable. For example, seasoning of timber, ripening of fruits, processing of coffee
beans, polishing of paddy, etc. Sometimes warehouses perform such activities on
behalf of the owners.
 Grading and branding:  Warehouses also undertake the functions of grading and
branding goods on behalf of the wholesaler, importer or manufacturer of goods. They
also offer services for mixing, blending and co-packing or repacking service.

6. Price Stabilisation

Warehouses play a crucial role in the process of price stabilisation. They help control violent
fluctuations in prices by –

 Storing goods, when their supply exceeds demand in the market. 

 Releasing goods, when the demand gains pace.
When there is excess demand in the market, the extra inflow of goods may further decrease
their price and lead to losses for the business owners. Hence, in this case, the warehouses
hold the stock back until the demand for such goods rises again.

7. Information Management
Warehouses keep track of information about goods and materials sent into the warehouse,
stored and shipped out. In addition to that, any other information regarding the warehouse is
recorded. It allows the warehouse managers and other concerned personnel to get accurate
insights to ascertain the availability of stock, stock processing and stock replenishment
requirements.
The data maintained by the information system in the warehouse must be precise, timely, and
free from errors. It may then be presented to the higher management for the purpose of
making more informed and better decisions.

8. Other Functions
Apart from the roles mentioned above, warehouses can also perform the following functions

 Risk bearing- The moment goods are delivered for storage, the liability of
these goods transfers to the warehouse-keeper. Consequently, the risk of loss
or damage to goods is borne by the warehouse keeper. Since it is now its
obligation to return the goods in good condition, the warehouse becomes
responsible for any mishappenings. Thus, it takes all precautions to prevent
any such situation. The stored goods may also be insured for compensation in
case of loss.
 Rental property- Some warehouses can also serve as a source of rental
income for their owners who rent them out to people or entities that seek to
use them for storage or other purposes.
 Place utility- Warehouses are mainly located at convenient places, for
instance, near a road, airport, rail or waterways to ease the movement of
goods.

12. A. various constraints in network optimization.

These constraints enable you to limit flow over lanes, production at sites, and inventory held
at sites. In addition to these constraints, you can also use Count constraints to limit the
number of sites, work centers, flows, inventory and production locations to be used within a
model structure.

Flow constraints
Flow constraints place restrictions on the amount of goods traveling between sites.
The dimensions of a flow constraint are:
 Source Site: The source of the flow
 Destination Site: The destination of the flow
 Product: The product flowing
 Mode: The method of transportation
 Period: The time in which the flow occurs
For example, let’s take a look at flow constraint that can be placed between a MFG and DC.
"No more than 500 units of product A can be transported from MFG1 to DC1"

3 of the 5 dimensions of a flow are in use for this constraint: source site, destination site, and
product. Since the constraint did not specify a mode or time period, assume (as the software
will) that the constraint between MFG1 and DC1 is for ALL modes and ALL periods. In
other words, the constraint applies across all the modes and all the periods under
consideration.
To understand how to apply the "no more than 500 units" component of the constraint, please
view the sections on Constraint types.

Inventory constraints
Inventory constraints place restrictions on the amount goods being held at sites.
The dimensions of an inventory constraint:
 Site: The place where inventory is held
 >Product: The product being held
 Period: The time in which inventory is held
For example, let’s take a look at inventory constraint that can be placed at facilities (e.g. DC).
"No more than 500 units of product A can be held at DC1"

2 of the 3 dimensions of an inventory are in use for this constraint: site and product. Since the
constraint did not specify a time period, assume (as the software will) that the constraint at
DC1 is for ALL periods.
To understand how to apply the "no more than 500 units" component of the constraint, please
view the sections on constraint type and constraint basis.

Production constraints
Production constraints place restrictions on the amount of goods produced at sites.
The dimensions of a production constraint are:
 Site: The locations where production takes place
 Product: The product being produced
 Period: The time in which the production occurs
For example, let’s take a look at production constraint that can be placed on MFG1.
"No more than 200 units of product A can be produced at MFG1"
2 of the 3 dimensions of a production are in use for this constraint: site and product. Since the
constraint did not specify a time period, assume (as the software will) that the constraint at
MFG1 is over ALL periods.
To understand how to apply the "no more than 200 units" component of the constraint, please
view the sections on constraint type and constraint basis.

b. the value added functions and differentiation of supply chain

The purpose of supply chains is to add value to production and distribution. Depending upon
the markets and the value chains they are servicing, supply chains can be differentiated
according to criteria such as costs, time reliability, and risk. Efficient logistics contributes to
added-value in four major interrelated ways:

 Production costs. Derived from the improved efficiency of manufacturing with

appropriate shipment size, packaging, and inventory levels. Thus, logistics contributes
to the reduction of production costs by streamlining the supply chain.
 Location. Logistics adds value by taking better advantage of various locations,
implying access to expanded markets (more customers), and lower distribution costs.
 Time. Added value derived from having goods and services available when required
along the supply chain (e.g. lower lead times) with better inventory and transportation
management.
 Control. Added value derived from controlling most, if not all, the stages along the
supply chain, from production to distribution. By better synchronizing cycles and lead
times, logistics enables better marketing and demand response, thus anticipating flows
and allocating distribution resources accordingly.

A variety of factors are jointly shaping the configuration of supply chains:

 Logistics costs. Considers the full array of costs to make products available to the
final consumer, namely transport, warehousing, and transshipment. Supply chain
managers are particularly sensitive to the stability of the cost structure (consistent
costs), implying that routes having cost fluctuations may be discarded in favor of
routes of a higher cost but with less volatility. Therefore, costs are a standard criteria
where the cheapest routing option is sought, as long as the cost structure remains
stable as supply chains are unlikely to be modified if a cost advantage is only
temporary. The concept of cost is relative since its importance is concerning the value
of the cargo being carried. Cost considerations tend to concern more containerized
goods with a low value, such as commodities (e.g. paper), than high-value goods (e.g.
electronics).
 Transit time. A factor that is increasingly being considered since it strongly influence
inventory carrying costs and inventory cycle time in supply chain management. So,
for cargo with a higher value (clothing) or is perishable (refers), the routing option
that is the fastest and/or shortest will be preferred.
 Reliability. Relates to a factor that is mitigated by contemporary supply chain
management practices. For several supply chains, time can be a secondary factor as
long as shipments arrive at the distribution center within an expected time frame. If
shipments are regular and that this reliability remains consistent, it is possible to
organize supply chains accordingly by having more inventory in transit.
 Supply chain risk. Relates to a generally imponderable factor and involving the level
of confidence that the shipment will reach its final destination within expected costs,
time, and reliability considerations. In some cases, risk can also involve potential
cargo damage or theft. Low risks routes are obviously preferred over higher-risk
routes.

CAT – 3
PART – A

1. CUSTOMER PROFITABILITY ANALYSIS LOOKS AT A EACH SEGMENT

OF THE PROCESS OF CREATING AND SELLING PRODUCTS TO
CUSTOMERS
Customer Profitability Analysis (in short CPA) is a management accounting and a
credit underwriting method, allowing businesses and lenders to determine the
profitability of each customer or segments of customers, by attributing profits and
costs to each customer separately.

2. Important functions of internal supply chain management

Supply chain management involves five main functions: aligning flows, integrating
functions, coordinating processes, designing complex systems, and managing
resources.

3. Future trends in green logistics

 Automation, robotization, and AI has high impact on logistics

 Internet of things is a key enabler for improving logistics value chains

 Electro-mobility largely contributes to greener transports

 Blockchain technology has the potential to revolutionize logistics

 Urbanization and consumption will put strains on city logistics

 Cognitive skills, insight, and innovation become more important

 Environmental footprint and sustainable solutions will be top focus

4. Channel relationship in supply chain

"Channel relationship management is about managing the relationship between a

vendor and the third parties it uses to get its products into customers' hands while
ensuring quality post-sales service and support."

5. 3 pl and 4 pl

3PL stands for third-party logistics, described above. The term third-party logistics is
often also used interchangeably with order fulfillment. A third-party warehouse
provides a full range of eCommerce fulfillment services. This can include
warehousing, order processing, and shipping and receiving

Fourth Party Logistics, popularly known as 4PL, is the outsourcing of logistics

operations to a single partner. The partner will be responsible for assessing, designing,
building, running and measuring integrated supply chain solutions for the client.
 6. Multi-echelon is the future of competitive supply chain

A multi-echelon inventory system is one that relies heavily on layers of suppliers

distributed across multiple distribution centers and that is based on outsourced
manufacturing. In such a system, new inventory shipments are first stored at a central
or regional distribution center (RDC).

7. Supply chain network diagram of any FMCG COMPANY

Supply chain management involves optimizing industrial operations to increase both

speed and efficiency. ... The FMCG Industry is on a high growth in our country.
Proper supply chain management practice is important for FMCG industries of our
country because customers will choose the company that meets their needs fastest.

8. REVERSE LOGISTICS ACTIVITIES THAT REDUCE ENVIRONMENTAL,

SOCIETAL AND ECONOMIC IMPACT
Through effective reverse logistics operations, companies can also cut out inefficient
returns processes that result in unnecessary transportation moves, helping to reduce
carbon emissions and improve air quality.

9. DECISION TREE ANALYSIS

Decision tree analysis is the process of drawing a decision tree, which is a graphic
representation of various alternative solutions that are available to solve a given
problem, in order to determine the most effective courses of
action.

PART – B

10. B. ISSUES AND CHALLENGES OF MANAGING GLOBAL SUPPLY CHAIN

MANAGEMENT

1. Lead times

Buyers increasingly expect faster deliveries.

“The effect of Amazon is heightened expectations,” says C. John Langley, a clinical

professor of supply chain management. “Next week is no longer good enough. It’s got to be
on its way now and arrive at its destination within a day or two.”

Although air freight is more expensive than ocean freight, it’s a lot faster. Consider using
land or ocean freight day-to-day, but having air freight agreements in place that you can use
quickly to capitalise on sudden increases in demand.
2. Delays

Unfortunately, long lead times can expose your shipments to even longer delays. With so
many steps in the global supply chain and such large distances for goods to travel, there’s
many opportunities for things to go wrong.

As a result, it’s crucial to have firm completion dates and shipping times. It’s also vital to
have agreements in place with your partners that outline what happens when things don’t go
according to plan.

3. Cash flow

Cash flow management is a serious issue in every business, but it’s a particularly complicated
task in global logistics and supply chain management.

Businesses must keep track and plan for a complex web of expenses. But with so many
entities operating simultaneously, it’s hard to know where and when to allocate your
resources.

4. Data management

By now, you may have realised that there are so many data points to take into account, data
management itself is an issue.

“Organisations can quickly become overwhelmed by the vast amount of data today’s
enterprise systems, connected devices and social networks create,” said Allan Dow, president
of the leading AI-based supply chain planning solution Logicality.

In short, to manage the global supply chain effectively, businesses must use and customise a
suitable data management solution.

5. Exposure to risk

Many countries providing relatively inexpensive labour and manufacturing costs also
typically have less stable governments and currencies. Local changes in leadership and policy
can often affect the global supply chain.

Set up prospective agreements with suppliers, manufacturers, and freight forwarders in

another region or country to fall back on. You may also want to secure appropriate insurance
policies to cushion potential blows.

6. Accountability and compliance

Companies have to consider social compliance when doing business internationally. 

Unfortunately, modern slavery, child labour practices, unacceptable working conditions and
unfair compensation are just some of the unethical practices present in global supply chains.
As time goes on, there are more and more ways to verify supply chain partners to ensure
ethical standards are followed. However, there’s often no way to be certain that everything is
above board.

7. Quality control and defects

Quality issues can also be challenging to manage. For example, businesses must consider the
differences in acceptable defect levels in different countries.

It’s essential to clarify the quality level expected and the percentage of acceptable defects
ahead of time. It’s also best to define who is responsible and what happens should there be a
disagreement in the future.

8. Language barriers

Another drawback to consider is that many countries will conduct day-to-day operations in a
different language.

You can manage these types of issues by employing professional interpreters with specialist
industry knowledge. Plus, it’s always worth clarifying expectations and responsibilities in
writing.

9. Time zones

Times zones can also make communication difficult. For example, the time difference
between the centre of America and central China is a whopping 15 hours.

When there’s no overlap in working hours, you can’t just pick up the phone.

Instead, communication often happens via email and messaging platforms. In this situation,
you’ll usually have to wait until the next day to receive an answer. This can make it very
challenging to oversee technical aspects of the production process.

10. Exchange rate and foreign transaction costs

Exchange rate fluctuations matter little when taking a holiday abroad. However, even the
smallest changes in foreign exchange rates can increase costs significantly when managing a
global supply chain.

Developing countries may offer the cheapest labour rates globally, but they often have
relatively unstable currencies that are susceptible to regional influences.

Another consideration is the high cost of international transactions when using a bank. These
fees can quickly add up and hurt your margins.
 11. A. IN WHAT WAY DO SUPPLY CHAIN FLOWS AFFECT THE SUCESS OR
FAILURE OF A FIRM SUCH AS AMAZON

Consider the purchase of a can of soda at a convenience store. Describe the various
stages in the supply chain and the different flows involved.

When a customer purchases a can of soda at a convenience store, his purchase represents the
end of a supply chain’s delivery of an item and the beginning of information regarding his
purchase flowing in the opposite direction. The supply chain stages include customers,
retailers, wholesalers/distributors, manufacturers, and component/raw material suppliers. A
customer’s purchase moves product towards the customer and dollars and information
towards the retailer.

Why should a firm like Dell take into account total supply chain profitability when
making decisions?

Dell realizes that its ultimate success lies with the success of its supply chain and its ability to
generate supply chain surplus. If Dell was to view supply chain operations as a zero-sum
game, they would lose their competitive edge as their suppliers’ businesses struggled. Dell’s
profit gained at the expense of its supply chain partners would be short-lived. Just as a
physical chain is only as strong as its weakest link, the supply chain can be successful only if
all members cooperate and focus on a global optimum rather than many local optima.

What are some strategic, planning, and operational decisions that must be made by an
apparel retailer like The Gap?

The Gap plans supply chain strategy it must first consider the marketing function’s pricing
plans in order to structure a supply chain consonant with these plans. Strategic considerations
such as the capacity of each supplier and assembly operations, sourcing decisions, and how
logistics are to be handled are all part of the design. The supply chain must also settle on
communication channels and frequencies. Supply chain planning takes the strategic decisions
as a given and seeks to exploit efficiencies in the chain to maximize supply chain surplus.
The entire chain should collaborate in forecasting and planning production to achieve a
global optimum. The forecasts should take into account planned promotions and known
seasonal fluctuations in demand.

Consider the supply chain involved when a customer purchases a book at a bookstore.
Identify the cycles in this supply chain and the location of the push/pull boundary.

All supply chain processes can be broken down into four process cycles that connect the five
stages of the supply chain; the customer order cycle, the replenishment cycle, the
manufacturing cycle, and the procurement cycle. The customer order cycle connects the
customer with the retailer. The replenishment cycle connects the retailer and the distributor
and is triggered by the retailer’s need to fill the empty shelf space with another copy of this
tome. The manufacturing cycle connects the distributor and the manufacturer. As demand for
the book is realized and distributors empty their warehouses, they signal the manufacturer to
print another million copies to fill their empty warehouses. Finally, the procurement cycle
connects the manufacturer and the supplier. The manufacturer requires raw material inputs of
paper, ink, etc., to begin the assembly process for another batch of Supply Chain
Management.

Consider the supply chain involved when a customer orders a book from Amazon.
Identify the push/pull boundary and two processes each in the push and pull phases.

In Amazon’s original operations design the push/pull boundary existed betwixt the retailer
(Amazon) and their distributor. Amazon ordered a product from the distributor and the
customer order arrived. Today, Amazon has six warehouses where it stocks an inventory of
items it is confident that will sell. In this scenario, the push/pull boundary exists between the
customer and the retailer. Processes in the pull phase are the order fulfillment, shipping,
customer returns, and customer billing. Processes in the push phase are production, stock
replenishments, shipping, and payment.

In what way do supply chain flows affect the success or failure of a firm like Amazon?
List two supply chain decisions that have a significant impact on supply chain
profitability.

The success or failure of a company like Amazon is decided by the effective function of its
supply chain. The flow of products from publishers to distributors to customers must be rapid
and reliable in order to satisfy customers. The flow of information back through the supply
chain allows all members to coordinate efforts. The flow of money allows all supply chain
members to maintain operations. Supply chain profitability is influenced by sourcing,
promotion, and fulfillment decisions.

2 supply chain decisions that have a significant impact on supply chain profitability

In today’s highly competitive marketplace, supply chain has become a major differentiating
factor between companies that are profitable and those not profitable and in industries where
new product introduction is common place this differentiation is even more pronounced. In
industries where products and services have become commoditized, supply chain is the major
frontier in which industry players compete, hence the impact of supply chain decisions on the
bottom line of these companies is something top management cannot afford to overlook
anymore. In light of its impact on corporate profitability, supply chain management now
requires that so many complex decisions be made simultaneously, particularly in relation to
the flow of information, goods and cash flow. Usually these decisions can either be long term
(strategic, involving several years), short term (quarterly or annually) or operational (daily
and weekly production planning decisions).

Long term supply chain decisions are usually strategic because they will determine the value
chain’s structure in terms of resource allocation, design of process staging, whether to
outsource or make in-house, supplier relationships and even the production capacity. Because
the implications of these decisions will reverberate over the course of several years for the
business, hence for any company that chooses to base its competitive position on cost
leadership and differentiation this becomes a make or break decision that must be
strategically thought through with little room for forecasting errors even in the face of high
implied demand uncertainty because it will be very difficult to change on short notice.
Therefore, two critical requirements for any company a making long term supply chain
decision is to factor in flexibility and cost in the decision making process. This will help the
company absorb shocks in demand and supply uncertainty that can greatly impact the bottom
line.

In the short term, companies still need to meet customer orders, keep operation running, pay
suppliers and employees, but how customer order and supplier needs are met and how
operation is continued on a quarterly and annual basis, though within the constraints of the
long term supply chain decision, is determined by tactical short term supply chain decisions
on how to maximize its supply network. Though short term, these decisions often have a
huge impact on the company’s bottom line as well. To succeed a company must factor in
market uncertainties like currency fluctuation, supplier responsiveness and competition (i.e
what is the competition’s inventory turnover and distribution strategy?) into its supply chain
decision. While operational decisions usually have the shortest planning horizon, it is by no
means unimportant to the profitability of the company. While making operational supply
chain decisions, critical factors to consider are sources of material waste and time waste,
quality and lead time.

As can be observed from the success of companies like Nigerian Breweries and Dangote that
have made bold supply chain decisions grounded on sound parameters such as inventory
turnover, production location, distribution channels, supplier relationships and sales
operations, it is evident that supply chain decisions (long term, short term and operational)
have the greatest impact on the profitability and success of companies in today’s competitive
market place.

B. A specialty chemical company is considering expanding its operations into Brazil,

where five companies dominate the consumption of specialty chemicals. What
sort of distribution network should this company utilize?
A distribution network can be seen as the flow of goods from a producer or supplier to an end
consumer. The network consists of storage facilities, warehouses, and transportation systems
that support the movement of goods until they reach the end consumer. The process of
ensuring the consumer receives the product from the manufacturer is done through direct
sales or by following a retail network.

Depending on the size of an enterprise or business, distribution networks vary in structure

and sizes. Companies like Amazon or Apple are likely to own more sophisticated and
complicated distribution networks, transportation, and logistics systems.

When defining the structure of a distribution network, the most crucial factors are the product
demands of the end customer, customer experience, product variety and product availability,
response time, and finally, product returnability.

Building the Ideal Distribution Network or Model

Distribution networks transform over time as businesses expand and aim to reach more
consumers. Therefore, they need to be set up in a way that allows for long-term optimization.
In order to determine the ideal and efficient distribution network and supply chain, the
satisfaction of customer demand comes into play. Satisfying overall customer demand has to
be done at low costs and required service levels. It requires strategic planning and specialized
supply chain management and planning.
Distribution networks are built by considering all key service and cost drivers. One of the
most important drivers for distribution and supply chain modeling is customer location.
Businesses need to identify where their customers are located in order to find a distribution
structure that works efficiently, at a cost that is low and will not result in a large impact on
the price of the product for the end consumer. The location of the customer allows for
logistics planning.

Another key driver is the order quantity and frequency. It is pivotal for a business to know
how often consumers purchase a product and the purchase volumes associated with the
product. It aids in inventory delivery management.

Transportation costs and the mode of transportation required are also key drivers in

building a distribution model. Determining the order frequencies and the location of
consumers aid in determining the right type of transport needed and the costs associated with
the transportation modes and vehicles required.

Warehousing is also an important driver in designing an efficient distribution network. The

business must determine the ideal warehouse locations, size, ease of access, and costs, to
ensure that the right selection is made to best suit the distribution needs and ensure overall
customer satisfaction.

In cases where the goods are being exported or imported, it is also important for the
businesses to identify points of entry. Other key drivers include factory and supplier
locations and service level requirements.

Benefits of Deciding on a Distribution Network

The two forms of distribution that a manufacturer can decide on are either direct distribution
or indirect distribution. Direct distribution is a direct sale from the manufacturer to the end
consumer, whereas the indirect distribution involves setting up or linking to an existing
distribution network, which normally encompasses warehousing, etc.

The benefits of making use of existing distribution networks or setting one up include (but
are not limited to):

1. Reduction in costs

Setting a new distribution point could be costly for certain businesses and manufacturers. An
existing distribution network provides speed and ease, as well as increasing reach for
products (geographically), thereby eliminating the costs and challenges associated with time,
human resources, and capital required.

2. Greater customer reach

An efficient distribution network allows for wider customer reach because it should ideally
enhance the speed at which products reach the end consumer and opens up opportunities to
reach other geographic areas.
Other benefits of setting up a working distribution network include increased customer
satisfaction and feedback, faster growth, more efficient marketing, and greater knowledge on
customer and product preferences.

If the expansion into Brazil is merely a sales operation, then distributor storage with last mile
delivery is the best network design. If the expanded operations include manufacturing
capabilities, then manufacturer storage with direct shipping is a strong possibility. Given the
nature of the product, package carrier delivery is not an option and retail storage with
customer pickup is out of the question since this is a B2B scenario. In-transit merge would be
an option only if the manufacturer established a network of plants in Brazil, perhaps focused
factories relatively close to each customer. The chemical company has only five customers to
serve; it would not require too large an investment in logistical infrastructure to effectively
serve all five without intervention by a distributor. Their short supply chain would be easier
to coordinate due to the stable demands and information sharing that is possible in a B2B
scenario.

12. A. EVERY MANAGEMENT MISTAKE ENDS UP IN INVENTORY.

EXPLAIN WHAT YOU THINK AS AN EXECUTIVE ABOUT THIS
STATEMENT

Knowing how much we have on hand is important before any inventory decisions are
made. If a company does not have a good idea of how much inventory is on the shelf,
they may order more or find themselves unable to fill customer orders. Not knowing
the amount of an item on the shelf is an indicator of poor inventory management and
poor warehouse/distribution center management.

This is based on the manufacturing forecast or hopefully from the Master Production
Schedule. How many products the company is going to make from the items in the
inventory drives the previous questions. How many end items the company will make
drives the total number of the component items the company must have in the
inventory at the start of production.

In order to know how many items the company needs to order, the company needs to
know how many end items need to be produced less the on-hand balance. This
produces the amount of each component or raw material that needs to be ordered to
meet the production numbers.

This is the final aggregate inventory question necessary to be successful in operations

management. The answer to this question may be more important than knowing how
much to order. Why? Because if a company knows how much to order but does not
know when the item should be ordered, the product may not arrive in time to meet the
production requirements. However, if the company knows when the product should
be ordered but does not have an exact number that needs to be ordered because of
other warehouse problems, at least some of the finished product can be made to meet
part of the customer orders.

Good aggregate inventory management leads to customer satisfaction and meeting the
needs of the customers. Poor inventory management decisions can be identified by
looking for the following symptoms: 

A large number of backorders. This is a good indicator of not having the right items
on the shelves at the retail facility or distribution center to fill the orders of the
customers. A similar symptom may be filling the customer orders from another
distribution center in the supply chain. Backorders or passing of orders to another
distribution center is a red flag that should indicate to management that the inventory
on the shelves is either too little or consists of wrong items
The first symptom may lead to another symptom. This symptom is customer turnover
or customer churn. The inventory management problem in the previous symptom
leads to this problem. If an activity does not have what the customer wants and passes
the action or backorders the action, customers will leave and “shop” elsewhere. This
may be evident by the number or orders that are cancelled by the customers as a result
of the backorders. Customers usually only order something when they need it and
they want it now!
Poor inventory may manifest itself in an increasing investment in more and more
inventory with no change in backorder levels. How can this happen? If we add more
to the inventory and spend more money won’t that fix any problem? This attitude
leads to compounded problems. The goal is to have the right stuff on the shelf in the
right quantities to meet customers’ requirements. If the company adds more of the
wrong inventory or adds more wrong items, the number of backorders will not
decrease. A careful analysis of the inventory is necessary to know what to add and
how much to add to meet the customers’ needs.
Not enough inventory and/or the wrong items in the inventory produced the previous
problems; having too much inventory produces different symptoms. Having too much
stuff not only leads to higher inventory costs as discussed below, but also produces a
shortage of storage space and the requirement to store items outside in trailers (a very
expensive form of storage) or leasing additional or contract warehouse space.
 B. IMPACT DUE TO LACK OF COORDINATION ON SUPPLY CHAIN
PERFORMANCE

 Managing demand and supply at maximum efficiency requires coordination among

supply chain stakeholders.
 To optimally balance between demand and supply, there must be visibility of true
demand across all links in the supply chain from consumers to the upstream chain.
 Information sharing is a key component to gain visibility.

Synchronization has a significant effect on performance in every aspect of the chain

including manufacturing, procurement, distribution, and customers. Companies that
adopt collaborative approach tend to increase visibility across the network, allowing them to
minimize variability than those who do not.

The lack of collaboration partly due to siloed working culture, creates unwanted interruptions
including a bullwhip effect, expediting costs, and ultimately lost sales. Let us find out some
of the implications when there is a lack of internal and external supply chain collaboration.

BULLWHIP EFFECT

A bullwhip effect is created when a demand shift from the customer creates an increasing
swing in inventory as it moves farther up through the supply chain. The bullwhip effect
distorts demand data because each stage has its own prediction different from other players
within the supply chain.

If the retailer’s order increase is due to planned promotion by which the manufacturer is
unaware, the producer might assume that it is a permanent demand increase and will place
orders to suppliers consequently.

Oftentimes, demand data is distorted when one chain relies on the order from the preceding
chain without understanding the actual demand. To avoid the bullwhip effect, information
sharing and close coordination between stages are effective solutions to better manage supply
and demand.

UNNECESSARY COSTS

The lack of coordination will translate to costs increases in manufacturing, inventory,

distribution, and almost every touchpoint of the supply chain. Due to the bullwhip effect,
warehouses are flooded with excess inventory resulting in unnecessary holding costs. In a
worst-case scenario, the company may be forced to build excess capacity
– outsource warehouse, increase labor, etc – which in turn increasing manufacturing cost per
unit produced.

Expediting costs are also incurred when the demand growth projection is underestimated
before it materializes. Such factors affecting the demand surge must be coordinated to the
supplier to avoid last-minute premium costs. Lack of coordination on anticipated increase in
demand will result in expedited production and shipping.

DELAYED DATA
Synchronization of people, processes, and systems across the supply chain is key to produce
real-time data enabling managers to make an informed decision, identify constraints, and up-
to-the-minute insights to demand. For example, due to shifting customer patterns across the
global market, technology software is playing a pivotal role in capturing a high volume of
consumer data the business requires.

The collected information laid the foundation for further analysis to produce analytics and
insights necessary to power key business decisions. Integrated supply chain companies are
gearing towards greater automation by leveraging data to better understand consumer
behavior, improve forecast, and respond quickly to customer needs.

Delayed data is one of the major consequences of fragmented supply chains. Instead of
feeding information into a single platform to effect real-time data across all process owners,
different teams are utilizing different tools such as spreadsheets or legacy system to satisfy
their own priorities.

POOR CUSTOMER SERVICE

We have identified the above-mentioned consequences – bullwhip effect, increase in supply

chain costs and delayed data. Those consequences prevent the business to respond quickly to
disruptions and demand leading to ineffective customer service. For example, lack of
information sharing across stakeholders create bullwhip effect throughout the supply chain as
characterized by unfulfilled orders, missed production schedules, or too much inventory – all
these lead to poor customer service.

Every company deserves a high performing supply chain. But it won’t happen
until executives change their mindset to realize the importance of integration throughout
people, processes, and systems. The coordination of these elements is a fundamental
undertaking for innovation, competitive advantage, and growth.

13. B. IDEntify why the high-tech industry has been the leader in ADOPTING
SUPPLY CHAIN IT SYSTEMS
The role that IT plays in supply chain management or SCM is so important. IT provides
the tools which can pick up relevant information, break it down for proper analysis and
execute it for optimum performance of the supply chain. Data is pivotal to the execution
of the supply chain, primarily because it provides the base on which the supply chain
managers can take decisions. Real-time or almost real-time information is the key to
proper supply chain management. With information about the various stages of the supply
chain, decision-makers can plan, manage, and adjust processes to achieve goals in
procurement, inventory, manufacturing, etc.

Why is technology important in supply chain management?

Business processes have been digitalized in the past couple of decades, and it has become a
necessity rather than an option. Why not? IT integrates various operations carried out by
different companies in the supply chain. It speeds up the business processes and prevents
bottlenecks. Companies are closer to achieving on-time procurement, shorter inventory, and
better efficiency, especially in manufacturing. IT allows companies in the supply chain to
meet the needs of consumers. 
How does information technology affect supply chain management?
Supply chain management is all about producing the right product in the right quantity and
sending them to the right place at the right time. It seems simple, but it can quickly become
complicated. 

How Suppliers Can Utilize Information Technology 

The supply chain starts with the supplies. With a reliable supply chain software that allows
real-time information sharing, manufacturers and suppliers can collaborate better and avoid
production delays due to insufficient raw materials. Normally, manufacturers initiate
transactions with suppliers but if you are a supplier, you can monitor your clients' inventory,
forecast future demands, and make sure that you're ready to fulfil orders for raw materials.
Suppliers can also use historical data to make informed decisions in aspects like partnership
and contract management. 
Be the most reliable supplier in your area! Take advantage of the latest technology for
supply chain management. 

How Manufacturers Benefit From IT

IT offers better visibility and transparency that lead to better accountability and control over
the production of goods. Manufacturers that have clear visibility on production can make
adjustments to make the process more efficient as well as foresee problems and prevent them.
For example, with IT, a manufacturer can foresee delays and make changes in the production
schedule.  

How Information Technology Helps Shippers 

Timely delivery is essential in any industry. Delivery that's done on time usually results in
customer satisfaction, and customer satisfaction normally leads to customer retention.
As a shipper or logistics provider, you can ensure customer satisfaction by improving order
tracking and delivery. Keeping the manufacturers and distributors informed of the entire
delivery process and possible delays already puts you a step closer to repeat business. What
more if you can avoid delays by utilizing data from the tools? Many supply
chain management tools for delivery and shipping service providers also let you give clients
access to a platform where they can enjoy a sense of control. 
Utilize the best supply chain management tools to keep your clients satisfied.

How Distributors Can Take Advantage of IT

Distributors that are spending a lot of time and wasting money on inventory management can
rely on supply chain management tools for some badly needed assistance. With the right tool
and documented process, distributors no longer have to worry about excess or insufficient
stock. Instead, they can predict demands and effectively manage inventory and orders. 

How Retailers Can Use Information Technology

In the supply chain, retailers are the ones who face consumers. They need flexibility and
visibility as well as integration. Retailers can integrate their POS systems, which capture their
sales, with their tool for monitoring the stock level, which is also visible to the distributor.
Retailers can also set a reorder point that when reached will automatically generate an order.
Predict demands and manage orders effectively. Get the most reliable supply chain tools
for sales and orders.
The Role of IT in Supply Chain Management
IT is leaving a mark everywhere. Nothing remains untouched. No wonder every aspect of a
business is now under its command! The role of IT in Supply Chain Management is
highlighted in the following points.

1. Integrated and Coordinated Supply Chain 

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

2. Increased Productivity
Smooth flow of information, new technologies and effective communication increase the
productivity of all entities in the supply chain. It is like a trigger for product movement.
Instead of going back and forth, IT provides the link that passes the needed information
continuously.

3. Cost Reduction 
IT permits optimum utilisation of resources and assets. Old data is used to study the trends,
and technology is used to analyse it for improving performance. When resources are used
optimally, they result in cost reduction.
In a supply chain, the role of IT becomes more prominent because it motivates all parties to
use their respective resources in the most cost-efficient manner. When IT is used as it should
be, there is a dramatic fall in overall expenses.

4. Product Improvement 
IT consists of tools and applications which can be used to gain early awareness. In a market
where consumers always want something new, the product will either have to evolve or it
will go out of demand. To stay in business, you must introduce product improvement and
innovation sooner rather than later. The kind and extent of product improvement can be
validated with the help of IT.

5. Supply Chain Visibility 

Information makes the entire supply chain visible to supply chain managers. The manner in
which the information flows from one collaborator to the other and the impact it has on others
is used by the managers in making strategic decisions.

The Functional Roles of IT in Supply Chain Management

Apart from the above-mentioned basic roles, there are three functional roles of IT in supply
chain management. These are:

1. Transaction Execution 
When information flows efficiently between the participants of the supply chain, the number
of transactions between them is reduced. IT increases the efficiency of repetitive data
exchanges. This data is usually appropriate for delivery verification, order processing, billing,
and dispatch advice.
2. Collaboration and Coordination 
IT renders the flow of information. This makes for easier planning, coordination and
improved collaboration between all participants. Demand forecasts make it possible to plan
for the future, and order tracking makes knowing the physical location of each order a reality.
Neither of these activities is possible without IT.

3. Decision Support 
Good decisions cannot be pulled out of thin air. They are and should be based on data. IT is a
huge benefit in decision support. It can collect even the most complicated set of data and
convert it to easy-to-understand charts and reports. In this context, IT extends decision
support to all managers. Enjoy smooth transaction, efficient execution, and better
collaboration whether you're on the upstream or downstream of the supply chain.
14. A. PACKAGING
The Role of Packaging in Supply Chain Management

The packaging industry is evolving. We now know that packaging no longer refers to a box
or a carton, but rather to a coordinated system of preparing goods for safe, cost-effective, and
efficient movement throughout the whole supply chain that eventually leads to maximizing
consumer value, sales, and hence profits.
This means packaging also plays an integral role in supply chain management. It protects
products from damage, allows for their efficient distribution, communicates to the consumers,
and is one of the major product promoters in a competitive marketplace. In fact, packaging
design has recently developed into a mature communication discipline on its own – and
clients now realize that packaging is a critical and central element in the creation of an
effective brand identity.
In order to achieve successful supply chain management, packaging systems have to be
connected with aspects of marketing, logistics, productions, and the environment.

Packaging-logistics demands can be easily handled throughout all processes and for the
consumers. Marketing, on the other hand, requires appealing packages that can engage
customers. Production usually requires one size of packaging for all types of products to
minimize time and labor costs. Good packages can satisfy all these aspects while also
fulfilling consumers’ expectations to create the desire to try the product.

Market, Flow, and Environment

The aspects mentioned before – and a few others – can summarize the packaging system into
three primary functions that interact with each other in supply chain
management: market, flow, and environment.
The market function is fundamental to the packaging system and takes into account things
like layout, design, communication, and ergonomic aspects that add to the product and
brand’s value. Its whole purpose is to satisfy consumers and increase sales.

In recent decades, the connection between marketing and packaging has been deeply
analyzed by several studies, most of them finding that packaging to be an instrumental part of
marketing campaigns that can influence aspects like consumer attention, product positioning,
evaluation and categorization, usage behavior, brand communication, and intent to purchase.

In other words, packaging plays the role of an interface between consumers and brand owners
and can genuinely alter the impression of the product’s quality.

The flow function takes into account all the packaging features that contribute to the easy
handling in distribution. This function includes internal material flows, packaging logistics,
distributions, disposal, unpacking, and return handling.

In recent years, packaging logistics has become a new discipline that has gained traction with
the scientific and industrial community over the strategic role of logistics in boosting a
company’s competitive advantage. Of course, both science and industry attribute different
degrees of maturity to the subject depending on culture and region.

The concept of packaging logistics is now focusing on the synergy achieved by mixing the
efficiency and effectiveness of supply chain management with packaging and logistics
systems through the improvement of both types of activities. In other words, it is the
relationship between packaging and logistic systems that increases the add-on value to the
complete supply chain, from raw material producers to the disposal of empty packages via
recycling, landfill, or incineration.

Yet in current operational environments, these innovations must also take into consideration
not only the market and flow functions, but also an equally important and increasingly
emerging factor: the environmental function. It aims to lower the negative impact of the
packaging process on the environment, focusing on issues like using fewer inputs, while
achieving the same outputs, re-using materials, and facilitating the recycling of said
packaging.

In fact, an increasing number of businesses are now choosing environmentally friendly

approaches and techniques since it became clear that packaging has a substantial influence
over the environmental aspect of the supply chain.
Enhanced Labeling and Traceability

The primary goal of supply chain management has always been achieving customer
satisfaction; However, we have to keep in mind multiple variables can obstruct this process.
Packaging, in particular, can affect a product’s dependability, quality, speed, costs, and
flexibility, while also having an impact on its life cycle. For companies trying to optimize all
the factors that play a prominent role in their supply chain, barcode label software might be
the answer.
Enhancing product traceability is one of the critical improvements any company can make to
their supply chain management. Traceability integrates inventory, transportation, and
manufacturing while affecting the overall cost. For a long-term customer satisfaction strategy
focused on product packaging, companies need to enhance their traceability and deliver such
improvements to customers through supply chain labeling and packaging.
GlobalVision’s barcode inspection software becomes an ally to companies with barcode
traceability systems already in place. It allows for the automatic inspection and grading of
both digital artwork and print. The software uses a state-of-the-art recognition system that
also ensures all barcodes are compliant with ISO 15415/15416 and ANSI standards and
delivers barcode inspection reports that let you know about possible adjustments.
As we tear down the layers between the creation of a product and its ultimate sale, the
importance of traceability and labeling in the supply chain become readily apparent.
Increased supply chain management costs end up being paid by the consumer, while
traceability and labeling improvements, on the other hand, might even enhance sales through
packaging enhancement.

Furthermore, packaging options are continually evolving, with new labeling and material
options specifically developed to boost customer engagement and increase the overall
packaging quality. These too have an impact on the user experience and ultimately the sale of
a product. So, to maintain business growth, companies should focus on aligning their supply
chain management, labeling, and traceability needs.

Conclusion

Packaging today involves far more than boxes and bags, but even though there has been an
incredible revolution in the industry, the optimization of packaging still needs to be at the
center of any efforts to enhance one’s supply chain management.

Countless marketing studies have concluded optimized packaging actually delivers results,
with regard to many aspects of the supply chain. It can increase product efficiency, smooth
the handling of materials at the production floor, ensure the efficient use of modern supply
chain technologies like stackers and pallets, and make for easier damage control, inventory
management, cycle counts, and space usage.

Simply put, packaging optimization also optimizes overall supply chain costs, leading to a
maximized return on investment.

B. BPR APPROACH AND ITS RELEVANCE IN SCM

To achieve that Michael Hammer & James Champy suggested the following seven principles
in their manifesto for Business Revolution:

1. Shared Information

This first principle allows quick responses to the final customers and economies of scale for
flexible agreements with vendors.

It allows direct exchanges between separate functional departments and based in dispersed
geography.

2. Result oriented

The second principle allows that all actions must be an added value for the customers.

3. Reusable technology

If the customer is facing any problem, he has to fill in the data himself instead of any office
doing it for him. It pushes the work to the consumer.

4. Just in Time

The processes of the activities must be integrated rather than the end results by using
communication networks, shared databases. This will eliminate the high costs and delays in
the outcome of the process and let be just in time of the customers.

5. Industry benchmarks

Industry Benchmarking assists businesses in identifying potential targets for improvement.

It is a must to be undertaken before planning and implementing reengineering methods to

achieve higher productivity.
6. Standardization around industry processes

It concerns the matter of standardization of standards and of standardization in the process

industry.

In a simple way, a very large integrated complex processes can be implemented in series of
small projects. This can overcome the scale disadvantage through standardization savings.

7. Outsourcing non-core activities

Outsourcing non-core activities means engaging more specialized companies to do the

activities that are not the main focus of the company business like customer support, digital
marketing campaigns.