Achieving Competitive Edge through Supply Chain Management
Predicting the future of operation is not easy but
interesting to estimate. Take an example of telecom
industry in India. A decade ago it take years to get the
single landline connection But today many of us take the
cell phone in our hand as granted. In today’s world
Completion is increasing day by day in maturing market.
Consumer want best deal and Company want best profit
and that where Operation management comes in.
 Company like Nimble take advantages of
short production cycles and global markets to
create new products and new business models.
 Dell is the best example its dynamic
connections to roughly 60 core suppliers
allow the Pc maker to cycle inventory through
assembly facilities in six hours.
 By 2020 RFID chips will become ubiquitous,
providing unprecedented information about
manufacturing process and customer
behaviour.
The above example is of OPERATION
MANAGEMENT which is defined as the design,
operation and improvement of the system that creates and
delivers the firm’s primary product and service
Clearchus of Sparta, in 401 B.C, recognised the value of
supply in his speech to the small Greek army he led a civil
war with Artaxerxes II. His army of 14000 was 1300 miles
from Greece when the Battle of Cunaxa began. The survival
of is army depend upon the supply.
Even today supply chain is one of the most important parts
of Army. Indian able to win the war of 1971 with Pakistan
and able to caught nearly 50000 of them only because of the
reason that the Indian cut their supply because of which they
left with no food and has to surrender
Today company has to continuously renovate there
strategizes to stay ahead in completion they has to undergo a
continuous changes it's no longer good enough simply to
have customer points of contact limited to your sales person
and their procurement department. Companies need to work
on multiple levels engineers working together to
troubleshoot process problems on their manufacturing lines
and to improve productivity; marketing teams discussing
new products and trend; and management working closely
together to develop mutually beneficial business
opportunities
Supply chain management is a vast field but this paper of
mine is mainly covering
“THE BEST PRACTICES IN SUPPLY CHAIN
MANAGEMENT ACROSS INDUSTRIES’’
INTEGRATED SUPPLY CHAIN- An Integrated Supply
Chain (ISC) is one that has full responsibility for the
planning and management of all activities involved in end-
to-end supply chain end supply chain processes, including
direct sourcing and procurement, conversion/manufacturing,
and all logistics management activities. In an integrated
supply chain, more employees actually can be involved in
solving problems for customers, visiting them at their sites
or working alongside commercial staff to find new solutions.
For a global organization, this adds tremendous resources.
For example, when one of dow-corning cooperation key
personal care customers faced a production shutdown when
their raw material shipment from Belgium was delayed in
transit across the ocean; there plant in Korea found a way to
solve the customers’ problem. Although they had never
made this polymer previously, within a week they had
produced five tons of polymer, got it qualified by the
customer and shipped enough product to the customer to
continue production.
TRANSPORTATION-Transportation is one of the areas
which is miss by the company while maintain cost of supply
chain management. If transportation costs fluctuated
drastically, as we seen in the bulk shipping and tanker
markets, the whole supply chain of a product will have to be
re-examined and stocks and production sites may will be
relocated to suit the new transportation cost structure.
Over the past two years, there's been an increase in supply
chain transportation costs of around 20 percent and therefore
various steps should be taken by the company to reduce cost.
1. E-TRANSPORTATION-Global transportation
routes also can be auctioned. Take, for example. The
Netherlands based clinical nutrition manufacturer
Royal Numico. Which makes use of an Internet-
based contract tendering system from Freight
Traders, a subsidiary of confectionery and foodstuff
giant Mars, McLean, Va.
2. COUNTRY SKIPPING-This is used by U.S.
manufacturers as a way of reducing the cost of
coast-to-coast shipments, Rather than being shipped
individually via a carrier such as FedEx or UPS,
multiple packages are consolidated into container
loads or truckloads for the long overland portion of
the journey. These packages are split apart upon
crossing the border of the country that is their final
destination. Individual items are then handed over to
FedEx or UPS for the cheaper intra-zone journey to
their ultimate destination.
For example Country skipping allows Emerson to
consolidate transatlantic shipments in the U.S., delivering
them to Europe as a single consignment. Split apart upon
arrival in Europe, the individual packages continue to their
destination a tactic that has yield the [euro] 7.38-miIlion
saving in just over two years, with Precision Software
providing both the global trade management and the
consolidation/deconsolidation application.
LOCAL FACTOR: - The transportation implication is
amplified by current environment concern. Longer
transportation increases the cost burden of the company for
Co2 emission it also increase the carbon credit and for this
purpose Local production to the local customer should be
promoted. It also helps to understand the customer better and
reduced the delivery time.
For example: To improve the Customer service, service lead
time and reduce transportation usage and cost of mobile
company can used service shops methods where maximum
repair can be taken by local shops and only few non
repairable should be sent to service centre
RFID SENSING: -RFID is quiet effective in supply chain
management and new trends are coming up in this
technology the RFID tag is doing more than just keeping
track of the location of an asset in real time; it is also now
capable of managing and monitoring the status of assets that
are critical to operating a business, including the
environmental operating and storage conditions as well as
how effectively that asset is being utilized.
Till now a temperature sensor is used with RFID and it can
be used for sensing the temperature of material like chemical
and fruits. “But, there is a range of sensor technology
beginning to emerge that will allow company to monitor
moisture and humidity levels, shock, PH levels and volatile
emissions and gases.
For example, in the commercial aerospace industry one
maintenance provider uses sensors to track the temperature
and humidity in storage areas where canisters and other
sensitive parts are stored. Instead of sending in a technician
to get a status update, the system receives a constant flow of
data. If the temperature or humidity deviates beyond a safe
operating range, the system sends a real-time alert so that it
can be addressed.
In addition to monitoring conditions, the information being
collected by these systems can be tied to business
intelligence and analytics software to help identify
bottlenecks in processes, to keep a repair process on track by
managing an asset and to track whether scheduled
maintenance or calibration was performed on a tool or part
so that it’s ready to be used when it’s needed.
For example, the asset management system of one
manufacturer using RFID is tied to the company’s ERP
system. It keeps track of hot parts that are needed in the
facility to complete jobs. When a hot part is read by an RFID
reader at the receiving dock, the system automatically directs
it to the workstation where it’s needed.
PLANNING A SCENARIO: - No one can predict the
future but what the organisations do is they make strategies
and evaluate the various possibilities how the market behave
in future. Generally companies relies on historical data to
make strategies for the future but what they forget is
situation market and other variables changes a lot during this
period and that for the same reason descriptions of the future
should incorporate multiple plausible interpretations that go
beyond the precedent of the realized past.
Plans with single views of future doesn’t work anymore and
various possibility should taken under consideration
To make sure that our future plan should work we have
think and plan according to the different scenario. Scenarios
are
Methodically constructed stories about alternative future
environments in which today’s decisions might play out. It
help decision maker to consider various possibilities that
either present in market today or in future
Application of scenario thinking can help supply chain
leaders in multiple ways.
1. It can help them identify critical market uncertainties
that directly impact the current and future product
demand and customer service needs. A deeper
understanding of such forces is key before supply
chain challenges and strategies can be considered in
full view of what could be expected in the future.
2. The analysis of scenarios from a supply chain
perspective helps uncover potential opportunities and
challenges that must be considered before making any
long-term investment in supply chain design and
capabilities.
OUTSOURCING AND MULTISOURCING : - out
sourcing is the act of moving some form of a international
activities and decision making to an external providers. It
help the organisation to transfer the company there non core
business and concentrate on their core business and thus
company can create a competitive advantages and increase
their profit of margin.
As generally outsourcing is done to developing market it
also helps in cost reduction.
Multisourcing is the new concept which is replacing
outsourcing It can be defined as a process where
organisations mix and match various kinds of providers to
obtain better services — goes beyond quick fix cost-cutting,
enabling capability-building, global expansion, increased
agility and competitive advantage. In other word it is a
process where organisation outsources not to a single
supplier but to multiple suppliers.
Multisourcing give the company advantages of flexibility of
supplier. Here company can choose organisation according
to their strength and then outsource accordingly. But this
technology is not problems free and brings various problems
for business and management. The larger the service
provider in multisourcing the more complex it become.
Traceability of each service provider and making sure that
each provide required work in required quantity with in time
period become difficult task to handle in multisourcing
LEAN PRODUCTION: - Lean production is an integrated
set of activity designed to achieve high-volume production
using minimal inventories of raw material, work in progress,
and finished goods. In other way all the activities work in
synchronisation with each other to achieve just in time
concept so that maximum utilisation of time and cost can be
achieved.
To make sure Lean production work properly we has to
make sure everything work in a proper manner and we has to
make sure
A proper communication is set from supplier to customer.
 SUPPLIER: - To maintain the efficient Lean
production supplier should be well connected with
the company and able to provide supply within a
short period of time.
For example:-BMW is working on a system where it able to
request a production change from suppliers only a few hour
before the part are needed on the BMW line. Suppliers are
accustomed to lock their plan week ahead of delivery. But
than forecasting become challenge, the manufactured
forecast it production six month in advance but then with
only 60% accuracy. Accuracy become 80% on six week
ahead and become 100% four day ahead of production.
This help the BMW to achieve two things:-
1. Able to forecast with 100% accuracy
2. Make use of that accuracy and time to make last
minutes changes
 CROSS-FUNTIONING: - To make sure that Lean
production does not go out of synchronization we
need people. Who will able to work in a various
department and not stick to a single department and
this way we able to solve various problem between
inter department
 CUTTING FAT: - Where Lean production mean
cut everything that does not add value cutting fat
mean make use of technologies to reduce the cost of
value added service
1. Choosing the most economical channel with
minimum time
2. Packing is done in such a way that empty
travelling can be avoided
KNOW YOUR CUSTOMERS :-Most companies belief
that they know there customer and try to segment the market
to reach to customer. But reaching the customer is not
enough company must also understand there problem and
demand. What the customer needs is what the customer
wants to buy. Answering these questions requires a mix of
human interaction and technology. Even some times
companies conduct various survey to know there customer
what then those survey are limited to few customer. What
about other customer
How do you know what is selling today in each store? How
does this apply to companies that don't sell to retailers? The
answer is technology-assisted collaboration. For example
some of the retail shop owner message there customer about
various product available in there shop to inform them what
they are selling in store.
It starts with demand signals knowing what quantities and
mix of products are selling in each store or region for you,
your customer or your customer's customer. This requires
linking point-of-sale and in-store inventory information to
demand replenishment networks that may be several layers
deep. Supply chain integration and visibility applications can
be the conduit making this channel collaboration possible.
It’s here where forecast comes in to existences if you able to
predict what your customer want with great deal of accuracy
you can come with product much earlier than your
competitor and can achieve a edge over others.
CONCLUSION: -These are the some of the techniques
used in the industry none of the techniques can be used in
every industry all techniques are industry and conditional
dependant but looking the current situation one can be sure
in this competitive world future lies with supply chain
management and companies has to develop new strategies
and innovate them self to stay ahead.