Different Corporate Policies

Following are the Different Corporate

Policies:
1. Supply Chain Policy
2. Marketing Policy
3. Personnel(HR) Policy
4. Financial Policy
5. Dividend Policy
6. Foreign Policy
1. Supply Chain Policy
• Supply chain is more accurately viewed as a set of
linked processes that take place in the extraction of
materials for transformation into products or
perhaps services for distribution to customers.

• Supply Chain Management is the design, planning,

execution, control and monitoring of supply chain
activities with the objective of creating net value,
building a competitive infrastructure, leveraging
worldwide logistics, synchronizing supply chain
demand, and measuring performance globally.
Objectives of Supply Chain
A. Add Value for Customers and Stakeholders

B. Improve Customer Service

C. Effectively Use System Wide Resources

D. Efficiently Use System Wide Resources

E. Leverage Partner Strengths

Objective 1: Add Value for Customers
and Stakeholders
• Supply chain management aims to create value
through financial benefits, match the values of
its various customers, and appeal to social value
of its customers, stakeholders and community.

• Adding value to a good or service is the

responsibility of each entity and process in the
supply chain.
• The goal is to add value at each step in a service
oriented value chain as well as in manufacturing
oriented supply chain.
• Utility may not be the only value, or worth, of a
good or service from a customer’s point of view.
• Price, availability, and attractiveness are also
values to consider.
Objective 2: Improve Customer Service

• Fundamental attributes of basic customer service:

• Availability is the ability to have the product when
it is wanted by a customer.
• Operational Performance deals with the time
needed to deliver a customer order.

• Customer Satisfaction takes into account

customer perception, expectations and opinions
based on the customer’s experience and knowledge.
Objective 3: Effectively Use System
Wide Resources

• Resources can be in form of employees, raw

materials, equipment, etc.

• Being effective means that supply chain gets the

right product and the right amount to the right
customer at the right time.
Objective 4: Efficiently Use System
Wide Resources
• Efficiency is a measurement (usually
expressed in percentage) of the actual output
compared to the standard output expected. It
measures how well something is performing
relative to existing standards.

• Efficiency is one of the measures of capacity in a

supply chain environment.
• Capacity is all about what can be accomplished
by employing all the resources in the supply
chain network that includes work centers,
storage sites, people and equipment.

• When a supply chain is operating at high

efficiency, it means that its utilizing its resources
well to produce the level of output in a
production plan within the time allowed.
Objective 5: Leverage Partner
Strengths
• Well-chosen partners will benefit from a high
level of mutual trust, respect of each other’s
expertise and contributions and shared vision.

• A strong and useful partnership will yield a

combination of the following as it performs the
functions needed by your organization:
• Adding value to products, such as shorter time
to market.
• Improving market access, such as providing new
market channels.
• Building financial strength through increased
income and shared costs.
• Adding technological strength if there is internal
expertise in use of more advanced software and
systems.
• Strengthening operations by lowering systems
costs and cycle times.
• Enhancing strategic growth to break through
barriers to new industry and opportunities.
• Improving organizational skills that facilitate
shared learning and insights of both firms’
management and employees.
 Supply chain management technologies and
practices can help a company select the
appropriate sales partners and support them by:
• Providing timely and accurate information.
• Helping them deal successfully with channel
customers.
• Aiding them in leveraging their strengths such as
innovation, speed, high quality, low costs, etc.
5 Steps for Effective Supply Chain
Policy
1. Supplier Discovery

2) Supplier Qualification

3) Supplier Selection

4) Supplier On boarding

5) Supplier Performance & Expectation Management

1. Supplier Discovery
• Finding a suitable competitive supplier is
fundamental to the success of a Supply Chain
Policy.
• With globalization, it is no longer efficient to
limit your supply chain to one country or
location.
• Company can follow multiple best practices.
• Traditionally companies referred to supplier
registry or external networks to scout for
suppliers.
• Using these traditional methods for selecting a
supplier can be tedious, complex and time
consuming.
• Today companies are using sourcing tools and
also, engaging with the suppliers early through
supplier portal.
• With advanced sourcing tool the benefits are
multifold.
• Along with drastic reduction in time to search
suppliers, companies are able to get the right
suppliers based on the parameters they set.
• Implementation of a supplier management
solution would enable sourcing managers to
create and manage a centralized supplier data
repository.
• This would facilitate screening of potential
supplier's based on pre-defined criteria and
maintain a list of pre-qualified supplier's for
new/existing sourcing initiatives.
2) Supplier Qualification
• The Supply Chain team should be aware of
unscrupulous suppliers entering the supply
chain and providing substandard raw materials.
• In recent times there have been multiple cases
of companies having to face the heat on account
of wrong supplier practices.
A few examples are:
• H&M, a fashion retailer was asked to sever ties
with suppliers sourcing cotton from Uzbekistan
where child and adult forced labor is prevalent.

• Levi's and GAP, clothes manufacturers had to

scrutinize their supply chain in China as their
manufacturing process was polluting watersheds
in China with hazardous cancer causing
chemicals.
• This situation signifies the need for supply
quality and cost assurance by implementing a
preliminary round or a qualification stage to
screen the suppliers.
• Sourcing teams should have a predetermined
screening process that every supplier registering
on the supplier portal should go through.
• This helps in eliminating suppliers who do not
compliment company's purchasing policies.
• Companies can have a questionnaire to judge
the suppliers.
• The questions can vary depending upon the
project requirement.
• Each question can be given weightage depending
on the project needs and complexity and can be
assigned score ranges.
Some of the qualification questions
can be:
• What is your employee strength?

• Do you have a formal framework of risk

assessment and improvement?

• How often is this tested?

• Do you have your own data centre? etc

• Depending on the answers, qualification score is
calculated and as per the benchmark set, the
supplier is either qualified or disqualified.

• Apart from the questionnaire, the suppliers also

need to satisfy credential requirements like
mandatory certificates, audit requirements etc.
3) Supplier Selection
• It is imperative for companies to select the right
suppliers who not only provide items/services at
a competitive cost but also possesses the ability
to reduce impact of economic
uncertainties/natural disasters/political
uncertainties on the organizations supply
chain/sourcing strategies.
• All stakeholders should be involved in the
supplier selection process to ensure
transparency and make evaluation process more
objective.
• Standardizing the requirements and
specifications in the form of a template, makes
the process more repetitive and effective.

• Two Envelope Bidding (Technical & Financial)

• The shortlisted suppliers after the qualifying
round are evaluated on different parameters or
scenarios like choosing a supplier from a
particular geographic location or working with
minority suppliers (women, backward class etc).
• Implementation of a sourcing tool allows
sourcing managers to run custom scenarios on
the bids received from suppliers based on the
business constraints.
• Sourcing managers can optimize bids not just
based on the lowest price but on a host of non-
price parameters like service delivered,
reputation etc to arrive at the best possible
supplier to award the contract.

• After performing the required analysis the most

competitive supplier complying with the
company's Supply Chain policies is awarded.
4) Supplier On boarding
• Supplier on-boarding refers to the process
where finalized suppliers are equipped with the
necessary knowledge and behavior to become a
part of the company's supply chain.

• A supplier is required to submit various

mandatory certificates and documents related to
company registration, insurance, diversity
certificate, quality certificate etc.
• The supplier portal makes the onboarding
process simple and less time consuming. It helps
the supplier to upload the required documents
and for the buyer company to keep a track of it
by installing approval workflows

• It also enables maintaining an audit trail to

check compliance requirements.
• For instance, submitting the tax documents
before starting the business or a background
check of the supplier.

• Thus automating the onboarding process

reduces the overall cycle time and helps buyer
companies to track compliance of the process.
5) Supplier Performance Management
• The potential supplier has cleared the qualifying
and selection stage, the contract terms and
conditions have been negotiated and agreed upon
and the supplier has now become a part of the
company's supply chain.

• It is now very important for the company to keep a

check on the suppliers' performance vis-à-vis the set
benchmark or Key Performance indicators (KPIs)
viz. product quality, innovation, on-time delivery,
carbon emission etc.
• Companies should have a supplier segmentation
strategy to bucket the suppliers based on for
instance, criticality in the supply chain or total
spend.

• After the segmentation, KPIs should be

determined and assigned a particular weightage
for each bucket and the supplier performance
must be reviewed based on the scores generated.
• If the performance of a supplier is not
satisfactory, the suppliers can be put through a
development program to ensure the suppliers
move towards the preferred score and meet the
objective of the organization.

• The supplier management tool must enable the

buyer company to develop and manage supplier
development program to drive the suppliers
towards a preferred score.
• Through supplier performance and expectation
management, companies can build a strategic
relation with their suppliers whereby they
become the customer of choice for the suppliers.
Challenges in Supply Chain
Costs
• Competition is fierce and cutting costs is often a
necessity to maintain an edge.
• Lean concepts, procurement strategies and
squeezing suppliers all contribute to improved
efficiencies and reduced costs.
• Yet these techniques also introduce risks to
supply chain disruptions and supplier
performance issues.
Sustainability

Consumers are demanding sustainable operations

from companies, and this is no more apparent
than in supply chains. The challenge is to
balance the need to demonstrate sustainable
sourcing while maintaining cost
competitiveness.
Supplier performance

As suppliers are squeezed on costs and tight

delivery schedules, they may be enticed to cut
corners. This can result in quality problems
which can have significant knock-on effects
throughout the supply chain.
Natural disasters (e.g. extreme
weather, earthquakes, floods)

• There is little doubt that global weather patterns

are changing and the incidence of extreme
weather events seems to be on the rise.
• Extreme weather events such as typhoons,
floods and extended deep freezes, coupled with
earthquakes and volcanoes, can have a
significant impact on supply chains depending
on location and duration.
Customer Service
• Today, customers have much higher demands, if
you don’t have the inventory they are looking
for, they’ll find another who does have what they
want.
• This requires an extremely organized Supply
Chain system that allows for more reliable and
faster delivery.
• It also requires a business to have accurate
information on their available inventory.
• Often times, supply chain management issues
stem from the challenge of balancing customer
demands with cost containment.
• With accurate real-time reporting on the trends
of your business and what you have in stock, you
can easily meet your clients’ needs while
eliminating excess costs.