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LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7
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LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7
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Author
R. Raja M.COM. MBA. M. PHIL
ASSISTANT PROFESSOR
DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES
PARVATHY’S ARTS AND SCIENCE COLLEGE
WISDOMCITY, DINDIGUL, TN
Legal Adviser
Mr. P. RAJENDRA CHOLAN
ADVOCATE, BAR ASSOCIATION
THIRUTHIRAIPOONDI, THIRUVARUR
LOGISTICS AND SUPPLY
CHAIN MANAGEMENT
LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7
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All rights are reserved. No part of this publication may be reproduced, stored in a retrieval
System, or transmitted in any form or by any means, electronic, mechanical, photocopying,
Recording, or otherwise, without the prior permission of the copyright holder.
Text ©AUTHOR, 2024
Cover page © HEDUNA PEER OF INTERNATIONAL RESEARCH AND
REVIEWS , Dr N Hariharan
Author ©: R . Raja
Editor: Dr J Nimala ,
Publisher: Heduna Peer of International Research and Reviews
T. Vadipatty, M.P Nagar, Madurai, Tamilnadu, India
Phone: + 91 9345020835
E-mail:hpirrjournal@gmail.com
Website: www.hedunapublications.com
Book: LOGISTICS AND SUPPLY CHAIN MANAGEMENT
ISBN- 978-81-969444-0-7
Edition: Feb -2024
Price: Rs 409/-
Printed By: HYAENA PUBLISHERS INDIA
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I realize that this book will create a great deal of controversy. It has never been easy to challenge the
consensus because the System – of any kind, in any context – will try to preserve the status quo, by
all means possible. .Hopefully, this account will raise the level of awareness among the general public
and initiate the discussion that, in turn, may entail major cultural changes, as well as a revision of the
consumer basket. This book can be read on two different levels. First, it may be read by ordinary
people with a limited, if any, scientific background. Throughout, the book has been written with this
audience in mind. I hope that you won’t be easily discouraged. Even if the chemical content of a given
chapter is hard to understand, the scientific evidence presented, the citations from original
documents, conclusions drawn, and recommendations made can be easily comprehended.
Represented by professionals from academia, and government agencies, as well as consumer
protection and advocacy groups. I do not expect everybody in the scientific community to agree with
the content and ideas put forth in this book. But I do hope that the information and knowledge
presented will become a wake-up call for the general public, regulatory agencies, legislators, business
leaders, and scientists coming to the realization.
Dr N HARIHARAN
FOUNDER & MD HPIRR JOURNAL AND
HYAENA PUBLISHERS INDIA
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ABOUT THE EDITOR
Dr. J. NIMALA., M. Com, M.Phil., Ph.D., NET
ASSISTANT PROFESSOR &
HEAD OF THE DEPARTMENT
SREE SARASWATHI THYAGARAJA COLLEGE, POLLACHI
Acted as Head of the Department in B.Com (Business Analytics) and B.Com
(Professional Accounting) Acting as member in Research and Consultancy
Cell, Acted as BOS Chairman in Department of B.Com (BA) in GVG College,
Acted as member in Exam committee GVG College. Acting as a member in
Career Guidance and Placement Cell GVG College. Acting as Member in e-
Content Development GVG College.
Acted as Head of the Department in St.Paul’s College for Women, Coimbatore.
Acted as a Placement officer in St.Paul’s College for Women, Coimbatore
Participated in N.S.S. Campaign Program-Awareness program in rural area in
Hindusthan College –Coimbatore
National level Five Days Faculty Development Program on “Industry 4.0:
Technologies, Outcomes and Futures of Manufacturing” as a Resource Person
from IBM, Bangalore. One Day Workshop on “MongoDB” in association with
Adroit Technologies One Day Workshop on “Problem Solving and Ideation
Innovative Thinking” Published Two Chapters in Edited Books.
Publication of Book is under Process. No of chapters and journals published
17. Conference Proceeding: 7 and Seminar/conference Attended: 12 Seminar
Organized Training Programme Attended: 04.
LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7
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Achievements
Received Appreciation Certificate from District Administration and District
Employment and Career
Guidance center, Tiruppur for rendering Yeoman service during the Mega job
fair held in the campus of Sri
G.V.G. Visalakshi College for Women (Autonomus), Udumalpet on 19.12.2020
& 20.12.2020.
2020,10 th March, Acted as Committee Member in one day international
seminar on “Business Strategies for
Sustainable Growth-A Global Perspective” held at Sri GVG Visalakshi College
for Women.
2018,14 th December, organized one day international seminar on “WINNING
THE BUSINES WAR-A ASSPORT TO SUCCESS” held at Sri GVG Visalakshi College
for Women.
2017, Appreciated as “Best Creator” by the Students in Hindusthan college of
Arts and Science, Coimbatore.
2014-2015, Awarded for 100% result in St.Paul’s College of Arts And Science
for Women, Coimbatore for the academic year 2014-2015 for all the subjects.
2013-2016, Worked as a Placement officer in St.Paul’s College for Women,
Coimbatore
2012 March, Awarded “FIRST PRIZE IN COMMERCE” in “National conference in
Sasurie College of Arts and Science – Vijayamangalam – TIRUPPUR
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R. Raja M. COM., MBA. M. PHIL
ASSISTANT PROFESSOR
DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES
PARVATHY’S ARTS AND SCIENCE COLLEGE
WISDOMCITY, DINDIGUL, TN
Raja M. COM., MBA., M. PHIL.,. He specializes in the areas of marketing
management, fiance, and baking. He was act as assistant. Exam co- coordinator He
has over 10 years of teaching and research experience. He is currently working as
an assistant professor in the Department of Commerce and Management Studies
at Parvathy's Arts and Science College (Autonomous), Dindigul, and a reviewer of
Heduna Peer international research and reviews. I reviewed three international
books. published more than 13 papers in various articles in national and
international journals. And attended more than 20 national and international
seminars and pledges.
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SI NO CHAPTER TITLE PAGE
NO
1
Supply Chain Management
Concept, Features, Evolution, Importance, Process and Barriers of
Supply Chain Management – Principles, Supply Chain Strategies –
Organizations, Coordination,
1-20
2
Innovation and Forecasting - Supply chain intermediaries –
Concept and Types, Channels of Distribution for Industrial Goods
and Consumer Goods, Channels of Distribution at Services Level,
Factors for selection of suitable channels.
21-31
3
Global perspectives: Measuring and analyzing the value and
efficiency of Global Supply Chain Networks, Global market forces,
Types of global supply chain -Indian Perspectives: Measuring and
Analyzing the value and efficiency of Domestic Supply Chain
Networks
32-38
4
Economic effects of supply chains - Customer Perspectives:
Customer values, Role of customers and Ways of improving
customer services in SCM.
39-46
5
Framework of Logistics
Logistics: Introduction – Positioning of Information in Logistics
and Supply Chain Management – Logistics Information System
(LIS) - Logistics Management: Concept and Process, Competitive
Advantages and Three C’s, Changing Logistics Environment,
47-56
6
Reverse Logistics, Importance of Inventory Control -Elements of
inventory management – Inbound and out bound logistics, Bull-
whip effect – distribution and warehousing management -
Transport Functions and Participants in Transportation Decisions -
Transport Infrastructure-
57-66
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7
Packaging and Materials Management: Consumer and Industrial
Goods Packaging - Factors influencing Materials Planning,
Preservation Safety and Measures of Materials Handling.
67-74
8
SCM-Warehousing Introduction– Concepts of Warehousing–
Types of Warehouse – Functions of Warehousing– Strategic
Warehousing, Warehouse Operations, Ownership Arrangements,
Warehouse Decisions, Warehouse Management Systems,
Packaging Perspectives,
75-85
9
Packaging for Material Handling Efficiency, Materials Handling,
Supply Chain Logistics Design: Global Strategic Positioning;
Global SC Integration, SC Security, International Sourcing,
Distribution control and evaluation.
86-90
10
SCM-Plan SCM Plan: Demand Planning, Source of Procurement,
Production or Assembly Steps, Sales return of defective or excess
goods-Use of Internet in SCM: Role of computer/ IT in supply
chain management –E- market places, E-procurement, E-logistics,
E-fulfillment
91-98
11
Operative Systems in SCM: Enterprise Resource Planning (ERP),
Performance Modeling of supply chains using Markov chains,
Inventory Control- Importance, Pareto’s Law -Emerging
Technologies in Logistics and Supply Chain Management:
99-107
12 CRM Vs SCM, Benchmarking concept, Features and
implementation, Outsourcing: Basic concepts, Value addition in
SCM – Concept of demand chain management - Growth of
Logistics and Supply Chain Management in national and
international scenarios.
108-119
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UNIT- I
Supply Chain Management
Supply Chain Management: Concept, Features, Evolution, Importance, Process and Barriers of
Supply Chain Management – Principles, Supply Chain Strategies – Organizations, Coordination,
Innovation and Forecasting - Supply chain intermediaries – Concept and Types, Channels of
Distribution for Industrial Goods and Consumer Goods, Channels of Distribution at Services
Level, Factors for selection of suitable channels.
1. SUPPLY CHAIN MANAGEMENT
At the most fundamental level, supply chain management (SCM) is management of the flow of
goods, data, and finances related to a product or service, from the procurement of raw materials to
the delivery of the product at its final destination.
2. CONCEPT
Supply management is the act of identifying, acquiring, and managing resources and suppliers that
are essential to the operations of an organization. It includes the purchase of physical goods,
information, services, and any other necessary resources that enable a company to continue
operating and growing.
3. FEATURES OF SUPPLY CHAIN MANAGEMENT
 Improved Efficiency
 Optimization of Transportation and Logistics
 Lower Cost Expenses
 Provides Customer Satisfaction
 Better Distribution System
 Cloud-Based Accessibility
 Keeping Improved Coordination
 Self Service Portals
 Performance Measurement
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 Security
Improved Efficiency
Efficiency is one of the most important goals of supply chain management. A crucial aspect of
supply chain management is minimizing waste. Waste can take many forms, including waste of
resources, money, labor hours, delivery times, etc. For instance, if your business uses ERP
software to update inventory data in real-time and share it with a supplier, it may quickly restock
its stock to satisfy customer demand. While it might be challenging to learn but can be quite helpful
for the success of your company as a whole.
Optimization of Transportation and Logistics
The improvement of logistics and transportation is yet another crucial objective of supply chain
management. Each firm is in charge of its own responsibilities with regard to placing orders,
sending packages, and transporting items in a free-standing business setting. With any vendors or
customers you do business with, SCM gives you the ability to optimize your transportation and
logistics operations. Orders are automatically inputted into a system, which alerts nearby facilities
that more resources are needed to fulfill this request. Because of this, the procedure is fairly
frictionless.
Lower Cost Expenses
Reduced operational cost is the main goal of supply chain management. The cost of all business
expenses, including those related to purchasing, producing, and transporting goods, is reduced by
creating an effective supply chain. The holding period for both raw materials and completed items
may be decreased by enabling a seamless flow of raw materials between a supplier and a business
and the movement of finished goods between a company and its clients. Losses are thereby
minimized, and total organizational costs are maintained to a minimum.
Provides Customer Satisfaction
Customer happiness is another aspect of SCM, as the supply chain is the best channel for providing
customer care. Pricing and delivery are the two most important factors, and SCM directly affects
them. You may surpass your rivals in terms of retail price and profitability by having an effective
supply chain. You may meet or surpass your customer’s expectations for product delivery with the
help of high-performing operations.SCM always gives clients what they want, when they want it,
and at a low price since these things raise the likelihood that they will continue to be satisfied.
Better Distribution System
The organization in charge of running the firm benefits from supply chain management since it
streamlines the distribution process. To ensure the quicker circulation of products, it is essential to
create adequate coordination between the various transportation channels and warehouses.
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SCM helps businesses to cut costs while providing products more quickly. This leads to an
improvement in the overall distribution system, which immediately helps in the timely and
accurate delivery of goods.
Cloud-Based Accessibility
Authorized users may access and use cloud-based supply chain management tools from any
location, at any time, and on any connected device. The biggest benefit of this feature is that cloud-
based solutions may be set up more affordably, more quickly, and with less risk than on-premise
ERP systems.
Keeping Improved Coordination
Supply Chain Management focuses on improved coordination between the business stakeholder.
A communication channel is created that allows employees, customers, and suppliers to
communicate with the company efficiently. In an emergency, employees may contact their
managers through the established route, and managers can promptly lead their workforce.
Self Service Portals
In a supply chain network, many partners working from various places are included. Due to their
inability to constantly communicate, communication problems arise. Business partners may
exchange plans and information depending on their actions and preferences via password-
protected self-service portals, enabling continual contact whenever necessary in the field of supply
chain management.
Performance Measurement
The measurement of performance measures by looking more closely at the operations is one of the
key components of supply chain management. The most important technique to promote
responsiveness and creativity in a business is by using metrics analysis based on the processes to
gain insightful data.An efficient SCM guarantees a clear picture of the business operations and
helps in determining the KPIs that need to be developed. In order to increase overall business
performance, a measuring system must be established for a standard process architecture
Security
Another crucial component of supply chain management software is security. Be sure the cloud-
based system you choose for supply chain management has security features like Data encryption,
network monitoring, virus scanning, multi-factor authentication, and role-based authorization.
4. EVOLUTION OF SUPPLY CHAIN MANAGEMENT
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The evolution of supply chain management has been characterized by increasing integration of
separate tasks; a trend underlined in the 1960s as a critical area for future productivity
improvements since the system was highly fragmented. Although logistics tasks have remained
relatively similar, they initially consolidated into two distinct functions related to materials
management and physical distribution during the 1970s and 1980s.
This process moved further in the 1990s as globalization incited functional integration and the
emergence of logistics in a true sense. All the elements of the supply chain became part of a single
management perspective. However, only with information and communication technologies did a
more complete integration became possible with the emergence of supply chain management. It
allows for the integrated management and control of information, finance, and goods flows,
making possible a new range of production and distribution systems.
Supply chain management has become a complex sequence of activities aiming at value capture
and competitiveness. More recently, the growing level of automation of supply chains has been a
dominant element in the evolution of both physical distribution and materials management. This
digitalization is particularly notable within distribution centers that have experienced a remarkable
push towards automation, such as storage, materials handling, and packaging. Automation may
eventually lead to automated delivery vehicle.
5. SUPPLY CHAIN MANAGEMENTIMPORTANCE
Higher Efficiency Rate
When your business is able to incorporate supply chains, integrated logistics and product invention
strategies, you will be in a great position to not only predict demand as well as to act accordingly.
This is without any doubt, one of the main supply chain management benefits. Why or when your
businesses implement supply chain management systems, it will be able to adjust more
dynamically to the fluctuating economies, emergency markets and shorter product life cycle.
Decrease Cost Effects
One of the advantages of supply chain management is the cost decrease in different areas. The
most important ones are:
 They improve your inventory system.
 They adjust the storage space for finished goods which eliminates damage to resources.
 They improve your system’s responsiveness, the actual customer’s requirements.
 They improve your relationship with both distributors and vendors
Increases Output
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One of the main benefits of supply chain management is the communication improvement. It adds
up to the coordination and collaboration with shipping and transport companies, vendors and
suppliers.
Increases Your Business Profit Level
When you place your business open to the new technologies and an improved collaboration within
the different areas, you can be sure that supply chain management ultimately increase your
business profit level.
Boost Cooperation Level
When we are talking about the most successful businesses right now, one of the things they all
have in common is communication. Infact, when there is a lack of communication, your vendors
and distributors have no idea about what’s going on. So, this is definitely one of the main
advantages of supply chain management. When you open your doors to technology, you can also
take advantage of the fact that people don’t even need to share the same space in order to be a true
communicator. The communication among the different areas of your business will allow you to
have faster access to forecast, reporting, quotation, statuses among many other plans in real time.
No More Delays in Processes
One of the main benefits of supply chain management is the fact that through communication, you
can actually lower any delays in the processes. Since, everyone is aware of what they are doing as
well as what others are doing. This will mitigate any late shipments from vendors, logistics and
distribution channels and holdups on production lines.
Enhance Supply Chain Network
It’s not easy to maintain a sustainable supply chain management system. According to some of the
advocates, one of the best ways to do it is by using a combination of lean practices like waste
removal with agile. By combining, all the information gathered on the different sectors of your
business, will allow you to have an enhanced supply chain network.
6. PROCESS OF SUPPLY CHAIN MANAGEMENT
Supply chain management is the unsung hero of the manufacturing sector. It’s not glamorous –
there’s nothing tangible to validate your efforts – but it’s the foundation that supports every
manufacturing business. A seamless supply chain improves inventory management, keeps waste
to a minimum and frees up capital that would otherwise be tied up in stock – so it’s worth getting
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right! However, supply chain management doesn’t happen in isolation, it is built on the foundation
of key business processes. Looking at some of these key processes, we can see how a best-of-breed
ERP system such as SYSPRO offers a platform for Supply Chain Integration:
Customer Relationship Management
Creates a structure for developing and maintaining relationships with customers. Individual
customers or groups are identified, based on their value over time, and their loyalty can be
enhanced by providing tailored products and services. Cross-functional customer teams develop
Product and Service Agreements (PSA) to meet the needs of key accounts and for segments of
other customers. They also work with key customers to improve processes and eliminate demand
variability and non-value added activities. Performance reports are designed to measure the
profitability of individual customers as well as the financial impact on the customer. The SYSPRO
software solution enables companies to collect, maintain and manipulate a rich, customer-related
database to promote increasing revenue and profitability. Our Sales and Distribution solutions and
SYSPRO Reporting also support the CRM process.
Supplier Relationship Management
Defines how a company interacts with its suppliers. As in the case of customer relationship
management, a company will form close relationships with some of its suppliers, while others are
less closely cultivated. Good supplier relationship management involves devising the right PSAs
and managing them well, so that the company and its suppliers continue to benefit from the most
favourable trading arrangements.
Customer Service Management
Operates at the customer interface. It provides the key point of contact for administering the PSA
and can give the customer information on orders, shipping dates and product availability. SYSPRO
ERP manufacturing and logistics modules supply the data required by customer service
management.
Demand Management
Allows a company to be proactive in matching supply to demand. The process includes forecasting
and synchronization of supply and demand, in order to increase flexibility and reduce demand
variability. The process should employ customer intelligence, historical sales information and
planned marketing efforts to forecast and influence demand.
The Order Fulfilment
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Process involves more than just filling orders. It includes all activities necessary to define customer
requirement and to design a process that allows a company to meet customer requests, while
minimising the total delivered cost. This is not just the logistics function, but instead needs to be
implemented cross-functionally and with the coordination of key suppliers and customers. The
objective is to develop a seamless process from the supplier to the organisation and to its various
customer segments.
Manufacturing Flow Management
Includes all the activities necessary to move goods through production and to obtain, implement
and manage manufacturing flexibility in the supply chain. Manufacturing flexibility reflects the
ability to make a wide variety of products at an appropriate rate and at lowest possible cost. To
achieve the desired level of manufacturing flexibility, planning and execution must extend beyond
the production site to encompass the entire supply chain. Clearly, managing manufacturing flow
requires an element of manpower planning. In the case of SYSPRO, our Equator HR module
integrates with the ERP system to facilitate this planning.
Product Development and Commercialization
Provides the structure for developing and bringing products to market in unison with customers
and suppliers. The product development and commercialization process team must coordinate with
customer relationship management to identify customer articulated and unarticulated needs; select
materials and suppliers in conjunction with the supplier relationship management process; and
develop production technology in manufacturing flow to manufacture and integrate into the best
supply chain flow for a given product/market combination.
Returns Management
Is the SCM process by which activities associated with product returns, reverse logistics,
gatekeeping, and avoidance are managed within the firm and across key members of the supply
chain. The correct implementation of this process enables management not only to manage the
reverse product flow efficiently, but to identify opportunities to reduce unwanted returns and to
control reusable assets such as containers. Effective returns management is an important link
between marketing and logistics, offering an opportunity for competitive advantage.
7. BARRIERS OF SUPPLY CHAIN MANAGEMENT
 Lack of IT solutions.
 Lack of knowledge.
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 Poor working relationship.
 Lack of communication.
 Cost of integration.
 Conflicting goals.
Lack of IT solutions
To solve IT problems quickly, identify the problem correctly, prioritize it, brainstorm possible
solutions, evaluate them, implement the best solution, test it, and document it. Get help from
others, use the right tools, and stay up-to-date on the latest IT trends. A solution is an
implementation of people, processes, information and technologies in a distinct system to support
a set of business or technical capabilities that solve one or more business problems. One of the
most common IT problems for businesses around the world today is security and vulnerability.
Between hackers, malware, data breaches, and identity theft, it seems like every business has one
or more reasons to be concerned about their company's security level.
Lack of knowledge
The term 'agnosia' signifies 'lack of knowledge,' and denotes an impairment of recognition.
Traditionally, two types of agnosia have been described (Lissauer, 1890). One, termed associative
agnosia, refers to a failure of recognition that results from defective retrieval of knowledge
pertinent to a given stimulus. What is the meaning of lack of knowing? "Lack of knowledge" refers
to a situation in which someone does not possess the information, skills, or understanding required
for a specific task or situation. This can lead to misunderstandings or mistakes
Poor working relationship
Poor work relationships between employees and employers can have far-reaching consequences
on an organisation's productivity, engagement, and retention. However, by fostering a culture of
open communication, mutual respect, and support, employers can create a positive and productive
work environment. the connections you form with coworkers, colleagues and managers in the
workplace. Although the relationships you build with colleagues and managers may not be as
intimate as those you have with family and friends, they are nonetheless crucial.
Lack of communication
A “lack of communication” typically occurs when someone experiences challenges with
effectively communicating their needs and expectations. If you have a difficult time
communicating, you may find yourself not getting your needs met at work, with your family or
friends, or in romantic relationships. A communication problem is a breakdown in the individual's
ability to effectively convey their thoughts as a meaningful message. A communication problem
may occur if the individual cannot effectively understand or convey a message being sent to them.
Cost of integration
Integration Costs means, with respect to any acquisition, all costs relating to the acquisition and
integration of the acquired business or operations into the Company, including labor costs, legal
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fees, consulting fees, travel costs and any other expenses relating to the integration process. In
Integration costs are a significant part of robotic automation, encompassing expenses for
customizing robots to specific tasks. Factors such as the robot itself, integrator fees, end effectors,
vision systems, and training contribute to these costs.
Conflicting goals
From Supply Chain leaders that they are struggling with several conflicting objectives. They are
expected to improve customer service levels with lower inventory and higher profits. Production
flexibility and responsiveness must be improved without dropping production levels. n general,
conflict is widespread within and among the supply chain partners, and there are some kinds of
conflict arisen in the supply chain.
8. PRINCIPLES SUPPLY CHAIN STRATEGIES
Customer Focus
Supply chain management begins with a thorough grasp of your consumers and their reasons for
purchasing your product or service. When people purchase your products, they are resolving a
problem or fulfilling a need. Supply chain managers must comprehend the customer’s problem or
demand and ensure that their organisations can address it more effectively, quickly, and affordably
than their competitors. SCM demands a grasp of the end-to-end system – the collection of people,
processes, and technology that must all function in concert to deliver your product or service.
Systems thinking includes an understanding of the series of causal linkages that occur throughout
a supply chain. Because supply chains are complicated systems, they can behave unpredictably,
and slight adjustments in one section of the system can significantly influence elsewhere.
Innovation
Business is changing at a breakneck pace, and supply chains must adapt by innovating. Continuous
process improvement and sustaining innovation is required to keep up with the competition. Lean,
Six Sigma and the Theory of Constraints are all methodologies for process improvement that can
aid in this endeavor. Continuous process improvement is not sufficient, as new technologies have
the potential to disrupt entire sectors. It is referred to as disruptive innovation. When a novel
solution to a customer’s problem is developed and adopted, it becomes the new dominant
paradigm. In other words, if you’re in the business of manufacturing scooters, you need to figure
out how to make them better, quicker, and cheaper than your competitors while also figuring out
what the next dominating paradigm will be, so you know what to create when scooters are phased
out.
Collaboration
Supply chain management cannot be carried out in isolation. Individuals must collaborate across
organisational silos and with suppliers and customers external to the organisation. A selfish
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mentality results in transactional relationships in which people prioritise short-term gains while
overlooking long-term advantages. This costs more money in the long term, as it fosters a lack of
trust and a reluctance to compromise among supply chain participants.
A community in which people trust one another and collaborate for shared success is far more
lucrative for everyone than a community in which each person is solely concerned with his or her
personal achievement. If you can anticipate that you will do more business with a particular
customer in the future and that the company will be lucrative, you are more inclined to offer them
a discount on the things they are purchasing today. Additionally, a collaborative environment
makes collaboration much more enjoyable.
Flexibility
Because unexpected events occur, supply chains must be adaptable. Flexibility is a metric that
indicates how rapidly your supply chain can adjust to changes in the environment, such as
increasing or reducing sales or disruption in supply. This flexibility is frequently manifested
through additional capacity, diverse sources of supplies, and alternate delivery modes. Generally,
flexibility is costly, but it also has a monetary worth. The trick is to recognise when the cost of
flexibility is a worthwhile investment.
Technology
The rapid evolution of technology, both for physical product movement and information
processing, has altered the way supply chains operate. We used to order items from catalogues,
mail-in checks, and wait for our deliveries to arrive. Today, we place orders for things on our
phones, pay with our credit cards, and anticipate real-time updates until our deliveries arrive at our
doorsteps. Supply chain management necessitates a grasp of how technologies work and how to
leverage them to add value at each stage of the supply chain.
Global Perspective
Due to the ease with which information can be shared and items can be transported cheaply
worldwide, every business today functions in a global economy. Your business, regardless of the
product or service you provide, is worldwide. As a supply chain manager, you must understand
how your firm is reliant on global forces to supply inputs and generate output demand.
Additionally, you must consider the competition on a worldwide scale. After all, your company’s
true competitive threat may come from a company on the other side of the globe that you’ve never
heard of.
Risk Management
When high performance expectations are combined with intricate technology and a reliance on
worldwide customers and suppliers, chaos will creep into the supply chain. Numerous variables
exist, and countless things can go wrong. Even a minor disruption, such as a delayed shipment,
can trigger a cascade of difficulties lower down the supply chain, such as stockouts, shutdowns,
and penalties. Supply chain management necessitates being aware of potential hazards and
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establishing methods for detecting and mitigating threats. While stability is necessary to ensure
that supply chains run smoothly, risk management is necessary to avoid or minimise the costs
associated with dealing with the unexpected. Risk management, when done well, can give
possibilities for value capture during times of uncertainty.
Visibility
Because you cannot manage what you cannot see, SCM puts great importance on visibility.
Knowing what is happening in real-time (or near real-time) enables you to make faster and more
informed judgments. However, visibility comes at a cost. You must design your supply chain in
such a way that it enables you to collect data on critical process steps. Visibility is valuable because
it enables you to make judgments based on facts rather than intuition or ambiguity. By gaining a
better understanding of supply and demand, you can optimise the amount of inventory held
throughout the supply chain.
9. ORGANIZATIONS COORDINATION INNOVATION AND FORECASTING
Supply chain forecasting is essential in e-commerce and a major component of supply chain
management. Without forecasting abilities and predictions on future demand, pricing trends, and
supply availability, it’s hard for organizations to make informed decisions about tactical,
operational, and strategic activities. Forecasting enables brands to move forward based on both
data and research, from conducting a competitive analysis to predicting future demand based on
historical order data, trends, and patterns.
Supply Chain Forecasting Methods
Quantitative forecasting
This method uses historical data to determine the future and make sales projections. Based on the
assumption that the future will largely mimic the past, it involves the use of formulas to calculate
a predetermined forecasting measurement. This information is especially useful if steady growth
is anticipated with few operational changes. The disadvantage is that it does not take new
developments into account such as market trends or increased competition. It could also be skewed
by unusual circumstances such as the COVID-19 pandemic.
Qualitative forecasting
This data is often used for new product lines or when a business first launches. Common types of
qualitative data include surveys and interviews, industry benchmarks, competitive analyses, and
more. Industry publications frequently provide information on upcoming developments, market
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trends, and consumer sentiment changes. And all of these factors should be considered when
making financial projections.
10. QUANTITATIVE FORECASTING METHODS
There are several quantitative forecasting methods to use in e-commerce logistics. Here is an
overview of the most common methods, how to use them, and when.
Exponential smoothing
Exponential smoothing is a sophisticated approach to supply chain forecasting. It uses weighted
averages with the assumption that past trends and events will mirror the future. When compared
to other quantitative methods, it makes it easier to come up with data-driven predictions without
the need to analyze multiple data sets. With the right tools, the exponential smoothing method can
be easy to use and is ideal for short-term forecasting.
Adaptive smoothing
The adaptive smoothing approach delves deep into understanding the fluctuations between
different time periods and identifies intricate patterns within the data. This methodology empowers
businesses to pinpoint specific variables and make more precise decisions. To implement adaptive
smoothing effectively, automation tools play a pivotal role. These tools are designed to seamlessly
capture, compile, and update data in real time.
Moving average
The moving average is one of the simplest methods for supply chain forecasting. It examines data
points by creating an average series of subsets from complete data. The average is used to predict
the upcoming time period and is then recalculated every month, quarter, or year. For instance, if
you started your business at the beginning . It’s important to remember, however, that the moving
average method doesn’t take into account that recent data may be a better indicator of the future
and should be given more weight. It also doesn’t allow for seasonality or trends. As a result, this
supply chain forecasting method is best for inventory control for low order volume.
Regression analysis
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Regression analysis works by examining the relationship between two or more specific variables.
While there are variations in how a regression analysis is conducted, they all examine the influence
of one or more independent variables on a dependent variable. This is a simple supply chain
forecasting method used to measure some determinations using existing assumptions such as
seasonality. When compared to other methods, it offers a fast and easy way to make predictions.
Life cycle modeling
Life-cycle modeling is a supply chain forecasting method that analyzes the growth and
development of a new product. It requires data across different market groups such as creators,
early and late adopters, and the early and late majority. The data then determines the future
performance and demand of a specific product across multiple markets, which helps brands
determine how to distribute and market products, and how long the product will be in demand.
Qualitative Forecasting Methods
In many cases, e-commerce brands use a combination of both quantitative and qualitative
forecasting methods to get as close to accurate predictions as possible. Qualitative forecasting
methods also come in handy when there is a lack of data. Available Here are the most common
qualitative forecasting methods used in e-commerce supply chain forecasting.
Market research
Market research can be used to determine whether or not there is strong demand for a product that
will support profit goals. Market research can be executed internally by marketing or sales experts,
or businesses can hire a third party that specializes in market research. There are different tactics
used, including developing stakeholder surveys, conducting a thorough competitive analysis, or
interviewing experts in a specific field or industry.
Delpi method
The Delphi method consists of market orientation and judgments within a small group of experts
or advisors, which is then sorted, grouped, and analyzed by third-party experts. The opinions of
the experts are gathered individually to avoid the influence of others’ options which differs from
a panel discussion or focus group. The gathering of opinions is outsourced to a third party that
analyzes the opinions and information shared. Once reviewed closely, the information is then
summarized with an emphasis on different patterns or trends before handing the findings over to
the business for review.
11. CHALLENGES THAT FORECASTING IN SUPPLY CHAIN FACES
Changing regulations
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Changes in regulations between countries can greatly disrupt forecasting as supply chains adapt to
comply with new laws and past data becomes less relevant. Just like what happened at the start of
COVID-19, emergency laws were passed around the world to close borders and stop travel which
ultimately slowed down trade. The impact is still ongoing as there is still congestion in many ports
all around the world. Combined with the ongoing war between Ukraine and Russia, it’s easy to
determine how these factors can disrupt supply chains and supply chain forecasting.
Changing trends
Although changing trends are constant in this world, the unpredictability with which they change
remains a threat to forecasting. For example, the pandemic has forced consumers to go online to
purchase their needs. Thus, many businesses tried to adapt quickly to meet the demands of their
customers.
Product returns
Product returns are considered a cost of doing business nowadays, However, they also changed
how customers shop. Many online shoppers order multiple products, find the right fit, and return
the rest. Thus, these returns can complicate supply forecasting.
Seasonality of products and supplier lead times
Not taking into consideration the seasonal and peak periods in the supply chain will easily disrupt
your forecasting. These periods in the calendar usually impact ocean freight and should be planned
in advance. If not, you will miss out on opportunities to capitalize on the increased demand.
You must take into consideration that different suppliers and manufacturers will have different
lead times, not just solely based on the services they provide, but they also have their own seasonal
or holiday calendars. This is the reason why a strong relationship with your suppliers is important.
Best Supply Chain Forecasting Software
Forecasting is hard, especially if you do not know where to start. Thus, here are some of the best
tools that can help you in forecasting your supply chain efficiently.
Oracle
Oracle Supply Chain Planning Cloud combines forecasting algorithms with flexible analytics to
help you adopt a customer-centric demand strategy. This cloud-based system is suited for
industries such as automotive, industrial manufacturing, retail, wholesale, and distribution as it
helps its clients to handle operations in real-time and plan for better customer service. Moreover,
it has a key feature that visualizes and tracks forecast factors such as baselines, trends, and
seasonality while maintaining causal correlations and adjusting for built-in exceptions.
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SAP Advanced Planning and Optimization (APO)
SAP APO is a cloud-based software tool that helps its users to plan, execute, optimize, and track
their logistic processes on the operational and strategic levels.
This specific module of SAP offers planning layouts, planning books, and a demand planning
library of statistical forecasting and macro techniques. By utilizing these, you can adopt a
consensus-based approach to make demand plans and forecasts with inputs from different
departments of your organization.
Streamline
Streamline is a supply chain forecasting software that has hundreds of partners across the world
and thousands of enterprise customers. It has an integrated proprietary AI in its system which can
tell you when and what techniques to apply to effectively forecast demand.
Kinaxis
Kinaxis is a cloud-based application that can help you create a collaborative and comprehensive
demand forecast based on statistical and functional perspectives. Additionally, it provides visibility
of your supply chain with the ability to integrate demand functions with other supply chain
processes. Thus, it greatly improves the accuracy of the forecast and efficiently executes plans
across departments in your company.
Infor Demand Planning
Infor is a fast and highly collaborative cloud-based system that can help you create new plans and
manage existing plans. It can also help you optimize your operation to meet demand, reduce costs,
improve services, and increase the efficiency of your operations. Infor has a feature that detects
variances in demand patterns for every inventory item. Additionally, it applies a framework that
can deliver accurate forecasts using probability and historical trend analysis.
12. SUPPLY CHAIN INTERMEDIARIES
Cost Control
One of the most important reasons for managing the supply chain of intermediate goods is cost
control. Manufacturers need to keep their costs low to remain competitive in the market. By
managing the supply chain of intermediate goods, they can ensure that they are getting the best
price for the materials they need to produce their products. By negotiating better prices with
suppliers, they can reduce their costs and increase their profit margins.
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Quality Control
Another critical component of managing the supply chain of intermediate goods is quality control.
Manufacturers need to ensure that the materials they are using are of high quality to produce a
final product that meets customer expectations. By managing the supply chain of intermediate
goods, manufacturers can ensure that they are receiving high-quality materials that meet their
specifications.
Timely Delivery
Managing the supply chain of intermediate goods is also critical for ensuring timely delivery of
the final product. Delays in the delivery of intermediate goods can cause delays in the production
process, which can lead to missed deadlines and dissatisfied customers. By managing the supply
chain of intermediate goods, manufacturers can ensure that they are receiving materials on time,
which can help them meet their production deadlines.
Examples
A good example of the importance of managing the supply chain of intermediate goods can be
seen in the automotive industry. Automakers rely on a complex supply chain to produce their
vehicles, with many intermediate goods required for the final assembly. For example, a car
manufacturer may require thousands of different parts, from the engine to the tires, to produce a
single vehicle. By managing the supply chain of intermediate goods, the automaker can ensure that
they receive high-quality parts on time, which can help them produce a final product that meets
customer expectations.
Conclusion
In conclusion, managing the supply chain of intermediate goods is critical for any business that
relies on a complex supply chain to produce their products. From cost control to quality control to
timely delivery, there are many reasons why it is important to manage the supply chain of
intermediate goods. By doing so, businesses can ensure that they are producing high-quality
products that meet customer expectations and are delivered on time
13. SUPPLY CHAINS ARE COMBINATIONS OF ORGANIZATIONS
In its simplest form, a supply chain is composed of a company and its suppliers and customers.
Combinations of these three – supplier, company, customer – create a simple supply chain.
Extended supply chains contain an additional kind of organization called a service provider (as
illustrated below).
Producers
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Producers (manufacturers or service providers) are organizations that make products or services.
This includes companies that are producers of raw materials and companies that are producers of
finished goods. Producers of raw materials are organizations that mine for minerals, drill for oil
and gas, and cut timber. It also includes organizations that farm the land, raise animals, or catch
seafood. Producers of finished goods use the raw materials and sub-assemblies made by other
producers to create their products. Service providers are producers of services, and manufacturers
are producers of products. Some producers are also consumers or customers of products made by
other producers. Producers supply the products and services used by other supply chain
participants.
2) Distributors
Distributors (or wholesalers) are companies that take inventory in bulk from producers and deliver
a bundle of related product lines to customers. They typically sell to other businesses and they sell
products in larger quantities than an individual consumer would normally buy. Distributors buffer
the producers from fluctuations in product demand by stocking inventory purchased from
producers, and doing much of the sales work to find and service customer needs.
In addition to product promotion and sales, distributors also perform activities such as inventory
management, warehouse operations, product movement, customer support and post sales service.
A distributor can also be an organization that only brokers a product between the producer and the
customer and never takes ownership of the product. As the needs of customers evolve, and the
mix of available products changes, distributors continually track customer needs and match them
with products to meet those needs.
Retailers
Retailers stock inventory and sell in smaller quantities to customers in the general public. Retailers
closely track the preferences and demands of their customers. They advertise to their customers
and use combinations of price, product selection, service, and convenience as their primary draw
to attract customers. Discount stores attract customers using low price and wide product selection.
Upscale stores offer a unique line of products and high levels of service. Retailers offer products
and services to meet the demand of individual customers who buy in smaller quantities.
Customers
Customers (or consumers) are individuals or organizations that purchase and use a product or
service. A customer may be an organization (a producer or distributor) that purchases a product
in order to incorporate it into another product that they in turn sell to their customers (ultimate
customers). Customers depend on producers, distributors, and retailers to meet their needs for
products and services.
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13. TYPES OF SUPPLY CHAIN MANAGEMENT
An important distinction to make is that each model will focus on achieving one of two larger ideal
goals:
That said, the reality is that each type of supply chain management philosophy includes elements
of both efficiency and responsiveness. And that makes sense if you think about it. If your supply
chain is extremely efficient, it won’t be able to respond to disruption. On the other hand, if the
supply chain does nothing but respond to individual or small requests, it won’t be very efficient at
turning out much volume.
The Continuous Flow Model
The continuous flow model is built around efficiency. It offers stability in high-volume
environments. This classic model is best suited for manufacturers who produce the same product
repeatedly, with little design fluctuation or alteration. This model is ideal for commodity
manufacturing. Its high level of efficiency is reflected in low product prices. For manufacturers,
margins are based on raw material prices. That sounds like science to me.
The Fast Chain Model
The fast chain model is built for responsiveness. It’s ideal for manufacturers who change their
product line frequently. This model is the best suited for trendy products with short life spans. In
this example, the manufacturer that can flood the market before the trend cycle ends is the
manufacturer that wins. This model emphasizes the competitive advantage of the first adopter. But
the true driver of the fast chain is the designer—and the marketing department. Put another way,
if you can create your own trend, you’ll be the first to market. In short, this model is driven by art.
The Efficient Chain Model
The efficient chain model is for hypercompetitive industries where end-to-end efficiency is the
ultimate goal. This model relies heavily on production forecasting in order to properly burden and
sweat machinery assets. The efficient model also relies heavily on commodity and raw material
prices. In the post-pandemic world, efficient chains are struggling with capacity issues. Drivers for
this are labor shortages, material shortages, and delays. The bottom line is this. When you miss a
forecast, it can create a ripple effect. This can result in lengthy lead times and inflated prices for
manufacturers up and down the supply chain. And that’s when you hear a lot of artful language.
The Agile Model
The agile model is ideal for manufacturers that deal in specialty items. This model is finely tuned
for small batches of product. That requires less automation and more expertise. And that additional
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value-add in turn allows businesses using this model to command higher prices. Agile-model
businesses can ramp up volume. But past a certain volume threshold, they typically prove
uncompetitive. Compared with efficient-chain-model businesses, at higher volumes agile
businesses get blown out of the water from a pricing standpoint.
The Custom-Configured Model
The custom-configuration model focuses on providing custom setups during production and
assembly. Most often, this setup time occurs at the beginning of a lengthier production and
assembly run process. For example, certain prototype or limited-production builds fall into
custom-configured manufacturing. This is a higher-touch model that can include quicker
turnaround times and small batches of products. In essence, the custom-configuration model is
combination of the agile and continuous flow models.
The Flexible Model
The flexible model tries to be the best of all worlds. It can react to high volume demands during a
peak season. On the other hand, flexible model businesses can manage and absorb stretches of low
or no demand. This model is like a light switch. Flip it on or off as needed. To pull off the flexible
supply chain model, a business requires the right tool (or automated machinery) for the job. This
model also requires a broad supplier network or personnel who have a broad knowledge base.
14. CHANNELS OF DISTRIBUTION LEVELS
Level 0
This is a direct-to-consumer model where the producer sells its product directly to the end
consumer. Amazon, which uses its platform to sell Kindles to its customers, is an example of a
direct model. This is the shortest distribution channel possible, cutting out both the wholesaler and
the retailer.
Level 1
A producer sells directly to a retailer who sells the product to the end consumer. This level includes
only one intermediary. HP or Dell are large enough to sell their computer products directly to
reputable retailers such as Best Buy.
Level 2
Including two intermediaries, this level is one of the longest because it includes the producer,
wholesaler, retailer, and consumer. In the wine and adult beverage industry, a winery cannot sell
directly to a retailer. It operates in a multi-tiered system, meaning the law requires the winery to
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first sell its product to a wholesaler who then sells to a retailer. The retailer then sells the product
to the end consumer.
Level 3
This level may add the jobber, this level adds the role of the individual who may assemble products
from a variety of producers, stores them, sells them to retailers, and acts as a middle-man for
wholesalers and retailers. A distribution channel, also known as placement, can be part of a
company's marketing strategy, which also includes the product, promotion, and price.
Distribution Channels in the Digital Era
Digital technology has transformed the way businesses, especially small businesses use direct
channels of distribution. With increasing consumer demand for online shopping and easy-to-use e
Commerce tools, direct selling means more success for businesses. Rather than having to rely on
relationships with retailers to sell their products, software and artificial intelligence (AI) sales
technology allows companies to manage sales, and automatically achieve high customer
relationship management (CRM).
Online advertising through social networks and search engines targets specific areas or
demographics and social media networks are increasingly considered the industry standard and
changing marketing strategies. If a company continues to use indirect channels of distribution,
digital technology also allows them to manage relationships with wholesale and retail partners
more efficiently.
Choosing the Right Distribution Channel
Not all distribution channels work for all products, so companies need to choose the right one. The
channel should align with the firm's overall mission and strategic vision including its sales goals.
The method of distribution should add value to the consumer. Do consumers want to speak to a
salesperson? Will they want to handle the product before they make a purchase? Or do they want
to purchase it online with no hassles? Answering these questions can help companies determine
which channel they choose.
Secondly, the company should consider how quickly it wants its product(s) to reach the buyer.
Certain products are best served by a direct distribution channel such as meat or produce, while
others may benefit from an indirect channel. If a company chooses multiple distribution channels,
such as selling products online and through a retailer, the channels should not conflict with one
another. Companies should strategize so one channel doesn't overpower the other.
15. Types of Distribution Channels
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Direct
A direct channel allows the consumer to make purchases from the manufacturer. This direct, or
short channel, may mean lower costs for consumers because they are buying directly from the
manufacturer.
Indirect
An indirect channel allows the consumer to buy the goods from a wholesaler or retailer. Indirect
channels are typical for goods that are sold in traditional brick-and-mortar stores.
Hybrid
Hybrid distribution channels use both direct channels and indirect channels. A product or service
manufacturer may use both a retailer to distribute a product or service and may also make sales
directly with the consumer.
16. FACTORS FOR SELECTION OF SUITABLE CHANNELS
Product Type
The choice of channel of distribution is based on the type of the product that is produced. It is
important to check whether the product is perishable or non-perishable, whether it is an industrial
or a consumer product, whether its unit value is high or low and also, the degree of complexity of
the product. For instance, if a good is perishable then short channels should be used rather than the
long ones. Similarly, if a product has a low unit value then longer channel are preferred. In a similar
manner, consumer products are distributed through long channels while industrial products are
distributed through short channels.
Characteristics of the Company
The two important characteristics of a company that affect the choice of channel are its financial
strength and the degree of control that the company wishes to hold on the intermediaries. Shorter
channels require greater funds than longer channels and also offer greater control over the members
of the channel (intermediaries). Thus, companies that are financially strong or wish to command
greater control over the channel of distribution opt for shorter channels of distribution.
Competitive Factors
The degree of competition and the channels opted by other competitors affect the choice of
distribution channel. Depending on its policies a company can adopt a similar channel as adopted
by its competitors or opt for a different channel. For example, if competitors of a company opt for
sale through retail store, it may also do the same or it can opt a different channel such as direct
selling.
Environmental Factors
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Environmental factors such as economic constraints and legal policies play an important role in
the choice of channel of distribution. For example, requirement of complex legal formalities at
each step of distribution induces the companies to opt for shorter channels.
Market Factors
Various other factors such as size of the market, geographical concentration of buyers, quantity
demanded, etc. also affect the choice between the channels. For instance, if potential buyers are
concentrated in a small geographical area then, shorter channels are used. As against this, if the
buyers are dispersed in a larger area then longer channels of distribution may be used.
Market coverage
The extent of market coverage—the percentage of the total market that may be reached through
marketing or sales activities—is a crucial consideration for entering a market. This applies to both
selling and distribution activities. If an agent or distributor only operates within a specific
geographic jurisdiction within the market, the company must decide if that geographic market
coverage is sufficient for its needs. In some cases, particularly when entering a large market for
the first time, some companies may decide to limit market coverage due to supply concerns or as
a way to test the market.
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UNIT- II
Global perspectives
Global perspectives: Measuring and analyzing the value and efficiency of Global Supply Chain
Networks, Global market forces, Types of global supply chain -Indian Perspectives: Measuring
and Analyzing the value and efficiency of Domestic Supply Chain Networks, Economic effects of
supply chains - Customer Perspectives: Customer values, Role of customers and Ways of
improving customer services in SCM.
1. MEASURING AND ANALYZING THE VALUE
According to the SCOR model, the five key components of the supply chain are planning,
sourcing, making, delivery, and returning. The performance of each component is assessed based
on reliability, flexibility, responsiveness, cost, and quality. By analyzing data from different
sources, such as suppliers, logistics providers, and customers, organizations can identify the factors
that contribute to delays, disruptions, or quality issues in their supply chain.
Value chain management is a way for a company to optimize all the activities in its manufacturing
process. Value chain management can have many benefits, including increasing profits, boosting
efficiency and improving quality control. The chain identifies each step in the process at which
value is added, including the sourcing, manufacturing, and marketing stages of its production. A
company conducts a value-chain analysis by evaluating the detailed procedures involved in each
step of its business.
2. EFFICIENCY OF GLOBAL SUPPLY CHAIN NETWORKS
Global supply chains have for long helped businesses increase their efficiency and reduce costs.
Unprecedented events and disruptions in recent times have compelled businesses to reduce their
dependence on global supply chains. Global supply chains have become highly vulnerable to
supply chain disruptions. Businesses that rely heavily on their global supply chains have struggled
in recent times. As a result, they are now looking at several options to shorten their supply chain
and reduce the dependence on overseas suppliers. A global supply chain is an integrated system of
processes, people, technology, and data across multiple countries and organizations. It is a complex
network of suppliers, manufacturers, warehouses, distributors, shippers, and customers that are all
connected to move products and services from one location to another.
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The global supply chain is an ever-evolving system that plays an integral role in the success of
businesses worldwide. It involves the coordination of various activities, such as sourcing,
manufacturing, logistics, distribution, and customer service, to ensure that goods and services are
efficiently and cost-effectively delivered to the right place at the right time.
By leveraging the latest technology and data analytics, businesses with global supply chains can
optimize processes, reduce costs, and increase customer satisfaction.
Advantages of a Global Supply Chain
There are several advantages to managing a global supply chain. Here are some of the most
common benefits:
 Lower costs: Global supply chains
allow businesses to take advantage
of lower costs associated with
foreign markets. Companies can
source materials from countries
with cheaper labor and production
costs, resulting in more cost-
efficient operations.
 Increased flexibility: Global
supply chains provide companies
with the flexibility to quickly
adjust their operations to meet
customer demand. This allows
businesses to respond quickly to changes in the market, such as new product releases or a
shift in consumer preferences.
 Improved quality: By leveraging the latest technology and data analytics, global supply
chains can ensure higher levels of quality control. This can result in improved customer
satisfaction and loyalty.
 Greater efficiency: Global supply chains are designed to be efficient and streamlined. By
optimizing processes and leveraging technology, businesses can reduce waste and increase
productivity.
 Increased market reach: Global supply chains allow businesses to expand their reach into
new markets and tap into new sources of revenue.
Disadvantages of a Global Supply Chain
While there are many advantages to managing a global supply chain, there are also several
potential risks and disadvantages. Here are some of the most common disadvantages:
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 Complexity: Global supply chains are complex and involve many different stakeholders.
This can result in increased costs and delays.
 Regulatory risks: Global supply chains must comply with numerous regulations and laws
in different countries. This can be challenging to manage and can result in costly fines and
penalties.
 Lack of visibility: The global supply chain involves a number of different stakeholders,
and it can be difficult to monitor and track the movement of goods and services. This can
lead to delays and inefficiencies.
 Language and cultural barriers: Global supply chains involve stakeholders from different
countries, which can lead to language and cultural barriers. This can make it difficult to
effectively communicate, resulting in misunderstandings and inefficiencies.
 Security risks: Global supply chains are vulnerable to security threats, such as cyberattacks,
data breaches, and theft. Companies must be prepared to invest in the right technology and
processes to ensure the security of their global supply chains.
 Costly shipping: Shipping costs can be high when dealing with global supply chains, as
goods must be transported across long distances
3. GLOBAL MARKET FORCES
In fact, when interacting with the global market, Chester and other participants must contend with
different types of forces that change depending upon circumstance and location. These forces
include sociocultural, political, legal, economic, physical and environmental. urthermore, these
factors cover all the four major aspects of globalization i.e. economic, financial, political, social
and technological. Although a variety of market forces may need to be addressed by your
organization, there are three common ones that affect businesses today: customer responsiveness,
information demand and cost pressure.
4. TYPES OF GLOBAL SUPPLY CHAIN
Continuous flow model
The Continuous Flow model is focused on maintaining consistent and smooth supply chain
operations. This model maximizes efficiency by keeping supply steady and not allowing for supply
or demand fluctuations. An example of a company using this supply chain model is Amazon. Their
supply chain is designed to deliver products constantly, with little to no pauses in supply flow.
This allows them to maintain their reputation as a quick and reliable delivery service.
Fast chain model
The Fast Chain supply chain model is all about speed. This model prioritizes quick delivery and
timely responses to changes in supply or demand. An example of a company using this supply
chain model is Zara, the clothing retailer. They are known for their speedy supply chain, and the
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ability to design and release new fashion trends within weeks instead of the typical six-month
period other retailers follow.
Efficient chain model
The Efficient Chain supply chain model is focused on reducing waste and improving overall
supply chain efficiency. Toyota, with its highly efficient and successful lean manufacturing
system, is an example of a company using this supply chain model. They strive to eliminate
unnecessary steps or resources in their supply chain operations to increase efficiency and reduce
waste.
Agile supply network model
The Agile Supply Network model focuses on creating a supply chain that is responsive and able
to adapt quickly to changes in supply or demand. This requires strong communication and
collaboration within the supply chain network and flexibility in processes and technology. Nike is
an example of a company using this supply chain model, being able to respond quickly to changes
in consumer demand for its products.
Virtual supply chain model
The Virtual supply chain model is characterized by using virtual technology, such as cloud
computing and data analysis, to improve supply chain operations. This allows for greater visibility
and communication within the supply chain network and increased efficiency and flexibility. An
example of a company using this supply chain model is Procter & Gamble, which implemented
virtual supply chain technology to increase supply chain responsiveness and reduce costs.
Custom-configured supply chain model
The Custom-configured supply chain model involves customizing the supply chain according to
specific customer demands or preferences. This requires strong communication with customers
and a high level of customization in processes and products. Dell is an example of a company
using this supply chain model, offering individualized computer configurations to meet their
customers’ specific needs.
Flexible supply chain model
The Flexible supply chain model emphasizes flexibility in supply chain operations, adapting to
changes and meeting varying customer demands. An example of a company using this supply
chain model is Hewlett Packard, which implemented flexible supply chain processes to respond
quickly to changing market conditions and customer preferences.
INDIAN PERSPECTIVES
As global supply chains become more digital, India can provide innovative AI, blockchain, and
IoT solutions. This could increase service exports and position India as a leader in digital supply
chain management. These five theories or views are: resource-based view (RBV), stakeholder
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theory (ST), institutional theory (IT), transaction cost theory (TCT), and resource dependence
theory (RDT). These theories and views are proposed by several authors to have the potential for
explaining various aspects of SCM. Using a critical rule set and customized multiplier values,
Three fundamental perspectives on supply chain management were found:
(1) The structural perspective;
(2) The relational perspective;
(3) The governance perspective.
5. EFFICIENCY OF DOMESTIC SUPPLY CHAIN NETWORKS
Supply chain efficiency is about how effectively a company gets its products to the right place at
the right time and at the lowest possible cost and how well it uses resources to produce and deliver
goods. Improving supply chain efficiency is a key part of any business' overall supply chain
management practice. The way you achieve all of that is by measuring supply chain performance.
You analyze key metrics like inventory turnover, transportation costs, warehousing expenses,
fulfillment cycle time, on-time delivery, lead time, order accuracy and production cycle time to
improve efficiency across your entire supply chain.
Step 1: Expand your supply chain visibility
The first step in improving supply chain efficiency is to increase your visibility over logistics
operations.The best way to do this is to implement inventory management strategies that allow
you and your team to track inventory levels as they move through stages, from receiving to
warehousing, to being packed, picked, and shipped to customers.
A modern inventory management software (IMS) can provide more visibility, as well as the ability
to access real-time inventory tracking, so you can avoid stockouts, backorders, and overpaying
carrying costs. By implementing an IMS, you’re also given access to data and analytics to help
you make informed business decisions, such as inventory forecasting.
Step 2: Develop a good relationship with your suppliers
Communication with your suppliers is key! When you have a good relationship with your
suppliers, you can plan better and avoid any shortages, delays, or issues early on. A dependable
supplier is responsible for tracking the work-in-process inventory phase (i.e., the movement of raw
materials being processed into finished goods), which impacts the quality of the products you sell
and how quickly you can obtain more inventory.
Suppliers that are inconsistent in delivering a quality product can slow down your supply from the
very beginning, so it’s important to be selective and weed out suppliers that are consistently
causing issues or delays to your sourcing.Once you have discovered suppliers that are both
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responsible and flexible, you’ll need to continually foster those relationships through clear and
open communication and conflict resolution.
Step 3: Automate your supply chain processes
Finding ways to automate supply chain processes is one of the best ways to improve efficiency,
reduce human error, increase supply chain performance and velocity, and save time and money in
the long run. Automating time-consuming tasks, from order processing to automated shipping,
doesn’t necessarily replace the need for human effort, but it does help you streamline your
operations and increase productivity.
Warehouse automation reduces the time, effort, and errors that are common in logistics. Some
business owners even employ logistics automation in their own warehouse, using their own
technology and tools.
However, since automation technology, equipment, and robotics can be costly, many ecommerce
businesses rely on a tech-enabled 3PL that have made investments in automation to optimize their
supply chain. This way, businesses can invest more in product development, marketing, and other
important initiatives.
Step 4: Implement supply chain software
With so many processes taking place simultaneously across your supply chain, it’s important to
use implement the right software and technology that allows your team to work as efficiently as
possible. If you manage a warehouse inventory across locations, you might want to consider using
a warehouse management system (WMS) that connects with your IMS, which can help you
automate order processing, get real-time inventory tracking, order management tools, and data
reporting and analytics.
For instance, ShipBob’s fulfillment centers are powered by a proprietary tech stack, including a
WMS that lets you know what’s going on in every fulfillment center you have inventory stored in
and where your products are stored at all times.
Step 5: Cultivate supply chain experts
Once you’ve made the decision to implement all of the changes above, the next step is to create a
training plan for your employees. Remember, your supply chain is only as efficient as the people
who manage it. Warehouse associates, order fillers, and logistics managers should all be trained
on standard operating procedures to provide consistency, efficiency, and accuracy in their decision
making. If an employee has been at the company for a long time, be sure to ask for feedback on
how your warehouse team can improve operations. If you lack a logistics team, a 3PL can provide
the expertise needs to manage your supply chain.
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Step 6: Establish green initiatives across your supply chain
Going green is business value that more customers these days are looking for. Your customers are
becoming extremely aware of the steps that companies are taking (or not taking) to reduce their
carbon footprint, so it’s important to consider ways to reduce waste.
One great cost-effective way is to utilize SIOC packaging whenever possible — which can also
reduce shipping costs — or strive for eco-friendly packaging that utilizes biodegradable materials
and minimizes waste by cutting back on unnecessary filler materials. If you’re looking to
outsource fulfillment, partner with a 3PL that invest in eco-friendly initiatives or allow you to use
your own sustainable custom packaging.
For example, ShipBob partners with Ecocart so you can purchase carbon credits by allowing your
customers to choose (and optionally, pay for) carbon offsets on a per-order basis, and allowing
you to offset the carbon impact of product manufacturing and even last-mile delivery. We also
partner with experts in eco-friendly shipping and packaging.
Step 7: Optimize your supply chain regularly to remain efficient
Improving your entire supply chain is not a one-time fix. It’s a process that needs to be reviewed
and optimized as often as possible. It’s important to continuously collect and analyze warehouse
inventory management performance to identify areas of improvement where further efficiency and
higher order accuracy can be achieved. This can be done by investing in technology, automating
processes, or hiring logistics experts to help.
For instance, Ship Bob looks at several different aspects of their fulfillment operations to find ways
to become more efficient, such as assigning pickers optimized routes, opening more fulfillment
center locations to cut down on shipping times, and improving warehouse picking and packing
processes. Investing in supply chain efficiency improvements allows ShipBob merchants the
ability to provide a better customer experience, save on costs, and spend less time worrying about
logistics.
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6. ECONOMIC EFFECTS OF SUPPLY CHAINS
Supply chain disruptions have a negative impact on global industrial production and trade, and a
positive impact on inflation. Our analysis aims to quantify the impact of the aforementioned supply
chain shock on activity, trade and prices, and, in turn, the headwinds it creates for the economic
recovery. If disruptions in the supply chain result in a situation where demand for products or
services outstrips available supplies, it can result in significant price increases for affected items.
As currency fluctuations, instability in demand and prices, changing labor costs and inflationary
pressures make it impossible for firms to accurately plan their investment in foreign markets. For
many companies, this means they must instead opt for a shorter and simpler supply chain.
Purchasing
 Manufacturing
 Inventory Management
 Demand Planning
 Warehousing
 Transportation
 Customer Service
Manufacturing
The production of merchandise for use or sale using labour and machines, tools, chemical and
biological processing, or formulation. The term may refer to a range of human activity, from
handicraft to high tech, but is most commonly applied to industrial production, in which raw
materials are transformed into finished goods on a large scale. Such finished goods may be used
for manufacturing other, more complex products, such as aircraft, household appliances or
automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end
users and consumers.
The management of inventory is a key function of any manufacturing company, whether domestic
or foreign. Physical inventory is often one of the most signification assets of a company, and
without it, a company would have no sales. Its important to have the right product, at the right
place at the right price, and inventory allows this to occur. In todays global economy the inventory
function has become more important and challenging as product can be produced and available
anywhere in the world.
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Demand Planning
Is the process of forecasting customer demand to drive execution of such demand by corporate
supply chain and business management. Demand forecasting involves techniques including both
informal methods, such as educated guesses, and quantitative methods, such as the use of historical
sales data and statistical techniques or current data from test markets. Demand forecasting may be
used in production planning, inventory management, and at times in assessing future capacity
requirements, or in making decisions on whether to enter a new market Demand forecasting is
predicting future demand for the product. In other words it refers to the prediction of probable
demand for a product or a service on the basis of the past events and prevailing trends in the present
Warehousing
Performance of administrative and physical functions associated with storage of goods and
materials. These functions include receipt, identification, inspection, verification, putting away,
retrieval for issue, etc. While many people view the function of warehousing as the simple process
of storing products, it has evolved into a function that does more than that. In today’s world of
mass customization, the warehouse has evolved into a distribution center, and even a facility to
customize the final product via repacking, labeling or other physical conversion. The importance
of these facilities has grown as it’s the final “stop” before moving to the customer. Proper
handling, storage and management of the products within these facilities must occur so that
customer orders can be fulfilled with the right product at the right time.
Transportation
Is the movement of people, animals and goods from one location to another. Modes of transport
include air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure,
vehicles and operations. Transport is important because it enables trade between persons, which is
essential for the development of civilizations. The transportation function is critical to the supply
chain because it is where the rubber literally meets the road. A company can have the right product
at the right warehouse at the right time, but without transportation if won’t make it to the customer
at the right time. In todays global economy, this function is even more critical as its no longer as
easy as putting a product on a truck and having it delivered. Now it might be shipped via container
ship, airplane, train, truck or even uber car before arriving at the customer. Companies have to
evaluate the many different dimensions of each option such as cost, speed, reliability and ability
to service when deciding which to utilize.
Customer Service
The process of ensuring customer satisfaction with a product or service. Often, customer service
takes place while performing a transaction for the customer, such as making a sale or returning an
item. Customer service can take the form of an in-person interaction, a phone call, self-service
systems, or by other means. While the customer service function appears to be at the end of the
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supply chain, it is definitely not the end of the process. This function is critical in that its works
to meet the needs of the customer and ensure the customer receives what they want, when they
want it. This function is sometimes the only point of contact a customer has with a customer so
its imperative that they have the skills and knowledge to understand a customers needs..and to
meet those needs when possible.
7. CUSTOMER PERSPECTIVES
Customer perspective refers to an approach that examines a company from the viewpoint of the
individuals who purchase and utilize its products and services. This viewpoint considers organizations'
client base, which is crucial to financial success and product sales. Consumer perspective is a collective
theoretical approach, or discipline borne out of a socio-political movement whereas consumers' views
are individual and contextual. The clients' perspective is not simply a matter of individual preferences
but is mediated through the social and cultural environment
Personalize your support interactions
If your support agents recite the same script on every call, your customer won’t be impressed. Show
every customer your value by tailoring the support experience to their unique needs. This not only
makes customers feel more valued, but it also inspires greater brand loyalty. To provide personalized
experiences, you’ll need to ethically gather customer data and leverage it to cater to each buyer. You
must ensure your support agents have quick and easy access to that information. With this level of
transparency, nothing will slip through the cracks, and customers won’t ever have to repeat themselves.
They’ll also feel as though your company truly understands them, which only adds to the customer
value you offer.
Provide multichannel support options
Provide support on a variety of channels—such as email, phone, live chat, and messaging—so
customers can reach you on the platforms they prefer. Find the channels your target audience uses
regularly, then make sure you adopt them. To deliver a more effortless customer experience, go a step
further by connecting conversations across the various channels you offer. This is what it means to
offer omnichannel support. With an omnichannel platform like Zendesk, interaction history and
context travels with the customer from channel to channel, allowing agents to provide better,
personalized support.
Create a robust onboarding program
Start customers off on the right foot by building a comprehensive onboarding guide for them. If
possible, give each account a support agent who can show stakeholders how to implement your
product. This agent can hold several onboarding meetings with your customer to make sure they’re
comfortable with your product and using it optimally. For products that require ongoing support, you’ll
want to assign a customer success associate to each account. This person should have specialized
knowledge about the product and should serve as a continuous source for strategic guidance. They’ll
need to check in consistently, provide best practices, and develop a true partnership with their clients.
Prioritize customer success
While support teams are essential for resolving short-term customer issues and technical problems,
customer success teams are equally important for ensuring buyers’ happiness. Rather than focusing on
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solving problems as they come up, customer success managers anticipate their clients’ needs and help
them achieve their long-term goals using a company’s products or services.
Having staff dedicated to helping customers succeed makes it easier to provide personalized
experiences, increase retention, and even find opportunities to cross-sell and upsell. But you’ll have to
leverage customer data to stay informed about how their needs might change and how you’ll be able
to meet those needs. That may mean using data analytics to spot trends and see where common
problems arise, creating a robust knowledge base to address frequently asked questions, or investing
in a CRM to track your evolving customer statistics over time.
Address patterns in support issues
Don’t wait for customers to complain—try to prevent setbacks as early as possible to keep your
customers happy. Success managers should share any customer problems they regularly see or hear
about with the rest of the support team, so the group can brainstorm potential solutions. You should
also consider collecting customer feedback and data on a more regular basis to gain increased visibility
into any recurring issues and take steps to address them.
You can also offer self-service options—such as FAQ pages, help centers, or AI-powered chatbots—
which make it easy for customers to solve their own issues. Research shows that 70 percent of
customers actually prefer to help themselves these days. From a business perspective, customer self-
service allows you to dramatically cut down on costs, increase live agent efficiency, and improve the
overall experience for customers.
Make sure customers know you’ve heard them
You may already send out surveys and act on customer feedback to make improvements. But take it a
step further by following up with customers who shared input to let them know how you incorporated
their feedback. (You can do this via email or text message.) Customers will be happy to hear that you
took their ideas and suggestions to heart and used them to make positive changes. It also shows that
you champion your customers at every step of their journey—adding to your value.
To track all that valuable feedback and customer information, use a CRM like Zendesk. The data is
housed in a central location, making it easy for employees across the organization to view it. Analytic
tools also help your whole team see what’s working and what’s not so they can make informed
decisions on how to better serve customers.
Find opportunities to surprise and delight
In 2021, customer retention is all about exceeding expectations and building lasting relationships with
your buyers. So, consistently show them your brand’s value with a stellar support experience. Establish
a strong, long-term connection with customers by regularly finding ways to wow them. For example,
empower your support team to go above and beyond for each customer by giving them the freedom to
offer a certain number of discounts each month or to surprise a customer with a free gift. You should
also make sure you’re providing quick and easy resolutions, self-service support, various channels for
customer service, and personalized experiences. All are crucial; components of a customer retention
strategy.
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Acknowledge and reward customer loyalty
Customers love to feel seen and appreciated. Recognize your most loyal buyers by offering them a
discount or promotion at the end of a support experience. Or, consider launching a loyalty rewards
program to show customer appreciation. A customer loyalty program is where buyers receive discounts
or freebies after reaching specific benchmarks, like having been a customer for one year or having
spent a certain amount of money. Take Sephora, for example. Customers who are part of the company’s
Beauty Insider rewards program receive points for every dollar they spend. They can then use those
points to choose gifts.
Loyal customers are rewarded simply for continuing their buying habits, further deepening their ties
to the business and giving them added value they can’t find at competitors. When creating a loyalty
program, choose rewards that are enticing to your particular audience. Listen to your customers and let
them be your guide.
Give your customers a sense of community
Everyone enjoys feeling like they’re part of a community. Foster this type of connection with your
brand by building a customer community forum where buyers can go for product support, Q&As, and
feedback. This forum can live on your website or social media page; it can also feed into your larger,
cross-channel support strategy as a self-service option for customers. Online forums help create a sense
of community by connecting users to others with similar needs and interests. This often translates to
customers feeling more supported by the brand, which increases your value. Additionally, if you give
forum users the space to share their knowledge or expertise, they’ll presumably be a longtime brand
advocate.
If you want to start building a thriving online community around your product or service, we
recommend using community forum software. The right solution takes the pressure off your agents
while promoting customer engagement.
8. ROLE OF CUSTOMERS
Customer value is best defined as how much a product or service is worth to a customer. It’s a
measure of all the costs and benefits associated with a product or service. Examples include price,
quality, and what the product or service can do for that particular person. There are also monetary,
time, energy, and emotional costs that consumers consider when evaluating the value of a
purchase.
Demand Shifts
Over the past few years, we’ve seen massive shifts in consumer demand across the supply chain.
Many of these changes happened as a result of the COVID-19 pandemic and resulting restrictions.
Today, the spread of COVID-19 is slowing down and most countries have rolled back their
restrictions, but many consumer shopping patterns have remained. During the height of the
pandemic, many people started ordering essential food and toiletries online rather than going to
the store. In the years since, consumers have continued to shop for their essentials online, and
many people have gotten used to the convenience that this provides. Economic trends have also
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caused major shifts in consumer demand. For example, inflation has forced many consumers to
tighten their budgets. This means that fewer people are eating out or buying discretionary products,
but demand for affordable grocery products has remained high.
Order Visibility and Tracking
Another major shift in the past few years is the way that consumers monitor and track their orders.
IoT and cloud technology has given organizations the power to track shipments from their initial
manufacturer all the way to their final destination. Geographic sensors monitor the location of each
shipment, and this data is then stored in the cloud for easy access. Many organizations have started
giving customers access to order tracking for some or all of the product’s journey. Customers enjoy
this heightened visibility into the supply chain, as it lets them know exactly when to expect their
order. Many consumers now expect to have access to shipment tracking when they place an order.
Incorporating order tracking will not only give you more control over your supply chain, but it
also creates a better experience for your customers.
Responsive Customer Service
In addition to order tracking, customers now expect a variety of responsive customer service
measures across your entire supply chain. Today’s customers expect the fastest delivery times
possible, and they expect clear communication when orders are going to be delayed. They also
expect the returns process to be seamless. Accurate demand forecasting and route planning can
help you improve your shipping times to keep customers satisfied. Demand forecasting will ensure
that you have an appropriate amount of product available for periods of high demand. Efficient
route planning will help you get this product to your end customer as quickly as possible. Both of
these tools can also help you better predict when orders are going to be delayed, so you can
communicate with your customers ahead of time to set expectations.
Affordable Shipping Costs
Inflation and other economic challenges have caused shipping costs to increase in recent years.
Organizations have taken a variety of different approaches to handle this issue. Some have passed
these costs onto their customers, while others have looked for other ways to absorb the extra
expense. Passing additional shipping costs onto your customers may seem like the most efficient
way to handle inflation, but it could backfire in the long run. Consumers are also feeling the
impacts of these economic challenges and may be unwilling to spend money on high shipping
costs. You’ll need to strike a balance – while you may increase customer shipping fees slightly,
you can also use machine learning and other technologies to make your supply chain more efficient
and cut back on unnecessary costs.
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LOGISTICS AND SUPPLY CHAIN MANAGEMENT

  • 1. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 1 | P a g e
  • 2. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 2 | P a g e Author R. Raja M.COM. MBA. M. PHIL ASSISTANT PROFESSOR DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES PARVATHY’S ARTS AND SCIENCE COLLEGE WISDOMCITY, DINDIGUL, TN Legal Adviser Mr. P. RAJENDRA CHOLAN ADVOCATE, BAR ASSOCIATION THIRUTHIRAIPOONDI, THIRUVARUR LOGISTICS AND SUPPLY CHAIN MANAGEMENT
  • 3. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 3 | P a g e All rights are reserved. No part of this publication may be reproduced, stored in a retrieval System, or transmitted in any form or by any means, electronic, mechanical, photocopying, Recording, or otherwise, without the prior permission of the copyright holder. Text ©AUTHOR, 2024 Cover page © HEDUNA PEER OF INTERNATIONAL RESEARCH AND REVIEWS , Dr N Hariharan Author ©: R . Raja Editor: Dr J Nimala , Publisher: Heduna Peer of International Research and Reviews T. Vadipatty, M.P Nagar, Madurai, Tamilnadu, India Phone: + 91 9345020835 E-mail:hpirrjournal@gmail.com Website: www.hedunapublications.com Book: LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 Edition: Feb -2024 Price: Rs 409/- Printed By: HYAENA PUBLISHERS INDIA
  • 4. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 4 | P a g e I realize that this book will create a great deal of controversy. It has never been easy to challenge the consensus because the System – of any kind, in any context – will try to preserve the status quo, by all means possible. .Hopefully, this account will raise the level of awareness among the general public and initiate the discussion that, in turn, may entail major cultural changes, as well as a revision of the consumer basket. This book can be read on two different levels. First, it may be read by ordinary people with a limited, if any, scientific background. Throughout, the book has been written with this audience in mind. I hope that you won’t be easily discouraged. Even if the chemical content of a given chapter is hard to understand, the scientific evidence presented, the citations from original documents, conclusions drawn, and recommendations made can be easily comprehended. Represented by professionals from academia, and government agencies, as well as consumer protection and advocacy groups. I do not expect everybody in the scientific community to agree with the content and ideas put forth in this book. But I do hope that the information and knowledge presented will become a wake-up call for the general public, regulatory agencies, legislators, business leaders, and scientists coming to the realization. Dr N HARIHARAN FOUNDER & MD HPIRR JOURNAL AND HYAENA PUBLISHERS INDIA
  • 5. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 5 | P a g e ABOUT THE EDITOR Dr. J. NIMALA., M. Com, M.Phil., Ph.D., NET ASSISTANT PROFESSOR & HEAD OF THE DEPARTMENT SREE SARASWATHI THYAGARAJA COLLEGE, POLLACHI Acted as Head of the Department in B.Com (Business Analytics) and B.Com (Professional Accounting) Acting as member in Research and Consultancy Cell, Acted as BOS Chairman in Department of B.Com (BA) in GVG College, Acted as member in Exam committee GVG College. Acting as a member in Career Guidance and Placement Cell GVG College. Acting as Member in e- Content Development GVG College. Acted as Head of the Department in St.Paul’s College for Women, Coimbatore. Acted as a Placement officer in St.Paul’s College for Women, Coimbatore Participated in N.S.S. Campaign Program-Awareness program in rural area in Hindusthan College –Coimbatore National level Five Days Faculty Development Program on “Industry 4.0: Technologies, Outcomes and Futures of Manufacturing” as a Resource Person from IBM, Bangalore. One Day Workshop on “MongoDB” in association with Adroit Technologies One Day Workshop on “Problem Solving and Ideation Innovative Thinking” Published Two Chapters in Edited Books. Publication of Book is under Process. No of chapters and journals published 17. Conference Proceeding: 7 and Seminar/conference Attended: 12 Seminar Organized Training Programme Attended: 04.
  • 6. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 6 | P a g e Achievements Received Appreciation Certificate from District Administration and District Employment and Career Guidance center, Tiruppur for rendering Yeoman service during the Mega job fair held in the campus of Sri G.V.G. Visalakshi College for Women (Autonomus), Udumalpet on 19.12.2020 & 20.12.2020. 2020,10 th March, Acted as Committee Member in one day international seminar on “Business Strategies for Sustainable Growth-A Global Perspective” held at Sri GVG Visalakshi College for Women. 2018,14 th December, organized one day international seminar on “WINNING THE BUSINES WAR-A ASSPORT TO SUCCESS” held at Sri GVG Visalakshi College for Women. 2017, Appreciated as “Best Creator” by the Students in Hindusthan college of Arts and Science, Coimbatore. 2014-2015, Awarded for 100% result in St.Paul’s College of Arts And Science for Women, Coimbatore for the academic year 2014-2015 for all the subjects. 2013-2016, Worked as a Placement officer in St.Paul’s College for Women, Coimbatore 2012 March, Awarded “FIRST PRIZE IN COMMERCE” in “National conference in Sasurie College of Arts and Science – Vijayamangalam – TIRUPPUR
  • 7. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 7 | P a g e R. Raja M. COM., MBA. M. PHIL ASSISTANT PROFESSOR DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES PARVATHY’S ARTS AND SCIENCE COLLEGE WISDOMCITY, DINDIGUL, TN Raja M. COM., MBA., M. PHIL.,. He specializes in the areas of marketing management, fiance, and baking. He was act as assistant. Exam co- coordinator He has over 10 years of teaching and research experience. He is currently working as an assistant professor in the Department of Commerce and Management Studies at Parvathy's Arts and Science College (Autonomous), Dindigul, and a reviewer of Heduna Peer international research and reviews. I reviewed three international books. published more than 13 papers in various articles in national and international journals. And attended more than 20 national and international seminars and pledges.
  • 8. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 8 | P a g e SI NO CHAPTER TITLE PAGE NO 1 Supply Chain Management Concept, Features, Evolution, Importance, Process and Barriers of Supply Chain Management – Principles, Supply Chain Strategies – Organizations, Coordination, 1-20 2 Innovation and Forecasting - Supply chain intermediaries – Concept and Types, Channels of Distribution for Industrial Goods and Consumer Goods, Channels of Distribution at Services Level, Factors for selection of suitable channels. 21-31 3 Global perspectives: Measuring and analyzing the value and efficiency of Global Supply Chain Networks, Global market forces, Types of global supply chain -Indian Perspectives: Measuring and Analyzing the value and efficiency of Domestic Supply Chain Networks 32-38 4 Economic effects of supply chains - Customer Perspectives: Customer values, Role of customers and Ways of improving customer services in SCM. 39-46 5 Framework of Logistics Logistics: Introduction – Positioning of Information in Logistics and Supply Chain Management – Logistics Information System (LIS) - Logistics Management: Concept and Process, Competitive Advantages and Three C’s, Changing Logistics Environment, 47-56 6 Reverse Logistics, Importance of Inventory Control -Elements of inventory management – Inbound and out bound logistics, Bull- whip effect – distribution and warehousing management - Transport Functions and Participants in Transportation Decisions - Transport Infrastructure- 57-66
  • 9. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 9 | P a g e 7 Packaging and Materials Management: Consumer and Industrial Goods Packaging - Factors influencing Materials Planning, Preservation Safety and Measures of Materials Handling. 67-74 8 SCM-Warehousing Introduction– Concepts of Warehousing– Types of Warehouse – Functions of Warehousing– Strategic Warehousing, Warehouse Operations, Ownership Arrangements, Warehouse Decisions, Warehouse Management Systems, Packaging Perspectives, 75-85 9 Packaging for Material Handling Efficiency, Materials Handling, Supply Chain Logistics Design: Global Strategic Positioning; Global SC Integration, SC Security, International Sourcing, Distribution control and evaluation. 86-90 10 SCM-Plan SCM Plan: Demand Planning, Source of Procurement, Production or Assembly Steps, Sales return of defective or excess goods-Use of Internet in SCM: Role of computer/ IT in supply chain management –E- market places, E-procurement, E-logistics, E-fulfillment 91-98 11 Operative Systems in SCM: Enterprise Resource Planning (ERP), Performance Modeling of supply chains using Markov chains, Inventory Control- Importance, Pareto’s Law -Emerging Technologies in Logistics and Supply Chain Management: 99-107 12 CRM Vs SCM, Benchmarking concept, Features and implementation, Outsourcing: Basic concepts, Value addition in SCM – Concept of demand chain management - Growth of Logistics and Supply Chain Management in national and international scenarios. 108-119
  • 10. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 10 | P a g e UNIT- I Supply Chain Management Supply Chain Management: Concept, Features, Evolution, Importance, Process and Barriers of Supply Chain Management – Principles, Supply Chain Strategies – Organizations, Coordination, Innovation and Forecasting - Supply chain intermediaries – Concept and Types, Channels of Distribution for Industrial Goods and Consumer Goods, Channels of Distribution at Services Level, Factors for selection of suitable channels. 1. SUPPLY CHAIN MANAGEMENT At the most fundamental level, supply chain management (SCM) is management of the flow of goods, data, and finances related to a product or service, from the procurement of raw materials to the delivery of the product at its final destination. 2. CONCEPT Supply management is the act of identifying, acquiring, and managing resources and suppliers that are essential to the operations of an organization. It includes the purchase of physical goods, information, services, and any other necessary resources that enable a company to continue operating and growing. 3. FEATURES OF SUPPLY CHAIN MANAGEMENT  Improved Efficiency  Optimization of Transportation and Logistics  Lower Cost Expenses  Provides Customer Satisfaction  Better Distribution System  Cloud-Based Accessibility  Keeping Improved Coordination  Self Service Portals  Performance Measurement
  • 11. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 11 | P a g e  Security Improved Efficiency Efficiency is one of the most important goals of supply chain management. A crucial aspect of supply chain management is minimizing waste. Waste can take many forms, including waste of resources, money, labor hours, delivery times, etc. For instance, if your business uses ERP software to update inventory data in real-time and share it with a supplier, it may quickly restock its stock to satisfy customer demand. While it might be challenging to learn but can be quite helpful for the success of your company as a whole. Optimization of Transportation and Logistics The improvement of logistics and transportation is yet another crucial objective of supply chain management. Each firm is in charge of its own responsibilities with regard to placing orders, sending packages, and transporting items in a free-standing business setting. With any vendors or customers you do business with, SCM gives you the ability to optimize your transportation and logistics operations. Orders are automatically inputted into a system, which alerts nearby facilities that more resources are needed to fulfill this request. Because of this, the procedure is fairly frictionless. Lower Cost Expenses Reduced operational cost is the main goal of supply chain management. The cost of all business expenses, including those related to purchasing, producing, and transporting goods, is reduced by creating an effective supply chain. The holding period for both raw materials and completed items may be decreased by enabling a seamless flow of raw materials between a supplier and a business and the movement of finished goods between a company and its clients. Losses are thereby minimized, and total organizational costs are maintained to a minimum. Provides Customer Satisfaction Customer happiness is another aspect of SCM, as the supply chain is the best channel for providing customer care. Pricing and delivery are the two most important factors, and SCM directly affects them. You may surpass your rivals in terms of retail price and profitability by having an effective supply chain. You may meet or surpass your customer’s expectations for product delivery with the help of high-performing operations.SCM always gives clients what they want, when they want it, and at a low price since these things raise the likelihood that they will continue to be satisfied. Better Distribution System The organization in charge of running the firm benefits from supply chain management since it streamlines the distribution process. To ensure the quicker circulation of products, it is essential to create adequate coordination between the various transportation channels and warehouses.
  • 12. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 12 | P a g e SCM helps businesses to cut costs while providing products more quickly. This leads to an improvement in the overall distribution system, which immediately helps in the timely and accurate delivery of goods. Cloud-Based Accessibility Authorized users may access and use cloud-based supply chain management tools from any location, at any time, and on any connected device. The biggest benefit of this feature is that cloud- based solutions may be set up more affordably, more quickly, and with less risk than on-premise ERP systems. Keeping Improved Coordination Supply Chain Management focuses on improved coordination between the business stakeholder. A communication channel is created that allows employees, customers, and suppliers to communicate with the company efficiently. In an emergency, employees may contact their managers through the established route, and managers can promptly lead their workforce. Self Service Portals In a supply chain network, many partners working from various places are included. Due to their inability to constantly communicate, communication problems arise. Business partners may exchange plans and information depending on their actions and preferences via password- protected self-service portals, enabling continual contact whenever necessary in the field of supply chain management. Performance Measurement The measurement of performance measures by looking more closely at the operations is one of the key components of supply chain management. The most important technique to promote responsiveness and creativity in a business is by using metrics analysis based on the processes to gain insightful data.An efficient SCM guarantees a clear picture of the business operations and helps in determining the KPIs that need to be developed. In order to increase overall business performance, a measuring system must be established for a standard process architecture Security Another crucial component of supply chain management software is security. Be sure the cloud- based system you choose for supply chain management has security features like Data encryption, network monitoring, virus scanning, multi-factor authentication, and role-based authorization. 4. EVOLUTION OF SUPPLY CHAIN MANAGEMENT
  • 13. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 13 | P a g e The evolution of supply chain management has been characterized by increasing integration of separate tasks; a trend underlined in the 1960s as a critical area for future productivity improvements since the system was highly fragmented. Although logistics tasks have remained relatively similar, they initially consolidated into two distinct functions related to materials management and physical distribution during the 1970s and 1980s. This process moved further in the 1990s as globalization incited functional integration and the emergence of logistics in a true sense. All the elements of the supply chain became part of a single management perspective. However, only with information and communication technologies did a more complete integration became possible with the emergence of supply chain management. It allows for the integrated management and control of information, finance, and goods flows, making possible a new range of production and distribution systems. Supply chain management has become a complex sequence of activities aiming at value capture and competitiveness. More recently, the growing level of automation of supply chains has been a dominant element in the evolution of both physical distribution and materials management. This digitalization is particularly notable within distribution centers that have experienced a remarkable push towards automation, such as storage, materials handling, and packaging. Automation may eventually lead to automated delivery vehicle. 5. SUPPLY CHAIN MANAGEMENTIMPORTANCE Higher Efficiency Rate When your business is able to incorporate supply chains, integrated logistics and product invention strategies, you will be in a great position to not only predict demand as well as to act accordingly. This is without any doubt, one of the main supply chain management benefits. Why or when your businesses implement supply chain management systems, it will be able to adjust more dynamically to the fluctuating economies, emergency markets and shorter product life cycle. Decrease Cost Effects One of the advantages of supply chain management is the cost decrease in different areas. The most important ones are:  They improve your inventory system.  They adjust the storage space for finished goods which eliminates damage to resources.  They improve your system’s responsiveness, the actual customer’s requirements.  They improve your relationship with both distributors and vendors Increases Output
  • 14. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 14 | P a g e One of the main benefits of supply chain management is the communication improvement. It adds up to the coordination and collaboration with shipping and transport companies, vendors and suppliers. Increases Your Business Profit Level When you place your business open to the new technologies and an improved collaboration within the different areas, you can be sure that supply chain management ultimately increase your business profit level. Boost Cooperation Level When we are talking about the most successful businesses right now, one of the things they all have in common is communication. Infact, when there is a lack of communication, your vendors and distributors have no idea about what’s going on. So, this is definitely one of the main advantages of supply chain management. When you open your doors to technology, you can also take advantage of the fact that people don’t even need to share the same space in order to be a true communicator. The communication among the different areas of your business will allow you to have faster access to forecast, reporting, quotation, statuses among many other plans in real time. No More Delays in Processes One of the main benefits of supply chain management is the fact that through communication, you can actually lower any delays in the processes. Since, everyone is aware of what they are doing as well as what others are doing. This will mitigate any late shipments from vendors, logistics and distribution channels and holdups on production lines. Enhance Supply Chain Network It’s not easy to maintain a sustainable supply chain management system. According to some of the advocates, one of the best ways to do it is by using a combination of lean practices like waste removal with agile. By combining, all the information gathered on the different sectors of your business, will allow you to have an enhanced supply chain network. 6. PROCESS OF SUPPLY CHAIN MANAGEMENT Supply chain management is the unsung hero of the manufacturing sector. It’s not glamorous – there’s nothing tangible to validate your efforts – but it’s the foundation that supports every manufacturing business. A seamless supply chain improves inventory management, keeps waste to a minimum and frees up capital that would otherwise be tied up in stock – so it’s worth getting
  • 15. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 15 | P a g e right! However, supply chain management doesn’t happen in isolation, it is built on the foundation of key business processes. Looking at some of these key processes, we can see how a best-of-breed ERP system such as SYSPRO offers a platform for Supply Chain Integration: Customer Relationship Management Creates a structure for developing and maintaining relationships with customers. Individual customers or groups are identified, based on their value over time, and their loyalty can be enhanced by providing tailored products and services. Cross-functional customer teams develop Product and Service Agreements (PSA) to meet the needs of key accounts and for segments of other customers. They also work with key customers to improve processes and eliminate demand variability and non-value added activities. Performance reports are designed to measure the profitability of individual customers as well as the financial impact on the customer. The SYSPRO software solution enables companies to collect, maintain and manipulate a rich, customer-related database to promote increasing revenue and profitability. Our Sales and Distribution solutions and SYSPRO Reporting also support the CRM process. Supplier Relationship Management Defines how a company interacts with its suppliers. As in the case of customer relationship management, a company will form close relationships with some of its suppliers, while others are less closely cultivated. Good supplier relationship management involves devising the right PSAs and managing them well, so that the company and its suppliers continue to benefit from the most favourable trading arrangements. Customer Service Management Operates at the customer interface. It provides the key point of contact for administering the PSA and can give the customer information on orders, shipping dates and product availability. SYSPRO ERP manufacturing and logistics modules supply the data required by customer service management. Demand Management Allows a company to be proactive in matching supply to demand. The process includes forecasting and synchronization of supply and demand, in order to increase flexibility and reduce demand variability. The process should employ customer intelligence, historical sales information and planned marketing efforts to forecast and influence demand. The Order Fulfilment
  • 16. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 16 | P a g e Process involves more than just filling orders. It includes all activities necessary to define customer requirement and to design a process that allows a company to meet customer requests, while minimising the total delivered cost. This is not just the logistics function, but instead needs to be implemented cross-functionally and with the coordination of key suppliers and customers. The objective is to develop a seamless process from the supplier to the organisation and to its various customer segments. Manufacturing Flow Management Includes all the activities necessary to move goods through production and to obtain, implement and manage manufacturing flexibility in the supply chain. Manufacturing flexibility reflects the ability to make a wide variety of products at an appropriate rate and at lowest possible cost. To achieve the desired level of manufacturing flexibility, planning and execution must extend beyond the production site to encompass the entire supply chain. Clearly, managing manufacturing flow requires an element of manpower planning. In the case of SYSPRO, our Equator HR module integrates with the ERP system to facilitate this planning. Product Development and Commercialization Provides the structure for developing and bringing products to market in unison with customers and suppliers. The product development and commercialization process team must coordinate with customer relationship management to identify customer articulated and unarticulated needs; select materials and suppliers in conjunction with the supplier relationship management process; and develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for a given product/market combination. Returns Management Is the SCM process by which activities associated with product returns, reverse logistics, gatekeeping, and avoidance are managed within the firm and across key members of the supply chain. The correct implementation of this process enables management not only to manage the reverse product flow efficiently, but to identify opportunities to reduce unwanted returns and to control reusable assets such as containers. Effective returns management is an important link between marketing and logistics, offering an opportunity for competitive advantage. 7. BARRIERS OF SUPPLY CHAIN MANAGEMENT  Lack of IT solutions.  Lack of knowledge.
  • 17. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 17 | P a g e  Poor working relationship.  Lack of communication.  Cost of integration.  Conflicting goals. Lack of IT solutions To solve IT problems quickly, identify the problem correctly, prioritize it, brainstorm possible solutions, evaluate them, implement the best solution, test it, and document it. Get help from others, use the right tools, and stay up-to-date on the latest IT trends. A solution is an implementation of people, processes, information and technologies in a distinct system to support a set of business or technical capabilities that solve one or more business problems. One of the most common IT problems for businesses around the world today is security and vulnerability. Between hackers, malware, data breaches, and identity theft, it seems like every business has one or more reasons to be concerned about their company's security level. Lack of knowledge The term 'agnosia' signifies 'lack of knowledge,' and denotes an impairment of recognition. Traditionally, two types of agnosia have been described (Lissauer, 1890). One, termed associative agnosia, refers to a failure of recognition that results from defective retrieval of knowledge pertinent to a given stimulus. What is the meaning of lack of knowing? "Lack of knowledge" refers to a situation in which someone does not possess the information, skills, or understanding required for a specific task or situation. This can lead to misunderstandings or mistakes Poor working relationship Poor work relationships between employees and employers can have far-reaching consequences on an organisation's productivity, engagement, and retention. However, by fostering a culture of open communication, mutual respect, and support, employers can create a positive and productive work environment. the connections you form with coworkers, colleagues and managers in the workplace. Although the relationships you build with colleagues and managers may not be as intimate as those you have with family and friends, they are nonetheless crucial. Lack of communication A “lack of communication” typically occurs when someone experiences challenges with effectively communicating their needs and expectations. If you have a difficult time communicating, you may find yourself not getting your needs met at work, with your family or friends, or in romantic relationships. A communication problem is a breakdown in the individual's ability to effectively convey their thoughts as a meaningful message. A communication problem may occur if the individual cannot effectively understand or convey a message being sent to them. Cost of integration Integration Costs means, with respect to any acquisition, all costs relating to the acquisition and integration of the acquired business or operations into the Company, including labor costs, legal
  • 18. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 18 | P a g e fees, consulting fees, travel costs and any other expenses relating to the integration process. In Integration costs are a significant part of robotic automation, encompassing expenses for customizing robots to specific tasks. Factors such as the robot itself, integrator fees, end effectors, vision systems, and training contribute to these costs. Conflicting goals From Supply Chain leaders that they are struggling with several conflicting objectives. They are expected to improve customer service levels with lower inventory and higher profits. Production flexibility and responsiveness must be improved without dropping production levels. n general, conflict is widespread within and among the supply chain partners, and there are some kinds of conflict arisen in the supply chain. 8. PRINCIPLES SUPPLY CHAIN STRATEGIES Customer Focus Supply chain management begins with a thorough grasp of your consumers and their reasons for purchasing your product or service. When people purchase your products, they are resolving a problem or fulfilling a need. Supply chain managers must comprehend the customer’s problem or demand and ensure that their organisations can address it more effectively, quickly, and affordably than their competitors. SCM demands a grasp of the end-to-end system – the collection of people, processes, and technology that must all function in concert to deliver your product or service. Systems thinking includes an understanding of the series of causal linkages that occur throughout a supply chain. Because supply chains are complicated systems, they can behave unpredictably, and slight adjustments in one section of the system can significantly influence elsewhere. Innovation Business is changing at a breakneck pace, and supply chains must adapt by innovating. Continuous process improvement and sustaining innovation is required to keep up with the competition. Lean, Six Sigma and the Theory of Constraints are all methodologies for process improvement that can aid in this endeavor. Continuous process improvement is not sufficient, as new technologies have the potential to disrupt entire sectors. It is referred to as disruptive innovation. When a novel solution to a customer’s problem is developed and adopted, it becomes the new dominant paradigm. In other words, if you’re in the business of manufacturing scooters, you need to figure out how to make them better, quicker, and cheaper than your competitors while also figuring out what the next dominating paradigm will be, so you know what to create when scooters are phased out. Collaboration Supply chain management cannot be carried out in isolation. Individuals must collaborate across organisational silos and with suppliers and customers external to the organisation. A selfish
  • 19. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 19 | P a g e mentality results in transactional relationships in which people prioritise short-term gains while overlooking long-term advantages. This costs more money in the long term, as it fosters a lack of trust and a reluctance to compromise among supply chain participants. A community in which people trust one another and collaborate for shared success is far more lucrative for everyone than a community in which each person is solely concerned with his or her personal achievement. If you can anticipate that you will do more business with a particular customer in the future and that the company will be lucrative, you are more inclined to offer them a discount on the things they are purchasing today. Additionally, a collaborative environment makes collaboration much more enjoyable. Flexibility Because unexpected events occur, supply chains must be adaptable. Flexibility is a metric that indicates how rapidly your supply chain can adjust to changes in the environment, such as increasing or reducing sales or disruption in supply. This flexibility is frequently manifested through additional capacity, diverse sources of supplies, and alternate delivery modes. Generally, flexibility is costly, but it also has a monetary worth. The trick is to recognise when the cost of flexibility is a worthwhile investment. Technology The rapid evolution of technology, both for physical product movement and information processing, has altered the way supply chains operate. We used to order items from catalogues, mail-in checks, and wait for our deliveries to arrive. Today, we place orders for things on our phones, pay with our credit cards, and anticipate real-time updates until our deliveries arrive at our doorsteps. Supply chain management necessitates a grasp of how technologies work and how to leverage them to add value at each stage of the supply chain. Global Perspective Due to the ease with which information can be shared and items can be transported cheaply worldwide, every business today functions in a global economy. Your business, regardless of the product or service you provide, is worldwide. As a supply chain manager, you must understand how your firm is reliant on global forces to supply inputs and generate output demand. Additionally, you must consider the competition on a worldwide scale. After all, your company’s true competitive threat may come from a company on the other side of the globe that you’ve never heard of. Risk Management When high performance expectations are combined with intricate technology and a reliance on worldwide customers and suppliers, chaos will creep into the supply chain. Numerous variables exist, and countless things can go wrong. Even a minor disruption, such as a delayed shipment, can trigger a cascade of difficulties lower down the supply chain, such as stockouts, shutdowns, and penalties. Supply chain management necessitates being aware of potential hazards and
  • 20. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 20 | P a g e establishing methods for detecting and mitigating threats. While stability is necessary to ensure that supply chains run smoothly, risk management is necessary to avoid or minimise the costs associated with dealing with the unexpected. Risk management, when done well, can give possibilities for value capture during times of uncertainty. Visibility Because you cannot manage what you cannot see, SCM puts great importance on visibility. Knowing what is happening in real-time (or near real-time) enables you to make faster and more informed judgments. However, visibility comes at a cost. You must design your supply chain in such a way that it enables you to collect data on critical process steps. Visibility is valuable because it enables you to make judgments based on facts rather than intuition or ambiguity. By gaining a better understanding of supply and demand, you can optimise the amount of inventory held throughout the supply chain. 9. ORGANIZATIONS COORDINATION INNOVATION AND FORECASTING Supply chain forecasting is essential in e-commerce and a major component of supply chain management. Without forecasting abilities and predictions on future demand, pricing trends, and supply availability, it’s hard for organizations to make informed decisions about tactical, operational, and strategic activities. Forecasting enables brands to move forward based on both data and research, from conducting a competitive analysis to predicting future demand based on historical order data, trends, and patterns. Supply Chain Forecasting Methods Quantitative forecasting This method uses historical data to determine the future and make sales projections. Based on the assumption that the future will largely mimic the past, it involves the use of formulas to calculate a predetermined forecasting measurement. This information is especially useful if steady growth is anticipated with few operational changes. The disadvantage is that it does not take new developments into account such as market trends or increased competition. It could also be skewed by unusual circumstances such as the COVID-19 pandemic. Qualitative forecasting This data is often used for new product lines or when a business first launches. Common types of qualitative data include surveys and interviews, industry benchmarks, competitive analyses, and more. Industry publications frequently provide information on upcoming developments, market
  • 21. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 21 | P a g e trends, and consumer sentiment changes. And all of these factors should be considered when making financial projections. 10. QUANTITATIVE FORECASTING METHODS There are several quantitative forecasting methods to use in e-commerce logistics. Here is an overview of the most common methods, how to use them, and when. Exponential smoothing Exponential smoothing is a sophisticated approach to supply chain forecasting. It uses weighted averages with the assumption that past trends and events will mirror the future. When compared to other quantitative methods, it makes it easier to come up with data-driven predictions without the need to analyze multiple data sets. With the right tools, the exponential smoothing method can be easy to use and is ideal for short-term forecasting. Adaptive smoothing The adaptive smoothing approach delves deep into understanding the fluctuations between different time periods and identifies intricate patterns within the data. This methodology empowers businesses to pinpoint specific variables and make more precise decisions. To implement adaptive smoothing effectively, automation tools play a pivotal role. These tools are designed to seamlessly capture, compile, and update data in real time. Moving average The moving average is one of the simplest methods for supply chain forecasting. It examines data points by creating an average series of subsets from complete data. The average is used to predict the upcoming time period and is then recalculated every month, quarter, or year. For instance, if you started your business at the beginning . It’s important to remember, however, that the moving average method doesn’t take into account that recent data may be a better indicator of the future and should be given more weight. It also doesn’t allow for seasonality or trends. As a result, this supply chain forecasting method is best for inventory control for low order volume. Regression analysis
  • 22. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 22 | P a g e Regression analysis works by examining the relationship between two or more specific variables. While there are variations in how a regression analysis is conducted, they all examine the influence of one or more independent variables on a dependent variable. This is a simple supply chain forecasting method used to measure some determinations using existing assumptions such as seasonality. When compared to other methods, it offers a fast and easy way to make predictions. Life cycle modeling Life-cycle modeling is a supply chain forecasting method that analyzes the growth and development of a new product. It requires data across different market groups such as creators, early and late adopters, and the early and late majority. The data then determines the future performance and demand of a specific product across multiple markets, which helps brands determine how to distribute and market products, and how long the product will be in demand. Qualitative Forecasting Methods In many cases, e-commerce brands use a combination of both quantitative and qualitative forecasting methods to get as close to accurate predictions as possible. Qualitative forecasting methods also come in handy when there is a lack of data. Available Here are the most common qualitative forecasting methods used in e-commerce supply chain forecasting. Market research Market research can be used to determine whether or not there is strong demand for a product that will support profit goals. Market research can be executed internally by marketing or sales experts, or businesses can hire a third party that specializes in market research. There are different tactics used, including developing stakeholder surveys, conducting a thorough competitive analysis, or interviewing experts in a specific field or industry. Delpi method The Delphi method consists of market orientation and judgments within a small group of experts or advisors, which is then sorted, grouped, and analyzed by third-party experts. The opinions of the experts are gathered individually to avoid the influence of others’ options which differs from a panel discussion or focus group. The gathering of opinions is outsourced to a third party that analyzes the opinions and information shared. Once reviewed closely, the information is then summarized with an emphasis on different patterns or trends before handing the findings over to the business for review. 11. CHALLENGES THAT FORECASTING IN SUPPLY CHAIN FACES Changing regulations
  • 23. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 23 | P a g e Changes in regulations between countries can greatly disrupt forecasting as supply chains adapt to comply with new laws and past data becomes less relevant. Just like what happened at the start of COVID-19, emergency laws were passed around the world to close borders and stop travel which ultimately slowed down trade. The impact is still ongoing as there is still congestion in many ports all around the world. Combined with the ongoing war between Ukraine and Russia, it’s easy to determine how these factors can disrupt supply chains and supply chain forecasting. Changing trends Although changing trends are constant in this world, the unpredictability with which they change remains a threat to forecasting. For example, the pandemic has forced consumers to go online to purchase their needs. Thus, many businesses tried to adapt quickly to meet the demands of their customers. Product returns Product returns are considered a cost of doing business nowadays, However, they also changed how customers shop. Many online shoppers order multiple products, find the right fit, and return the rest. Thus, these returns can complicate supply forecasting. Seasonality of products and supplier lead times Not taking into consideration the seasonal and peak periods in the supply chain will easily disrupt your forecasting. These periods in the calendar usually impact ocean freight and should be planned in advance. If not, you will miss out on opportunities to capitalize on the increased demand. You must take into consideration that different suppliers and manufacturers will have different lead times, not just solely based on the services they provide, but they also have their own seasonal or holiday calendars. This is the reason why a strong relationship with your suppliers is important. Best Supply Chain Forecasting Software Forecasting is hard, especially if you do not know where to start. Thus, here are some of the best tools that can help you in forecasting your supply chain efficiently. Oracle Oracle Supply Chain Planning Cloud combines forecasting algorithms with flexible analytics to help you adopt a customer-centric demand strategy. This cloud-based system is suited for industries such as automotive, industrial manufacturing, retail, wholesale, and distribution as it helps its clients to handle operations in real-time and plan for better customer service. Moreover, it has a key feature that visualizes and tracks forecast factors such as baselines, trends, and seasonality while maintaining causal correlations and adjusting for built-in exceptions.
  • 24. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 24 | P a g e SAP Advanced Planning and Optimization (APO) SAP APO is a cloud-based software tool that helps its users to plan, execute, optimize, and track their logistic processes on the operational and strategic levels. This specific module of SAP offers planning layouts, planning books, and a demand planning library of statistical forecasting and macro techniques. By utilizing these, you can adopt a consensus-based approach to make demand plans and forecasts with inputs from different departments of your organization. Streamline Streamline is a supply chain forecasting software that has hundreds of partners across the world and thousands of enterprise customers. It has an integrated proprietary AI in its system which can tell you when and what techniques to apply to effectively forecast demand. Kinaxis Kinaxis is a cloud-based application that can help you create a collaborative and comprehensive demand forecast based on statistical and functional perspectives. Additionally, it provides visibility of your supply chain with the ability to integrate demand functions with other supply chain processes. Thus, it greatly improves the accuracy of the forecast and efficiently executes plans across departments in your company. Infor Demand Planning Infor is a fast and highly collaborative cloud-based system that can help you create new plans and manage existing plans. It can also help you optimize your operation to meet demand, reduce costs, improve services, and increase the efficiency of your operations. Infor has a feature that detects variances in demand patterns for every inventory item. Additionally, it applies a framework that can deliver accurate forecasts using probability and historical trend analysis. 12. SUPPLY CHAIN INTERMEDIARIES Cost Control One of the most important reasons for managing the supply chain of intermediate goods is cost control. Manufacturers need to keep their costs low to remain competitive in the market. By managing the supply chain of intermediate goods, they can ensure that they are getting the best price for the materials they need to produce their products. By negotiating better prices with suppliers, they can reduce their costs and increase their profit margins.
  • 25. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 25 | P a g e Quality Control Another critical component of managing the supply chain of intermediate goods is quality control. Manufacturers need to ensure that the materials they are using are of high quality to produce a final product that meets customer expectations. By managing the supply chain of intermediate goods, manufacturers can ensure that they are receiving high-quality materials that meet their specifications. Timely Delivery Managing the supply chain of intermediate goods is also critical for ensuring timely delivery of the final product. Delays in the delivery of intermediate goods can cause delays in the production process, which can lead to missed deadlines and dissatisfied customers. By managing the supply chain of intermediate goods, manufacturers can ensure that they are receiving materials on time, which can help them meet their production deadlines. Examples A good example of the importance of managing the supply chain of intermediate goods can be seen in the automotive industry. Automakers rely on a complex supply chain to produce their vehicles, with many intermediate goods required for the final assembly. For example, a car manufacturer may require thousands of different parts, from the engine to the tires, to produce a single vehicle. By managing the supply chain of intermediate goods, the automaker can ensure that they receive high-quality parts on time, which can help them produce a final product that meets customer expectations. Conclusion In conclusion, managing the supply chain of intermediate goods is critical for any business that relies on a complex supply chain to produce their products. From cost control to quality control to timely delivery, there are many reasons why it is important to manage the supply chain of intermediate goods. By doing so, businesses can ensure that they are producing high-quality products that meet customer expectations and are delivered on time 13. SUPPLY CHAINS ARE COMBINATIONS OF ORGANIZATIONS In its simplest form, a supply chain is composed of a company and its suppliers and customers. Combinations of these three – supplier, company, customer – create a simple supply chain. Extended supply chains contain an additional kind of organization called a service provider (as illustrated below). Producers
  • 26. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 26 | P a g e Producers (manufacturers or service providers) are organizations that make products or services. This includes companies that are producers of raw materials and companies that are producers of finished goods. Producers of raw materials are organizations that mine for minerals, drill for oil and gas, and cut timber. It also includes organizations that farm the land, raise animals, or catch seafood. Producers of finished goods use the raw materials and sub-assemblies made by other producers to create their products. Service providers are producers of services, and manufacturers are producers of products. Some producers are also consumers or customers of products made by other producers. Producers supply the products and services used by other supply chain participants. 2) Distributors Distributors (or wholesalers) are companies that take inventory in bulk from producers and deliver a bundle of related product lines to customers. They typically sell to other businesses and they sell products in larger quantities than an individual consumer would normally buy. Distributors buffer the producers from fluctuations in product demand by stocking inventory purchased from producers, and doing much of the sales work to find and service customer needs. In addition to product promotion and sales, distributors also perform activities such as inventory management, warehouse operations, product movement, customer support and post sales service. A distributor can also be an organization that only brokers a product between the producer and the customer and never takes ownership of the product. As the needs of customers evolve, and the mix of available products changes, distributors continually track customer needs and match them with products to meet those needs. Retailers Retailers stock inventory and sell in smaller quantities to customers in the general public. Retailers closely track the preferences and demands of their customers. They advertise to their customers and use combinations of price, product selection, service, and convenience as their primary draw to attract customers. Discount stores attract customers using low price and wide product selection. Upscale stores offer a unique line of products and high levels of service. Retailers offer products and services to meet the demand of individual customers who buy in smaller quantities. Customers Customers (or consumers) are individuals or organizations that purchase and use a product or service. A customer may be an organization (a producer or distributor) that purchases a product in order to incorporate it into another product that they in turn sell to their customers (ultimate customers). Customers depend on producers, distributors, and retailers to meet their needs for products and services.
  • 27. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 27 | P a g e 13. TYPES OF SUPPLY CHAIN MANAGEMENT An important distinction to make is that each model will focus on achieving one of two larger ideal goals: That said, the reality is that each type of supply chain management philosophy includes elements of both efficiency and responsiveness. And that makes sense if you think about it. If your supply chain is extremely efficient, it won’t be able to respond to disruption. On the other hand, if the supply chain does nothing but respond to individual or small requests, it won’t be very efficient at turning out much volume. The Continuous Flow Model The continuous flow model is built around efficiency. It offers stability in high-volume environments. This classic model is best suited for manufacturers who produce the same product repeatedly, with little design fluctuation or alteration. This model is ideal for commodity manufacturing. Its high level of efficiency is reflected in low product prices. For manufacturers, margins are based on raw material prices. That sounds like science to me. The Fast Chain Model The fast chain model is built for responsiveness. It’s ideal for manufacturers who change their product line frequently. This model is the best suited for trendy products with short life spans. In this example, the manufacturer that can flood the market before the trend cycle ends is the manufacturer that wins. This model emphasizes the competitive advantage of the first adopter. But the true driver of the fast chain is the designer—and the marketing department. Put another way, if you can create your own trend, you’ll be the first to market. In short, this model is driven by art. The Efficient Chain Model The efficient chain model is for hypercompetitive industries where end-to-end efficiency is the ultimate goal. This model relies heavily on production forecasting in order to properly burden and sweat machinery assets. The efficient model also relies heavily on commodity and raw material prices. In the post-pandemic world, efficient chains are struggling with capacity issues. Drivers for this are labor shortages, material shortages, and delays. The bottom line is this. When you miss a forecast, it can create a ripple effect. This can result in lengthy lead times and inflated prices for manufacturers up and down the supply chain. And that’s when you hear a lot of artful language. The Agile Model The agile model is ideal for manufacturers that deal in specialty items. This model is finely tuned for small batches of product. That requires less automation and more expertise. And that additional
  • 28. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 28 | P a g e value-add in turn allows businesses using this model to command higher prices. Agile-model businesses can ramp up volume. But past a certain volume threshold, they typically prove uncompetitive. Compared with efficient-chain-model businesses, at higher volumes agile businesses get blown out of the water from a pricing standpoint. The Custom-Configured Model The custom-configuration model focuses on providing custom setups during production and assembly. Most often, this setup time occurs at the beginning of a lengthier production and assembly run process. For example, certain prototype or limited-production builds fall into custom-configured manufacturing. This is a higher-touch model that can include quicker turnaround times and small batches of products. In essence, the custom-configuration model is combination of the agile and continuous flow models. The Flexible Model The flexible model tries to be the best of all worlds. It can react to high volume demands during a peak season. On the other hand, flexible model businesses can manage and absorb stretches of low or no demand. This model is like a light switch. Flip it on or off as needed. To pull off the flexible supply chain model, a business requires the right tool (or automated machinery) for the job. This model also requires a broad supplier network or personnel who have a broad knowledge base. 14. CHANNELS OF DISTRIBUTION LEVELS Level 0 This is a direct-to-consumer model where the producer sells its product directly to the end consumer. Amazon, which uses its platform to sell Kindles to its customers, is an example of a direct model. This is the shortest distribution channel possible, cutting out both the wholesaler and the retailer. Level 1 A producer sells directly to a retailer who sells the product to the end consumer. This level includes only one intermediary. HP or Dell are large enough to sell their computer products directly to reputable retailers such as Best Buy. Level 2 Including two intermediaries, this level is one of the longest because it includes the producer, wholesaler, retailer, and consumer. In the wine and adult beverage industry, a winery cannot sell directly to a retailer. It operates in a multi-tiered system, meaning the law requires the winery to
  • 29. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 29 | P a g e first sell its product to a wholesaler who then sells to a retailer. The retailer then sells the product to the end consumer. Level 3 This level may add the jobber, this level adds the role of the individual who may assemble products from a variety of producers, stores them, sells them to retailers, and acts as a middle-man for wholesalers and retailers. A distribution channel, also known as placement, can be part of a company's marketing strategy, which also includes the product, promotion, and price. Distribution Channels in the Digital Era Digital technology has transformed the way businesses, especially small businesses use direct channels of distribution. With increasing consumer demand for online shopping and easy-to-use e Commerce tools, direct selling means more success for businesses. Rather than having to rely on relationships with retailers to sell their products, software and artificial intelligence (AI) sales technology allows companies to manage sales, and automatically achieve high customer relationship management (CRM). Online advertising through social networks and search engines targets specific areas or demographics and social media networks are increasingly considered the industry standard and changing marketing strategies. If a company continues to use indirect channels of distribution, digital technology also allows them to manage relationships with wholesale and retail partners more efficiently. Choosing the Right Distribution Channel Not all distribution channels work for all products, so companies need to choose the right one. The channel should align with the firm's overall mission and strategic vision including its sales goals. The method of distribution should add value to the consumer. Do consumers want to speak to a salesperson? Will they want to handle the product before they make a purchase? Or do they want to purchase it online with no hassles? Answering these questions can help companies determine which channel they choose. Secondly, the company should consider how quickly it wants its product(s) to reach the buyer. Certain products are best served by a direct distribution channel such as meat or produce, while others may benefit from an indirect channel. If a company chooses multiple distribution channels, such as selling products online and through a retailer, the channels should not conflict with one another. Companies should strategize so one channel doesn't overpower the other. 15. Types of Distribution Channels
  • 30. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 30 | P a g e Direct A direct channel allows the consumer to make purchases from the manufacturer. This direct, or short channel, may mean lower costs for consumers because they are buying directly from the manufacturer. Indirect An indirect channel allows the consumer to buy the goods from a wholesaler or retailer. Indirect channels are typical for goods that are sold in traditional brick-and-mortar stores. Hybrid Hybrid distribution channels use both direct channels and indirect channels. A product or service manufacturer may use both a retailer to distribute a product or service and may also make sales directly with the consumer. 16. FACTORS FOR SELECTION OF SUITABLE CHANNELS Product Type The choice of channel of distribution is based on the type of the product that is produced. It is important to check whether the product is perishable or non-perishable, whether it is an industrial or a consumer product, whether its unit value is high or low and also, the degree of complexity of the product. For instance, if a good is perishable then short channels should be used rather than the long ones. Similarly, if a product has a low unit value then longer channel are preferred. In a similar manner, consumer products are distributed through long channels while industrial products are distributed through short channels. Characteristics of the Company The two important characteristics of a company that affect the choice of channel are its financial strength and the degree of control that the company wishes to hold on the intermediaries. Shorter channels require greater funds than longer channels and also offer greater control over the members of the channel (intermediaries). Thus, companies that are financially strong or wish to command greater control over the channel of distribution opt for shorter channels of distribution. Competitive Factors The degree of competition and the channels opted by other competitors affect the choice of distribution channel. Depending on its policies a company can adopt a similar channel as adopted by its competitors or opt for a different channel. For example, if competitors of a company opt for sale through retail store, it may also do the same or it can opt a different channel such as direct selling. Environmental Factors
  • 31. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 31 | P a g e Environmental factors such as economic constraints and legal policies play an important role in the choice of channel of distribution. For example, requirement of complex legal formalities at each step of distribution induces the companies to opt for shorter channels. Market Factors Various other factors such as size of the market, geographical concentration of buyers, quantity demanded, etc. also affect the choice between the channels. For instance, if potential buyers are concentrated in a small geographical area then, shorter channels are used. As against this, if the buyers are dispersed in a larger area then longer channels of distribution may be used. Market coverage The extent of market coverage—the percentage of the total market that may be reached through marketing or sales activities—is a crucial consideration for entering a market. This applies to both selling and distribution activities. If an agent or distributor only operates within a specific geographic jurisdiction within the market, the company must decide if that geographic market coverage is sufficient for its needs. In some cases, particularly when entering a large market for the first time, some companies may decide to limit market coverage due to supply concerns or as a way to test the market.
  • 32. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 32 | P a g e UNIT- II Global perspectives Global perspectives: Measuring and analyzing the value and efficiency of Global Supply Chain Networks, Global market forces, Types of global supply chain -Indian Perspectives: Measuring and Analyzing the value and efficiency of Domestic Supply Chain Networks, Economic effects of supply chains - Customer Perspectives: Customer values, Role of customers and Ways of improving customer services in SCM. 1. MEASURING AND ANALYZING THE VALUE According to the SCOR model, the five key components of the supply chain are planning, sourcing, making, delivery, and returning. The performance of each component is assessed based on reliability, flexibility, responsiveness, cost, and quality. By analyzing data from different sources, such as suppliers, logistics providers, and customers, organizations can identify the factors that contribute to delays, disruptions, or quality issues in their supply chain. Value chain management is a way for a company to optimize all the activities in its manufacturing process. Value chain management can have many benefits, including increasing profits, boosting efficiency and improving quality control. The chain identifies each step in the process at which value is added, including the sourcing, manufacturing, and marketing stages of its production. A company conducts a value-chain analysis by evaluating the detailed procedures involved in each step of its business. 2. EFFICIENCY OF GLOBAL SUPPLY CHAIN NETWORKS Global supply chains have for long helped businesses increase their efficiency and reduce costs. Unprecedented events and disruptions in recent times have compelled businesses to reduce their dependence on global supply chains. Global supply chains have become highly vulnerable to supply chain disruptions. Businesses that rely heavily on their global supply chains have struggled in recent times. As a result, they are now looking at several options to shorten their supply chain and reduce the dependence on overseas suppliers. A global supply chain is an integrated system of processes, people, technology, and data across multiple countries and organizations. It is a complex network of suppliers, manufacturers, warehouses, distributors, shippers, and customers that are all connected to move products and services from one location to another.
  • 33. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 33 | P a g e The global supply chain is an ever-evolving system that plays an integral role in the success of businesses worldwide. It involves the coordination of various activities, such as sourcing, manufacturing, logistics, distribution, and customer service, to ensure that goods and services are efficiently and cost-effectively delivered to the right place at the right time. By leveraging the latest technology and data analytics, businesses with global supply chains can optimize processes, reduce costs, and increase customer satisfaction. Advantages of a Global Supply Chain There are several advantages to managing a global supply chain. Here are some of the most common benefits:  Lower costs: Global supply chains allow businesses to take advantage of lower costs associated with foreign markets. Companies can source materials from countries with cheaper labor and production costs, resulting in more cost- efficient operations.  Increased flexibility: Global supply chains provide companies with the flexibility to quickly adjust their operations to meet customer demand. This allows businesses to respond quickly to changes in the market, such as new product releases or a shift in consumer preferences.  Improved quality: By leveraging the latest technology and data analytics, global supply chains can ensure higher levels of quality control. This can result in improved customer satisfaction and loyalty.  Greater efficiency: Global supply chains are designed to be efficient and streamlined. By optimizing processes and leveraging technology, businesses can reduce waste and increase productivity.  Increased market reach: Global supply chains allow businesses to expand their reach into new markets and tap into new sources of revenue. Disadvantages of a Global Supply Chain While there are many advantages to managing a global supply chain, there are also several potential risks and disadvantages. Here are some of the most common disadvantages:
  • 34. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 34 | P a g e  Complexity: Global supply chains are complex and involve many different stakeholders. This can result in increased costs and delays.  Regulatory risks: Global supply chains must comply with numerous regulations and laws in different countries. This can be challenging to manage and can result in costly fines and penalties.  Lack of visibility: The global supply chain involves a number of different stakeholders, and it can be difficult to monitor and track the movement of goods and services. This can lead to delays and inefficiencies.  Language and cultural barriers: Global supply chains involve stakeholders from different countries, which can lead to language and cultural barriers. This can make it difficult to effectively communicate, resulting in misunderstandings and inefficiencies.  Security risks: Global supply chains are vulnerable to security threats, such as cyberattacks, data breaches, and theft. Companies must be prepared to invest in the right technology and processes to ensure the security of their global supply chains.  Costly shipping: Shipping costs can be high when dealing with global supply chains, as goods must be transported across long distances 3. GLOBAL MARKET FORCES In fact, when interacting with the global market, Chester and other participants must contend with different types of forces that change depending upon circumstance and location. These forces include sociocultural, political, legal, economic, physical and environmental. urthermore, these factors cover all the four major aspects of globalization i.e. economic, financial, political, social and technological. Although a variety of market forces may need to be addressed by your organization, there are three common ones that affect businesses today: customer responsiveness, information demand and cost pressure. 4. TYPES OF GLOBAL SUPPLY CHAIN Continuous flow model The Continuous Flow model is focused on maintaining consistent and smooth supply chain operations. This model maximizes efficiency by keeping supply steady and not allowing for supply or demand fluctuations. An example of a company using this supply chain model is Amazon. Their supply chain is designed to deliver products constantly, with little to no pauses in supply flow. This allows them to maintain their reputation as a quick and reliable delivery service. Fast chain model The Fast Chain supply chain model is all about speed. This model prioritizes quick delivery and timely responses to changes in supply or demand. An example of a company using this supply chain model is Zara, the clothing retailer. They are known for their speedy supply chain, and the
  • 35. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 35 | P a g e ability to design and release new fashion trends within weeks instead of the typical six-month period other retailers follow. Efficient chain model The Efficient Chain supply chain model is focused on reducing waste and improving overall supply chain efficiency. Toyota, with its highly efficient and successful lean manufacturing system, is an example of a company using this supply chain model. They strive to eliminate unnecessary steps or resources in their supply chain operations to increase efficiency and reduce waste. Agile supply network model The Agile Supply Network model focuses on creating a supply chain that is responsive and able to adapt quickly to changes in supply or demand. This requires strong communication and collaboration within the supply chain network and flexibility in processes and technology. Nike is an example of a company using this supply chain model, being able to respond quickly to changes in consumer demand for its products. Virtual supply chain model The Virtual supply chain model is characterized by using virtual technology, such as cloud computing and data analysis, to improve supply chain operations. This allows for greater visibility and communication within the supply chain network and increased efficiency and flexibility. An example of a company using this supply chain model is Procter & Gamble, which implemented virtual supply chain technology to increase supply chain responsiveness and reduce costs. Custom-configured supply chain model The Custom-configured supply chain model involves customizing the supply chain according to specific customer demands or preferences. This requires strong communication with customers and a high level of customization in processes and products. Dell is an example of a company using this supply chain model, offering individualized computer configurations to meet their customers’ specific needs. Flexible supply chain model The Flexible supply chain model emphasizes flexibility in supply chain operations, adapting to changes and meeting varying customer demands. An example of a company using this supply chain model is Hewlett Packard, which implemented flexible supply chain processes to respond quickly to changing market conditions and customer preferences. INDIAN PERSPECTIVES As global supply chains become more digital, India can provide innovative AI, blockchain, and IoT solutions. This could increase service exports and position India as a leader in digital supply chain management. These five theories or views are: resource-based view (RBV), stakeholder
  • 36. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 36 | P a g e theory (ST), institutional theory (IT), transaction cost theory (TCT), and resource dependence theory (RDT). These theories and views are proposed by several authors to have the potential for explaining various aspects of SCM. Using a critical rule set and customized multiplier values, Three fundamental perspectives on supply chain management were found: (1) The structural perspective; (2) The relational perspective; (3) The governance perspective. 5. EFFICIENCY OF DOMESTIC SUPPLY CHAIN NETWORKS Supply chain efficiency is about how effectively a company gets its products to the right place at the right time and at the lowest possible cost and how well it uses resources to produce and deliver goods. Improving supply chain efficiency is a key part of any business' overall supply chain management practice. The way you achieve all of that is by measuring supply chain performance. You analyze key metrics like inventory turnover, transportation costs, warehousing expenses, fulfillment cycle time, on-time delivery, lead time, order accuracy and production cycle time to improve efficiency across your entire supply chain. Step 1: Expand your supply chain visibility The first step in improving supply chain efficiency is to increase your visibility over logistics operations.The best way to do this is to implement inventory management strategies that allow you and your team to track inventory levels as they move through stages, from receiving to warehousing, to being packed, picked, and shipped to customers. A modern inventory management software (IMS) can provide more visibility, as well as the ability to access real-time inventory tracking, so you can avoid stockouts, backorders, and overpaying carrying costs. By implementing an IMS, you’re also given access to data and analytics to help you make informed business decisions, such as inventory forecasting. Step 2: Develop a good relationship with your suppliers Communication with your suppliers is key! When you have a good relationship with your suppliers, you can plan better and avoid any shortages, delays, or issues early on. A dependable supplier is responsible for tracking the work-in-process inventory phase (i.e., the movement of raw materials being processed into finished goods), which impacts the quality of the products you sell and how quickly you can obtain more inventory. Suppliers that are inconsistent in delivering a quality product can slow down your supply from the very beginning, so it’s important to be selective and weed out suppliers that are consistently causing issues or delays to your sourcing.Once you have discovered suppliers that are both
  • 37. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 37 | P a g e responsible and flexible, you’ll need to continually foster those relationships through clear and open communication and conflict resolution. Step 3: Automate your supply chain processes Finding ways to automate supply chain processes is one of the best ways to improve efficiency, reduce human error, increase supply chain performance and velocity, and save time and money in the long run. Automating time-consuming tasks, from order processing to automated shipping, doesn’t necessarily replace the need for human effort, but it does help you streamline your operations and increase productivity. Warehouse automation reduces the time, effort, and errors that are common in logistics. Some business owners even employ logistics automation in their own warehouse, using their own technology and tools. However, since automation technology, equipment, and robotics can be costly, many ecommerce businesses rely on a tech-enabled 3PL that have made investments in automation to optimize their supply chain. This way, businesses can invest more in product development, marketing, and other important initiatives. Step 4: Implement supply chain software With so many processes taking place simultaneously across your supply chain, it’s important to use implement the right software and technology that allows your team to work as efficiently as possible. If you manage a warehouse inventory across locations, you might want to consider using a warehouse management system (WMS) that connects with your IMS, which can help you automate order processing, get real-time inventory tracking, order management tools, and data reporting and analytics. For instance, ShipBob’s fulfillment centers are powered by a proprietary tech stack, including a WMS that lets you know what’s going on in every fulfillment center you have inventory stored in and where your products are stored at all times. Step 5: Cultivate supply chain experts Once you’ve made the decision to implement all of the changes above, the next step is to create a training plan for your employees. Remember, your supply chain is only as efficient as the people who manage it. Warehouse associates, order fillers, and logistics managers should all be trained on standard operating procedures to provide consistency, efficiency, and accuracy in their decision making. If an employee has been at the company for a long time, be sure to ask for feedback on how your warehouse team can improve operations. If you lack a logistics team, a 3PL can provide the expertise needs to manage your supply chain.
  • 38. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 38 | P a g e Step 6: Establish green initiatives across your supply chain Going green is business value that more customers these days are looking for. Your customers are becoming extremely aware of the steps that companies are taking (or not taking) to reduce their carbon footprint, so it’s important to consider ways to reduce waste. One great cost-effective way is to utilize SIOC packaging whenever possible — which can also reduce shipping costs — or strive for eco-friendly packaging that utilizes biodegradable materials and minimizes waste by cutting back on unnecessary filler materials. If you’re looking to outsource fulfillment, partner with a 3PL that invest in eco-friendly initiatives or allow you to use your own sustainable custom packaging. For example, ShipBob partners with Ecocart so you can purchase carbon credits by allowing your customers to choose (and optionally, pay for) carbon offsets on a per-order basis, and allowing you to offset the carbon impact of product manufacturing and even last-mile delivery. We also partner with experts in eco-friendly shipping and packaging. Step 7: Optimize your supply chain regularly to remain efficient Improving your entire supply chain is not a one-time fix. It’s a process that needs to be reviewed and optimized as often as possible. It’s important to continuously collect and analyze warehouse inventory management performance to identify areas of improvement where further efficiency and higher order accuracy can be achieved. This can be done by investing in technology, automating processes, or hiring logistics experts to help. For instance, Ship Bob looks at several different aspects of their fulfillment operations to find ways to become more efficient, such as assigning pickers optimized routes, opening more fulfillment center locations to cut down on shipping times, and improving warehouse picking and packing processes. Investing in supply chain efficiency improvements allows ShipBob merchants the ability to provide a better customer experience, save on costs, and spend less time worrying about logistics.
  • 39. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 39 | P a g e 6. ECONOMIC EFFECTS OF SUPPLY CHAINS Supply chain disruptions have a negative impact on global industrial production and trade, and a positive impact on inflation. Our analysis aims to quantify the impact of the aforementioned supply chain shock on activity, trade and prices, and, in turn, the headwinds it creates for the economic recovery. If disruptions in the supply chain result in a situation where demand for products or services outstrips available supplies, it can result in significant price increases for affected items. As currency fluctuations, instability in demand and prices, changing labor costs and inflationary pressures make it impossible for firms to accurately plan their investment in foreign markets. For many companies, this means they must instead opt for a shorter and simpler supply chain. Purchasing  Manufacturing  Inventory Management  Demand Planning  Warehousing  Transportation  Customer Service Manufacturing The production of merchandise for use or sale using labour and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be used for manufacturing other, more complex products, such as aircraft, household appliances or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users and consumers. The management of inventory is a key function of any manufacturing company, whether domestic or foreign. Physical inventory is often one of the most signification assets of a company, and without it, a company would have no sales. Its important to have the right product, at the right place at the right price, and inventory allows this to occur. In todays global economy the inventory function has become more important and challenging as product can be produced and available anywhere in the world.
  • 40. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 40 | P a g e Demand Planning Is the process of forecasting customer demand to drive execution of such demand by corporate supply chain and business management. Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data and statistical techniques or current data from test markets. Demand forecasting may be used in production planning, inventory management, and at times in assessing future capacity requirements, or in making decisions on whether to enter a new market Demand forecasting is predicting future demand for the product. In other words it refers to the prediction of probable demand for a product or a service on the basis of the past events and prevailing trends in the present Warehousing Performance of administrative and physical functions associated with storage of goods and materials. These functions include receipt, identification, inspection, verification, putting away, retrieval for issue, etc. While many people view the function of warehousing as the simple process of storing products, it has evolved into a function that does more than that. In today’s world of mass customization, the warehouse has evolved into a distribution center, and even a facility to customize the final product via repacking, labeling or other physical conversion. The importance of these facilities has grown as it’s the final “stop” before moving to the customer. Proper handling, storage and management of the products within these facilities must occur so that customer orders can be fulfilled with the right product at the right time. Transportation Is the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure, vehicles and operations. Transport is important because it enables trade between persons, which is essential for the development of civilizations. The transportation function is critical to the supply chain because it is where the rubber literally meets the road. A company can have the right product at the right warehouse at the right time, but without transportation if won’t make it to the customer at the right time. In todays global economy, this function is even more critical as its no longer as easy as putting a product on a truck and having it delivered. Now it might be shipped via container ship, airplane, train, truck or even uber car before arriving at the customer. Companies have to evaluate the many different dimensions of each option such as cost, speed, reliability and ability to service when deciding which to utilize. Customer Service The process of ensuring customer satisfaction with a product or service. Often, customer service takes place while performing a transaction for the customer, such as making a sale or returning an item. Customer service can take the form of an in-person interaction, a phone call, self-service systems, or by other means. While the customer service function appears to be at the end of the
  • 41. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 41 | P a g e supply chain, it is definitely not the end of the process. This function is critical in that its works to meet the needs of the customer and ensure the customer receives what they want, when they want it. This function is sometimes the only point of contact a customer has with a customer so its imperative that they have the skills and knowledge to understand a customers needs..and to meet those needs when possible. 7. CUSTOMER PERSPECTIVES Customer perspective refers to an approach that examines a company from the viewpoint of the individuals who purchase and utilize its products and services. This viewpoint considers organizations' client base, which is crucial to financial success and product sales. Consumer perspective is a collective theoretical approach, or discipline borne out of a socio-political movement whereas consumers' views are individual and contextual. The clients' perspective is not simply a matter of individual preferences but is mediated through the social and cultural environment Personalize your support interactions If your support agents recite the same script on every call, your customer won’t be impressed. Show every customer your value by tailoring the support experience to their unique needs. This not only makes customers feel more valued, but it also inspires greater brand loyalty. To provide personalized experiences, you’ll need to ethically gather customer data and leverage it to cater to each buyer. You must ensure your support agents have quick and easy access to that information. With this level of transparency, nothing will slip through the cracks, and customers won’t ever have to repeat themselves. They’ll also feel as though your company truly understands them, which only adds to the customer value you offer. Provide multichannel support options Provide support on a variety of channels—such as email, phone, live chat, and messaging—so customers can reach you on the platforms they prefer. Find the channels your target audience uses regularly, then make sure you adopt them. To deliver a more effortless customer experience, go a step further by connecting conversations across the various channels you offer. This is what it means to offer omnichannel support. With an omnichannel platform like Zendesk, interaction history and context travels with the customer from channel to channel, allowing agents to provide better, personalized support. Create a robust onboarding program Start customers off on the right foot by building a comprehensive onboarding guide for them. If possible, give each account a support agent who can show stakeholders how to implement your product. This agent can hold several onboarding meetings with your customer to make sure they’re comfortable with your product and using it optimally. For products that require ongoing support, you’ll want to assign a customer success associate to each account. This person should have specialized knowledge about the product and should serve as a continuous source for strategic guidance. They’ll need to check in consistently, provide best practices, and develop a true partnership with their clients. Prioritize customer success While support teams are essential for resolving short-term customer issues and technical problems, customer success teams are equally important for ensuring buyers’ happiness. Rather than focusing on
  • 42. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 42 | P a g e solving problems as they come up, customer success managers anticipate their clients’ needs and help them achieve their long-term goals using a company’s products or services. Having staff dedicated to helping customers succeed makes it easier to provide personalized experiences, increase retention, and even find opportunities to cross-sell and upsell. But you’ll have to leverage customer data to stay informed about how their needs might change and how you’ll be able to meet those needs. That may mean using data analytics to spot trends and see where common problems arise, creating a robust knowledge base to address frequently asked questions, or investing in a CRM to track your evolving customer statistics over time. Address patterns in support issues Don’t wait for customers to complain—try to prevent setbacks as early as possible to keep your customers happy. Success managers should share any customer problems they regularly see or hear about with the rest of the support team, so the group can brainstorm potential solutions. You should also consider collecting customer feedback and data on a more regular basis to gain increased visibility into any recurring issues and take steps to address them. You can also offer self-service options—such as FAQ pages, help centers, or AI-powered chatbots— which make it easy for customers to solve their own issues. Research shows that 70 percent of customers actually prefer to help themselves these days. From a business perspective, customer self- service allows you to dramatically cut down on costs, increase live agent efficiency, and improve the overall experience for customers. Make sure customers know you’ve heard them You may already send out surveys and act on customer feedback to make improvements. But take it a step further by following up with customers who shared input to let them know how you incorporated their feedback. (You can do this via email or text message.) Customers will be happy to hear that you took their ideas and suggestions to heart and used them to make positive changes. It also shows that you champion your customers at every step of their journey—adding to your value. To track all that valuable feedback and customer information, use a CRM like Zendesk. The data is housed in a central location, making it easy for employees across the organization to view it. Analytic tools also help your whole team see what’s working and what’s not so they can make informed decisions on how to better serve customers. Find opportunities to surprise and delight In 2021, customer retention is all about exceeding expectations and building lasting relationships with your buyers. So, consistently show them your brand’s value with a stellar support experience. Establish a strong, long-term connection with customers by regularly finding ways to wow them. For example, empower your support team to go above and beyond for each customer by giving them the freedom to offer a certain number of discounts each month or to surprise a customer with a free gift. You should also make sure you’re providing quick and easy resolutions, self-service support, various channels for customer service, and personalized experiences. All are crucial; components of a customer retention strategy.
  • 43. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 43 | P a g e Acknowledge and reward customer loyalty Customers love to feel seen and appreciated. Recognize your most loyal buyers by offering them a discount or promotion at the end of a support experience. Or, consider launching a loyalty rewards program to show customer appreciation. A customer loyalty program is where buyers receive discounts or freebies after reaching specific benchmarks, like having been a customer for one year or having spent a certain amount of money. Take Sephora, for example. Customers who are part of the company’s Beauty Insider rewards program receive points for every dollar they spend. They can then use those points to choose gifts. Loyal customers are rewarded simply for continuing their buying habits, further deepening their ties to the business and giving them added value they can’t find at competitors. When creating a loyalty program, choose rewards that are enticing to your particular audience. Listen to your customers and let them be your guide. Give your customers a sense of community Everyone enjoys feeling like they’re part of a community. Foster this type of connection with your brand by building a customer community forum where buyers can go for product support, Q&As, and feedback. This forum can live on your website or social media page; it can also feed into your larger, cross-channel support strategy as a self-service option for customers. Online forums help create a sense of community by connecting users to others with similar needs and interests. This often translates to customers feeling more supported by the brand, which increases your value. Additionally, if you give forum users the space to share their knowledge or expertise, they’ll presumably be a longtime brand advocate. If you want to start building a thriving online community around your product or service, we recommend using community forum software. The right solution takes the pressure off your agents while promoting customer engagement. 8. ROLE OF CUSTOMERS Customer value is best defined as how much a product or service is worth to a customer. It’s a measure of all the costs and benefits associated with a product or service. Examples include price, quality, and what the product or service can do for that particular person. There are also monetary, time, energy, and emotional costs that consumers consider when evaluating the value of a purchase. Demand Shifts Over the past few years, we’ve seen massive shifts in consumer demand across the supply chain. Many of these changes happened as a result of the COVID-19 pandemic and resulting restrictions. Today, the spread of COVID-19 is slowing down and most countries have rolled back their restrictions, but many consumer shopping patterns have remained. During the height of the pandemic, many people started ordering essential food and toiletries online rather than going to the store. In the years since, consumers have continued to shop for their essentials online, and many people have gotten used to the convenience that this provides. Economic trends have also
  • 44. LOGISTICS AND SUPPLY CHAIN MANAGEMENT ISBN- 978-81-969444-0-7 44 | P a g e caused major shifts in consumer demand. For example, inflation has forced many consumers to tighten their budgets. This means that fewer people are eating out or buying discretionary products, but demand for affordable grocery products has remained high. Order Visibility and Tracking Another major shift in the past few years is the way that consumers monitor and track their orders. IoT and cloud technology has given organizations the power to track shipments from their initial manufacturer all the way to their final destination. Geographic sensors monitor the location of each shipment, and this data is then stored in the cloud for easy access. Many organizations have started giving customers access to order tracking for some or all of the product’s journey. Customers enjoy this heightened visibility into the supply chain, as it lets them know exactly when to expect their order. Many consumers now expect to have access to shipment tracking when they place an order. Incorporating order tracking will not only give you more control over your supply chain, but it also creates a better experience for your customers. Responsive Customer Service In addition to order tracking, customers now expect a variety of responsive customer service measures across your entire supply chain. Today’s customers expect the fastest delivery times possible, and they expect clear communication when orders are going to be delayed. They also expect the returns process to be seamless. Accurate demand forecasting and route planning can help you improve your shipping times to keep customers satisfied. Demand forecasting will ensure that you have an appropriate amount of product available for periods of high demand. Efficient route planning will help you get this product to your end customer as quickly as possible. Both of these tools can also help you better predict when orders are going to be delayed, so you can communicate with your customers ahead of time to set expectations. Affordable Shipping Costs Inflation and other economic challenges have caused shipping costs to increase in recent years. Organizations have taken a variety of different approaches to handle this issue. Some have passed these costs onto their customers, while others have looked for other ways to absorb the extra expense. Passing additional shipping costs onto your customers may seem like the most efficient way to handle inflation, but it could backfire in the long run. Consumers are also feeling the impacts of these economic challenges and may be unwilling to spend money on high shipping costs. You’ll need to strike a balance – while you may increase customer shipping fees slightly, you can also use machine learning and other technologies to make your supply chain more efficient and cut back on unnecessary costs.