Final SCM

Supply Chain Management
Table of Contents
Chapter No-1.................................................................................................................. 3
Introduction.................................................................................................................... 3
Elements of the Supply Chain........................................................................................ 13
Process View of a Supply Chain..................................................................................... 15
Importance of Supply Chain Management.........................................................................16
Importance of SCM in Manufacturing..............................................................................18
Latest Trends towards SCM of backhoe Loader Manufacturing.................20
Objective.................................................................................................................. 25
ROLE OF CHANNEL MEMBERS:............................................................................... 26
Chapter No-2................................................................................................................ 28
Literature Review.......................................................................................................... 28
Introduction........................................................................................................ 29
Concept of Supply Chain Management.............................................................................32
Evolution of Supply chain............................................................................................. 36
Chapter No-3................................................................................................................ 44
Project Work................................................................................................................. 44
Brief Description of Industry......................................................................................... 52
Receiving and assembling the subassemblies..................................................................61
Painting and curing.................................................................................................. 62
Hydraulic cylinders and radiator.................................................................................. 62
Final assembly........................................................................................................ 63
Quality Control.......................................................................................................... 64
Implementation of SCM.................................................................................... 67
Chapter No-4.......................................................................................................... 79
Methodology.......................................................................................................... 79
Improvement by using Methodology.................................................................80
Primary Data:............................................................................................................ 82
Secondary Data:......................................................................................................... 82
Conclusion.............................................................................................................. 84
Finding and Suggestion....................................................................................... 86
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Recommendation..................................................................................................... 88
Reference............................................................................................................... 90
Chapter No-1
Introduction

Introduction
Supply chain management is a process responsible for the development and Management of a
firms total supply system both the internal and external components. At an operational level, it
includes and expands the activities of purchasing function and the procurement process. Its major
focus however is strategic.
Supply Chain is process from the initial raw materials to the ultimate consumption of the
finished product linking across supplier-user companies.
Value Chain is the functions within and outside a company that enables the value chain to male
products and provides services to the customer.
Supply chain management (SCM) is the management of a network of interconnected businesses
involved in the ultimate provision of product and service packages required by end customers
(Harland, 1996). 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).
Supply chain management (SCM) is the oversight of materials, information, and finances as they
move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply
chain management involves coordinating and integrating these flows both within and among
companies. It is said that the ultimate goal of any effective supply chain management system is
to reduce inventory (with the assumption that products are available when needed). As a solution
for successful supply chain management, sophisticated software systems with Web interfaces are
competing with Web-based application service providers (ASP) who promise to provide part or
all of the SCM service for companies who rent their service.
4

Supply chain management flows can be divided into three main flos:
The product flow
The information flow
The finances flow
The product flow includes the movement of goods from a supplier to a customer, as well as any
customer returns or service needs. The information flow involves transmitting orders and
updating the status of delivery. The financial flow consists of credit terms, payment schedules,
and consignment and title ownership arrangements.
There are two main types of SCM software: planning applications and execution applications.
Planning applications use advanced algorithms to determine the best way to fill an order.
Execution applications track the physical status of goods, the management of materials, and
financial information involving all parties.
Some SCM applications are based on open data models that support the sharing of data both
inside and outside the enterprise (this is called the extended enterprise, and includes key
suppliers, manufacturers, and end customers of a specific company). This shared data may reside
in diverse database systems, or data warehouses, at several different sites and companies.
By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a
company's clients), SCM applications have the potential to improve the time-to-market of
products, reduce costs, and allow all parties in the supply chain to better manage current
resources and plan for future needs.
5

Increasing numbers of companies are turning to Web sites and Web-based applications as part of
the SCM solution. A number of major Web sites offer e-procurement marketplaces where
manufacturers can trade and even make auction bids with suppliers
Supply chain management (SCM) oversees and optimizes the processes of acquiring inputs from
suppliers, converting those inputs into a finished product, and delivering those productsor
outputsto customers. SCM is an umbrella term that refers to a variety of approaches for the
management of natural and human resources from the supplier to the manufacturer or service
provider to the consumer and back . This includes the identification and creation of new
opportunities for products and services in cooperation with upstream and downstream partners,
and the involvement of internal as well as external stakeholders in decision making on supply
chain matters.

Traditionally, a supply chain is:
What is SUPPLY CHAIN MANAGEMENT?
Figure 1: Supply Chain Management
It has been noted that discussions of SCM often use complicated terminology, thus limiting
managements understanding of the concept and its effectiveness for practical application (Ross
1998).
This section is, thus, dedicated to reviewing, classifying, and synthesizing some of the widelyused definitions of supply chain and supply chain management in both academia and

practice. The goal of this discussion is the development of one, comprehensive definition upon
which managers and future researchers can build.
Defining the Supply Chain
The definition of supply chain seems to be more common across authors than the definition of
supply chain management (Cooper and Ellram 1993; La Londe and Masters 1994; Lambert,
Stock, and Ellram 1998). La Londe and Masters proposed that a supply chain is a set of firms
that pass materials forward. Normally, several independent firms are involved in manufacturing a
product and placing it in the hands of the end user in a supply chainraw material and
component producers, product assemblers, wholesalers, retailer merchants and transportation
companies are all members of a supply chain (La Londe and Masters 1994). By the same token,
Lambert, Stock, and Ellram define a supply chain as the alignment of firms that brings products
or services to market. Note that these concepts of supply chain include the final consumer as part
of the supply chain.
Another definition notes a supply chain is the network of organizations that are involved, through
upstream and downstream linkages, in the different processes and activities that produce value in
the form of products and services delivered to the ultimate consumer (Christopher 1992). In
other words, a supply chain consists of multiple firms, both upstream (i.e., supply) and
downstream (i.e., distribution), and the ultimate consumer.
Given these definitions, for the purposes of this paper, a supply chain is defined as a set of three
or more entities (organizations or individuals) directly involved in the upstream and downstream
flows of products, services, finances, and/or information from a source to a customer.

Encompassed within this definition, we can identify three degrees of supply chain complexity: a
direct supply chain, an extended supply chain, and an ultimate supply chain. A direct
supply chain consists of a company, a supplier, and a customer involved in the upstream and/or
downstream flows of products, services, finances, and/or information (Figure 1a). An extended
supply chain includes suppliers of the immediate supplier and customers of the immediate
customer, all involved in the upstream and/or downstream flows of products, services, finances,
and/or information (Figure 1b). An ultimate supply chain includes all the organizations involved
in all the upstream and downstream flows of products, services, finances, and information from
the ultimate supplier to the ultimate customer.
Figure 1c illustrates the complexity that ultimate supply chains can reach. In this example, a third
party financial provider may be providing financing, assuming some of the risk, and offering
financial advice; a third party logistics (3PL) provider is performing the logistics activities
between two of the companies; and a market research firm is providing information about the
ultimate customer to a company well back up the supply chain. This very briefly illustrates some
of the many functions that complex supply chains can and do perform.
Although we will address this point in greater depth later in this paper, it is important to realize
that implicit within these definitions is the fact that supply chains exist whether they are
managed or not. If none of the organizations in Figure 2 actively implements any of the concepts
discussed in this paper to manage the supply chain, the supply chainas a phenomenon of
businessstill exists. Thus, we draw a definite distinction between supply chains as phenomena
that exist in business and the management of those supply chains. The former is simply
something that exists (often also referred to as distribution channels), while the latter requires
overt management efforts by the organizations within the supply chain.
9

Given the potential for countless alternative supply chain configurations, it is important to note
that any one organization can be part of numerous supply chains. Wal-Mart, for example, can be
part of the supply chain for candy, for clothing, for hardware, and for many other products. This
multiple supply chain phenomenon begins to explain the network nature that many supply chains
possess.
For example, AT&T might find Motorola to be a customer in one supply chain, a partner in
another, a supplier in a third, and a competitor in still a fourth supply chain.
Note also that within our definition of supply chain, the final consumer is considered a member
of the supply chain. This point is important because it recognizes that retailers such as Wal-Mart
can be part of the upstream and downstream flows that constitute a supply chain.
TYPES OF CHANNEL RELATIONSHIPS
FIGURE 2a DIRECT SUPPLY CHAIN
FIGURE 2b EXTENDED SUPPLY CHAIN
Figure 2: Types of Channel Relations
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Although definitions of SCM differ across authors (see Table 1 for a representative sample), they
can be classified into three categories: a management philosophy, implementation of a
management philosophy, and a set of management processes. The alternative definitions and the
categories they represent suggest that the term supply chain management presents a source of
confusion for those involved in researching the phenomena, as well as those attempting to
establish a supply chain
approach to management. Research and practice would be improved if a single definition were
adopted.
A network of companies that exchange resources such as materials and information to deliver
products to customers. Supply chains consist of a company, its suppliers, its distributors, and its
customers.
In the traditional supply chain structure resources flow downstream to the consumer. The supply
network consists of a focal company and its suppliers, retailers, and customers. Figure shows the
basic structure of a supply chain.
Supplier
Company
Retail
Customer
A supply chain is the stream of processes of moving goods from the customer order through the
raw materials stage, supply, production, and distribution of products to the customer. All
organizations have supply chains of varying degrees, depending upon the size of the organization
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and the type of product manufactured. These networks obtain supplies and components, change
these materials into finished products and then distribute them to the customer.
Managing the chain of events in this process is what is known as supply chain management.
Effective management must take into account coordinating all the different pieces of this chain
as quickly as possible without losing any of the quality or customer satisfaction, while still
keeping costs down.
The first step is obtaining a customer order, followed by production, storage and distribution of
products and supplies to the customer site. Customer satisfaction is paramount. Included in this
supply chain process are customer orders, order processing, inventory, scheduling,
transportation, storage, and customer service. A necessity in coordinating all these activities is
the information service network.
In addition, key to the success of a supply chain is the speed in which these activities can be
accomplished and the realization that customer needs and customer satisfaction are the very
reasons for the network. Reduced inventories, lower operating costs, product availability and
customer satisfaction are all benefits which grow out of effective supply chain management.
The decisions associated with supply chain management cover both the long-term and shortterm. Strategic decisions deal with corporate policies, and look at overall design and supply
chain structure. Operational decisions are those dealing with every day activities and problems of
an organization. These decisions must take into account the strategic decisions already in place.
Therefore, an organization must structure the supply chain through long-term analysis and at the
same time focus on the day-to-day activities.
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Furthermore, market demands, customer service, transport considerations, and pricing
constraints all must be understood in order to structure the supply chain effectively. These are all
factors, which change constantly and sometimes unexpectedly, and an organization must realize
this fact and be prepared to structure the supply chain accordingly.
Structuring the supply chain requires an understanding of the demand patterns, service level
requirements, distance considerations, cost elements and other related factors. It is easy to see
that these factors are highly variable in nature and this variability needs to be considered during
the supply chain analysis process. Moreover, the interplay of these complex considerations could
have a significant bearing on the outcome of the supply chain analysis process.
Elements of the Supply Chain
A simple supply chain is made up of several elements that are linked by the movement of
products along it. The supply chain starts and ends with the customer.
Customer:
The customer starts the chain of events when they decide to purchase a product that has been
offered for sale by a company. The customer contacts the sales department of the company,
which enters the sales order for a specific quantity to be delivered on a specific date. If the
product has to be manufactured, the sales order will include a requirement that needs to be
fulfilled by the production facility.
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Planning:
The requirement triggered by the customers sales order will be combined with other orders. The
planning department will create a production plan to produce the products to fulfill the
customers orders. To manufacture the products the company will then have to purchase the raw
materials needed.
Purchasing:
The purchasing department receives a list of raw materials and services required by the
production department to complete the customers orders. The purchasing department sends
purchase orders to selected suppliers to deliver the necessary raw materials to the manufacturing
site on the required date.
Inventory:
The raw materials are received from the suppliers, checked for quality and accuracy and moved
into the warehouse. The supplier will then send an invoice to the company for the items they
delivered. The raw materials are stored until they are required by the production department.
Production:
Based on a production plan, the raw materials are moved inventory to the production area. The
finished products ordered by the customer are manufactured using the raw materials purchased
from suppliers. After the items have been completed and tested, they are stored back in the
warehouse prior to delivery to the customer.
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Transportation:
When the finished product arrives in the warehouse, the shipping department determines the
most efficient method to ship the products so that they are delivered on or before the date
specified by the customer. When the goods are received by the customer, the company will send
an invoice for the delivered products.
Process View of a Supply Chain

Supply chain process cycle illustrates the four cycles and five supply chain stages
Customer
Manufacturing
cyce
Manufacturer
15
Customer
order cycle
Retailer
Distributor
Replenishment
cycle
Procurement
cycle
Supplier

Importance of Supply Chain Management
Supply chain management is gaining growing importance because of the following reasons:
The total time for materials to travels through the entire supply chain management can be
quite long. Since the materials spends so much time waiting in inventory at various stages
in the supply chain, there is a great opportunity to reduce the total supply chain cycle
time leading to a corresponding reduction in inventory, increased flexibility, reduced
costs and better deliveries.
Many companies have drastically improved their internal operations and now find it
necessary to consider relations with external customer and supplier in the supply chain to
gain further improvements in their operations.
Supply chain thinking is an application of systems thinking and provides a basic for
understanding processes that cut across a companys internal department and processes
that extend outside the company as well.
The goals of supply chain management are to reduce uncertainty and risks in the supply
chain, thereby positively affecting inventory levels, cycle time, processes and ultimately
end-customer service levels.
The design, planning and operation of supply chain have a strong impact on overall
profitability and success.
Supply chain management has become a hot competitive advantage as companies

struggle to get the right stuff to the right place at right time.
16
All the Total Quality Management, Just-in-Time System, Reengineering, Team

work and Delighting the Customers depends on the relationships with supplier and
distributors who are part of the supply chain.
Supply chain management includes transportation vendors, suppliers, distributors, banks,

credit and cash transfers, bills payable and receivable, warehousing and inventory levels,
order fulfillment and sharing customer, forecasting and production information.
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Importance of SCM in Manufacturing
Supply chain management is a systematic approach to managing the distribution of goods from
producers of raw materials, through manufacturers and eventually down to end users. Supply
chain management affects manufacturing companies in a variety of ways, including the
availability of inputs needed for production processes, costs and profitability of manufactured
items, company infrastructure and ways in which companies interact with their suppliers and
customers. Understanding the ways that supply chain management affects manufacturers from
both a daily operational perspective and a strategic viewpoint is important for all managers and
entrepreneurs in the industry.
Reliability of Inputs
Effective supply chain management can ensure that raw materials consistently arrive at
production facilities on time. A poorly management supply chain, on the other hand, can bring
production to a halt. Without reliable delivery of inputs, assembly lines can lie dormant while
employees have no work to perform, which could leave a company unable to fulfill timesensitive orders. If the supply chain breaks down before inputs arrive, a manufacturer can be
forced to procure materials from alternative sources quickly, possibly resulting in higher prices
and lower profitability.
Distribution Costs
Lowering distribution costs is a major function of supply chain management. With a costefficient supply chain, manufacturers can reduce overhead and direct sales costs at the same
time. Savvy manufacturers use technologically advanced routing and navigation systems for
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drivers, fuel-efficient vehicles, cost-efficient purchasing and order-processing systems and strict
handling procedures to lower supply-chain costs and boost overall profitability.
Company Infrastructure
Manufacturing managers seek to find the perfect balance of fully-owned distribution systems and
contractor services. Building in-house distribution systems can be quite costly when vehicles and
vehicle repair, fuel and labor costs are taken into account, but this option allows a company full
control over its outgoing supply chain. Relying on contractors can be significantly more
affordable, but carries the risk of giving up control of distribution processes once goods leave a
factory or plant. Distribution-system decisions affect a range of managerial decisions, such as
how much to invest in distribution infrastructure, or how closely to work with transportation
contractors.
Supplier and Customer Integration
Modern manufacturers squeeze every ounce of efficiency they can out of production processes to
remain competitive in the global marketplace. Continuous quality improvement programs such
as Six Sigma introduce changes to supply-chain dynamics that require greater collaboration with
customers and suppliers than ever before. Manufacturers utilizing a just-in-time ordering system,
or serving customers who do, must integrate ordering and order-processing systems directly with
other companies' systems via virtual networks. In a just-in-time supply chain, orders are
processed automatically between computers at both suppliers' and customers' facilities, one of
which places immediate orders based on electronically tracked inventory levels, and the other of
which instantly processes payment and queues new orders to be delivered, all without any human
interaction.
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20

Latest Trends towards SCM of backhoe Loader Manufacturing
The existing and new entrants in backhoe loaders manufacturing in India are rechristening
products offering strategy to suit the emerging demand order. P.P. Basistha finds out the details.
Projection of the economy to grow @ more than 7% during the 12th plan period and 1$ trillion
ambitious investment plans of the government, seem to make the Indian CE market in general
and backhoe loaders market in particular lucrative. With the demand projected to grow at 40,000
units by 2015, the market is witnessing entry of new players whereas the existing manufacturers
are ramping up their production capacities. However, the demand of units are strongly
characterized by emergence of multiple factors, wherein few of them are quite challenging for
the equipment manufacturers to reckon with; during 2011 the market size of backhoe loaders was
33,500 units wherein JCB alone sold 24,500 units.
Though, recent positive achievement of the government is timely completion of tenders in
awarding new road projects. President's directives to Coal India to sign fuel supply agreements
with consumers in order to put proposed greenfield power projects on fast track, and to meet the
emerging demand from remote areas (Pradhan Mantri Gram Sadak Yojana, irrigation projects),
tier-I and tier-II cities and even from hamlets which will allow manufacturers to share the
optimism that the demand fundamentals for the versatile equipment will remain quite firm and
wide.
However, most of them also agree that the new demand will increasingly be characterized by
growing liquidity crunch and stagnant rental rates. Thus making it more imperative for
equipment owners to get adequate ROI with the very first deployment of the equipment at the job
site with enough products support from the manufacturers. The stiff competition among product
21

offerings in high price sensitive construction sector, dovetailed by demand distortion owing to
tardy awarding of tenders, are emerging challenges where the business now need to be developed
with.
However, most importantly, manufacturers point out, gelling the product with the new demand
transition is equally challenging. This is as because compared to previous years, application
versatility of the equipment was its sole selling proposition. The new demand trend is more on
value proposition.
Demand in value is a natural phenomenon in any maturing market, which needs to be addressed
by manufacturers through their products backed why necessary improvements in production line,
allowing both sides to reap, honest benefits on their investment.
Considering this, JCB is on the way to the same path where the company has in place new,
completely state-of-the-art 'ecoMAX' engine shop integrated with its main backhoe loaders
production line at its flagship Ballabgarh plant. The tier-III engines are being fitted in JCB's
Backhoe Loader range and other models of its heavy equipment range of tracked excavators,
wheeled loaders and vibratory compactors.
22
According to Mr. Vipin Sondhi, MD and CEO JCB India Limited, "better filtration and fuel
injection will allow JCB engines to perform well in off-highway fuel conditions minimizing
equipment downtime, above all it will ensure better equipment integration." While JCB will
maintain its partnership with Cummins and Kirloskar as engine suppliers for some of its machine
models, powering JCB machines by JCB engines will provide customers with a one stop solution
for their servicing needs.
Mr. Sondhi says, "apart from gaining through improvements in products support, our backhoe
loaders are recognized as highly reliable, fuel efficient, productive and durable, characterized by
faster cycle time, high digging force and less maintenance support. To ensure that our machines
are reliable, we make them pass through several qualifying tests during production process that
give our backhoe loaders' strong market position in turn driving sales." The company sold 27,000
units in 2011 and commands 75% share in country's backhoe loaders market.
Nonetheless, emerging competition on value proposition front and newer application areas are
not altogether being discounted by the company. JCB has recently launched small capacity 2DX
backhoe loader which is powered by Kirloskar 49hp, Kirloskar 4R810 engines. The machine
comes with a shovel capacity of 0.55 cum and bucket capacity of 0.18 cum. Mr. Sondhi informs,
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"2DX will also be applicative for irrigation jobs; with better fuel efficiency, it will be most viable
for light and small hiring jobs in agriculture and other sectors."
JCB's extended product offerings in the backhoe range include, 3DX Super, 3DX-XTRA and
4DX backhoe loaders. Stronger in its class, the 3DX Super backhoe loader comes with 92 HP
turbo water cooled JCB engine with increased cooler size for better performance in hot and dusty
conditions. The machine has 6-in-1 front shovel with high break out force for better loader productivity. Better visibility, improved front reach, lower turning radius and high tractive and
breakout forces give 'best in class' loader performance. 4DX comes with similar engine as that of
3DX super. The machine has 1.2 cum loader bucket and a 17 ft excavator, enhanced tear out
forces and bigger bucket size for enhanced productivity.
On emerging competition from new entrants, Mr. Sondhi says, "we score on customers support
as well, with 55 dealers across the country and 430+service outlets, we are adequately positioned
in terms of equipment availability and customer support. We intend to strengthen the position
further by being closer to the customers." However, with demand unfolding coming fiscal, the
basis of the company's products support and expansion in portfolio will stand for test.
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Making affordable products available for customers with value propositions while calculating to
enhance market share, is also a challenging job for existing acclaimed brands facing rising
production costs. Terex Equipment is computing to raise its share in backhoe loaders business
from 4% to 6% during 2012. According to Mr. Sunil Tiku, Senior Director Sales & Marketing
"the idea to raise market shares will be fully backed by expansion of production volumes which
will also bring our production costs down. Investments are being made at large scale in robotic
welding and other advanced production technologies reducing repetition in production and
assembly line, consequently it will roll out high quality products in minimum time."
Terex is committed to provide low-cost products to its customers through its plant at Greater
Noida near Delhi, besides retaining its business where over 30% of new orders come from the
existing customers in order to avoid brand substitution. The company is aiming to increase its
number of units from 1,400 + to over 2,000 this year.
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Objective
The fundamental objective is to "add value".
Supply Chain Management becomes a tool to help accomplish corporate strategic objectives:
reducing working capital,

taking assets off the balance sheet,
accelerating cash-to-cash cycles,
Increasing inventory turns, and so on.
Making smooth availability of product to the target market.

Achievement of the best possible coverage of the target market.
Ensuring that the consumer incurs the minimum extenuation in procuring the product.
Safe in quality & accuracy in quantity.
Quick services.
Ensuring that the firm is able to carry on with its manufacturing activities, confident that
the channel will take care of the distribution job.
Ensuring that the distribution is cost effective.
The primary objective of channel of the distribution is to bridge the gap by resolving
spatial (geographical distance) and temporal (relating to time) discrepancies as to supply
and demand.
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ROLE OF CHANNEL MEMBERS:
Channel members are not play only the role of sales the products to the customers but
also play the role as they promote the products, gathering the customer interest,
complaints, suggestion, and information to the organizations they are work as the coordination between the targeted customers & manufactures.
Members of the marketing channel perform many key functions as follows:
Gathering & distributing marketing research and intelligence information about actors &
forces in the marketing environment.
Helpful in making marketing strategy.
Developing & spreading the promotional offer of company and promote the sales activity.
Easily make a sales contact with the customers.
Intermediaries are taking the title to goods, so they invest the fund.
Through the intermediaries, manufactures are made physical distribution of goods.
Intermediaries are taking various type of risks, in the term of storing, dispatching etc.
CONTRIBUTION OF CHANNEL:
Make available on time.
Reduce the cost of distribution
Save the distribution time.
Helpful in product design & developments.
Flow of feedback from consumer.
Flow of money consumers to manufacture.
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VARIOUS TYPES OF CHANNEL LEVELS:
While a marketers wants to sell or marketing about the products or services, requirement of
design a distribution channel to make product & services available to customers in different
ways. In the process of distribution of products, each layer of marketing intermediaries are
performs some work in bringing the product and its ownership closer to the final buyer is a
channel level.
Generally two methods of distribution are in the practices.
1. DIRECT MARKETING CHANNEL
2. INDIRECT MARKETING CHANNEL
DIRECT MARKETING CHANNEL:
DMC is a marketing channel that has no intermediary levels. Manufacture or sellers are advertise
their product through the various method of advertising & make awareness about the products,
then contact to the needful customers through their salesmen, internet, e-mail, telephone or by
post.
MANUFACTURIN
CONSUMER
INDIRECT MARKETING CHANNEL:

IMC is a channel containing one or more intermediary levels. Manufactures or sellers are
appointed various types of marketing intermediaries in the context of nature of the products &
segmentation of markets.
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Chapter No-2
Literature Review
29

Literature Review:Introduction
A literature review is a description of the literature relevant to a particular field or topic. It gives
an overview of what has been said, who the key writers are, what are the prevailing theories and
hypotheses, what questions are being asked and what methods and methodologies are
appropriate and useful. As such, it is not in itself primary research, but rather it reports on other
findings.
A literature review is an account of what has been published on a topic by qualified scholars
and researchers. (Dena Taylor, 2007)
Every organization works with certain objectives and these are to be achieved. To achieve the
Pre-decided objectives a number of activities are to be performed. It is not necessary that one all
organizations would perform one type of activities. The activities may include production,
Marketing, human resource, finance, transportation, service, research, logistics, purchasing, and
storage, trading, assembling, distribution and others. These activities are performed and these are
related to each other so that the objectives can be fulfilled effectively. Similar way the marketing
activities are performed in some of the company those are interested in marketing the products or
services for use of customers. Marketing is one of the important activities of an organization. It is
through marketing the products or services of the company are reaching to the customers. The
company gets the money back when the products are sold out in the market. So the business
cycle keeps on going further. It is required to coordinate the marketing activities without
activities also. It is necessary to work in close coordination with production. Production alone is
30

not going to serve the purpose. Production without marketing become useless for the company
and marketing without production is not possible. Similarly, marketing is related to other
activities like finance, research and human resource activities. So the main concerned here is
with the marketing activities. Marketing is the process by which companies create customer
interest in goods or services. It generates the strategy that underlies sales techniques, business
communication, and business developments. It is an integrated process through which companies
build strong customer relationships and create value for their customers and for themselves.
Although most authors speak about some parts of Strategic Marketing, here is included a list of
definitions of the term. Some authors appear in different years ( for example, Jain), It is
understand that they have added new comments or redefined the term after the years. The table
and the definitions have been ordered
By year of publication.
Author
Year
Drucker
1973
Definition
Marketing as seen as a process consisting of: analyzing
environmental, market competitive and business factors affecting the
corporation and its business units, identifying market opportunities
and threats and forecasting future trends in business areas of interest
for the enterprise ,and participating in setting objectives and
formulating corporate and business unit strategies. Selecting market
target strategies for the product-markets in each business unit,
establishing
marketing
objectives
as
well
as
developing
implementing and managing the marketing program positioning
31

strategies in order to meet market target needs.
" a statement in very general terms of how the marketing
Hart &
1977
objective is to be achieved, e.g. acquiring a competitive

Stapleton
company, by price reductions, by product improvement, or by
intensive advertising. The strategy becomes the basis of the
marketing plan"
The role of strategic marketing is to lead the firm towards
Lambin
1977
attractive economic opportunities, that is, opportunities that
are adapted to its resources and know how and offer a
Potential for growth and profitability.
the establishment of the goal or purpose of a strategic
Baker
1984
business unit and the means by which it is to be achieved
trough management of the marketing function"
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Concept of Supply Chain Management
33

Supply chains encompass the companies and the business activities needed to design, make,
deliver, and use a product or service. Businesses depend on their supply chains to provide them
with what they need to survive and thrive. Every business fits into one or more supply chains and
has a role to play in each of them. The pace of change and the uncertainty about how markets
will evolve has made it increasingly important for companies to be aware of the supply chains
they participate in and to understand the roles that they play. Those companies that learn how to
build and participate in strong supply chains will have a substantial competitive advantage in
their markets.
1) Adapt Supply Chain to Customer's Needs both business people and supply chain professionals
are trained to focus on the customer's needs. In order to understand customer better, we divide
customers into a different group and we call it "segmentation". The most primitive way to
segment customer is ABC analysis that groups customer based on the sales volume or
profitability. Segmentation can also be done by product, industry and trade channel. Back then,
Anderson et al suggested that customer be segmented based on the service needs, namely, "sales
and merchandising needs" and "order fulfillment needs". I totally agree that we should focus on
the customer's needs but this doesn't seem to be enough these days. The reason is that your
customers may not know what they need until your competitors offer something different. For
example, in 2011 Amazon initiated a program called Amazon Prime (free 2-day shipping and
discounted 1-day shipping). Today, people are still discussing if this program makes sense. But
one thing for sure, customer turns to Amazon more and more. The morale of this story is that you
should "anticipate" the customer's needs as well.
2) Customize Logistics Network When you segment a customer based on the service needs, you
may have to tailor the different logistics networks to serve different segment. However, this
34

principle doesn't hold true for all situations. For example, if you were a contract manufacturer in
China, you might already have different logistics networks for different customers. Each
customer in US or EU might already control the source of raw materials, ask you to provide
dedicated production lines, nominate 3pl companies and air/sea carriers. So, logistics network
design is a kind of initiative driven mainly by customer.
3) Align Demand Planning Across Supply Chain Supply chain practitioners are taught to share
the demand data with trading partners so nobody has to keep the unnecessary stock. In general,
this principle holds true. But in the reality, only Walmart is actively sharing the demand data to
trading partners. There is a very interesting paper "Top-Down Versus Bottom-Up Demand
Forecasts: The Value of Shared Point-of-Sale Data in the Retail Supply Chain" by Williams and
Waller 2011, the result of research found that, - If you make the demand forecast based on
SKU/Customer level, using your own historical order data is more accurate than using the POS
data you get from retailers - If you make the demand forecast based on SKU/Store level, using
the POS data you get from retailers is more accurate than using your own historical order data
The implication is that the absence of demand sharing is not necessary bad. But when you got the
demand data from trading partners, you MUST use it the right way.
4) Differentiate Products Close to Customer Dell keeps components and assemble them only
after customer places the order in order to increase the product variety. This principle is still true,
but, there is another principle that you should consider. "Standardization" is in the opposite
polarity of "Differentiation". For example, some cosmetics manufacturers formulate products
and choose a packaging and labeling that complies with the regulations of multiple countries in
Asia. So they only make one SKU that can be sold in 15 countries instead of 1 SKU/Country. By
35

standardizing product appropriately, they can drive the cost down drastically due to the economy
of scale. So standardization is something that you should also consider.
5) Outsource Strategically This is the principle that stands the test of time. In short, don't ever
outsource your core competency. More information about outsourcing can be found from the
infographic named "7 Pitfalls of Outsourcing and How to Avoid Them".
6) Develop IT that Support Multi-Level Decision Making If you search Google for the term
"critical success factor erp", you'll find lots of information about how to implement ERP
successfully. My opinion is that an IT project shouldn't be done in the isolation, business process
reengineering is something that you have to do before implementing an IT project. This will
equip you with the full understanding about process deficiencies then you can determine what
kind of technology that you really need.
7) Adopt Both Service and Financial Metrics Anderson et al suggested that the activity based
costing (ABC) be implemented so you can determine customer's profitability. However, there is
the interesting twist about the ABC concept. In 1987, Robert Kaplan and W Bruns defined the
activity based costing concept in his book "Accounting and Management: A Field Study
Perspective". However, in 2003 Robert Kaplan said that it's difficult to maintain an ABC costing
model to reflect the changes in activities, processes, products and customers. Then, he introduced
the refined concept called "Time Driven Activity Based Costing".
36

Evolution of Supply chain
The participants in a supply chain are continuously making decisions that affect how they
manage the five supply chain drivers. Each organization tries to maximize its performance in
dealing with these drivers through a combination of outsourcing, partnering, and in-house
expertise. In the fast-moving markets of our present economy a company usually will focus on
what it considers to be its core competencies in supply chain management and outsource the rest.
This was not always the case though. In the slower moving mass markets of the industrial age it
was common for successful companies to attempt to own much of their supply chain. That was
known as vertical integration. The aim of vertical integration was to gain maximum efficiency
through economies of scale .In the first half of the 1900s Ford Motor Company owned much of
what it needed to feed its car factories. It owned and operated iron.
37

Iron-mines that extracted iron ore, steel mills that turned the ore into steel products, plants that
made component car parts, and assembly plants that turned out finished cars. In addition, they
owned farms where they grew flax to make into linen car tops and forests that they logged and
sawmills where they cut the timber into lumber for making wooden car parts. Fords famous
River Rouge Plant was a monument to vertical integrationiron ore went in at one end and cars
came out at the other end. Henry Ford in his 1926 autobiography, Today and Tomorrow, boasted
that his company could take in iron ore from the mine and put out a car 81 hours later (Ford,
Henry, 1926, Today and Tomorrow, Portland, OR: Productivity Press, Inc.). This was a profitable
way of doing business in the more predictable, one-size-fits-all industrial economy that existed in
the early 1900s. Ford and other businesses churned out mass amounts of basic products. But as
the markets grew and customers became more particular about the kind of products they wanted,
this model began to break down. It could not be responsive enough or produce the variety of
products that were being demanded. For instance, when Henry Ford was asked about the number
of different colors a customer could request, he said,they can have any color they want as long
as its black. In the 1920s Fords market share was over 50 percent but by the 1940s it had fallen
to below 20 percent. Focusing on efficiency at the expense of being responsive to customer
desires was no longer a successful business model. Globalization, highly competitive markets,
and the rapid pace of technological change are now driving the development of supply chains
where multiple companies work together, each company focusing on the activities that it does
best. Mining companies focus on mining, timber companys focus on logging and making
lumber and manufacturing companies focus on different types of manufacturing from making
component parts to doing final assembly. This way people in each company can keep up
with rapid rates of change and keep learning the new skills needed to compete in
38

their particular business. Where companies once routinely ran their own warehouses or operated
their own fleet of trucks, they now have to consider whether those operations are really a core
competency or whether it is more cost effective to outsource those operations to other companies
that make logistics the center of their business. To achieve high levels of operating efficiency and
to keep up with continuing changes in technology, companies need to focus on their core
competencies. It requires this kind of focus to stay competitive. Instead of vertical integration,
companies now practice virtual integration. Companies find other companies who they can
work with to perform the activities called for in their supply chains. How a company defines its
core competencies and how it positions itself in the supply chains it serves is one of the most
important decisions it can make.
39

This type of thought is clearly focused to converge in a base of subjects such as:
I.
The profitability:-This it is an element which crowns the previously mentioned

objectives, as well as the use of Strategic Analysis Techniques. The profitability, which is
a purpose of the company (Ansoff 1985) appears in a systematic way in the the
definitions. It is important to mention that from a Strategic Marketing point of view, the
profitability not only has to be kept in mind but rather also other such factors as the
market share, stability, the company, the coherence of the products etc. should be kept in
mind. The profitability will show if strategic plans of marketing are aligned with the
II.
financial policies of the company.

Analysis:- The analyzing activity seems also important in the definitions of Strategic
Marketing. (Boyd et al., 1998; Walker & C., 2003). It is vital as a first step be able to
read, to evaluate, to gather data, to generate systems of information of marketing
intelligence, which allow the marketing manager to decide the markets and the most
attractive products for the company in the future. Without a good analysis of the
marketing plan it doesn't exist the Strategic Marketing Plan Sturdiness(Lambin & JeanJacques, 2000), and then is not easy to build on it. The robustness of the Strategic
Marketing Plans is determined by seven following aspects which are: the opportunity, the
validity, the feasibility, the coherence, the vulnerability, the flexibility, and the
III.
profitability. (Day 1986).

The planning process:-Under a general rule, the word planning(Wilson et al., 1997)
also appears continuously in the definitions. Authors talk about planning keeping in mind
aspects like analysis and decisions and the actions which should be kept in mind to
determine future products and markets, as well as attractiveness, market opportunities,
40

etc. Some authors have developed investigations related to the barriers in the marketing
IV.
planning, ( McDonald 1999)., and consequently to the planning of Strategic Marketing.

Resource allocation:-Strategic Marketing explores and gives relevance to the importance
of negotiating resources of any type. (Gale, T., Branch, & Ben, 1980). Financial, human,
production, marketing budgets, etc. Such factors as the launch of new products, the
selection of guarantees, the divestment or the diversification are directly related with the
term Strategic Marketing. For the marketing manager it will be he very important to
know and manage the economic flows and financial.
41

Elements of Marketing:-
a) Product:-The product is a combination of tangible and intangible aspects of the products

offered by the manufacturer to the customers. It can be defined as a bundle of satisfaction
and dissatisfactions offered by company to the customers at a point of time. Their physical
attributes what they do, how they differ from your competitors and what benefits they
provide. The products can be classified as durable and non durable, consumers and
industrial goods, perishable and non perishable, finished and semi-finished etc.
b) Price:-Price means the monetary value of the product has been fixed for exchange purpose.
The price is the amount a customer pays for the product. It is fixed after considering various
factors such as market share, competition, material costs, product identity and the customer's
perceived value of the product. The business may increase or decrease the price of product if
other stores have the same product. It is through price the company gets its money back in
business. It should be fixed in such a way the company is in position to recover the costs
and earn profits also. If it is fixed very low then it may be difficult to come to the breakeven
point and if fixed very high then it may have deterrent effect on the sale.
c) Promotion:- The promotion concept is applied for products or services and to the business.
The promotion include all communications a marketer used in the market for his products of
services to create awareness, persuade the customers to buy and retain in future also. For
improvement in the position of sales or progress of business this method is used. The
message is given to target group regarding the features and benefits of the products or
services to the target customers. Without communication the features, benefits and schemes
would not be known to the customers and objectives of in launching of products or services
42

and increasing sates would not be completed. When communication creates awareness then
only the interest would be created and customers would take the decision for buying. For
promotion different methods of communication can be used.
d) Placement: - Place represents the point or location where the product is made available to
purchase. It is required that the products and customer should be available at a point then
only the sales would be possible. If not then the sale does not taken place. This term is used
for distribution channel. It can include any physical store as well as virtual stores on the
Internet. Place is not exactly a physical store where it is available Place is nothing but how
the product takes place or create image in the mind of customers. It depends upon the
perception of customers. The products or services should reach to the customer that channel
is called distribution channel of placement.
e) People:- The services are being provided with the help of employees and to the customers.
There is direct contact for delivery of the services to the customers. The type of people
providing the service matters a lot from business point of view. The people are to be
selected, trained and motivated to keep the customers very happy. So the people are very
important for service marketing. It is to be managed effectively.
f) Process:- For availing a service certain activities are to be performed. For that purpose
procedure, mechanism and flow of activities by which services are delivered are to be
decided. Without The service cannot be delivered properly with uniformity. That would
maintain the standard format for availing the services. This is called process. For example,
one wants saving account facility in a bank then he has to apply for opening an account.
After this the pass book, cheque book and ATM card would be issued and service can be
availed after this.
g) Physical Evidence:-There are essential conditions for providing the service. These are two
types. One is internal and another is external. These create the environment in which the
43

service or product is delivered. For example to provide the hotel service and external
evidence required are building, parking place, gate and a long drive- way. Internal evidence
required like counter, telephone, passbooks, reservation facilities, cigarettes etc. Without this
providing hotel service, a question does not arise.
44
Chapter No-3
Project Work
45

Organization Study
JCB India Limited is a leading manufacturer of Earthmoving and Construction Equipment in
India. Started as a JV in 1979, it is now a fully owned subsidiary of J C Bamford Excavators, UK
and has five World Class Manufacturing facilities in India.
The Ballabgarh Facility near New Delhi, also the Headquarters, is the Worlds Largest Backhoe
Loader plant and manufactures Backhoe Loaders, Skid Steers, Loadalls, Generators and JCB
Engines. The two facilities at Pune house the Heavyline Business which includes manufacturing
of Excavators, Loaders, Compaction Equipment and Fabrications for the JCB Group. With over
400 Engineers, JCB India also has the largest Design Centre, outside of the UK in India, at Pune
and the latest facility at Jaipur, a Zero Discharge, Green Facility manufactures Fabrications for
the JCB Group.
From manufacturing only Backhoe Loaders in 1979, JCB India today offers 43 different types of
models in 7 product categories such as Backhoe Loaders, Wheeled Loaders, Excavators, Skid
Steer loaders, Telehandlers, Compactors and Generators. With all plants operating on the
principle of One Global Quality, these products are sold not only in the Indian Market but are
also Exported to over 60 Countries today.
Over the years JCB India invested more than Rs. 2000 crores in India and today employs over
5,500 people in India. It has a network of 61 dealers and over 600+ outlets throughout India
which provide Parts and Product Support to our Customers. Over 6000 Professionally Trained
people are employed at these Dealerships. JCB India also has strategically set-up large parts
warehouses across India (Pune, Chennai, Faridabad and Kolkata) for supporting these
Dealerships.
46

With 14 Operator Training Centres, JCB has collaborated with the Governments Skilling
Initiatives to create Employment and Entrepreneurship through a one month certified training
course of machine operations and maintenance. JCB has also a 16 weeks detailed induction
program for the ITIs and Diploma Institutes graduate at the welding training school in the
premises of the JCB Jaipur facility. The objective being not only to impart the technical skills but
also help the graduates develop soft skills.
The Lady Bamford Charitable Trust has taken various community welfare initiatives around
JCBs plants which are being implemented by the Lady Bamford Charitable Trust. The Trust
today partners with 29 government schools to support quality, career focused education. It runs
seven vocational training centres for training and production support on hand looms and
handicrafts and works with a little over 16000 students and trainees in the areas around its three
factories in Jaipur, Pune and Ballabgarh.
Over the past 35 years JCB has remained committed to India all through; over the years it
launched new India Centric products and opened new factories with Innovation and R&D. But
above all Customer focus and Quality have been at the core of our operations.
47

Product Offered By JCB India
1) Backhoe Loader
The JCB Backhoe Loader range leads the world in performance, innovation and
reliability. The 2DX Loaders take versatility to previously inaccessible areas with its
compact size. The 3DX,3DX ecoXcellence, 3DX Xtra, 3DX Super and 4DX Backhoes
are the heavyweights of the range setting new standards in operator comfort, fuel
efficiency & performance. JCB has also launched the new ecoXcellence range of
Backhoes, with advanced Livelink Telematics. Choose from a wide range of Backhoe
Loaders to buy from the world's favourite earthmoving equipment manufacturer.
2) Compactors
JCB offers the finest road and soil compaction equipment - VMT 860, VM115 and
VMT330. The VMT 330 Tandem Roller, a highly versatile Compactor with high
compaction forces and drum offset design is a latest addition. The VM115 caters to the
soil compaction needs of the sector while the VMT 860 is a master at asphalt compaction.
Choose from JCB's range of Compactors to buy from the world's favourite earthmoving
equipment manufacturer.
48
3) Generator
A diverse range of gensets catering to all your power generation needs, JCB power
products provide you quality solutions that speak of reliability and durability.
49

4) Loadall
JCB is the world's largest manufacturer of Forklift Telehandlers known as JCB Loadall.
In India, we have three models (530-70, 530-110 and 540-170). Loadall is a material
handling equipment which aims at mechanizing the handling processes across all
industries such as Agricultural Logistics, Construction, and Process industry.
5) Skid steers loader

The JCB ROBOT 155 Skid Steer Loader is a compact wonder that is designed to work
efficiently through out! This Loader has best in class fuel efficiency, lowest maintenance
cost and very high productivity among Skid Steers in India. This resourceful Loader also
offers unmatched safety and operator comfort in any condition. This Skid Steer Loader
has IP 67/69 certified dust and water proof electrical connectors.
6) Tracked Excavator
JCB Tracked Excavator are the best in class range of Excavator machines with maximum
performance, strength, efficiency & productivity. JCB range of Excavators incorporates a
wide array of large, mid & mini Excavators with high visibility, low noise levels, highest
50

productivity and excellence in doing any application. Choose from a wide range of
Tracked Excavators to buy from the world's favorite earthmoving equipment
manufacturer.
51

7) Wheeled Loaders
JCB presently offers 4 Wheel Loader models (four variants of 3DXL, 430 ZX Plus, 432
ZX). JCB Wheel Loaders offers best in class productivity and fuel efficiency. JCB Wheel
Loaders are capable of continuous hours of uninterrupted and productive operation. JCB
Wheel Loaders come with bucket capacities ranging from 1.5 cum (rock bucket), 1.8cum
(rock bucket) to 3.1 cum buckets. Choose from JCB's range of Wheel Loaders to buy
from the world's favorite earthmoving equipment manufacturer.
We are study a lot on the product and services of JCB India and select
Backhoe Loader and further study on that Machine.
52

Brief Description of Industry
Manufacturing industry refers to those industries which involve in the manufacturing and
processing of items and indulge in either creation of new commodities or in value addition. The
manufacturing industry accounts for a significant share of the industrial sector in developed
countries. The final products can either serves as a finished good for sale to customers or as
intermediate goods used in the production process.
Evolution of the manufacturing industry:
Manufacturing industries came into being with the occurrence of technological and socioeconomic transformations in the Western countries in the 18th-19th century. This was widely
known as industrial revolution. It began in Britain and replaced the labor intensive textile
production with mechanization and use of fuels.
Working of manufacturing industry:
Manufacturing industries are the chief wealth producing sectors of an economy. These industries
use various technologies and methods widely known as manufacturing process management.
Manufacturing industries are broadly categorized into engineering industries, construction
industries, electronics industries, chemical industries, energy industries, textile industries, food
and
beverage
industries,
metalworking
industries,
plastic
industries,
transport
and
telecommunication industries.
Manufacturing industries are important for an economy as they employ a huge share of the labor
force and produce materials required by sectors of strategic importance such as national
53

infrastructure and defense. However, not all manufacturing industries are beneficial to the nation
as some of them generate negative externalities with huge social costs. The cost of letting such
industries flourish may even exceed the benefits generated by them.
The backhoe is one of the most commonly seen pieces of construction equipment because of its
adaptability. Its cousin, the front-end loader, is also a smaller piece of equipment that has a broad
bucket like the one on the front of the backhoe for hauling soil, debris, and materials, and lifting
them up into trucks. These two machines have some much larger relatives, including the road
grader (with a large blade that smoothes soil surfaces), roller compactor (equipped with a heavy
roller that compacts soil and asphalt during construction), the bulldozer and crawler tractor (big
loaders that move earth by digging, ripping, and blading, with traction from rolling tracks, not
tires), the excavator (a track-mounted vehicle with a much larger bucket than the backhoe), and
the scraper (with a large bowl in the center of the machine that cuts into the earth and carries the
material it has cut in that bowl). More distant members of the vast construction equipment family
are cranes, dump trucks, pipe layers, draglines, truck-mounted drills, and shovels.
The key to the power of the backhoe is hydraulic pressure. Hydraulic lines, a reservoir of
hydraulic fluid, a pump, and a series of pistons allow the machine's operator to extend its arm
and cut through soil with a toothed bucket. The pump exerts pressure on the hydraulic fluid, and
operating the levers opens a valve that releases the oil into a piston. The piston expands to lift the
arm, swing the bucket, press the bucket into the soil, and lift it out of the excavation. Reversing
the valve causes the oil to flow out of the piston and return to the reservoir.
The backhoe's standard equipment is a narrow bucket on the rear end and a loader on the front.
The operator effectively makes either device the working end by simply rotating his chair and
54

operating a different set of controls. Typically, if the bucket is being used, the flat front end of the
loader is set down on the ground to stabilize the vehicle.
History
The history of heavy excavating machinery began in 1835 when the dipper shovel was invented
to excavate hard soil and rock and to load trucks. The dipper shovel was steam-powered and
mounted on rails like a train. Rail lines were laid into mines and large excavations so the dipper
shovel could move around and load materials into railroad cars or horse-drawn trucks. The
dipper shovel had a short boom (lifting arm), a dipper stick (a beam that pivoted out from the
boom and gave the shovel its name), and an attached bucket for digging. The dipper shovel was
modified in many ways to create the familiar construction equipment of today; the boom was
changed, different attachments were added, the weight and balance of the equipment were
changed, and the type of tires or tracks were chosen to suit the equipment's primary jobs. Of
course, with the invention of gasoline-and diesel-powered vehicles, construction equipment
became even more adaptable. Most construction equipment is powered by diesel engines,
although electric-power, battery power, and propane tanks are used on specialized equipment.
The backhoe is one of the smaller and more versatile descendants of the dipper shovel. The
backhoe became an important piece of equipment with the large-scale construction of highways
and increased underground
55
A backhoe with highlights of its gear-driven track and bucket.

Placement of utilities. Backhoes and trenchers are used to excavate trenches for drainage and
utilities. But, from the early 1900s until the late 1950s, the backhoe remained a large piece of
equipment, and agricultural tractors were often called into service for smaller, limited access
construction projects. Kits were available to adapt the tractors to construction tasks, but
56

sometimes the right connections or attachment points were not provided, and the strains of
construction were unsafe for the tractor's design and the operator.
In the late 1950s, a boom in residential development sparked another spurt of changes in backhoe
design. Excavation of footings for house foundations, trenching, backfilling (replacing soil in a
trench to cover drainpipes or utilities), and grading projects required a compact machine capable
of a variety of tasks. By 1957, Elton Long, an engineer who had retired from the Case
Corporation, reinvented the backhoe in the form of the loader/backhoe that combined two pieces
of equipment in one and allowed the agricultural tractor to return to farming. Long's
loader/backhoe had rubber tires for mobility and the right swing mechanism and buckets for
specialized work. The loader on the opposite end of the machine from the backhoe bucket
provided weight and balance when the backhoe was used; likewise, the teeth of the backhoe
bucket could be driven into to the ground to provide anchorage as the loader lifted heavy
materials. By 1965, other evolutions of the backhoe had created machines exclusively for the
construction industry; diesel power, improved hydraulic linkages, four-wheel drive, and other
features were added or improved in the 30 years from 1965 to 1995.
By 1995, Case added its L Series loader/backhoes to its product line. The six models in this
series have improved hydraulics, more comfortable cabins for the operators, fuel-injection
pumps, better cooling efficiency, better access for servicing, improved road performance,
improved cycle times (allowing the operator to shift the transmission and accomplish the full
cycle of lowering, digging, and raising the bucket), larger fuel tanks, and increased performance
of both the backhoe and loader. They range in power from 73 to 99 horsepower (54 to 74 kW),
and their loaders are able to lift from about 5,300-7,300 lb (2,400-3,300 kg). The backhoe on the
57

largest L Series machine can excavate to a depth of almost 16 ft (5 m), and the Extendahoe (an
adapter that increases the length of the stick) increases that to about 20 ft (6 m).
Raw Materials
Backhoe manufacturers purchase many of its parts as subassemblies, or partially assembled
smaller units, that the manufacturer then completes. The manufacture of subassemblies may be
done by a number of independent firms that specialize in metal fabrication, hydraulics, or other
specialties. The subassemblies that are commonly purchased by backhoe builders include the
chassis (body), drive line (the engine, transmission, and front and rear axles), and the loader and
the backhoe (the buckets themselves plus the boom, stick, and other attachments). The hydraulic
system is supplied as a package including the pump, valves, and hydraulic cylinders. The
operator's station may be an open, canopy type or an enclosed cab; these may also be provided
by outside suppliers.
Raw materials purchased by the manufacturer and included in many of the subassemblies
includes medium-strength alloy steel in the form of thin sheets and as thicker plates that are
about 1 in (2.5 cm) thick. The thicker steel plates are used for structural parts of the backhoe, and
the thin steel is for housings and cosmetics. Plastics comprise the trim in the interior and around
the exterior of the cab, and a temperature-resistant composite plastic is used for the air-cleaner
housing. Seals are made of a high-grade elastomeric plastic that can withstand high temperatures
and pressures. A lower grade of plastic is formed into the fender and the cab trim. A
subcontracted foundry uses ductile iron to cast the backhoe and loader buckets.
58

Design
By late in the twentieth century, the function, and so the basic design, of the backhoe was clearly
defined by the construction industry that uses it. Design improvements continue to be made, but
they are in features and performance characteristics, rather than radical design changes. Leading
manufacturers like Case Corporation rely on surveys among their customers to collect data
leading to design modifications. The company defines the product based on a list of attributes,
and these attributes are ranked in importance and in actual performance or delivery by the
customers. Case routinely surveys its customers globally to obtain data over the broadest range
of operating conditions; it hopes to learn that the design concepts behind its backhoe exceed their
customers' expectations.
After collecting survey results and opinions from its customers, Case uses a technique called
Quality Function Deployment (QFD) to boil down the input and create a new model or series of
models with the requested characteristics. Three or four prototypes of the new design are built,
and customers are invited to visit the manufacturing plant for "customer clinics," during which
the proto-types are examined and tested. Construction operations are simulated over two or three
days, and the customers evaluate the performance of the prototypes and the new features. For
example, the operator's comfort may be evaluated in a series of as many as 50 questions and a
kind of competition between the earlier design and the prototype. With this detailed input, the
manufacturer then performs its own durability, reliability, and other tests and analyzes cost and
manufacturability of the redesigned product. Further internal quality evaluations are done before
the product is actually launched in the marketplace.
59
60

Use of Backhoe Loader
Backhoe loaders are very common and can be used for a wide variety of tasks: construction,
small demolitions, light transportation of building materials, powering building equipment,
digging holes/excavation, landscaping, breaking asphalt, and paving roads. The backhoe bucket
can also be replaced with powered attachments such as a breaker, grapple, auger, or a stump
grinder. Enhanced articulation of attachments can be achieved with intermediate attachments
such as the tilt rotator. Many backhoes feature quick coupler (quick-attach) mounting systems
and auxiliary hydraulic circuits for simplified attachment mounting, increasing the machines
utilization on the job site. Some loader buckets have a retractable bottom or "clamshell",
enabling it to empty its load more quickly and efficiently. Retractable-bottom loader buckets are
also often used for grading and scraping. The front assembly may be a removable attachment or
permanently mounted. Often the bucket can be replaced with other devices or tools. The backhoe
loader must be equipped with a tool coupler in order to mount different attachments to the loader.
A tool coupler consists of two cylinders on the end of the loader arm assembly which can expand
and retract allowing different tools to be attached to the unit. Advanced couplers like the tilt
rotator allow for greater articulation of attachments and makes the backhoe an effective tool
carrier.
Because digging while on tires intrinsically causes the machine rock, and the swinging weight of
the backhoe could cause the vehicle to tip, most backhoe loaders use hydraulic outriggers or
stabilizers at the rear when digging and lower the loader bucket for additional stability. This
means that the bucket must be raised and the outriggers retracted when the vehicle needs to
change positions, reducing efficiency. For this reason many companies offer miniature tracked
61

excavators, which sacrifice the loader function and ability to be driven from site to site, for
increased digging efficiency.
Their relatively small frame and precise control make backhoe-loaders very useful and common
in urban engineering projects such as construction and repairs in areas too small for larger
equipment. Their versatility and compact size makes them one of the most popular
urban construction vehicles. For larger projects, a tracked excavator is generally used.
In recent years, small compact tractors from manufacturers such as Kubota have become very
popular with private homeowners. Subcompact tractors, the size between a compact tractor and
lawn tractor, are also often sold in backhoe loader setup, sometimes with a bellymounted mower also included. These tractors offer private homeowners the ability to perform
minor excavation projects.
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The Manufacturing Process
Receiving and assembling the subassemblies
Manufacturing begins at the receiving docks of the factory. Purchased sub-assemblies

and components are unloaded, inventoried, and stored at a number of docks and then
directed toward subassembly cells. These cells are a number of work areas where
components and subassemblies are put together in more complete units or subassemblies.
For example, the components of a canopy-type cab will go to one cell where the steel
canopy components are cleaned of oil. One side of the canopy is tack-welded together by
a robotic welder and then final welded. While the robot welds, the subassembly operator
loads the components for the other side. It is welded in two steps, and the parts of the
canopy are welded together, also in a tack and final weld. The completed canopy shell is
then loaded on a conveyor to carry it to the next operation.
The backhoe casting (poured by an independent foundry) has not been machined. In a
subassembly cell, it is machined in a flexible machining center that is computer
controlled. Bushings (the bearings that are required at pivot points) are fitted to the
machined casting, and the backhoe subassembly is fed through the painting center to the
next assembly area. Similarly, the loader arn components are machined, equipped with
fittings, and moved through the painting center.
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Painting and curing
The material handling system consists of conveyors that are both electrically powered
and free to move as subassemblies are placed on them or removed. As the structural
subassemblies are completed, all are conveyed through the painting center, which has two
processes. The pieces are primed using an electrical deposition process that provides a
generous protective paint layer. This is called an "e-coat" for the electrical method and is
also termed a robust process for its vigorousness. The final coat of paint is applied
manually because the painters are able to observe where paint is needed and use their
judgment in applying it; that is, manual painting is more flexible than the electrical
process. The painted subassemblies are conveyed to curing ovens where the metal is
heated to cure the paint.
Hydraulic cylinders and radiator
A parallel subassembly is the cylinder factory. The cylinder rods are usually received in
precut lengths that have already been internally machined and chromed. Fittings are
added in a subassembly area, and the cylinders are processed through their own dedicated
paint system where they are e-coated, hand-painted, and oven-cured. The completed
cylinders are carried by forklift to the assembly area. The radiator is also a finished
assembly, but connections are added so that water lines may be attached to the radiator
and, from it, to the engine. Other subassemblies for the cooling, fuel, and lubrication
systems are fumished with appropriate connections, attached lines, and sometimes,
pumps and valves. Larger components like cylinders and tanks for fluids are added later
during the assembly of larger components.
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Final assembly
All of the subassemblies meet each other in the assembly area. The subassemblies are
transported to and delivered at the point-of-use on the assembly line, so there is no lost
motion for the assemblers. Each chassis is set on its on assembly cart with its front and
rear axles and built up from the deck (bottom or base) to the cab. The cab and canopy are
assembled at another area; when each unit is finished, it is carried to the chassis assembly
line and attached to the completed chassis.
The engine, radiator, transmission, and hydraulic system are mounted onto the chassis.
Other systems like the fuel, coolant, and exhaust components are also mounted on the
chassis. Hoses and other fittings are attached, and supporting flanges or brackets are
added as appropriate. When the cab is in place, the controls are linked to the engine,
hydraulics (for moving the buckets), and other systems controlled by the operator. The
two bucketsthe backhoe and the loaderare the last of the large components to be put
in place, using large pins that fit the inset lugs and bushings. Their hydraulics are fitted,
tightened, and tested.
The electrical system is the last to be connected; all of the fluid-bearing systems are
attached and tested first. Batteries, electrical connections for lighted controls in the cab,
and lighting are hooked up. Final body rails and handles are bolted in place, and trim is
added.
Although all the major parts were pre-painted in the subassembly stage, the finished
backhoe makes a last visit to the paint booth for a final coat. Detailing is the last step;
65

decals and warning labels are applied to specific locations based on a template, and each
completed backhoe is driven off the assembly line on its own power to the testing area for
evaluation.
Quality Control
Quality begins outside the backhoe factory with each of the subcontracted suppliers. They are
given product specifications as well as lists of key or critical characteristics (end results) that
might not be immediately obvious from the specifications. The suppliers perform their own
quality inspections and certify their products with data from those inspections.
As the components are received, they begin a history of documentation, called station control
documentation that travels with them through each stage of manufacture. First, they are logged in
and inspected at the receiving dock, and then the assemblers inspect them to make sure they meet
the specified criteria at each stage of assembly. Each assembler on the line has the authority to
reject parts or subassemblies throughout the process. A welder may reject parts for fit or rust, and
an assembler can stop the entire assembly line if he or she sees a flaw in materials, subassembly,
or appearance.
Independent of the assembly line, the manufacturer also performs random audits. Inspectors may
look at components, entire systems, or subassemblies and pull them off the line for inspection.
The purposes of these audits are to check the items against specifications, confirm the
observations of the assemblers, train assemblers in the finer points of inspections, and maintain
the high standards established by the manufacturer.
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A final check is performed on each backhoe. The inspector uses a checklist to validate a set of
criteria for the machine's function; for example, there should not be any leaks, torque levels
should be appropriate to the pieces, and moving parts should move according to a set of clearly
defined motions and limits of motion.
Byproducts/Waste
Backhoe manufacturers do not produce true byproducts, but they make lines with several
different models (called derivatives) and accessories. The derivatives are not identical, but they
may have a number of features in common to keep costs down and to ease the manufacturing
process. The derivatives or models may differ in size, scale, horsepower, or engine displacement.
Case's current line of backhoes includes a model that is a loader only. With a three-point hitch
and landscaping tools that are manufactured as a separate set of accessories, the loader becomes
a loader/landscaper, and its uses are multiplied.
The process for manufacturing backhoes produces little if any waste. Scrap is not generated in
the assembly process. In accordance with directives formulated by the U.S. Environmental
Protection Agency (EPA) for clean air, paint systems are carefully regulated so they produce little
airborne waste. An internal wastewater treatment system treats water that is used to clean
materials, product parts, manufacturing equipment, and the factory itself. This internal system
discharges into the local city wastewater system, so an external monitor confirms that there are
no contaminants in the discharged water. Other materialsprincipally card-board packaging and
wooden palletsare reusable or can be recycled.
Safety Concerns
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Safety is a primary concern in the factory. Assembly processes are designed to
be ergonomic (that is, they allow workers to move without stress or strain), lifting is limited, and
safe work zones are built into the assembly line. Overall, the industry establishes and rewards
safe work practices, and, through training, workers are constantly made aware of safe work
issues. A major manufacturer should have millions of worker hours without any safety-related
losses.
The Future
Despite the backhoe's well-established position in the construction industry, there is always room
for improvement. Design modifications are driven by customer demand. As of 2000, the two
primary areas where customers would like to see more improvements are in the ease of operation
and the operator's comfort. The need for simple operation is forced by the fact that there are
fewer skilled operators in the marketplace. And operations and reliability are both improving
because of the continuing integration of electronics, automation, better engine technology, and
on-board diagnostics. It is now up to the manufacturers to cost-effectively incorporate
improvements.
The future of the backhoe depends not only on cost-effective design changes but cost
consciousness in all aspects of operation including maintenance, durability, fuel efficiency, and
resale value. The backhoe is its own best guarantee of a secure future. It is a versatile machine
that is becoming even more flexible, thanks to modern technology linked with a proven track
record.
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Implementation of SCM
The implementation of SCM needs the integration of processes from sourcing, to
manufacturing, and to distribution across the supply chain
Stevens (1989) identified four stages of supply chain integration and discussed the planning and
operating implications of each stage:
Stage-1 Represents the base line case. The supply chain is a function of fragmented operations
within the individual company and is characterized by staged inventories, independent and
incompatible control systems and procedures, and functional segregation.
Stage-2 Begins to focus internal integration, characterized by an emphasis on cost reduction
rather than performance improvement, buffer inventory, initial evaluations of internal trade-offs,
and reactive customer service.
Stage-3 Reaches toward internal corporate integration and characterized by full visibility of
purchasing through distribution, medium-term planning, tactical rather than strategic focus,
emphasis on efficiency, extended use of electronics support for linkages, and a continued reactive
approach to customers.
Stage-4 Achieves supply chain integration by extending the scope of integration outside the
company to embrace suppliers and customers.
Effective SCM is made up of a series of partnerships and, thus, SCM requires partners to build
and maintain long-term relationships (Cooper et al. 1997; Ellram and Cooper 1990; Tyndall et
al. 1998). Cooper et al. believe the relationship time horizon extends beyond the life of the
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contract perhaps indefinitelyand, at the same time, the number of partners should be small
to facilitate increased cooperation.
Gentry and Vellenga (1996) argue that it is not usual that all of the primary activities in a chain
inbound and outbound logistics, operations, marketing, sales, and servicewill be performed by
any one firm to maximize customer value. Thus, forming strategic alliances with supply chain
partners such as suppliers, customers, or intermediaries (e.g., transportation and/or warehousing
services) provides competitive advantage through creating customer value (Langley and
Holcomb 1992).
The future of supply chain management is sustainability. Forward thinking companies are
already taking steps to develop sustainability within their supply chains. What is the secret to
implementing sustainability? How can we create a sustainable supply chain? What changes must
we make to our supply chains in order to become sustainable in todays business world? What
processes or steps must we implement in order to achieve this goal of sustainability?
There are seven steps that companies can take in order to become sustainable.
1) The first step is culture. Many companies are transfixed on short term results. The first
industrial revolution was defective and has transformed us into a disposable society.
Unfortunately we have trained our leaders on how to conduct business from a throwaway
viewpoint. The assumptions these executives have had is if it is within the law, we are allowed
to do it regardless of the repercussions to the environment. This is the first significant paradigm
that must be changed.
CEO/Presidents must be sustainability leaders! They have to be relentless about instituting a
culture of eliminating waste, using environmentally friendly processes and products and
70

conserving resources as much as possible. This culture starts with the top executive. Their words
and actions will play a large role on the implementation of a sustainability culture within an
organization.
Leaders need to realize that todays business actions will impact tomorrows environment.
Progressive companies are appointing high level champions within their companies to signify the
importance of sustainability within the organization.
2) The second step to instituting sustainability within a corporation is to educate the organization
on sustainability. It is imperative to show employees the benefits of sustainability and what it can
do for a company and our environment.
Many organizations are holding conferences and workshops on sustainability. Several
universities including Syracuse University have a certificate program on sustainability. There are
countless
books
on
sustainability
such
as The
Ecology
of
Commerce,
by
Paul
Hawken, Biomimicry, by Janine Benyus, Making Sustainability Work, by Epstein, Green to Gold,
by Esty & Winston andCradle to Cradle, by McDonough and Braungart. The books are powerful
advocates for change and they show us how doing the right thing for the environment can help
our companies!
3) The third step on our journey to sustainability is to complete a sustainability audit of our
companys supply chain. We need to develop a baseline measure for where we are today in order
to gauge where we need to go.
This audit should focus on the following areas: energy use, environmental costs, materials
recovery, water usage, transportation, products, hazardous materials used, processes, reverse
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logistics, packaging and social responsibility. Once the audit is complete we can determine our
deficiencies and start focusing on improving these processes within our supply chains.
4) The audit results should help the organization with our fourth step, which is determining the
goals and objectives for the sustainable supply chain. When developing goals and objectives,
companies must make sure their goals are SMART (Specific, Measurable, Attainable, Relevant,
and Timely) and that they are focused on sustainability. We should have goals on the reduction of
energy consumption, the use of renewable resources, recycled material in our products,
eliminating waste and reducing a companys carbon footprint. We need to set goals that make
sense for our company. Incremental steps towards the goals should be the plan. These goals
should be incorporated into the overall objectives of an organization.
5) Once we develop the sustainable goals for the organization, the fifth step would be to
determine what actions need to take place in order to meet these objectives. A plan must be
developed and projects assigned to help meet the sustainable goals of the company. The objective
is to achieve a sustainable supply chain but unfortunately it will not happen overnight. This is a
long arduous process and one that will take years to change. The actions and projects should
facilitate this change and help us reach our goals and objectives.
6) Once the projects are in place the next step is to measure the sustainability progress. Measures
must be in taken in order to see how effective we are with our projects. These sustainability
measures must be posted and discussed at company meetings. Measuring objectives will drive
results! Once we reach a measure we need to raise the bar and focus on getting more
sustainability within our supply chain processes. If we are falling short of our measures we need
to find out what is preventing us from reaching our goals?
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7) Part of the last step on the journey to sustainability is benchmarking where your company is in
regards to sustainability. Even though we have goals, and have projects and measures in place,
we need to seek out other companies that are trying to achieve sustainability. What are they
doing that we can incorporate in our organizations? How can we replicate and incorporate their
successful sustainability initiatives? We need to leverage the learning that is occurring in other
companies and incorporate it into our organizations, which in turn will benefit society.
The key to becoming sustainable is to develop a culture of sustainability within your
organization. Educate your employees, audit your supply chain processes, develop goals and
objectives, implement projects to meet your goals, measure your companys progress towards
sustainability and benchmark other sustainability initiatives. A company will reach sustainability
when they produce no waste, exclusively use renewable resources, employ no hazardous
materials in their process and develop products that are recycled or used in another form that
benefits the environment and society. The Industrial Revolution is evolving into the Sustainable
Revolution!
In recent years, the basis for global competition has changed. No longer are organizations
competing against other organizations, but rather supply chains are competing against supply
chains. The success of an organization is now invariably measured neither by the sophistication
of its products nor by the size of the market share. It is usually seen in the light of the ability,
sometimes forcefully and deliberately harnesses its supply chain and to opt for innovative
approaches of supply chain flows such as single-piece-flow, to deliver responsively to the
customers as and when they demand it.
This paper tries to identify and analyze the importance and adoption of various SCM
73

practices in Indian FMCG industry. The paper is based on empirical study conducted by the
author in Indian FMCG industry and various SCM practices are clubbed in different factors
through Factor analysis.
It is rightly said that manufacturers now compete less on product and quality which are often
comparable and more on inventory turns and speed to market (John Kasarda, 1999). This
statement shows the beliefs that supply chain management will increasingly be the principal
determinant of the ability to compete. Every link in it can add up to a competitive advantage.
There was time when companies looked at their supply chains the upstream part of their value
chain from the companys perspective as a means of focusing on their own core competencies,
and of leveraging those of vendors and lowering their cost to increase their responsiveness
towards consumers . Those goals can not be swept away by supply chain but they will be
superseded by a single super objective as to compete on the basis of how well organization
manage its supply chain thus the competitive advantage is shifting from the shop floor. The
question arises why it is so important to optimize the supply chain. It is so because inefficiencies
in the supply chain leads to higher inventories at all points of the chain. This adds costs related to
wastages, blocked funds and risk of holding obsolete products with chances of quality depletion.
SCM in Indian Business Scenario
Indian organizations are still juggling among the Material Resource Planning (MRP-II),
Enterprises Resource Planning (ERP), Logistics and Supply Chain Management (SCM).
However, it is quite evident that Indian corporate sector is fast recognizing the need of SCM,
which can integrate all other practices and processes. SCM in India offers one of the fastest
growth areas in revenues as well as employment. According to ETIG, there is no reliable
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estimate of the market opportunities for supply chain and its components exist in India today.
Even though, ETIG estimates the Indian market value for supply chain / logistics at 13 percent of
GDP is more than US $50 billion, a lions share of which is accounted for by transportation and
warehousing.
India started a little late for restructuring and reformulating the strategies related with supply
chain. However, there is no doubt that Indian industries are fast catching and gearing up for
meeting the new business environment. A study of available literature related with Indian
business practices after 1991s liberalization policies shows that organizations are concerned
about their value chain and identifying that competition is shifting towards the efficiency and
effectiveness of entire supply chain activities.
The traces of SCM adoption by Indian organizations are given as:
Until 1990, logistics was treated as the management of transportation, inventories and
warehousing and organizations had to perform these activities individually in an efficient
manner.
Before opening of Indian market, Indian business giants were enjoying the solo play with
continuous expansion of capacities. Later on when they heard the music of competition,
they found themselves with excess capacities with huge cost burdens. This forced
organizations to control the cost factor for the survival at marketplace.
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At the same time of 1990s, Indian organizations got fascinated by Business Process Reengineering (BPR). Organizations treated BPR as remedy of their illness across the
organizations processes and functions by eliminating the non-value adding activities and
streamlining the operations with a promise of higher returns.
Later on, the emergence of Enterprises Resource Planning (ERP) gave boost to BPR. For
the first time, organizations could have an integrated view of the various silos that
existed in their businesses, giving an opportunity to rationalize, remove duplication and
speed up the processes.
Rapid growth and improvement of telecommunication networks and wide spread of
information technology tools and techniques after mid 1990s posed the biggest challenge
in handling well-informed customers. Nevertheless, these changes also provided the
biggest boost to Indian industries because organizations found themselves able to reach
out vendors or suppliers on one end, and customers to the other. Due to this revolution
only, ERP-II integrated the internal departments into a seamless organization, whereas,
SCM attempts to integrate the external factors and processes into the internal processes.
Changes can be implemented easily when tough times reign. Companies in India have been
looking at ways of cutting costs and improving process efficiencies, in their quest to become
globally competitive through taking initiatives for supply chain management practices
because SCM recognizes that distinct functions like purchases, inventory management,
distribution and production planning work best when integrated. At the same time, supply
chain management in India seems to be following the path of more advanced industrial
countries, involving not only the customers, manufacturers, and vendors but also the third
76

party service providers, consultants, software providers etc.
Indian Fast Moving Consumer Goods (FMCG) Industry
Indian Fast Moving Consumer Goods (FMCG) industry has a long history. However, the Indian
FMCG industry began to take shape only the last fifty years. Even today, the Indian FMCG
industry continues to suffer from a definitional dilemma as well as the exact estimation of market
size. Nevertheless, more than Rs. 43,000 crores ( in organized sector) fast moving consumer
goods (FMCG) industry is a critical component of the Indian economy. The actual size of
industry is phenomenal, if one adds the turnover of unorganized sector. That is why, this sector
has potential to drive growth, enhance quality of life and create jobs. The Indian FMCG sector is
primarily a low margin business, where success depends on the volume. Presently, the FMCG
sector is one of the largest in the country, which accounts for more than 14.5 per cent of GDP
with whooping sum of domestic consumption capacity of nearly 20 billion U.S. Dollar. With the
average growth of Indian economy in the range of 6-8% per year will witness a consistence rise
in demand and purchasing power of Indian market. Following the trend, the FMCG sector will
grow by 5-6% per year in mature categories and 8-10% per year in upcoming categories.
However, factors such as low rural penetration, dependence on monsoon, the price sensitivity of
the consumers and increased level of competition could result in decreasing profit margins in the
industry.
The following section examines the different philosophies related to development of SCM.
Subsequent sections describe the research construct, which provides details of sample design,
design of questionnaire, survey methodology, followed by an analysis of the results and the
managerial implications of the study along with the future research directions.
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Causes for Demand Fluctuations
Transportation discounts
Volume discount
Promotional activity
No minimum or maximum order quantities
Product proliferation
Long order lead times
Poor customer service rates
Poor communication
To address this problem, the director of JCB India suggests the implementation of Just-in-Time
Distribution (JITD), with Barillas distributors.
Under the proposed JITD system, decision-making authority for determining shipments from
Barilla to a distributor would transfer from the distributor to Barilla.
Specifically, rather than simply filling orders specified by the distributor, Barilla would monitor
the flow of its product through the distributors warehouse, and then decide what to ship to the
distributor and when to ship it.
Implementation Issues Resistance from the Distributors
Managing stock is my job; I dont need you to see my warehouse or my figures.
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I could improve my inventory and service level myself if you would deliver my orders more
quickly; I would place my order and you would deliver within 36 hours.
We would be giving Barilla the power to push products into our warehouse just so that Barilla
can reduce its costs.
Implementation Issues Resistance from Sales and Marketing
Our sales levels would flatten if we put this program in place.
How can we get the trade to push Barilla product to retailers if we dont offer some sort of
incentive?
If space is freed up in our distributors warehouses, the distributors would then push our
competitors product more than ours.
It seems that the distribution organization is not yet ready to handle such a sophisticated
relationship.
We run the risk of not being able to adjust our shipments sufficiently quickly to changes in
selling patterns or increased promotions.
We increase the risk of having our customers stock out of our product if we have disruption in
our supply process.
We wouldnt be able to run trade promotions with JITD.
It is not clear that costs would even be reduced.
Solutions the Implementation Problems.
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Demonstrate that JITD benefits the distributors (lowering inventory, improving their service
levels and increasing their returns on assets); Run experiment at one or more of Barillas 18
depots
Middle Management needs to look at JITD not as a logistics program, but as a company-wide
effort; Get top management closely involved.
Built Trust among all liked entities such as distributors, sales team, retailers.
80
Chapter No-4
Methodology
81

Improvement by using Methodology
Objective:
To understand the logistical operational functions of Supply Chain Management
Understanding of the operational areas of logistics management and their interrelationships.
Data Collection:
Market Penetration is the sole of Distribution Business. Companies use market penetration as a
key factor in implementing their growth strategy & most of their marketing activity revolves
around penetration. The Distributors set up plays a very important role in achieving good
Market penetration for any product, brand or company.
At JCB India planning & implementation goes in to achieve maximum market penetration. The
distribution set up at JCB India consists of trained manpower backed by strong planning,
processes and infrastructure.
Highlights of JCB India distribution set up:
Coverage:
More than 1500 retailers & 200 Distributors/ stockiest are covered in Haryana region.
Manpower:
Well-trained and motivated Sales team comprising of 2 Sales managers, 2 Sales Supervisor,
managing a team of 15 Sales Representatives covering every nook & corner of the market.
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Sales Management tools:
Effective implementation of sales planning & monitoring tools for ensuring effective Market
coverage & Product availability. This comprises of Permanent Journey Plan, Standard Route
plans, Visit reports & Outlet Take-off report.
Market Coverage:
Regular market coverage cycles ensuring reach to every retailer are planned. The sales team
reaches every retailer twice / thrice in a week depending upon the planned routes for different
Companies & product lines. The sales team also ensures proper merchandising activities as per
the Marketing Plan/ Campaigns for various products.
Infrastructure:
2 Retailing/ Delivery Vans, Computerized billing, SMS Service to keep the retailers/ stokiest
informed about latest schemes and offers.
Market Feedback:
Regular surveys are conducted for different products, which ensure regular feedback to the
companies. These feedbacks have provided the companies in improvising and making effective
marketing plans.
Recognition: Timely & Suitable Incentive & recognition policies ensure a motivated sales team.
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Primary Data:
Face to face interview with the Distributors
Telephonic Interview
Street Mapping for understanding the various requirement
Secondary Data:
Banners & Posters
Channel listing on websites
Annual Brochure of Association & different trade Associations
Methodology:
The design of research (medium of interaction)
Participant observation
Personal Interviewing (by appointment)
Telephonic Interview
Sampling Plan:1. Sampling universe:

It is space where our study is conducted upon area defined to the study. In this project
sample universe is restricted to Distributors and Customer of Haryana city.
2. Sample size:
Since a vast sample gives more reliable information so we took the sample size of 50
stores (approx) in the city.
3. Sample unit:
The sample unit means How many Distributors called per day .In this project sample unit
is 15 Distributors /day
4. Sampling Frame:
Sampling frame means the boundaries under which survey has to be completed. In this
project sampling frame is Distributors of Haryana city.
5. Geographical location:
Haryana
84
85

Conclusion
It is said that a chain is only as strong as its weakest link. This holds true for the supply chain as
well.
Online administrative working by advanced SAP software
Good contacts helpful in maintaining better customer relationships
Large market coverage, and easy availability of products
Delivery of products is done on the basis of early batch production
The clubbing of various SCM practices of Indian FMCG organizations emerged as few
exclusive factors through research study, which were different on agreement continuum and
adoption continuum from each other. The result of study revealed that supply chain
partnership and supply chain networking are considered to be dominating factors for Indian
FMCG organizations. This seems to be quite true with the rapid spread and development of
IT and telecommunication tools and techniques throughout India, which is facilitating the bidirectional flow of information and enhanced level of coordination and collaboration.
Besides that leanness or operational efficiency factors have high degree of agreement but low
level of adoption. The reasons behind the same are basically infrastructural bottlenecks and
the presence of unskilled and semi-skilled suppliers at backend and distributors at front end
of the supply chain. However, cross functionality and strategic outsourcing are leading on
adoption continuum.
A truly integrated supply chain requires a huge amount of commitment by all members of the
supply chain. The focal firm might require to overhaul the purchasing process and integrate
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suppliers R&D teams directly into its own decision making processes so as to leverage on
its own core competency and partners core capabilities. Integrating the purchasing and
logistics processes with other key corporate processes creates a closely linked set of
manufacturing and distribution processes. It further allows focal firm to deliver products and
services to both internal and external customers in a more timely and effective manner.
The future belongs to rural supply chains. With more than four billion people living
in rural areas, there is a tremendous need to focus attention on issues of product designs,
production, marketing and retail of food, and other electric and communication items in
rural areas at affordable prices. India has a huge

opportunity to become a leading global food supplier, as well as global garment
Suppliers, if correct strategies are put in place and encouraged.
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Finding and Suggestion
Findings from various resources are:
Following parameters are found to be performance indicator
Price
Ability to meet delivery due dates
Commitment towards quality
Timely Payment to vendors
Technical expertise
Innovation
Impact of Supply chain management on Productivity and efficiency

SCM Findings, Suggested Model & Recommendations
Reduction in cycle time
Reduction in inventories
Reduction in stock outs
Improved quality of service
Cost reduction
Effective resource planning
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Factors for minimizing supply chain cost
Proper information system
Regular training
Process flow
Barriers for effective supply chain are
Lack of sophisticated information system
Lack of ability to manage inventory
Lack of cooperation among supply chain members
Competition from other supply chain
Geographical distances
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Recommendation
Integration and Coordination
In an enterprise, integration can simply mean that each unit of the organization will have access
to information relevant to its task and will understand how its actions will impact other parts of
the organization thereby enabling it to choose alternatives that optimize the organization's goals
The key to integration is coordination. To coordinate is to manage dependencies among activities
so as to achieve coherent operation of the entire system in question. . The objective of multiplant coordination is to coordinate the plans of several plants in a vertically integrated company
so that the overall performance of the company is improved. In order for such coordination to be
efficient, the effects of uncertainty of final demand, is taken into consideration.
Modeling and Simulation
Modeling and simulation is most often used to test the impact strategic level decisions have on
supply chain performance. This may for example be the impact of restructuring the supply chain
by reducing the number of plants, changing modes of transport, or relocating warehouses.
Simulation as a method, does not give the optimal solution. It simply allows the user to test
different solutions. Simulations are run with various parameters or ``set-ups'', and the results are
analyzed and compared to arrive at the optimal solution among those tested.
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The 7 Principles of effective Supply Chain Management
Principle 1: Segment customers based on the service needs of distinct groups and adapt
the supply chain to serve these segments profitably.
Principle 2: Customize the logistics network to the service requirements and profitability
of customer segments.
Principle 3: Listen to market signals and align demand planning accordingly across the
supply chain, ensuring consistent forecasts and optimal resource allocation.
Principle 4: Differentiate product closer to the customer and speed conversion across the
supply chain. Principle 5: Manage sources of supply strategically to reduce the total cost
of owning materials and services.
Principle 6: Develop a supply chain-wide technology strategy that supports multiple
levels of decision making and gives a clear view of the flow of products, services, and
information.
Principle 7: Adopt channel-spanning performance measures to gauge collective success in
reaching the end-user effectively and efficiently.
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Reference
http://smallbusiness.chron.com/supply-chain-management-affect-manufacturingcompanies-75841.html
http://nbmcw.com/reports/equipment-machinery/28943-backhoe-loaders-manufacturersthink-beyond-demand.html
http://www.supplychainopz.com/2013/07/principles-of-supply-chain-management.html
http://www.economywatch.com/world-industries/manufacturing/?page=full
http://www.madehow.com/Volume-6/Backhoe.html
https://www.jcbindia.com/company_overview.aspx
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Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

The product flow

The information flow

The finances flow

Supply Chain Management

Supply Chain Management

What is SUPPLY CHAIN MANAGEMENT?

Figure 1: Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

FIGURE 2a DIRECT SUPPLY CHAIN

FIGURE 2b EXTENDED SUPPLY CHAIN

Figure 2: Types of Channel Relations

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Process View of a Supply Chain

Supply Chain Management

Supply chain management has become a hot competitive advantage as companies

Supply Chain Management

All the Total Quality Management, Just-in-Time System, Reengineering, Team

Supply chain management includes transportation vendors, suppliers, distributors, banks,

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

reducing working capital,

Making smooth availability of product to the target market.

Supply Chain Management

Supply Chain Management

INDIRECT MARKETING CHANNEL:

Supply Chain Management

Supply Chain Management

Supply Chain Management

implementing and managing the marketing program positioning

Supply Chain Management

objective is to be achieved, e.g. acquiring a competitive

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

Supply Chain Management

The profitability:-This it is an element which crowns the previously mentioned

financial policies of the company.

profitability. (Day 1986).

Supply Chain Management

planning, ( McDonald 1999)., and consequently to the planning of Strategic Marketing.