Supply Chain Management Meets the Holiday Season

Presentation byHitesh Bhatia A011 Annesha Ghosh A020 Astha Saith A046

Company Information
Major Chicken processing company Based in US, Annual sales over $4.6 Billion Established in 1920 End to end solution, from farm till table

What is SCM ??
Supply chain management is aimed at managing complex and dynamic supply and demand networks.
SUPPLIER FACTORY DC RDC RETAILER

Raw Materials

Finished Goods Information Flow

Why did Perdue Farms feel the need of IT in SCM ??

Moment of Truth!!
Holiday Season Toughest time for manufacturers and retailers
Supply Chain Weakness exposed

Supply Chain Weakness exposed Difficulty in sales estimation

Difficulty in sales estimation

Window to respond to fluctuations is short

Unpredictable Consumer tastes Elongated supply chain

Existing Supply Chain

Sourcing from Asia (As lower costs) Long Route Early Sourcing Decisions

Demand Uncertain at an early time

Systems in Place

Constraints & Initiatives taken

CONSTRAINTS INITIATIVES
QUALCOMMs mobile communications system Omni TRACS GPS system, where exactly the product Communicate real-time with drivers Better customer service Efficiency of drivers, more take home income Manugistics forecasting software and Supply Chain tools Product and geography-wise Distribution Signaling - Actual sales and Actual Inventory coordination Substituting inventory with information

Inability to track delivery Vans Time a critical factor in poultry business

Difficulty in estimation Low Speed and flexibility

Constraints & Initiatives taken

CONSTRAINTS INITIATIVES
Vendor management inventory control systems to track sales in real time

Inability to track everyday sales

Inventory v/s Information

End Users

Suppliers

Forecasting based on seasonal history, gut feel

Perdue Farms

Inventory Stocked to respond to demand fluctuations

Suppliers

Perdue Farms

End Users

Questions & Answers

Question 1
What are the key factors which determine the success or failure of supply chains during holiday season? Which of these are under control of companies and which are inherent in end-consumer business? Provide some examples

Answer 1
Speed and Flexibility - Response to Volatile demand Proximity of Warehouse to Retail store - Lead time System integration - Efficient forecasting Examples: GPS installed in trucks Investment in latest technology for communication

Question 2
Effect of gift Cards during holiday season on Demand planning and Supply chain Management? Suppose nothing is known about the recipients of gift cards. What strategies can retailer and supplier consider to accommodate these effects?

Answer 2
Surge in demand from customer will exert pressure on supply chain, testing its capability Make use of past data purchases/ordering during January & February Overhaul and revisit the entire supply chain immediately after Christmas

Question 3
Prof Tomlin says that Smart companies substitute information for inventory. What do you think he means by this statement?
How do companies take advantage of information to improve their inventory and logistic practices?

Answer 3
Optimal inventory Information system can provide shelf life Integration of supplier and retailer System-Efficient demand management Logistics can be planned in advance and deployed efficiently GPS tracks logistics-Helps in contingency planning.

Take Away
Managing Supply Chain using Information System & Technology:
Speed and flexibility in supply chain Everyday sales monitoring Minimising gap between actual sales and actual inventory Better customer service Tackling changing customer demands Cost effectiveness Reduction of lead time Growth of Business