efficiency in supply chain & ware hosing

1. Efficiency in Supply Chain
and
Warehousing
Aditya Kumar Dubey (16)
Siddharth Jain (30)
Ashwani Kumar (45)
Prin. L. N. Welingkar Institute of Management Development & Research, Mumbai
Akanksha Kaushik (38)
Madhu Kumar (46)
Sushmita Shukla (70)
Aaruti Toshniwal (80)

3. Contents
 Supply Chain Management
• Concept of SCM
• Factors which make SCM effective
• Traditional SCM v/s Advance in SCM
 Warehousing
• Concept of warehousing
• Factors which make warehousing effective
• Traditional warehousing v/s Advance in warehousing
 SCM & Warehousing: India v/s Globe

4. Supply Chain
Management

5.  SCM in retail is an end to end process in merchandise planning and movement, from
planning the inventory (preparing the purchase order) to the point of reaching the
merchandise to the customer.
 Individual activities of the SCM process-i.e.- warehousing, distribution, transportation
both for inbound and outbound movement of merchandise which were handled
separately in the past are now carried out in logical sequence fallowing a specific time
table i.e. Logistics.
 Managing continuous supply of right products, at right time from different entities is the
challenge of managing supply chain.
 Information technology tools has helped retailers in greatly reducing cycle times and
attaining efficiency.

7. Objectives of SCM
 Rapid demand fulfillment
 Shortening time to order
 Provide flexible planning and control mechanism
 Greater labor, space and equipment efficiency
 Effective distribution and channel partnerships
 Responsiveness and accountability to customers
 Give customers what, when and how they
want, at the lowest cost

8. SCP and SCE in the supply chain

9. Factors which make
supply chain management
effective

10.  Organizational factors
• Different organizational factors like organization structure, organizational
culture, training of employees. Some companies are working on JIT system in
which raw material is provided at the time of production.
• Some others are working on the concept of mass customization, Dell computer
corporation.
 Distribution network optimisation
• Optimising the distribution network--that is determining the best location for
each facility, setting the proper system configuration and selecting the right
carriers--brings immediate cost advantages of 20 to 30 percent.
 Mutual understanding
• The trust between firms takes a key part in strategy formulation. It is a thing by
which the cost of SC can be reduced. Actually it is mutual confidence that
describes that no party exploit the believes of other party.

11.  Flow of information
• To decrease the cost is the control purpose of supply chain inventory management.
• Collaboration in inventory system can be difficult because the firms are separate
from each others.
• Sharing information is important for making supply chain responsive.
 Relationship and decision making
• Increasing the satisfaction, decreasing conflicts and maximizing relational
behaviour are three outputs of long term coordination. The result of better
decision making are that demand can be better forecasted.
 Cross docking
• Another supply-chain technique with proven payback potential is cross docking.
This is the practice of receiving and processing goods for reshipping in the shortest
time possible and with minimum handling and no storage.
 Tracking
• Using the technology and software
to track the shipment from one end
to another end safely

12. SCM Success Stories
 Top reasons why more and more executives are turning to SCM to
manage their extended enterprises

13. SCM Success Stories

14. Traditional SCM
v/s
Advances in SCM

15.  Supply Chain Model - PUSH based strategy
 Manufactures -> production of goods -> pushed through supply chain
 Lack of proper feedback and information regarding any requirements or specifications.
 Gaps between the supply and demand.
Traditional Supply Chain:
• Improper planning leading non harmonization between channel partners
• Focused on individual performance without considering the intermediaries
• Lack of long term growth plan and focus
• Supported by old legacy system with very low integration among various parts
• Lack of Vision and Mission Statements
Traditional Supply Chain Model

16. New Supply Chain Models:
• Strong network across the whole supply chain leads to cost savings and higher
profitability
• Long term growth plan and strategy are aligned with the company vision and mission
• Strong connection between the suppliers and procurement managers
• Reduction of inventory waste through effective SCM process
• All the individual system are integrated with each other.
 PULL distribution which is based on accurate customer demand and proper feedback
methods
 There is high scope to receive and feedback from customers and change the product
type/design accordingly
Modern Supply Chain Model

17.  E-commerce and Omni-channel distribution
 Mobile and wearable technology
 Robotics and automation
 Sensors and the Internet of Things
 Big Data
Sustainability

18.  New Technologies Impacting Supply Chains and Big Data In the last two decades
 Digital technologies have had a lasting impact on how supply chain activities are
conducted
 According to a recent study by Intermec, a leading supply chain solutions
provider, the top 10 technologies that have the most impact on supply chain
operations include:
1. Comprehensive connectivity – from 802.11 wireless LAN technologies,
cellular networks, and Bluetooth
2. Voice and GPS communication integrated into rugged computers
3. Speech recognition
4. Digital imaging
5. Portable printing
6. 2D & other bar coding advances
7. RFID (radio-frequency identification)
8. RTLS (real-time locating system)
9. Remote management
10. Wireless and device security

20. Warehousin
g

21. Concept
 Need for storage arises both for raw materials and finished products
 STORAGE involves proper management for preserving goods from the time of the
production or purchase till actual use
 When the storage is done on a large scale and in a specific manner it is called
WAREHOUSING
Definition:
A designated place where goods are stored to balance demand and supply
uncertainty, to serve customers in much better way, to consolidate upstream
flow and distribute downstream flow as per requirement, to do last mile
value addition such as packaging, kitting etc and to reduce last mile
distribution cost.

22. Types of warehouses
• Private Warehouse
• Public Warehouse
• Government Warehouse
• Co-operative Warehouse
• Bonded Warehouses
• Distribution Centres or Warehouse
• Cold Storage Warehouse
• Field Warehouse
• Agricultural Warehouse

23. Warehouse goals
• Maximize effective use of space
• Maximize effective use of equipment
• Maximize effective use of labour
• Maximize accessibility of all items
• Maximize protection of all items
• Maximize effective use of information
• Maximize the protection of company’s assets
• Minimize goods handling
• Minimize the company operating cost

24. Warehouse Functions
• Unloading
• Receiving and checking inbound goods
• Internal product movement
• Storing
• Order picking
• Stock Rotation
• Packing
• Loading and shipping
• Cycle counting
• Replenishment
• Handling Returns
• Maintenance and loss Prevention

25. Factors which make
Warehousing
effective

26.  An efficient warehouse is critical for:
• Customer satisfaction because it helps ensure quick, accurate shipments
• Lifeblood of every business offering products to customers
• Growing customer demand
• For companies to stay competitive
 Warehouse personnel are adopting order
fulfillment technologies, re-organization
techniques, and picking optimization methods to
create efficient operations to answer the growing
demands of customers.

27.  Maximize and optimize all available space
• Rather than expand the footprint of your warehouse, consider better use of vertical
space
• Adding taller storage units
• Various types of shelving for different materials
• Standardized bins to help keep shelves neat and orderly.
 Lean Inventory
• Lean inventory for warehouse is just as
important as it is in manufacturing
• The basic premise of lean is only what you
need, and nothing more
• Possibly reduce or eliminate safety stocks,
and try to get suppliers to deliver smaller
quantities more frequently

28.  Adopt enabling technology
• A warehouse management system (WMS) or an ERP system with a strong WMS
module
• Automated pick lists that can be sent to mobile readers and devices
• Barcode or radio frequency identification (RFID)
• Research conducted at the University of Arkansas shows that using RFID increased
inventory accuracy by 27 per cent in just 13 weeks
 Organize workstations
• Organizing workstations improves
productivity because workers do not
have to search for tools or equipment
• Use the “5S” method
Sort
Set in order
Shine
Standardize
Sustain
Keep clutter at bay, reduce errors, and improve safety and organization

29.  Optimize labor efficiency
• Analyze material usage patterns
• Store high-volume items together near the front of the warehouse to eliminate travel
time.
• Store items that are frequently sold together near one another
• Streamline operations if you try to keep the items you pick most often in the most
accessible locations to eliminate picking delays
 Streamline the Order Fulfillment Process
• Streamline the much neglected order fulfillment process
• Warehouse staff will waste time when they are running everywhere to fulfill orders
• People going to the first aisle to pick up an item, going to the end of the warehouse
for another product, and then returning to the first aisle to pick up a different item to
complete the same order
• The right warehouse software can allow you to batch requested orders in a more
organized method

30.  Reduce the Amount of Shipping Containers
• Select two to three standard sizes for shipping containers
• Then select several custom sizes for merchandise that are in irregular shapes
• It will cut down on order fulfillment and waste
• You will also be able to manage and budget your freight costs more efficiently
 Select Effective Storage Options
• Select the best fit storage options based on the various products
• Warehouse staff can have a faster time fulfilling orders for in-demand products
when the items are in arm's reach
• Storing merchandise at waist level allows the staff to "grab and go" when filling
multiple orders
• Weight of the item will also dictate where it is placed, as heavier products will
need to be put on lower shelves or on pallets

31.  Create a warehouse within a warehouse
• Grouping together the 20 percent of your SKUs that complete 80 percent of your
orders
• Cuts travel time for pickers
 Focus on Continuous Process Improvement
• Keep an eye on continuous process improvement
• Don’t just focus on short-term goals; set objectives and accountability for
improvement, review their progress, and start over – time and time again

32. Traditional Warehousing
v/s
Advances in Warehousing

33. Traditional Warehousing
THE SIMPLE RULE IN TRADITIONAL SUPPLY CHAINS WAS TO STORE “MAXIMUM
POSSIBLE QUANTITY OF EVERY PRODUCT, EVERYWHERE, EVERY TIME”
• A traditional warehouse is a typical stock carrying unit of the supply chain
• As far as distribution is concerned this is a place where the manufactured and ready-
to-sell products are stored
• This gave birth to the warehouses which were used for stockpiling inventory and
inventory would be shipped out months after it arrived in the warehouse
• Items are shipped to fulfill orders from customers (end customers or intermediaries).
These warehouses are also called as distribution centers
• Costs associated with a traditional warehouse include inventory carrying costs in
addition to the facility costs and the transportation costs

34. Advancements in Warehousing
THE NEW SUPPLY CHAIN RULE IS TO HAVE “THE REQUIRED QUANTITY OF THE RIGHT
PRODUCT IN THE RIGHT PLACE AT THE RIGHT TIME”
• Entrance and domination of ERP vendors: SAP, ORACLE,SSA made significant inroad by
self developing advanced warehousing modules
• Increased Protocols for Product Recalls and Warehouse Employee Safety
• More Acceptance of Third-Party Logistic Solutions
• Mobility Devices for More Accurate Order and Shipping Fulfillment: Operators are using
barcode scanners, RFID readers and other types of handheld devices to better
streamline the shipping and inventory process.
• Unique Warehouse Management Systems for
Multichannel Solutions
• Automation Improvements for Enhanced
Operational Processes
• Use of robots

35. Ways How Warehousing Adds Value
 Storage Accumulation
• The use of a warehouse to stockpile and to handle overflow. The warehouse
serves as a buffer to balance supply and demand for long-term storage
 Postponement
• The use of a warehouse as a final step deferment or postponement until a
customer places an order for a specific quantity
 Order Consolidation
• The use of the distribution center to gather product which is to be shipped to a
final destination
 Cross docking
• The process requiring a truck to pull up to a
warehouse dock and transfer stock directly from the
back of one truck into the back of another for
deployment to different distribution centers or retail
stores

36.  Flow-through
• The use of the warehouse, in order to support a manufacturing or distribution
operation, as an inventory staging process which relies exclusively on forward
picking locations and fills them with only enough inventory for the immediate
future (from one day to one week)
 Order Assembly
• The use of a distribution center to fulfill unpredictable order patterns, to
accommodate a broad SKU mix and ship same-day orders, as well as to use cross
docks whenever possible.
 Product Mixing
• The use of a distribution center to combine items in the entire product line for a
single manufacturer from product-oriented manufacturing facilities in different
geographic locations

39. SCM & WAREHOUSING
INDIA v/s GLOBE

40. Demand side
•Varied tastes and consumer
preferences and purchasing
habits
Supply Side
•Poor infrastructure
•Complex taxing regulations
•Lack of technology adoption
Challenges Faced By Indian Logistics

41. Supply Chain Management Worldwide
• Worldwide the supply chain management happens real
time:-
– Real-time route planning and optimization
– Real-time package/shipment tracking
– Real-time delivery personal tracking and managing
– Real-time ETA calculation
– Real-time alerts, notification with Geo
– Fencing and Geo-coding
• 40% of today’s organizations are not currently pursuing
increased mechanization to streamline supply chain
processes: this percentage will shrink to 17% by 2018
• Inventory and warehouse management is increasing in
value and relevance. The number of warehouses in the
U.S. has risen 6.8% over the last five years
• The average inventory accuracy threshold for retail
operations is only 63%
• 44% of US shoppers combine online and in-person
shopping activities (“Omni-channel shopping”) across 15
product and service categories.
• Amazon Drone Delivery

42. PRIMARY FOCUS
Quality Cost Service
SECONDARY FOCUS
Delivery Speed Volume Flexibility Innovation
• Focus on development of vendors in
geographical proximity.
• Implementation and utilization of
ICT : Routing and scheduling software
are increasingly being used.
• Transportation and logistics services
are generally outsourced to third
parties.
MANUFACTURING FIRMS: High collaboration partnership with vendors
SERVICE FIRMS: Focus on Express Delivery and Logistics Solutions
FMCG and PERISHABLES SECTOR: Link distributors through Internet
and Intranet based systems. E.g. HUL through RSNet, Marico through
MINet, Dabur through DaburNet
Firms use ERP software
Supply Chain Management in India

43. Warehousing Globally
Type Of Warehouse
Region Of Growth Of Warehousing
Global refrigerated
warehousing and storage is
growing fastest due to
“RISE IN CONSUMPTION
OF PROCESSED FOOD”
GROWING DEMAND OF
PROCESSED AND FROZEN FOOD
PRODUCTS in China and India is
driving the need for state-of-art
cold storage facilities, thus driving
market growth in APAC.

44. GLOBAL VENDOR
• Market leaders capitalize on the potential
demand for energy-efficient warehouses.
• Introduce highly innovative inventory tracking
methods and value added services such as
repackaging and quality control testing over the
next few years.

45. • SIZE OF THE INDIAN WAREHOUSING INDUSTRY (across commodities and modes) :
INR560 billion excluding inventory carrying costs.
• Warehousing accounts for ~5% of the Indian logistics market (excluding inventory carrying costs,
which amount to another ~30%).
Key Players In India
55%
14%
15%
16%
KEY SEGMENTS
Industrial or Retail
Warehousing
CFS/ICD
Agri Warehousing
Cold Stores
27%
31%
18%
24%
KEY DEMAND CENTRES
Delhi Mumbai Bangalore Others
Warehousing in India