INTRODUCTION

Supply Chain Management (SCM) is the systemic, strategic coordination of the traditional business functions within a particular company and across businesses within the supply chain for the purpose of improving the long-term performance of the individual companies and the supply chain as a whole. A supply chain consists of all parties involved, directly or indirectly in fulfilling a customer request. The supply chain not only includes the manufacturer and the supplier but also transporters, warehouses, retailers, and customers themselves. Within each organization, such as a manufacturer, the supply chain includes all the functions involved in receiving and filling a customer request. A typical supply chain may involve a variety of stages. These supply chain stages includes, (i) (ii) (iii) (iv) (v) Customers Retailers Whole salers/Distributors Manufacturers Component / Raw-material suppliers

NEED FOR SUPPLY CHAIN MANAGEMENT Corporations have turned increasingly to global sources for their supplies. This globalization of supply management has forced companies to look for more effective ways to coordinate the flow of materials into and out of the company. Companies and distribution channels compete more today on the basis of time and quality. Having a defect-free product to the customer faster and more reliably than the competition is no longer seen as competitive advantage but simply a requirement to be in the market. Customers demand products consistently delivered faster, exactly on time, and with no damage. Each of these necessitates closer coordination with supplier and distributors. The global orientation and increased performance based competition combined with rapidly changing technology and economic conditions all contribute to market place uncertainty. This uncertainty requires great flexibility on the part of individual companies and distribution channels, which in turn demand more flexibility in channel relationship. All these factors have made the concept of Supply Chain Management more important to companies. OBJECTIVE OF SUPPLY CHAIN

The objective of every supply chain is to maximize the overall value generated. The value a supply chain generates is the difference between what the final product is worth to the customer and the cost of supply chain incurs in filling the customer's request. For most commercial supply chains, value will be strongly correlated with supply chain profitability i.e. the difference between the revenue generated from the customer and the overall cost across the supply chain. PROCESS VIEW OF A SUPPLY CHAIN The supply chain process occurs in two ways, Cycle View and Push/Pull view. 1. Cycle View The processes in a supply chain are divided into a series of cycle, each performed at the interface between two successive stages of a supply chain. Cycle view of Supply chain process includes, Customer order cycle Replenishment cycle Manufacturing cycle Procurement cycle 2.Push/ Pull view The processes in a supply chain are dividing into two categories depending on whether they are executed in response to a customer order or in anticipation of customer orders. Pull process are initiated by a customer order, whereas push process are initiated and performed in anticipation of customer orders. SUPPLY CHAIN MANAGEMENT IN GLOBAL ENVIRONMENT The globalization of business has received a great deal of press in recent years. The pressure of global competition is frequently cited as primary drivers for greater customer demands for improved products and services. These increased demands have caused businesses to pursue improvement initiatives, such as implementation of Just-in-Time (JIT) and Quick Responses (QR) inventory management policies, business reengineering, and supply chain management as tools to enhance their competitiveness. At the same time, firms increasingly look to foreign markets for growth opportunities, or to foreign suppliers for improved sourcing opportunities. This increased interest in foreign business has been reflected in several trends. As firms increase their participation in a global economy developing an understanding of supply chain management issues and opportunities in a global context becomes increasingly important.

Drivers for Economic Globalization Over the past several decades, a number of factors have led to the increasing globalization of the world economy, and as a result, the competitive environment faced buy firms has changed dramatically. These drivers for globalization are decreasing tariffs, improving transportation communications and information technology, globalization of products, services and markets, global competition, economic regionalism. Supply chain management tools and techniques are seen as mechanisms that will allow a firm to respond to the environmental changes. By working more collaboratively with supply chain partners, a firm can better understand changes in customer requirements and respond more quickly to the changes. As firm have searched for ways to enhance their competitive position, supply chain management concepts have emerged as increasingly important. By sharing risks across supply chain partners, firm may be able to improve their own performance in increasingly volatile and competitive global markets. DYNAMIC ROLE OF SALES FUNCTION IN SCM The role of the contemporary sales person in changing dramatically, and in many situations, the old models of selling are simply outdated, ineffective and counter productive to SCM goals and objectives. Although most sales organizations focus on prepurchase activities, supply chain partners focus on managing relationships and conducting postpurchase activities to enhance supply chain performance. As companies adopt supply chain management, functional areas need to change their traditional ways of conducting business and better align their current management practices to support and enhance supply chain management. Personal Selling In SCM The sales function plays a critical role in implementing many supply chain management activities and behaviours. For the sales force to add value in the supply chain, the contemporary sales force must adopt a new orientation to personal selling, interface more effectively with logistics, and gain new supply chain management skills and expertise. New Roles for Sales Management To support the sales force in its new supply chain management roles, sales managers need to train, support and encourage supply chain activities and logistics expertise. To achieve this goal, sales managers must also adopt a new orientation and embrace new management technique to enhance supply chain performance. Specifically sales managers must become "Change Agents" in the sales organization and lead the sales force in a new direction. Training programs, performance objectives, and compensation package need to be adapted and better aligned with a supply chain management. The leading edge firms are redesigning the sales function to create value in a supply chain management environment. As more and more firms compete through supply chain management, the role of sales force will continue to evolve.

ROLE OF TRANSPORTATION IN A SUPPLY CHAIN Transportation refers to the movement of product from one location to another as it makes it way form the beginning of a supply chain driver because products are rarely produced and consumed in the same location. Transportation is a significant component of the costs incurred by most supply chains. The role of transportation is even more significant in global supply chains. International trade is becoming a bigger part of the world's economic activity. Any supply chains success is closely linked to the appropriate use of transportation. Supply chain also use responsive transportation to centralize inventories and operate with fewer facilities. To understand the transportation in a supply chain it is important to consider the perspective of all four parties. A carrier makes investment decisions regarding the transportation equipment (locomotives, trucks, airplanes, etc) and in some cases infrastructure (rail) and then makes operating decisions to try to maximize the return from these assets. A shipper, in contrast uses transportation to minimize the total cost (transportation, inventory, information, sourcing and facility) while providing an appropriate level of responsiveness to the customer. Supply chain use a combination of various modes like air, package carriers, trucks, rails, water, pipelines and Intermodal for the transportation purpose. INFORMATION TECHNOLOGY IN SUPPLY CHAIN MANAGEMENT A key aspect of supply chain management is the ability to make strategic decisions quickly based on accurate data, and this requires an efficient and effective information system. Information is vital for a supply chain to function. Without information relayed at right time to the right place, there are no purchase orders, no shipment managers and no payments and the supply chain shuts down. Supply chain management is based on the exchange of substantial quantities of information among the buyer, supplier and carrier to increase the efficiency and effectiveness of supply chain. The Business Environment Information is at the center of virtually every aspect of business especially in today's dynamic uncertain and highly cooperative environment. E-commerce applications and e-enabled capabilities that rely on efficient information transfer have the potential to completely revolutionize the existing business environment. Functional Integration, Time & Quality Based Competition and Increasing Computing Power are the major trends of business environment. The first major trend is functional integration; it directly influenced the information systems that were developed to facilitate Supply Chain Management. Supply Chain activities sourcing, vendor selection and purchasing, as well as manufacturing related activities such as production planning, scheduling and packing must be part of the integration effort. Key enablers of the integration of functions in information technology. The major benefit of

integrating functional activities through information technology is reducing the associated costs. The second major trend in the business environment influencing the development of information system is emphasis on speed to market with high quality product. Time & Quality based competition can be defined as the elimination of waste in the form of time, effort, defective units, and inventory in manufacturing distribution systems. Two capabilities that are useful in a time and quality based competitive environment are agility and flexibility. With faster product innovations, decrease product life cycles, and rapid imitative competition, only firms that are agile and flexible will survive. Agility is the agility to respond quickly to changes in the marketing environment. Agile firms are able to successfully market low-cost, highquality products with short lead times in varying volumes that provide enhance value to customers through customize. Flexibility is defined as the capability of changing from one task to another rapidly when changing conditions are defined ahead of time. The third major trend in the business environment that has helped increase the growth of information systems in the tremendous increase in computing power at very low costs. The evolution of information technology and diminishing transaction costs will lead to fundamental restructuring of industry practices for distributing and supporting products. Advances in information system will likely causes four changes more transparent organizational structures, more strategic alliance, increased emphasis on performance measurement and great reliance on time-based strategies. Supply Chain Information Systems Information systems are essential to managing a supply chain. The supply chain information systems rely on either EDI (Electronic Data Interchange) or the Internet to transmit information within the supply chain. A valuable initial element in managing a supply chain is developing supply chain information systems. The concept of supply chain management is built on functional integration, which is supported and often catalyzed by information technology. One of the components of the implementation of supply chain management is information sharing through two-way communication between partners within a supply chain. The activities of information generation, storage, and utilization in individual firms in a supply chain are essential to implement supply chain management. Member of a supply chain need real-time visibility of performance data across the entire supply chain. In Dell computer's direct relationship with its customer create valuable information that, in turn, allow the company to coordinate its entire supply chain back through manufacturing to product design with other firms.

CONCLUSION World is shrinking day-by-day with advancement of technology. The expectations of customers are rising and the companies are prone to more and more uncertain environment. Under this uncertain volatile environment, companies will fund that their conventional supply chain integration will have to be expanded beyond the boundaries of their own organization. In the 21st century companies will have to start using IT for their strategy development in contrast to the earlier situation when IT was aligned with existing business strategies to gain competitive advantage. New developments such as the proliferation of Internet Technology, World Wide Web, Electronic Commerce, etc., will change the way a company is required to do business. The companies must also realize that they must harness the power of technology to collaborate with their business partners as never before. It can be concluded that a proper IT strategy integrated with a supply chain strategy can turn around a company's fortune.

An Introduction to Supply Chain Management- Part 1

Supply Chain Management is the process in which a company produces and distributes products to its intended target audience. There are a number of specific factors, which are crucial and need to be considered; production planning, material sourcing, transportation management, warehouse management and demand management. The intention of the process is intended to provide products and services to the consumer in a efficient and profitable manner. In addition to these internal elements, the supply chain also takes into account the processes of external considerations, these can include materials and parts suppliers, manufacturers, distributors and transportation providers. The process of Supply Chain Management does not only consist of the movement of goods but also the flow of information concerning products or services and funds. Individuals who have experience of the Supply Chain Management process will be aware that it is essential to have a solid awareness of the underlying principles involved within the process. It is crucial to remember that the majority of systems are constructed along the basic principles of Supply Chain Management, in the beginning this process runs at a satisfactory level but as they mature, various problems occur and soon become evident. These are usually encountered when the supply chain matures and is required to meet an increasing list of tasks and strategies. As the process can be considered to be evolutionary by nature due to the variants of demand, problems are often seen where the basics are deviated away from and companies are unable to meet their intended targets and objectives. It it therefore imperative to remember to keep a list of Supply Chain Management basics nearby and continually monitor and assess the supply chain. The main concern of those managing a supply chain is the speed and efficiency of the products reaching their intended consumer. Of course, the faster the stock reaches the consumer, the more effective the supply chain is going to be considered to be. It is obvious that this is the most crucial elements and should always be at the forefront of the manager's mind when considering their supply chain. This highlights the fact that it is essential for the supply chain to have enough of the right elements to deliver products in this manner, however, many supply chains often take a cautious approach and end up having too many of these parts and do not consider other elements quite so much, this can be damaging for the supply chain in the long term. With this in mind, it is important to consider how stock enters the supply chain. The way in which stock exists in a supply chain is crucial for any or three of these reasons; it is the most economical way to move products from point A to point B, the variable nature of supply, including delivery failures and failure of product quality and the variable nature of demand, both in quantities and timing. This variable nature of demand is what many believe to be disruptive to the supply chain and this had led to many focusing on improving their forecast models. However, an improvement in the response time of the supply chain is just as, if not more valuable than an improved forecast. The speed in which you can transfer information concerning actual usage back to the top of the chain, the more effectively you can adjust to the increases and decreases in demand. This helps to ensure that the right numbers of each part enter the supply chain before they are required. This extra time also allows you extra ability in relation to shipping and storing parts, leading to a decrease in overall costs. This requires awareness of the entire flow of materials, not just within your own company but also from external sources, even if it is two or three tiers removed from what you would consider to be your supply chain. It is therefore essential and imperative to ensure that any delay in the transfer of information is eliminated.

An Introduction to Supply Chain Management- Part 2

It is essential to ensure that all information relating to any changes in demand and the requested actions should always be dealt with directly by the same person who oversees the supply chain. Ideally, this data should be in a clear format which can be easily understood and processed by this individual concerned. It is of the utmost importance that checks are implemented in any system to ensure that any information does not get lost or damaged. Ways in which these can be implemented are through verification checks and read receipts, visibility of the response status to other people in the supply chain can be then be used as backup if the primary response process fails. The aim of these procedures is to ensure that everyone in the direct line from supply to usage should know that the triggered event has taken place and that the event is acknowledged by the person responsible for making sure that the next steps are set in motion. We can also consider this by using a simple, real life example to highlight this. When you send someone an important email or when you order a product online, you expect to receive, almost instantaneously, a return email indicating that your submission has been received and that the transaction has been, at least, logged. Even though you may not expect any action to take place immediately, this acknowledgement allows to rest assured that the wheels are set in motion. It is essential to ensure that everything remains in context with regards to the management of the supply chain. Each time a trigger occurs, or data is collected, your supply chain should include a mechanism for answering the following question: is this a 'normal' event, an 'extraordinary' one or, is it something in between the two? In order to ascertain this we must define as being 'normal' for that part of the supply process. An example of this could be when you order a monthly magazine to your home, firstly you will expect to receive a 'thank you' note from the company, followed by the publication itself. You may also see the situation as normal if you did not receive the publication that first month, you might be disappointed, but you understand the publication does not arrive that first month. This is because our past experience of events also contribute to what we see as being normal. Occurrences which may surprise you would include, if on the first month you received two copies of the publication, or if you received the publication for the first six months but it did not arrive in the seventh month. As you can see, our past experiences of events also contributes to what we perceive as being normal. It is evident that a forecast which has consistently been confirmed through actual usage, or has been compared to usage of similar parts, is much more powerful than either piece of information alone. It is this normality and previously validated future prediction that allows us to detect when an event is out of ordinary and important. It is this that helps us to find a context: has demand increased or decreased? Is this a single event in one area or are we about to dramatic change throughout the supply chain. This is a context which the supply chain needs to detect to convey in order to minimise the the likelihood of overstocks and shortages. In other words, the supply chain should provide more than simple data, it should also provide some kind of information. It needs to show not simply numbers but also changes as well. Before we move onto part 3, we can discuss and use another real life example to highlight these points, this is asking for directions. If you were to ask two individuals for directions and both of them independently agree on the correct path, you are more confident and more certain that you have received credible directions. Imagine having the ability to ask someone at both the departure point and at the arrival point of the best route to pursue. If they match, then you are going to highly

confident. If you are able to compare forecast models against usage data can provide a great amount of perspective and confidence.

An Introduction to Supply Chain Management- Part 3

To carry on from the second part of our 'Introduction to Supply Chain Management', we will now consider an extraordinary trigger. Let's just say, for arguments sake, that the trigger is fifteen days earlier than expected. That is, fifteen days before both the forecast and the historical data have led us to believe is 'normal'. The supplier has seen this, sent their recognition of the trigger and has understand that this is an exception and that this is considered to be very early. By itself, this earlier demand is simple to manage but questions need to be asked as to whether or not it is an indication of something much more major. This important questions leads us to another key basic need of a supply chain: a mechanism for clarification. There really needs to exist a method for the supplier to ask the direct line customer and their customer(s) to explain, as in the above case, the unusually high trigger. This can be as simple as an email from the supplier or as robust as a shared portal. Without this process of clarification, most suppliers will look to the side of caution, meaning that they will have end up with extra stock, this takes us back to a situation that as we discussed earlier, we really want to avoid. You may be wondering why, throughout this article I have mentioned the individual and not a team. This is not a mistake, I will now provide you with scenario as to why this is the case. A supplier has queried a customer about an early order for a small number of parts via an email. You may think that this sufficient in a situation like this one. However, the email was sent to five people in charge of that part of the supply chain and each person in the team assumed that someone else would take responsibility for the query, resulting in the clarification request being misplaced due to the work volume of this part of the supply chain. The supplier decided that no additional information was fore coming so this early order resulted in an increase in production, this led to more 'abnormal' triggers coming in and shortages appear throughout the chain. The solution here is simple, ensure that one person, not a committee is tasked with the replying to a small list of suppliers and or portions of the chain. Others can and should be included for technical assistance but no more than one person should be accountable for ensuring that replies are dispatched within a specified amount of time, depending on levels of priority of the request. Once parts have been manufactured, it is essential to ascertain the most effective methods of: 1. The fastest way to move parts. 2. The lowest cost to move parts. 3. The lowest cost to store the parts. The second and third variable combine to provide the following consideration that it is sometimes better to let parts sit on a warehouse shelf for an extended period of time. It is important to remember that this should not be considered a sign of failure. It can appear that this means that the supply chain is not as effective and sufficient as it could be, however, this really is considered to be best practise and it can be backed up by real life examples.

Now, let us consider two real life examples to highlight this. We will look at two screwdrivers and shopping lists: 1. You are installing an electric socket, which is considered to be a critical need, and the final step is to screw the new socket and plate into place. So you locate a screwdriver and within seconds the job is concluded but before you put the screwdriver away, you locate other jobs in the vicinity which may need to be attended to. This makes the most of one's effort, despite the fact that you are attending to jobs which maybe considered to be low priority. 2. Another example is when you create a shopping list before you go to the shop, despite the fact that you only need salt for your evening meal. In the long term, this action will save you both time and energy, despite the fact that you may need to 'ship' some items before they are truly required. Both of these examples highlight intelligent planning of the supply chain. So, now that you are ready to begin shipping in items and putting items on shelves, we really need to consider ways in which to increase the value of transportation and storage. The obvious answer is to group by priority and due dates, however as we can see from the screwdriver examples, this may not always be the most efficient. The most efficient way is to group by the following: 1. Similar Items 2. Items going to similar locations, and/or 3. Items with similar manufacturing and handling requirements. This decision making process should be used when assigning tasks to individuals, from the pickers in the warehouses to front office managers. Obviously we need to make sure any high priority and/or rush needs are met, but once these are completed, let's see our efforts for known future requirements.

An Introduction to Supply Chain Management- Part 4

In this part of our 'Introduction to Supply Chain Management', we will considering the risks associated with forecasting stock levels. In order to understand this we will be evaluating the risks using the following three considerations: the forecast, the demand data and the understanding that forecasts are skewed by previous events of the Supply Chain. When a company runs out of stock, it can result in very expensive consequences. However, when considering this advice, it is essential to remember to be cautious in your approach to purchasing stock and to err on the side of caution with regards to having too many of an item. Of course, there are numerous issues which regards to this, how much stock is too much and stock and how can you be sure that you do not leave yourself at risk of being devoid of stock completely? Of course, the best way to evaluate this is to evaluate the risk of the downside. If you are putting together a sub assembly for a future order and the shortage requires you to expedite a packet of items from the nearby warehouse to the line for a total cost of 35.00 then you certainly would not make sure all eight stations (for example) had an extra 100 worth of parts sitting nearby just in case. However, if the same stock out meant a 100,000 penalty, then the additional 800.00 insurance costs (eight lines needing an additional 100 worth of parts) might prove to be excellent value. Of course, this can often

appear to be common sense but what is less obvious is most productive way to assess the probability of the stock out or shortage and a find a level of confidence that balances the risk. This requires us to consider both sides of the equation and study the forecast data- this displays how much of an item is anticipated as being needed and any mitigating future factors such as an increase or decrease in orders. Secondly, we need to consider the historical data, which details how quickly the stock is being used and how closely the actual usage matches the usage which has been forecast. It is also imperative to consider that once forecasters have experienced misfortune then they are much more likely to be overly cautious in the future. In order to illustrate this example we can consider and examine past weather forecasts. There has been occasions in the past where a weather forecaster has made predictions of light snow only to see a blizzard arrive, causing great embarrassment and possibly enough criticism to lose their job. There is evidently, far less consequence to predicting an abundance of snow, therefore forecasts will always be skewed upwards. A predicted one to three inch snowfall becomes one to nine inches. This allows the weather forecaster the chance to arrive at work the next day not expecting to face dire consequences. This analogy can appear valueless to those of us who are watching but can be used to parallel those who forecast and acquire parts and materials. Fortunately, a supply chain is far more reliable than weather, so long the forecast data is compared to the pull data in an accurate manner. When you are considering implementing any changes- whether it is an upgrade, a new technology, or even an elimination of a step in the process- we must keep in mind that people, not technology or spreadsheets, make up the backbone in any supply chain. It is important to remember that unlike machines, people require motivation to function at their best. It is important to remember that there is no proven or definitive method, nor is there a one time fix. Motivation is always a moving target and additionally, morale rises and falls in unpredictable ways, for unpredictable reasons. Before I provide any advice, let's start with a basic example: on one assembly line, we noticed that operators were hoarding parts, which was costing the company money, affecting their ability to predict usage and ultimately production. We identified and collected the hoarded parts and implemented a more controlled and traceable flow to each work station. We then waited to see the increase in productivity, however this did not come. It seemed that each time the line workers saw a decrease in the number of parts coming to their station, they also knew that redundancies and cutbacks would soon follow. While the plant had a record number of orders, the line workers could only judge the amount of future work by the parts they had near their stations. The more parts they had, the less they were afraid of losing their jobs. The fewer the parts, the higher the perceived risk to their job securities. The more they were afraid of job losses, the slower they worked to help stave off the day when they would have nothing to do. So, a all- hands on meeting was called and the entire situation was clearly outlined. The operations manager explained that the increased efficiencies- leading to a more controlled number of parts to each station- were due to the higher levels of orders. He then showed the stocks of open orders to make his point. After that meeting, an expected increase in productivity was witnessed. It is essential to consider two important factors, the more clearly and transparent the process is outlined to every member of the team, the more they can see how their part in the overall process is critical. Secondly, people are the most important element of the supply chain and their efforts should never be taken for granted. To conclude the fourth part of our Introduction to Supply Chain Management, I would like to discuss one of the classic examples of negative motivation: buying morestock from suppliers with poor delivery histories. The reason for this very clear, to buffer yourself against their unreliable supply you add more stock, thus rewarding the supplier's poor performance with large orders. Conversely, the

good suppliers are punished for their reliable service with smaller orders, shorter lead times and most likely, smaller profits. Eventually, you believe, this will come back to have a negative effect on the bad supplier. However, in the meantime, the wrong message is being sent out to your supplier base. With all of this considered, this is one of the main reasons consignment warehousing should be considered. While there is certainly a cash flow benefit for the procurer, there is possibly a larger benefit: it corrects this issue of motivation and allows good suppliers to beat the bad supplier out of the supply chain.

An Introduction to Supply Chain Management- Part 5

A successful supply chain should not be static but always adapting to changes in the business. It is important to remember that a supply chain should really provide choice and opportunity and should never been seen as or considered as a restraint. It is essential to remember that any changes, whether due to an increase in productivity, an improved process or the addition of new suppliers, will require changes to the supply chain itself. It is also important to consider that in addition to this, the industry continues to shorten deadlines and tighten the accessibility of excess inventory. This creates the need for supply chains which are far leaner than any that existed in the past. These supply chains will have very different features from the original supply chain which was designed. I will now details factors which really do need to be considered in relation to supply chains. 1. Any technology or process improvement must be adaptable for future needs. These future requirements can be predicted by seeing the needs of other companies that are considered to be industry leaders and world-class manufacturers, both within and outside of your industry. 2. Adding and or altering parts and supply points are as much a part of the supply chain process as the movement of stock. In many systems this maintenance mechanism is not designed to the same degree as the part movement area of the system. This causes delay in the response of the system to new demands and means that stock levels are often higher than initially required. Your employees must have the time to work on this, essentially they need to be able to automate the norm, allowing more time to add value. If employees are constantly expediting or chasing parts then they do not have the time or resources to support and improve the supply chain as well. It is essential to consider that a manufacturer is only as efficient as its supply chain allows it to be. A supply chain is only as efficient as its weakest link. It is important, therefore, that there are people in the process that have not only the expertise but also the time to continually monitor and improve the supply chain.

Supply Chain Management An Improved Version of Logistics

Supply chain management (SCM) is the management of an interconnected network, channel and node businesses involved in the provision of product and service packages required by the end customers. In a layman's terms supply chain management is an art of managing all the channels involved in final outcome of the finished product and proper delivery of the same to the customer. Companies offering

Supply chain management solutions are the masters in handling multiple channels to ensure timely delivery to the consumers. Briefly, what supply chain management does is, ensures proper movement of goods from manufacturing unit to packaging unit. It all starts with raw materials collection, moving to production (work in progress), and eventually converts in the finished goods for final consumption. A supply chain management system manages supplier, manufacturer, wholesaler, and retailer. This entire process of supply chain management is conducted under concrete guidance and assistance. Converting the raw materials into usable products would become impossible and inappropriate for production units, without such surveillance. Imagine functioning of a major production unit without supply chain management solutions, and you would get to know the significance and value of such system. Supply chain management solutions providing firms maintains trade logistics, demand of the consumers, storage of the product, transportation involved, etc before the goods could be used by the consumer. Objective of Supply Chain Management Which company does not want to satisfy its consumers? They all are here to ensure what consumers need and whether we could deliver it effectively. The sole objective of supply chain management system is to ensure customer satisfaction. Timely delivery of goods, proper condition of goods, safe transportation is what a supply chain management solution does. Not just customer's satisfaction, companies also look to get the competitive advantage over their counterparts in the market, which can be ensured through an effective supply chain management system; hence, a supply chain management solution ensures that the information between channels like procurement unit, manufacturing unit, packaging unit, etc is transferred effectively and aptly. Supply chain management does not only manage the flow of product from raw material to finished one, but also effectively transfers information between important channels in the factory. With this the flow of goods as well as the flow of the information becomes smooth. Organisations with supply chain management solutions The use of technology is quite evident in logistics. Organisations utilising supply chain management solutions are the masters in logistics. The system ensures effective management of every portion of supply chain with the help of: Warehouse Management Systems. Transportation Management Systems. Trade Logistics International Trade Logistics. Supplier Relationship Management. Demand Management. Finished Product Packaging. With this, each and every movement of goods is supervised and any form of damage can be controlled immediately. To Conclude Gone are the days when huge factories where handled manually today, at just one click you get the entire gist of where your product is lying in the manufacturing process, and that's the magic of supply chain management systems. The system does not only provide details on goods but also identifies issues and accordingly gives solutions also.

NNOVATIONS IN LOGISTICS INDUSTRY CHAIN REACTION - SUPPLY CHAIN MANAGEMENT

Global industrial growth in the last 5-7 years has triggered a general uptrend across all sectors. One of the sectors that has benefited tremendously and seen exponential growth is the Logistics Industry. The Logistics Service Providers in India have grown and continue to grow at an extremely fast pace. Logistics service providers face many of the business challenges affecting other industries: stiff competition, pressure to increase shareholder value, and keeping pace with technology advances and the widespread effects of globalization. These market forces are causing LSP' to embrace new approaches to business, including providing value-added services as customer specific packaging. Meanwhile, the trend to improve financial performance by placing responsibility for inventory management in supplier's hands is putting added strains on traditional supply chains. And with more goods in transit to contract manufacturers, suppliers, and third parties around the world, LSP' will benefit from additional visibility into supply chain logistics. Some years ago, any mention of a supply chain inevitably implied boundaries that either starts from the dispatch area or ended at the materials inwards gate. So the supply chain "Supplied Raw Material" to manufacturers and made arrangements for it to be taken away from the factory. This process often resulted in high inventories , inefficient schedules /forecasts, low productivity due to frequent changes and numerous conflicts between procurement , manufacturing and marketing departments. To succeed in Today's highly competitive market place, organizations must embrace a customer-centric supply chain model that allows them to sense, plan and respond to real time demand signals across a network of partners, suppliers, retailers and customers. 1. These including reduction of profit margins, high customer expectations and bigger supply chain complexities. Customers are now requiring manufacturers and suppliers to deliver highly configured, made-to-order products with more specialized features than ever before. Rapid product proliferation and shrinking product life cycles are also forcing manufacturers to not only innovate across product portfolios, but find new approaches for bringing products to market. The Globalization of the supply chain brings rewards, such as cheaper labour costs, but also new risks like longer supply chain lead times and the need to maintain greater local inventoryModern Supply chain are complex and interrelated networks involving the movement of goods, services, funds and information among a wide range of participants. Keeping this network functioning with high efficiency is a major challenge. THE LOGISTICAL CHALLENGES OF DOING BUSINESS IN INDIA Though India sits atop the global retail opportunity index as the greatest underserved market in the world, its Supply Chains are built on slow transit networks fed by poor roads, ineffective ports and scanty distribution infrastructure. Manufacturers looking to cash in on India's growth need to be aware of the opportunities and obstacles when they expand their Supply Chains LOGISTICS INFRASTRUCTURE WILL SLOW PROGRESS In India, there is no such thing as next day delivery, no transport company to manage nation wide deliveries, and limited distribution channels. Logistics Infrastructures is severely lagging the country's growth and costs are extremely high as a result. Logistics costs are estimated to be nearly 13 percent of the GDP compared with 8 percent in the U.S. Entities that have created a retail presence

and are currently selling products in India are hit with transportation cost that total 40 percent of all products cost. For organization retailing to prosper, existing logistical challenges must be overcome and the foundation in India's supply chain must be built. SUPPLY CHAIN CHALLENGES IN INDIA MARKET Highlighted are some of the Supply Chain Challenges that companies are expected to encounter as they enter India Market. They are: Limited Physical Infrastructure Overburdened Ports Non existent Warehouse Standards Disorganized Trucking Operations Limited Technology Use. BUILDING A DEMAND - DRIVEN SUPPLY CHAIN Organizations in the current scenario applies new technology to improve their standards in all aspects. But it should be understood that by applying new technology alone will not transform a company into a demand - driven manufacturers. It requires a combination of people, process, technology and performance measures. For a successful transformation, the following things need to be taken into account. Successful collaboration (with partners, customers, suppliers and vendors) to ensure adequate and timely demand visibility Regular access to timely and accurate data. Today's technology enables us to get and analyze high volume of data, including historical sales, RFID and other resources. Detailed formulation of sales and operational planning. S&OP is the process by which executives and planners in Sales, Marketing, Product management, Finance and operations collaborate to align their respective plans based on a globa; view of demand. The goal is to understand and project current and future demand variables across every part of the enterprise, and then align customer, product, operational and business plans based on multiple perspectives. DESIGN A MULTI-TIERED DISTRIBUTION NETWORK The key to a successful distribution strategy will be proximity. The tail that wags the distribution dog is transportation reliability. Transportation reliability or more accurately , unreliability will play a key role in determining the number of nodes required for distribution and the inventory to support it. Even firms with fast-moving goods will be required to set up decentralized, multi-tiered distribution networks that are: Rely more heavily on Inventory Reside close to the Market Use Technology to provide visibility and Collaboration Select a Key Partner. SET BASIC TRANSPORTATION GOALS Currently the transportation network consists of few highways , small trucks and constrained speeds. It is projected that highways will improve, as recently funded projects are completed. The Government has pledged to build 10,000 Kms of new roads and improve ports by 2010. But the bulk of the infrastructure will likely come from private or foreign investment. As infrastructure improves , new market entrants will need transportation strategies, which are likely to be: i) Focus on high asset utilization Leveraging low cost labour to maximize the utilization of asset will be a critical element to optimizing transportation strategies. By employing strategies such as "slip-seating" one driver can be

changed-over with another driver when his maximum driving time is reached, since there is minimal financial impact in having him rest for the remaining of the day. Firms can utilize team-driving to improve not only equipment utilization, but also transit time and reduce variability. ii) Establishing a Core, Senior Logistics Team on the Ground Delivery success in the near term will not be based on technology, but rather on relationship and communications. Any organization can successfully penetrate into India, by employing a core, experienced operation team in each region. iii) Set rigid provider qualification India's carrier based will continue to consolidate and become more sophisticated as the shippers they serve demand higher service. Companies need to put in place a set of rigid qualifications to net expectation for intermediaries and independent carriers. Firms need to rigorously qualify and measure carrier performance and communicate that data back to carrier. iv) Establish Infrastructure others can use Firms should consider infrastructure investments as potential future profit centers. Manufacturers will have an opportunity to not only build infrastructure for themselves, but to create distribution and transportation services that others can use. v ) Invest early in Technology India's telecom industry is extremely advanced when compared to other industries. And while only 30,000 vehicles in the country have tracking capability that is expected to grow 100 percent over in next 5 years. KNITTING TOGETHER THE SUPPLY CHAIN Effective telecom networks can help, optimize and strengthen manufacturing supply chains The passage of goods from each stage in the manufacturing process to the next is almost always triggered and followed by the handling over of information from one party to another. This information, in the form of order, pick lists, manifests and numerous other documents and instructions is usually transmitted over the telecom network. The smooth movement of goods through the production process depends on how efficiently information is exchanged between manufacturers, suppliers, customers and logistics partners. However to move information smoothly, you need an underlying robust communication network. Otherwise, ineffectiveness and interruptions in the flow of information will be quickly manifested upstream and downstream in the form of delays and added costs. KEEPING A WATCH - Communication Inefficiencies Since the competitive nature of the manufacturing industries allows no room for error, it is necessary that the communication network be fully integrated, highly automated and extremely reliable. Network monitoring tool now have evolved to the point where information flows and handover can be mapped with total precision. Documents files and instruction can be tracked and timed as they make their way across the complex network of services, scanners, readers, printers and countless other devices involved in the today's supply chain operations. USING TECHNOLOGY TO IMPROVE SUPPLY CHAINS Investments need to be made in a wide variety of technologies and solutions by both shippers and service providers to enable smooth management of Supply Chains. With the industry facing a global slowdown, financial crisis, high flue costs, and go green' environmental efforts , efficient management of supply chains has become critical to the growth, profitability and even survival of business. As a part of the strategy to streamline business operations, companies are increasingly investing in IT infrastructure and applications across their supply chain operations.

Some of the Key issues faced by the shipper community include obtaining total supply chain visibility, reducing the time to market, responding to changes in demand through mass communication, and creating a supply chain of chains with enough flexibility to enable an agile enterprise rapidly respond to change. To address these needs, the logistics service provider community needs to provide the seamless access to global networks, deliver real-time' accurate information, integrate into shipper systems, manage more than transportation, and achieve a balance between managing client expectations, maximizing asset utilization and human resources. TECHNOLOGY AS ENABLER IN SCM In India, the supply chain market has numerous small and big players, coupled with complex processes, a multitude of incompatible systems, and a plethora of manual operations. This makes the SCM a challenging activity. Most supply chain participants do not have compatible IT systems, platforms and application infrastructure in place to share informations and data that is crucial to execute collaboration objectives. Some technologies that can help today's supply chain managers in overcoming these hurdles are: i) Forecasting & Planning Management Collaborative planning and forecasting allows business to create, modify and track their financial and promotional plans for each channel and communicate changes across the entire supply chain ii) Electronic Data Interchange Electronic Data Interchange (EDI) is the inter-organizational exchange of business documents in structures, machine processable form. EDI can be used to electronically transmit documents such as purchase order, invoices, shipping bills, receiving advices and other standard business correspondence between trading partners. iii) Web Based Solutions Integrated, new generations web-based systems can be designed to provide end-to-end automation of all functions, providing the necessary business visibility and increased accessibility. iv) Mobility Solutions Integrating mobile technology with business applications will be a key trend in the future. Mobility management is about eliminating the barrier between field resources and the corporate information they need to perform their work. v) E-Commerce Platforms Airports and ports need to have a common platform where all its stakeholders can exchange information and interact seamlessly. Such an e-commerce platform will reduce paper work. vi) Radio Frequency Identification (RFID) Technology providers are working hard to keep pace with end user expectations by focusing on easier management and distribution of RFID data. SEARCHING FOR A ROI Enterprises typically struggle to justify the ROI for investing in supply chain visibility. However, smart investments in visibility can be leveraged to improve supply chain productivity through increased data accuracy and elimination of bad data' issues plaguing existing EDI and ERP systems. Some of the significant benefits of visibility that contribute to rapid ROI include: 1. Lower total cost of supply chain through reduced inventories and perfect-order-delivery. 2. A better understanding of the supply chain to enable re-design of the network 3. Elimination of non value-add activities and costs 4. Reduction in lead times, and shorter time to market 5. Better management through improved information technology (IT)

6. Access to intelligence that mitigates supply chain risks, like automated detection of security exceptions and environmental exceptions helps mitigate losses and save costs. SECURING SUPPLY CHAIN Maintaining a safe and secure supply chain, is just as vital in an economic downturn, as it is during an upturn. Business managers have recently become sensitized to the vulnerability of their SC's and are now leveraging a variety of technologies to enhance and the security of their SC's.

Massive Advantages of Supply Chain Management

It always seems pretty a good thing to have a perfect marketing mix in order to ensure right products and services to the customers. Supply chain management process contemplates an entire procedure to manufacture right blend of products based on complete research to accomplish the consumer needs. This process has upper hand in handling the distribution channel properly to create supply chain improvements. Its core focus is to work on a cost-effective system where prices are competitive and under every one's reach. Only a supply chain management expert can tell you the major ways in which you can take care of these most powerful logistic consulting measures. These professionals address the major risks of supply chain beratung that usually come from increasingly complex and global business models available across the corporate. These service providers need to approach supply chain management as an important entity and must ensure it as an integrated corporate function that fortunately provides strategic benefit to an organization deals in warehousing. It's very important to focus on the latest available supply chain optimierung techniques whether you are a food & Beverages Company or any other organization, core focus should be on a clear cut long term business objective. You therefore need to attempt and analyse every supply chain category and its momentum in thorough supply chain logistics management process. Major supply chain consulting firms take immense care of cost reduction and ensure a very active supply chain berater as well. This is therefore very necessary to identify various processes of logistics consulting which. According to the supply chain management consultants, it's very mandatory to implement the change management in automotive industry. This is certainly a very critical process for the supply chain management consultants. 3rd party logistic companies usually employ a core team of supply chain management professionals who work round the clock to improve the warehousing management processes by reducing the occasions of poor shipment that lead to delays in fulfilment of customer orders. An organization must know the limitations of the supply chain management and should take all the measures important enough to increase the full potential of the organization. Either a professional in the domain or organization that deals in the supply chain processing units knows the basic fundamentals of the processing of the warehousing management. It is very important therefore to work out with these professionals in close coordination with their experience and mechanism they follow to move work on.

"Supply Chain Management: From Cost to Advantage"

Over the past ten years in Australia, supply chain management has begun to transition from the back office to the boardroom. Historically seen as a necessary evil' or simply part of the cost of doing business', supply chain was the realm of trucks, warehouses and burly men in fluorescent safety vests. This view is rapidly changing as organisations recognise the upside of effective supply chain management. Companies can realise improvements both to the company's financial position and to customer service levels. Reducing operating costs and increasing asset turnover boosts performance ratios, such as return on capital employed (ROCE). This is not just the realm of familiar global examples like Dell, Zara and Ikea. Automobile parts supplierSuper Cheap Auto Group and vitamins and health supplements manufacturer Blackmores are examples of local firms that have used the supply chain to their advantage. Super Cheap Auto improved operating cash flow by $23 million in 18 months (17% "like-for-like" inventory reduction) while simultaneously improving service levels. How was this possible? Intuitively reducing operating cash flow should reduce service levels. By adopting leading demand planning techniques, optimising inventories and up-skilling the planning team, the Super Cheap enhanced service levels and grew significantly. The company was able to fund growth from operating cash flows rather than debt and outperform the industry during a retail downturn. Super Cheap's shareprice tripled over the next 12 months. As a notable point of comparison, competitor Repco was acquired by private equity and delisted from the ASX during this period. Blackmores used its supply chain disciplines to respond swiftly and capably to the Pan Pharmaceutical recall in April 2003. It quickly locked in supply contracts, serviced key customers and increased its market share sustainably while the rest of the industry was in a state of disarray, floundering to formulate a response. Both examples show how effective supply chain management can be a key competitive advantage and rapidly deliver market leading results. A couple of quick facts to underscore the point: Looking at supply chain costs as a percentage of sales, did you know that best-in-class' performers have roughly half the costs of average-in-class' performers? In other words, if you're an average performer, your supply chain costs are likely to be twice that of the best performers. Given today's margin pressures, that's a big difference. Do you know where your organisation sits on this spectrum? Best-in-class performers have higher asset turnover because inventories are lower, often by 20-40 per cent comparatively, while customer response times are faster. In a climate of tight credit and higher capital costs, those that can generate superior cash flows and ROCE will outperform. The view of supply chain management is shifting from a cost-driven logistics function to an end-to-end process discipline that can deliver real competitive advantages and shareholder value. Equipping yourself with the right supply chain tools is becoming increasingly important as pressure builds to improve your supply chain competencies in order to face the challenges ahead: Technology By their nature, supply chains are complex and data intensive, and recent advances in supply chain planning, optimisation and execution technology have been significant. Smart tools for supply chain design, planning and optimisation, and execution are now essential and leading organisations use these tools to drive sustainable cost, capital and

service advantages in their business. If you are relying on spreadsheets, your ERP system or the knowledge of a few key individuals, there is significant risk and opportunity on the table. Skills As the supply chain becomes more strategic and technologically sophisticated, specialist skills become more important, and the market for these skills becomes more competitive. In Australia it has become difficult to find people with the right combination of skills. In addition, management often don't really understand the supply chain skill sets it should seek. Organisations must identify, acquire and develop the right skills if they're to stay ahead of the curve or even on it. The economy Tight credit markets, higher capital costs, ongoing global economic uncertainty, weak consumer sentiment and a strong Aussie dollar. Organisations need to be equipped to respond to challenging business conditions and changes in their respective markets. As illustrated previously, supply chain management can have a major and rapid impact on cash flow, costs and responsiveness to change (for better or worse). Both Super Cheap Auto and Blackmores converted disasters into successes because they understood this and had invested in the tools and capabilities to respond. Multi-channel retailing In the 2010- 2011 financial year, retailers posted the worst results in 20 years, with little prospect for improvement in the near future, according to Deloitte Access Economics. Australian retailers arguably weathered the storm better than their European and US counterparts. These retail survivors acknowledged the certainty of online shopping, substantially lower prices, the virtual collapse of national borders and a strong Aussie dollar, and have jumped into the hot space of multi-channel retailing. The challenge now facing retailers, logistics support companies and the supply chains supporting them is, how to make it work effectively? Sourcing alternatives to China Vietnam, India, the Philippines and Thailand are becoming increasingly competitive as alternative-source markets to China. As Chinese labour and materials costs rise, China is being challenged in terms of cost, quality and supply dependability. Australian companies are diversifying to reduce supply-disruption risks. Carbon Tax Whether or not you believe in climate change, we all agree that energy costs are rising. In Australia, relatively cheap fuel and transportation costs coupled with high labour costs have led to long, complex, global supply chains. In the past three years, Australian electricity prices have increased by roughly 35%. It's predicted that energy bills will continue to skyrocket with Australia's electricity prices projected to grow by 100% between now and 2015, driven partly by the introduction of the carbon tax from July 2012. As energy costs rise and carbon costs are factored into our decision making, supply chains will need to adapt. In summary, supply chain management represents a genuine opportunity. It's an exciting time for supply chain ready' companies, but for those organisations ill-equipped and unprepared to embrace future challenges, the predominant emotion will be panic rather than excitement. Notes: Carter McNabb is a Partner at GRA, an expert consulting firm specialising in supply chain strategy, planning and execution. This article was revised in March 2013. It was first published in Dispatch Magazine in 2012.