ASSIGNMENT

DRIVE
PROGRAM
SUBJECT CODE
NAME
SEMESTER
CREDITS
MARKS

&

FALL 2014
MBADS (SEM 4/SEM 6) / MBAN2
MBAFLEX (SEM 4) /
PGDFMN (SEM 2)
OM0012 SUPPLY CHAIN MANAGEMENT

3
4
60

Note: Answer all questions. Kindly note that answers for 10 marks
questions should be approximately of 400 words. Each question is
followed by evaluation scheme.
1 Write short notes on:
Intermodal transportation
Answer : Intermodal transportation. The movements of passengers or freight
from one mode of transport to another, commonly taking place at a terminal
specifically designed for such a purpose. In North America, the term intermodal
is also used to refer to containerized rail transportation.
Intermodal transportation network. A logistically linked system using two or more
transport modes with a single rate. Modes are having common handling
characteristics, permitting freight (or people) to be transferred between modes
during a movement between an origin and a destination. For freight, it also
implies that the cargo does not need to be handled, just the load unit such as a
pallet or a container.
Capacitated plant location model
Answer : The capacitated plant location problem with customer and supplier
matching can be modelled as a mixed integer linear program, where the product
distribution from plants to customers and the material supply from suppliers to
plants are considered together. In order to save allocation cost, distribution trip
and a supply trip is merged into one triangular trip. Moreover, vehicles from
plants visit a customer and a supplier for each trip. In this paper, we assume
interval uncertainties in the demands of costumers. We show that the robust
counterpart of the original model with interval uncertainty is equivalent to a
larger mixed integer linear program. Finally, the original and robust models are
compared on several randomly generated examples showing the impact of
uncertainty.
Bulk shipments Purchasing strategies
Answer : Its difficult to talk about procurement planning without mentioning
procurement strategy, because procurement strategy is developed in conjunction
with and during the procurement planning phase and is a key factor in
determining the most appropriate procurement method given the complexity and
monetary value of the requirement, and market availability.

While procurement planning deals with when, procurement strategy looks at

what, how, where and why; which need to be decided before the when.
What to buy?
Why buy it?
How to buy it?
What purpose does it serve?
Whats the objective of the purchase?
How much does it cost?
Where can it be sources?
How many sources are available?
Whats the risk?
Whats the benefit?
Whats the cost?
But even after a preliminary procurement plan is developed, there are still
further strategic questions that need to be answered, such as:

Is the expected contract award date realistic given the procurement

method?
Does the procurement process need expediting?
Are there opportunities for packaging requirements in order to purchase in
bulk?
What are the monetary or strategic advantages/disadvantages of grouping
requirements?
Are there any dependent requirements?

2 Discuss the steps involved in the measurement of supplier

performance.
Answer : The Supplier Development and Scorecard process at Measurement
Specialties helps to ensure that the sourcing organizations can identify, qualify,
monitor, and reward its supplier base. The main components to this program are:
Assess and Qualify
Measure and Scorecard
Rate and Recognize
We call this our "5-Step Supplier Development Process" and it is a tool to help us
ensure that we have a developed supply base that can help us compete for our
unshared fair of business with our own customers. This methodology also will
help to ensure that we can compete for capacity at the declining number of
world-class suppliers in our global market.
The following explains the overall rating process, the scoring methodology, the
supplier categorization process, and our award process for those suppliers who
become eligible. As part of our ongoing relationship, it is important for both of
our organizations to communicate effectively with each other. Accordingly, we
would like to introduce the Measurement Specialties Supplier Performance
Scorecard (SPS). The purpose of the SPS is to give Suppliers timely feedback on
their performance as a supplier to our organization.
A Supplier's SPS rating will be based upon four specific performance criteria or
metrics in the areas of Quality, Service Level, Productivity, and Responsiveness.

Each of these ratings, with the exception of Responsiveness, will be attributable

to specific fact-based metrics of your organization's performance. The ratings for
each of these aspects are weighted differently to arrive at your overall SPS
Score, which then drives your categorization as a Category 1, 2, or 3 supplier of
Measurement Specialties.
3 Write short notes on:
Lead time reduction
Answer : The most effective way for businesses to reduce stock is by
reducing the supply lead time. Lead time can be defined as the time it
takes from when you first determine a need for a product until it arrives on
your doorstep. If lead time was zero, inventory could be zero.
In a perfect world, imagine how simple business would be with a lead time
of zero and orders being filled instantly. A customer could walk through the
door of your business, place their order, and walk out happy with no delay.
If business was this easy, you would require no warehouse space, no order
follow-up, no inventory counting, no forecasting, no product damage, no
obsolete inventory, fewer employees, less risk of theft, and less cost
overall.
Of course the real world does not work like this, but the shorter the lead
times, the less complex our inventory management will be. In general, you
can expect the following reductions in inventory as lead times are
reduced:
Note that lead time can be separated into three components:
review time
manufacture time
transit time.
Review time is the time it takes for your company to generate an order.
Changing your order frequency from twice a month to once a week or
even daily can cut total effective lead times substantially.
It should be clearly understood that lead time reliability is just as
important as lead time itself. Short lead times with a high degree of
uncertainty can force necessary inventories upward. Obviously this is
something to keep in mind when selecting suppliers.
Reduction of product replenishment lead times is a core element of our
supply chain management services.
Cross docking
Answer : Cross docking is a distribution system where items received at
the warehouse are not received into stock, but are prepared for shipment
to another location or for retail stores. Cross docking can realize a cost
reduction by skipping put away and retrieval steps.
The term cross docking refers to moving product from a manufacturing
plant and delivers it directly to the customer with little or no material
handling in between. Cross docking not only reduces material handling,
but also reduces the need to store the products in the warehouse. In most
cases the products sent from the manufacturing area to the loading dock
has been allocated for outbound deliveries. In some instances the
products will not arrive at the loading dock from the manufacturing area,
but may arrive as a purchased product that is being re-sold or being
delivered from another of the company's manufacturing plants for
shipment from the warehouse.

Benefits
Many companies have benefitted from using cross docking. Some of the
benefits include:

Reduction in labor costs, as the products no longer requires picking

and putaway in the warehouse.
Reduction in the time from production to the customer, which helps
improve customer satisfaction.
Reduction in the need for warehouse space, as there is no
requirement to storage the products.

Distributor integration
Answer : To effectively monitor the distribution business, integrated
Distribution Software has been developed as a helping hand to the
business community. This distributor integrated with eCommerce software
is so versatile that it guarantees the trader hassle-free eCommerce. The
robust software has integration of all distribution including assembly
segment, wholesale and retail networks, accounting including shipping,
analysis of stock and so on.
One of the main benefits of eCommerce in todays world is that it has
made trade and commerce a global phenomenon. The effectiveness of this
global trade depends on its monitoring. This calls for effective software
which caters to the requirements of the business. The software should
produce accurate workflow charts, monitor sales and distribution, handle
settlement of bills, monitor the exchange rate of various currencies and
more. The integration of API with XML and web applications has made the
process of monitoring eCommerce much more effective.
e-sourcing
Answer : E-Sourcing is a faster, more transparent and fairer way of
facilitating tenders and conducting negotiations. Founded on a web-based
platform, e-sourcing ensures smooth and clear communication, and is a
more profitable business tool for both the suppliers as well as the A.P.
Moller-Maersk Group.
What are the benefits of e-Sourcing

Time saving
Provides a simple format for submitting data online
Faster evaluation process
Clearly defined requirements
More transparent negotiation
Compete for global business

e-Sourcing Terminology

E-RFI (Electronic-Request for Information): Online collection of

information used to shortlist suppliers.
E-RFQ (Electronic-Request for Quotation): Online collection of quotes
to either award business or shortlist suppliers.

E-RFP (Electronic-Request For Proposal): Online collection of

proposals used to evaluate and shortlist business cases.
E-RFS (Electronic-Request For Solution): Online collection of different
proposals used to evaluate and shortlist business cases.

4 What are the issues faced in global supply chain?

Answer : Supply chain leaders must invest in developing their teams
skills to meet growing expectations about how procurement can
support the business.
The five issues cited by The Chief Supply Chain Officer Report 2013 were:

The need to continue to reduce costs while improving customer service and
supporting expansion in new markets and product lines. Some 68 per cent of
respondents said operating cost reduction is very important , compared
with 64 per cent in 2012.

The need to manage the complexity of omnichannel selling and customer

fulfilment. More than half (55 per cent) said the demands of e-commerce and
mobile-enabled consumers are increasing the number of stock keeping units they
have to support. Almost 55 per cent reported they are building new distribution
centres, and 48 per cent are building direct-to-customer fulfillment capabilities.
The fact boards expect lower costs and greater efficiency. Nearly half (47 per
cent) agreed this was the case this year, up from 43 per cent last year, and 32
per cent in 2011.
Following the horse meat scandal, safety and quality incidents are at the top of
the risk index, with 37 per cent reporting that they are very concerned about
this for 2013-14 and 35 per cent are concerned .
Facilitating career progression, developing new production skills and
demonstrating a return on investment is a further issue. Three-quarters (76 per
cent) said providing compelling career options for talented supply chain staff is
challenging, this is up from 66 per cent in each of the previ ous two years.
Some 53 per cent believe new product introduction and launch capabilities are
now essential for supply chain, up from just 18 per cent in 2011. And 53 per
cent of respondents and 31 per cent of those spending 5 per cent or more of
their personnel costs on training and development say they dont track return
on investment.
5 What is standardisation? Explain the four approaches to
standardisation?
A Explanation of standardization
Description of the approaches to standardization
Answer : As a business owner, a key component to your business plan is likely
how to promote your product. It's important to create an efficient, results-driven
marketing and advertising strategy, especially if your product will be sold
internationally. If this is the case, you may consider using a global
standardization of marketing to sell your product, gain a larger customer base
and increase sales and profits.

Global standardization refers to the process of designing and developing

things in line with a set of pre-agreed international standard. The global
standardization strategy which is mostly with business world is aimed at
standardizing marketing approach to business so that it can be used
internationally.
Standardization marketing strategy is typically applied to discussion of global
businesses and means to market a solution with uniform consistency throughout
the marketing mix. This is an opposite approach to an adaptation strategy, under
which multinational companies differentiate their product and adapt it to fit the
unique needs of countries.
Specifics of Standardization
A major point about a standardization marketing strategy is that organizations
can choose to standardize all aspects of the product experience, or they can
standardize component of the product or marketing. Standardizing the whole
product experience includes product uniformity, customer service, product
support, marketing, pricing and distribution. This is a standardized marketing
mix.
Benefits
The overriding benefits of a standardized marketing strategy are consistency
throughout the world and cost savings. Increased globalization of world
businesses contributes to more similarities among international marketplaces.
This has led some companies to realize the benefits of providing a consistent,
and uniform product and marketing system around the world. Because these
organizations are producing same products and reusing established marketing
and distribution systems, they also get economies of scales benefits in
production and buying.
Weaknesses
An inherent disadvantage of a standardized marketing strategy emerges from its
goal of offering uniformity. Selling the same products with the same message
globally means little to no differentiation for local markets and their unique
needs. Ideally, a standardized approach is based on research that unique needs
are not relevant. However, companies open the door for competitors to enter the
market and offer some type of standardized product, service, or unique
marketing messages.
Additional Insights
Even companies that desire to standardize may find it difficult to do so in lieu of
global restrictions. Trade barriers and tariffs are common tools global
governments use to force companies to adapt to local market needs and
requirements. Many countries have varying expectations on delivery from
external sources. Not all businesses benefit from a standardized approach to
international marketing and business. Each organization must carefully weigh its
offering, its options and its ability to standardize or adapt for business results.
6 Discuss the impacts of e-commerce on SCM.
Answer : A production supply chain refers to the flow of physical goods and
associated information from the source to the consumer. Key supply chain
activities include production planning, purchasing, materials management,

distribution, customer service, and sales forecasting. These processes are critical
to the success of any operation whether theyre manufacturers, wholesalers, or
service providers.
E-commerce impacts supply chain management in a variety of key ways.
These include:
Cost efficiency:
E-commerce allows transportation companies of all sizes to exchange cargo
documents electronically over the Internet. E-commerce enables shippers, freight
forwarders and trucking firms to streamline document handling without the
monetary and time investment required by the traditional document delivery
systems.
By using e-commerce, companies can reduce costs, improve data accuracy,
streamline business processes, accelerate business cycles, and enhance
customer service. For example, Ocean carriers and their trading partners can
exchange bill of lading instructions, freight invoices, container status messages,
motor carrier shipment instructions, and other documents with increased
accuracy and efficiency. The only tools needed to take advantage of this solution
are a personal computer and an Internet browser.
Changes in the distribution system:
E-commerce will give businesses more flexibility in managing the increasingly
complex movement of products and information between businesses, their
suppliers and customers. E-commerce will close the link between customers and
distribution centers. Customers can manage the increasingly complex movement
of products and information through the supply chain.
Customer orientation:
E-commerce is a vital link in the support of logistics and transportation services
for both internal and external customers. E-commerce will help companies
deliver better services to their customers, accelerate the growth of the ecommerce initiatives that are critical to their business, and lower their operating
costs.
Using the Internet for e-commerce will allow customers to access rate
information, place delivery orders, track shipments and pay freight bills. Ecommerce makes it easier for customers to do business with companies:
Anything that simplifies the process of arranging transportation services will help
build companies' business and enhance shareholder value.
By making more information available about the commercial side of companies,
businesses will make their web site a place where customers will not only get
detailed information about the services the company offers, but also where they
can actually conduct business with the company.
Shipment tracking:

E-commerce will allow users to establish an account and obtain real-time

information about cargo shipments. They may also create and submit bills of
lading, place a cargo order, analyze charges, submit a freight claim, and carry
out many other functions. In addition, e-commerce allows customers to track
shipments down to the individual product and perform other supply chain
management and decision support functions.
The application uses encryption technology to secure business transactions.
Shipping notice:
E-commerce can help automate the receiving process by electronically
transmitting a packing list ahead of the shipment. It also allows companies to
record the relevant details of each pallet, parcel, and item being shipped.
Shipping Documentation and Labeling:
There will be less need for manual intervention because standard bills of lading,
shipping labels, and carrier manifests will be automatically produced; this
includes even the specialized export documentation required for overseas
shipments. Paperwork is significantly reduced and the shipping department will
therefore be more efficient.
Online Shipping Inquiry:
This gives instant shipping information access to anyone in the company, from
any location. Parcel shipments can be tracked and proof of delivery quickly
confirmed. A customer's transportation costs and performance can be analyzed,
thus helping the customer negotiate rates and improve service.
Risks:
Trust
In most of the cases, customers do not trust to conduct business with a
newly introduced company because they have no well reputation on the
market. To achieve the belief of people, the company has to be
determined to make the companys business purposes very well.
Internet connectivity
Although e-commerce has a significant impact on supply chain
management system, but e-commerce is fully dependable on the internet.
So, failure of internet connection (for example, natural disaster, power
failure etc) may cause a negative impact on business such as a firm
cannot contact with customers and other business partners, delay of
delivery etc.
Supply chain management links and coordinates the activities of involved in
buying, making and moving a product .It also integrates supplier, manufacture,
distributor and customers by reducing time and inventory costs. E-commerce
advantages are taking companies a substantial step forward by providing
customers with a faster and easier way to do business with them.