Assignment On Supply Chain Management

Course code: ACC-324 Course Title: Taxation Submitted to Wahida Akther Course Instructor Submitted by Grou !ame: The "#G#!$S o% &&A !ame I$ 'a(lul )arim *aihan +,,+,+,+42 -d. Ahadu//aman +,,+,+,+3+ Abdul A0i0 +,,+,+,+21 Gulam Sar2ar +,,+,+,,3, Ash%a4ur *ahman *umon +,,+,+,+4+ Sec-C5 24th batch

$e artment o% &usiness Administration "eadin( 6ni7ersity5 Sylhet $ate o% Submission: Au(ust 25 2,+2

1: Definitions of Supply chain management

According to the Council of Supply Chain Management Professionals (CSCMP), Supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. It also includes the crucial components of coordination and collaboration ith channel partners, hich can be suppliers, intermediaries, third!party service providers, and customers. In essence, supply chain management integrates supply and demand management ithin and across companies. More recently, the loosely coupled, self!organi"ing net or# of businesses that cooperate to provide product and service offerings has been called the $%tended $nterprise. Supply chain management (SCM) is the management of a net or# of interconnected businesses involved in the ultimate provision of product and service pac#ages re&uired by end customers Global Supply Chain Forum - Supply Chain Management is the integration of #ey business processes across the supply chain for the purpose of adding value for customers and sta#eholder A supply chain is a net or# of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains e%ist in both service and manufacturing organi"ations, although the comple%ity of the chain may vary greatly from industry to industry and firm to firm. Supply chain management is typically vie ed to lie bet een fully vertically integrated firms, here the entire material flo is o ned by a single firm and those here each channel member operates independently. 'herefore coordination bet een the various players in the chain is #ey in its effective management. Cooper and $llram compare supply chain management to a ell! balanced and ell!practiced relay team. Such a team is more competitive hen each player #no s ho to be positioned for the hand!off. 'he relationships are the strongest bet een players ho directly pass the baton, but the entire team needs to ma#e a coordinated effort to in the race.

: A typical Supply chain

A typical supply chain may involve many participants. (ut some orders may pass through only a fe . )ot all participants ill be in all supply chains. It ill depend on the needs of the customer and the roles of the participants fulfilling these needs.

!: Supply Chain Stages

A typical supply chain process may involve a variety of stages. 'he supply chain stages include, Suppliers Manufacturers *istributors+ ,holesalers Customers -etailers
100

Su

lier

-anu%acturer

$istributor

*etailer

Customer

Su

lier

-anu%acturer

$istributor

*etailer

Customer

Su

lier

-anu%acturer

$istributor

*etailer

Customer

Figure 2.1: Supply Chain Stages

Source: Chopra, Sunil and Meindl, Peter. Supply Chain Management: Strategy, Planning, and Operation, 2nd ed. India: Pearson Prentice Hall, 2007 (21)

$ach stage supply chain is connected through the flo

of product, information, and funds. 'his

flo often occurs in both directions and may be managed by one of the stages or an intermediary. 'he appropriate design of supply chain depends on both the customers. needs and the roles played by the stages involved. 'he se&uence of the stages is depicted in figure /.0.

": Process #ie$ of Supply Chain

A Supply chain is a se&uence of processes and flo s that ta#e place ithin and bet een different stages and combined to fill a customer need for a product. 'here are t o different ays to vie the processes performed in a supply chain. Cycle 1ie Push Pull 1ie

"%1: Cycle #ie$ of Supply Chain Process All supply chain processes can be bro#en do n into the follo ing four process cycles and also are sho n in the figure /./. Customer order cycle -eplenishment cycle Manufacturing cycle Procurement cycle Customer Order Cycle Customer

&etailer
Replenishment Cycle

Distributor
Manufacturing Cycle

Manufacturer Procurement Cycle

Supplier
Figure 2.2 : Supply Chain Process Cycles Source: Chopra, Sunil and Meindl, Peter. Supply Chain Management: Strategy, Planning, and Operation, 2nd ed. India: Pearson Prentice Hall, 2007 (27)

$ach cycle occurs at the interface bet een t o successive stages of the supply chain. 'he five stages thus result in four supply chain processes cycles. )ot every supply chain ill have all four cycles clearly separated.

"% : Push-Pull #ie$ of Supply Chain Process All processes in a supply chain fall in to one of t o categories depending on the timing of their e%ecution relative to end customer demand. ,ith pull processes e%ecution is initiated in response to a customer order. ,ith push processes e%ecution is initiated in anticipation of customer order. 'he pictorial presentation of push pull vie is given in the figure /.2.

Push+Pull (oundary Push Process

Pull Process

Process 1

Process Process 3 1 2

Process k

Process k+1

Process N1

Process N

Customer 7rder Arrives Figure 2.3: Push/Pull View of the Supply Chain Source: Chopra, Sunil and Meindl, Peter. Supply Chain Management: Strategy, Planning, and Operation, 2nd ed. India: Pearson Prentice Hall, 2007 (29)

': A()antages of Supply Chain Management

Corporations have turned increasingly, to global sources for their supplies. 'his globali"ation of supply management has forced companies to loo# for more effective ays to coordinate the flo of materials into and out of the company. SCM has allo ed business no adays to not 3ust have productivity advantage alone but also on value advantage. As Martin Christopher in his boo#, 4ogistics and Supply Chain Management5 Strategies for -educing Cost and Improving Service6 states, 6Productivity advantage gives a lo er cost profile and the value advantage gives the product or offering a differential 6plus6 over competitive offerings.6 'hrough ma%imi"ing added value and also reduce the cost in the same time, more innovation can be added to the product and process.

Mass manufacturing offers productivity advantage but through effective supply chain management, mass customi"ation can be achieved. ,ith mass customi"ation, customers are given the value advantage through fle%ible manufacturing and customi"ed adaptation.Product life cycles also can be improved through effective use of SCM. Companies and distribution channels compete more today on the basis of time and &uality. Ma#ing a defect!free product and selling it to customer faster and more reliably than the competition is no longer seen as a competitive advantage but simply as a re&uirement in the mar#et. Customers demand products consistently delivered faster, e%actly on time and damage. ith no

*: Supply Chain Decisions

,e classify the decisions for supply chain management into t o broad categories !! strategic and operational. As the term implies, strategic decisions are made typically over a longer time hori"on. 'hese are closely lin#ed to the corporate strategy (they sometimes the corporate strategy), and guide supply chain policies from a design perspective. 7n the other hand, operational decisions are short term, and focus on activities over a day!to!day basis. 'he effort in these types of decisions is to effectively and efficiently manage the product flo in the 8strategically8 planned supply chain. 'here are four ma3or decision areas in supply chain management5 0) location, /) production, 2) inventory, and 9) transportation (distribution), and there are both strategic and operational elements in each of these decision areas.

a+ ,ocation Decisions
'he geographic placement of production facilities, stoc#ing points, and sourcing points is the natural first step in creating a supply chain. 'he location of facilities involves a commitment of resources to a long!term plan. 7nce the si"e, number, and location of these are determined, so are the possible paths by hich the product flo s through to the final customer. 'hese decisions are of great significance to a firm since they represent the basic strategy for accessing customer mar#ets, and ill have a considerable impact on revenue, cost, and level of service. 'hese decisions should be determined by an optimi"ation routine that considers production costs, ta%es, duties and duty dra bac#, tariffs, local content, distribution costs, production limitations, etc. Although location decisions are primarily strategic, they also have implications on an operational level

b+ Pro(uction Decisions
'he strategic decisions include hat products to produce, and hich plants to produce them in, allocation of suppliers to plants, plants to *C6s, and *C6s to customer mar#ets. As before, these decisions have a big impact on the revenues, costs and customer service levels of the firm. 'hese decisions assume the e%istence of the facilities, but determine the e%act path through hich a product flo s to and from these facilities. Another critical issue is the capacity of the manufacturing facilities!!and this largely depends the degree of vertical integration ithin the firm. 7perational decisions focus on detailed production scheduling. 'hese decisions include the construction of the master production schedules, scheduling production on machines, and e&uipment maintenance. 7ther considerations include or#load balancing, and &uality control measures at a production facility. c+ -n)entory Decisions 'hese refer to means by hich inventories are managed. Inventories e%ist at every stage of the supply chain as either ra materials, semi!finished or finished goods. 'hey can also be in!process bet een locations. 'heir primary purpose to buffer against any uncertainty that might e%ist in the supply chain. Since holding of inventories can cost any here bet een /: to 9: percent of their value, their efficient management is critical in supply chain operations. It is strategic in the sense that top management sets goals. ;o ever, most researchers have approached the management of inventory from an operational perspective. 'hese include deployment strategies (push versus pull), control policies !!! the determination of the optimal levels of order &uantities and reorder points, and setting safety stoc# levels, at each stoc#ing location. 'hese levels are critical, since they are primary determinants of customer service levels. (+ .ransportation Decisions 'he mode choice aspects of these decisions are the more strategic ones. 'hese are closely lin#ed to the inventory decisions, since the best choice of mode is often found by trading!off the cost of using the particular mode of transport ith the indirect cost of inventory associated ith that mode. ,hile air shipments may be fast, reliable, and arrant lesser safety stoc#s, they are e%pensive. Mean hile shipping by sea or rail may be much cheaper, but they necessitate holding relatively large amounts of inventory to buffer against the inherent uncertainty associated ith them. 'herefore customer service levels and geographic location play vital roles in such decisions. Since transportation is more than 2: percent of the logistics costs, operating efficiently ma#es good economic sense. Shipment si"es (consolidated bul# shipments versus 4ot!for!4ot), routing and scheduling of e&uipment are #ey in effective management of the firm6s transport strategy

/: Problems in Supply Chain Management

Supply chain management must address the follo ing problems5

Distribution 0et$or1 Configuration5 number, location and net or# missions of suppliers, production facilities, distribution centers, arehouses, cross!doc#s and customers. Distribution Strategy5 &uestions of operating control (centrali"ed, decentrali"ed or shared)< delivery scheme, e.g., direct shipment, pool point shipping, cross doc#ing, *S* (direct store delivery), closed loop shipping< mode of transportation, e.g., motor carrier, including truc#load, 4'4, parcel< railroad< intermodal transport, including '7=C (trailer on flatcar) and C7=C (container on flatcar)< ocean freight< airfreight< replenishment strategy (e.g., pull, push or hybrid)< and transportation control (e.g., o ner!operated, private carrier, common carrier, contract carrier, or 2P4). .ra(e-Offs in ,ogistical Acti)ities5 'he above activities must be ell coordinated in order to achieve the lo est total logistics cost. 'rade!offs may increase the total cost if only one of the activities is optimi"ed. =or e%ample, full truc#load (='4) rates are more economical on a cost per pallet basis than less than truc#load (4'4) shipments. If, ho ever, a full truc#load of a product is ordered to reduce transportation costs, there ill be an increase in inventory holding costs hich may increase total logistics costs. It is therefore imperative to ta#e a systems approach hen planning logistical activities. 'hese trades!offs are #ey to developing the most efficient and effective 4ogistics and SCM strategy. -nformation5 Integration of processes through the supply chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc. -n)entory Management5 >uantity and location of inventory, including ra or#!in!progress (,IP) and finished goods. materials,

Cash-Flo$5 Arranging the payment terms and methodologies for e%changing funds across entities ithin the supply chain.

Supply chain e%ecution means managing and coordinating the movement of materials, information and funds across the supply chain. 'he flo is bi!directional

2: Functions
Supply chain management is a cross!function approach including managing the movement of ra materials into an organi"ation, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organi"ation and to ard the end!consumer. As organi"ations strive to focus on core competencies and becoming more fle%ible, they reduce their o nership of ra materials sources and distribution channels. 'hese functions are increasingly being outsourced to other entities that can perform the activities better or more cost

effectively. 'he effect is to increase the number of organi"ations involved in satisfying customer demand, hile reducing management control of daily logistics operations. 4ess control and more supply chain partners led to the creation of supply chain management concepts. 'he purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement. Strategic

Strategic net or# optimi"ation, including the number, location, and si"e of (istribution centers, and facilities.

arehousing,

Strategic partnerships ith suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross (oc1ing, direct shipping, and thir(-party logistics. Pro(uct life cycle management, so that ne and e%isting products can be optimally integrated into the supply chain and capacity management activities. -nformation technology chain operations. ,here!to!ma#e and hat!to!ma#e!or!buy decisions. Aligning overall organi"ational strategy ith supply strategy. It is for long term and needs resource commitment.

.actical

Sourcing contracts and other purchasing decisions. Production decisions, including contracting, scheduling, and planning process definition. Inventory decisions, including &uantity, location, and &uality of inventory. 'ransportation strategy, including fre&uency, routes, and contracting. 3enchmar1ing of all operations against competitors and implementation of best practices throughout the enterprise. Milestone payments. =ocus on customer demand.

Operational

*aily production and distribution planning, including all nodes in the supply chain.

Production scheduling for each manufacturing facility in the supply chain (minute by minute). *emand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast ith all suppliers. Sourcing planning, including current inventory and forecast demand, in collaboration all suppliers. Inbound operations, including transportation from suppliers and receiving inventory. Production operations, including the consumption of materials and flo of finished goods. 7utbound operations, including all fulfillment activities, arehousing and transportation to customers. 7rder promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers. ith

4: Supply Chain Mo(eling Approaches

' o levels of decisions re&uire a different perspective. 'he strategic decisions are, for the most part, global or 8all encompassing8 in that they try to integrate various aspects of the supply chain. Conse&uently, the models that describe these decisions are huge, and re&uire a considerable amount of data. 7ften due to the enormity of data re&uirements, and the broad scope of decisions, these models provide appro%imate solutions to the decisions they describe. 'he operational decisions, mean hile, address the day to day operation of the supply chain. 'herefore the models that describe them are often very specific in nature. *ue to their narro perspective, these models often consider great detail and provide very good, if not optimal, solutions to the operational decisions. 'o facilitate a concise revie of the literature, and at the same time attempting to accommodate the above polarity in modeling, e divide the modeling approaches into three areas !!! )et or# *esign, ??-ough Cut8 methods, and simulation based methods. 'he net or# design methods, for the most part, provide normative models for the more strategic decisions. 'hese models typically cover the four ma3or decision areas described earlier, and focus more on the design aspect of the supply chain< the establishment of the net or# and the associated flo s on them. 8-ough cut8 methods, on the other hand, give guiding policies for the operational decisions. 'hese models typically assume a 8single site8 (i.e., ignore the net or#) and add supply chain characteristics to it, such as e%plicitly considering the site6s relation to the others in the net or#. Simulation methods are a method by hich a comprehensive supply chain model can be analy"ed, considering both strategic and operational elements. ;o ever, as ith all simulation models, one can only evaluate the effectiveness of a pre!specified policy rather than develop ne ones. Metho(s of Supply Chain Management

0et$or1 Metho( 'hese methods determine the location of production, stoc#ing, and sourcing facilities, and paths the product(s) ta#e through them. Such methods tend to be large scale, and used generally at the inception of the supply chain. 'he earliest or# in this area, although the term 8supply chain8 as not in vogue, as by Geoffrion an( Gra)es. 'hey introduce a multicommodity logistics net or# design model for optimi"ing annuali"ed finished product flo s from plants to the *C6s to the final customers. @eoffrion and Po ers A0BB2C later give a revie of the evolution of distribution strategies over the past t enty years, describing ho the descendants of the above model can accommodate more echelons and cross commodity detail. 'he net or#!design based methods add value to the firm in that they lay do n the manufacturing and distribution strategies far into the future. It is imperative that firms at one time or another ma#e such integrated decisions, encompassing production, location, inventory, and transportation, and such models are therefore indispensable. &ough Cut Metho(s 'hese models form the bul# of the supply chain literature, and typically deal ith the more operational or tactical decisions. Most of the integrative research (from a supply chain conte%t) in the literature seems to ta#e on an inventory management perspective. In fact, the term 8Supply Chain8 first appears in the literature as an inventory management approach. 'he thrust of the rough cut models is the development of inventory control policies, considering several levels or echelons together. 'hese models have come to be #no n as 8multi!level8 or 8multi!echelon8 inventory control models. =or a revie the reader is directed to 1ollman et al. Although current research in multi!echelon based supply chain inventory problems sho s considerable promise in reducing inventories ith increased customer service, the studies have several notable limitations. First5 these studies largely ignore the production side of the supply chain. 'heir starting point in most cases is a finished goods stoc#pile, and policies are given to manage these effectively. Since production is a natural part of the supply chain, there seems to be a need ith models that include the production component in them. Secon(5 even on the distribution side, almost all published research assumes an arborescence structure, i. e. each site receives re!supply from only one higher level site but can distribute to several lo er levels. .hir(, researchers have largely focused on the inventory system only. In logistics!system theory, transportation and inventory are primary components of the order fulfillment process in terms of cost and service levels. 'herefore, companies must consider important interrelationships among transportation, inventory and customer service in determining their policies.

Fourth, most of the models under the 8inventory theoretic8 paradigm are very restrictive in nature, i.e., mostly they restrict themselves to certain ell #no n forms of demand or lead time or both, often &uite contrary to hat is observed. 'he preceding sections are a selective overvie of the #ey concepts in the supply chain literature. =ollo ing is a list of recommended reading for a &uic# introduction to the area.

16: De)elopments in Supply Chain Management

Si% ma3or movements can be observed in the evolution of supply chain management studies5 Creation, Integration, and @lobali"ation (4avassani et al., /::Da), Speciali"ation Phases 7ne and ' o, and SCM /.:. a+ Creation 7ra 'he term supply chain management as first coined by a E.S. industry consultant in the early 0BD:s. ;o ever, the concept of a supply chain in management as of great importance long before, in the early /:th century, especially ith the creation of the assembly line. 'he characteristics of this era of supply chain management include the need for large!scale changes, re!engineering, do nsi"ing driven by cost reduction programs, and idespread attention to the Fapanese practice of management. b+ -ntegration 7ra 'his era of supply chain management studies as highlighted ith the development of $lectronic *ata Interchange ($*I) systems in the 0BG:s and developed through the 0BB:s by the introduction of $nterprise -esource Planning ($-P) systems. 'his era has continued to develop into the /0st century ith the e%pansion of internet!based collaborative systems. 'his era of supply chain evolution is characteri"ed by both increasing value!adding and cost reductions through integration. c+ Globali8ation 7ra 'he third movement of supply chain management development, the globali"ation era, can be characteri"ed by the attention given to global systems of supplier relationships and the e%pansion of supply chains over national boundaries and into other continents. Although the use of global sources in the supply chain of organi"ations can be traced bac# several decades (e.g., in the oil industry), it as not until the late 0BD:s that a considerable number of organi"ations started to integrate global sources into their core business. 'his era is characteri"ed by the globali"ation of supply chain management in organi"ations ith the goal of increasing their competitive advantage, value!adding, and reducing costs through global sourcing. (+ Speciali8ation 7ra9Phase One: Outsource( Manufacturing an( Distribution

In the 0BB:s industries began to focus on Hcore competenciesI and adopted a speciali"ation model. Companies abandoned vertical integration, sold off non!core operations, and outsourced those functions to other companies. 'his changed management re&uirements by e%tending the supply chain ell beyond company alls and distributing management across speciali"ed supply chain partnerships. 'his transition also re!focused the fundamental perspectives of each respective organi"ation. 7$Ms became brand o ners that needed deep visibility into their supply base. 'hey had to control the entire supply chain from above instead of from ithin. Contract manufacturers had to manage bills of material ith different part numbering schemes from multiple 7$Ms and support customer re&uests for or# !in!process visibility and vendor!managed inventory (1MI). 'he speciali"ation model creates manufacturing and distribution net or#s composed of multiple, individual supply chains specific to products, suppliers, and customers ho or# together to design, manufacture, distribute, mar#et, sell, and service a product. 'he set of partners may change according to a given mar#et, region, or channel, resulting in a proliferation of trading partner environments, each ith its o n uni&ue characteristics and demands.

e+ Speciali8ation 7ra9Phase .$o: Supply Chain Management as a Ser)ice Speciali"ation ithin the supply chain began in the 0BD:s ith the inception of transportation bro#erages, arehouse management, and non!asset!based carriers and has matured beyond transportation and logistics into aspects of supply planning, collaboration, e%ecution and performance management. At any given moment, mar#et forces could demand changes from suppliers, logistics providers, locations and customers, and from any number of these speciali"ed participants as components of supply chain net or#s. 'his variability has significant effects on the supply chain infrastructure, from the foundation layers of establishing and managing the electronic communication bet een the trading partners to more comple% re&uirements including the configuration of the processes and or# flo s that are essential to the management of the net or# itself. Supply chain speciali"ation enables companies to improve their overall competencies in the same ay that outsourced manufacturing and distribution has done< it allo s them to focus on their core competencies and assemble net or#s of specific, best!in!class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency. 'he ability to &uic#ly obtain and deploy this domain!specific supply chain e%pertise ithout developing and maintaining an entirely uni&ue and comple% competency in house is the leading reason hy supply chain speciali"ation is gaining popularity.

7utsourced technology hosting for supply chain solutions debuted in the late 0BB:s and has ta#en root primarily in transportation and collaboration categories. 'his has progressed from the Application Service Provider (ASP) model from appro%imately 0BBD through /::2 to the 7n! *emand model from appro%imately /::2!/::G to the Soft are as a Service (SaaS) model currently in focus today.

11: Supply chain business process integration

Successful SCM re&uires a change from managing individual functions to integrating activities into #ey supply chain processes. An e%ample scenario5 the purchasing department places orders as re&uirements become #no n. 'he mar#eting department, responding to customer demand, communicates ith several distributors and retailers as it attempts to determine ays to satisfy this demand. Information shared bet een supply chain partners can only be fully leveraged through process integration. Supply chain business process integration involves collaborative or# bet een buyers and suppliers, 3oint product development, common systems and shared information. According to 4ambert and Cooper (/:::), operating an integrated supply chain re&uires a continuous information flo . ;o ever, in many companies, management has reached the conclusion that optimi"ing the product flo s cannot be accomplished ithout implementing a process approach to the business.

Customer relationship management Customer service management *emand management 7rder fulfillment Manufacturing flo management Supplier relationship management Product development and commerciali"ation -eturns management

Much has been ritten about demand management. (est!in!Class companies have similar characteristics, hich include the follo ing5 a) Internal and e%ternal collaboration b) 4ead time reduction initiatives c) 'ighter feedbac# from customer and mar#et demand d) Customer level forecasting 7ne could suggest other #ey critical supply business processes stated by 4ambert such as5 hich combine these processes

a. Customer service management b. Procurement c. Product development and commerciali"ation d. Manufacturing flo management+support e. Physical distribution f. 7utsourcing+partnerships g. Performance measurement a+ Customer ser)ice management process Customer -elationship Management concerns the relationship bet een the organi"ation and its customers. Customer service is the source of customer information. It also provides the customer ith real!time information on scheduling and product availability through interfaces ith the company6s production and distribution operations. Successful organi"ations use the follo ing steps to build customer relationships5

determine mutually satisfying goals for organi"ation and customers establish and maintain customer rapport produce positive feelings in the organi"ation and the customers

b+ Procurement process Strategic plans are dra n up ith suppliers to support the manufacturing flo management process and the development of ne products. In firms here operations e%tend globally, sourcing should be managed on a global basis. 'he desired outcome is a in! in relationship here both parties benefit, and a reduction in time re&uired for the design cycle and product development. Also, the purchasing function develops rapid communication systems, such as electronic data interchange ($*I) and Internet lin#age to convey possible re&uirements more rapidly. Activities related to obtaining products and materials from outside suppliers involve resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage, handling and &uality assurance, many of hich include the responsibility to coordinate ith suppliers on matters of scheduling, supply continuity, hedging, and research into ne sources or programs. c+ Pro(uct (e)elopment an( commerciali8ation ;ere, customers and suppliers must be integrated into the product development process in order to reduce time to mar#et. As product life cycles shorten, the appropriate products must be developed and successfully launched ith ever shorter time!schedules to remain competitive. According to

4ambert and Cooper (/:::), managers of the product development and commerciali"ation process must5 0. coordinate ith customer relationship management to identify customer!articulated needs< /. select materials and suppliers in con3unction ith procurement, and 2. develop production technology in manufacturing flo to manufacture and integrate into the best supply chain flo for the product+mar#et combination. (+ Manufacturing flo$ management process 'he manufacturing process produces and supplies products to the distribution channels based on past forecasts. Manufacturing processes must be fle%ible to respond to mar#et changes and must accommodate mass customi"ation. 7rders are processes operating on a 3ust!in!time (FI') basis in minimum lot si"es. Also, changes in the manufacturing flo process lead to shorter cycle times, meaning improved responsiveness and efficiency in meeting customer demand. Activities related to planning, scheduling and supporting manufacturing operations, such as or#!in!process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites and ma%imum fle%ibility in the coordination of geographic and final assemblies postponement of physical distribution operations.

e+ Physical (istribution 'his concerns movement of a finished product+service to customers. In physical distribution, the customer is the final destination of a mar#eting channel, and the availability of the product+service is a vital part of each channel participant6s mar#eting effort. It is also through the physical distribution process that the time and space of customer service become an integral part of mar#eting, thus it lin#s a mar#eting channel ith its customers (e.g., lin#s manufacturers, holesalers, retailers). f+ Outsourcing:partnerships 'his is not 3ust outsourcing the procurement of materials and components, but also outsourcing of services that traditionally have been provided in!house. 'he logic of this trend is that the company ill increasingly focus on those activities in the value chain here it has a distinctive advantage, and outsource everything else. 'his movement has been particularly evident in logistics here the provision of transport, arehousing and inventory control is increasingly subcontracted to specialists or logistics partners. Also, managing and controlling this net or# of partners and suppliers re&uires a blend of both central and local involvement. ;ence, strategic decisions need to be ta#en centrally, ith the monitoring and control of supplier performance and day!to!day liaison ith logistics partners being best managed at a local level.

g+ Performance measurement $%perts found a strong relationship from the largest arcs of supplier and customer integration to mar#et share and profitability. 'a#ing advantage of supplier capabilities and emphasi"ing a long! term supply chain perspective in customer relationships can both be correlated ith firm performance. As logistics competency becomes a more critical factor in creating and maintaining competitive advantage, logistics measurement becomes increasingly important because the difference bet een profitable and unprofitable operations becomes more narro . A.'. Jearney Consultants (0BDK) noted that firms engaging in comprehensive performance measurement reali"ed improvements in overall productivity. According to e%perts, internal measures are generally collected and analy"ed by the firm including 0. Cost /. Customer Service 2. Productivity measures 9. Asset measurement, and K. >uality. $%ternal performance measurement is e%amined through customer perception measures and 8best practice8 benchmar#ing, and includes 0) customer perception measurement, and /) best practice benchmar#ing. Components of Supply Chain Management are 0. Standardi"ation /. Postponement 2. Customi"ation

1 : .heories of supply chain management

Currently there is a gap in the literature available on supply chain management studies5 there is no theoretical support for e%plaining the e%istence and the boundaries of supply chain management. A fe authors such as ;alldorsson, et al. (/::2), Jetchen and ;ult (/::G) and 4avassani, et al. (/::Db) have tried to provide theoretical foundations for different areas related to supply chain by employing organi"ational theories. 'hese theories include5 -esource!(ased 1ie (-(1) 'ransaction Cost Analysis ('CA) Jno ledge!(ased 1ie (J(1) Strategic Choice 'heory (SC')

 Agency 'heory (A') Institutional theory (In') Systems 'heory (S') )et or# Perspective ()P)

1!: Supply chain sustainability

Supply chain sustainability is a business issue affecting an organisation.s supply chain or logistics net or# and is fre&uently &uantified by comparison ith S$C; ratings. S$C; ratings are defined as social, ethical, cultural and health footprints. Consumers have become more a are of the environmental impact of their purchases and companies. S$C; ratings and, along ith non! governmental organisations (A)@7Cs), are setting the agenda for transitions to organically!gro n foods, anti!s eatshop labour codes and locally!produced goods that support independent and small businesses. (ecause supply chains fre&uently account for over LKM of a company.s carbon footprintA0:C many organisations are e%ploring ho they can reduce this and thus improve their S$C; rating.

1": Components of supply chain management integration

'he management components of SCM 'he SCM components are the third element of the four!s&uare circulation frame or#. 'he level of integration and management of a business process lin# is a function of the number and level, ranging from lo to high, of components added to the lin# ($llram and Cooper, 0BB:< ;oulihan, 0BDK). Conse&uently, adding more management components or increasing the level of each component can increase the level of integration of the business process lin#. 'he literature on business process re!engineering,A00C buyer!supplier relationships,A0/C and SCMA02C suggests various possible components that must receive managerial attention hen managing supply relationships. 4ambert and Cooper (/:::) identified the follo ing components5 Planning and control ,or# structure 7rgani"ation structure Product flo facility structure Information flo facility structure Management methods

 Po er and leadership structure -is# and re ard structure Culture and attitude

&eferences:-

1! http"##en!$ikipedia!org#$iki#%upply&Chain&Management 2! http"##en!$ikipedia!org#$iki#'n(entory&control&system 3! http"##lcm!csa!iisc!ernet!in#scm#supply&chain&intro!html )! http"##$$$!$ork!com#in(entory management systems 12*# +! http"##en!$ikipedia!org#$iki#Customer&relationship&management ,! http"##en!$ikipedia!org#$iki#%er(ice&management