MBA (OPERATIONS MANAGEMENT) SEMESTER 3 OM 0012 SUPPLY CHAIN MANAGEMENT - 4 CREDITS (BOOK ID B1234) ASSIGNMENT- 60 MARKS Note: Answer

r all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Q1. It is necessary for Supply Chain managers to identify the obstacles to co-ordination in the Supply Chain so that they can take suitable actions that help achieve co-ordination. Explain the major categories of obstacles. (Incentive obstacles; Information processing obstacles; Operational obstacles; Pricing obstacles; Behavioural obstacles 10 marks, i.e. 2 marks each) 10 Marks Answer. Coordination implies actions by various agents in the supply chain that are aimed at increase in total supply chain profits. It also implies that supply chain agents avoid actions that improve their local profits but hurt total profits. A lack of coordination creates "bullwhip effect" in the supply chain. Due to this effect, fluctuations in sales become larger and larger fluctuations in orders at higher stages in the supply chain. This leads to situations wherein large shortages or large surplus capacities are felt in the supply chain cyclically. Obstacles to Coordination in a Supply Chain The five factors that lead to local optimization, an increase in information delay, distortion, and variability within the supply chain. These categories are:

a) Incentive obstacles: These are obstacles that are caused by wrong incentives provided to supply chain members in order to influence their decisions to support global optimization instead of pare to-efficient solutions. If sales force has incentive for selling to dealers, they push sales to dealers even though there is no sale in the period to customers. This will reduce orders from the dealers in the subsequent periods. b) Information processing obstacles: They consist of orders based on forecasts instead of customer demand, and a lack of information sharing. If each supply stage depends on orders from its previous stage without considering the ultimate sales to the consumer bull whip effect will appear. c) Operational obstacles: Lot requirements, rationing and shortage gaming, and large replenishment lead times can be summarized as operational obstacles. The effect of lead times was pointed out which can result in the halving of forecast errors.

d) Pricing obstacles: Lot sizes based on quantity discounts and price fluctuations contribute largely to the variability within supply chains. Quantity discounts and sales promotion discounts to dealers create distortions in orders. e) Behavioral obstacles: Each stage of the supply chain thinks locally and it unable to see the effect on the total supply chain and other supply chain stages. Policies and management practices, such as frequency of MRP runs, limited company perspective and local optimization characterize this category Q2. Write a note on assessment tool. (Planning assessment- 1 mark; Sample Schedule for Conducting an Assessment 3 marks; Description/Using an of assessment tool 4 marks; Completing assessment tool-2 marks) 10 Marks Answer. Planning assessment- Assessment tools are for immediate use with students in the classroom. They are suitable for use in many different contexts and are aimed at improving assessment practices. An assessment plan contains the details of how you will work through the steps of the assessment cycle for one or two learning. Sample Schedule for conducting assessment This session plan for conducting a daily activities schedule assessment can be adapted to fit a clubs specific needs. Objective Identify the daily routines of different people in any community. Time 1-1 hours Preparation Select a convenient meeting location and time. Invite people from the community to participate 20 to 30 people is an ideal number, with an equal number of men and women. Materials Large sheets of flip-chart paper or poster-size newsprint Blank sheets of paper for each participant Pens or pencils Markers in a variety of colors

Tape

Procedures 1. Introduce yourself and explain the purpose of the assessment. (5 minutes) 2. Ask everyone to take a moment to think about all the activities he or she does each day, such as household chores, work, and recreation. (5 minutes) 3. Ask participants to write down their schedule on a typical day. (10 minutes) 4. Divide participants into groups of four to six, based on gender. (5 minutes) 5. Ask the members of each group to briefly discuss what their schedules have in common. (10 minutes) 6. Ask each group to develop a generic daily schedule. (10 minutes) 7. Bring everyone together and ask a spokesperson from each group to briefly describe his or her groups daily schedule. (5 minutes) 8. Discuss the differences and similarities between the groups schedules. (20 minutes) Ask: What are the differences? What are the similarities? Why are there differences? What could be done to reduce peoples workloads? What would be the best time of day for a meeting or training? 9. Collect everyones daily schedules for reference, keeping them separated by group.

Variation Create daily schedules for different members of the community. For example, you might have a group of students and a group of business professionals compare their schedules. Description/Using an of assessment tool: Assessment is the process of documenting, usually in measurable terms, knowledge, skills, attitudes and beliefs. Assessments can be classified in many different ways. The most important distinctions are: (1) formative and summative; (2) objective and subjective; (3) referencing (criterion-referenced, norm-referenced, and ipsative); and (4) informal and formal. There is a wide range of assessments that are available for use in restructuring science assessment in the classroom. These types of assessments include strategies that are both traditional and alternative. The various types of alternative assessments can be used with a range of science content and process skills, including the following general targets.

Declarative Knowledge the "what" knowledge Conditional Knowledge the "why" knowledge Procedural Knowledge the "how" knowledge Application Knowledge the use of knowledge in both similar settings and in different contexts Problem Solving a process of using knowledge or skills to resolve an issue or problem Critical Thinking evaluation of concepts associated with inquiry Documentation a process of communicating understanding Understanding synthesis by the learner of concepts, processes, and skills Q3. How can differential advantage be achieved through Supply Chain Management? (Competitive-forces approach 2 marks; capabilities approach 6 marks; conclusion 2 marks) 10 Marks Answer. A supply chain is the set of business processes and resources that transforms a product from raw materials into finished goods and delivers those goods into the hands of the customer. Supply chains are undergoing a degree of change that rivals the transformation that occurred in the industrial revolution. There are several approaches to achieve differential advantages through supply chain management. Two main approaches are given below: 1. Competitive-forces approach-The first is competitive forces approaches , which emphasizes the intensity of completion in an industry and the ability to achieve and defend a position of low cost or differentiation in an attractive market segment. Strategies are aimed at making preemptive moves that keep competitors off balance and allow the firm to maintain a favorable balance of power. 2. Capabilities approach- this approach focused on developing and maintaining distinctive skills and resources that enable the firm to deliver superior customer value or deliver value more cost effectively. SCM utilizes capabilities approaches to achieve differential advantages through the creation and deliver of customer value. The test of distinctiveness includes the following: 1. Does it make a disproportionate contribution to providing superior customer value or to delivering value most cost-effectively? 2. Can it be readily matched by rivals?

Distinctive capabilities are categorizes in three way: 1. Capability deployed inside out are activities with an internal emphasis that are activated in response to external forces. 2. Conversely, outside-in capabilities are aimed at anticipating market requirement, monitoring competitors, and creating long term relationship with customer, channel members, and suppliers. 3. Spanning capabilities are required to integrate the inside out and outside-in capabilities. Conclusion: The focus of SCM is on creating value for the ultimate consumer and differential advantage for the supply chain as a a whole. Thus, the ability of firm in supply chain to collectively utilize market sensing and customer linking capabilities to serve the end consumer more efficiently and effectively is critical to achieving competitive advantage for the supply chain as a whole. Q4. Discuss the five basic components of Supply Chain Management. (5 components X 2 marks =unit 10) 10 Marks Answer. Five basic components of Supply Chain Management: There are the five basic components of Supply Chain Management (SCM) Plan Every company needs a strategy on how to manage the resources in order to achieve their customers demand for their products and services. The supply chain management is developing a set of metric to monitor the supply chain so that it can deliver high qualities and values to customers. Source To create their products, companies need to be very careful when choosing suppliers to deliver their goods and services needed. The managers need to develop a set pricing and delivery system in the supply chain. They can also put processes for managing their goods and goods inventory, for example; receiving shipments. Make In manufacturing the supply chain manager should always schedule the activities that are needed for the production, packaging, testing and preparation for delivery. The most metric-intensive portion of the supply chain, production output and measure levels. Deliver

This part is mainly referred to as logistics by the supply chain management. In this case companies coordinate receipts of orders, pick carriers to get products to customers and develop a network of warehouses. Return In many companies this is usually where the problem is in the supply chain. The planners should create a flexible and responsible network for receiving a flaw and excess products sent back to them (from customers). Q5. Explain Relationship Marketings impact on firms. (7 impacts X 1.25 = 8.75 marks; conclusion 1.25 marks) 10 Marks Answer. Relationship Marketing: Relationship marketing is best defined as being the building of long term relationships with consumers through non-intrusive advertising and marketing strategies and objectives Relationship Marketings impact on firms: Relationship marketing is very important for a firm. Using the relationship marketing a firm gain following benefits:
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The cost of acquisition occurs only at the beginning of a relationship, so the longer the relationship, the lower the amortized cost. Account maintenance costs decline as a percentage of total costs (or as a percentage of revenue). Long-term customers tend to be less inclined to switch, and also tend to be less price sensitive. This can result in stable unit sales volume and increases in dollar-sales volume. Long-term customers may initiate free word of mouth promotions and referrals. Long-term customers are more likely to purchase ancillary products and high margin supplemental products. Customers that stay with you tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share. Regular customers tend to be less expensive to service because they are familiar with the process, require less "education", and are consistent in their order placement. Increased customer retention and loyalty makes the employees' jobs easier and more satisfying. In turn, happy employees feed back into better customer satisfaction in a virtuous circle.

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Relationship marketers speak of the "relationship ladder of customer loyalty". It groups types of customers according to their level of loyalty. The ladder's first rung consists of "prospects", that

is, people that have not purchased yet but are likely to in the future. This is followed by the successive rungs of "customer", "client", "supporter", "advocate", and "partner". The relationship marketer's objective is to "help" customers get as high up the ladder as possible. This usually involves providing more personalized service and providing service quality that exceeds expectations at each step. Q6. The Global Supply Chain Forum (GSCF) framework consists of eight supply chain management processes. Explain them. (8 process X 1.25 marks) Answer. The Global Supply Chain Forum has introduced another supply chain model. This framework is built on eight key business processes that are both cross-functional and cross-firm in nature. Each process is managed by a cross-functional team including representatives from logistics, production, purchasing, finance, marketing, and research and development. While each process interfaces with key customers and suppliers, the processes of customer relationship management and supplier relationship management form the critical linkages in the supply chain. The key business processes are: 1. 2. 3. 4. 5. 6. 7. 8. Customer relationship management Supplier relationship management Customer service management Demand Management Order fulfillment Manufacturing flow management Product development and commercialization Returns management

1. Customer relationship management (CRM) is a model for managing a companys interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support. 2. Supplier relationship management (SRM) is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers in order to uncover and realize new value and reduce risk. 3. In customer service management, a customer services manager make sure that customers needs and expectations are satisfied. He is responsible for anything from managing a customer service team and dealing with enquiries in person, to developing customer service standards for a large company. Duties and responsibilities:

helping to develop or update customer service policies and procedures managing or leading a team of customer services staff handling more complex enquiries and complaints authorizing refunds or other compensation to customers making sure accurate records are kept of communications with customers

4. Demand management is about understanding demand. The process should focus on using planning and forecasting skills to ensure patients receive the most appropriate care in the right setting. It is not about managing the number and type of referrals. 5. In order fulfillment, need to fulfill the order if the transaction was successful, or handle any error case which may have occurred. Sometimes Order fulfillment is used to describe the narrower act of distribution or the logistics function, however, in the broader sense it refers to the way firms respond to customer orders. 6. Manufacturing flow management is the supply chain management process that includes all activities necessary to move products through the plants and to obtain, implement and manage manufacturing flexibility in the supply chain. Manufacturing flexibility reflects the ability to make a wide variety of products in a timely manner at the lowest possible cost. To achieve the desired level of manufacturing flexibility, planning and execution must extend beyond the four walls of the manufacturer in the supply chain. 7. Product Development and Commercialization is the process of launching a new product; it may involve heavy promotion and filling the distribution networks with the product. 8. Returns management - returns cycle have a ripple effect throughout your supply chain. Returns represent costs beyond the warehouse; without visibility and control, returns expose your company to regulatory and financial risks. Enterprise Returns Management (ERM) offers a comprehensive, Web-based solution to automate the entire returns life cycle, from return material authorization (RMA) creation to final product disposition.