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SCM (BM 2014-16)

Session 2 (23 September 2015)

Takshashila Pani

UM14175

Section S2

Partnership V/s Supp! Chain"

A partnership involves one buyer and one seller.

A basic supply chain ust have at leat ! ebers" #ith at least one eber havin$ %lo#&transactions

on both side 'i.e" upstrea and do#nstrea(.

The number o# interme$iaries in a supp! %haindepends on several %actors such as)

1. The econoic %easibility o% inte$ratin$ all the parts o% the supply chain" based on the business

volue. This is usually deterined by A*+ analysis.

2. ,% the deand&arket is not very lar$e" the interediaries in the supply chain vanish.

-aple ) *i$ *a/aar ay not buy %ro distributor" instead it directly buys %ro the anu%acturer.

0ere" distributor $ets er$ed #ith anu%acturer.

&o' $oes a %ompan! $e%i$e the number o# $istributors

,t is a %unction o%)

1. The uantity that can be sold" i.e." the deand.

2. The distance bet#een the depot and the tar$et custoers.

!. The etra cost o% brin$in$ in a ne# distributor ' etra stora$es" transportation etc.(. The

custoer o%ten ends up payin$ these additionally incurred costs #hich decreases the custoer

value and ends up eatin$ the copanys pro%its.

The nuber o% retailers in a supply chain" on the other hand" is un3onitored and un3re$ulated.

Manu%acturers have the hi$hest stake in manain the %ompe*it! o# a supp! %hain. A eber ay

be a part o% ore than one supply chain. 0o#ever" each eber behaves as a separate copany #ith

its o#n $oals" obectives 'aiise pro%it and iprove operational e%%iciency( and balance sheets.

+ther members 'ho impa%t %ustomer ,aue)

1. inancers

2. Transporters

!. Public 6arehouses

4. !P

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The key $i##eren%e bet'een a C . an$ a $istributoris that +8 is ust a storin$ unit used by

anu%acturers. ,t is not reuired i% volue o% deand is not very hi$h ' -) 6hen there is a sin$le

distributor(.

hat are the pro%esses oin on at the inter#a%e bet'een t'o members o# a supp! %hain

1. Procureent

2. o$istics

!. 9rderin$

4. :eturn o% ;oods

5. Payent

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naely inventory ana$eent" production ana$eent" transportation ana$eent etc" have

tar$ets&obectives #hich are in con%lict #ith each other.

Thus #e need to i$enti#! the a%ti,ities/pro%esses 'hi%h are bein $upi%ate$ b! mutipe

members in the supp! %hain9 iminate these a%ti,ities at members 'here it is bein $one in-

e##i%ient!9

S%ope

1. >o easure o% ? sales lost due to stock outs. Strate$y) ,prove sales by ensurin$ no loss in

sales due to stock3outs" i.e." iprove the top3line #ithout pushin$ up the costs.

2. ,nventory ana$eent ) ,ncrease the inventory turn3over

!. Savin$s achieved by inte$rated lo$istics in place o% stand alone lo$istics"

nterate$ :oisti%s Manaement

o$istics ) Material 0andlin$ ' Plan" Store and Move aterials(

+obinin$ inbound and outbound lo$istics.

*rin$in$ in the third party service provider #hen you do not have the econoies o% scale %or

hi$h transportation costs.

actors #hich have caused this to happen)

1. ;lobalisation) +ustoer value is bein$ copared internationally

2. Product i%e +ycle has decreased) Processes are becoin$ obsolete very %ast.

!. 9utsourcin$ to absorb this cost o% investent and brin$ do#n the costs.