Birla Institute of Technology and Science, Pilani
First Semester 2006-2007
MBA C421: Supply Chain Management
Comprehensive Examination (Closed book)
Date: 05/12/2006 Max marks: 40
Time: 3 hours
All Questions are compulsory.
Marks are indicated against each question.
Do all sub-parts together.
Q1. Name the supply chain process / technology: (1 x 4 marks)
a. The distributor or the manufacturer monitors and manages inventories at the wholesaler or
b. This process coordinates the supply and delivery, so that goods arrive at the receiving area
and are transferred straight away to the loading area, without having to be stored in the
warehouse, where they are put onto delivery vehicles.
c. Standard markings that can be read by automatic or handheld scanners that allow for labour
saving logistical activities for all supply chain members.
d. A cross-functional enterprise system driven by an integrated suite of software modules that
supports the basic internal business processes of a company.
Q2. Identify the technology / process shown in the pictures: (1 x 4
a. Identify the supply chain warehousing activity depicted in picture (i).
b. What is the storage concept demonstrated in picture (ii)
c. Name the process in picture (iii)
d. Specify the information integration technology shown in picture (iv)
Q3. Write short answers: (2 x 6 marks)
a. Why do organizations use supplier certification? What are the benefits of supplier
b. What do you think the most important evaluation criteria would be for Wal-Mart’s suppliers?
McDonald’s suppliers? Harley-Davidson’s suppliers?
c. A major biotechnology company has developed a new drug for arthritis victims using
gene-splicing technology. It has been on the market for five months and has experienced the
following sales (in thousands of dollars):
What is the exponential smoothing forecast for May assuming that January sales is also the
initial forecast and the alpha value is .5?
d. List some major benefits of the Just-in-Time (JIT) system
e. At a retail shop the demand for personal computer furniture is normally distributed with a
mean of 250 units a week and a standard deviation of 40 units. The reorder cost is Rs. 1800
per order, holding cost is Rs. 6 per unit per year and lead time is fixed at three weeks.
Describe a policy that give 95% service level. How much would be cost rise if the service is
raised to 97%.
f. What are some innovative developments in logistics.
Q4. Explain thoroughly: (4 x 3 marks)
a. Explain how product characteristics influences supply chain design.
b. What are the key features of CPFR?
c. Describe several third-party logistics services. What role do they play in SCM?
Q5. Answer in brief the questions given against the case below: (2 x 4 marks)
Collaborative Logistics Management at Maruti
Maruti was a pioneer in development of a good logistic system in India. Dhirender Yadav
(2002) describes the unique features of logistics management in the automobile industry. The
extended scope of operation of the logistics function has provided Maruti with more accurate
sales forecasts, changing trends and proactive sales planning guidelines. The mutually
helpful relationships with the transporters that were developed by Maruti helped the
organizations (Maruti and other chain partners) to work at low costs by sharing of resources
and ideas that eventually lead to increased productivity, lower costs and thus improved
Maruti has come out as a pioneer in the field of automobiles in India; not only did it develop
the first fuel efficient, light weight family car but it has also brought about major changes is
the fields of logistics and supply chain management. The company developed new systems
for transportation of vehicles, new modes of transportation, effective ways of delivering
damage free vehicles to the customers, and most importantly, introduced the buyer to new
standards of customer service.
Maruti has come a long way in maintaining its market leader position despite wide
fluctuations in the market situation. The factors that have contributed to the ability of Maruti
to adapt to these changes are mainly:
A strong corporate culture with discipline as the mainstay
An efficient and quickly adapting information system
Young and dynamic employees
A responsive and fast developing infrastructure
In a competitive and uncertain market scenario in which the customer has also become more
Knowledgeable and demanding. The customer order administration and delivery process are
as important as the product quality and product range offered. Customer satisfaction is
largely dependent on an efficient customer service process comprising proper
communication, problem solving to the desired level and expectation of the customer.
The application of information sciences to the logistic function has had a major impact on
added value in the value chain. Many applications devised in conjunction with the
Information Technology Division (ITD) of Maruti, and it resulted in:
More accurate and rapid information flows
Improved logistic system productivity
Closer relationship with the dealers and customers
Improved cash flows
And more accurate forecasting methods.
The basic objectives of sales and despatch department at Maruti are: to maximize dispatches,
in the fastest manner, at a lowest cost, with minimum damages. Developing innovative
transportation modes, and building strategic alliances for collaborative advantage contributed
to the success at Maruti towards better logistics management.
Maruti is a pioneer in the field of outbound logistics. Before Maruti all the cars used to be
driven on their own power. There were no dedicated car carriers available, and hence, it was
decided by MUL to go ahead and design its own. In the process not only did it develop a
highly advanced transportation infrastructure and network but also led to a national saving.
A broad cost benefit analysis reveals that by despatching 2.1 million vehicles in the past 15
years by covered trucks and carriers, instead of sending them on their own power MUL has
resulted in a saving of 482 million Rupees, even after assuming that the trucks came back
empty on their return loads.
Maruti has used the art of strategic relationship to get maximum collaborative advantage,
which has helped it to eventually gain a competitive advantage. Learning from the Japanese
concepts like JIT, lifetime employment and many similar concepts, Maruti has realized that
developing a good partner is a key to corporate success. Maruti has developed business
relationships based on mutually benefiting relationships with its logistics operators.
As a pioneer in the field of transportation of vehicles in carriers, Maruti faced initial
resistance to change. However, Maruti successfully developed the transporters by investing
its own funds in the development of trucks. With the increase in credibility and marketability
of Maruti vehicles, the market for Maruti vehicles grew. Resulting in a parallel growth for
vehicle shipment quantum. It is at this stage that Maruti further nurtured the concept of
developing mutually beneficial collaborations with its transporters. The mutual benefit aspect
of the transportation relations took a lot of time and energy and long time to spread. The
benefits that finally accrued to the transporters and to Maruti were far greater than those that
had been envisaged.
Maruti developed the mutually beneficial relationship with the logistics partners by nurturing
specifically built relationship measures. Some of the ways where these carefully built
relationships were developed into profit partnership are: i. Helping transporters in Truck
designing ii. Freight disbursal System. iii. Information Systems (available to transporters as
well). iv. Human Resource Development v. Fleet inspection and rating. vi. Other Services
like route study, region-wise appointment of transporters, and providing route status to the
transporters. These steps concretely benefited the transporters in operating their fleet more
efficiently and effectively and thereby contributing to the mutual benefit of the supply chain
a. How did Maruti and its logistcs partners in the value chain increased the productivity
and lowered costs?
b. What are the benefits that resulted due to the application of information sciences to
the logistics function?
c. What were the objectives of logistics function in Maruti and how were they achieved?
d. List the specific carefully built relationship exercises that were developed by Maruti.