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A supply chain is a network 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 exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm. Supply chain management is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm and those where each channel member operates independently. Therefore coordination between the various players in the chain is key in its effective management. Cooper and llram !"##$% compare supply chain management to a well&balanced and well&practiced relay team. Such a team is more competitive when each player knows how to be positioned for the hand&off. The relationships are the strongest between players who directly pass the baton 'stick(, but the entire team needs to make a coordinated effort to win the race. )elow is an example of a very simple supply chain for a single product, where raw material is procured from vendors, transformed into finished goods in a single step, and then transported to distribution centers, and ultimately, customers. *ealistic supply chains have multiple end products with shared components, facilities and capacities. The flow of materials is not always along an arborescent network, various modes of transportation may be considered, and the bill of materials for the end items may be both deep and large.


To simplify the concept, supply chain management can be defined as a loop+ it starts with the customer and ends with the customer. All materials, finished products, information, and even all transactions flow through the loop. ,owever, supply chain management can be a very difficult task because in the reality, the supply chain is a complex and dynamic network of facilities and organizations with different, conflicting ob-ectives. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm. .nlike commercial manufacturing supplies, services such as clinical supplies planning are very dynamic and can often have last minute changes. Availability of patient kit when patient arrives at investigator site is very important for clinical trial success. This results in overproduction of drug products to take care of last minute change in demand. */0 manufacturing is very expensive and overproduction of patient kits adds significant cost to the total cost of clinical trials. An integrated supply chain can reduce the overproduction of drug products by efficient demand management, planning, and inventory management. Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own ob-ectives and these are often conflicting. 1arketing2s ob-ective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals. 1any manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. 3urchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization&&&there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such integration can be achieved.


The challenge of integrating and coordinating the flow of materials from multitude of suppliers, including offshore, and similarly managing the distribution of the finished product by way of multiple intermediaries. Achieving cost reduction or profit improvement at the expense of their supply chain partners does not make companies more competitive. Transferring cost upstream or downstream leads to 5logistics myopia6 as all costs ultimately will make way to the final market place to be reflected in the price paid by the end user. Therefore, the leading edge companies seek to make the supply chain as a hole more competitive through the value it adds and the cost it reduces overall. Thus today the real competition is not the companies against the companies but rather supply chain against supply chain.

Supply Chain 1anagement 'SC1( is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer re7uirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work&in&process inventory, and finished goods from point&of&origin to point&of&consumption. According to the Council of Supply Chain Management Professionals (CSCMP), a professional association that developed a definition in 4889, Supply Chain 1anagement 5encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities6. :mportantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third&party service providers, and customers. :n essence, Supply Chain 1anagement integrates supply and demand management within and across companies.

According to Cohen & Lee (19

Supply Chain 1anagement is 5The network of organizations that are having linkages, both upstream and downstream, in different processes and activities that produces and delivers the value in form of products and services in the hands of ultimate consumer.6 Thus a shirt manufacturer is a part of supply chain that extends up stream through the weaves of fabrics to the spinners and the manufacturers of fibers, and down stream through distributions and retailers to the final consumer. Though each of these organizations are dependent on each other yet traditionally do not closely cooperate with each other. An integrated supply chain management streamlines processes and increases profitability by delivering the right product to the right place, at the right time, and at the lowest possible cost. According to !aneshan & "arrison (#$$1) Supply Chain 1anagement is a 5systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer.6 Supply chain event management 'abbreviated as SC 1( is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. ;ith SC 1 possible scenarios can be created and solutions can be planned. Some e%perts distinguish supply chain management and logistics management, &hile others consider the terms to 'e interchangea'le( )rom the point of *ie& of an enterprise, the scope of supply chain management is usually 'ounded on the supply side 'y your supplier+s suppliers and on the customer side 'y your customer+s customers( Supply chain management is also a category of soft&are products(


Logistics Management <ogistics management is primarily concerned with optimizing flows within the organization. <ogistics is essentially a framework that creates a single plan for the flow of products and information through a business Supply Chain Management Supply Chain 1anagement deals with integration of all the partners in the value chain. Supply chain builds upon this framework and seeks to achieve linkage and coordination between process of other entities in the pipeline i.e. suppliers and costumers, and the organization it self.


The following are the five basic components of Supply Chain 1anagement+ 1( Plan,This is the strategic portion of SC1. =ou need a strategy for managing all the resources that go toward meeting customer demand for your product or service. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high 7uality and value to customers. #( Source,Choose the suppliers that will deliver the goods and services you need to create your product. 0evelop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services you receive from suppliers, including receiving shipments, verifying them, transferring them to your manufacturing facilities and authorizing supplier payments.


.( Ma/e,This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric&intensive portion of the supply chain, measure 7uality levels, production output and worker productivity. 0( 1eli*er,This is the part that many insiders refer to as logistics. Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments. 2( 3eturn,The problem part of the supply chain. Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products.


Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own ob-ectives and these are often conflicting. 1arketing2s ob-ective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals. 1any manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. 3urchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization&&&there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such integration can be achieved.

1oreover, shortened product life cycles, increased competition, and heightened expectations of customers have forced many leading edge companies to move from physical logistic management towards more advanced supply chain management. Additionally, in recent years it has become clear that many companies have reduced their manufacturing costs as much as it is practically possible. Therefore, in many cases, the only possible way to further reduce costs and lead times is with effective supply chain management. :n addition to cost reduction, the supply chain management approach also facilitates customer service improvements. :t enables the management of+ inventories, transportation systems and whole distribution networks so that organizations are able to meet or even exceed their customers2 expectations. The ma4or o'4ecti*e of supply chain management is to reduce or eliminate the buffers of inventory that exists between originations in chain through the sharing of information on demand and current stock levels. )roadly, an organization needs an efficient and proper supply chain management system so that the following strategic and competitive areas can be used to their full advantage if a supply chain management system is properly implemented. 1( )ulfillment of ra& materials, nsuring the right 7uantity of parts for production or products for sale arrive at the right time. This is enabled through efficient communication, ensuring that orders are placed with the appropriate amount of time available to be filled. The supply chain management system also allows a company to constantly see what is on stock and making sure that the right 7uantities are ordered to replace stock.

#( Logistics, The cost of transporting materials as low as possible consistent with safe and reliable delivery. ,ere the supply chain management system enables a company to have constant contact with its distribution team, which could consist of trucks, trains, or any other mode of transportation. The system can allow the company to track where the re7uired materials are at all times. As well, it may be cost effective to share transportation costs with a partner company if shipments are not large enough to fill a whole truck and this again, allows the company to make this decision. .( Smooth Production, nsuring production lines function smoothly because high&7uality parts are available when needed. 3roduction can run smoothly as a result of fulfillment and logistics being implemented correctly. :f the correct 7uantity is not ordered and delivered at the re7uested time, production will be halted, but having an effective supply chain management system in place will ensure that production can always run smoothly without delays due to ordering and transportation. 0( 5ncrease in 3e*enue & profit, nsuring no sales is lost because shelves are empty. 1anaging the supply chain improves a company flexibility to respond to unforeseen changes in demand and supply. )ecause of this, a company has the ability to produce goods at lower prices and distribute them to consumers 7uicker then companies without supply chain management thus increasing the overall profit. 2( 3eduction in Costs, Aeeping the cost of purchased parts and products at acceptable levels. Supply chain management reduces costs by increasing inventory turnover on the shop floor and in the warehouse controlling the 7uality of goods thus reducing internal and external failure costs and working with suppliers to produce the most cost efficient means of manufacturing a product.

6( Mutual Success, Among supply chain partners ensures mutual success. Collaborative planning, forecasting and replenishment 'C3C*( is a longer&term commitment, -oint work on 7uality, and support by the buyer of the supplierDs managerial, technological, and capacity development. This relationship allows a company to have access to current, reliable information, obtain lower inventory levels, cut lead times, enhance product 7uality, improve forecasting accuracy and ultimately improve customer service and overall profits. The suppliers also benefit from the cooperative relationship through increased buyer input from suggestions on improving the 7uality and costs and though shared savings. Consumers can benefit as well through higher 7uality goods provided at a lower cost.

Supply chain management is a cross&functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end&consumer. As corporations strive to focus on core competencies and become more flexible, they have reduced their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other corporations that can perform the activities better or more cost effectively. The effect has been to increase the number of companies involved in satisfying consumer demand, while reducing management control of daily logistics operations. <ess control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity. Several models have been proposed for understanding the activities re7uired managing material movements across organizational and functional boundaries. SCE* is a supply chain management model promoted by the Supply&Chain Council. Another model is the SC1 1odel proposed by the Flobal Supply Chain Corum 'FSCC(. Supply chain activities can be grouped into strategic, tactical, and operational levels of activities.

(a) Strategic, Strategic network optimization, including the number, location, and
size of warehouses, distribution centers and facilities.

Strategic partnership with suppliers, distributors, and customers,

creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third&party logistics.

3roducts design coordination, so that new and existing products can be

optimally integrated into the supply chain.

:nformation Technology infrastructure, to support supply chain


;here to make and what to make or buy decisions. (') 7actical, Sourcing contracts and other purchasing decisions. 3roduction decisions, including contracting, locations, scheduling, and planning process definition. :nventory decisions, including 7uantity, location, and 7uality of inventory. Transportation strategy, including fre7uency, routes, and contracting. )enchmarking of all operations against competitors implementation of best practices throughout the enterprise. and

(c) 8perational, 0aily production and distribution planning, including all nodes in the supply chain. 3roduction scheduling for each manufacturing facility in the supply chain 'minute by minute(.


0emand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers. Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers. :nbound operations, including transportation from suppliers and receiving inventory. 3roduction operations, including the consumption of materials and flow of finished goods. Eutbound operations, including transportation to customers. all fulfillment activities and

Erder promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers. 3erformance tracking of all activities.


An integrated supply chain management streamlines processes and increases profitability by delivering the right product to the right place, at the right time, and at the lowest possible cost. .nlike commercial manufacturing supplies, clinical supplies planning is very dynamic and can often have last minute changes. Availability of patient kit when patient arrives at investigator site is very important for clinical trial success. This results in overproduction of drug products to take care of last minute change in demand. */0 manufacturing is very expensive and overproduction of patient kits adds significant cost to the total cost of clinical trials. An integrated supply chain can reduce the overproduction of drug products by efficient demand management, planning, and inventory management. :mplementation of *3 system 'such as SA3( in */0 can have ma-or *E: by an efficient supply and inventory management system and also by reducing overproduction.


"o& 5ntegration 5s Achie*ed 5n Supply Chain9 Stage 1 Complete functional independence where each business function such as production or purchasing does its own thing in complete isolation from other business function. Cor instance, production function seeking to optimize its unit cost of manufacture by long production runs with out regard for build up of finished goods inventory and advance impact it will have on the warehousing as well as working capital. Stage ! Companies recognize the need of limited integration between ad-acent functions such as distribution and inventory management or purchasing and material control. Stage " A natural extension of stage two, leading to establishment and implementation of end& to&end integration. A concept of linkage and coordination is achieved. STAGE # The linkage achieved in stage three is extended upstream to suppliers and down stream to customers. :t represents true supply chain integration. This concept is also called Gco&managed inventoryD 'C1:(. Corce of supply chain management is on trust and cooperation and the recognition that is properly managed Gthe whole cane be greater then the sum of its partD. 5s Supply Chain Management Same As :ertical 5ntegration9 Ho. supply chain management is not the same as vertical integration. Iertical integration normally implies ownership of upstream suppliers and down stream customer. Ence, the vertical integration used to be describable strategy but increasingly the companies are focusing on their Gcore businessD i.e. the activities that they do really well and where they have a differential advantage. very thing else is Gout&sourcedD i.e. procured from outside the firm.



;e classify the decisions for supply chain management into two broad categories J Short term / <ong term decisions. As the term implies, short term decisions focus on activities over a day&to&day basis. En the other hand, long term decisions are made typically over a longer time horizon. These are closely linked to the corporate strategy and guide supply chain policies from a design perspective. There are four ma-or decision areas in supply chain management+ "(. <ocation, 4(. 3roduction, $(. :nventory, and 9(. Transportation 'distribution(, and there are both short term and long&term elements in each of these decision areas. "(. Location 1ecisions, The geographic placement of production facilities, stocking points, and sourcing points is the natural first step in creating a supply chain. The location of facilities involves a commitment of resources to a long&term plan. Ence the size, number, and location of these are determined, so are the possible paths by which the product flows through to the final customer. These decisions are of great significance to a firm since they represent the basic strategy for accessing customer markets, and will have a considerable impact on revenue, cost, and level of service. These decisions should be determined by an optimization routine that considers production costs, taxes, duties and duty drawback, tariffs, local content, distribution costs, production limitations, etc. Although location decisions are primarily long term they also have implications on short term level. 4(. Production 1ecisions The long term decisions include what products to produce, and which plants to produce them in, allocation of suppliers to plants, plants to 0C2s, and 0C2s to customer markets. As before, these decisions have a big impact on the revenues, costs and customer service levels of the firm. These decisions assume the existence of the facilities, but determine the exact path's( through


which a product flows to and from these facilities. Another critical issue is the capacity of the manufacturing facilities&&and this largely depends the degree of vertical integration within the firm. Short term decisions focus decisions focus on detailed production scheduling. These decisions include the construction of the master production schedules, scheduling production on machines, and e7uipment maintenance. Ether considerations include workload balancing, and 7uality control measures at a production facility. $(. 5n*entory 1ecisions, These refer to means by which inventories are managed. :nventories exist at every stage of the supply chain as either raw material, semi&finished or finished goods. They can also be in&process between locations. Their primary purpose to buffer against any uncertainty that might exist in the supply chain. Since holding of inventories can cost anywhere between 48 to 98 percent of their value, their efficient management is critical in supply chain operations. :t is long term in the sense that top management sets goals. ,owever, most researchers have approached the management of inventory from short term perspective. These include deployment strategies 'push versus pull(, control policies &&& the determination of the optimal levels of order 7uantities and reorder points, and setting safety stock levels, at each stocking location. These levels are critical, since they are primary determinants of customer service levels. 9(. 7ransportation 1ecisions, The mode choice aspect of these decisions is the more long term ones. These are closely linked 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 with the indirect cost of inventory associated with that mode. ;hile air shipments may be fast, reliable, and warrant lesser safety stocks, they are expensive. 1eanwhile 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 with them. Therefore customer service levels and geographic location play vital roles in such decisions. Since transportation is more than $8 percent of the logistics costs, operating efficiently makes good economic sense. Shipment sizes 'consolidated bulk shipments versus <ot&for& <ot(, routing and scheduling of e7uipment are key in effective management of the firm2s transport strategy.



Successful SC1 re7uires a change from managing individual functions to integrating activities into key supply chain processes. The purchasing department placed orders as re7uirements became appropriate and marketing, responding to customer demand, interfaced with several distributors and retailers and attempted to satisfy this demand. Shared information between supply chain partners can only be fully leveraged through process integration. 3rocess integration means collaborative working between buyers and suppliers, -oint product development, common systems and shared information. According to <ambert and Cooper '4888(, operating an integrated supply chain re7uires continuous information flows, which in turn assist to achieve the best product flows. ,owever, in many companies, such as $1, management has reached the conclusion that optimizing the product flows cannot be accomplished without implementing a process approach to the business. The key critical supply business processes stated by <ambert and Cooper are as follows+ 1( Customer ser*ice management process, Customer service provides the source of customer information. :t also provides the customer with real&time information on promising dates and product availability through interfaces with the company production and distribution operations #( Procurement process, Strategic plans are developed with suppliers to support the manufacturing flow management process and development of new products. :n firms where operations extend globally, sourcing should be managed on a global basis. The desired outcome is a win&win relationship, where both parties benefit, and reduction times in the design cycle and product development is achieved. Also, the purchasing function develops rapid communication systems, such as electronic data interchange and :nternet linkages to faster transfer possible re7uirements. Activities related to


obtaining products and materials from outside suppliers re7uires performing resource planning, supply sourcing, negotiation, order placement, inbound transportation, storage and handling and 7uality assurance Also, includes the responsibility to coordinate with suppliers in scheduling, supply continuity / research to new programmes. "$ Product de*elopment and commerciali;ation, ,ere, customers and suppliers must be united into the product development process, thus to reduce time to market. As product life cycles shorten, the appropriate products must be developed and successfully launched in ever shorter time&schedules to remain competitive. According to <ambert and Cooper, managers of the product development and commercialization process must+ a( coordinate with customer relationship management to identify customer&articulated needsK b( select materials and suppliers in con-unction with procurement, and c( develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the productLmarket combination 0( Manufacturing flo& management process, The manufacturing process is produced and supplied products to the distribution channels based on past forecasts. 1anufacturing processes must be flexible to respond to market changes, and must accommodate mass customization. Erders are processes on a -ust&in&time 'M:T( basis in minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times, meaning improved responsiveness and efficiency of demand to customers. Activities related to planning, scheduling and supporting manufacturing operations, such as work&in&process storage, handling, transportation, and time phasing of components, inventory at manufacturing sites and maximum flexibility in the coordination of geographic and final assemblies postponement of physical distribution operations.


%$ Physical 1istri'ution, This concerns movement of a finished productLservice to customers. :n physical distribution, the customer is the final destination of a marketing channel, and the availability of the productLservice is a vital part of each channel participant. :t is also through the physical distribution process that the time and space of customer service become an integral part of marketing, thus it links a marketing channel with its customers 'e.g. links manufacturers, wholesalers, retailers(. &$ 8utsourcing< Partnerships, Hot -ust outsourcing the procurement of materials and components, but also outsourcing of services that traditionally have been provided in&house. The logic of this trend is that the company will increasingly focus on those activities in the value chain where it has a distinctive advantage and everything else it will outsource. This movement has been particularly evident in logistics where the provision of transport, warehousing and inventory control is increasingly subcontracted to specialists or logistics partners. Also, to manage and control this network of partners and suppliers re7uires a blend of both central and local involvement. ,ence, strategic decisions need to be taken centrally with the monitoring and control of supplier performance and day&to&day liaison with logistics partners being best managed at a local level. '$ Performance Measurement, )y taking advantage of supplier capabilities and emphasizing a long& term supply chain perspective in customer relationships can be both correlated with firm performance. As logistics competency becomes a more critical factor in creating and maintaining competitive advantage, logistics measurement becomes increasingly important because the difference between profitable and unprofitable operations becomes narrower. As Aearney Consultants '"#B>( noted that firms engaging in comprehensive performance measurement realized improvements in overall productivity. According to internal measures are generally collected and analyzed by the firm including "( Cost, 4( Customer Service, $( 3roductivity measures, 9( Asset measurement, and >( NualityO..

Corce of supply chain management is on trust and cooperation and the recognition that is properly managed 2the whole cane be greater then the sum of its part2. )or e%ample, <et2s look at consumer packaged goods for an example of collaboration. :f there are two companies that have made supply chain a household word, they are ;al&1art and 3rocter / Famble. )efore these two companies started collaborating back in the 2B8s, retailers shared very little information with manufacturers. )ut then the two giants built a software system that hooked 3/F up to ;al&1art2s distribution centers. ;hen 3/F2s products run low at the distribution centers, the system sends an automatic alert to 3/F to ship more products. :n some cases, the system goes all the way to the individual ;al&1art store. :t lets 3/F monitor the shelves through real&time satellite link&ups that send messages to the factory whenever a 3/F item swoops past a scanner at the register. ;ith this kind of minute&to&minute information, 3/F knows when to make ship and display more products at the ;al&1art stores. Ho need to keep products piled up in warehouses awaiting ;al&1art2s call. :nvoicing and payments happen automatically too. The system saves 3/F so much in time, reduced inventory and lower order&processing costs that it can afford to give ;al&1art Plow, everyday pricesP without putting itself out of business.


Supply chain management software is possibly the most fractured group of software applications on the planet. ach of the five ma-or supply chain steps previously outlined composes dozens of specific tasks, many of which have their own specific software. Some vendors have assembled many of these different chunks of software together under a single roof, but no one has a complete package that is right for every company. )or e%ample, 1ost companies need to track demand, supply, manufacturing status, logistics 'i.e. where things are in the supply chain(, and distribution. They also need to share data with supply chain partners at an ever increasing rate. ;hile products from large *3 vendors like SapDs Advanced 3lanner and Eptimizer

'A3E( can perform many or all of these tasks, because each industry2s supply chain has a uni7ue set of challenges, many companies decide to go with targeted best of breed products instead, even if some integration is an inevitable conse7uence. !oal of installing SCM soft&are=s, )efore the :nternet came along, the aspirations of supply chain software devotees were limited to improving their ability to predict demand from customers and make their own supply chains run more smoothly. )ut the cheap, ubi7uitous nature of the :nternet, along with its simple, universally accepted communication standards have thrown things wide open. How, you can connect your supply chain with the supply chains of your suppliers and customers together in a single vast network that optimizes costs and opportunities for everyone involved. This was the reason for the )4) explosionK the idea that everyone you do business with could be connected together into one big happy, cooperative family. Ef course, reality isn2t 7uite that happy and cooperative, but today most companies share at least some data with their supply chain partners. The goal of these pro-ects is greater supply chain visibility. The supply chain in most industries is like a big card game. The players don2t want to show their cards because they don2t trust anyone else with the information. )ut if they showed their hands they could all benefit. Suppliers wouldn2t have to guess how many raw materials to order, and manufacturers wouldn2t have to order more than they need from suppliers to make sure they have enough on hand if demand for their products unexpectedly goes up. And retailers would have fewer empty shelves if they shared the information they had about sales of a manufacturer2s product in all their stores with the manufacturer. 3elationship 'et&een >3P and SCM, 1any SC1 applications are reliant upon the kind of information that is stored in the most 7uantity inside *3 software. Theoretically you could assemble the information you need to feed the SC1 applications from legacy systems 'for most companies this means xcel spreadsheets spread out all over the place(, but it can be nightmarish to try to get that information flowing on a fast, reliable basis from all the areas of the company. *3 is the battering ram that integrates all that information together in a single application, and


SC1 applications benefit from having a single ma-or source to go to for up& to&date information. 1ost C:EDs who have tried to install SC1 applications say they are glad they did *3 first. They call the *3 pro-ects Pputting your information house in order.P Ef course, *3 is expensive and difficult, so you may want to explore ways to feed your SC1 applications the information they need without doing *3 first. These days, most *3 vendors have SC1 modules so doing an *3 pro-ect may be a way to kill two birds with one stone. Companies will need to decide if these products meet their needs or if they need a more specialized system. Applications that simply automate the logistics aspects of SC1 are less dependent upon gathering information from around the company, so they tend to be independent of the *3 decision. )ut chances are, you2ll need to have these applications communicate with *3 in some fashion. :t2s important to pay attention to the software2s ability to integrate with the :nternet and with *3 applications because the :nternet will drive demand for integrated information. Cor example, if you want to build a private website for communicating with your customers and suppliers, you will want to pull information from *3 and supply chain applications together to present updated information about orders, payments, manufacturing status and delivery. 3oad'loc/s in installing SCM Soft&are=s, There are some hurdles which come in way while installing the SC1 softwareDs in the organizations. They are+ 1( !aining trust from your suppliers and partners,Supply chain automation is uni7uely difficult because its complexity extends beyond your company2s walls. =our people will need to change the way they work and so will the people from each supplier that you add to your network. Enly the largest and most powerful manufacturers can force such radical changes down suppliers2 throats. 1ost companies have to sell outsiders on the system. 1oreover, your goals in installing the system may be threatening to those suppliers, to say the least. )or e%ample, ;al&1art2s collaboration with 3/F meant that 3/F would assume more responsibility for inventory management, something retailers have

traditionally done on their own. ;al&1art had the clout to demand this from 3/F, but it also gave 3/F something in return&better information about ;al& 1art2s product demand, which helped 3/F manufacture its products more efficiently. To get your supply chain partners to agree to collaborate with you, you have to be willing to compromise and help them achieve their own goals. #( 5nternal resistance to change,:f selling supply chain systems is difficult on the outside, it isn2t much easier inside. Eperations people are accustomed to dealing with phone calls, faxes and hunches scrawled on paper, and will most likely want to keep it that way. :f you can2t convince people that using the software will be worth their time, they will easily find ways to work around it. =ou cannot disconnect the telephones and fax machines -ust because you have supply chain software in place. .( Many mista/es at first,There is a diabolical twist to the 7uest for supply chain software acceptance among your employees. Hew supply chain systems process data as they are programmed to do, but the technology cannot absorb a company2s history and processes in the first few months after an implementation. Corecasters and planners need to understand that the first bits of information they get from a system might need some tweaking. :f they are not warned about the system2s initial naivetQ 'simplicity(, they will think it is useless. :n one case, -ust before a large automotive industry supplier installed a new supply chain forecasting application to predict demand for a product, an automaker put in an order for an unusually large number of units. The system responded by predicting huge demand for the product based largely on one unusual order. )lindly following the system2s numbers could have led to inaccurate orders for materials being sent to suppliers within the chain. The company caught the problem but only after a demand forecaster threw out the system2s numbers and used his own. That created another problem+ Corecasters stopped trusting the system and worked strictly with their own data. The supplier had to fine&tune the system itself, and then work on reestablishing employees2 confidence. Ence employees understood that they would be merging their expertise with the system2s increasing accuracy, they began to accept and use the new technology.


Conclusions, ;hat has enabled the effective implementation of supply chain managementR The answer is found from the rapid developments in information and communications technologies. .se of databases, communication systems, and foremost advanced computer software are crucial for the development of a modern cost&effective supply chain management.


;e live in interesting times. 3owerful forces are re&shaping the global business scene+ financial and economic upheaval in the Car ast, <atin America / China is creating a tidal&wave of change in the competitive environment. Erganisations that once felt insulated from overseas low&priced competitors now find that they too must not only continue to constantly create new value for customers, but must do so at a lower price. To meet the challenge of simultaneously reducing cost and enhancing customer value re7uires a radically different approach to the way the business responds to marketplace demand. Ene of the keys to success is the creation of an agile supply chain on a worldwide scale. 7he Agile Supply Chain,

There is now widespread recognition of the role that supply chain management can play in enabling organisations to compete in volatile markets. ,owever, experience suggests that there are significant barriers both within the company and between its upstream and downstream partners in achieving the re7uired level of responsiveness across the chain as a whole. Continuous change is a phenomenon with which the supply chains have had to cope for some time. )ut due to high rate of competition in todayDs market the logistics environment of the new millennium will have to contend with+ i. ii. iii. ( turbulent markets that change rapidly and unpredictably, ( highly fragmented 2niche2 markets instead of mass markets, ( ever greater rates of technological innovation in products and processes,


iv. v. vi.

( shorter product life&cycles, ( growing demand for tailored products & 2mass customisation2, ( the delivery of complete 2solutions2 to customers, comprising products and services.

And all of the a'o*e to 'e achie*ed at less cost? These severe challenges mean that a new operating paradigm is needed. The key factor is agility & rapid strategic and operational adaptation to large scale, unpredictable changes in the business environment. Agility implies responsiveness from one end of the supply chain to the other. :t focuses upon eliminating the barriers to 7uick response, be they organisational or technical. Cigure " suggests that whilst there will still be conditions where lean concepts are appropriate, in particular where the product is standard and volume demand is high and predictable. :ncreasingly however these situations are tending to become fewer as the global forces we have described lead to higher levels of market volatility.

,ow do global supply chains achieve agilityR :n a sense the very process of globalisation has retarded agility. Cor example, many companies in their search for lower production costs have moved much of their manufacturing and assembly offshore. The main driver for such moves often being low labour costs. ,owever, in so doing they run the risk of extending

their lead&times significantly thus generating the need for more inventory in the pipeline. As a result their agility is reduced. Some organisations have actually sought to reverse this trend by bringing manufacturing back closer to their main markets & 0ell Computer being a case in point. Ether companies are using low cost sources of supply to manufacture products where there is a predictable demand and using more local, flexible facilities for producing less predictable, more volatile products. Sara, the successful Spanish fashion retailer, has followed a very similar strategy enabling it to respond more rapidly to changes in demand. To overcome the potential loss of agility through extended global supply chains, companies need to adopt a number of guiding principles+& 3emo*e the organisational 'arriers, Too many companies are hindered in their attempts to streamline their supply chains because of their out&molded organisational structures. :t is not possible to even contemplate a seamless global pipeline if there are 7uasi& independent national subsidiaries making their own decisions on sourcing, distribution facilities and inventory for example. Similarly, it is still the case that for many businesses the functional 2barons2 still wield significant power. As a result decisions are taken which are based on a narrow definition of 2optimisation2 & in other words the focus is on improving performance within a function without regard for its wider supply chain impact. Thus we find, for instance, that often factories are designed and built to maximise the economies of scale rather than to enhance flexibility of response. :n a global marketplace this tunnel vision can lead to a damaging loss of competitiveness. The solution has to be to re&engineer the organisation structure so that supply chains are managed on a truly integral basis with cross&functional teams being given the responsibility for managing the pipeline from source to final market.


Ma/e the supply chain the *alue chain, The idea that companies should focus on their core competencies is rapidly taking hold. As a result there is a greater willingness to out&source than was previously the case. This trend has been particularly observable in global corporations where there has been recognition that the complexity of managing a worldwide logistics chain re7uires specialist resources. There is now a great opportunity to start thinking of the supply chain as a value chain. *ather than accepting the conventional view that believes that all value&creating activities need to be conducted under the same corporate roof, forward&looking organisations are taking a different view. 3articularly as supply chains become global it will often make sense to move to a greater level of 2localisation2, i.e. the final finishing or configuration of the product being performed much closer to the point of demand. To enable this to be achieved on a global basis, specialist third party logistics service providers have emerged who can now act as extensions of the company2s value chain. :n structuring cost&effective and agile global supply chains the 7uestion of where in that chain the value creation should take place becomes crucial. )y working more closely with specialist providers, greater levels of customer value can often be achieved at less cost to the supply chain as a whole. ,ewlett 3ackard has adopted this concept for many of its products such as the 0esk Met printer, even going to the lengths of re&designing it so that a generic semi&finished global version could be built centrally with localisation being performed by regional partners. Shift the de-coupling point, A ma-or problem in all supply chains, but significantly worse for global business, is that they have little visibility of 2real2 demand. )ecause global supply chains tend to be extended with multiple echelons of inventory between the point of production and the final market place they tend to be forecast driven rather than demand driven. :n other words decisions on production and distribution are based upon forecasts or orders 'which themselves do not necessarily reflect demand but rather tend to be based on arbitrary 2rules2 such as re&order points and re&order 7uantities(.


The point to which real demand penetrates upstream in a supply chain is termed the decoupling point. These decoupling points also tend to dictate the form in which inventory is held. Thus in the uppermost example in Cigure 4 demand penetrates right to the point of manufacture and inventory is probably held in the form of components or materials. :n the lower example demand is only visible at the end of the chainK hence inventory will be in the form of finished product. :deally, information from the marketplace should flow as far upstream and in as close to real time as possible. :n this way all the parties in the supply chain work to the same information and reduce their dependency on the forecast. At the same time opportunities for postponing the final configuration of finished inventory should be investigated. The aim of the global supply chain should be to carry inventory in a generic form, i.e. standard semi& finished products awaiting final assembly or localisation. 1anaging the global supply chain re7uires a level of agility and responsiveness several magnitudes greater than that re7uired in the old model of 2local for local2 manufacturing. mphasis will increasingly have to be placed on creating a business model that recognises that competitive advantage is created through the management of the supply chain as a single entity rather than through fragmented, locally&focused decision making units. Cor the foreseeable future leadership in global markets will belong to those organisations that exhibit greater agility than their competitors.

The most notable is *adio Cre7uency :dentification, or *C:0. *C:0 tags are essentially barcodes on steroids. ;hereas barcodes only identify the product, *C:0 tags can tell what the product is, where it has been, when it expires, whatever information someone wishes to program it with. *C:0 technology is going to generate mountains of data about the location of pallets, cases, cartons, totes and individual products in the supply chain. :t2s going to produce oceans of information about when and where merchandise is manufactured, picked, packed and shipped. :t2s going to create rivers of numbers telling retailers about the expiration dates of their perishable items& numbers that will have to be stored, transmitted in real&time and shared with warehouse management, inventory management, financial and other enterprise systems. :n other words, it is going to have a really big impact.


7he a ' c(((((( 1 of 3)51, @1A7A@

:n current systems, you may know there are "8 items on the shelf, and that information is compiled in an enterprise planning software system. ;ith *C:0, you know there are "8 items, their age, lot number, and expiration date and warehouse origin. :t2s like knowing there are ",888 people in a city. ;ith *C:0, you know their names. Think like you are a ,* manager of a global corporation who remembers all the employees by their namesTT ;ouldn2t that be greatR That2s the power of *C:0& the 0ATA. *adio fre7uency identification '*C:0( can be broadly categorized as an 2e&tagging2 technology. *C:0 enables passive ob-ect tagging and automatic data capture, using *C sensing as opposed to optical sensing in the case of barcodes. *C:0 is fast, reliable, and does not re7uire physical sight or contact between readerLscanner eliminating the problems mentioned for barcodes. The range of sensing *C:0 tags from a reader varies from a few centimeters to a few meters, depending on the fre7uency and the type of tags 'active or passive(. The amount of data that can be stored inside *C:0 tag ranges from few bits to " 1) for active tags. Aenefits,

The main benefit of *C:0s is that, unlike barcodes, *C:0 tags can be read automatically by electronic readers. :magine a truck carrying a container full of widgets entering a shipping terminal in China. :f the container is e7uipped with an *C:0 tag, and the terminal has an *C:0 sensor network, that container2s whereabouts can be automatically sent to ;idget Co. without the truck ever slowing down. :t has the potential to add a substantial amount of visibility into the extended supply chain. The benefits are divided into two parts (a) Be)e*+t, t-,at+-) Inventory Management: 1aintain a real&time view of tagged inventory as it flows through the supply chain. Track discrete movement of tagged inventory. Trigger alerts around inventory movement based on business rules you construct.


Allowing -ust&in&time practices.

Maximizing warehouse space:;ith the high costs associated with storage real estate, the goal is to maximize warehouse space. This will improve utilization without undermining the ease with which goods can be moved in and out. Minimizing goods shrinkage:Theft combined with imprecise inventory management can create a significant shortfall in actual versus expected goods available. ;ithin the retail environment goods shrinkage is widely perceived to account for up to one per cent of stock, representing a significant dent in profit margin.

(/) Be)e*+t, t- C-),01e.,

Value Innovation in customer service 1arks / Spencer, a )ritish retailer, has -ust extended a trial in which tags are applied to suits, shirts and ties for men, allowing retailers to monitor and replenish stock levels with far more accuracy at the end of each day to make sure that every size, style and color remains in stock. )eyond improving efficiencies, the smart tags could help to drive sales. Ene example of improving customer service+ a customer could take a tagged suit to a kiosk, which could then suggest a matching shirt and tie. Minimizing errors in delivery 1isdirected deliveries or incorrect orders can immediately result in on&shelf out&of&stock situations leading to reduced sales and damaged customer relationships. :ndeed, for organizations relying on the delivery of specific components to fulfill their own order schedule, such errors can have a serious impact on customer satisfaction. *C:0 tags represent a significant step forward from traditional bar code technology and offer highly reliable data most notably, the .S 0epartment of 0efense re7uires their suppliers to ship products with *C:0 tags from 488? onwards. Therefore, the broad adoption of *C:0 is on its way. )y 48"8, *C:0 should be ubi7uitous throughout industries. *ight now the

two biggest hurdles to widespread *C:0 adoption are the cost of building the infrastructure and the lack of agreed&upon industry standards. Some Aey technologies which are going to change the face of SC1 in coming days are+ ". 0: 'for exchange for information across different players in the supply chain(K 4. lectronic payment protocolsK $. :nternet auctions 'for selecting suppliers, distributors, demand forecasting, etc.(K 9. lectronic )usiness 3rocess EptimizationK >. &logisticsK ?. Continuous tracking of customer orders through the :nternetK @. :nternet&based shared services manufacturingK etc.


Supply chain management must address the following problems+ 1() 1istri'ution Bet&or/ Configuration, Humber and location of suppliers, production facilities, distribution centers, warehouses and customers. #() 1istri'ution Strategy, Centralized versus decentralized, direct shipment, cross docking, pull or push strategies, third party logistics. .() 5nformation, :ntegrate systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation. 0() 5n*entory Management, Nuantity and location of inventory including raw materials, work&in& process and finished goods.



One of the fundamental tradeoffs in supply chain management is that between inventory levels and customer service. For any given supply chain, increasing the level of service (product/spare part availability) typically means higher levels of inventory. Most companies have discovered their "best place" on the curve, depending on what their customers re uire and what their competition offers. !owever, supply chain strategies can shift the entire curve, lowering your inventory levels without adversely affecting your customers (or the reverse, improving customer service levels with no increase in inventory). !ow might this wor"# $hrough effective supply chain management you may be able to reduce lead times. $his would shift the curve to the right, speeding up customer response times without raising inventories. %upply &hain Module


reviews a strategy called postponement, or ris" pooling, that can lower the curve, allowing you to maintain (or enhance) service levels with less finished'goods inventory.

$his tradeoff curve provides a perfect e(ample of how silo behavior 'in which functional areas lose sight of cross&functional optimizations( can cause problems in supply chains. Ene of the first steps in improving a supply chain is making sure that organizational responsibility for inventory levels and customer service are appropriately managed. These two responsibilities should not be separated & in fact, they should report to the same desk. 0oing so enables a company to set expectations and properly manage this tradeoff, without costly swings from one place on the curve to another as different functional groups PfightP for either lower inventories or higher service.


Howadays, one of the few outcomes in the constantly changing business world is that organizations can no longer compete solely as individual entities. :ncreasingly, they must rely on effective supply chains, or networks, to successfully compete in the global market and networked economy ')aziotopoulos, 4889(. 3eter 0ruckerDs '"##B( managementDs new paradigms, this concept of business relationships extends beyond traditional


enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies. 0uring the past decades, globalization, outsourcing and information technology have enabled many organizations such as 0ell and ,ewlett 3ackard, to successfully operate solid collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities 'Scott, "##$(. This inter&organizational supply network can be acknowledged as a new form of organization. ,owever, with the complicated interactions among the players, the network structure fits neither 5market6 nor 5hierarchy6 categories '3owell, "##8(. :t is not clear what kind of performance impacts different supply network structures could have on firms, and little is known about the coordination conditions trade&offs that may exist among the players.Crom a systemDs point of view, a complex network structure can be decomposed into individual component firms 'Shang and 0ilts, 4889(. Traditionally, companies in a supply network concentrate on the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of internal management control structure is known to impact local firm performance '1intzberg, "#@#(. :n the 4"st century, there have been few changes in business environment that contributed to the development of supply chain networks. Cirst, as an outcome of globalization and proliferation of multi&national companies, -oint ventures, strategic alliances and business partnerships were found to be significant success factors, following the earlier 5Must&:n&Time6, 5<ean 1anagement6 and 5Agile 1anufacturing6 practices '1ac0uffie and ,elper, "##@K 1onden, "##$K ;omack and Mones, "##?K Funasekaran, "###(. Second, technological changes, particularly the dramatic fall in information communication costs, a paramount component of transaction costs, has led to changes in coordination among the members of the supply chain network 'Coase, "##B(. 1any researchers have recognized these kinds of supply network structure as a new organization form, using terms such as 5Aeiretsu6, 5 xtended nterprise6, 5Iirtual Corporation6, Flobal 3roduction Hetwork6, and 5Hext Feneration 1anufacturing System6 '0rucker, "##BK Tapscott, "##?K 0ilts, "###(. :n general, such structures, can be defined as 5a group of semi&independent organizations, each with their capabilities, which

collaborate in ever&changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration6 'Akkermans, 488"(.



This study focuses on the inventory&related issues at bonded stock rooms ')S*Ds( and depots in a huge supply chain network of a leading consumer products company dealing in cosmetics and other personal care products. 8rgani;ation Aac/ground, 1atrix <aboratories ':ndia( <td. is a leading consumer 3roducts Company dealing in cosmetics and personal care products with its head office located at <ondon '..A(. The company had a supply chain network of $ factories with bonded stock rooms ')S*( attached for despatch to the depots and $> depots for servicing distributors. Foods move from the factory to the )S*. )S* dispatches stocks to 1other CCAs 'depot(. Ether depots receive stocks from the 1other depot and sell them to distributors. Cey Concerns for the Company,

1$ To reduce inventory level at the )S* and depots. !$ To improve inventory accuracy at stocking points including both )S*s and "$
depots. To identify the damaged stocks across the chain and initiate action in a timely manner.

)indings, The company appointed an external Supply Chain expert from .S to help them out of their problems stated above. The expert found out some discrepancies which are as follows. A) !igh Inventory "evels: Total average inventory holding at )S*s was B.4 weeks of sales and at depots was ?.> weeks of sales.


They were very high across the distribution chain because+ Sales and despatch forecasts that were not in line with actual primary L secondary sales. There was no process to periodically review and refine the Annual Corecasts, in line with market feedback. Stocking across all points in the distribution chain was driven by a push&oriented system that did not have provisions to be tuned to market re7uirements. Actual safety stocks maintained at depots were significantly higher that target safety stocks agreed at the beginning of the year. Ho system was in place to monitor and correct the same during the year. Stock allocation from depots was manual. Erders received from distributors were manually processes and no process was in place to automatically collate orders and allocate stocks. #) !igh "evels o$ %ld & 'ithdrawn &(amaged & )low-moving stocks+ 0epots were holding ,igh inventory of oldLwithdrawn stocks and damaged stocks for a long time 'over $ months( )ook and physical stocks had discrepancy of over $8U. 0ead stocks were allowed to accumulate in the system mainly because+ ". There was an absence of visibility into inventory details across stocking points. 4. The process to monitor and act on dead stocks was not adhered to. $. *ecords of slow&moving L old Lwithdrawn L damaged stocks were not maintained methodically at the stocking points. *ecords were inaccurate. 9. Communication of details of dead stocks to the relevant teams was based on manually filed reports which were time&taking and open to error. *) Inaccuracy in inventory records: The organisation did not have a clear policy on periodic reconciliation of physical stock with book records. Thus inaccuracies grew over time, compounded with process failure on accounting for dead stocks.


Action Steps Dnderta/en, The expert advised and undertook some steps in the organization as follows+ )in card system was implemented for each rack at the CCAs and the delivery staff was trained in relevant bin card maintenance practices. A process to regularly reconcile physical and book stocks using the cycle& count process was implemented. An :T solution was identified and implemented for+

Accounting the Cycle count process, providing 1:S on deviations and accounting the ad-ustment notes. Computing the forecast using consolidated orders, with factoring for promotions and seasonality. Calculating safety stock level based on number of weeks of sales target. Cacilitating communication of closing stock data from )S* and depots to logistics department. Cacilitating communication of damaged and un&saleable stock 7uantity to commercial department. Automatically allocating stocks using C:CE principle at the depots.

0emand planning and forecasting were made a periodic activity using the above :T solution to align forecasting with market orders and actual sales. The process of setting safety stocks at depots was made periodic and dynamic, based on updated sales data. Horms were set to act on damaged Lold and other dead stocks. Clear action steps were laid down to li7uidate or destroy these stocks. *esponsibility and accountability were set to in the organisation to monitor and authorise activities in this regard based on visibility provided by the :T solution.

Aenefits, 0ue to above steps were implemented properly the results were fascinating and this increased the profits of the company by 48U.

'a( The organisation achieved an inventory record accuracy 'book stocks

correctly reflecting physical stocks( of #>U within 4 months . 'b( The company achieved ';ithin 43lanning cycles i.e. 4 1onths( 'i.( Stock level reduction Crom B.4 weeks to >.> weeks at the )S*. Crom ?.> weeks to 9 weeks at the depots which included damaged inventory. *eduction in stock value holding across the supply chain.

'c( Transparency of saleable and damaged stocks 7uantities across the

supply chain resulting in more accurate demand planning, stock allocation and production. 'i.()etter management of damaged and un&saleable stocks+ Sales realisation on salvaging and selling damaged stocks at a discounted price. Timely destruction of unusable and potentially harmful products. Timely action on transport, handling, stock management and product development fronts to reduce damages. 'ii.( *eduction in proportion of old and damaged stocksK 'iii.( Cacilitation of ensuring fresher stocks in the market. This was achieved mainly by reducing inventory levels across the chain and also by better stock management at the depots.



:nfosys2 Supply Chain 1anagement solutions help organizations in creating strategic differentiation and operational superiority by configuring and implementing solutions that are aligned with the elements of organizationDs competitive strategy. The Supply Chain 1anagement solutions and services help manage and optimize the many facets of Supply Chain 3lanning, Sourcing / 3rocurement, :nventory Eptimization, ;arehouse 1anagement, <ogistics 0istribution / Transportation and Supply Chain :ntegration. 1oreover the organization can recover their investments earlier. This is because of the Pextended work dayP concept of the Flobal 0elivery 1odel 'F01(, which :nfosys pioneered. :nfosys2 Flobal 0elivery 1odel 'F01( also reduces the Total Cost of Ewnership 'TCE( by cutting operational costs to the tune of anything between 48&$>U. The results are+ robust implementations, faster roll&outs and de&risked upgrades of the highest 7ualityK all delivered with the on&time, on&budget, and on&spec industry& benchmark of :nfosys 3redictability. :nfosysD supply chain management solutions include+ i. ii. iii. iv. v. vi. vii. viii. ix. Culfillment 1anagement. Collaborative Iendor 1anaged :nventory 'I1:(. Sales and Eperations 3lanning. Erder 1anagement. 1anufacturing 3lanning and Scheduling. Supplier Collaboration. 3rocurement 1anagement. Hetwork 0esign and Eptimization. Track and Trace. (i() 7he Client, The client is a global leader in pressure&sensitive technology, self& adhesive base materials, and self&adhesive consumer and office products and specialized label systems and ranks among the Cortune >88. ;ith sales of almost .S0 V> billion, the client is best known for its office automation and


consumer products, self&adhesive materials, reflective and graphic materials, peel&and&stick postage stamps, industrial labeling solutions, *adio Cre7uency :dentification '*C:0( labels, label stock and related services and systems, automated retail tag and labeling systems, specialty tapes and chemicals. (ii() Ausiness Beed and Challenges, Cor the client, success re7uired managing short product lifecycles, focusing on customer service, and most importantly, reducing supply chain costs. Eptimized supply chain management is crucial for the success of companies in this industry, and a key component of supply chain management is accurate forecasting and demand planning. The client was looking for a way to make its supply chain more streamlined, and hence more cost&effective. Specifically, the client had been looking at forecasting the .S sales for each Stock Aeeping .nit 'SA.(. :t wanted to move towards a demand planning model that was based around collaborative and consensus forecasting. To facilitate this, the office products division of the client had already implemented i4 0emand 3lanning '03(, but poor forecast accuracy and sub&optimal forecasting process took its toll on overall system efficiencies and diminished user confidence. (iii() 7he 5nfosys Solution, :nfosys was engaged to conduct diagnostics to identify issues in 03 implementation and to tune&up the overall forecasting process. An :nfosys team was deployed to identify the re7uisite improvements with a 7uick turn round time of > weeks. The :nfosys team conducted diagnostics to identify issues with current implementation and potential opportunities to optimize the system. The team then came up with 49 recommendations for improvement of utilization, user productivity and forecast accuracy. These recommendations were analyzed from two aspects viz. 2ease of implementation2 and 2delivered business value2 to arrive at the priority classification for implementation. :n the second phase, the :nfosys team was asked to implement eight of the statistical modeling initiatives, clubbed under four Clusters with an ob-ective to improve forecasting process, user productivity 'by making the system user friendly and flexible( and implementing various advanced

features of 03 that were not being used. The above scope was completed within a short span of four months leveraging the :nfosys2 Flobal 0elivery 1odel with significant productivityL process improvements. (i*() Aenefits, nhanced version management capability, reducing hours of manual work. :ncreased forecast accuracy & rror reduction by 4U and bias improvement by Bmn units over the year. Clexible process to manage historical data cleansing and accounting for future promotions. :ncreased user confidence by making the process more transparent and flexible. A sustainable and repeatable knowledge base through user education and training. A roadmap for future enhancements.

Supply chain management 'SC1( is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers. :t is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer re7uirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work&in&process inventory, and finished goods from point&of&origin to point& of&consumption. Supply chain management has emerged as the new key to productivity and competitiveness of manufacturing and service enterprises. The importance of this area is shown by a significant spurt in research in the last five years and also proliferation of supply chain solutions and supply chain companies. All ma-or *3 companies are now offering supply chain solutions as a ma-or extended feature of their *3 packages.



Ee'sites *isited,
". Whttp+LLwww.infosys.comLservicesLpackaged&

4. Whttp+LLwww.lancoglobal.comLindex.htmlY $. Whttp+LLen.wikipedia.orgLwikiLSupplyXchainXmamagementY

9. Whttp+LLen.wikipedia.orgLwikiL0emandXchainXmanagementY

3eference 'oo/s,
". Hotes of H1:1S. 4. Arntzen, ). C., F. F. )rown, T. 3. ,arrison, and <. Trafton. Flobal Supply Chain 1anagement at 0igital 7uipment Corporation. :nterfaces, Man.&Ceb., "##>.