SYNOPSIS ON ANALYTICAL STUDY OF

SUPPLY CHAIN MANAGEMENT

Submitted to the

G.B. Pant University of Agriculture & Technology,

Pantnagar-263145(U.S. Nagar)

Submitted by :-

RAJAN VERMA (45389)

SOURAV BHATIA (45390)

NIHARIKA GANGOLI (45398)

Under the guidance of

Mrs. ANSHIKA GUPTA

ASSISTANT PROFESSOR

Department of Industrial and Production Engineering

G.B. Pant University of Agriculture & Technology

Pantnagar-263145(U.S. Nagar), Uttarakhand , INDIA.

OBJECTIVE:

The objectives in this study is designed to investigate the effect of supply chain
management strategy on supply chain performance and to study the method of supply
chain used by KHATEMA FIBRES LTD. Supply chain management has been becoming
increasingly important in competitive business.
To compete at the supply chain level, firms must adopt an appropriate supply chain
management strategy. The strategy needs integrate and coordinate throughout the supply
chain to generate the performance of supply chain members.

INTRODUCTION
Supply Chain Management is a network of facilities that produce raw materials,
transform them into intermediate goods and then final products, and deliver the products
to customers through a distribution system. The management of the supply chain and the
roles of various factor involved differ from industry to industry and company to company.
As a result Supply Chain Management (SCM) has become a vital issue for manufacturers,
professionals and researchers. It is felt that to manage the supply chain effectively entire
structure of supply chain must be understood properly.

In the 1950s and 1960s, most manufacturers emphasized mass production to minimize
unit production cost at the primary operations strategy, with little product or process
flexibility. In the 1970s, material requirements planning (MRP) was developed and
managers realized the impact of huge WIP inventories on manufacturing cost, quality,
product development, and delivery lead-time. The intense global competition of the 1980s
forced world-class organizations to offer low-cost, high-quality, and reliable products
with greater design flexibility. Manufacturers utilized Just-In-Time (JIT) and other
management programs to improve manufacturing efficiency and cycle time. The
evolution of SCM continued into the 1990s as organizations further extended best
practices in managing corporate resources to include strategic suppliers and the logistics
function. Many manufacturers and retailers are embracing the concept of SCM to
improve efficiency and effectiveness across the supply chain Supply Chain Management
(SCM) has been a well-researched area. Supply chain is a network of entities that are
involved in activities ranging from supply of raw material to production, distribution, and
delivery of final product to end consumer. In order to execute all the activities efficiently,
an optimum network design is required. Network design is a strategic level decision with
a long term investment. After network design is set and product design is finalized, some
important issues may have to be addressed. For example, which supplier, manufacturing,
and transportation mode, out of available options, are to be selected in order to minimize
the total cost of supply chain? In other words, it is selection of best option, out of all
available options, at each stage of supply chain in order to minimize the total supply
chain cost. These decisions are tactical in nature and require a different kind of supply
chain design.

Supply chain has become an important focus of competitive advantage for organization
business. The management of supply chain study emphasizes how to maximize the
overall value of the firm by better using and deployment of resources across the whole of
the firm. A supply chain is the set of values adding activities connecting the enterprises
suppliers and its customers. The principle of supply chain activity is receiving input from
firms suppliers add value deliver to customers (Levi at al (2004). A supply chain
encompasses all the parties that involved, directly or indirectly, in fulfilling a customer
request. The supply chain includes manufacturer, suppliers, transporters, warehouses,
retailers and even customers themselves. Within each organization, such as a
manufacturer, the supply chain includes all function involved in receiving and filling a
customer request. These functions includes new product development, marketing,
operation, distribution, finance, customer service and other function that related to
serving customer request (Chopra and Meindl, 2007). Effective supply chain management
is important to build and sustain competitive advantage in product and services of the
firms. This paper attempts to provide the reader a complete picture of supply chain
management through a systematic literature review. It presents main activities of supply
chain and the step-by-step approach for understanding a complete picture of supply chain.

LITERATURE SURVEY

Supply Chain Management is a network of facilities that produce raw materials,

transform them into intermediate goods and then final products, and deliver the products
to customers through a distribution system. It spans procurement, manufacturing and
distribution the basic objective of supply chain management is to optimize performance
of the chain to add as much value as possible for the least cost possible. In other words,
it aims to link all the supply chain agents to jointly cooperate within the firm as a way to
maximize productivity in the supply chain and deliver the most benefits to all related
parties.
Supply Chain Management is management of material, money, men, and information
within and across the supply chain to maximize customer satisfaction and to get an edge
over competitors. The performance of supply chain was influenced by managing and
integrating key element of information into their supply chain. To achieve effective
supply chain integration, the firms need to implement information technology (Handfield
and Nichols,1999); Sufian (2010). Brandy berry et al. (1999) suggested that by using
technology of information, the firms could managing the flow and impact of numerous
supply chains dimension, such as quality, cost, flexibility, delivery, and profit. Byrd and
Davidson (2003) found that information technology impact the supply chain
effectiveness. They stated that the development and long-term utilization of information
technology lead to better firm performance in terms of return on investment (ROI, return
on equity (ROI) and market share. Vickery et al. (2003) showed that supply chain
coordination and integration is facilitated by using integrated information technology,
which directly impacts a financial performance of the firms.
According to Sufian (2010) to achieve a competitive advantage and better
performance, supply chain management strategy need support the business strategy
The purpose of this study to find out the effect of supply chain management strategy such
as lean supply chain, agile supply chain, and hybrid supply chain on supply chain
performance. This study also investigates the effect of supply chain management
practices in terms of strategic supplier partnership, customer relationship and information
sharing on supply chain performance. The paper is organized as follows. Relevant
literature is reviewed and synthesized first to develop a conceptual model, followed by
research methodology. The results are then presented along with discussion. Conclusion
and implication are discussed finally.

Amini and Li (2011) propose an SCC optimization model wherein they consider modified
Bass model. Their optimization model maximizes total net profit of whole supply chain
for a new product. Also, their model is applicable for forward supply chain (FSC) only. In
FSC, the flow of material is from suppliers to end consumers with intermediate activities
include manufacturing, transportation, distribution, and retailing. A Close-loop supply
chain (CLSC) requires a set of activities for both forward and reverse flow of materials.
Reverse flow of material includes activities ranging from collection of used products to
testing, disassembling, value recovering, and remarketing. For existing products, past
researchers have identified and resolved issues related to CLSC network design such as
number and location of collection centres testing facility etc. On the other hand, in
forward supply chain, supply chain configuration (SCC) models are developed only for
new products. But, in todays world firms are producing both new and reconditioned
products due to several reasons (for instance, regulatory compliance, customers demand,
and profits).
Keeping in mind the literature gaps, the key objectives of the study are outlined as
follows:
A) Conduct a comprehensive computational study and compare results of different
scenarios based on parametric values.
For successful SCM implementation managers must understand the issues concerned with
planning the supply Chain . While developing supply chain they will have to analyze the
critical factors for external and integration .These six stages are: Plan, Analyze, Develop,
Integrate, Deliver, and Return.

Plan:
The first stage in supply chain management is known as a Plan. Sadler and Hines (2002)
investigated how a team of managers from the companies in a supply chain can help to
formulate strategic plans for operating the whole chain, to benefit each company and to
benefit the whole chain. Huan et al. (2004) introduced the SCOR model, analyzed its
strength and weakness, and discussed how it can be used to assist managers for strategic
decision-making.

Analyze:
The second stage would be to analyze the various factors involved in supply chain. The
analysis would be useful for the practicing managers in developing strategies for their
supply chains. Prater et al (2001); Koh and Gunasekaran (2006) provided a new approach
for understanding the different types of uncertainties that can impact supply chains and
information systems. The approach presented allows researchers and practitioners to
analyze the exact problems encountered in the management of supply chains and the tools
that are needed to address these problems. Customer requirements and supply chain
relationships are identified as key criteria in SCM for selecting the most appropriate
method of target costing for supply chains.

Develop:
This phase not only identifies reliable suppliers but also includes development of mutual
trust, information system and cordial relations between the various partners in supply
chain. In this stage SCM concepts are applied for developing methods of payments,
shipping, and delivery to provide better customer services. Claroet al. (2006) discussed
the value of trust and the effects of transaction specific investments for the relative degree
of collaborative joint efforts, and also to assess the moderating effect of the information
network on such
It has been concluded that supply chain collaboration is difficult to implement; when
there is overreliance on technology, and fundamentally a lack of trust between trading
partners.

Integrate:
The next stage in supply chain management is to integrate. SCM needs integration of all
activities like sourcing, procurement, production scheduling, order processing, inventory
management, transportation, manufacturing, warehousing, and customer services. Zailani
and Rajagopal (2005) presented a model of an integrated business process, which
highlights the importance of communication between processes and between partners in
the supply chain. It is urged that though there is a wide acceptance of the strategic
importance of integrating operations with suppliers and customers in the supply chain,
many questions remain unanswered for supply chain strategies. Research suggests that
integration of several functions at different organizational levels could give above average
financial and performance results.
Deliver:

At the logistics phase, customer orders are received and delivery of the goods is planned,
this stage of supply chain management stage is aptly named Deliver. Johnson and
Anderson (2000) suggested both the repositioning of final manufacturing into the
distribution channel and the move towards customization-on-order are related to the
implementation of postponed manufacturing. Smith (2005) suggested that such
technologies with the appropriate IT infrastructure could help major distributors,
manufacturers; to deal complex and global supply chains. Because of cost, or security, or
safety, or because parts are subject to corrosion, or food/medicine is subject to quality
degradation, or products and product shipments must be traced and identified in a non-
contact, wireless fashion is used in computer network.
Radio frequency identification (RFID) is currently used in many industries in
transportation, distribution, manufacturing, processing and security.

Return:

The final stage of supply chain management is called Return. Returns management is the
supply chain management process by which problems associated with returns, reverse
logistics, gate keeping, are managed within the firm and across key members of the
supply chain. Rogers et al. (2002); Mukhopadhyay and Setoputro (2004) developed a
profit-maximization model to obtain optimal policies for price and the return policy in
terms of certain market reaction parameters. Remanufacturing of used products is an
innovative way in return management from economic and environmental point of view.
Inderfurth (2005) studied a product recovery system where a manufacturer of original
products is engaged in remanufacturing used products taken back from its customers, in
the context of extended product responsibility.
REASEARCH METHODOLOGY

DATA COLLECTION
Both Primary as well as Secondary Research Method will be included for making suggestions and
conclusions:

PRIMARY SOURCE
Observation
Personal Interviews
Questionnaire feedback

OBSERVATIONS
It is the methods of nothing and recording information without asking specific question from the
respondents. The advantage of this method is that it is highly effective to provide information asked for.
PERSONAL INTERVIEWS In this method I will ask the questions from the performance in the
order questions are listed and record the replies.

SECONDARY SOURCE
Google search engine.
Other web links.

TECHNICAL METHODOLOGY
Organizations adopt numerous business improvement methodologies to improve the
business performance.

PCBR (PLANNING AND CONTROL OF BATCH PRODUCTION )

Batch production is necessary when the demand of the product is limited or when rate of
production is high compared to rate of consumption. The product is therefore
manufactured periodically in quantity that will sufficient to satisfy the demand for some
time until manufacture of product is started. In the interval between two production
periods the plants and equipments can be used for manufacturing of variety of product in
similar manner.
CRITERIA FOR SELECTION OF BATCH SIZES
Minimum costs per piece

Maximum profit per batch

Maximum return batch

Maximum rate of return per unit time

MINIMUM COST BATCH SIZE

C =L+M+O

L = Labour cost
M= Material cost

O = Overheads

PREPARATION COSTS (S) PER BATCH

Set up cost per piece S/Q

INTEREST CARRYING COST

I = i C per piece per unit time

Average stock during consumption period TC is half of (Q + QO)

Carrying cost for carrying stock for this time period are I*half of (Q +Q O)

Substituting for TC = Q/d and dividing by Q

Carrying cost per piece are IQ (1 + )/2d

STORGE CARRYING COST

If average storage costs per piece are B unit per time for consumption period T C

They are BTC OR BQ/d

Total cost per piece TC = C+(S/Q) +Q/2d{I (1+)+2B}

Differentiating total cost (TC) W.R.T Q

and equating it to zero

so

We get QM = {(2dS)/I(1+)+2B}^(1/2)

QM = Economic batch size

Carrying costs per piece and preparation

S/QM = { I(1+)+2B]/2d}QM

Minimum total cost per piece TCM

TCM = C + {I(1+)+2B/2d}QM
PRODUCTION RANGE

An increase in total production cost above total minimum cost results into two batches on
the either side of QM. If deviation in he cost is allowed then any batch size that lies in
between two limits of QM without causing any an increase in production costs above a
predetermined value is determined. The range between two limits is called Production
Range.

To determine the value of two limits of production range Q A and QB a non-dimensional

ratio P is defined as

P = [TC -C] / [TCM-C] = Variable cost /Minimum variable cost

The value of QA and QB are computed as

QA =QM [P - (P^2-1)^0.5]

QB =QM[P +(P^2-1)^0.5 ]

MAXIMUM PROFIT BATCH SIZE

The minimum production costs per piece and minimum cost batch size are unrelated to
the sale price of the product. In case of minimum cost batch size, the profit per piece will
be maximum but the profit for the whole batch is dependent on the number of pieces in
the batch It is clear that when the batch size is larger than Q M is produced the total profit
will increase .There is limit on increase in the batch size as an increase in batch size
corresponds to rise in production costs higher carrying costs .The maximum profit batch
is shown in above figure.

Profit can be shown in term of batch size .If Q pieces are produced at the cost of T C per
piece and if sale price is TC* then

The profit per piece is

Z = Q(TC* - TC)

Maximum profit is achieved when

First differential of Z equating to zero

Finally the expression of maximum profit batch size is

QP = P* QM
Where QM is minimum cost batch size and P* gives relation between the sales price and
minimum production costs

P* = (TC* - C) / (TCM -C)

PARALLEL SUPPLY CHAIN MANAGEMENT

It is the method which is in practice by various industries which are used to do excess of
production because of their production is based on recycled material . In this method the
production which is left after completing the order to major customers is supplied to a
group of small firms by doing so we are able to settle our excess production .

OBSERVATIONS

QUESTIONNAIRE

How do you manage your supply chain?

* close partnership with suppliers

* JIT

*Outsourcing

*Many suppliers

*Holding safety stock

Does your company have separate logistics dept.?

*Yes

* No

Is the distribution department is having proper transportation?

* Yes

* Not sufficient
Choose the right option, where the supply chain department is facing problem in taking
care of the raw material?

* During storage

* Packaging

* Testing of packaging

* Evaluation of defective raw material

How do you rate the delivery activity of the department?

* Excellent

*Very effective

* Good

* Average

Is supply chain management having all the address of the developer branches of the
company?

* Yes

* No

What type of systems are currently in use in your company ?

*Subcontracting

*3pl

*outsourcing

Rate the working strategies of supply chain management department on the basis of the
current programs?
* Outstanding

* Excellent

* Good

*Average

What problem do you face in production

* Excess production

* Less production

How efficient is company production unit

* Excellent

* Good

* Average

* Poor

How is the coordination between different work centres?

* Poor

* Good

* Average

* Excellent

SIMULATION OF DATA
Data will be collected from the industry and then it will be tackled as per given
procedures and formulas discussed above in the methods which are to be applied like
various calculative procedure described in PCBP.

References
1. Rajendra Kumar Shukla et al. / International Journal of Engineering Science and
Technology (IJEST) UNDERSTANDING OF SUPPLY CHAIN
2. MehdiAmini,HaitaoLihttp://www.sciencedirect.com/science/article/pii/S03050483
10000988.
3. https://www.cips.org/en-au/knowledge/procurement-topics-and-skills/strategy-
policy/models-sc-sourcing--procurement-costs/traditional--open-loop--forward-
supply-chain/
4. https://www.kbmanage.com/concept/closed-loop-supply-chain-clsc
5. http://www.tandfonline.com/doi/abs/10.1080/00207543.2010.511294?
journalCode=tprs20
6. https://www.scribd.com
7. http://www.measuringu.com/blog/interpret-responses.php
8. Chopra, S., & Meindl, P. (2007). Supply Chain Management: Strategy, Planning,
& Operation. (3th ed) NJ0)
9. Gunasekaran, A., & Ngai, E. W. T. (2004). Information systems in supply chain
integration & management.
10. Inda Sukati, Abu Bakar Hamid, Rohaizat Baharun, Rosman Md Yusoff. The
Study of Supply Chain Management Strategy and Practices on Supply Chain
Performance
11. Supply chain Management INNOREGIO: dissemination of innovation and
knowledge management techniques (2000)
12. An approach to evaluate a firms supply chain strategy: Mahender Singh, Yossi
Sheffi.
13. http://www.exportersindia.com/uttarakhand/corrugated-box.htm
14. Industrial engineering and production management by Martand Telsang.
 SYNOPSIS
Rajan Verma 45389
Sourav Bhatia 45390
Niharika Gangoli 45398
Degree Programme B.Tech
Advisor Mrs.Anshika Gupta
Project Title Analytical Study Of Supply Chain Management

Mrs.Anshika Gupta
Assistant Professor, Dept. Of Industrial and Production Engineering
Advisor

Department of Industrial and Production Engineering

G.B.Pant University of Agriculture and Technology
Pantnagar 263145 (U.S. Nagar), Uttarakhand, INDIA