ASSIGNMENT

Course Code : MS-55

Course Title : Logistics and Supply Chain Management
Assignment Code : MS-55/ TMA/SEM - II /2016
Coverage : All Blocks
Note: Attempt all the questions and submit this assignment on or before 31st October, 2016
to the coordinator of your study centre.
1. Every organization has to move materials to support its operations. Take the case of a
poultry that deals in eggs, meat products and a range of related goods. What materials are
moved in this case?
2. An integrated supply chain is a convenient notion, but it does not reflect real operations.
An organization is only really concerned with its own customers and suppliers, and does not
have time to consider other organizations further along the chain. Do you think that this is
true?
3. Give various supply chain information categories. Give examples of information contained
in these categories with reference to a FMCG company.
4. Managers can be tempted to use the easiest measures of performance, or those that show
themselves in the best light. What are the consequences of this? Can you give examples of
problem this create?
5. Take the example of a nationalized bank and discuss how it is cutting costs and improving
customer service by changing its supply chain from brick and mortar branches to ATM’s and
phone & net-banking.

Answer
1. Every organization has to move materials to support its operations. Take the case of a
poultry that deals in eggs, meat products and a range of related goods. What materials are
moved in this case?
Ans.: As we all know that, chicken and egg are very nutritious food items. Doctors
alwaysprescribe it as nutritious food. From statistical data, each and everyday a familyneeds
at least four eggs in this country. Most of all children are fond of egg. Sothere is a great
prospect to being succeeded as being act as distributor. We willdistribute our product to
household customers, restaurant, hotel, bakery, cookery etc.
It is essential for every business organization to identify its existing competitorstheir skill,
strength and as well as weakness. We have huge number of existingcompetitors but most of
them have not high skill and future orientation. The futurecompetitors can easily entre the
business because of its low cost and its industrystructure is very easy.
Typically, a layer’s production cycle lasts just over a year (52-56 weeks). During the
production cycle many factors influence egg production; therefore, the cycle must be

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managed effectively and efficiently in order to provide maximum output and profitability.
The following factors influence egg production.
Breed: The breed of the laying bird influences egg production. Management and feeding
practices, however, are the key determining features for egg production.
Mortality rate: Mortality rate may rise due to disease, predation or high temperature. The
mortality rate of small chicks (up to eight weeks of age) is about 4 percent; that of growers
(between eight and 20 weeks of age) is about 15 percent; and that of layers (between 20 and
72 weeks of age) is about 12 percent. The average mortality rate of a flock is from 20 to 25
percent per year.
Birds usually start to lay at around five months (20-21 weeks) of age and continue to lay for
12 months (52 weeks) on average, laying fewer eggs as they near the moulting period.
The typical production cycle lasts about 17 months (72 weeks) and involves three distinct
phases, as follows:
 Phase 1: Small chicks or brooders. This phase lasts from 0 to 2 months (0-8 weeks)
during which time small chicks are kept in facilities (brooder houses) separate from
laying birds.
 Phase 2: Growers. This phase lasts about 3 months, from the ninth to the twentieth
week of age. Growers may be either housed separately from small chicks or continue
to be reared in brooder-cum-grower houses. It is important to provide appropriate care
to the growers particularly between their seventeenth and twentieth week of age as
their reproductive organs develop during this period.
 Phase 3: Layers. Growers are transferred from the grower house to the layer house
when they are 18 weeks old to prepare for the laying cycle. Birds typically lay for a
twelve-month period starting when they are about 21 weeks old and lasting until they
are about 72 weeks old.
On average a bird produces one egg per day. Furthermore, not all birds start to lay exactly
when they are 21 weeks old. Planning is therefore required for egg production to be constant
so as to meet market demand. A schedule similar to the one shown in Table 2, which
indicates on average satisfactory levels of production for a flock of birds, can be used.
In areas where the climate is hot and humid, commercial hybrid laying birds produce on
average between 180 and 200 eggs per year. In more temperate climates birds can produce on
average between 250 and 300 eggs per year. The table below illustrates a typical production
schedule in a hot and humid climate.
Quality determines the acceptability of a product to potential customers. The quality of eggs
and their stability during storage are largely determined by their physical structure and
chemical composition. It is important therefore that those concerned with the handling of
eggs are knowledgeable about this information in order to understand why eggs need to be
treated in specific ways and to have a rational basis for day-to-day marketing decisions.
2. An integrated supply chain is a convenient notion, but it does not reflect real operations.
An organization is only really concerned with its own customers and suppliers, and does not

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have time to consider other organizations further along the chain. Do you think that this is
true?
Ans.: Over the past decades industry has been confronted with significant changes, both in
the marketplace as well as in the society. The marketplace has turned from a quasi-infinite
market, with only limited and mostly local competition in the 1970s, to an almost completely
saturated and extremely competitive global world market at present. Industries are confronted
today with ever tightening legislation with respect to the environmental impact of their
production, the use of natural resources, and the disposal or recycling of their products. They
are getting full responsibility for all future effects of their production processes as well as of
their products and by-products on people and environment. Hence, industries have to move
towards a competitive and sustainable production on demand at tight operating as well as
product quality and variability constraints in order to cope with these changes.
The highly competitive market situation has already resulted in a strong need for flexibility
with respect to the production of a broad variety of product types and grades at time-varying
capacities. Good prices can only be made during those time periods where a product is asked
for in the market. Hence, production capacity and product quality must become predictable to
enable and support marketing and sales. On-time delivery of the right product at the right
quality at a competitive price at the right location must be guaranteed. Despite the need for
flexibility, delivery on demand has to be achieved by the industries without investing a lot of
capital in product or educt stock for obvious reasons. Further, competition enforces a
producer to process a broad variety of feedstock materials and utilities at loosely specified
properties into products of tight quality specifications.
Instead of focussing on a specific plant assuming a high degree of autonomy, it must rather
be viewed as part of a larger dynamic system - the supply chain which itself is embedded in
an even larger dynamic system, the market and the society. Such a widening of the scope of
process operations complies with a shift from the traditional supply-driven production
paradigm to a demand-driven production paradigm in largely saturated markets (Towill,
1991). The former is based on fixed production targets whereas the latter accomodates
variable targets on production capacity and product quality. A quickly changing dynamic
environment acts by a variety of forcing functions on the plant. The market demand is a
prominent example of such a forcing function. It strongly requests a plant's operational ability
to directly follow the demand with minimum delay. In a demand-driven production the
business relations between the supply chain partners and consequently the forcing function on
an individual plant become extremely intensive. However, the tight and numerous
interactions between the plant and its environment should not be viewed as exogenous
disturbances to be compensated by feedback control. Rather, it should be taken as an
opportunity that has to be exploited in the choice of the operational strategy. Exploitation of
the plant forcing functions requires some kind of coordination between supply chain
constituents. The benefits obtained from such a coordinated approach are expected to
outperform the benefits resulting from application of state of the art model predictive control
by a factor of two to three.

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Two challenges have to be faced in order to move towards intentional dynamic and supply
chain conscious plant operation. First of all, new technologies need to be provided to enable
the implementation of such ideas in industrial practice. A first step towards new concepts and
technologies will be attempted in the sequel of the paper. However, advanced operational
strategies and technologies will also require a significant change in the culture of operators
and plant management. Dynamics has to be accepted as an additional opportunity rather than
considered as a strange, undesired and even dangerous phenomenon outside the scope of
normal process operations. In addition, information on operational objectives and
manufacturing status must become transparent on all levels of the automation hierarchy, since
the operators will ultimately become the proprietors of the process (Clark, Scarlett, 1995,
Rhinehardt et al., 1995, Han, Stephanopoulos, 1995). Instead of merely executing process
operation tasks targeting at process variables, operators will move towards making
productivity decisions on the basis of real-time business variables derived from process
measurements and enterprise policy.
3. Give various supply chain information categories. Give examples of information contained
in these categories with reference to a FMCG company.
Ans.: Supply chains encompass the end-to-end flow of information, products, and money. For
that reason, the way they are managed strongly affects an organization's competitiveness in
such areas as product cost, working capital requirements, speed to market, and service
perception, among others. In this context, the proper alignment of the supply chain with
business strategy is essential to ensure a high level of business performance.
In 1997 Marshall Fisher introduced the revolutionary concept of supply chain segmentation
in his famous article "What is the right supply chain for your product?"1 Following Fisher's
article, several academics and consultants, including Lee,2 Gattorna and Christopher,3
Ketchen and Hult,4 Martínez-Olvera and Shunk,5 and the consulting firm A.T. Kearney,6
among others, developed several models regarding the formulation of supply chain strategy.
Despite these advances in supply chain theory, traditional approaches to formulating and
validating supply chain strategy have not been consistently successful. This is largely because
they have not paid enough attention to the connections and combinations among key drivers
throughout the value chain, nor to their alignment with an industry's competitive framework
and with each organization's unique value proposal (also called the "value proposition").
In order to address this shortcoming, I have conducted an analysis of the most widely
recognized theories and case studies about supply chain strategy. My analysis has identified a
set of common patterns that reveal key drivers of supply chain strategy and explain how these
can be aligned in a coherent strategy. Those findings are summarized in a strategy-
formulation model called the "Supply Chain Roadmap," which provides:
 a compilation of the most relevant key drivers of a supply chain strategy;
 an understanding of the interrelation of these key drivers with an industry's
competitive framework and a business's competitive positioning; and
 the characteristic profile of six generic supply chain types: efficient, fast, continuous-
flow, agile, custom-configured, and flexible.

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Supply chain management (SCM) is a process used by companies to ensure that their supply
chain is efficient and cost-effective. A supply chain is the collection of steps that a company
takes to transform raw components into the final product. The following are five basic
components of SCM:
Plan: The first stage in supply chain management is known as plan. A plan or strategy must
be developed to address how a given good or service will meet the needs of the customers. A
significant portion of the strategy should focus on planning a profitable supply chain.
This is the strategic portion of SCM. Companies need a strategy for managing all the
resources that go toward meeting customer demand for their product or service. A big piece
of SCM planning is developing a set of metrics to monitor the supply chain so that it is
efficient, costs less and delivers high quality and value to customers.
Develop (Source): Develop is the next stage in supply chain management .It involves
building a strong relationship with suppliers of the raw materials needed in making the
product the company delivers. This phase involves not only identifying reliable suppliers but
also planning methods for shipping, delivery, and payment.
Companies must choose suppliers to deliver the goods and services they need to create their
product. Therefore, supply chain managers must develop a set of pricing, delivery and
payment processes with suppliers and create metrics for monitoring and improving the
relationships. And then, SCM managers can put together processes for managing their goods
and services inventory, including receiving and verifying shipments, transferring them to the
manufacturing facilities and authorizing supplier payments.
Make: At the third stage, make, the product is manufactured, tested, packaged, and
scheduled for delivery. This is the manufacturing step. Supply chain managers schedule the
activities necessary for production, testing, packaging and preparation for delivery. This is
the most metric-intensive portion of the supply chain - one where companies are able to
measure quality levels, production output and worker productivity.
Deliver: Then, at the logistics phase, customer orders are received and delivery of the goods
is planned. This fourth stage of supply chain management stage is aptly named deliver.
This is the part that many SCM insiders refer to as logistics, where companies coordinate the
receipt of orders from customers, develop a network of warehouses, pick carriers to get
products to customers and set up an invoicing system to receive payments.
Return: The final stage of supply chain management is called return. As the name suggests,
during this stage, customers may return defective products. The company will also address
customer questions in this stage.
This can be a problematic part of the supply chain for many companies. Supply chain
planners have to create a responsive and flexible network for receiving defective and excess
products back from their customers and supporting customers who have problems with
delivered products.
Supply chains for fast-moving consumer goods (FMCGs) like toiletries, soft drinks, over-the-
counter medications and other consumables can be extremely complex. Suppliers, production

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plants, distribution centres and markets are usually located in multiple countries and regions.
In some cases, raw materials are part of the chain and these can be affected by factory
closures, strikes and other industrial factors. What’s more, brand loyalty to FMCGs like
toiletries are particularly vulnerable to stock issues. Customers often switch to competitor
products when their favourite brand isn’t on the supermarket shelf. That’s why FMCG
companies need efficient, responsive and robust global supply-chains.
In recent years, FMCG companies have started shipping to emerging markets in Asia, Africa
and Latin America where growing middle classes have more disposable income to spend.
FMCG suppliers are often the first foreign companies to enter these new regions which until
recently, largely exported goods. Now countries in these regions are importing goods on a
large scale for the first time. FMCG companies with operations in these countries often don’t
have the internal structures and processes to handle imports efficiently and comply with
customs regulations. In addition, local operating companies can have their own ways of doing
things, making it difficult for parent companies to impose standard procedures and implement
improvements.
Supply chain improvement can generate considerable long-term savings for FMCG
customers, a sector with very tight profit margins. As well as cost savings, customers have
one point of contact instead of numerous different logistics providers. This along with
standardized processes not only gives customers certainty, a library of performance data
allows them to measure progress and seasonality so they can plan better.
4. Managers can be tempted to use the easiest measures of performance, or those that show
themselves in the best light. What are the consequences of this? Can you give examples of
problem this create?
Ans.: The challenge of service-business management begins with design. As with product
companies, a service business can’t last long if the offering itself is fatally flawed. It must
effectively meet the needs and desires of an attractive group of customers. In thinking about
the design of a service, however, managers must undergo an important shift in perspective:
Whereas product designers focus on the characteristics buyers will value, service designers
do better to focus on the experiences customers want to have. For example, customers may
attribute convenience or friendly interaction to your service brand. They may compare your
offering favorably with competitors’ because of extended hours, closer proximity, greater
scope, or lower prices. Your management team must be absolutely clear about which
attributes of service the business will compete on.
Organizations that have successfully integrated a 360-degree feedback system into their
performance management and merit systems usually do a thorough job of piloting and
evaluation. Typically a project team involving various stakeholders such as HR, line
management, and field staff-is created to design and pilot the new performance management
system. It’s best to introduce the 360-degree rating system over several years. During the first
year performance evaluation and merit increases should be based on traditional performance
measures and the 360-degree results used only for development purposes.

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Designers seek the requirements and expectations, identify the objectives and measurements
of success, give structure to the elements, and form to the components of systems. Success or
failure hinge on the ability of a designer to attain the proper requirements and expectations of
a system. For example, a systems innovator plans to design a new cell phone network for
500,000 subscribers. Unfortunately, the innovator fails to include the requirement of future
growth of the cell phone network to 2,000,000 individuals in five years. When the network is
built, per the design of the innovator, new cell phone subscribers must be turned-away from
accessing the network because of the omitted designer requirement. Since the designer failed
to include the proper requirements, this omission diminishes the success of the system.
In addition to developing a structural plan for a system, designers must manage the process of
systems development, to include overseeing systems implementation, adoption, and
continuing operation. Design also sometimes involves the augmentation and extension of an
existing system. Part of being a systems innovator includes the enhancement of an existing or
legacy system with a new idea, method, or technological device. Extending the life of a
useful system, or upgrading capabilities to better align with the enterprise objective, may be
the best service of the systems innovator. Often, it is easier to enhance an existing system,
than it is to decode, decipher, or replace such a system.
At times an organization will introduce information systems that may not improve the
organization’s efficiency, effectiveness, or enable it to communicate and coordinate better.
This happens when regulations and laws require the organization to perform certain tasks –
for example, recurrent maintenance on the machinery they use – or produce some information
– for example, tax reports. Regulatory compliance typically requires the organization to be
able to create, manage, store or produce information – for example, maintenance logs or
financial reports to compute taxes. In theses situations the firm will introduce an information
system. Measuring the impact of an information system The measurement of efficiency and
effectiveness gives managers guidelines to assess the value of information systems. Without
these measures, managers may be misled and make wrong decisions when investing in new
technology and designing information systems. On the one hand, if the value of the system is
underestimated, managers may cut back the allocated resources, which will result in
foregoing the benefits of the new system. If the value of the system is overestimated,
managers are wasting resources which could be used in other projects with higher returns. In
this section, we introduce several established methods to measure efficiency and
effectiveness improvements (or lack thereof) deriving from the use of information system.
5. Take the example of a nationalized bank and discuss how it is cutting costs and improving
customer service by changing its supply chain from brick and mortar branches to ATM’s and
phone & net-banking.
Ans.: The term ‘public sector banks’ by itself connotes a situation where the major/full stake
in the banks are held by the Government. Till July,1969, there were only 8 Public Sector
Banks (SBI & its 7 associate banks). When 14 commercial banks (total 20 banks) were
nationalized in 1969, 100% ownership of these banks were held by the Government of India.
Subsequently, six more private banks were nationalized in 1980. However, with the changing
in time and environment, these banks were allowed to raise capital through IPOs and there by

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the share holding pattern has changed. By default the minimum 51% shares would be kept by
the Government of India, and the management control of these nationalized banks is only
with Central Government. Since all these banks have ownership of Central Government, they
can be classified as public sector banks. Apart from the nationalized banks, State Bank of
India, and its associate banks, IDBI Bank and Regional Rural Banks are also included in the
category of Public Sector banks. The total number of public sector banks as on March, 2013
were 82.
Cooperative banks play an important role in the Indian Financial System, especially at the
village level. The growth of Cooperative Movement commenced with the passing of the Act
of 1904. A cooperative bank is a cooperative society registered or deemed to have been
registered under any State or Central Act. If a cooperative bank is operating in more than one
State, the Central Cooperative Societies Act is applicable. In other cases the State laws are
applicable. Apart from various other laws like the Banking Laws (Application to Co-
operative Societies) Act, 1965 and Banking Regulation (Amendment) and Miscellaneous
Provisions Act, 2004, the provisions of the RBI Act, 1934 and the BR Act, 1949 would also
be applicable for governing the banking activities.
Internet banking one of the popular e-banking modes has changed the banking operations and
offer virtual banking services to the clients on 24 × 7 basis. It is also called as convenient
banking, since the customer (account holder) can have access to his bank account from
anywhere at any time, through the bank’s web site. The customer is allowed online access to
account details and payment and funds transfer facilities. Net banking services of a bank can
be accessed through a Personal Identification Number (PIN) and access password as in the
case of ATMs. In net banking the advantage for the bank customer is that funds can be
transferred from the client’s bank account to another account with the same bank or another
bank through NEFT/RTGS. Another method of funds transfer facility is online payment of
taxes. Bank customer can pay various taxes like income tax, service tax, etc.; Net banking
can be used as a channel by the customer to pay the utility bills (electricity bills, telephone
bills, etc) on line. Customers can make use of net banking to pay the insurance premiums and
similar other payments.
ATMs are used as a channel for cash management of individual customers. ATMs can be
accessed by ATM card, debit or credit cards. To have access the customer (the card holder)
needs to use his Personal Identification Number (PIN) issued by his/her banker and access
password. ATMs generally used for cash deposit and withdrawals, they can also be used for
payment of utility bills, funds transfer thereby ATMs serve as a channel for electronic funds
management. Requests for new cheque book and statement of accounts can also be given
through ATMs. White Label ATMs- RBI has vide notifications dated 20th June, 2012,
permitted non-banking entities to set up or start ATMs which are called White Label ATMs
(WLA). From such ATMs customers of any bank will be able to withdraw money, takeout
statement, change PIN etc. These WLAs will not display logo of any bank. However, WLA
operator has been permitted to display advertisements, and offer value added services as per
regulations in force. While WLA operator is entitled to receive a fee from the banks for use
of ATM resources by their customers, WLAs are not permitted to charge Bank customers
directly for use of WLA.
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Internet banking allows national banks to offer a wide array of options to their banking
customers. Some customers will rely on traditional branches to conduct their banking
business. For many, this is the most comfortable way for them to transact their banking
business. Those customers place a premium on person-to-person contact. Other customers are
early adopters of new technologies that arrive in the marketplace. The demographics of
banking customers will continue to change. The challenge to national banks is to understand
their customer base and find the right mix of delivery channels to deliver products and
services profitably to their various market segments.
In the last several decades, instructions to transfer notational money between accounts are
increasingly sent electronically: wire transfers, ATM transactions, or more generally,
Electronic Funds Transfer. Notational and token currency are boundary conditions. For
example, cashiers checks are notational money, but they share some of the properties of token
money. There are also interfaces between the two: ATM machines and bank tellers exchange
notational currency for token currency.