A

Project study report

On
Training undertaken at
Pyrotech electronics ltd , UDAIPUR
Titled

A Study of supply chain management

Submitted in partial fulfilment for the award of degree of

Master of Business Administration

Submitted By- Submitted To-

Karmendra Singh Miss Manila rathod
MBA Part –III

2009-11

AISHWARYA INSTITUTE OF MANAGEMENT & IT, UDAIPUR

(Affiliated to Rajasthan Technical University, Kota)

1
]REFACE

From a nation's perspective international business allows the nation to survive

and gain a higher standard of living by trading it's resources for what lacks
while moderating the inflation rate and generating employment. From the
company's perspective , many foreign markets offer growth, sales profiles and
risk and diversification , they enable a company to discover new ideas that may
heads to new products and application .

International experiences are not luxuries, they are requisite to understanding

the independence of nation and markets as well as the concepts of various
disciplines.

For this reason international (import) marketing acquires a vital role to play as
international business involves many intricacies of business, which makes
import marketing .

To face these challenges and just to understands and learn the various I have
chosen to work in this field and put the best effort to makes the projects a
success.

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 ACKNOWLEDGEMENT

Today in the fast developing country beside the earlier plans. The growth in
recent years has been rapid. The electronic industry has contributed a great
deal in the growth of the country.

It deem to be my proud privilege to express my deep sense of gratitude and

acknowledgement to Mrs. SURBHI SONI, Hr manager of pyortech for her
unceasing interest incessant encouragement, conservative suggestions and
gifted guidance throughout the process of this project.

I am grateful to Miss manila madam course director, Aishwarya Institute Of

Management & It, Udaipur and other lecturers of the department for their kind
help and advice for completing this project work.

We are also thankful to our friends who directly or indirectly help us a lot.

(KAR
MENDRA SINGH)

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 INDEX

S.No. Topic Name Page No.

1 Introduction
2 History, Structure and Corporate Milestones

3 COMPANY POLICIES

4 CONTROL ROOM SOLUTIONS PROVIDER

5 AWARDS AND RECOGNITION

6 SUPPLY CHAIN MANAGEMENT

7 LEVEL OF SUPPLY CHAIN MANAGEMENT

8 Developments in supply chain management

9 Supply chain business process integration

10 Theories of supply chain management

11 Supply Chain Decisions

12 Supply Chain Modeling Approaches

13 NETWORKS DESIGN METHODS

14 ROUGH CUT METHODS

15. LOGISTICS

16 DISTIBUTION – INTRODUCTION

17 BUILDING CUSTOMER RELATIONSHIP MANAGEMENT

18 ATTENTION ON CHANGING REQUIREMENT OF

CUSTOMERS
19 BIBLIOGRAPHY

INTRODUCTION

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PYROTECH: An Over View

Pyrotech Electronics Pvt. Ltd. unit # 2 a ISO 9001 concern and it was
established on 18th March 1988 in Madre Industrial area, Udaipur with an initial
capital of Rs. 60.85 lakhs. It was promoted by technocrat entrepreneurs Mr.
P.S. Talesra, Mr. N.K. Pandy and Mr. C.P. Talesra who are well known
professionals in electronic instrumentation industry.
The history was made long before 1980. In 1976 to be precise, and that too in
a small house at Udaipur in Rajasthan, where four visionaries put their heads
together and thus Pyrotech was born.
The quantum of success ca be measured from the fact that the company has
registered an average growth rate of 55% since its inception, the reason behind
the success is strong emphasis on customer satisfaction in all respects.

Pyrotech is a renewed company for control room electronics and sensors. The
company have claimed up the value chain by collaborating with global
companies like -
Synelec (Large Video Screen)
Subklew (Mosaic Tile System)
Karus & Naimer (Swithes)
Weigel Meters (Meters) and others.

History, Structure and Corporate Milestones

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1976 Pyrotech international established by four technocrats in Udaipur First

products thermocouple & RTD’s.

1980 factory expansion for electronics product-indicators, temperature

controllers.

1984 prototype development of ALCOSY. Separate temperature sensor

division tempsens.

1986 land mark hare as BHEN Bangalore started using ALCOSY technology.

Large orders executed for IL bokaro steel power plant for marshalling panels.

1990 HZL chanderia instrumentation work commenced & completed in

November 1991.

1992 high performance 19”racks developed for defence suppliers to army for

Missile launch. National excellence award in CL & RE, R&D ELCINA award.

1993 Major power project executed for PSEB Bhatinda, Panipat, with Swiss

Mosaic Tiles. LSC supplied for NTPC Korba.

1996 Tie up with Siemens AF for Pal series of products Dr.Theding for unit 1&2
Attains the ISO 9001status & Tempsens accredited with honoured with Rajiv
Gandhi national quality award.

1999 Executed orders for submarine program of navy, new concept for Indian
Marked of control room design.

2000:- Major projects executed for mega power house –NTPC Simbadari,
UPSEB, BESES etc. New design developed in consoles & fecosy panels.

2001:- Tie up with AMS, Germany for oxygen & Zirconia analysis. New offices
at Hyderabad, Trichy, Kota, Hardware. Indigenous technology for active mosaic
Tiles developed for Delhi metro rail corporation.

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2003:- Unit 2 attains ISO 9001:2000 industrial furniture range introduced with
Major approvals from NTPC, BHEL &TISCO.

2005:- Folded construction panel introduced.

2006:- Unit 2 attains ISO 9001:2000 from DNV Netherlands total turnkey room
solution for 1000 MW Jindal super thermal power plant. Area Sq. fit azuila &
vector CNC machine introduced expansion of conveyorised Plan proposed ISO
14000:2004 EMS.

COMPANY POLICIES

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QUALITY POLICY:

Our organization policy is to manufacture defect free panels, control desks,

process control system and industrial enclosures to provide value for money
and customer satisfaction. We shall strive to adopt ‘Zero Defect’ working
culture, by continually improving quality, Technology and skills.

ENVIRONMENT HEALTH & SAFETY POLICY:

We are committed for conservation of natural resources by efficient utilization

of row material, water, energy and manpower. Keeping healthy and safe
environment in and around our factory premises.
We are committed to sound and sustainable environment management system,
safe and healthy working culture and complying with legal requirement. We are
dedicated for continual improvement and high degree of customer satisfaction.
We aim zero defect quality product and accident free, safe and healthy
environment.

Group Company’s structure

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 Pyrotech electronics pvt.ltd.
Unit 2 control panels/desks,
mosaic & video well

Pyrotech marketing and Pyrotech electronics pvt.ltd.

project Pvt. Limited project Unit 1 electronic process
and system integration control instruments

Pyrotech control India Tempests instrument India

limited enclosures, control Pvt. Limited temperature Py
panels sensors

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 “CONTROL ROOM SOLUTIONS PROVIDER”

Total construction 50,000 Sq. ft. and is equipped with CNC press Break, NC
sharing machine and CNC press punch, environment friendly painting both(2
nos.) and two powder coating plant with ovens.

MANPOWER CAPABILITY

Besides the infrastructure facilities we have dedicated workforce with

experience & well-qualified people. Who are always willing to help as per
requirement? Any cooperation aiming to produce dominated world, an
organization can use its manpower as assets and a part of decision-making.

The companies have 200employees. Almost all the divisions in the company
have technical staffs who directly cater to customers requirements. The entire
marketing, design, quality, Fabrications divisions rely on the expertise of the
expertise of the Engineers doing the work with the quality policy of the
company to do every work for the first time and every time correctly.

Highly educated and experienced non-technical are in the other departments.

The most important aspect of our workforce is that they are always available for
sales service and support for our products.

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 SISTER CONCERNS

1. PYROTECH CONTROL INDIA PVT.LTD

2. PYROTECH ELECTRONICS PVT.LTD.UNIT#1
3. TEMPSENS

Pyrotech unit # 2 is the youngest bird of all groups of companies is technology

driven with leading edge capabilities is fields related to control &
instrumentation. Pyrotech unit # 2 commenced its production & commercial
activities in 1998, & soon is a renowned name for control & instrumentation
field.
The products are well accepted and approved by consultants and customers
like-
• Engineers India ltd.
• BHEL
• NTPC
• PROJECT & DEVELOPMENT INDIA LTD.
• MINISTRY OF DEFENSE
• Ministry of defense
• Mecon
• Larson & Turbo(Mumbai)
• Westinghouse,(USA)
• Siemens
• Howe

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TECHNOLOGY

Pyrotech have two types of technology

1. ALCOSY
2. FECOSY
Main technology is ALCOSY [20/30] which is complete based on aluminum 20
and 30. ALCOSY has unique non-welded modular construction and higher
strength grade. The company has developed technology for hi-tech electronics,
process control instruments and systems and application software for
programmable logic controllers. All products manufactured are in house
developed and includes quite a few import substitution items
MARKET

PEPL has a full fledged marketing establishment at Delhi and Udaipur and
agents in different cities like Bangalore, Kolkata, Mumbai, Bhopal, Baroda and
Ahmadabad.
It has also worked with consultant’s like-
• Mecon

• Davy Mc. Kee (uk)

• Lurgi (west Germany)

• Hotech

• NTPC

• Birla

• Fuller KCP

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 PRDUCT RANGE

Pyrotech has built up its market reputation mainly in the following fields:-

 Control panel

 Process or panel

 Electronic panel

 Instrument panel

 Mosaic mimic panel

 Junction Box

 Clibration Box

 Purge panel

 Analyser panel

 Pneumic panel

 LIE & LIR

 Large video screens

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 Control room design

 Test bench

 19”Rack Enclosures

 Swas panel

 Computer consoles & CRT desks

 Centralized control desk

 Relay panel

 Explosion proof & purge panel

 Gas analyzer panel

 Electrical panel

AWARDS AND RECOGNITION

 The company has received the R & D recognition in August, 1993.

 The company has been awarded “Excellence in electronics” from

department of electronics government of India in November 17, 1993.

 The company has also awarded a shield and certificates from income
tax department for paying second highest income tax in 1996-97.

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  The company has been awarded ISO-9001 certificate in 1999.

 The company has been awarded ELCINA (llnd prize) for R & D in
September’94.

SUPPLY CHAIN MANAGEMENT

Supply chain management (SCM) is the process of planning implementing

and controlling the operatioms of the supply chain as efficiently as possible
. supply Chian management bspans all movement and storage of rew
materials ,work –in -process inventory ,and finished goods form point-
of –oigin to point -of –consumption .

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 The definition of one American professional association put forward is that
supply chain management encompasses the planning and management
of all activies in sourcing , procurement , conversion,and logistion
management activies Importantly , it also includes coordination and
collaboration with channel partners ,which can be suppliers , intermediaries
,third –party service providers,and customers.

In essence,supply Chain management integrates supply and demand

management within and across companies . More recently, the loosely
coupled, self –organizing network of businesses that cooperates to provide
product and service offerings has been the Extended Enterprise .
Some expets distinguish supply Chain management and logistics, while
others consider the terms to be interchangeable

Supply chain management can also refer to Supply Chain management

software which are tools or modules used in executing supply chain
transactioms, managint supplier relationships and controlling associated
business processes.
Supply chain event management ( abbreviated as SCEM ) is a
consideration of all possible events and factors that can cause a
disruption in a suplly chain . With SCEM possible scenarios can be created
and solutions can be planned.

LEVEL OF SUPPLY CHAIN MANAGEMENT

Strategic

• Strategic network optimization, including the number, location and size

of warehouses, distribution centres and facilities.
• Strategic partnership with suppliers, distributors, and customers,
creating communication channels for critical information and operational
improvements such as cross docking, direct shipping, and third-party logistics.
• Product designs coordination, so that new and existing products can be
optimally integrated into the supply chain, load management.

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 • Information technology infrastructure, to support supply chain operation.
• Where-to-make and what-to-make or-buy decisions
• Aligning overall organisational strategy with supply strategy.

Tactical

• Sourcing contracts and other purchasing decisions

• Production decision, including contracting, location, scheduling, and
planning process definition.
• Inventory decisions, including quantity, location, and quality of
inventory.
• Transportation strategy, including frequency, routes, and contracting.
• Benchmarking of all operations against competitors and
implementation of best practices throughout the enterprise.
• Milestone payments.

Operational

• Daily production and distribution planning, including all nodes in the

supply chain.
• Production scheduling for each manufacturing facility in the supply
chain management (minute by minute)
• Demand planning and forecasting, coordinating the demand forecast
of all customers and sharing the forecast with all suppliers.
• Inbound operations, including transportation from suppliers and
receiving inventory.
• Production operation, including the consumption of material and flow
of finished goods.
• Outbound operations, including all fulfilment activities and
transportation to customers.
• Order promising, accounting for all constraints in the supply chain,
including all suppliers, manufacturing facilities, distribution centres,
and other customers.

Supply chain management

Organizations increasingly find that they rely on effective supply chains or

networks, to successfully compete in the global market and networked
economy. In Peter Drucker’s (1998) management’s new paradigms, this
concept of business relationships extends beyond traditional enterprise
boundaries and seeks to organize entire business processes throughout a
value chain of multiple companies.

During the past decades, globalization, outsourcing and information

technology have enabled many organizations, such as Dell and Hewlett-

17
Packard, to successfully operate solid collaborative supply networks in
which each specialized business partner focuses on only a few key
strategic activities (Scott 1993). This inter-organisational supply network
can be acknowledged as a new form of organization. However, with the
complicated interactions among the players the network structure fits
neither “market” nor “hierarchy” categories (Powell,1990). It is not clear
what kind of performance impacts that different supply network structures
could have on firms and little is known about the coordination conditions
and trade-offs that may exist among the players. From a system’s point
view, a complex network structure can be decomposed into individual
component firms (Zhang and Dilts, 2004). Traditionally, companies in a
supply network concentrate on the inputs and outputs of the process, with
little concern for the internal management working of other individual
players. Therefore the choice of an internal management control structure
is known to impact local firm performance (Mintzberg, 1979).

In the 21st century, there have been a few changes in business

environment that have contributed to the development of supply chain
networks. First, as an outcome of globalisation and the proliferation of
multi-national companies, joint ventures, strategic alliances and business
partnerships, there were found to be significant success factors, following
the earlier “Just-In-Time”, Learn Management” and “Aglie Manufacturing”
practices. Second, technological changes, particularly the dramatic fall in
information communication costs, which are a paramount component of
transaction costs have led to changes in coordination among the members
of the supply chain network(Coase, 1998).

Many researchers have recognised these kinds of supply network

structures as a new organisation form using terms such as “Keiretsu”,
“Extended Enterprise”, “Virtual Corporation”, Global production network”
and Next Generation Manufacturing System”. In general such a structure
can be defined as “ a group of semi-independent organisations, each with
their capabilities, which collaborate in ever changing constellations to
serve one or more markets in order to achieve some business goal
specific to that collaboration” (Akkermans,2001)

Developments in supply chain management

Six major movements can be observed in the evolution of supply chain

management studies: creation, integration, and globalization (Lavassani
et. Al 2008), specialization phases one and two and SCM 2.0

1. Creation era

The term supply chain management was first coined by an American

industry consultant in the early 1980s. However the concept of supply
chain in management, was of great importance long before in the early

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20th century, especially by the creation of the assembly line. The
characteristics of this era of supply chain management include the need
for large scale changes, re-engineering, downsizing driven by the cost
reduction programmes and widespread attention to the Japanese practice
of management.

2. Integration era

This era of supply chain management studies was highlighted with the
development of electronic data interchange (EDI) systems in the 1960s
and developed through the 1990s by the introduction of Enterprise
resource planning (ERP) systems. This era has continued to develop into
the 21st century with the expansion of internet based collaborative
systems. This era of SC evaluation is characterized by both increasing
value added and cost reduction through integration.

3.Globalization era

the third movement of supply chain management development,

globalization era, can be characterized by the attention towards global
systems of suppliers relations and the expansion of supply chain over
national boundaries and into other continents. Although the use of global
sources in the supply chain of organizations can be traced back to several
decades ago (e.g. the oil industry) it was not until the late1980s that a
considerable number of organizations started to integrate global sources
into their core business. This era is characterized by the globalization of
supply chain management in organization with a goal of increasing
competitive advantage, creating more value added, and reducing cost
through global sourcing.

4.Specialization Era- Phase one- Outsourced Manufacturing and

Distribution

In the 1990s industries began to focus on “core competencies” and

adopted a specialization model. Companies abandoned vertical
integration, sold off non-core operation and outsourced those functions to
other companies. This changed management requirements by extending
the supply chain well beyond the four walls and distributing management
across specialized supply chain partnerships.

This transaction also refocused the fundamental perspectives of each

respective organisation. OEMs became brand owners that needed deep
visibility into their supply base. They had to control the entire supply chain
from above instead of from within. Contract manufactures had to manage
bills of material with different part numbering schemes from multiple OEMs
and support customer request for work in process visibility and vendor-
managed inventory (VMI)

The specialization model creates manufacturing and distribution networks

composed of multiple, individual supply chains specific to products,
suppliers, and customers, who work together to design, manufacture,

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distribute, market, sell and service a product. The set of partners may
change according to a given market, region, or channel, resulting in a
proliferation of trading partner environments, each with its own unique
characteristics and demands.

5. Specialization Era- Phase Two- Supply chain management as a

service

Specialization within the supply chain began in the 1980s with the
inception of transportation brokerages , warehouse management and non
asset based carriers and has matured beyond transportation and logistics
into aspects of supply planning, collaboration, execution and performance
management.

At any given moment, market forces could demand changes within

suppliers, logistics providers, locations ,customers and any number of
these specialised participants within supply chain networks. This variability
has significant effect on the supply chain infrastructure, from the
foundation layers of establishing and managing the electronic
communication between the trading partner to the more-complex
requirement, including the configuration of the processes and work flows
that are essentials to management of the network itself.

Supply chain specialization enables companies to improve their overall

competencies in the same way that outsourced manufacturing and
distribution has done; it allows them to focus on their core competencies
and assemble networks of best in class domain specify partner to
contribute to the overall value chain itself-thus increasing overall
performance and efficiency. The ability to quickly obtain and deploy this
domain specify supply chain expertise without developing and maintaining
an entirely unique and complex competency in house is the leading
reason why supply chain specialization is gaining popularity.

Outsourced technology hosting for supply chain solution debuted in the

late 1990s and has taken root in transportation and collaboration
categories most dominantly. This has progressed from the Application
Service Provider (ASP) model from approximately 1998 through 2003 to
the On-Demand model from approximately 2003-2006 to the Software as
a Service (SAAS) model we are currently focused on today.

6. SUPPLY CHAIN MANAGEMENT (scm 2.0)

Building off of globalization and specialization, SCM 2.0 has been coined
to describe both the changes within the supply chain itself as well as the

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evalution of the processes ,methods and tools that manage it in this new
“era”.

Web 2.0 is defined as a trend in the use of the World Wide Web that is
meant to increase creativity, information sharing, and collaboration among
users. At its core, the common attribute that Web 2.0 brings is it helps us
navigate the vast amount of information available on the web to find what
we are looking for. It is the notion of a usable pathway.SCM2.0 follows this
notion into supply chain operations. It is the pathway to SCM results-the
combination of the processes, methodologies, tools and delivery options to
guide companies to their results quickly as the complexity and speed of
the supply chain increase due to the effects of global competition, rapid
price commoditization, surging oil prices, short product life cycles,
expanded specialization, near/far and off shoring, and talent scarcity.

Rapidly deliver results with the agility to quickly manage future change for
continuous flexibility, value and success. this is delivered through
competency networks composed of best of breed supply chain domain
expertise to understand which elements, both operationally and
organizationally, are the critical few that deliver the results as well as the
intimate understanding of how to manage these elements to achieve
desired results ,finally the solutions are delivered in a variety of option as
no-touch via business process outsourcing ,mid-touch via managed
service and software as a service(SAAS), or high touch in the traditional
software deployment model.

Supply chain business process integration

Successful SCM requires a change from managing individual functions to

integrating activities into key supply chain processes. An example
scenario: the purchasing department places orders as requirements
become appropriate. Marketing, responding to customer demand,
communicates with several distributors and retailers, and attempts to
satisfy this demand. Shared information between supply chain partners
can only be fully leveraged through process integration.

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 Supply chain business process integration involves collaborative work
between buyers and suppliers, joint product development, common
systems and shared information. According to Lambert and Cooper (2000)
operating and integrated supply chain requires continuous information
flows, which in turns assist to achieve the best product flows. However, in
many companies, management has reached the conclusion that
optimizing the product flows cannot be accomplished without
implementing a process approach to the business. The key supply chain
processes stated by Lambert (2004) are:

• Customer relationship management

• Customer service management
• Demand management
• Order fulfilment
• Manufacturing flow management
• Supplier relationship management
• Product development and commercialization
• Returns management

One could suggest other key critical supply business process combining
these processes stated by Lambert such as:

a.customer service management

b.procurement
c.product development and commercialization
d.manufacturing flow management/ support
e.physical distribution
f. outsourcing/ partnerships
g.performance measurement

a) customer service management process

Customer Relationship Management concerns the relationship between

the organisation and its customers. Customer service provides the source
of customer information. It also provides the customer with real time
information on promising dates and product availability through interfaces
with the company’s production and distribution operations. Successful
organizations use following steps to build customer relationships:

• determine mutually satisfying goals between organization and

customers
• establish and maintain customer rapport
• produce positive feelings in the organization and the customers

b) Procurement process

Strategic plans are developed with suppliers to support the manufacturing

flow management process and development of new products. In firms

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where operations extended globally, sourcing should be managed on a
global basis. The desired outcome is a win- win relationship, where both
parties benefit, and reduction times in the design cycle and product
development are achieved. Also, the purchasing function develops rapid
communication systems such as electronic data interchange (EDI) and
internet linkages to transfer possible requirements more rapidly. Activities
related to obtaining products and material from outside suppliers requires
performing resource planning, supply sourcing, negotiation, order
placement, inbound transportation, storage, handling and quality
assurance, many of which include the responsibility to coordinate with
suppliers in scheduling, supply continuity, hedging and research into new
sources or programmes.

c) Product development and commercialization

Here, customers and suppliers must be united into the product

development process, thus to reduce time to market. As product life cycle
shorten, the appropriate products must be developed and successfully
launched in ever shorter time schedules to remain competitive.
According to Lambert and Cooper (2000), managers of the product
development and commercialization process must:

1. coordinate with customer relationship management to identify

customer- articulated needs;
2. select materials and suppliers in conjunction with procurement, and
3. Develop production technology in manufacturing flow to manufacture
and integrate into the best supply chain flow for the product/ market
combination.

d) Manufacturing flow management process

The manufacturing process is produced and supplies product to the

distribution channels based on past forecasts. Manufacturing process
must be flexible to respond to market changes, and must accommodate
mass customization. Orders are processes operating on a just-in-time
(JIT) basis in minimum lot sizes. Also, changes in the manufacturing flow
process lead to shorter cycle times, meaning improved responsiveness
and efficiency of demand to customers. Activities related to planning,
scheduling and supporting manufacturing operations, such as work-in-
process storage, handling, transportation and in time phasing of
components, inventory at manufacturing sites and maximum flexibility in
the coordination of geographic and final assemblies postponement of
physical distribution operations.

e) Physical distribution

This concerns movement of a finished product/ service to customers. In

physical distribution, the customer is the final destination of a marketing
channel and the availability of a product/service is a vital part of each
channel participants marketing effort. It is also through the physical
distribution process that the time and space of a customer service become

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an integral part of marketing thus it links a marketing channel with its
customer (e.g. links manufactures, wholesalers, retailers).

f) outsourcing/partnerships

This is not just outsourcing the procurement of materials and components,

but also outsourcing of services that traditionally have been provided in-
house. The logic of this trend is that the company will increasingly focus
on those activities in the value chain where it has a distinctive advantage
and everything else it will outsource. This movement has been particularly
evident in logistics where the provision of transport, warehousing and
inventory control is increasingly subcontracted to specialists or logistics
partners. Also, to manage and control this network of partners and
suppliers requires a blend of both central and local involvement. Hence,
strategic decisions need to be taken centrally with the monitoring and
control of supplier performance and day-to-day liaison with logistics
partners being best managed at a local level.

g) Performance measurement

Experts found a strong relationship from the largest arcs of supplier and
customer integration to market share and profitability. By taking advantage
of supplier capabilities and emphasizing a long-term supply chain
perspective in customer relationships can be both correlated with the firm
performance. As logistics competency becomes a more critical factor in
creating and maintaining competitive advantage, logistics measurement
becomes increasingly important because the difference between profitable
and unprofitable operations becomes more narrow. A.T. Kearney
Consultants (1985) noted that firms engaging in comprehensive
performance measurement realized improvements in overall productivity.
According to experts internal measures are generally collected and
analysed by the firm including

1. Cost
2. Customer Service
3. Productivity measures
4. Asset measurement
5. Quality

External performance measurement is examined through customer

perception measures and “best practice” benchmarking and includes: 1)
customer perception measurement and 2) best practice benchmarking.

A supply chain is a network of facilities and distribution options that

performs the functions of procurement of materials, transformation of
these materials into intermediate and finished products and the distribution
of these finished products to customers. Supply chains exist in both
service and manufacturing organization although the complexity of the
chain may vary greatly from industry to industry and firm to firm.

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 Below is an example of a very simple supply chain for a single product,
where raw material is produced from vendors, transformed into finished
goods in a single step, and then transported to distribution centers and
ultimately, customers. Realistic supply chains have multiple end products
with shared components, facilities and capacities. The flow of materials is
not always along an arbores cent network, various modes of transportation
may be considered, and the bill of materials for the end items may be both
deep and large.

Traditionally, marketing, distribution, planning, manufacturing and the

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

Supply chain management is typically viewed to lie between fully vertically

integrated firms, where the entire material flow is owned by a single firm,
and those where each channel member operates independently.
Therefore coordination between the various players in the chain is key in
its effective management. Cooper and Ellram (1993) compare supply
chain management to a well balanced and well practiced relay team. Such
a team is more competitive when each player knows how to be positioned
for the hand-off. The relationships are the strongest between players who
directly pass the baton, but the entire team needs to make a coordinated
effort to win the race.

Chain Decisions
We classify the decisions for supply chain management into two broad
categories-- strategic and operational. As the term implies, strategic
decisions are made typically over a longer time horizon. These are closely
linked to the corporate strategy (they sometimes { /it are} the corporate
strategy) and guide supply chain policies from a design perspective. On
the other hand, operational decisions are short term, and focus on
activities over a day-to-day basis. The effort in these types of decisions is
to effectively and efficiently manage the product flow in the “strategically”
planned supply chain.

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There are four major decision areas in supply chain management: 1)
location, 2) production, 3) inventory, and 4) transportation (distribution)
and there are both strategic and operational elements in each of these
decision areas.

Location Decisions

The geographic placement of production facilities, stocking points and

sourcing points is the natural first step in creating a supply chain. The
location of facilities involves a commitment of resources to a long term
plan. Once the size, number, and the location of these are determined so
are the possible paths by which the product flows through to the final
customer. These decisions are of great significance to a firm since they
represent the basic strategy for accessing customer markets and will have
a considerable impact on revenue, cost and level of service. These
decisions should be determined by an optimization routine that considers
production cost, taxes, duties and duty drawback, tariffs, local content,
distribution cost, production limitations, etc. Although location decisions
are primarily strategic, they also have implications on an operational level.

Production Decisions

The strategic decisions include what products to produce and which plants
to produce them in, allocation of suppliers to plants, plants to DC’s and
DC’s to customer markets. As before, these decisions have a big impact
on the revenues, costs and customer service levels of the firm. These
decisions assume the existence of the facilities, but determine the exact
path(s) through which a product flows to and from these facilities. Another
critical issue is the capacity of the manufacturing facilities—and this largely
depends the degree of vertical integration within the firm. Operational
decisions focus on detailed production scheduling. These decisions
include the construction of the master production schedules, scheduling
production on machines and equipment maintenance. Other
considerations include workload balancing and quality control measures at
a production facility.

Inventory Decisions

These refer to means by which inventories are managed. Inventories exist

at every stage of the supply chain as either raw material, semi-finished or
finished goods. They can also be in-process between locations. Their
primary purpose to buffer against any uncertainty that might exist in the
supply chain. Since holding of inventories can cost anywhere between 20
to 40 percent of their value, their efficient management is critical in supply
chain operations. It is strategic in the sense that top management sets
goals. However, most researchers have approached the management of
inventory from an operational perspective. These include deployment
strategies (push versus pull), control policies --- the determination of the

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optimal levels of order quantities and reorder points and setting safety
stock levels at each stocking location. These levels are critical, since they
are primary determinants of customer service levels.

Transportation decision

The mode choice aspects of these decisions are the more strategic ones.
These are closely linked to the inventory decisions, since the best choice
of mode is often found by trading off the cost of using the particular mode
of transport with the indirect cost of inventory associated with that mode.
While air shipments may be fast, reliable and warrant lesser safety stocks,
they are expensive. Meanwhile shipping by sea or rail may be much
cheaper, but they necessitate holding relatively large amounts of inventory
to buffer against the inherent uncertainty associated with them. Therefore
customer service levels and geographic location play vital roles in such
decisions. Since transportation is more then 30 percent of the logistics
costs, operating efficiently makes good economic sense. Shipment sizes
(consolidated bulk shipment versus lot- for- lot), routing and scheduling of
equipment are key in effective management of the firm’s transport
strategy.

NETWORKS DESIGN METHODS

As the very name suggests, these methods determine the location of

production ,stocking,and sourcing facilities, paths theproducts take
through them. Such methods tend to be large scale and used generally at
the inception of the supply chain.the earlist work in this area ,although the
term”supply chain” was not in vogue, was by Geoffrin and Graves[1974].
They introducea multycommodity logistics networks design model for
optimizing annualized finished product flows from plants to the DC’s to the
final customers.Geoffrin and Powers [1993]later give a review of the
evolution of distribution strategies over the past twenty years, describing

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how the descendants of the above model can accommodate more
echelons and cross commodity detail.

Breitman and Lucas [1987] attempt to provide a framework for a

comprehensive model of a production- distribution system,”PLANETS”,that
is used to decide what products to produce,where and how to produce
it,which market to pursue and what resources to use. Parts of this
ambitious project were successfully implemented at General Motors.

Cohen and Lee[1985] develop a conceptual frameworks for manufacturing

strategies analysis ,wher they describe a series of stochastic sub-
models,that considers annulized prodect flows from raw material vendors
via intermediate plants and distribution echelons to the final
customers.they use heuristic methods to link and optimized these sub-
models.

They later give an integrated and readable exposition of theie models and
methods in Cohen and Lee[1998].

Cohen and Lee[1998] present a normative model for resource

denelopment in a global manufacturing and distribution network.global
after-tax profit (profit-local taxes)is maximized through the desin of facility
network and control or material flows within the network.the cost structure
consist of variable and fix cost for material and procurement,production
,distribution and transportation. They validate the model by applying it to
analyze the global manufacturing strategies of a personal computer
manufacturer.

Finally, Arntzen.Brown,Harrison, and Trafton[1995] provide the most

comprehensive deterministic model for supply chain management. The
objective function minimizes a combination of costs and time elements.

Examples of cost elements include purchasing, manufacturing,pipeline

inventory, transportation costs between various sites,duties, and
taxes.time elements include manufacturing lead times and transit
times.unique to this model was the explicit consideration of duty and their
recovery as the product is model at the Digital Equipment Corporation has
produced spectacular results saving in the order of $100 million dollars.

Clearly,these network-design based methods add value to thhe firm inn

that they lay down the manufacturing and distribution strategies far into the
future. it is imperative that firms at one time or another make such
integrated decisions,encompassing production,location,inventory,and
transportation,and such models are therefore indispensable. Although the
above review shows considerable potential for these models as strategic
determinants in the future, they are not without their shortcomings. Their
very nature forces these problems to be of a very large scale. They are
often difficult to solve to optimality. Furthermore ,most of the models in this
category are largerly deterministic and static in nature.additionally, those
that consider stochastic elements are very restrictive in nature. In sum,

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there does not seem to yet be a comprehensive model that is
representative of the true nature of material flows in the supply chain.

LOGISTICS

Logistics is the management of the flow of goods, information and other

resources, including energy and people, between the point of origin and
the point of consumption in order to meet the requirements of consumers (
frequently, originally, military organizations).logistics involves the
integration of information ,transportation ,inventory, warehousing,material-
handling, and packaging.

ORIGINS AND DEFINITIONS

The term “logistic”originates from the ancient GREEK(”logos”-

ratio”,word, calculation, reason,speech,oration”).

Logistics is considered to have originated in the military’s need to supply

themselves with arms, ammunition and rations as they moved from their
base to a forward position. In ancient Greek, Roman and Byzantine
empires ,there were military officers with the title’ Logistikas’ who were
responsible for financial and supply distribution matters.

The Oxford English dictionary defines logistic as: the branch of military
science having to do with procuring, maintaining and transporting material,
personnel and facilities. ”Another dictionary definition is: ”the time related
positioning of resources.” As such is commonly seen as a branch of
engineering which creates” people system” rather than “machine
system”…

Logistician is the profession in the logistics and transport sectors,

including sea, air, land and rail modes. Professional qualifications for the
logisticians can carry post-nominal letters. Common examples include
FCILT/CMILT/MILT (the chartered institute of logistics and transport)
(CILT), EJLog/ESLog/EMLog (by European Logistics Association) (ELA),
PLog (by Canadian Professional Logistics Institute), CML/CPL (by SOLE-
The International Society of Logistics), jrLog/Log/SrLog (by China
Federation of Logistics and Purchasing) (CFLP), FHKLA/MHKLA ( by
Hong Kong Logistics Association) (HKLA), PLS/CTL/DLP (by American
Society of Transportation and Logistics) (AST&L). However, some
universities and academic institutions do help in producing logisticians, by
offering academic degree programmes at both undergraduate and
postgraduate levels, too.

MILITARY LOGISTICS
in military logistics, logistics officers manage how and when to move
resources to the places they are needed. In military science, maintaining
one’s supply lines while disturbing those of the enemy is a crucial,science
an armed force without resources and transportation is defenceless.

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 LOGISTIC MANAGEMENT

Logistic management is that part of the supply chain which plans,

implements and controls the efficient, effective forward and reserve
flow and storage of goods, services and related information between the
point of
The issue is not the transportation itself, but to streamline and control the
flow through the value adding process and eliminate non-value adding
ones. Production logistic can be applied in existing as well as new plants.
Manufacturing in an existing plant is a constantly changing process.
Machines are exchanged and new one added, which gives the opportunity
to improve the production logistic system accordingly. Production logistics
provides the means to achieve customer response and capital efficiency.

Production logistic is getting more and more important with the decreasing
batch sizes.in many industries(e.g. mobile phone) batch size one is shoirt
term aim.this way even a single customer demand can be fulfilled in an
efficient way.track and tracing, which is an essential part of production
logistics-due to product safety and product reliability issue-is also gaining
importance especially in the automotive and the medical industry.

SPACE LOGISTICS

Logistics and Supply Chain in Space exploration

Space Logistics the science of planning and carrying out the movement of
humans and material to, from and within space combined with the ability to
maintain human and within space combined with the ability to maintain human
and robotics operations within space. In its most comprehensive sense, space
logistics address the aspects of space operations both on the earth and in that
deal with:

1. Design and development, acquisition, storage, movement, distribution,

maintainance, evacuation and dispotion of space amterial.

2. Movement, evacuation and hospitalization of people in space.

3. Acquition or construction, maintenance,operation and dispotion of facility

on the earth and in space to support human and robotics space
operations.

4. Acquition or furnishing of service to support human and robotics space

operations.

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 DISTIBUTION – INTRODUCTION

Distribution (or “place”) is the fourth traditional element of the marketing

mix. The other three are product, price and promotion.

THE NATURE OF DISTRIBUTION CHANNELS

Most business use third Parties or intermidiaries to bring their products

to market.they try to forge a “distribution channel” which can be defined

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 as “all the organization through which a product must pass between its
point of production and consumption.”

Why does a business give the job of selling its product to

intermediaries?

After all, using intermediaries means giving up some control over how
products are sold and who they are sold to.

The answer lies n efficiency of distribution costs. Intermediaries are

specialists in selling.they have the contacts, experience and scale of
operation which means that greater sales can be achieved than if the
producing business tried run a sales operation itself.

FUNCTIONS OF A DISTRIBUTION CHANNEL

The main function of a distribution channel is to provide a link between

production and consumption. Organization that form any particular
distribution channel perform many key function:

INFORMATION gathering and distribution market research

intelligence-important for marketing planning.

PROMOTION developing and spreading communication

About offers

CONTACT finding and communicating with prospective Buyers

MATCHING adjusting the offer to fit buyers needs, Including grading,

assembling and packaging

NEGOTIATION reaching agreement on price and other terms

PHYSICAL of the transpoting and storing goods

Distribution

FINANCING acquiring and using funds to cover the costs of the

Distribution channel

RISK TAKING assuming some commercial risks by operating the

Channel (e.g. holding stock)

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 All the above functions need to be undertaken in any market. The question is-
who performs them and how many levels there need to be in the distribution
channel in order to make it cost effective.

Numbers of Distribution Channel levels

Each layer of marketing intermediaries that perform some work in bringing the
product to its final buyer is a “channel level”. The figure below shows some
example of channel levels for marketing channels:

Manufacturer Customer

Manufacturer Retailer Customer

Manufacturer Wholesaler Customer

Retailer

Manufacturer Wholesaler Retailer Customer

Jobber

Examples of Customer Marketing Channels

In the figure above, channel 1 is called a “direct-marketing” channel, since it

has no intermediary levels. In this case the manufacture sells directly to
customers. An example of a direct marketing channel would be a factory outlet
store. Many holiday companies also market direct to consumers, bypassing a
traditional retail intermediary- the travel agent.

The remaining channels are “indirect marketing channels”

CHANNEL 2 CONTAINS ONE INTERMEDIARY . IN CONSUMER MARKET

,THIS IS TYPICALLY A RETAILER.THE CONSUMER ELECTRICAL GOODS
MARKET IN THE UK IS TYPICAL OF THIS ARRANGEMENT whereby
producers such as sony, Panasonic, canon etc. sell their goods directly to large
retailers such as comet, Dixons and currys which then sell the goods to the
final consumers.
Channel 3 contains two intermediary levels-a wholesaler and a retailer. A
wholesaler typically buys and stores large quantities of several producers

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gooda then breaks into the bulk deliveries to supply retailers with smaller
quantities.for small retailers with limited order quantities , the use of
wholesalers makes economic sense. This arrangement tends to work best
where the retail channel is fragmented-i.e. not dominated by a small number of
large , powerfull retailers who have an incentive to cut out the wholesaler. A
good example of this channel arrangement in the uk is the distribution of drugs.

BUILDING CUSTOMER RELATIONSHIP MANAGEMENT

Input for customer acquisition

Acquisition is a vital stage in building customer relationship. An organization is
likely to focus its attention on the following as its major sources for providing
input for acquisition.

1. The suspects: the suspects represents the segment of the market who
have the potential to become prospective customers.

2. The enquires: enquiries whether they areintentional or causal provides

for a focused approach in the process of acquisition.

3. The lapsed customers: the lapsed customers should not be neglected.

Thet can be booked as new customers if the reasons for lapsed are
rectified suitably.

4. The former customers:

5. The competitors customers: customers , who always prefer more value

for for money every time, are inclined to opt for alternative. In this
context, the cometing organization can acquire the competitors
customers if the customers perceive that they would be rewarded with
more value for money.

6. The competitors lapsed customers

7. The competitors enquiries.

8. The compititors former customers.

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9. The referrals:referral is likely that fresh customers will rely heavily on
referrals rather the organization own efforts.

10. The existing customers: existing buyers may also be targeted for
acquisition in the event of the organization expanding its product line.

10.1 people: people within the organization have the basic role in
developing and maintaining relationship with customers. Everyone in the
organization must realize the fact that their work is towards satisfying
customers. Everyone from the lowest to the highest must integrate their
activities towards one of the main objectives of the organization i.e.
customer satisfaction.

10.2 processes: process involves a logical sequence of activities right from

the need identification of potential customers to need fulfilment. Need
fulfilment requires manufacture of products with desired attributes.

10.3. Product: the product offered must constantly provide value addition.

10.4. organization: an organization should be aware of the technology

advancement and provide quality services in tune with the customers
expectations. The responsive and learning nature of the organization must
build confidence in the mind of the customer mind that will go a long way in
building the customer relationship.

10.5 Setting satisfactory service standard: a customer not only expects

quality products but also quality services. Organization is expected to
render services in all three phases viz. pre sales and after sales.

10.6. concentration on competitors: an organization must focus constant

attention on the competitors performance, their strategy and style of
operation and compare the same with its own performance . customers
always make this comparison and decide their future purchase pattern.

10.7. Customer analysis: customer must be periodically analysed from

several perspective such as who constitute the customer inventory, level of
customer retention, what makes them buy, what their level of satisfaction is
where they are placed in the loyalty ladder and what makes them disloyal.

10.8. Cost analysis: an organization must focus attention on the cost of the
product or services.there must be sincere attempts towards cost reduction
without compromising on quality.

10.9. concentration on the paying ability of customers:before fixing price,

the paying ability of the potential customer must also be viewed. To some
extent prices are to be adjusted in tune with the fluctuations in the paying
ability of potential customers.

10.10. knowledge on purchase behavior pattern: organization should have a

thorough knowledge of the behavior pattern of their customers. The

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 influencing factors of the purchaser decision process and the ultimate
outcome are to be analyzed in depth.

10.11. different in prices and quality standards:an organization must.offer

services or brands of different varieties with price variations. To meet a
particular need, three or four brands of varied quality and at differing price
level must be available so that, the customer depending on his financial
position may prefer at least one of the varieties available.this prevents the
customer from switching over to other brands.

10.12. focus on reducing dissatisfaction: the causes foe dissastisfaction are

to be identified and have to be attended well.if a complaint is well attended,
then the dissatisfied customer becomes more loyal to the organization and
thereby , the relationship would continue to exist.

Research methodology

Research in common parlance refers to a “search for knowledge “ .it is an

original to the contribution to the exiting stock of knowledge , making for its
advancement . it is pursuit of truth with the help or study , observation
comparison & equipment.
Objective:

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1. To understand the importance of logistics and supply chain management in
organized retail markets.

2. To study on impact of logistics and supply chain management on organized

retail market.

Research design

A research design is a purely & simplythe framework or plan for a study that
guides the collection and analysis of data .it is blueprint that followed in
completing the study a research design is nothing more than the framework for
the study so that
1. The study will be relevant to the problem.

2. The study will employ economical procedures.

Data collection
After defining the research problem &determining specific information required
solving the problem, the researcher ‘s task is to look for the type & source of
data , & which may yield the desired results ,generally two types of data are
available to the researcher.

Secondary data

Secondary data includes those data which are collected for some earlier
research work & are applicable or usable in the study researcher has presentlt
undertaken.
In my project analysis I have used secondary type of data.

Facts & Findings:-

Supply Chain Management Problems

Supply chain management must address the following problems:

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• Distribution Network Configuration : number , location and
network missions of suppliers ,production facilities ,distribution
centers warehouses , cross –docks and

Customers.

• Distribution strategy: including questions of operating control

(centralized, decentralized or shared); delivery scheme (e.g. , direct
shipment ,pool point shipping ,cross docking DSD (direct store
delivery ), closed loop shipping ); mode of transportation (e.g.,
motor carrier , including truckload , LTL , parcel; railroad ;
intermodal, including TOFC and COFC; ocean freight; airfreight );
replenishment strategy (e.g. , pull, push or hybrid ); and transportation
control (e.g. , owner - operated , private carrier , common carrier,
contract carrier).

• Information integration of and other processes through the supply

chain to share valuable information, including demand signals,
forecasts, inventory and transportation etc.

• Inventory management : quantity and location of inventry including raw

materils, work-in-progress and finished goods

ATTENTION ON CHANGING REQUIREMENT OF CUSTOMERS

The requirement of the customers are bound to change in tune with the
changes in their lives,demographic and psychographic profiles and the
related aspects.the organization must see that there is a sense of matching
between the customer requirement and that of the organization
requirements in the terms of the following parameters at every point of time.
These parameters are:
• Goals: are what the organization would like to reach and what the
customer would like to receive.

• Demand: are concerned with the pressure under the organization

and the customers are

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  LIMITATIONS: are constraints on the part of the organization and also
part of the customers.

 OPTION: the parameters related to the alternatives available to the

organization as well as to the customers concerned.

 VALUE: are convinced standards accepted both by the organizations

and the customers.

 Behaviours the line of action by organizations and customers.

BIBLIOGRAPHY

WEB SITES

WWW.PYROTECHINDIA.COM

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WWW.GOOGLE.COM

www.indiabizclub.com

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