UNIT 1

SUPPLY CHAIN MANAGEMENT

1.CONCEPT OF SCM:

Flow Management:
SCM focuses on managing the flow of goods, data, and finances throughout
the supply chain, ensuring timely and efficient delive
Integration:
SCM emphasizes the integration of various processes and activities within
and across different organizations in the supply chain.
Collaboration:
Effective SCM requires collaboration and coordination among all
stakeholders, including suppliers, manufacturers, logistics providers, and
customers.
Optimization:
The goal of SCM is to optimize the entire supply chain, improving efficiency,
reducing costs, and maximizing value for all stakeholders.
Risk Management:
SCM also includes proactive risk management to anticipate and mitigate
potential disruptions or issues that may impact the supply chain.

2.FEATURE OF SCM

• Inventory Management:

SCM systems help track and manage inventory levels of raw materials,
work-in-progress, and finished goods, enabling better demand forecasting
and resource allocation.

• Logistics and Transportation:

SCM facilitates efficient transportation and delivery of goods, optimizing

routes, minimizing costs, and ensuring on-time delivery.

• Order Management:

SCM streamlines the order process from creation to fulfillment, automating

tasks like purchase order generation, supplier management, and pricing.

• Analytics and Performance Measurement:

 SCM systems provide tools for analyzing supply chain performance,
identifying bottlenecks, and making data-driven decisions.

• Quality Control and Compliance:

SCM ensures adherence to quality standards and regulatory requirements

throughout the supply chain, minimizing risks and ensuring product safety.

• Collaboration and Real-Time Data Sharing:

SCM facilitates seamless communication and data sharing between different

stakeholders in the supply chain, improving coordination and
responsiveness.

• Cloud-Based Solutions:

SCM can be deployed in the cloud, providing scalability, accessibility, and

flexibility.

3. EVOLUTION OF SCM:

Pre-1950s – Traditional Logistics: Focus was on basic functions like transportation

and warehousing. Activities were managed separately with minimal coordination.

1950s–1970s – Physical Distribution: Companies began integrating logistics functions

to reduce costs. Emphasis was on inventory control and materials management.

1980s–1990s – Logistics Management: Introduction of MRP and ERP systems led to

better planning. The term "Supply Chain Management" emerged, highlighting cross-
functional coordination.

2000s – Global and Technological Growth: Use of the internet, e-commerce, and
SCM software improved global connectivity. Outsourcing and third-party logistics
gained importance.

2010s–Present – Digital and Smart SCM: Advanced technologies like AI, IoT, and
blockchain are used to create responsive, resilient, and sustainable supply chains.

4. IMPORTANCE AND PROCESS:

Importance of SCM:

• Efficiency and Cost Reduction:

SCM helps optimize operations, reduce waste, and minimize costs, leading to increased
profitability.
 • Faster Delivery:

Effective SCM enables businesses to deliver products to customers faster and more
efficiently, enhancing customer satisfaction.

• Improved Customer Satisfaction:

By ensuring timely delivery, quality products, and efficient service, SCM contributes to
increased customer loyalty and satisfaction.

• Risk Management:

SCM helps businesses anticipate and mitigate potential risks, such as supply chain
disruptions, and ensure compliance with regulations.

• Increased Resilience:

A well-managed supply chain can withstand disruptions and maintain operations

effectively, increasing organizational resilience.

• Enhanced Competitiveness:

By streamlining operations and reducing costs, SCM helps businesses gain a

competitive advantage in the market.

SCM Process:

The SCM process typically involves the following key phases:

1. 1. Planning:

This involves forecasting demand, developing production plans, and managing

inventory levels.

2. 2. Sourcing:

Selecting and managing suppliers, including negotiating contracts and ensuring quality.

3. 3. Production:

Manufacturing products according to planned specifications and managing production

processes.

4. 4. Distribution:

Handling the movement of goods from production to customers, including

warehousing, transportation, and logistics.

5. 5. Returns:

Managing product returns, including reverse logistics and handling customer issues.
5.BARRIERS OF SCM:

Internal Barriers:

• Lack of top management commitment:

Without strong leadership support, supply chain initiatives may lack resources and
prioritization.

• Resistance to change:

Organizations can be hesitant to adopt new technologies, processes, or strategies,

especially when it comes to integrating new partners or systems.

• Poor communication and information sharing:

Inadequate communication and collaboration between departments and supply chain

partners can lead to misunderstandings, delays, and errors.

• Lack of integration and collaboration:

Failure to integrate different parts of the supply chain and collaborate effectively with
partners can lead to inefficiencies and disruptions.

• Lack of qualified personnel:

A shortage of skilled employees with the necessary knowledge and experience in supply
chain management can hinder the implementation of effective strategies.

External Barriers:

• Unforeseen delays:

Logistics issues like port congestion, weather disruptions, or transportation problems

can significantly impact the supply chain, causing delays and increased costs.

• Supplier relationships:

Difficulties in managing supplier relationships, including issues with quality, lead times,
or reliability, can affect the overall supply chain performance.

• Market conditions:

Fluctuations in demand, changing customer preferences, or economic downturns can

create challenges for managing the supply chain effectively.

• Risk management:

Unexpected events like natural disasters, political instability, or pandemics can disrupt
the supply chain, requiring proactive risk management and contingency planning.
 • Increased material scarcity:

Shortages of raw materials or components can impact production and lead to delays or
increased costs.

6.PRINCIPLES OF SCM:

•
Customer Focus:
The supply chain should start with understanding customer needs. Companies
must deliver products and services that add value to the customer, ensuring
satisfaction and loyalty. Customization, fast delivery, and quality are key.
• Segment Customers Based on Needs:
Not all customers are the same. SCM should be designed to serve different
customer segments differently. For example, high-value customers might need
faster delivery and more support than regular ones.
• Demand Planning and Forecasting:
Accurate demand forecasting is essential to avoid overproduction or stockouts.
It helps maintain the right inventory levels, reduce costs, and improve service
levels.
• Strategic Supplier and Partner Relationships:
Building long-term, trust-based relationships with suppliers and partners helps
improve collaboration, quality, and reliability. It also supports shared goals like
cost reduction and innovation.
• Technology Integration:
The use of modern technologies like ERP, AI, and real-time data analytics
improves supply chain visibility, coordination, and responsiveness. It enables
better decision-making and faster problem-solving.

7.STRATEGIC OF SCM:

• Aligning with Business Goals

The supply chain strategy should support the company’s overall objectives such
as cost leadership, customer satisfaction, or product innovation.
• Customer-Centric Approach
Understanding customer expectations and designing the supply chain to meet
service levels, delivery timelines, and customization needs is key to building
loyalty.
• Efficient Resource Utilization
Managing resources like inventory, transportation, and manpower efficiently
reduces waste and lowers operational costs.
 • Technology and Data Use

Implementing systems like ERP, AI, and IoT enhances real-time visibility, demand
forecasting, and decision-making.

• Risk Management and Flexibility

A good SCM strategy includes plans to manage risks like supplier failure, market
fluctuations, or disruptions (e.g., natural disasters), and ensures flexibility to
adapt quickly.

8. Organizations, Coordination, Innovation and Forecasting

• Organizations refer to structured entities involved in managing business

activities. In distribution, they manage the flow of goods and services from
producers to consumers.

• Coordination involves aligning various departments like production, inventory,

sales, and logistics to work towards a common goal efficiently. Poor coordination
can cause delays and higher costs.

• Innovation in distribution may include the use of automation, AI, or new logistics
models to enhance speed, reduce costs, and improve customer satisfaction.

• Forecasting is predicting future market demand based on historical data and

trends. Accurate forecasting helps in better inventory management and timely
product availability.

9. Supply Chain Intermediaries

• Concept: Supply chain intermediaries are middle agents that help transfer
goods from the manufacturer to the end customer, facilitating storage,
transportation, and sales.

• Types:

o Wholesalers: Buy in large quantities from producers and sell in smaller

lots to retailers.

o Retailers: Sell goods directly to the final consumers.

o Distributors: Work under contract to distribute goods within a region or

industry.

o Agents/Brokers: Do not take title of goods; they act as facilitators

between buyers and sellers.
 o Logistics Providers: Offer services like warehousing, inventory
management, and transportation.

10. Channels of Distribution for Industrial Goods and Consumer Goods

Industrial Goods:

These often use short or direct channels due to technical specifications and
bulk buying. Manufacturers may sell directly or use industrial agents.

o Usually expensive, technical, and bought in bulk.

o Distributed through short channels—often directly from the manufacturer

to the business buyer or via a distributor or agent.

o Requires personal selling and negotiation.

Consumer Goods:

These typically require longer channels. Products move from producers to

wholesalers, then to retailers, and finally to consumers to ensure wider reach and
availability.

• Purchased frequently and in small quantities.

• Use longer channels like Manufacturer → Wholesaler → Retailer → Consumer.

• Involves mass marketing and wide distribution for availability.

11. Channels of Distribution at Services Level

Unlike physical goods, services are usually distributed through direct

channels. The service provider interacts directly with the consumer, such as in
education, healthcare, or banking. However, with digital advancement, services can
also be delivered via online platforms, mobile apps, or third-party agencies. The
focus is on accessibility, quality, and timely delivery rather than physical logistics .

types of Service Distribution Channels:

• Direct Channels:

These channels involve the service provider directly interacting with the customer, such
as through a website, app, or in-person interactions.

• Indirect Channels:

These channels involve intermediaries like agents, distributors, or partners who help the
service provider reach customers.
 • Hybrid Channels:

This approach combines direct and indirect channels to maximize reach and
effectiveness.

12. Factors for Selecting Suitable Channels

Selecting the right distribution channel depends on several factors:

1. Nature of the Product – Perishable or delicate goods require faster, direct

channels. Durable goods can use longer channels.

2. Market Coverage – Wide or global markets need intermediaries to ensure

availability.

3. Customer Type – Business buyers prefer direct interaction; general consumers

need convenience and accessibility.

4. Cost and Control – Direct channels offer better control over branding and
customer experience but at a higher cost.

5. Legal Constraints – Some products require regulatory approvals or licensed

intermediaries (e.g., drugs, alcohol).

UNIT 2

GLOBAL PERPESCTIVE

1. Global Perspectives-Measuring and analyzing the value and efficiency of Global

Supply:

Measuring Value and Efficiency in a Global Supply Chain:

• Cost Optimization:

• Global Sourcing: Leveraging lower production costs and strategic

partnerships with international suppliers to negotiate better pricing and
reduce overheads.

• Transportation Costs: Optimizing delivery routes and modes of

transportation to minimize costs.
 • Inventory Management: Reducing inventory holding costs through
effective inventory management practices.

• Speed and Responsiveness:

• Supply Chain Cycle Time: Measuring the time it takes for goods to move
through the supply chain.

• Fill Rate: Assessing the ability to fulfill customer demand.

• Service Rate (On-Time Deliveries): Tracking the frequency of on-time

deliveries.

• Reliability and Quality:

• Perfect Order Index: Measuring the percentage of orders delivered on

time, complete, without damage, and with proper documentation.

• Order Accuracy: Tracking the accuracy of orders throughout the supply

chain.

• Flexibility and Adaptability:

• Demand Forecasting: Using data analytics and demand forecasting to

anticipate demand and optimize inventory levels.

• Risk Management: Identifying and mitigating potential risks in the supply

chain, such as geopolitical instability or natural disasters.

Analyzing Global Supply Chain Performance:

• Benchmarking:

Comparing the supply chain's performance against industry standards and best
practices.

• Trend Analysis:

Monitoring key metrics over time to identify trends and patterns.

• Root Cause Analysis:

Investigating the underlying causes of performance issues to develop targeted

solutions.

• Data-Driven Decision Making:

Using data insights to make informed decisions about supply chain strategy and
operations.
2.CHAIN NETWORK:

a chain network refers to a specific structure of interconnected entities

involved in the flow of goods and services. It's essentially a "chain" where each link
represents a stage in the process, from raw materials to the final product, and
everything in between, like manufacturing, distribution, and delivery.

3. Global Market Forces

• Trade Policies & Tariffs: Import/export duties shape sourcing decisions

• Currency Fluctuations: FX risk can erode margins or create arbitrage

opportunities

• Technological Advances: IoT, blockchain, AI for visibility and agility

• Geopolitical Risk: Political instability, sanctions, natural disasters disrupt flows

• Sustainability Pressure: Carbon regulations and consumer demand for “green”

supply chains

4. Types of Global Supply Chains

1. Continuous Flow:

This model focuses on maintaining a stable and consistent flow of materials, goods,
and information, suitable for industries with predictable and high demand.

2. Fast Chain:

Prioritizes speed and responsiveness to meet rapidly changing market demands and
short product lifecycles, often leveraging technology and data analytics.

3. Efficient Chain:

Emphasizes minimizing costs and maximizing efficiency in production and delivery,

typically used for high-demand, low-cost products.

4. Agile Supply Chain:

Focuses on flexibility and adaptability to handle unpredictable demand fluctuations

and disruptions, requiring a network of globally dispersed suppliers.
 5. Custom-Configured:

Tailored to specific business requirements, blending elements from other models to

optimize operations for unique needs.

6. Flexible:

This model attempts to incorporate aspects of all other models, adapting to changing
market conditions and peak/low demand seasons.

7. Virtual Supply Chain:

Utilizes technology to create a virtual network, reducing physical constraints and

enabling global collaboration.

8. Digital Supply Chain:

Leverages technology and data analytics to improve efficiency, visibility, and resilience
in the supply chain.

9. Green Supply Chain:

Prioritizes environmental sustainability and minimizing the ecological footprint of

supply chain operations.

10. Antifragile Supply Chains:

Designed to learn and adapt from disruptions, becoming stronger and more resilient
over time.

11. Indian Perspectives: Measuring and Analyzing the value and efficiency of
Domestic Supply

Measuring Value and Efficiency:

• Economic Impact:

Assess the economic effects of supply chains, including their contribution to GDP, job
creation, and overall economic growth.

• Supply Chain Costs:

Analyze costs associated with raw material procurement, manufacturing,

transportation, warehousing, and distribution to identify areas for optimization.

• Customer Satisfaction:

Evaluate customer perceptions of service quality, delivery times, and overall value
received from the supply chain.
 • Efficiency Metrics:

Utilize metrics like on-time delivery, inventory turnover ratio, perfect order index, and
order accuracy to gauge supply chain performance.

• Value Chain Analysis:

Conduct a value chain analysis to identify areas where value can be added, and the
process can be made more efficient.

• Supply Chain Cycle Time:

Track the total time it takes for a product to move through the supply chain, from raw
materials to the end customer, to identify bottlenecks and improve responsiveness.

Analyzing the Indian Context:

• Infrastructure Challenges:

Acknowledge the limitations in India's infrastructure, including roads, railways, ports,

and warehousing facilities, which can impact supply chain efficiency.

• Logistical Difficulties:

Recognize the challenges of navigating the vast geographical distances and diverse
conditions within India, requiring optimized logistical solutions.

• Regional Variations:

Consider the differences in supply chain practices across various regions in India, and
the need for tailored strategies for each region.

• Government Policies:

Analyze the impact of government policies on supply chain management, such as

import-export regulations, logistics support, and infrastructure development initiatives.

• Technological Adoption:

Assess the level of technology adoption in the Indian supply chain, including the use of
ERP systems, RFID, and digital platforms.

• Sustainability Considerations:

Evaluate the environmental and social impact of supply chains, and the need for
sustainable practices.
12. Economic Effects of Supply Chains:

Positive Economic Effects:

• Reduced Costs:

Efficient supply chains minimize transportation, inventory, and production costs,

allowing companies to be more competitive.

• Increased Productivity:

Well-managed supply chains can improve efficiency and output, contributing to overall
economic growth.

• Global Trade Expansion:

Supply chains facilitate the movement of goods and services across borders, expanding
markets and creating economic opportunities.

• Job Creation:

Supply chains support jobs in various sectors, including transportation, manufacturing,

and logistics.

• Technological Advancement:

The need for efficient supply chains drives innovation and the adoption of new
technologies.

• Sustainable Practices:

Many companies are adopting sustainable supply chain practices, which can lead to
cost savings, reduced environmental impact, and improved brand reputation.

Negative Economic Effects:

• Inflation:

Supply chain disruptions, such as those caused by the COVID-19 pandemic, can lead to
shortages and increased prices.

• Economic Instability:

Disruptions can create imbalances between supply and demand, potentially leading to
recessions or other economic downturns.

• Reduced Competitiveness:

Companies facing supply chain disruptions may struggle to compete in the market,
leading to decreased profits or even bankruptcy.
 • Increased Costs:

Disruptions can increase transportation costs, inventory holding costs, and production
costs, ultimately raising the price of goods and services for consumers.

• Job Losses:

Supply chain disruptions can lead to factory closures, reduced production, and job
losses in related industries.

• Increased Dependence:

Reliance on global supply chains can make economies vulnerable to disruptions in

other countries.

13. Customer Values

• Price & Quality: Competitive pricing balanced with product reliability

• Speed & Reliability: Fast, predictable delivery windows

• Customization & Flexibility: Personalization (e.g., bundle offers, build-to-order)

• Sustainability: Ethical sourcing, reduced carbon footprint

14. Role of customers and Ways of improving customer services in SCM:

Role of Customers in SCM

• Demand Drivers:

Customers' demand for products and services initiates the entire SCM process.

• Feedback and Insights:

Customers provide valuable feedback that helps refine processes, improve product
offerings, and enhance the overall experience.

• Loyalty and Repeat Business:

Satisfied customers become loyal advocates, driving repeat business and positive
brand image.

Ways to Improve Customer Services in SCM

• Tailoring Supply Chain to Customer Needs:

Personalize the supply chain to meet specific customer requirements, from product
customization to delivery options.

• Multi-Channel Communication:

Offer various communication channels (social media, website chat, phone, etc.) to
make customer service accessible and convenient.

• Empowering Customer Service Representatives:

Equip customer service representatives with the knowledge, skills, and authority to
address customer concerns and exceed expectations.

• Real-time Updates and Transparency:

Provide customers with real-time updates on order status, delivery timelines, and any
potential issues.

• Streamlining Order Fulfillment:

Integrate customer service with order entry and fulfillment systems to ensure accurate
and timely order processing.

• Building Relationships:

Cultivate long-term relationships with customers through regular communication,

proactive support, and personalized experiences.

• Continuous Improvement:

Regularly gather customer feedback and use it to drive continuous improvement in SCM
processes.

• Leveraging Technology:

Utilize CRM systems and other technologies to track customer interactions,

preferences, and behaviours, enabling personalized service and efficient
communication.

By focusing on customer value, understanding the role of customers in SCM, and

implementing strategies to improve customer service, businesses can create a positive
customer experience, build loyalty, and achieve long-term success.
 UNIT 3

FRAMEWORK OF LOGISTICS

1. Logistics

Logistics refers to the process of planning, implementing, and controlling the efficient
flow and storage of goods, services, and related information from the point of origin to
the point of consumption. It is a critical part of supply chain management and aims at
delivering the right product, at the right place, at the right time, and at the lowest
possible cost.

2. Positioning of Information in Logistics and Supply Chain Management

Information is the backbone of logistics and supply chain management. It ensures

visibility, coordination, and control across the network.

• In logistics, information helps in tracking shipments, forecasting demand,

managing inventory, and optimizing routes.

• In SCM, it facilitates better decision-making between suppliers, manufacturers,

warehouses, and retailers.

• Key technologies include ERP (Enterprise Resource Planning), GPS, RFID

(Radio Frequency ID), EDI (Electronic Data Interchange), and IoT (Internet of
Things).

3. Logistics Information System (LIS)

A Logistics Information System is a software solution designed to manage logistics

operations efficiently.

Features:

• Order Processing: Tracks orders from entry to delivery.

• Inventory Management: Monitors stock levels.

• Transportation Management: Optimizes shipping routes and schedules.

• Warehouse Management: Manages space utilization and order picking.

• Customer Service: Ensures quick resolution of delivery issues.

Benefits include cost savings, real-time tracking, and enhanced customer satisfaction.
4. Logistics Management: Concept and Process

Logistics Management is the part of supply chain management that plans and controls
the movement and storage of goods and services.

Concept of logistics management:

Logistics management is the strategic planning, implementation, and control of
the efficient, effective flow and storage of goods, services, and related information
between the point of origin and the point of consumption to meet customer
requirements. It encompasses the complete process of managing the flow of materials
and products into, though, and out of an organization. In simpler terms, it's about
getting the right product to the right place at the right time, in the right quantity, and to
the right customer

Process Involves:

1. Planning logistics strategies (how and where to distribute goods)

2. Procuring materials

3. Warehousing and inventory control

4. Transporting goods to customers

5. Handling returns (Reverse Logistics)

5. Competitive Advantages and the Three C’s

A well-managed logistics system can offer significant competitive advantages:

• Reduced operational costs

• Faster delivery

• Better customer service

The Three C’s are:

1. Customer – Focus on customer needs and satisfaction.

2. Cost – Reduce logistics and inventory costs.

3. Cycle Time – Minimize the time from order to delivery.

6. Changing Logistics Environment

The logistics environment is evolving due to:

• Globalization: Complex, cross-border supply chains.

• E-commerce: Need for faster, direct-to-consumer delivery.

• Technology: Use of AI, automation, and robotics in warehouses.

• Sustainability: Eco-friendly packaging and transport solutions.

7. Reverse Logistics

Reverse logistics refers to the return flow of products from customers back to the seller
or manufacturer.

Examples:

• Product returns due to defects

• Recycling or disposal of old products

• Reuse of packaging materials

Benefits:

• Improves customer satisfaction

• Reduces waste

• Enhances brand reputation

8. Importance of Inventory Control

Inventory control is essential for:

• Avoiding stockouts and overstocking

• Reducing holding costs

• Maintaining smooth production and sales

• Improving customer service levels

9. Elements of Inventory Management

Key elements include:

• ABC Analysis: Categorizing inventory based on value.

• Economic Order Quantity (EOQ): Optimal order quantity.

• Just-In-Time (JIT): Inventory arrives just before use.

• Safety Stock: Extra stock to prevent shortages.

• Reorder Point: When to place the next order.

10. Inbound and Outbound Logistics

• Inbound Logistics: Flow of materials and parts from suppliers to the business.

• Outbound Logistics: Distribution of finished goods from the business to end-

users.

Managing both efficiently reduces delays, costs, and improves service.

Inbound Logistics:

• Focus:

Bringing materials, goods, and information into a company for the purpose of
production or use within the business.

• Activities:

Includes sourcing raw materials, managing inventory, warehousing, and transportation

of these resources.

• Example:

Outbound Logistics:

• Focus: Moving finished products, goods, and information out of a company and
to customers or other end-users.

• Activities: Involves order fulfillment, packaging, transportation, and distribution

of goods.

• Example: Shipping finished products from a warehouse to a customer's

doorstep.
11. Bullwhip Effect

The Bullwhip Effect is the phenomenon where small changes in customer demand
cause larger changes in orders up the supply chain.

Causes:

• Lack of demand visibility

• Delayed information sharing

• Overstocking due to panic buying

Solutions:

• Sharing real-time demand data

• Coordinated planning with suppliers

• Using demand forecasting tools

12. Distribution and Warehousing Management

• Distribution Management involves the delivery of products to consumers

through various channels.

• Warehousing includes the storage, handling, and management of goods.

Functions:

• Inventory control

• Order fulfillment

• Product packaging

• Space optimization

13. Transport Functions and Participants in Transportation Decisions

Functions:

• Movement of goods

• Storage in transit

• Handling and tracking

Participants:
 • Shippers (producers or sellers)

• Carriers (transport companies – road, rail, air, sea)

• 3PLs (Third-party logistics providers)

• Government authorities (for infrastructure and regulation)

14. Transport Infrastructure

This includes:

• Roads and Highways

• Railways

• Airports

• Seaports

• Warehousing facilities

Good infrastructure reduces transit time and logistics costs.

15. Packaging and Materials Management

a) Packaging

• Consumer Goods Packaging: Focuses on branding, protection, and

convenience.

• Industrial Goods Packaging: Prioritizes durability, bulk handling, and safety.

b) Materials Management

Involves planning, sourcing, storing, and controlling materials required in production.

Objectives:

• Reduce waste

• Ensure timely availability

• Optimize material costs

16. Factors Influencing Materials Planning

 • Demand forecast

• Inventory levels

• Supplier reliability

• Lead times

• Production schedules

17. Preservation, Safety, and Measures of Materials Handling

Preservation:

• Proper Storage:

Storing materials in appropriate containers and environments protects them from

damage, contamination, and spoilage.

• Temperature and Humidity Control:

Maintaining optimal temperature and humidity levels can prevent damage to materials
like wood, electronics, and food.

• Protection from Light and Oxygen:

Some materials, such as drugs and chemicals, need to be shielded from light and
oxygen to maintain their effectiveness and stability.

Safety Measures:

• Proper Lifting Techniques:

Using correct body mechanics, such as bending at the hips and knees, and keeping the
back straight, helps prevent back injuries during lifting.

• Equipment Selection and Use:

Using the right tools and equipment for the job, including forklifts, conveyors, and hand
trucks, reduces the risk of accidents and strain.

• Personal Protective Equipment (PPE):

Wearing appropriate PPE, such as gloves, safety glasses, and steel-toed boots, protects
workers from potential hazards.

• Hazard Identification and Risk Assessment:

Identifying potential hazards in the workplace, such as tripping hazards, uneven
surfaces, and heavy loads, and implementing measures to mitigate those risks is
crucial.

• Training and Education:

Proper training on safe material handling practices, including the correct use of
equipment and proper lifting techniques, is essential for employee safety.

• Maintenance and Inspection:

Regularly inspecting and maintaining equipment, as well as ensuring that the workplace
is clean and free of hazards, is critical for safety.

• Clear Communication and Communication:

Establishing clear communication protocols, such as using hand signals and speaking
clearly during lifts, helps prevent accidents.

• Emergency Procedures:

Having well-defined emergency procedures, such as evacuation plans and first aid
protocols, is important for responding to accidents and injuries.

Measures for Efficient and Safe Material Handling:

• Workplace Organization:

Maintaining a clean and organized workspace, free of clutter and obstructions, is

essential for safe and efficient material handling.

• Efficient Material Flow:

Streamlining material flow through the workplace, such as using conveyors and chutes,
reduces the need for manual handling and improves efficiency.

• Automation:

Utilizing automated systems, such as robotic arms and automated guided vehicles
(AGVs), can improve efficiency and reduce the risk of injuries associated with manual
material handling.
 UNIT 4

SCM-WAREHOUSING

1. Warehousing in SCM

Warehousing is the process of storing goods and materials between the point of origin
and point of consumption. In Supply Chain Management (SCM), warehousing plays a
critical role in ensuring product availability, reducing delivery times, and supporting
distribution.

2. Concepts of Warehousing

• A warehouse is a facility used to store goods safely until they are needed.

• It supports inventory management, order fulfillment, and demand-supply

balancing.

• Warehousing bridges the gap between production and consumption.

3. Types of Warehouses

1. Private Warehouse – Owned and operated by a company for its use.

2. Public Warehouse – Rented out to businesses for a fee; open to multiple users.

3. Bonded Warehouse – Used to store imported goods before customs duty is

paid.

4. Distribution Centers – Focus on quick movement of goods rather than long-

term storage.

5. Cold Storage – Used for perishable goods (e.g., food, pharmaceuticals).

6. Automated Warehouses – Use robotics and automation for storage and

retrieval.

4. Functions of Warehousing

• Storage: Protects goods until they are required.

• Inventory Management: Tracks quantity, location, and condition.

• Consolidation: Combines products from various sources for shipment.

• Break Bulk: Divides large shipments into smaller ones for distribution.
 • Value-Added Services: Labeling, packaging, assembling, etc.

5. Strategic Warehousing

• Aligns warehousing decisions with business and supply chain strategies.

• Focuses on location, capacity planning, technology use, and customer

service.

• Aims to reduce costs and improve service levels.

6. Warehouse Operations

Core operations include:

• Receiving: Inspecting and unloading incoming goods.

• Put-away: Storing goods in assigned locations.

• Picking: Retrieving items for orders.

• Packing: Preparing goods for shipping.

• Shipping: Dispatching goods to customers or retailers.

• Cycle Counting: Periodic inventory checks for accuracy.

7. Ownership Arrangements

• Company-owned: Offers control but involves high capital investment.

• Third-party Logistics (3PL): Outsourced warehousing; flexible and scalable.

• Leased Warehouses: Rented facilities based on need.

8. Warehouse Decisions

Important decisions include:

• Location: Proximity to customers, suppliers, and transport links.

• Size and Capacity: Based on expected inventory levels and demand.

• Technology Investment: Use of WMS, barcodes, RFID.

• Layout and Design: For operational efficiency and safety.

9. Warehouse Management Systems (WMS)

• A WMS is software that manages day-to-day warehouse operations.

• Functions include: inventory tracking, order processing, space optimization,

labor management.

• Benefits: Improved accuracy, faster operations, cost savings.

10. Packaging Perspectives

• Packaging protects goods during storage and transit.

• In SCM, packaging should also enhance handling efficiency and minimize space.

• Sustainable Packaging is gaining importance due to environmental concerns.

11. Packaging for Material Handling Efficiency

• Good packaging should:

o Be durable

o Allow for easy stacking and transport

o Fit standard pallets or containers

• It reduces damage, speeds up handling, and lowers transportation cost.

12. Materials Handling

• Refers to the movement, protection, storage, and control of materials within a

facility.

• Involves equipment such as:

o Forklifts

o Conveyor belts

o Pallet jacks

• Efficient materials handling increases safety, reduces damage, and enhances

productivity.
Supply Chain Logistics Design

13. Global Strategic Positioning

• Involves selecting strategic locations for warehouses and distribution centers

worldwide.

• Factors:

➢ Market proximity
➢ cost of land/labour,
➢ tax policies,
➢ transport infrastructure.

14. Global Supply Chain Integration

• Ensures smooth coordination between global partners (suppliers,

manufacturers, and retailers).

• Requires:

o Common IT platforms

o Standardized processes

o Shared data and performance metrics

15. Supply Chain Security

• Protection of products, facilities, and data across the supply chain.

• Includes:

o Physical security (CCTV, access control)

o Cybersecurity

o Risk management (for theft, fraud, terrorism)

16. International Sourcing

• Procuring goods and materials from global suppliers.

• Benefits: Lower cost, access to quality or unique products.

 • Challenges: Longer lead times, customs regulations, currency fluctuations.

17. Distribution Control and Evaluation

• Distribution control involves monitoring product flow and ensuring timely

deliveries.

• Evaluation includes measuring performance using KPIs such as:

o Delivery time

o Order accuracy

o Inventory turnover

o Warehouse utilization

UNIT 5

SCM PLAN

SCM Plan

1. Demand Planning

• Involves forecasting future customer demands.

• Helps in aligning inventory, production, and procurement.

• Methods: Historical sales data, market analysis, statistical tools.

2. Source of Procurement

• Selecting and managing vendors for raw materials or components.

• Goals: Quality, timely delivery, cost-efficiency.

• Types: Domestic vs. international sourcing.

3. Production or Assembly Steps

• Converting raw materials into finished goods.

• Includes scheduling, resource allocation, quality checks, and final assembly.

4. Sales Return of Defective or Excess Goods

• Returned goods due to damage, defects, or overstock.

• Managed through reverse logistics.

• Involves inspection, restocking, repair, or disposal.

5. Use of Internet in SCM

1. Real-time Tracking and Monitoring:

• IoT devices:

Connected devices, such as sensors and RFID tags, provide real-time data on the
location and condition of goods throughout the supply chain.

• Improved visibility:

This allows businesses to track inventory, monitor transportation routes, and identify
potential issues early on.

• Enhanced decision-making:

Real-time data empowers managers to make informed decisions about inventory

management, transportation logistics, and production planning.

2. Improved Communication and Collaboration:

• Web-based platforms:

Businesses can use web-based platforms to share information with suppliers,

customers, and other supply chain partners.

• Electronic Data Interchange (EDI):

EDI allows for automated data exchange between different systems, facilitating faster
and more efficient transactions.

• Enhanced communication:

This improves collaboration and coordination among all parties involved in the supply
chain.

6. Role of Computer/IT in SCM

• Enables automation, real-time tracking, and integration.

• Improves visibility, coordination, and decision-making.

7. E-marketplaces

• Digital platforms where buyers and sellers meet.

• Offer competitive pricing, wide selection, and global reach.

8. E-procurement

• Use of digital tools for purchasing activities.

• Advantages: faster processing, lower costs, better vendor management.

9. E-logistics

• Managing logistics through internet-based tools.

• Examples: Online tracking, automated warehouses, route optimization.

10. E-fulfillment

• Completing online orders including packing, shipping, and delivery.

• Key for e-commerce operations.

11. Operative Systems in SCM

• Planning and Execution:

This involves defining objectives, understanding the supply chain structure, and
implementing effective planning systems.

• Operations Management:

This includes managing internal processes like manufacturing, warehousing, and

inventory, as well as external aspects like transportation and logistics.

• Technology and Software:

SCM operating systems leverage various technologies like inventory management

software, order management systems, warehouse management systems,
transportation management systems, and even blockchain for enhanced visibility and
traceability.

• Integration and Visibility:

A good SCM operating system integrates different functions and departments within a
company, providing a holistic view of the supply chain and allowing for real-time data
sharing.

• Optimization and Efficiency:

The goal is to optimize all aspects of the supply chain, from resource allocation to
inventory management, to minimize costs and improve overall efficiency.

12. Enterprise Resource Planning (ERP)

• Integrates all departments (inventory, HR, finance) through a single system.

• Benefits: consistency, efficiency, real-time access.

13. Performance Modeling using Markov Chains

• Used to predict system performance and state transitions (e.g., stock levels,
demand).

• Helps in managing uncertainty in supply chains.

14. Inventory Control – Importance

• Ensures right inventory at the right time.

• Reduces holding costs, avoids stockouts or overstocking.

15. Pareto’s Law (80/20 Rule)

• 80% of sales come from 20% of items/customers.

• Used to prioritize inventory and focus on high-impact areas.

16. Emerging Technologies in SCM & Logistics

• Artificial Intelligence (AI):

AI-powered tools are used for predictive analytics, optimizing processes, improving
forecasting accuracy, and enhancing decision-making.

• Internet of Things (IoT):

IoT devices, like sensors and RFID tags, enable real-time tracking and monitoring of
goods, providing valuable insights into inventory, resources, and shipments.

• Blockchain Technology:

Blockchain provides transparency and security by creating an immutable ledger of

transactions, enhancing trust and accuracy across the supply chain.

• Robotics and Automation:

Robotic automation in warehousing streamlines operations, reduces manual effort, and

improves efficiency in tasks like picking, packing, and storage.
 • Cloud Computing:

Cloud-based solutions offer centralized data storage, accessibility, and scalability,

enabling businesses to optimize supply chain operations and drive efficiency.

• Predictive Analytics:

Utilizing data to anticipate demand fluctuations, optimize inventory levels, and prevent
stockouts.

17. CRM vs. SCM

• CRM (Customer Relationship Management): Focuses on customer satisfaction

and loyalty.

• SCM: Focuses on material, information, and financial flow in the supply chain.

18. Benchmarking

• Comparing performance with industry best practices.

• Involves setting standards, evaluating gaps, and implementing improvements.

19. Features of Benchmarking

• Continuous improvement

• Competitive analysis

• Goal setting and implementation

20. Outsourcing

• Contracting third parties to perform logistics or manufacturing tasks.

• Benefits: Focus on core activities, cost savings, flexibility.

21. Value Addition in SCM

• Enhancing product or service appeal through packaging, speed, customization,

etc.

• Leads to higher customer satisfaction and competitive advantage.

22. Demand Chain Management (DCM)

• Extension of SCM focusing on demand-side activities.

• Starts with the customer and works backward to supply chain planning.

23. Growth of SCM in National and International Scenarios

National Scenarios (e.g., India):

• Rapid Growth:

The Indian logistics and supply chain sector is one of the largest globally and is
experiencing rapid growth, with projections reaching $380 billion by 2025.

• Technological Advancements:

The industry is leveraging technology to increase efficiency, including adopting AI,

automation, and data analytics.

• E-commerce Impact:

The rise of e-commerce is significantly impacting the industry, requiring increased focus
on last-mile delivery and managing higher order volumes.

• Infrastructure Development:

Government initiatives and investments in infrastructure like roads, railways, and ports
are improving logistics efficiency and supporting international trade.

• Job Opportunities:

The expanding sector offers numerous job opportunities, with a skilled workforce in
demand.

International Scenarios:

• Global Trade Growth:

The global logistics market is expected to reach $445.8 billion by 2027, driven by factors
like increasing global trade and e-commerce.

• Supply Chain Resilience:

Companies are focusing on building resilient supply chains to manage disruptions and
uncertainties, including using scenario planning and improving visibility.

• Technology Adoption:

Technological advancements like AI, automation, and cloud computing are

transforming global supply chains, leading to increased efficiency and cost savings.

• Sustainability Concerns:

Logistics and supply chain management are increasingly focusing on sustainability,

including reducing carbon emissions and promoting responsible sourcing.

• International Collaboration:
Companies are partnering with international entities and leveraging global networks to
expand their reach and optimize their operations.

Key Trends:

• Automation:

Increased use of robots, drones, and other automated systems in warehouses and
transportation.

• Data Analytics:

Utilizing data analytics to improve demand forecasting, optimize inventory

management, and enhance decision-making.

• Cloud Computing:

Leveraging cloud-based solutions for data storage, sharing, and application

deployment.

• Sustainability:

Implementing sustainable practices throughout the supply chain, from sourcing to

delivery.

• E-commerce Growth:

Continued expansion of e-commerce and the need to adapt supply chain strategies to
meet evolving customer demands.