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Usama Yasir
Nirmal Francis
Vineeth George

Vendor Managed Inventory
Green SCM
Ethical SCM
The vendor(supplier) manages the stock
levels and availability for the customer based
on safety stock levels as per the agree terms
and conditions.

Vendor Managed Inventory(VMI) is a
planning and management system in which the
vendor is responsible for maintain the
customers inventory levels
Improved cash cycle
Reduction of logistics cost
Fewer unprofitable sales
Extended E-business capability
New service opportunities
Increase customer loyalty
Low customer service cost
Automated ERP integration
Better forecasts & Fewer
consumer stock outs

Assured product supply
Reduced demand uncertainty
Fewer distress purchases
Improved customer service levels
Extended E-business capability
Lover planning and ordering
Reduction of daily management
of inventory stocks & orders
Reduction of working capital

JIT philosophy means getting the right quantity of
goods at the right place and the right time
JIT exceeds the concept of inventory reduction; it is
an all-encompassing philosophy geared to eliminate
waste, anything that does not add value
A broad JIT view or lean production/lean systems -
is one that encompasses the entire organization
JIT originated in Japan at Toyota Motor Co, fueled by
a need to survive the devastation post world war 2.
JIT gained worldwide prominence in the 1970s
Often termed Lean Production or Lean Systems
Broad view that entire organization has the same
goal - to serve customers

JIT is built on simplicity - simpler is better
Visibility all waste must be visible to be
identified and eliminated
Flexibility - to adapt to changes in environment
JIT manufacturing focuses on production system to
achieve value-added manufacturing
TQM is an integrated effort designed to improve
quality performance at every level
Respect for people rests on the philosophy that
human resources are an essential part of JIT
JIT Manufacturing is a philosophy of value-added
Achieved by focusing on these elements:
Inventory reduction - exposes problems
Kanbans & pull production systems
Small lots & quick setups (SMED)
Uniform plant loading
Flexible resources
Efficient facility layouts

Integrate quality into all processes
Focus on continuous improvement - Kaizen
Quality at the source - sequential inspection
Jidoka - authority to stop line
Poka-yoke - fail-safe all processes
Preventive maintenance - scheduled
Work environment - everything in its place, a place
for everything
The Role of Employees:
Genuine and meaningful respect for associates
Willingness to develop cross-functional skills
Bottom-round management consensus
management by committees or teams
Quality circles small volunteer teams that solve
quality problems

Lifetime Employment:
Everyone feels secure/is empowered
Everyone is responsible for quality:
understand both internal and external
customer needs

The Role of Management:
Responsible for culture of mutual trust
Serve as coaches & facilitators
Responsible for developing workers
Provide multi-functional training
Facilitate teamwork
Support culture with appropriate incentive
system including non-monetary

Supplier Relationships
Single-source suppliers
Can supply entire family of parts
Build long-term relationships with small number of
Fewer contracts
Cost and information sharing
Work together to certify processes
Reduction in inventories
Improved quality
Reduced space requirements
Shorter lead times
Lower production costs
Increased productivity
Increased machine utilization
Greater flexibility

Starts with a company shared vision of where
it is and where it wants to go
Management needs to create the right

Implement the sequence of seven steps:
1. Make quality improvements
2. Reorganize workplace
3. Reduce setup times
4. Reduce lot sizes & lead times
5. Implement layout changes
6. Switch to pull production
7. Develop relationship with suppliers
Kanban is a scheduling system for lean and just-in-time (JIT) production.
Kanban Cards: key component of kanban and signal the need to move materials
within a manufacturing or production facility or move materials from an outside
supplier in to the production facility.
Open Kanban: open source, Agile and lean based method to deliver value for
knowledge-intensive work
For example in the fields of information technology, software development,
business, product development and personal organization
Electronic Kanban: It eliminates common
problems such as manual entry errors and lost
cards. E-kanban systems can be integrated
into enterprise resource planning (ERP) systems

Three bin system: One bin is on the factory floor
(the initial demand point), one bin is in the
factory store (the inventory control point), and
one bin is at the supplier. The bins usually have a
removable card containing the product details
and other relevant information

Visualize: Visualizing workflows supports proper
understanding of changes planned and helps to
implement them according to this plan
Limit WIP: Limiting work-in-process implies that a pull
system is implemented on parts or all of the workflow
Manage flow:Each transition between states in the
workflow is monitored, measured and reported

Make policies explicit: With an explicit understanding
it is possible to move to a more rational, empirical,
objective discussion of issues.
Implement feedback loops: Organizations generally
do not see process improvements beyond a localized
team level.
Improve collaboratively, evolve experimentally: Using
a scientific approach to implement continuous,
incremental and evolutionary changes.
Integrating environment thinking into supply
chain management, including product design,
material sourcing and selection, manufacturing
processes, delivery of the final product to the
consumers, and end-of-life management of
the product after its useful life".

Green stands for ecological sustainability and
encompasses many different concerns including,
air, water and land pollution, energy usage and
efficiency, and waste generation and recycling
(refer fig). Green initiatives aim is to minimize
the impact of human activities on the
Increasing Environmental Constraints due to
Global Warming
Corporate Social Responsibility
Environmental awareness in stakeholders
Response to increasing fuel prices

Carbon Sinks
Renewable Energy
Green Products
Green Process
Green Transportation
Eco Friendly Packaging

Focus on ethical supply chain management
Integrate ethical considerations into
technical solutions
INVEST in greater integration and
ownership of supply chain channels
Go beyond compliance training to develop a
stronger ethical culture

Focus talent recruitment efforts on
candidates who value business ethics
Share best practices with other companies
Transparency and accountability
What are the key operational techniques used
in supply chain and how companies can adopt
ethics in their SCM?