Supply Chain

Management
and
Warehousing
Module 01 : Understanding Logistics and Supply Chain

BM Campus 24th September, 2007 Balaram Swamy

 Understanding Logistics and
Supply
Logistics : from Greek Chain
word “Logisticos” – The science of
Evolution, Confusions, Jargon and

computing and calculating

1905
Major Chauncey B Baker … That branch of the art of war pertaining to
the movement and supply of armies is called Logistics
Definitions

Agrawal and Rahul Atlekar, Web

Reference
2, Pg 6~8; 4, Pg 14~15 & 19~20, Balaram Swamy
 Understanding Logistics and
Supply Chain
Definition that we will use
Material

Money
Supplier Customer
Information

• Definition : Bi-directional flow of Material, Money and

• Information
Definitions are an answer to Xth Why? Ref to “B-school
…

• learning to living the

Stated otherwise, do life”
not look at a definition in a context, it
will limit
First, understanding
understanding-and-feeling and then, knowing it, is -
defining
Next is, knowing it through it’s context(s) … i.e. knowing it
more fully …
Following is the contexts in which we will understand
Logistics
Various and Supplyand
Components Chain
their role in the Strategic Thinking of the
Company
Designing the Network viz. Warehouse Location and Transport
Various Processes, Infrastructure, Manpower and Information Needs
Managing a Logistics and Supply Chain Infrastructure

Reference
1, Pg 5~12 Balaram Swamy
 Understanding Logistics and
Supply Chain
Situational Contexts
Workplace Logistics
Situational Contexts

within a single workstation, viz. stocking and replenishing the

display-rack stock or promo-zone stock in a store, ergonomics
in a assembly line
Facility Logistics
between workstations, viz. material handling inside a facility
e.g. warehouse to floor of store, floor of the store to cash
counter and to the exist, exit to the car park
Corporate Logistics
between the facilities of a company or that of the company
and it’s supplier(s) or customer(s) or that of suppliers’
suppliers or customers’ customers
Global Logistics
same as Corporate Logistics but includes between countries;
globalisation and increased use of web sites for buying and
selling has increased the incidence of this complex activity
viz. multiple handing-over, players, languages, documents,
currencies,
Supply time
Chain zones and cultures of a international business
Logistics
Inter and intra workstation, facility and corporate logistics
Reference
1, Pg 6~8 Balaram Swamy
 Understanding Logistics and
Supply Chain vs. Supply
Logistics Chain
Confusion between Supply Chain and

Supply Chain is …
• Facilities : Factories, Warehouses, Rail & Air Terminals, Ports,
Stores and Homes
Transport : Trucks, Trains, Plaines and Ships
Information System : Source Documents and information on the
real time status of the document, material, facilities and
transport
Logistics are …
Logistics

Activities that take place in the Supply Chain Components, as given

above and between them
Activity Components of Supply Chain are – Customer Satisfaction,
Inventory Management, Supply, Transportation and Warehousing; 5-
Point Analysis of Logistics
Supply Chain vs. Logistics - Comparison

Supply Chan as facilities and logistics as activities with window 2007

Reference1, Pg 8 Balaram Swamy

 Understanding Logistics and
LSC Activities Supply Chain
Customer
CRP Response Policy
5-Point Activities

Inventory Planning
and Management
WMS IP&M

Supplier Service
Logistics
and Supply Policy
Chain

Physical
Distribution
System
PDS SSP
Warehouse
Management and
Systems
5-Point Interdependent Activities
Reference
1, Pg 12~15 Balaram Swamy
 Understanding Logistics and
Supply Chain
LSC Activities : Framework

Logistics and
5-Point Activities

Supply Chain

Goals, Measures Information

and Performance System Common to
Parametrs Requirements
all 5-Point
Organisation
Process Design
Development
Activities

Inventory
Planning and
Customer Response Supply Transportation Warehousing
Managemen
t

5-Point Interdependent Activities

Reference
1, Pg 16 Balaram Swamy
 Understanding Logistics and
Supply
LSC Activity : Analysis Chain
Framework
Systematic Analysis of 5-Point Activities

Investigate
Investigate Profile
Measure
Benchmark

Innovate
Simplify
Optimise
Use Best
Practice
Implement
Innovate Implement Systemize
Automate
Humanize

Each LSC Activity need be analysed using this tool

Reference
1, Pg 18~19 Balaram Swamy
 Understanding Logistics and
Supply Chain
Perf Para
6
54.0
Example of Gap Analysis

WMS Process
43.5
4.0 4.0
3.0 3 3.0
2
PDS
5.0 3.5 1 Info Sys
3.0 4.0
0

3.5 3.5
5.0
SSL 5.0
Org Dev
3.2
3.8 4.0

IP&M
5.5 CSL
Actual Best Practices
Perf. Info Org
Para Proces Sys Dev CSL IP&M SSL PDS WMS
Actual 3.5 3.0 3.0 3.5 3.2 3.8 3.5 3.5 3.0
Best Practices 4.0 4.0 4.0 5.0 4.0 5.5 5.0 5.0 4.0
Reference
1, Pg 19 Balaram Swamy
 Assignment - 01
1. Guidelines for using Case Studies in Supply Chain Management is
given for classroom discussion and/or presented in the classroom
• Following Cases are given for presentation and discussion on
Supply Chain Management and

24th September,
Gateway : A direct2007
Sales Manufacturer
Thunderbolts
Zara : Apparel Manufacturing and Retail Pinnacle
W W Grainger and McMaster-Carr : MRO Suppliers Achievers
Warehousing

Toyota : A Global auto manufacturer Vikings

Amazon. COM : An e-business Saptarishi

1. In addition to participating in the above case, the following

students will present an additional case; New Global Links in Auto
Supply Chain
Namita Bhuyan Namita Bhuyan
Dharmendra Dharmendra
Kumar Kumar
XXXXXXXXX XXXXXXXXX
TXXXXXXXXXXXXXXXX TXXXXXXXXXXXXXXXX
XXXXXXXXXXX
XXXXXXXXXXX

Reference
PGPRM; 2006~08 Batch Balaram Swamy
 References
1. Frazelle, Edward ; Supply Chain Strategy; 2004 edition; Tata McGraw-Hill
Pub. Co. Ltd.
1. Agrawal, D K; Textbook of Logistics and Supply Chain Management; 2003
edition; Macmillan India Ltd.
• Chopra Sunil and Meindl Peter; Supply Chain Management – Strategy,
Supply Chain Management and

Planning and Operation; 3rd edition; Prentice Hall of India Pvt. Ltd.
1. Mohanty R P and Deshmukh S G; Supply Chain Management – Theories
and Practices; 2005 edition; Biztantra
1. Rahul Atlekar Mohanty R P and Deshmukh S G; Supply Chain
Warehousing

Management – Theories and Practices; 2005 edition; Biztantra

1. Sople Rahul Atlekar Mohanty R P and Deshmukh S G; Supply Chain
Management – Theories and Practices; 2005 edition; Biztantra
1. Kaminski Sople Rahul Atlekar Mohanty R P and Deshmukh S G; Supply
Chain Management – Theories and Practices; 2005 edition; Biztantra

Reference
PGPRM; 2006~08 Batch Balaram Swamy
 Prepared for Classroom Discussions by

Prof. Balaram Swamy J

B. Tech (IIT, Kharagpur) and PGDM (IIM Calcutta, Joka)

Asian School of Business

Management
City Office :
# 8, Sai Anandam Complex, Patia Square, Bhubaneswar
: 751 024 Phone : 91 674 274 4881,
4882, 3154 Fax : 91 674 274 4883

Campus :
Shiksha Vihar, Baranga-Khurda Road,
Chandaka, Bhubaneswar : 754 005 Phone :
91 674 211 1204, 1207, 1208 Fax : 91 674 211
1205, 1206
e-mail
Website :: www.asbm.ac.in
balaramswamyj@yahoo.com and
balaram@asbm.ac.in Mobile : 91 99380 68979

Reference
PGPRM; 2006~08 Batch
 Thank You

BM Campus 24th September, 2007 Balaram Swamy

 Supply Chain
Management
and
Warehousing
Module 02 : Customer Response

BM Campus 24th September, 2007

 Customer Response
75% of the reasons that customers leave a company has nothing
to do with the product
98% of dissatisfied customers do not complain, they just leave
85% of dissatisfied customers tell 9 people; 13% tell 20 people; a
Hidden Cost and it’s

satisfied customer
In the next 6 years,tell
80% 5 of your customers will leave, 65% due to
something you did
Importance

• Therefore, Customer Response Strategy is very important … it

helps
• in arriving
agreement at an …logistics organisation and it’s External and
between
Internal Customer
• agreement on the Customer Service Policy at a Total Logistics
Cost
External External
Environment Customer
Custo
Busin mer Custo
ess Resp mer
Strat onse Respo
egy Strat nse
egy Policy
Internal Internal
Analysis Customer

Reference
1, Pg 70~71, Fortune One World Distribution Balaram Swamy
 Customer Response
Understanding Customer Service
In Retail Strategy, we appreciated that the “Customer Service”
A Wider Perspective

is one of the major components which classifies the Retail

Business in various Retail Formats
We appreciated that, the cost of “Customer Service” is a part
of “Value Pack Offering” to the customer in the Retail Business
We also understood that, Merchandise – both Variety and
Assortment, are integral part of the “Value Pack” and
appreciated that, the cost is factored into the Price
“Customer Service” arising out of

Service-to-the-Customer (during and post-purchase),

Merchandise (Inventory Management)
and, Inbound-Outbound
Logistics (Porter’s Generic Value Chain Analysis for SCA)
Here,
are we
the will understanding
subject Customer Service as given
of LSC Domain
below:
Various Feature and Components of Customer Service
Customer Service Measures – the Gap Analysis

Reference
x, Pg xx Balaram Swamy
 Customer Response
Understanding to Defining “Customer Service”
Definition and Features

A strategic process of Cost-Efficient, Value-Added Benefit

provided to External Customers so as to exploit this in Sales and
Marketing Process
Features of Customer Service
A Strategic Process to provide Value-Added Services to the
Customers
Always ensures a Trade-off between Cost and Service

Keeps the Customer always, Happy and Loyal

Brings in Harmonious Relationships between Supply Chain

Members
Starts, generally with Order Entry and ends with Delivery of
Goods to the Customer
Brings in Competitive Advantage

Reflects Corporate Vision

More often, this has become a source of Sustained

Competitive Advantage for some of the successful
companies
Reference
2, Pg 83 : Pg 80, Ashok Leyland Caselet Balaram Swamy
 Customer Response
A Mature Customer Service Policy - CSP
Customer Service Policy

CSP is stated, Quantified and Segmented by Customer and Item

Categories
Statement of CSP
• Refer to the Caselet : 2, Pg 99; The Financial Express, 2nd August 1999
J K Tyres Treads a New Measure for Winning Dealer
Loyalty The Company is sharing its Sales Policy
for 1999~2000 with its Dealers in writing
CSP is in measurable Quantified terms and are Segmented by
Customer-Item
Sales Activity Cat
Profile - by Customer (SAP-C)
Sales Activity Profile - by Item (SAP-I)
Sales Activity Profile - by Customer-Item (SAP-CI)
Investigate
Profile
Watch the use of Investigate-Innovate- Measure
Implement framework in the following two Benchmark
Innovate
slides Investigate
Simplify
Optimise
Use Best
Practice
Implement
Systemize
Automate
Humanize
Innovate Impleme

Reference
1, Pg 78~xx ; 2, Pg 87
nt
Balaram Swamy
 Customer Activity Profiling
Sales Activity Profile – by Customer (SAP-C)
ABC Category of Customers by Sales or Profits
Typically 5% of customers normally account for 80% of sales
or profit; 15% of customers for 15% and, balance 80% of
customers account for 5% of sales or profit
This helps in making differentiated customer policy, each
serving to a segment of customers; hence, cost differentiation
and justification is possible
SAP-C

Reference
1, Pg 73~76 Balaram Swamy
 Customer Activity Profiling
Sales Activity Profile – by Item (SAP-I)
ABC Category of Items by Sales or Profits
Typically 5% of items normally account for 80% of sales or
profit; 15% of items for 15% and, balance 80% of items
SAP-I and SAP-CI

account for 5% of sales or profit

Sales Activity Profile – by Customer and Item (SAP-CI)
This is similar to ABC-VED Matrix, in Inventory Management
where different Service Levels viz. 95% Service Level means
going o/f stock for 5% of times when it is needed
This system of analysis helps to make a Differentiated
Customer Policy and derive maximum cost-benefit

Refer to Fig 4.4, 1, Pg 76 : % Sales-Profit across Customer and Items

Categories

On Item axis, further subdivision over SKUs and, on Customer axis,

Store Location wise data from Data-Warehouse helps fix a Customer
Service Standard which is optimal

Reference
1, Pg 73~76 Balaram Swamy
 Customer Response
We will begin with Investigate, Innovate and Implement
route …
Using the Frameworks

Investigate
Investigate Profile
Measure
Benchmark
Innovate
Simplify
Optimise
Use Best
Practice
Implement
Systemize
Innovate Implement Automate
Humanize

and, plan Customer Response (CR) Activities as per

Logistics Activity Framework
Logistics and
Supply Chain

Goals, Measures Information

and Performance System Common to
Parametrs Requirements all 5-Point
Process Design
Organisation Activities
Development

Reference
1, Pg 16 & 18 Balaram Swamy