Outbound Logistic

Management

Consumer Needs Problems with Indian SCM Difference in SCM Strategy in India & US Amazon’s Supply Chain Model in USA Ideal Strategy Overcoming Existing Difficulties Bibliography

Agenda

In-time delivery of goods Goods should be delivered with no wreckage

or damage Packaging of goods should be proper Goods should be exactly in the same quantity

and quality as demanded

Consumer/Retailer/Whole-seller Needs

Poor quality roads > increased transport time

> dissatisfied customer Transportation is not as efficient Warehouse problems

Low number of warehouses Average size is 13200 sq.ft. as compared to

23700 sq.ft. in USA Forcing e-networking vendors to move to market

based model to inventory based model because of high demand with increasing population

Problems with Indian SCM

[Reference : Mr B B Pattanaik, Chairman of the Seminar & Chairman & Managing Director, Central Warehousing Corporation at Building Warehousing Competitiveness seminar in New Delhi 29-30 July 2009]

Labor intensive rather than Automation

because of cheap labor but expensive machinery, hence scope for human error is high

Cross-Docking is not possible and hence the supplier has to rely on third party vendor for direct supply which at the risk of his own trustworthiness

Impossible to implement JIT (Just-In-Time) because of lack of infrastructure

Problems with Indian SCM

Low-reach of efficient and high quality courier

services or transporters to interiors of the country and hence the reliability on Indian Post increases (there are places in India where no-one but Indian Post is reachable)

Problems with Indian SCM

Difference in SCM Strategy in India & US

India US

• Labor is cheap and mostly unskilled

• Labor is costly and mostly skilled

• Less automated as machinery and automation is costlier as compared to labor

• Highly automated since automation and machinery is cheaper as compared to labor

• Consumers demand Quality and want it to be affordable as well

• Consumers demand Quality and are ready to pay the premium

• Transport is an issues due to poor quality of infrastructure

• Transport is not an issue because of efficient infrastructure

• Inefficient reach to all parts of the country because of lack of connectivity

• Efficient reach to all corners of the country because of extensive reach and connectivity

Amazon’s Supply Chain Model in USA

Ideal Strategy

Look out for the best transportation means Increase the number and size of warehouses

Try diving the country in different zones Each zone should have a central or main

warehouse which would be big in size There should be multiple warehouses across cities

or towns to cover the entire stretch of the zone, size would depend on the sub-zone it is covering

This would also decrease the reliability on third party suppliers and shift the trend to market based model

Overcoming Existing Difficulties

Try to increase reachability or maybe tie up

with Indian Post for the same Give trainings to labor to skill them which

would increase goods handling efficiency Although JIT is not possible, techniques like

KAIZEN (continuous improvement) can be implemented

Increasing and trying to implement cross-docking atleast for small distances or between closely separated warehouses

Overcoming Existing Difficulties

http://

www.cgnglobal.com/supply-chain-management

http://www.joneslanglasalle.co.in/India/EN-GB/Pages/ResearchDetails.aspx?ItemID=4248

http://www.usanfranonline.com/wal-mart-successful-supply-chain-management/

http://ess365.atspace.eu/walmart/walmart-supply-chain-management.html

Bibliography

Thank You