The document provides information about supply chain management. It discusses key topics like definition of supply chain management, objectives of SCM, elements and levels of SCM like strategic, tactical and operational. It also covers important SCM factors like inventory management, warehousing, and transportation. Finally, it presents a case study on the supply chain of Namdhari Fresh, an Indian company that produces and retails fresh fruits and vegetables through owned production and retail stores.

1. SUPPLY CHAIN
MANAGEMENT
Presented by
Akash Rana
3rd year
09A641

2. INTRODUCTION
A supply chain is a network of facilities and distribution option
that performs the functions of procurement of materials trans-
formation of these materials into intermediate and finished pro-
ducts and the distribution of these finished product to customer

3. Definition of scm
The supply chain is the network of organizations that are involved
through upstream and down Stream linkages, in different process
and activities that produce value in the form of products and ser-
vices in the hand of ultimate customer.

4. Objective of scm
 Quality
 Speed
 Dependability
 Flexibility
 Cost

5. Elements of scm
 Customer
 Planning
 Purchasing
 Inventory
 Production
 Transportation

6. Levels of scm
• Supply Chain Design
Strategic • Resource Acquisition
• Long Term Planning (1 Year ++)
• Production/ Distribution Planning
Tactical • Resource Allocation
• Medium Term Planning (Qtrly,Monthly)
• Shipment Scheduling
Operational • Resource Scheduling
• Short Term Planning (Weekly,Daily)

7. FACTORE OF SCM
 Inventory management
 Warehousing
 Transportation

8. INVANTORY
Inventory or stock as it is more commonly called
is defined as the stored accumulation of material
resources in a transformation system.Some time
the inventory is also used to describe any capital
Transforming resources,such as rooms in a
hotel
Or cars in a vehicles- hire firm.

9. Why inventories are necessary
 To satisfy the customer demands without time
lag.
 To cover time required for procurement of
material.
 To cater to fluctuations in demand.
 Seasonal demand of products.
 Production constraints of suppliers.
 To retain supplier goodwill.

10. Type of Inventory
 Buffer inventory
 Cycle inventory
 De-coupling inventory
 Anticipation inventory
 Pipeline inventory

11. Inventory Control
Inventory control is the technique of maintaining the size
of the inventory at some desired level keeping in view the
best economic interest of an organization.

12. Objectives of inventory
control
 Protection against fluctuations in demand
 Better use of men, machines and material
 Protection against fluctuations in output
 Control of stock volume
 Control of stock distribution

13. Major activities of inventory
control
 Planning the inventories.
 Procurement of inventories.
 Receiving and inspection of inventories.
 Storing and issuing the inventories.
 Recording the receipt and issues of
inventories.

14. Major activities of inventory
control (cont’d)
 Physical verification of inventories;
 Follow-up function;
 Material standardization and substitution.

15. WAREHOUSE
Storage or warehousing provides the place utility
as part of logistics for any business and along
with
Transportation is a critical component of customer
services standard.

17. Need For Warehouse
 Seasonal Production
Agricultural commodities are harvested during
certain seasons their consumption or use takes
places through out the year. Therefore, these is
need for proper storage for there commodities
from where they can be supplied as and when
required.

18. Seasonal demand
There are certain goods, which are demanded
seasonally like woolen garments in winters or
umbrellas in the rainy season.The production
of those goods taken places through out the
year to meet the seasonal demand. therefore
there is a need to store these goods in a ware
house to make them available at the time need.

19. Large-scale production
In case of manufactured goods, now a day
production takes places to meet the existing
as well as future demand of the product,
manufacturers to enjoy the benefits of large
scale, production, which is more economical
So the finished products, which are produced
on a large scale, need to be stored properly
till they are cleared by sales.

20. Quick supply
Both industrial as well as agricultural goods
are produced at some specific places but
consumed through out the country.Therefore
it is essential to stock there goods near the
place of consumption, so that without making
any delay these goods are made available to
the consumers at the time of their need.
time of their need.

21. Continuous Production
Continuous production of goods in factories
requires adequate supply of raw materials,so
there is a need to keep sufficient quantity of
stock of raw material in the warehouse to
ensure continuous production.

22. Prices Stabilization
To maintain a reasonable level of the price of
goods in the market there is a need to keep
sufficient stock in warehouse,scarcity in supply
of goods may increase their price in the market
again excess production and supply may also
lead to fall in prices of the product. By main-
taining a balance of supply of goods, warehou-
sing leads to price stabilization.

23. Types of Warehouses
Warehouses have been classified as under:
 Private Warehouses
 Public Warehouses
 Government Warehouses
 Bonded Warehouses
 Co-operative Warehouses

24. Private Warehouse
The warehouses which are owned and managed by the
manufacturers or traders to store, exclusively, their
own stock of goods are known as private warehouses.
Generally these warehouse are constructed by the far-
mers near their fields, by wholesalers and retailers
Near their business centres and by manufacturers near
their factories. The design and the facilities provided
there in are according to the nature of products to be
stored.

26. Public Warehouse
The warehouses which are run to store goods of the general
public are known as public warehouse. Any one can store his
goods in these warehouse on payment of rent. An individual,
a partnership firm or a company may own these warehouses.
To start such warehouse a license from the government is
required. The government also regulates the function and ope
-rations of warehouse. Mostly these warehouse are used by
manufacturers, wholesalers, exporter, impoter government
agencies, etc

28. Government Warehouse
These warehouses are owned, managed and controlled
by central and state governments or public corporation
or local authorities both government and private enter
-prises may use these warehouse to store their goods.
Central warehousing corporation of India, state ware-
housing corporation of food. Corporation of India are
example of agencies maintaining government
Warehouse.

30. Bonded warehouse
These warehouses are owned, managed and controlled
by government as well as private agencies. Private bon-
ded warehouses have to obtain license from the govern
-ment. Bonded warehouses are used to store imported
goods for which import duty is yet to be paid. Incase of
imported goods the importers are not allowed to take
away the goods from the ports until such duty is paid.
These warehouses are generally owned by dock autho-
rities and found near the ports.

32. Co-operative Warehouse
These warehouses are owned, managed and controlled
by co-operative societies. They provided warehousing
facilities at the most economical rates to the members
of their society.

34. Warehousing is becoming significant to
achieve the following objectives:
 To reduce inventory
 To reduced labor costs
 To increase storage capacity
 To increase customer service
 To increase inventory accuracy

40. TRANSPORTATION
Transportation is the process of strategically
managing the procurement, movement and
storage of materials (and related information
flows) through the organization and its
marketing channels

41. Factors affecting
transportation performance
TRANSPORTATION
Transportation performance
Cost Speed Consistency

42. Cost of transportation
The payment for movement between two geographical
locations and expenses related to administration and
maintaining in-transit inventory.

43. Speed of transportation
o The time required to complete a specific
movement.
o Transport firms capable of providing faster
services normally charge higher rate.
o The faster the transportation services, shorter
is the time interval during which the inventory
is in transit and unavailable.

44. Consistency of
transportation
o Refers to variations in time required to perform a
specific movement over a number of shipments.
o Consistency is a measure of dependability of
transportation.
o Inconsistency in transportation leads to
inventory safety stocks required to protect
against unpredictable service breakdowns.

45. Transportation Functionality
Product Movement Product Storage
45

46. Product Movement
• Primary function is the movement up and
down the value chain.
• As transportation uses temporal, financial
and environmental resources, the
movement of materials should take place
only when it enhances the product value.

47. Product Storage
• Temporary storage through vehicles becomes
expensive as in-transit storage is required to be
moved again in a short duration of time.
• Sometimes temporary storage becomes
advantageous as the cost of unloading and
reloading the product in a warehouse may exceed
the daily charge of storage in transportation
vehicles.
• Many times where the warehouse space is limited,
utilizing transportation vehicles becomes a viable
option.

48. Principles of Transportation
Economies of Scale Economies of Distance
48

49. Economies of Scale
 Transportation cost per unit of weight
decreases when the size of the shipment
increases i.e. shipments that utilize the
entire vehicle’s capacity like truck load
(TL) cost less per kg than less than truck
load (LTL) shipments

50. Economies of Distance
 Transportation cost per unit of distance
increases at a decreasing rate as distance
increases. Also called “Tapering Principle”

51. Features of Different Modes
of Transportation
Mode of transportation
Modes of Transportation
Rail Highway Water Pipeline Air
51

52. Rail
 Capability to transport large shipments
economically with more frequency.
 Bulk industries and heavy manufacturing
use railways more frequently.

53. Highway
 Growth of motor carrier industry has
resulted into door-to-door operating
flexibility and speed of inter-city
movement.
 Compared to railways, motor carriers have
relatively small fixed investments in
terminal facilities and operate on publicly
maintained highways.
 High labor cost.

54. Water
• Capacity to move extremely large shipments.
• Typically bulk commodities such as mining ,
chemicals, cement, and certain selected
agricultural products are transported by ocean
going vessel.
• Unless the point of origin and point of
destination are adjacent to a waterway, it needs
to be supplemented by rail or trucks.

55. Pipelines
 Used for transporting natural gas,manufactured
chemicals, pulverized dry bulk materials such
as cement and flour via hydraulic suspensions,
sewage and water within the cities and
municipalities.
 As pipelines are not labor intensive, variable
operating cost is extremely low once the
pipeline is constructed.
 No empty container or vehicle that must be returned

56. Air
 Though the freight cost is very high, the
same may be trade-off with reduced
warehousing or inventory.
Airfreight is justified in following situations:
(a)High value products
(b)Perishables
(c)Limited marketing period.
(d)Emergency.

57. ENTERPRICE RESOURCE
PLANNING
Enterprise resource planning (ERP) System integrate
internal and external management information across
an entire organization, embracing finance/account,
manufacturing sales and services, customer
relationship
management ,etc. ERP systems automate this activity
with an integrated software application. Their purpose
is to facilitate the flow of information between all busi-
ness function inside the boundaries of the organization
and manage the connections to outside stakeholder.

58. Advantage of ERP
 Sales forecasting, this allows inventory
optimization ERP
 Chronological history of every transaction
through relevant data compilation in every
area of operation
 Oder tracking, from acceptance through
fulfillment

59. Case Study
Supply Chain of Namdhari
Fresh
Food and Vegetable

60. Namdhari Fresh
 Started in 2000, Bidali near Bangalore
 Unit of namdhari seeds
 Diversified into production, retail, and
export
 Turnover RS.60 crore in 2009-10
 14 retails stores in Bangalore

61. Production
 More than 1800 production house in
different agro- climatic zones
 Network with more than 2000 farmers
under contract farming
 Test, weight and transport in refrigerator
vehicles to pack house
 Demand from export segment 3-4 month
in advance

62. Packing
 Check quality, weight and store in per cool
chambers
 Sorting, grading, and packing in pack
house on table
 Proper dress code of worker

63. Supply of two segments
Retail
Export

64. Retail
 Weekly order from retails shops indicating daily
requirements
 Packed produce is placed in crates and stored in
cold chambers
 Store wise creates (names printed) for easy
identification, packing and transportation
 Transported to stored before 6 am by refrigerated
vehicles
 Unsold stock information is conveyed to adjust to
nest day of supply
 Incase of any change, convey by mail or phone

65. Export
 Order received in advance specifying
parameters
 Grading and packing according to
specification
 Transport by ship and air

66. Supply chain of fruits and
vegetables under own
production
 4-6 types of vegetable cut and packed into
different packet
 Similar salads and spouts
 Supply along with fruits and vegetable

67. Other Product
 Groceries, beverages, dairy products, bakery item,
organic product, juices, and sugar free product.
 Sell goods quality products of few companies
 Order twice a week from store to central processing
unit and forwarded to dealers
 Dealers supply the order quantity directly to stores
twice in a week
 Some groceries and also sold under own brand name
 Grocery procured from market cleaned, graded,
weighted and packed

68. IMPORT
Import some exotic fruits directly from
Australia, Canada, USA and other
country.

69. Conclusion
Supply chain management - delivering the right
product to the right place, at the right time and
at the right price - is one of the most powerful
engines of business transformation.

70. THANK YOU