supply chain
TRANSCRIPT
PREFACE
Theoretical knowledge is provided in the institute, but in fact it is not much useful
without practical aspects of management. Master of Business Administration course is
designed with the objective of preparing the most competent business person. In order
to achieve this objective in best possible manner “Gujarat University” has made it
mandatory for the students of M.B.A to undergo training for two months in a firm of their
choice so that they can have some knowledge of the corporate world.\
As per the syllabus requirement I underwent my training at MEGHMANI INDUSTRIES
LTD, Chharodi. I sincerely try my best in collecting in all the necessary information and
have gained both practical and theoretical knowledge during my training at MIL.
This report is reflection of what I have observed and came to know during my training. I
hope that the report prepared by me will fulfill the requirement of the syllabus and
contains all information which is required in the preparation of report.
Acknowledgement
For the success of any work there are few people who are responsible for it. I
completed my report work with the help of some people and for this I would like to
express my appreciation and gratitude towards these people who have contributed their
efforts and valuable time in guiding me.
I would like to acknowledgement my deep and sincere regards to our honourable
Director Mr. P.K. Mehta for allowing us to undergo training. I am also thankful to Mr.
Mehul Yogi for giving me valuable guidelines concerning the project report.
I also express my due thanks to Mr. Benny Peter (H.R.M), Mr. Prakashbhai Patel
(Dept.G.M.) and to the management of MIL for giving me this golden opportunity and
rendering finest hospitality in rendering on necessary information.
TABLE OF CONTENT
Chapter No. Content Page No.Executive Summary
1 Objective and Research Methodology2 Company Profile
Meghmani At GlanceMission of MILVision of MILObjectives of MILResearch and Development at MILCompetitive Strength of MILEnvironment and SafetyNetwork of MILMain products of MILStrategies of MIL
3 Theoretical Framework of Supply chain managementLiterature ReviewDefining Supply ChainDefinition of supply chain managementElements of supply chainSupply chain managementSupply chain management technologyImportance of supply chain managementConsequence of SCMScope of SCM
4 Supply chain decisions at MILLocation DecisionPurchase DecisionProduction DecisionInventory Decision
Transportation Decision5 Findings6 Suggestions7 Bibliography
EXECUTIVE SUMMARY
The supply chain is the series of links and shared processes that exist between
suppliers and customers. These links and processes involve all activities from the
acquisition of raw materials to the delivery of finished goods to the end consumer. It
includes all activities and processes to supply a product or services to the final
customer. Often it includes more than one company in a series of supplier-customer
relationships. It usually includes four functional components.
1. Demand planning
2. Manufacturing planning and scheduling
3. Supply planning and
4. Transportation plan.
While supply chain management software is related to enterprise resource planning
software (ERP), Supply Chain Management (SCM) is focused on planning and ERP is
focused on execution. Two of the most beneficial supply chain practices are matching
the correct supply chain strategy to the product and communication between supplier –
customer partners in the supply chain.
Supply chain management is the act of optimizing all activities throughout the supply
chain, so that products and services are supplied in the right quantity, to the right
location at the right time and at the optimal cost.
This project is about the supply chain management of Meghmani Industries Ltd. Project
starts with research methodology and objective of the project. Second chapter deals
with introduction about company. Third chapter is theoretical framework of supply chain
management and last part is about the supply chain management of Meghmani
Industries Ltd.
CHAPTER -1
OBJECTIVE AND RESEARCH METHODOLOGY
Objective of the study:
1) To understand the process of supply chain which starts at procurement of
material to distribution of material to customer at Meghmani industries. Ltd.
2) To know the different factor affecting supply chain.
Research Methodology
When we talk of research methodology, we not only talk of the research methods but
also the comparison of the logic behind the methods we used in this context of our
research study and explain why we are using a particular method or technique and why
sign the others. A research design is a framework to prepare plan or study. It is useful
as a guide to collect the data and analyzing it. It is a blue print that is followed in
completing the study. Research design is the conceptual structure within which the
research will be conduct.
Type of Research: The study exploratory in nature.
Sources of Data Collection
I have used both primary as well as secondary data for my report but the concentration
on secondary data is more than primary data.
• Primary data will be collected through interview of logistic dept. and through
observation of supply chain of the company.
• Secondary data will be collected through brochures, list of customer, website and
journals.
Limitation
1) This project is restricted to study purpose only and can be used keeping in
view the object that is made for.
2) The respondent in the project may not reveal important / confidential
information pertaining to the company policy and for this the project should be used
keeping in view the said limitation.
3) Finding of the study will be based on the assumptions that respondents have
given correct information.
4) Company is in the business of agro based products and heavy chemicals,
some areas will be restricted for us.
5) The branch of supply chain is very wide so it is not possible to cover each and
every topic.
CHAPTER -2
MEGHMANI AT A GLANCE
Name of the unit : Meghmani Industries Ltd.
Year of establishment : 1993
No. of employees : 900
Registered office : Plot No.27,
Phase I, GIDC,
Vatva,
Ahmedabad
Plant locations : Chharodi, Vatva
Auditors : Balkrishna T. Thakkar & Co.
MEGHMANI INDUSTRIES LTD. (MIL) : A company establishment in 1993 offering
comprehensive range of herbicides and fungicides technical as well as its formulations
used for crop protection – mainly for treating weeds and fungal disease in various crops.
It has ISO 9001 certified manufacturing sites spread over 1,15000 sq. mts. Land.
Company enjoys Export House Recognition by Govt. of India. Dept. of Commerce, New
Delhi MIL products enjoy very good market reputation in Domestic as well International
market across the globe.
Its corporate company MEGHMANI CORGANICS LTD. offers insecticides used in crop
protection, public health, termite & insect control and veterinary applications.
Overview of MIL:
• ISO 9001 & 14001-2000 Certification
• Dyes are free from banned amines.
• Market leader in chemical as well as agro based products
• 24×7 operation capacity
• Domestic as well as international presence
• Export house recognition by government of India
MISSION OF MIL
• Strived to achieve growth and leading position in the market.
• Give complete satisfaction to customer – every time.
• Consistent quality
• Cultivate long and mutually beneficial relationship with customer.
• Providing product and solution to match customers need in every respect.
VISION OF MIL :
• A front runner in India and a producer with International repute.
OBJECTIVES OF MIL
Objectives establish the goals and the aims of the business and determine the shape of
future events. Objectives are the way of achieving motives for profit of social service.
Main objectives of MIL are:
• Increasing productivity of work force
• To introduce new products and create new markets
• Customers service and customer satisfaction
• Improving work culture among the employees
• Capitalizing on company strength and use of corporate assets
• Continuous innovation
• To provide a growth rate of about 20% p.a.
RESEARCH AND DEVELOPMENT AT MIL:
Continued emphasis on Research & Development have enabled Meghmani group to
carve a niche for itself in the global markets in the manufacture of pigments, and
dyestuffs as well as in basic crop protection chemicals. Maintaining international
standard in product quality has ensured customer satisfaction. The Research &
Development activities are focused on Process development, New Intermediates, Raw
Material substitution, Improvement of Yield and Quality, Development of Active
Ingredients and Toll research/Custom Synthesis.
COMPETITIVE STREGTHS OF MIL
• Experienced and Qualified Management Team and Technical Personnel
Co. has a proven management team led by founders who have over 20 years of
collective experience in the pigments and pesticides industry.
The production operations at each of plants are managed by a team of skilled technical
engineers with the requisite technical know-how to carry out production processes. It is
through their consistent research and development efforts in improving co.’s production
processes that Co. has developed an extensive range of products suitable for use in a
multitude of applications. Co.’s technical staff is highly qualified and trained, and many
have had working experience with MNCs and other reputed large Indian companies.
Co. has a workforce of over 900 employees. It is the expertise and dedication of people
that provide Co. the leverage to respond quickly to changing market trends and
demands in the pigments and agrochemicals industry.
• Diversified Customer Base
Co.’s Pigments customers are mainly MNCs from a wide range of industries such as
printing inks, plastics, paints, textiles and leather, paper and rubber. It has more than
200 Pigment products customers from various countries in North America, Europe,
Central and Latin America, and Asia-Pacific.
Co. has more than 90 Agrochemical customers, which include leading pesticides
manufacturers from countries in North America, Europe, Latin America and Asia, as well
as end users in the domestic Indian market.
Co. has a distribution network of 20 overseas distributors catering to its international
markets for its Pigments and Agrochemical products, and a chain of over 1,000
stockiest, agents, distributors and dealers covering the domestic market in India.
• Cost Advantage
Vertical integration of production processes yields some upstream products that are
used as raw materials for its pigment and agrochemical products. This allows for
effective management of costs and ensures regular supply of raw material of the
desired quality.
Multi functional design of Co.’s agrochemical production facilities provides flexibility to
meet changing demand requirements.
Strategic location of Co.’s production facilities at close proximity to sources of raw
materials lowers procurement costs. Collectively, these features provide a distinct cost
advantage to our Company.
• Established brand names
Company's brands, “Megastar', 'Megacyper' (Pesticide Formulations) and 'Meghafast'
(Pigments) are recognized names among consumers in India, Europe, USA and Latin
America. Co. has more than 36 brands of various pesticides formulations which cater to
the needs of Indian farmers.
Environment and Safety
MIL's Plants and operational facilities:
• Have a good track records on safety and loss prevention / minimization
• Have the necessary facilities to treat liquid / solid waste and air emission that
contain pollutants, in accordance with the requirements of the Gujarat Pollution
Control Board ("GPCB").
• Are complying with rules and regulations of Indian Government on Health, Safety
and Environment Protection
• Are ISO certified and follow sound Health, Safety and Environmental policy
It is also found that following safeguards are in place at all the plants.
• Fire fighting hand appliance are provided
• Work procedures and safety instructions provided
• Personal protective equipment are in place and in use
• Risk analysis are being carried out periodically
• Medical support is available to attend to occupational health related problems
and supervision of trained first-aid providers
• Some of Co.’s products and raw materials are considered hazardous and /or
poisonous. Co. has adopted safety procedures at its manufacturing plants,
particularly in relation to the import of, storage, transportation and sale of such
hazardous and/or poisonous substances.
• They have prepared safety manual, which is made available to its entire staff at
all plants. In addition, a medical room is provided at all the plants where routine
medical checks are carried out.
NETWORK OF MIL
“INTERNATOINAL LEVEL EXPOSURE”
Suppliers, Customers & Market (Pesticides)
• Company’s major suppliers are :
GACL (Gujarat Alkalis and Chemicals Ltd.)
BASF India
Tata Chemicals
Sudarshan Chemicals
Mansi Industries Ltd.
• A partial list of company’s long-standing customers for pesticides is :
Micro Flo
Valent
Meghmani Agro dyne Limited
FMC Agricultural Products
• Company has :
Over 90 customers, including leading pesticides manufactures in North America,
Europe, Latin America, Asia and end users in the domestic India market.
Markets:
Global marketing network
Warehouse in Belgium, Uruguay, China, Russia, Germany, the U.S. Columbia.
Overseas offices in Belgium, China and the U.S.
We market via direct sales terms and distributors / agents.
Company has:
An extensive network of 20 overseas distributors worldwide
Over 1000 stockiest, agents, distributors and dealers covering India market
Warehouse in Belgium and Uruguay
MAIN PRODUCTS OF MIL
• Pesticides :
A pesticide is any chemical which is used by man to control pests. The pests may be
insects, plant diseases, fungi, weeds, nematodes, snails, slugs, etc. Therefore,
insecticides, fungicides, herbicides, etc., are all types of pesticides. Some pesticides
must only contact (touch) the pest to be deadly. Others must be swallowed to be
effective. The way that each pesticide attacks a pest suggests the best way to apply it;
to reach and expose all the pests. For example, a pesticide may be more effective and
less costly as a bait, rather than as a surface spray.
• Fungicides
Fungicides are chemicals used to control the fungi which cause molds, rots, and plant
diseases. All fungicides work by coming in contact with the fungus, because fungi do
not "swallow" in the normal sense. Therefore, most fungicides are applied over a large
surface area to try to directly hit every fungus. Some fungicides may be systemic in that
the plant to be protected may be fed or injected with the chemical. The chemical then
moves throughout the plant, killing the fungi.
• Herbicides
Herbicides are chemicals used to control unwanted plants. These chemicals are a bit
different from other pesticides because they are used to kill or slow the growth of some
plants, rather than to protect them. Some herbicides kill every plant they contact, while
others kill only certain plants.
● Nonselective herbicides are toxic to all plants. These are often used when no
plants are wanted in an area. For example, nonselective herbicides could be
used for clearing under guardrails or for total control of weeds in industrial
areas.
● Selective herbicides kill some plants with little or no injury to other plants.
Usually selective types will kill either broadleaved plants or grassy plants.
These are useful for lawns, golf courses or in areas with desirable trees.
Some very selective herbicides may kill only certain plants in a group; for
example, crabgrass killers on lawns.
STRATEGIES OF MIL
• World class manufacturing
• Individual R&D centre at each unit
• Total quality management
• Participative management
CHAPTER -3
THEORETICAL FRAMEWORK OF SUPPLY CHAIN MANAGEMENT
LITERATURE REVIEW
“Management is on the verge of a major breakthrough in understanding how industrial
company success depends on the interactions between the flows of information,
materials, money, manpower, and capital equipment. The way these five flow systems
interlock to amplify one another and to cause change and fluctuation will form the basis
for anticipating the effects of decisions, policies, organizational forms, and investment
choices.” Forrester introduced a theory of distribution management that recognized the
integrated nature of organizational relationships. Because organizations are so
intertwined, he argued that system dynamics can influence the performance of functions
such as research, engineering, sales, and promotion. He illustrated these phenomena
utilizing a computer simulation of order information flow and its influence on production
and distribution performance for each supply chain member, as well as the entire supply
chain system. More recent replications of this phenomenon include the “Beer Game”
simulation and research covering the “Bullwhip Effect”. Discussing the shape of the
future, Forrester proposed that after a period of research and development involving
basic analytic techniques, “there will come general recognition of the advantage enjoyed
by the pioneering management who have been the first to improve their understanding
of the interrelationships between separate company functions and between the
company and its markets, its industry, and the national economy.” Though his article is
more than forty years old, it appears that Forrester identified key management issues
and illustrated the dynamics of factors associated with the phenomenon referred to in
contemporary business literature as Supply Chain Management (SCM). The term
supply chain management has risen to prominence over the past ten years. For
example, at the 1995 Annual Conference of the Council of Logistics Management,
13.5% of the concurrent session titles contained the words “supply chain.” At the 1997
conference, just two years later, the number of sessions containing the term rose to
22.4%. Moreover, the term is frequently used to describe executive responsibilities in
corporations. SCM has become such a “hot topic” that it is difficult to pick up a
periodical on manufacturing, distribution, marketing, customer management, or
transportation without seeing an article about SCM or SCM-related topics. There are
many reasons for the popularity of the concept. Specific drivers may be traced to trends
in global sourcing, an emphasis on time and quality-based competition, and their
respective contributions to greater environmental uncertainty. Corporations have turned
increasingly to global sources for their supplies. This globalization of supply has forced
companies to look for more effective ways to coordinate the flow of materials into and
out of the company. Key to such coordination is an orientation toward closer
relationships with suppliers. Further, companies in particular and supply chains in
general compete more today on the basis of time and quality. Getting a defect-free
product to the customer faster and more reliably than the competition is no longer seen
as a competitive advantage, but simply a requirement to be in the market. Customers
are demanding products consistently delivered faster, exactly on time, and with no
damage. Each of these necessitates closer coordination with suppliers and distributors.
This global orientation and increased performance-based competition, combined with
rapidly changing technology and economic conditions, all contribute to marketplace
uncertainty. This uncertainty requires greater flexibility on the part of individual
companies and supply chains, which in turn demands more flexibility in supply chain
relationships. Despite the popularity of the term Supply Chain Management, both in
academia and practice, there remains considerable confusion as to its meaning. Some
authors define SCM in operational terms involving the flow of materials and products,
some view it as a management philosophy, and some view it in terms of a management
process. Authors have even conceptualized SCM differently within the same article: as
a form of integrated system between vertical integration and separate identities on one
hand, and as a management philosophy on the other hand. Such ambiguity suggests a
need to examine the phenomena of SCM more closely in order to clearly define the
term and concept, to identify those factors that contribute to effective SCM, and to
suggest how the adoption of a SCM approach can affect corporate strategy and
performance. The purpose of this paper is to examine the existing research in an effort
to understand the concept of “supply chain management.” Various definitions of SCM
and “supply chain” are reviewed, categorized, and synthesized. Definitions of supporting
constructs of SCM and a framework are then offered to establish a consistent means to
conceptualize SCM. Antecedents and consequences of SCM are identified, and the
boundaries of SCM in terms of business functions and organizations are proposed. A
conceptual model and definition of SCM are then presented that indicate the nature,
antecedents, and consequences of the phenomena. The model is accompanied by a
series of managerial and research implications.
WHAT IS SUPPLY CHAIN MANAGEMENT?
It has been noted that discussions of SCM often use complicated terminology, thus
limiting management’s understanding of the concept and its effectiveness for practical
application. This section is, thus, dedicated to reviewing, classifying, and synthesizing
some of the widely-used definitions of “supply chain” and “supply chain management” in
both academia and practice. The goal of this discussion is the development of one,
comprehensive definition upon which managers and future researchers can build.
Defining the Supply Chain
The definition of “supply chain” seems to be more common across authors than the
definition of “supply chain management”. La Londe and Masters proposed that a supply
chain is a set of firms that pass materials forward. Normally, several independent firms
are involved in manufacturing a product and placing it in the hands of the end user in a
supply chain-raw material and component producers, product assemblers, wholesalers,
retailer merchants and transportation companies are all members of a supply chain. By
the same token, Lambert, Stock, and Ellram define a supply chain as the alignment of
firms that brings products or services to market. Note that these concepts of supply
chain include the final consumer as part of the supply chain.
Another definition notes a supply chain is the network of organizations that are involved,
through upstream and downstream linkages, in the different processes and activities
that produce value in the form of products and services delivered to the ultimate
consumer. In other words, a supply chain consists of multiple firms, both upstream (i.e.,
supply) and downstream (i.e., distribution), and the ultimate consumer. Given these
definitions, for the purposes of this paper, a supply chain is defined as a set of three or
more entities (organizations or individuals) directly involved in the upstream and
downstream flows of products, services, finances, and/or information from a source to a
customer. Encompassed within this definition, we can identify three degrees of supply
chain complexity: a “direct supply chain,” an “extended supply chain,” and an “ultimate
supply chain.”
A direct supply chain consists of a company, a supplier, and a customer involved in
the upstream and/or downstream flows of products, services, finances, and/or
information. An extended supply chain includes suppliers of the immediate supplier and
customers of the immediate customer, all involved in the upstream and/or downstream
flows of products, services, finances, and/or information.
An ultimate supply chain includes all the organizations involved in all the upstream
and downstream flows of products, services, finances, and information from the ultimate
supplier to the ultimate customer. Figure illustrates the complexity that ultimate supply
chains can reach. In this example, a third party financial provider may be advice; a third
party logistics (3PL) provider is performing the logistics activities between two of the
companies; and a market research firm is providing information about the ultimate
customer to a company well back up the supply chain. This very briefly illustrates some
of the many functions that complex supply chains can and do perform. Although we will
address this point in greater depth later in this paper, it is important to realize that
implicit within these definitions is the fact that supply chains exist whether they are
managed or not. If none of the organizations actively implements any of the concepts
discussed in this paper to manage the supply chain, the supply chain—as a
phenomenon of business—still exists. Thus, we draw a definite distinction between
supply chains as phenomena that exist in business and the management of those
supply chains. The former is simply something that exists (often also referred to as
distribution channels), while the latter requires overt management efforts by the
organizations within the supply chain. Given the potential for countless alternative
supply chain configurations, it is important to note that any one organization can be part
of numerous supply chains. Wal-Mart, for example, can be part of the supply chain for
candy, for clothing, for hardware, and for many other products. This multiple supply
chain phenomenon begins to explain the network nature that many supply chains
possess. For example, AT & T might find Motorola to be a customer in one supply
chain, a partner in another, a supplier in a third, and a competitor in still a fourth supply
chain. Note also that within our definition of supply chain, the final consumer is
considered a member of the supply chain. This point is important because it recognizes
that retailers such as Wal-Mart can be part of the upstream and downstream flows that
constitute a supply chain.
Definitions of Supply Chain Management
Although definitions of SCM differ across authors, they can be classified into three
categories: a management philosophy, implementation of a management philosophy,
and a set of management processes. The alternative definitions and the categories they
represent suggest that the term “supply chain management” presents a source of
confusion for those involved in researching the phenomena, as well as those attempting
to establish a supply chain approach to management. Research and practice would be
improved if a single definition were adopted.
SCM as a Management Philosophy
As a philosophy, SCM takes a systems approach to viewing the supply chain as a
single entity, rather than as a set of fragmented parts, each performing its own function.
In other words, the philosophy of supply chain management extends the concept of
partnerships into a multi firm effort to manage the total flow of goods from the supplier to
the ultimate customer. Thus, SCM is a set of beliefs that each firm in the supply chain
directly and indirectly affects the performance of all the other supply chain members, as
well as ultimate, overall supply chain performance. SCM as a management philosophy
seeks synchronization and convergence of intra firm and inter firm operational and
strategic capabilities into a unified, compelling marketplace force. SCM as an integrative
philosophy directs supply chain members to focus on developing innovative solutions to
create unique, individualized sources of customer value. Langley and Holcomb suggest
that the objective of SCM should be the synchronization of all supply chain activities to
create customer value. Thus, SCM philosophy suggests the boundaries of SCM include
not only logistics but also all other functions within a firm and within a supply chain to
create customer value and satisfaction. In this context, understanding customers’ values
and requirements is essential. In other words, SCM philosophy drives supply chain
members.
Based upon the literature review, it is proposed that SCM as a management philosophy
has the following characteristics:
1. A systems approach to viewing the supply chain as a whole, and to managing the
total flow of goods inventory from the supplier to the ultimate customer;
2. A strategic orientation toward cooperative efforts to synchronize and converge intra
firm and inter firm operational and strategic capabilities into a unified whole; and
3. A customer focus to create unique and individualized sources of customer value,
leading to customer satisfaction.
SCM as a Set of Activities to Implement a Management Philosophy
In adopting a supply chain management philosophy, firms must establish management
practices that permit them to act or behave consistently with the philosophy. As such,
many authors have focused on the activities that constitute supply chain management.
This previous research has suggested various activities necessary to successfully
implement a SCM philosophy.
SCM ACTIVITIES
1. Integrated Behavior
2. Mutually Sharing Information
3. Mutually Sharing Risks and Rewards
4. Cooperation
5. The Same Goal and the Same Focus on Serving Customers
6. Integration of Processes
7. Partners to Build and Maintain Long-Term Relationships
Bowersox and Closs (1996) argued that to be fully effective in today’s competitive
environment, firms must expand their integrated behavior to incorporate customers and
suppliers. This extension of integrated behaviors, through external integration, is
referred to by Bowersox and Closs as supply chain management. In this context, the
philosophy of SCM turns into the implementation of supply chain management: a set of
activities that carries out the philosophy. This set of activities is a coordinated effort
called supply chain management between the supply chain partners, such as suppliers,
carriers, and manufacturers, to dynamically respond to the needs of the end customer.
Related to integrated behavior, mutually sharing information among supply chain
members is required to implement a SCM philosophy, especially for planning and
monitoring processes. Cooper, Lambert, and Pagh emphasized frequent information
updating among the chain members for effective supply chain management. The Global
Logistics Research Team at Michigan State University defines information sharing as
the willingness to make strategic and tactical data available to other members of the
supply chain. Open sharing of information such as inventory levels, forecasts, sales
promotion strategies, and marketing strategies reduces the uncertainty between supply
partners and results in enhanced performance. Effective SCM also requires mutually
sharing risks and rewards that yield a competitive advantage. Risk and reward sharing
should happen over the long term. Risk and reward sharing is important for long-term
focus and cooperation among the supply chain members. Cooperation among the
supply chain members is required for effective SCM Cooperation refers to similar or
complementary, coordinated activities performed by firms in a business relationship to
produce superior mutual outcomes or singular outcomes that are mutually expected
over time. Cooperation is not limited to the needs of the current transaction and
happens at several management levels involving cross-functional coordination across
the supply chain members. Joint action in close relationships refers to carrying out the
focal activities in a cooperative or coordinated way. Cooperation starts with joint
planning and ends with joint control activities to evaluate performance of the supply
chain members, as well as the supply chain as a whole. Joint planning and evaluation
involve ongoing processes over multiple years (Cooper et al. 1997). In addition to
planning and control, cooperation is needed to reduce supply chain inventories and
pursue supply chain-wide cost efficiencies. Furthermore, supply chain members should
work together on new product development and product portfolio decisions. Finally,
design of quality control and delivery systems is also a joint action.
La Londe and Masters proposed that a supply chain succeeds if all the members of the
supply chain have the same goal and the same focus on serving customers.
Establishing the same goal and the same focus among supply chain members is a form
of policy integration. Lassar and Zinn suggested that successful relationships aim to
integrate supply chain policy to avoid redundancy and overlap, while seeking a level of
cooperation that allows participants to be more effective at lower cost levels. Policy
integration is possible if there are compatible cultures and management techniques
among the supply chain members. The implementation of SCM needs the integration of
processes from sourcing, to manufacturing, and to distribution across the supply chain.
Integration can be accomplished through cross-functional teams, in-plant supplier
personnel, and third party service providers. Stevens identified four stages of supply
chain integration and discussed the planning and operating implications of each stage:
Stage 1) Represents the base line case. The supply chain is a function of fragmented
operations within the individual company and is characterized by staged inventories,
independent and incompatible control systems and procedures, and functional
segregation.
Stage 2) Begins to focus internal integration, characterized by an emphasis on cost
reduction rather than performance improvement, buffer inventory, initial evaluations of
internal trade-offs, and reactive customer service.
Stage 3) Reaches toward internal corporate integration and characterized by full
visibility of purchasing through distribution, medium-term planning, tactical rather than
strategic focus, emphasis on efficiency, extended use of electronics support for
linkages, and a continued reactive approach to customers.
Stage 4) Achieves supply chain integration by extending the scope of integration
outside the company to embrace suppliers and customers.
Effective SCM is made up of a series of partnerships and, thus, SCM requires partners
to build and maintain long-term relationships. Cooper et al. believe the relationship time
horizon extends beyond the life of the contract perhaps indefinitely—and, at the same
time, the number of partners should be small to facilitate increased cooperation.
Gentry and Vellenga argue that it is not usual that all of the primary activities in a chain
inbound and outbound logistics, operations, marketing, sales, and service—will be
performed by any one firm to maximize customer value. Thus, forming strategic
alliances with supply chain partners such as suppliers, customers, or intermediaries
(e.g., transportation and/or warehousing services) provides competitive advantage
through creating customer value.
SCM as a Set of Management Processes
As opposed to a focus on the activities that constitute supply chain management, other
authors have focused on management processes. Davenport (1993) defines processes
as a structured and measured set of activities designed to produce specific output for a
particular customer or market. La Londe proposes that SCM is the process of managing
relationships, information, and materials flow across enterprise borders to deliver
enhanced customer service and economic value through synchronized management of
the flow of physical goods and associated information from sourcing to consumption.
Ross defines supply chain process as the actual physical business functions,
institutions, and operations that characterize the way a particular supply chain moves
goods and services to market through the supply pipeline. In other words, a process is a
specific ordering of work activities across time and place, with a beginning, an end,
clearly identified inputs and outputs, and a structure for action. Lambert, Stock, and
Ellram (1998) propose that, to successfully implement SCM, all firms within a supply
chain must overcome their own functional silos and adopt a process approach. Thus, all
the functions within a supply chain are reorganized as key processes. The critical
differences between the traditional functions and the process approach are that the
focus of every process is on meeting the customer’s requirements and that the firm is
organized around these processes. Lambert, Stock, and Ellram suggest the key
processes typically include customer relationship management, customer service
management, demand management, order fulfillment, manufacturing flow management,
procurement, and product development and commercialization.
Elements of the Supply Chain
A simple supply chain is made up of several elements that are linked by the movement of products
along it. The supply chain starts and ends with the customer.
• Customer: The customer starts the chain of events when they decide to purchase a product
that has been offered for sale by a company. The customer contacts the sales department of
the company, which enters the sales order for a specific quantity to be delivered on a
specific date. If the product has to be manufactured, the sales order will include a
requirement that needs to be fulfilled by the production facility.
• Planning: The requirement triggered by the customer’s sales order will be combined with
other orders. The planning department will create a production plan to produce the products
to fulfill the customer’s orders. To manufacture the products the company will then have to
purchase the raw materials needed.
• Purchasing: The purchasing department receives a list of raw materials and services
required by the production department to complete the customer’s orders. The purchasing
department sends purchase orders to selected suppliers to deliver the necessary raw
materials to the manufacturing site on the required date.
• Inventory: The raw materials are received from the suppliers, checked for quality and
accuracy and moved into the warehouse. The supplier will then send an invoice to the
company for the items they delivered. The raw materials are stored until they are required
by the production department.
• Production: Based on a production plan, the raw materials are moved inventory to the
production area. The finished products ordered by the customer are manufactured using the
raw materials purchased from suppliers. After the items have been completed and tested,
they are stored back in the warehouse prior to delivery to the customer.
• Transportation: When the finished product arrives in the warehouse, the shipping
department determines the most efficient method to ship the products so that they are
delivered on or before the date specified by the customer. When the goods are received by
the customer, the company will send an invoice for the delivered products.
Supply Chain Management
To ensure that the supply chain is operating as efficient as possible and generating the highest level
of customer satisfaction at the lowest cost, companies have adopted Supply Chain Management
processes and associated technology. Supply Chain Management has three levels of activities that
different parts of the company will focus on: strategic; tactical; and operational.
• Strategic : At this level, company management will be looking to high level strategic
decisions concerning the whole organization, such as the size and location of
manufacturing sites, partnerships with suppliers, products to be manufactured and sales
markets.
• Tactical : Tactical decisions focus on adopting measures that will produce cost benefits
such as using industry best practices, developing a purchasing strategy with favored
suppliers, working with logistics companies to develop cost effect transportation and
developing warehouse strategies to reduce the cost of storing inventory.
• Operational : Decisions at this level are made each day in businesses that affect how the
products move along the supply chain. Operational decisions involve making schedule
changes to production, purchasing agreements with suppliers, taking orders from customers
and moving products in the warehouse.
Supply Chain Management Technology
• If a company expects to achieve benefits from their supply chain management process, they
will require some level of investment in technology. The backbone for many large
companies has been the vastly expensive Enterprise Resource Planning (ERP) suites, such
as SAP and Oracle.
• Since the wide adoption of Internet technologies, all businesses can take advantage of
Web-based software and Internet communications. Instant communication between
vendors and customers allows for timely updates of information, which is key in
management of the supply chain.
Importance of Supply Chain Management
Of late, supply chain management is gaining growing importance because of the following
reasons:
• The total time for materials to travels through the entire supply chain management can be
quite long. Since the materials spends so much time waiting in inventory at various stages
in the supply chain, there is a great opportunity to reduce the total supply chain cycle time
leading to a corresponding reduction in inventory, increased flexibility, reduced costs and
better deliveries.
• Many companies have drastically improved their internal operations and now find it
necessary to consider relations with external customer and supplier in the supply chain to
gain further improvements in their operations.
• Supply chain thinking is an application of systems thinking and provides a basic for
understanding processes that cut across a company’s internal department and processes that
extend outside the company as well.
• The goals of supply chain management are to reduce uncertainty and risks in the supply
chain, thereby positively affecting inventory levels, cycle time, processes and ultimately
end-customer service levels.
• The design, planning and operation of supply chain have a strong impact on overall
profitability and success.
• Supply chain management has become a hot competitive advantage as companies struggle
to get the right stuff to the right place at right time.
• All the “Total Quality Management”, “Just-in-Time System”, “Reengineering”, “Team
work” and “Delighting the Customers” depends on the relationships with supplier and
distributors who are part of the supply chain.
• Supply chain management includes transportation vendors, suppliers, distributors, banks,
credit and cash transfers, bills payable and receivable, warehousing and inventory levels,
order fulfillment and sharing customer, forecasting and production information.
Consequences of SCM
The motive behind the formation of a supply chain arrangement is to increase supply
chain competitive advantage defines two types of competitive advantage: cost
leadership and differentiation. According to Giunipero and Brand, improving a firm’s
competitive advantage and profitability through SCM can be accomplished by
enhancing overall customer satisfaction. By the same token, La Londe proposed that
SCM aims at delivering enhanced customer service and economic value through
synchronized management of the flow of physical goods and associated information
from sourcing to consumption. According to Porter, competitive advantage grows
fundamentally out of the customer value a firm creates, and aims to establish a
profitable and sustainable position against the forces that determine industry
competition. Thus, it is proposed that the implementation of SCM enhances customer
value and satisfaction, which in turn leads to enhanced competitive advantage for the
supply chain, as well as each member firm. This, ultimately, improves the profitability of
the supply chain and its members. Specific objectives to improve profitability,
competitive advantage, and customer value/satisfaction of a supply chain, as well as its
participants, are suggested by several researchers. For example, a key objective of
SCM is to lower the costs required to provide the necessary level of customer service to
a specific segment. The other key objective is to improve customer service through
increased stock availability and reduced order cycle time. Customer service objectives
are also accomplished through a customer-enriching supply system focused on
developing innovative solutions and synchronizing the flow of products, services, and
information to create unique, individualized sources of customer service value. Finally,
low cost and differentiated service help build a competitive advantage for the supply
chain. As such, SCM is concerned with improving both efficiency (i.e., cost reduction)
and effectiveness (i.e., customer service) in a strategic context (i.e., creating customer
value and satisfaction through integrated supply chain management) to obtain
competitive advantage that ultimately brings profitability. If we distinguish between the
operational function of customer service and the resultant goal of customer value and
satisfaction, this discussion leads us to conclude the consequences of SCM are lower
costs and improved customer value and satisfaction to achieve competitive advantage.
Industry reports support this contention.
SCOPE
The scope of SCM is functional and organizational. The functional scope of SCM refers
to which traditional business functions are included or excluded in the implementation
and the process of SCM. The organizational scope of SCM concerns what kinds of
inter-firm relationships are relevant to the participating firms in the implementation and
the process of SCM.
Functional Scope of SCM
Since process refers to the combination of a particular set of functions to get a specific
output, all of the traditional business functions should be included in the process of
SCM. The supply chain concept originated in the logistics literature, and logistics has
continued to have a significant impact on the SCM concept. In this context, Tyndall et al
propose that “SCM logistics” is the art of managing the flow of materials and products
from source to user. SCM-or the logistics system— includes the total flow of materials,
from the acquisition of raw materials to delivery of finished products to the ultimate
users, as well as the related counter-flows of information that both control and record
material movement.
According to Lambert, Stock, and Ellram , however, there exist important differences
between the definition of supply chain management and the Council of Logistics
Management’s definition of logistics: “Logistics is the process of planning, implementing
and controlling the efficient flow and storage of raw materials, in-process inventory,
finished goods, services, and related information from point of origin to point of
consumption (including inbound, outbound, internal and external movements) for the
purpose of conforming to customer requirements.” CLM apparently agreed, since its
new definition states, “Logistics is that part of the supply chain process that plans,
implements, and controls the efficient flow and storage of goods, services, and related
information from the point of origin to the point of consumption in order to meet
customers requirements” (emphasis added). Thus, CLM has also distinguished between
logistics and supply chain management, and acknowledged that logistics is one of the
functions contained within supply chain management. Ross explains that the role of
logistics spans from warehousing and transportation to integrating the logistics
operations of the entire supply chain, whereas SCM merges marketing and
manufacturing with distribution functions to provide the enterprise with new sources of
competitive advantage. Logistics puts more emphasis on efficient movement and
storage to fulfill customer requirements. Customer value and satisfaction that help a
supply chain improve competitive advantage and profitability, however, require more
than logistics. Thus, Cooper, Lambert, and Pagh argued SCM is more comprehensive
than logistics so that SCM means the management of multiple business processes,
including logistics processes. Marketing research, promotion, sales, information
gathering, research and development, product design, new product development, and
total systems/value analysis should also be included.
We can conclude that the functional scope of SCM encompasses all the traditional intra
business functions.
Organizational Scope of SCM
According to Christopher, leading-edge companies have realized the real competition is
not company against company, but rather supply chain against supply chain. Cooper,
Lambert, and Pagh argue that organizational relationships tie firms to each other and
may tie their success to the supply chain as a whole. In this context, a supply chain as a
whole may have its own identity and function like an independent firm. However, to
accomplish this ultimate supply chain, all companies in the supply chain must have a
supply chain orientation. The result is a fully managed supply chain. Ellram and Cooper
suggest that effective supply chain management is made up of a series of partnerships
among firms working together and mutually sharing information, risks, and rewards that
yield a competitive advantage. In the same article, Ellram and Cooper also contend the
successful supply chain relies on forming strategic partnerships with long-term
orientations. Christopher suggests a network of organizations, through upstream and
downstream linkages, as the organization for SCM. According to Webster, networks are
the complex, multifaceted organizational structures that result from multiple strategic
alliances. Thus, it is proposed that a network is a well-recognized organization for SCM.
The basic characteristic of a network organization is a confederation— a loose and
flexible coalition guided from a hub where the key functions include development and
management of the alliances themselves, coordination of financial resources and
technology, definition and management of core competencies and strategies,
development of relationships with customers, and management of information
resources that bind the network. From this discussion, and given our earlier definition of
supply chains, we see the organizational scope of SCM as the implementation and
process of SCM across three or more companies, all of which must have a SCO. This
implementation and process must also include the systemic, strategic management of
the activities.
CHAPTER -4
SUPPLY CHAIN DECISOINS AT MIL
SCM decisions can be classified into two broad categories -- strategic and operational.
As the term implies, strategic decisions are made typically over a longer time horizon.
These are closely linked to the corporate strategy and guide supply chain policies from
a design perspective. On the other hand, operational decisions are short term, and
focus on activities over a day-to-day basis. The effort in these type of decisions is to
effectively and efficiently manage the product flow in the "strategically" planned supply
chain.
There are four major decision areas in supply chain management:
1. Location.
2. Purchase
3. Production.
4. Inventory.
5. Transportation (Distribution).
Location Decisions :
The geographic placement of production facilities, stocking points, and sourcing points
is the natural first step in creating a supply chain. The location of facilities involves a
commitment of resources to a long-term plan. Once the size, number, and location of
these are determined, so are the possible paths by which the product flows through to
the final customer. These decisions are of great significance to a firm since they
represent the basic strategy for accessing customer markets, and will have a
considerable impact on revenue, cost, and level of service. These decisions should be
determined by an optimization routine that considers production costs, taxes, duties and
duty drawback, tariffs, local content, distribution costs, production limitations, etc.
Although location decisions are primarily strategic, they also have implications on an
operational level.
Meghmani is situated in GIDC area where they have fewer restrictions and regulations
by the State Government and Pollution Control Board as they have developed a
chemical plant. The factory is far from human locality, so it is less harmful to society.
Purchase Decisions:
Flowchart for the working Process of Purchase Department
Inspection
Payment Process
IKR
If amount is paid
If not Paid
*PR- Purchase Requisition
*KR- Kachha Receipt
*IKR-Irregular Katcha Receipt
(Rejected Receipt)
Consumer Dept. Raise the PR
Finance Dept.
Verification of Payment terms & Payment
Mill Stores
Transporters
Will be finalized by either Consignee or
Consignor
Float Enquiry & Finalize the Party
Procurement or Purchase Dept.
Pay Amount to the Customer/ Party
Inspection for Quality/
Specification by Consumer
Dept.
Return to Vendor (RTV)
Material Rejection
Keep the Material for Exchange
Kachha Receipt
KR
• Here at Meghmani Industries Ltd. all the Procuring activities are done by the Purchasing
department.
• The Purchase Department arranges the requirement of the Consumer Departments.
• These consumer departments will raise the Purchase Requisition (PR) for their
Requirement to purchase Dept.
• The Purchase Dept. floats the Enquiry against the Indent.
• Then according to the SOP (Standard Operating Procedures) they finalize the Party or
Customer.
• Then the Transporter is been decided, it may be Contractual or Nominated by the Party.
• Then it is updated in the software for approval from competent authority.
• When all the concerned authorities approves, the Order will be raised.
• When the consignment reaches at the Consignee (Manufacturing UNIT) it is been assigned
a Serial no. generated through software by Stores Dept.
• Then it has to go through a process like entry at each level for example Gate Entry, Store
Entry.
• Then the concerned Consumer Department people inspect the Inventory as per Quality or
Specification and confirm the acceptance.
• After acceptance of the material Stores will raise the KR. it goes through the Payment
Process where the Finance Dept. verifies the payment terms and payments and pays the
amount to the Customer.
• If in Case it does not match with the Specification it is allotted an IKR (Irregular Kachha
Receipt).
• When it is allotted IKR it goes to rejection stage where the Purchase Dept. check for
whether the payment has been made or not.
• If it is been made the Inventories are kept for Exchange otherwise it is sent back the
Vendor which is called RTV (Return to Vendor).
● Vendor Selection
Steps followed in Vendor selection are:
Step 1: Identification of company requirements.
Step 2: Search for the Vendors.
Step 3: Consideration of Vendor based on Infrastructure, financial status and Good
will of the Vendor
Step 4: Receiving Vendor Profile
Step 5: Vendor Selection Criteria
• Previous experience and past performance with the product / service to be
purchased.
• Relative level of sophistication of the quality system, including meeting regulatory
requirements or mandated quality system registration (for example, ISO 9001, QS-
9000).
• Ability to meet current and potential capacity requirements, and do so on the
desired delivery schedule.
• Financial stability.
• Technical support availability and willingness to participate as a partner in
developing and optimizing design and a long-term relationship.
• Total cost of dealing with the supplier (including material cost, communications
methods, inventory requirements and incoming verification required).
• The supplier’s track record for business-performance improvement.
• Total cost assessment.
Step 6: Final Selection of Vendor based on 3 Trial orders.
Step 7. Vendor rating as A,B,C and feedback and training.
Quality standards are fixed for each product of the vendor according to Quality Assurance
department.
Rejected raw materials are returned to vendor and vendor has to bare all the costs.
Vendor codes are given for financial transactions.
Company selects new vendors only in the following cases:
o In case of increase in Production.
o In case of New product development- where the existing vendor fails to supply required
raw materials.
o Misunderstandings between the company and the Vendor in payments.
o Company finds new vendors through the people of purchase department, “Yellow
Pages” and through Internet.
Risks involved in Vendor selection are:
o New Supplier Risk- Incase of new suppliers. Vendor has to adjust for the company
standards.
o Business Risk- Improper supply of quality raw materials.
o Time Risk- Delay in Delivery Time of raw materials. This is the main part of
purchasing.
Process of Negotiation:
Company is finalizing the price for raw materials.
Calculation of project cost and process cost which forms working cost is calculated and
finalized by Costing department.
Based on the working cost; Negotiation process is carried out.
Purchase Department is carrying the Negotiation process.
Before receiving the raw materials, negotiation is carried out.
Negotiating price ranges from ‘+‘or ‘-‘10% of the company’s quoted price.
5% is the profit fixed by the company on all its finished goods.
Percentage of discount available for the company for early payment
Days Percentage
30 2%
60 4%
Immediate payment 5%
Production Decisions:
The strategic decisions include what products to produce, and which plants to produce
them in, allocation of suppliers to plants, plants to DC's, and DC's to customer markets.
As before, these decisions have a big impact on the revenues, costs and customer
service levels of the firm. These decisions assume the existence of the facilities, but
determine the exact path(s) through which a product flows to and from these facilities.
Another critical issue is the capacity of the manufacturing facilities--and this largely
depends the degree of vertical integration within the firm. Operational decisions focus
on detailed production scheduling. These decisions include the construction of the
master production schedules, scheduling production on machines, and equipment
maintenance. Other considerations include workload balancing, and quality control
measures at a production facility.
MIL has its own production plant, the maintenance cost of various equipments, boilers
etc are too high. Moreover the company uses push strategy and produce the product on
“make to stock” bases and pushes in the market. Some of the raw material is
manufactured by company itself to reduce the manufacturing and transportation cost.
Company has its own formulation and R&D dept. to make research and development.
Process dept 4
Process dept 3
Supervisor3 [indent]
Inventory Decisions
These refer to means by which inventories are managed. Inventories exist at every
stage of the supply chainas either raw materials, semi-finished or finished goods.
They can also be in-process between locations. Their primary purpose to buffer against
any uncertainty that might exist in the supply chain. Since holding of inventories can
cost anywhere between 20 to 40 percent of their value, their efficient management is
critical in supply chain operations. It is strategic in the sense that top management
sets goals. However, most researchers have approached the management of inventory
from an operational perspective. These include deployment strategies (push versus
pull), control policies --- the determination of the optimal levels of order quantities and
reorder points, and setting safety stock levels, at each stocking location. These levels
are critical, since they are primary determinants of customer service levels.
Scenario at Meghmani :
Company occurs high inventory cost and hence it is a major cost driver for it. As
company purchased many type of chemicals from abroad they occur large cost of
importing materials, not only that they have to keep a high amount of buffer stock.
Moreover the cost of preventing material from direct sunlight, humidity etc.
• MIL has its own warehouse.
The dimension of warehouse is 40/100ft
Number of warehouse employs are as follow
Process dept 4
Process dept 3
Supervisor3 [indent]
Officers 3Clerks 2Workers 8Total 13
Tools used in warehouse
o Cranes
o Pallet trucks
o Handling equipments
o Chain, pulleys, roaps
To maintain warehouse equipment and MIL has given contract.
The process of receiving raw materials from vendors
Step 1: Cross verification of Invoice
Step2: Materials testing from QAII (Quality Assurance of Incoming Inspection) by
Inspectors.
Step3: Unloading
The process of dispatching raw materials from stores
Store STORES
Process dept 1
Process dept 4
Process dept 3
Process dept 2
Supervisor1 [indent]
Supervisor3 [indent]
Supervisor3 [indent]
Supervisor2 [indent]
To get raw material from stores supervisor of particular department only have authority.
In stores without indent raw material has not provide.
Inventory are broadly categorized into 4 types based on their Nature and Requirement
which are as follows-
BERT
B (Block) - In this category comes all the materials which require a lots of capitalization, Time
for Implementation and lots of human effort to carry forward the task. This kind of Inventory is
been purchased by knowing of the top management or we can say it is their decision to purchase
or acquire that particular Inventory. Some Example of this kind of Inventory is New Machinery,
New Equipment, and New Technology for Production etc. These are one time activity. For this
kind of inventory only the top management can raise the PR.
E (Essential) – In this category as the name suggests all the essential items come that can be
used for continues, without interruption Production. For example spare parts of machinery, Raw
material etc. But there is level for both maximum and minimum essential inventory which
should be maintained. For this kind of inventory a particular consumer department can raise the
PR (Purchase Requisition) for a particular use.
R (Regular) – In this category all the regularly consumed items that are being needed every
time comes. It can be consumed by every department for which the store generates the PR
through a sub inventory. There is a maximum and minimum level for these inventories. To raise
the PR the Lead Time and Consumption value are taken into consideration and the ABC
analysis is being done.
T (Temporary) – All the inventories that are of temporary requirement comes under this
category.
There is also a special category which is not included but has some importance in
Inventory Handling which is described as below.
S (Surplus) - All the inventories can be converted to this category because any inventory which
is of further no use or less required in future can be categorized in it. For example after
implementing new production technique by establishing new machinery all the spare parts of
old machinery is of no use. So these inventories can come to this category. Thus these
inventories become a dead asset for the company and contribute nothing to the company. So to
use it effectively the concerned Store in charge circulates a mail to other Units of the company
to take and use them as per their requirements.
Transportation Decisions
The mode choice aspects of these decisions are the more strategic ones. These are
closely linked to the inventory decisions, since the best choice of mode is often found by
trading-off the cost of using the particular mode of transport with the indirect cost of
inventory associated with that mode. While air shipments may be fast, reliable, and
warrant lesser safety stocks, they are expensive. Meanwhile shipping by sea or rail may
be much cheaper, but they necessitate holding relatively large amounts of inventory to
buffer against the inherent uncertainty associated with them. Therefore customer
service levels, and geographic location play vital roles in such decisions. Since
transportation is more than 30 percent of the logistics costs, operating efficiently makes
good economic sense. Shipment sizes (consolidated bulk shipments versus Lot-for-Lot),
routing and scheduling of equipment are key in effective management of the firm's
transport strategy.
The main plant of Meghmani is situated at Chharodi; far from any big city, the
transportation cost is very high. Company has to hire containers for inward and outward
materials. Company prefers shipping by sea to reduce transportation cost for exporting
and for domestic market it hires domestic logistic service providers.
Including transportation cost quotations are prepared by the MIL and suppliers are responsible for
transporting the raw material to the warehouse of the company.
From the warehouse to the layout of production to transport material Cranes are used which
are company owned.
Price will fix based on distance, weight and type of vehicle or 5% margin.
CHAPTER -5
FINDINGS
• Facility and location :
Both the units are situated in GIDC areas
Decentralized location focusing on production facilities.
Optimal capacity utilization by manufacturers to serve expected forecasted
demand.
• Process :
Operational designs to make finished product-product focus.
At every phase of manufacturing, the wastage is very low.
Company provides protections like mask, gloves and special equipments to
their workers for safety.
The wastage is very hazardous and harmful, so they have developed special
plant to destroy hazardous chemicals and to reduce its effects.
• Inventory
Make to stock decisions.
Production decisions are based on long term forecast. Typically, the
manufacturer uses orders received from retailers’ warehouses to forecast
customer demand.
A disciplined approach to planning and scheduling of inbound requirements.
• Transportation :
Each player has its own logistic management.
Transportation is through outside transport agencies.
Speed is less and cost is also less.
• Information :
Selective information sharing-push strategy
• Technology
A bit role played by technology
Reasons for not using the Technology Driven supply chain management
Channel conflict : relationship with supplier
Cost benefits analysis + upgrading equipment and system
Training issues
System failure
Reliance, too much dependence, should have backup systems
Human error, fiddling system
• Market structure
The whole business of the players in the Chemical industries is dependent on the
relationship with the respective partners.
From total production 70% is exported in other countries.
Company also enjoys good share in domestic market.
In domestic as well as international market company uses “push strategy” to sale
its product.
CHAPTER -6
RECOMMENDATIONS / SUGGESTIONS
Company should look for joint venture or strategic partnership with other
companies to reduce procurement costs.
Company can outsource the production of some of the raw materials and reduce
the production cost.
Company has to pass on the price of increasing raw material to its customers.
Company should develop green environment at its Chharodi plant to reduce the
effects of pollution.
ERP system is implemented but not fully utilized so company should provide
training.
Product design and packing should make more attractive.
CHAPTER - 7
BIBLIOGRAPHY
Books :
• B.M. Chaturvedi, Supply chain management – An introduction, ICFAI books.
• B.M. Chaturvedi, Supply chain management – Efficiency and performance
measurement, ICFAI books.
Web links :
• http://www.meghmanidyes.com
• www.yahoo.com