Briefly describe and analyze the supply chain The supply chain of the company can be presented as shown

on picture 1.

Picture 1. Supply chain of IPCA The company has a compound supply chain structure, as not only local company is involved, but the global office as well. The structure of the Russian office (and the roles of the regional offices) of the company is as follows (Picture 2): ELENA IMPEX - Moscow - supplying medicine to Moscow national

distributors, direct supply to hospitals and central district clients ELENA IMPEX filial - St. Petersburg - supplying to distributors &

hospitals in North-West region

 regions

ELENA IMPEX filial - Voronezh - supplying to distributors & hospitals to

Black Earth Soil region ELENA IMPEX filial - Samara - supplying to Volga - Vyatka region ELENA IMPEX filial - Krasnodar - supplying to South & Kavkaz region ELENA IMPEX filial - Ekaterinbugr - supplying to Ural region ELENA IMPEX - filial - Novosibisk - supplying to Siberian & Far East

Picture 2. The structure of the Russian office of IPCA

Consider whether the organization of the supply chain is close to traditional

one (discussed in the class), or includes coordination and cooperation between supplier and customer; analyze whether it is subject (or can be subject) to negative influence of bullwhip effect, and if not, point out what in particular eliminates this influence.

A traditional supply chain has distinctive structure and looks like the following (Pictures 3 and 4):

Picture 3. Example of a traditional supply chain

Picture 4. Example of a traditional supply chain As we can see from the structure of IPCAs supply chain, it has some of the traditional structure elements, but still it has more decentralized, compound, branched structure, and could include some coordination and cooperation between supplier and customer, so the answer is diverse. The company could be influenced by the bullwhip effect due to its structure. If the informational system in the supply chain is not running smoothly there could be differences in demand forecasts on different levels of supply chain which will lead to negative consequences of bullwhip effect.

 Consider what (and how) could be changed in the supply chain under consideration to improve its performance Considering ways to improve the performance of the supply chain lets look at the supply management more closely. The process of supply management in the company is the following: 1. 2. 3. factories; 4. 5. Factories will procure raw materials & manufacture; Manufactured medicines dispatch to export division ; ELENA IMPEX will give order of medicines to IPCA rep office; IPCA rep office will send the order to IPCA Intenational division; IPCA International division will forward the order to the respective

Timewise, the supply chain looks like the following:

1. 2. 3. 4. 5. 6. 7.

Manufacturing of medicines takes 4- 6 weeks 3-5 days from factory to the air cargo company 2- 3 days air shipment will go to Moscow 3-5 days custom clearance 5-10 days for certification of medicine Dispatch of goods to the filials 8 - 14 days Filial will make LCAO delivery of the medicine the same day

So, it takes from 49 to 79 days from the start of production of the product to be received by the Filial, which is quite a long time and it should be rearranged somehow to reduce this time period and increase productivity of the company as well as the income and would become a competitive advantage of the company. For that reason, the company should make some changes to the structure and operations in order to reduce the time of each phase of supply chain.

It could be improvement of operational system, using professional planning tools, etc. Also, changes can be made in delivery process to make maximum optimization, for example, reorganization of transportation system of the company. Some technological innovations could cause the reducing time of medicines manufacturing. And for sure, there should be a distinctive procedure of dispatch of goods to the filials, as 14 days is too much time for the goods to be delivered. Maybe, the company should consider outsourcing some of those functions.

Essay: Supply chain management

Nowadays, major trends in the management of procurement and supply of an industrial enterprise, according to K. Lysons and M. Gillingham, are [1]: - The transformation of evaluation of suppliers, their selection and management of a key activity for the procurement; - The establishment of strategic procurement centers as a competitive advantage by selecting partners for supply chains and the impact on them; - Enhancing the role of strategic alliances with suppliers; - Increase in exchange of information between members of the supply chain; Coordination of the suppliers through their associations [1].

We consider it appropriate to take a closer look on the relevant today and widely practiced in the procurement activities of large companies and corporations process supply chain management. The fact is that in economic theory and practice theres no consensus on this issue, even with regard to the terminology used (chain / supply chain / supply / suppliers, etc.). A number of authors consider supply chain management to be a consistent participation and relationships in the logistics industry enterprise of its various services and departments. On the other hand, many people understand the term "supply chain management" as a synonym for "logistics" or "integrated logistics" [2]. One of the supply managers of "General Electric", on the international conference, which was held by the U.S. National Association of Procurement Management, revealing the contents of the proposed concept "supply chain management," said that "the business will require special attention to the flow of material resources of mother earth to the consumer. It will be even more needed because of the increasing importance of the time resource" [3]. We think that an understanding of the need for and content of the process of supply chain management is well illustrated by the words of Mark Keogh, manager of a large industrial company, who said that "one of the automobile companies has a staff of

10 engineers with full-time job, with a lot of production experience, who are studying the possibility of suppliers and, on this basis, improve production practices. Corporations leading procurement activities were deeply interested in the production process of its suppliers right up to the evaluation of suppliers of their supplier." [5] Supply Chain Management is one of the most misunderstood business terms in the last few years, is an integration of each element of the supply, design, production and distribution from the point of extraction of raw materials till the interaction with consumer. The key word of this concept is the integration. We define the term "supply chain management" as the management of the materials flow, goods and services from the point of extraction of raw minerals to the delivery of products to the consumer. Supply Services are the key functional groups in the supply chain, and sometimes even manage them" [5]. Ph. Kotler and K.L. Keller noted that "supply chains are more extended channels [than marketing channels], ranging from suppliers of raw materials to manufacturers of various components of finished products delivered to end customers. ... Supply chain is a system of providing value. Each company is a link in the overall value generated by the supply chain. When the company absorbs the competitors or teams up with higher or lower organizations in the chain, its aim is to increase the attributable value of its "link" in the supply chain" [6]. Supply (suppliers) chain management, from our point of view, can be expressed as the completion of the following steps: 1. Careful selection of production plants which are consistently feedstock material, semi-finished components for the final product, produced by the company the initiator of the organization of the supply chain. Enterprises, chain members provide (each on its stage of production chain of the final finished products) the best option to provide an intermediate product. 2. Association of selected suppliers into the association of suppliers of the consumer company (buyer) with development of common to all of the members of the

supply chain charter or set of rules and standards of conduct for their interaction in the process of material from the state of the source material to the state of completed finished product. 3. Development of quality standards of operations and activities, and products for all chain members as well as the formation of plans for their technological and financial cooperation. 4. Regulation and function of the supply chain or the manufacturer of the final product, or specially created body to the priority of the final purchaser, which allows you to actively use the methods of logistics in the chain. 5. Constant economic analysis of indicators for the established supply chain and the periodic determination of the efficiency of its work. According to such respected analyst firms as AMR Research and Forrester Research, in supply chain management (in case of their correct alignment) businesses get the following results: - Reduction of the cost and time of processing the order from 20 to 40%; - Reduction of the time to put the product in the market from 15 to 30%; - Reduction of the cost of purchases from 5 to 15%; - Reduction of stocks from 20 to 49%; - Reduction of the production costs from 5 to 15%; - Increase in profit from 5 to 15% [9]. It should be noted that in recent years global international supply chains have been actively built, the effect of which is provided by the international communication of information and computer systems.

Sources of information: 1. ., . : . 6- . . ., 2005. . 166. 2. .., .., .., .. : . / . .. . ., 2008. . 31. 3. , (, , 1992 .). 4. Keough M. Buying your way to the top // Director. 1994. Apr. . 75. 5. .., .., ., .-. : / . . .. ; . . .. . , 2008. . 60. 6. ., .. -. 12- . ., 2006. . 53. 7. http://www.cscmp.com. Annual conference program: Glossary Oakbrook / IL.:

Council of logistics management. N.Y., 1998. P. 28. 8. http://www.cscmp.com. Supply chain and logistics terms and glossary / Council of supply chain management professionals. N.Y., 2005. P. 96. 9 .., .., .., .. . . . 32.