BBA-RO

Supply Chain Management

Assignment

Roll No:520967890
Name:SANJITH KRISHNA C R
Centre Code:2760
Module code:CA0003
Bachelor of Business Administration in Retail
Operations
BBA- RO Semester 1
CA0003 – Supply Chain Management - 2 Credits
(Book ID: B0738)
Assignment Set- 1 (30 Marks)

1. Give the importance of supply chain management in retail sector. Discuss the
components and players of supply chain

In the highly competitive retail marketplace, typified by changing consumer preferences,

different formats as well as large geographical stores spread, the onus on retail logistics to
ensure efficiency and cost margins is quite substantial. Hence, it would not be inappropriate to
state that oftentimes the viability of a retail operation hinges as much on achieving efficient
logistics and supply chain as it does on attaining success in the front end.

The compulsion of retailers, which necessitate seamless logistics function, can be summarised
as follows:

 To ensure perfect coordination among various entities involved in the supply chain such as
suppliers, manufacturers and vendors.
 To ensure that consumers get the right product at the right time and at the right place.
 To ensure that supply to retail stores across various geographies is seamless and consistent.
 To be flexible in order to allow for changes in the product mix owing to changes in consumer
demand.
 To constantly improve operating margins.
 To achieve profitable and sustainable growth of retail operations in the long run.
 To achieve optimal inventory levels and reduce wastage of products.
Components

Traditionally, retail logistics had two major components – transportation and storage. But with
the increasing complexity of modern retail supply chains, the scope of logistics has also
expanded beyond the traditional definition. An efficient retail logistics function has become a
significant instrument for retailers to ensure competitive advantage, and its scope now
includes plans and processes that allow the back end to effectively meet consumer demand.
Currently, retail logistics is a holistic concept that involves coordinating the following main
processes among others:

 Inbound and outbound transportation

 Warehousing
 Packaging and labeling
 Shipment consolidation
 Tracking/Tracing the products
 Inventory management
 Quality checking
 Planning for cost control
 On Point • Retail Distribution Warehousing 5
 Distribution of merchandise
 Reverse handling and flow of products (reverse logistics)

The main processes and activities of retail logistics listed above are aimed at making sure that
the shelves in a retail front-end store are never vacant and are filled with the right products at
the right time and at the right place. Apart from maintaining an efficient supply chain, which
keeps the stores filled with the correct products, it is also important that retail logistics
increases operational efficiencies to allow retailers to run a viable retail operation.

Delivery Models

For decades, retail logistics has evolved through various models. Years ago, retailers and
manufacturers had to rely on a traditional distribution channel composed of transporters,
clearing and forwarding agents and stockists. Since mid-1990s, the emergence of alternative
modern distribution channels has allowed retailers to choose from a range of logistics service
providers to achieve an efficient storage and flow of products.

As of now, there are four logistics delivery models that retailers can choose from:

 Entirely self-managed logistics and warehousing network

 Partly outsourced to traditional service providers like transporters, clearing and forwarding
agents and stockists
 Partly or completely outsourced to third-party logistics service providers (otherwise known as
PL players)
 Completely outsourced to fourth-party logistics providers (otherwise known as 4PL players)

Whilest the above four are broad delivery models available to manufacturers, retail chains and
retailers, it has been observed through interactions with retailers and warehouse users during
this study that oftentimes, hybrid models of distribution are preferred. For example, a retail
chain may choose to manage the transportation of its goods while the warehousing may be
outsourced to a PL provider. The first two models listed above are more or less self
explanatory, while the following definitions further explain the 3PL and 4PL delivery models.

3PL – A third-party logistics provider (3PL) is an entity that provides services to companies for
some or all of their supply chain management functions. PL providers typically specialize in
 integrated warehousing and transportation services that can
be scaled and customized to the client’s needs based on market conditions and the demands
and delivery service requirements for their products and materials. In India, a large number of
professional 3PL players like DRS, Gati, DHL, OM Logistics, Indo Arya, Sical Logistics, Reliance
Logistics, SafeExpress, Agility, M J Logistics, AS Cargo, Kuehne+Nagel, Panalpina, Expeditors
and AFL among others have been providing services to retailers and other sectors for their
logistics requirements.
4PL – As retailing in India is expanding and reaching new heights in terms of both
geographical coverage and volume of products, there is an emerging requirement for an
integrating logistics firm to assemble various resources, capabilities and technologies of its
own as well as other companies to provide a complete logistics package to clients. Such firms
are typically known as 4PL players. Typically, the resources used by a 4PL player are of other
service providers, and its fundamental role is to manage all the PL players and other
independent agencies employed for a logistics function, providing a turnkey logistics solution
to retail chains and to other sectors.

Whilst this model is quite prevalent in developed countries, the 4PL sector in India is at a
nascent stage, with a few players emerging such as Future Logistics (which is a 4PL for Future
Group).

The organized PL sector in India has been consistently growing over the last few years,
mirroring the growth witnessed in the retail logistics sector overall. The sector comprises of
global as well as Indian companies that are ramping up their operations on a Pan-India level
to cater to retail as well as other sectors. According to my studies, in future the total
outsourced logistics revenue in India will be billions of INR

2. Is supply chain planning really needed? Support your answer. Explain supply chain planning
decisions

Yes, supply chain planning really needed in today’s retail market, the term
Supply Chain Management is a very familiar term in today's business world. It
refers to the processes which involves from the acquiring of the raw material
stage to the production stage to the distribution until it finally reaches the
customer in an efficient and effective manner. It involves activities like sourcing,
procurement, production along with the logistics activities.

With globalization having a great impact on the supply chain management , it has
become very important for the organizations to have global networking. A lot of
changes are seen in the corporates in terms of procurement, production and
distribution. With the organizations becoming more and more focused on the
efficiency and the effectiveness of the various core competencies stat ed earlier
the companies have relatively opted to outsource the other activities to a much
effective destination. The main focus here is to satisfy the existing and the new
customers by matching or bettering the demands of the customers. This in turn
will ensure the smooth functioning of the supply chain partners thus giving way
for better and competitive edge to the work flow.

Strategic planning, operative planning, product planning, production planning,

supplier management,logistics management, sales for ecasting and order
fulfillment play a very vital role in the success of the smooth work flow. SCM has
to go through a lot of complexities both internally and externally ranging from
product designs to the price configurations till the delivery of them to t he
customers.

The key components of Supply Chain Management includes :

1.Strategic planning: Quality planning has to be done for the implementation and
optimization of the necessary tools for determining the location, size and the
kind of facilities opted in order to meet the customer service goals.

2.Demand Planning: Based on the customer demand predictions the demand

planning is done thus, ensuring better and accurate customer demand.

3.Distribution Planning: There are a lot of recent changes in t he corporate world

due to globalization. The planning for distribution is done to determine which
demands can be fulfilled by the existing supply elements.

4.Manufacturing Planning: The manufacturing division is usually confronted with

a lot of complexities when compared to other divisions. Meeting the demands in
terms of maximization of the assets like people, materials, equipment and capital
and planning has to be done accordingly in terms of planning related to
engineering, assemble and the manufacturin g environments. It would help in
delivering advanced capabilities that would help the organization make the best
use of the production resources, improve efficiencies, increase output and lower
costs.

5.Production Planning: Under production planning detai led scheduling is done

with proper planning for procurement. The comparison of the capacity
requirements from the production orders with the available production capacity is
done through detailed scheduling.

6.Transportation and logistics planning: The pl anning is done in terms of route,

management is done in terms of transportation and the planning for the billing
and delivery of the products are done accordingly.

Further the end to end fulfillment would be done giving ways for the benefits
mentioned below:

* With the adaptability and visibilit y in the supply chain management there is
better and almost immediate response to the existing and new supply and
demand. Opportunities are more quickly capitalized on.
 * The level of customer satisfaction is rela tively more and hence boosts each and
every aspect of the supply chain management.

* Monitoring and tracking of the compliance can be done.* Better planning for
procurement, management and transportation can be done because of relatively
lower operational expenditure.

* The business relationship gets strengthened more paving way for the
achievement of goals with excellence.

3. What is sourcing and explain the key sourcing decisions that managers need to
make.

What is sourcing ?

Before we answer this, we have to know what our customers require

- Product that appeals to our customers, is the key to any successful retailing
business – In terms of, Design, Fit, Value and Quality

- Merchandise available when our customers want to make their purchase in the size
and colour they want

Once we understand what our customers want we then have to add any additional
requirements we may have of our own to achieve these requirements;

- Firstly our ability to respond to our customer needs through speed to market,
breaks into two areas;

 Ensuring products reach the market place within a specified time scale and
can be replenished as quickly as possible

 Ensuring processes are in place to enable us to react to sales and product

trends earlier and in line with our competitors

- And I have left cost until last, but as a retailer we have to ensure we source our
merchandise at the best possible value taking account of our quality standards and
ethical trading policy.

Price is always a difficult one, as there has to be a balance struck between a matrix of lead-time v
service v value. This will be dependent on the particular product segmentation of a garment or
range.

- shorter lead times, adherence to agreed delivery dates, ability to deliver smaller more
reactive production runs and good prices.

It is this criteria that begins to mould our sourcing decision making process
Sourcing decisions that managers need to make;

- Quality product: Quality in our business is paramount. Before placing any

contracts we have to be sure that a potential new vendor can make to the quality
standards our customers demand. Our business only has one quality standard,
which is not negotiable – If a new vendor is unable to make to these exacting
standards then we will not take any relationship forward.

- Ethical trading policy: As a company we take our social responsibilities very

seriously and until a vendor meets all our ethical requirements, no contracts will
be placed.

- Stock management: The management of stock and holding differentiated levels of

stock today is an important factor in deciding how a particular range maybe
sourced. Also we must ensure we deliver our availability targets.

- Lead times: We are continually striving to reduce our lead times, as we make
better buying decisions the closer to the point of sale that we buy product.

- Responsiveness: Being able to respond to sales in season and the ability to stop
slow selling product and chase the fast in season is a crucial factor in determining
the overall level of profitability at the end of a season of our categories.

- Lower mark downs: Controlling our mark downs leads on from being able to
respond to sales minimizing cost of reductions of slow selling merchandise.

- Reducing Costs: Our business, is continually looking at its overall costs so we can
invest in product, be it upgrading raw materials or in selling price or investing in
our stores to create an aspirational shopping environment.

These criteria build into an overall picture of what kind of sourcing model we propose for a product

area.
Bachelor of Business Administration in Retail
Operations
BBA- RO Semester 1
CA0003 – Supply Chain Management - 2 Credits
(Book ID: B0738)
Assignment Set- 2 (30 Marks)

1. Give a brief note on (A) execution elements of Supply chains in modern retail (b)
Vendor management Key performance

(A) A retail revolution is happening in the country. For global giants looking at newer
markets, India presents exciting opportunities on account of its vast middle-class and a
virtually untapped retail industry.

The Indian retail sector has seen unprecedented growth in the last few years. The
KPMG report, `Consumer Markets in India: the next big thing has predicted that the
organized retail sector is expected to grow at rate higher than GDP growth in the next
five years.The AT Kearney's 2006 Global Retail Development Index positions India as a
leading destination for retail investment.

The success in this competitive and dynamic sector depends on achieving an efficient
logistics and supply chain, which can be provided by professionals, as they combine the
best systems and expertise to manage a ready flow of goods and services.

The retail boom promises to give an impetus to a host of allied sectors and the logistics
industry, as the backbone of the retail sector, stands to gain the maximum.

In India, the logistics market is mainly meant for transportation. But the major
elements of logistics cost for industries include transportation, warehousing, inventory
management, courier and other valued-added services such as packaging.
 The logistics costs account for 13 per cent of GDP. The industry is currently on an
upswing and is poised for a growth of 20 per cent in the coming years.

With the expansion of retail, supply chain will take on an increasingly important role.
With the end consumer becoming more demanding and time conscious, the need for
just-in-time services is increasing. In retail, where competition is intense and stakes are
high, customer satisfaction is paramount.

 Forecast;

 Order management;

 Inbound transportation and import/export considerations;

 Domestic distribution practices;

 Transportation to customer; and

 Performance measurement and improvement.

Linking partners in the supply chain can yield the highest level of improvement. It can also highlight
the elements of the supply chain that truly need to be improved. Transparency begets understanding;
understanding begets improvement. There is nothing like a comprehensive exchange among all of
your trading partners (and your internal processes) to gain transparency to where the pains lie and
where improvements are needed.

(b) vendor management key performance

Scorecards – The Vendor Management Enterprise View provides a central repository for all of your
supplier scorecards.

Scorecard features include:

 Support for your supplier hierarchy with roll-up summary scorecards, enabling visibility into

supplier performance at any level of the hierarchy

 Automatic scorecard processing prevents bottlenecks and eliminates manual tasks.

 Configurable scorecards meet your companies supplier performance management needs for:

 Performance categories

 Key performance indicators

 Flexible data sources including Web-surveys, Automated Data Feeds, and Supplier Self-
Reporting

 Scoring Rules

 Powerful drill-down reporting through supplier hierarchy increase visibility into supplier issues.
 Supplier Performance visibility across multiple dimensions including commodity category, business
unit, and geography.

Alerts – The Vendor Management scorecard functionality is complemented by actionable performance

alerts.

Alert features include:

 Automated scorecard alert triggers compare supplier scorecard results against configured alert
rules.

 Triggered alerts are sent to the Buyer, Manager, or Supplier’s email and Performance Manager
dashboard and inbox, maximizing visibility into supplier performance issues.

 Relationship manager’s are free from manual scorecard collection tasks and can use the
automated alerts to manage supplier performance by exception and concentrate their free time on
supplier development and sourcing responsibilities.

 Alerts can be configured with business rules based on different levels of supplier performance in
order to best meet your company’s supplier performance management needs.

Action Plans – Vendor Management enables corrective Action Plan processes to be configured as part
of your supplier performance management program. The Action Plan process is easy to follow and to
monitor through web-based tools, ensuring that both buyer and supplier collaborate to effectively
contain, remedy, and eliminate the performance defect.

2. Write a short note on warehouse management in retail environment

Warehouse Management System, or WMS, is a key part of the and primarily aims to control the
movement and storage of materials within a warehouse and process the associated transactions,
including shipping, receiving, put away and picking. The systems also direct and optimize stock put away
based on real-time information about the status of bin utilization.

Warehouse management systems often utilize technology, such as , , and potentially Radio-frequency
identification (RFID) to efficiently monitor the flow of products. Once data has been collected, there is
either a batch synchronization with, or a real-time wireless transmission to a central database. The
database can then provide useful reports about the status of goods in the warehouse.
The objective of a warehouse management system is to provide a set of computerized procedures to
handle the receipt of stock and returns into a warehouse facility, model and manage the logical
representation of the physical storage facilities (e.g. racking etc), manage the stock within the facility and
enable a seamless link to order processing and logistics management in order to pick, pack and ship
product out of the facility.

Warehouse management systems can be stand alone systems, or modules of a system or supply chain
execution suite.

The primary purpose of a WMS is to control the movement and storage of materials within a warehouse –
you might even describe it as the legs at the end-of-the line which automates the store, traffic and
shipping management.

In its simplest form, the WMS can data track products during the production process and act as an
interpreter and message buffer between existing ERP and WMS systems. Warehouse Management is
not just managing within the boundaries of a warehouse today, it is much wider and goes beyond the
physical boundaries. Inventory management,inventory planning, cost management, IT applications &
communication technology to be used are all related to warehouse management. The container storage,
loading and unloading are also covered by warehouse management today. Warehouse management
today is part of SCM and demand management. Even production management is to a great extent
dependent on warehouse management. Efficient warehouse management gives a cutting edge to a retail
chain distribution company. Warehouse management does not just start with receipt of material but it
actually starts with actual initial planning when container design is made for a product. Warehouse design
and process design within the warehouse (e.g. ) is also part of warehouse management. Warehouse
management is part of Logistics .

Warehouse Management monitors the progress of products through the warehouse. It involves the
physical warehouse infrastructure, tracking systems, and communication between product stations.

Warehouse management deals with receipt, storage and movement of goods, normally finished goods, to
intermediate storage locations or to final customer. In the multi-echelon model for distribution, there are
levels of warehouses, starting with the Central Warehouse(s), regional warehouses services by the
central warehouses and retail warehouses at the third level services by the regional warehouses and so
on. The objective of warehousing management is to help in optimal cost of timely order fulfillment by
managing the resources economically. Warehouse management = "Management of storage of products
and services rendered on the products within the four walls of a warehouse"
3. Give the importance of sales forecasting in modern retail environment.

Sales Forecasting is the process of estimating what your business’s sales are going to be in
the future.

Sales forecasting is an integral part of business management. Without a solid idea of what
your future sales are going to be, you can’t manage your inventory or your cash flow or plan
for growth. The purpose of sales forecasting is to provide information that you can use to
make intelligent business decisions.

Sales forecasting for an established business is easier than sales forecasting for a new
business; the established business already has a sales forecast baseline of past sales. A
business’s sales revenues from the same month in a previous year, combined with knowledge
of general economic and industry trends, work well for predicting a business’s sales in a
particular future month.

Sales forecasting for a new business is more problematical as there is no baseline of past
sales. The process of preparing a sales forecast for a new business involves researching your
target market, your trading area and your competition and analyzing your research to
guesstimate your future sales.

Businesses are forced to look well ahead in order to plan their investments, launch new
products, decide when to close or withdraw products and so on. The sales forecasting process
is a critical one for most businesses. Key decisions that are derived from a sales forecast
include:

- Employment levels required

- Promotional mix
- Investment in production capacity

There are two major types of forecasting, which can be broadly described
as macro and micro:

Macro forecasting is concerned with forecasting markets in total. This is about determining
the existing level of Market Demand and considering what will happen to market demand in
the future.

Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a
product’s market share in a particular industry and considering what will happen to that
market share in the future.

The selection of which type of forecasting to use depends on several factors:

(1) The degree of accuracy required – if the decisions that are to be made on the basis of
the sales forecast have high risks attached to them, then it stands to reason that the forecast
should be prepared as accurately as possible. However, this involves more cost

(2) The availability of data and information - in some markets there is a wealth of
available sales information (e.g. clothing retail, food retailing, holidays); in others it is hard to
find reliable, up-to-date information
(3) The time horizon that the sales forecast is intended to cover. For example, are we
forecasting next weeks’ sales, or are we trying to forecast what will happen to the overall size
of the market in the next five years.

(4) The position of the products in its life cycle. For example, for products at the
“introductory” stage of the product life cycle, less sales data and information may be available
than for products at the “maturity” stage when time series can be a useful forecasting method.

Creating the Sales Forecast for a Product

The first stage in creating the sales forecast is to estimate Market Demand.

Sales forecasting is a very important in modern retail environment because in India there are
a few big companies are playing in the retail sector like Big bazaar, Reliance fresh, adithya
birla’s more, Carrefour, Seveneleven etc. and the Planning Commission of India had opened
Indian retail sector for foreign investors because of this many more competitors are looking
their own India and of course India’s retail market is billions of INR that’s why more players
from foreign countries are coming to India which sectors are booming in that sector you can
see a lots of players too. Here in India the retail sector is booming so the player are also many
more with a lots of Business strategies. Here which player is not forecasting their sales they
can’t perform well that means they won’t be able to be in the market for a long time.