LOGISTICS AND SUPPLY CHAIN MANAGEMENT

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

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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.

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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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Sustainable and Ethical Practices
Another consumer trend we’ve seen in recent years is an increased focus on sustainable and ethical
practices across the supply chain. The internet has made it much easier for consumers to research
the companies they’re buying from, and they want to work with organizations that align with their
values. This means that organizations will need to look for ways to be more sustainable and ethical
throughout the supply chain process. There are so many ways to do this, from using low-waste
packaging to partnering with shipping partners that use sustainable travel methods. To appeal to
the conscious consumer, you’ll need to consider these factors in your supply chain. Upgrading to
sustainable practices often comes with an extra cost, so you’ll need to consider what’s most
important to your customers and make changes that work for your budget.
9. WAYS OF IMPROVING CUSTOMER SERVICES IN SCM.
Train Customer Services Reps
You can’t expect employees to read your mind when it comes to customer service expectations.
Customer service reps (CSRs) should be trained to find a customer’s particular pain points and
then offer the best possible solutions.
Create a Consistent Experience
No matter what business partners you use or how many locations you have worldwide, there should
be a consistent experience for customers. You can achieve this by creating a set of standards for
your brand that must be followed internally and externally.
Integrate Customer Service With Order Systems
220308-optimizing-ecommerce-fulfillment-1Customer service reps should be able to access order
and delivery systems to help customers with fulfillment issues. Many customers are likely to call
with issues related to delivery times, so this can help CSRs resolve them and increase customer
satisfaction.
Integrate Your Logistics System
It’s challenging to remain competitive and provide a positive experience if your business’s systems
are still separate. A better solution is to integrate your logistics system by implementing something
like a warehouse management system (WMS). This type of system will handle everything, such
as customer contacts, order fulfillment, inventory, shipping, finance, and more.
Be More Adaptable
Companies can better meet the challenges of today’s supply chain by being more adaptable. This
means a logistics company might have relationships with several suppliers and shippers. Doing
this helps ensure promises to customers are kept no what the external conditions may be.

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Provide Complete Transparency
rfid-tagsBy changing your tracking system to something like barcodes or RFID tags, you provide
complete transparency throughout the supply chain. Customers can see what items are in stock and
track their orders through the fulfillment process, from packing to shipping to delivery.
Leverage Automation Solutions
Automation technology makes providing a better customer experience seamless because it reduces
errors, speeds up the order fulfillment process, and makes everything more transparent.
Get Buy-In from All Employees
A commitment to customer service should be organization-wide. It won’t work if only top-level
management makes a pledge. Companies should provide continuous training and incentives to
staff to help them internalize why the customer experience is a priority.

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UNIT- III
Framework of 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, 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- Packaging and Materials
Management: Consumer and Industrial Goods Packaging - Factors influencing Materials
Planning, Preservation Safety and Measures of Materials Handling.
1. Logistics: Introduction
Logistics is the process of planning, organizing, controlling, and executing the movement and
management of goods from the point of origin to the point
of destination. It also encompasses the related techniques
and technologies used to achieve these goals. Logistics
refers to the overall process of managing how resources are
acquired, stored, and transported to their final destination.
Logistics management involves identifying prospective
distributors and suppliers and determining their
effectiveness and accessibility.
Logistics is the management of supply and transportation to deliver the goods on time and in good
shape. handling of operations is a part of the logistics industry, and the need to perform efficient
and cheap operations is of utmost importance in the modern competitive world.
2. POSITIONING OF INFORMATION IN LOGISTICS
Logistics information systems
Logistics information systems (LIS) are digital programs that are implemented to facilitate
decision-making and the management of operations such as procurement, storage, order picking,
and the shipment and transportation of goods. These logistics applications ensure continuous flows
of information between companies involved in the design, manufacture, storage, and marketing of
a product or service, connecting all the organizations and supporting product traceability.

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Depending on which tasks in the warehouse are automated, different types of logistics information
systems can be used. For example, a transportation management system (TMS) plans and
organizes delivery routes, while an enterprise resource planning (ERP) system syncs processes and
data between departments in a company ― including the logistics division.
3. LOGISTICS INFORMATION SYSTEM (LIS)
Logistics Information System or LIS is a set of highly advanced digital programs running on
integrated software infrastructure that is implemented to facilitate smart management and data-
driven decision-making in logistics.
Benefits of implementing logistics information systems

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Process automation: logistics management programs do away with manual data entry. They also
automate the generation of the necessary documentation for logistics operations, minimizing the
risk of error in processes such as inventory control and order fulfillment.
Automated information flows: logistics software extracts information from operations to
coordinate warehouse processes and the different levels of the supply chain with each other. The
most cutting-edge programs analyze logistics activity to obtain information in real time on the
throughput of the facility.
Improved logistics planning: information systems make it possible to monitor a product across
the supply chain and collect data, equipping logistics managers with all the information they need
to carry out logistics planning. Ultimately, logistics programs ramp up the efficiency of
warehousing operations, syncing the facility with other levels of the supply chain, e.g., the building
that houses the production lines or the distribution centre, among others.
4. LOGISTICS MANAGEMENT CONCEPT
Logistics management consists of the process of planning, implementing and controlling the
efficient flow of raw-materials, work-in-progress and finished goods and related information-from
point of origin to point of consumption; with a view to providing satisfaction to the customer.
According to Phillip Kotler, “Market logistics involve planning, implementing and controlling
physical flow of material and final (finished) goods from the point of origin to the point of use to
meet customer requirements, at a profit.”
5. LOGISTICS MANAGEMENT PROCESS

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Logistics management is the part of the supply chain process that plans, implements, and controls
the efficient, effective flow and storage of goods, services, and related information from the point
of origin to the point of consumption to meet customer requirements.
Procurement
The purpose of procurement is to supply raw materials or goods to a logistics centre, manufacturing
centre or point of sale in order to properly conduct business (production, distribution or sale).
Having a well-organised and coordinated facility is a must for managing procurement in a way
that is efficient and profitable. Companies that incorporate a warehouse management system
(WMS) into their logistics processes can organise their stock levels based on their sourcing
strategy. Procurement also provides for the shipment of goods to manufacturing. To optimise this
logistics phase, Easy WMS, the software from Mecalux, has the WMS for Manufacturing module,
which ensures an uninterrupted supply of raw materials to the manufacturing lines. In addition, the
program is connected to the manufacturing execution system (MES) to sync warehouse operations
with production processes and ensure supply. This advanced functionality provides full traceability
of all processes and real-time visibility of inventory.
Storage
Storage covers the activities related to properly storing, protecting and preserving goods for the
required period of time. To carry out this activity, the company must choose the storage system
that best suits its logistics needs, taking into account the layout of the facility and the characteristics
of the goods themselves. It’s essential to choose the right number and type of handling equipment
to handle the products because the throughput of the warehouse depends on it.
Automation and digitisation have become the best allies when it comes to optimising the storage
of goods. Companies use automated solutions such as stacker cranes, conveyors, electrified
monorail systems and transfer cars, among others, to increase productivity and minimise errors.
Inventory management
Another relevant logistics process is inventory control to determine the amount of stock and the
timing of supplies to meet customer requirements. Efficient stock management has a direct impact
on the throughput of the operations involved in the logistics process and reduces exposure to
overstocking or stockouts.
To track the goods accurately and efficiently, it’s advisable to install a warehouse management
system (WMS). This software allows organisations to control in real time the resources available
in their facilities, know the exact location of each item, supervise product entries and exits and
anticipate exactly when the goods will be sold out. To do so, the WMS identifies and records the
products the moment they arrive at the warehouse. It then assigns them a location based on the
needs of the business (slotting). As a result, products are fully traceable.

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Digital stock management leads to more efficient operations. For instance, Heidelberg, a
multinational supplier to the printing industry, uses Easy WMS in its Barcelona facility to optimise
its inventory management. In the words of Sonia Ros, the company’s Logistics Manager: “Thanks
to Easy WMS we’ve simplified our inventory management. We’ve definitely improved our
response times, product placement and quality control.”
Order picking and dispatch
Order processing involves packaging the products requested by customers so that they can be
dispatched at minimum cost and in the shortest possible time. Together with transport, this logistics
process has the greatest influence on final customer satisfaction — good service is only possible
if orders are delivered on time and without errors. Picking and dispatch operations comprise
various activities. These include operator travel around the warehouse, the removal of products
from the racks, goods sortation and consolidation, packaging and lorry loading.
Transport and delivery of goods
Last-mile delivery — the final leg of the goods delivery process — is one of the main challenges
in logistics. Products must overcome numerous obstacles from the time they leave the distribution
centre until they reach their final destination. Optimising transport and delivery costs can be key
to achieving efficient processes and differentiating yourself from the competition. At this logistics
stage, ecommerce companies usually work with one or more transport agencies. To avoid delays
and failures that can lead to customer complaints and ultimately slow business growth, companies
must coordinate packaging and labelling processes with freight forwarders.
To optimise the final logistics process, the Mecalux Group has developed the Multi Carrier
Shipping Software module. This advanced functionality streamlines the dispatch of goods by
coordinating with the software of the main carriers. The program organises order packing, labelling
and shipping to ensure that no errors occur at this logistics stage.
“We’ve improved the goods dispatch process in addition to eliminating shipping errors,” says
Vincent Beaufreton, development manager at Espace des Marques, after implementing Multi
Carrier Shipping Software in its two facilities in France. The correct distribution of the warehouse
and the organisation of operations have allowed the online clothing and footwear retailer to triple
the number of orders shipped.
Synced logistics processes for efficiency
Coordinated logistics processes improve service to end customers and optimise a company’s costs
and resources. Faced with the complexities of today’s logistics landscape, automating decision-
making through logistics software and automated solutions can be the path to efficiency. Software
like Easy WMS coordinates the flow of information with other links in the supply chain to achieve
synced and productive logistics processes. If you want to fully leverage the advantages of
automating and digitalising your company’s logistics processes, don’t hesitate to get in touch with

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us. Our team of expert consultants is ready to provide you with personalised advice on the optimal
solution for your needs.
5. PROCESS OF LOGISTICS CYCLE
 Serving Customers
 Product Selection
 Quantification
 Inventory Management
 Logistics Management Information System
Serving Customers
The main objective of the logistics is to serve the customers by providing them with the products
they need. The logisticians continuously monitor the demand for the products in different
locations.
Product Selection
Selection of the right products is very important in any logistics system. It directly impacts the
supply chain system. If you are a logistician, then it depends on you that which category products
you want to move from one point to another point. It is essential to define this so that you can plan
your transportation methods, your warehouse and your place of establishment accordingly.
Quantification
Quantification means the procurement or sourcing of the material from the manufacturer or the
supplier. It focuses on the calculation of the estimate of the quantities. You know that sometimes
it happens that you get an unexpected demand for material or sometimes an order in large quantity.
For this, either you have to import it or you have to procure it to get ready for fulfilling future
demands.
Inventory Management
In the logistics management system, the role of inventory management is the storage and
distribution of goods. When the goods are procured in sufficient quantity, they are stored until a
customer places a purchase request.
Logistics Management Information System
The logistics management system of the supply chain system runs on the communication between
the sender, the supplier and the receiver. It is very important to establish proper coordination
among them to make the process smooth and free from errors. This process is defined as the
Logistics Management Information System (LMIS) that plays a significant role in the delivery of
right products, in the right quantity, at the right place, on the right time.

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Logistics Management
Basically, Logistics management is a process in the supply chain system that majorly focuses on
moving goods to different locations in order to meet the requirements of the customers. It is crucial
to decide the amount of different products logistician needs to store. He can make a calculation on
the basis of demands in the previous seasons.
6. COMPETITIVE ADVANTAGES AND THREE C’S
The 3C analysis business model was originally created by Kenichi Ohmae, a management
consultant. It has been used as a strategic business model for many years and is often used in web
marketing today.
This method has you focusing your analysis on the 3C’s or strategic triangle: the customers, the
competitors and the corporation. By analyzing these three elements, you will be able to find the
key success factor (KSF) and create a viable marketing strategy. Many variations have been
derived from this method because of its simplicity.
The 3 “C”s, but it is recommended that you analyze the customers first, then the competitors, and
finally the company you are working for.
If you analyze the corporation first, you will tend to use the company data as the standard for
analyzing the competitors and customers. Understanding the customer’s viewpoint is important in
marketing. Therefore, first know the customer, then the competition in your market, and finally
the company.
The First C – Customer Analysis
Doing in-depth consumer research is the best way for you to figure out how to appeal to your target
market. Being able to create catchy catchphrases and creative ads is going to be your bread and
butter. Demographic data plays a huge part in this analysis. Figuring out your business’s target
market and their desires will drastically improve the success rate of your marketing strategies after

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they are put into circulation. Data such as disposable incomes, likes, dislikes, where they get
information, if they make impulse buys or not, and even how they respond to the client service or
product already available is invaluable.
Use answers from in-depth interviews, questionnaires and user tests to gain insight into the
consumer mind. Use that insight to create concept diagrams, communication designs and personas
that will boost your company’s popularity and hopefully help you spread your product or service
into the world. If they know and trust the corporation you’re promoting, their response will be
much more noticeable.
The Second C – Competitor Analysis
You can use the aforementioned websites and search engine results to discover rival brands and
companies in addition to the list of data your employer offers. Comparison websites are popular
in every industry and make investigating their products and services quite straightforward. It’s
important to note that, a hamburger shop for example, is going to have competitors in not only the
fast food industry but in the restaurant industry and supermarket industry as well. You’ll have to
narrow down your results so that you can put more emphasis on how to compete with the top three
to five rival businesses.
After determining the main competitors, analyze them. How much effort do they put into their
website? What catchphrase do they mainly use? What do they provide? What tools (e.g.,
newsletters and SNS) do they use to invite users to their website? What is their overall marketing
logic? Ideally, you’ll want to investigate the competitors from as many angles as possible so that
their marketing activities can be completely understood.
Competitor analysis is mainly done by visiting their websites, subscribing to their newsletters,
visiting their stores and/or receiving the service (heuristic analysis) they offer. In addition, you can
perform a user test to compare your client company with their competitor. It’s best to use an SEO
tool to find out how the competitor is talked about on the web as well as to obtain the SEO-related
information. For large-scale websites, you can use a competitor website analysis tool such as
SimilarWeb to obtain useful information.
The Third C – Corporation Analysis
The last step you’ll want to take with this method requires you to analyze your own client’s
corporation. You’ll want to know what marketing strategies have worked for them in the past and
what ideas have failed. The best way for you to do this is, again, from the customer’s viewpoint.
From the results of the customer and competitor analyses you have done so far, enumerate the
company’s “strong points” and “resources” which produce them. If you are having trouble finding
them, ask real customers for their opinions. By asking why they prefer you client’s product, you
can get points to compare with the competitors and how customers are responding to current
marketing activities.

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If you can check web analytics data with a tool like Google Analytics, it will also help you.
Contents you think attractive tend to have high values for the average session duration and PV.
Based on such data, find out which pages of the company’s website the users are interested in and
which pages they are not. This can be a clue about products and services matching the needs of
the existing users. Referrer information is also helpful. See which websites link to the client’s
website, and in what context, to discover third party opinions of how the client’s website is
regarded. The referrer URL can be used for this purpose.
7. CHANGING LOGISTICS ENVIRONMENT
Global trends bring about transformation and growth in the logistics industry. Specifically,
Industry 4.0 is producing uneasy waves in industrial and production processes. 7 trends that are
paving the way for our industry are: a growing customer base, the rise of the digital consumer,
political and economic developments, the performance of the logistics industry since the 2008
financial crisis, the Internet of Things (the third age of the Internet), rise of the platforms, and 3D
printing and driverless vehicles.
A Growing Customer Base
The world’s population is rising and expected to reach 9 billion in 2050. Augmentation of internet
access and growing e-commerce demand will require logistics providers to deliver to remote
locations in emerging economies. At the mean time, the logistics industry will be affected by
demographic shifts as well.
The Rise of The Digital Consumer
The number of Smartphone subscriptions is predicted to approximately double to 4 billion by 2025.
With the increased use of digital services, people will begin to expect similar service quality in
other industries. As such, logistics companies will strive to serve their retail and corporate
customers through multiple platforms.
Political and Economic Developments
Similar to any industry, the logistics industry is affected by geopolitical and economic
developments. Oil prices, trade harmonization, and growing concern in relation to the environment
top the list. Accordingly, logistics companies will seek out methods to utilize greener methods of
transportation. The Performance of The Logistics Industry Since The 2008 Financial Crisis
The logistics industry commenced to generate revenues across diverse segments following the
economic crisis of 2008. Trucking revenues and transport support services recorded the highest
average annual growth. The Internet of Things (The Third Age of The Internet)

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Described as a smart network in which devices connect and exchange information with each other
through various communication protocols, the IoT trend will positively impact the logistics
industry. By 2020, IoT is expected to grow to almost 50 billion objects.
Giant internet platforms such as eBay, Amazon and Alibaba are among the most major latest
trends. These platforms enable startups and small firms to operate in a global market and customers
– businesses or consumers – benefit from having a broad range of alternative suppliers to select
from.
3D Printing and Driverless Vehicles
These have the potential to revolutionize the logistics industry. These technologies will contribute
to render delivery services even faster. Autonomous vehicles are ideal for the logistics industry –
so much so that Mercedes is already pioneering digital trucks, while Amazon is testing delivery
drones.

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8. REVERSE LOGISTICS
Reverse logistics refers to the supply chain process of
returning products from end users back through the supply
chain to either the retailer or manufacturer. The five Rs of
reverse logistics are returns, reselling, repairs, replacements,
and recycling. The processes and solutions you apply to each
of these can help your business improve its Results. There are
several reasons that a reverse logistics process may begin.
These include customer returns (particularly common in
eCommerce purchases), delivery failures or issues, B2B
returns, and more. These reasons are divided into planned
reverse logistics (returns) or on-demand (failed delivery
attempts).
There are several reasons that a reverse logistics process may begin. These include customer returns
(particularly common in eCommerce purchases), delivery failures or issues, B2B returns, and more. These
reasons are divided into planned reverse logistics (returns) or on-demand (failed delivery attempts).
9. IMPORTANCE OF INVENTORY CONTROL
Manage Customer Demand
If you do not have the stock on hand to manage the needs of your customers, you will miss vital sales. Not
only that but decreased inventory may also cause customers to seek out their needs elsewhere–and in some
cases, which may mean that your customers stick with that new business, rather than return to you.
Maintain Your Supply Chain
Part of the inventory control process is ensuring that you have adequate levels of all inventory stages,
including raw materials and the materials needed to help keep your business running effectively. With
adequate inventory control measures, you can ensure that you have a supply chain in place that will allow
you to keep up with the needs of your business.
Manage Working Capital
Many businesses, especially small businesses, often struggle with working capital. When you purchase
stock, you have the expectation that the stock will sell within a reasonable period, allowing you to keep that
steady flow of capital through your business.
Avoid Overstock

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While you want to make sure you have enough
inventory on hand to meet the demands of your customer
base, you also want to make sure that you do not have too
much inventory on hand. Overstock may mean that you end
up having goods go bad before they are purchased, which
can mean financial losses for your business. Often, you will
end up selling off overstock at much lower prices, which
can lead to financial losses.
Keep Up with Current, Real-Time Inventory
Ideally, your inventory control measures should allow you
to keep up with real-time inventory. Your inventory needs
can change dramatically and unexpectedly. By tracking
real-time changes in inventory, you can often do a better
job of keeping up with immediate needs–and you can
adjust your ordering accordingly.
Maintain Better Overall Inventory Quality
By keeping tight control over your inventory, you can often do a much better job of maintaining your
inventory quality. Inventory control can help avoid unnecessary damage and make it easier for you to
ensure that perishable items do not go bad before you have a chance to sell them. With an effective inventory
control system in place, you can do a much better job of managing your business's and your customers'
ongoing needs. With inventory control, you will know what goods you have on hand, what items you need,
and where those items are in your system–and with real-time tracking, you can adapt to any needs
immediately. Want to learn more about how inventory control can help your business? Contact us today for
more information about our inventory control and management systems
10. ELEMENTS OF INVENTORY MANAGEMENT
Track Your Activity
As a business owner, you ought to know about any movement in your stock. From product transfers to
inventory losses such as testers, damaged goods or missing products, everything must be brought to your
attention, so when the right time comes, you’ll be on top of things instead of being overwhelmed by
irregularities. In addition to those, it’s extremely important to have detailed inventory management reports
organized in one place. Collecting this inventory data is essential when it comes to identifying room for
improvement, so it is key to record all information that you have available in order to fine-tune processes.
Daily Counts
Managing your inventory is a daily inventory management task. Without keeping daily track of your
inventory status, even the most advanced reports won’t help you. Daily counts are a major part of any
organised retail business routine and these must be accurate to maintain stock visibility. For retailers that
are keen to utilise technology, this can be streamlined with effective inventory control, meaning you do not
physically have to count every item you have in storage, providing you are confident that inventory
management reporting is accurate.

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Manage Out-Of-Stock Products
With the help of your detailed reports, you will be able to know exactly which products are missing, and
which are sold the most. So when you need to reorder – you’ll know exactly what to order and when. As
well as helping you to avoid running out of stock, it means you can act quickly to remove out-of-stocks
from ecommerce platforms so you do not sell products that are not available.
Clear Description
A major part of inventory management involves being organised, so you should keep clear and informative
descriptions of your products: names, sizes, colours, wholesaler name etc. Without this detailed
information, you won’t be able to fully understand your reports and see the total picture. Make sure
everything is clearly labelled or marked, so you know what a product is at a quick glance. This is vital to
speed up fulfilment processes, as well as making sure no mistakes are made when it comes to stock counts.
If you’re unable to do this work yourself, it’s recommended to hire someone who will.
Organized Work Environment
A clean, spacious and neat work environment might save you a lot of time trying to search for products.
Research also indicates that such a work environment may raise the effectiveness of you and your
employees. If your storage or warehousing space isn’t already organised, it is worth investing time to
improve inventory management. There are no flaws to that – only clean profit.
11. INBOUND AND OUT BOUND LOGISTICS
Inbound logistics
Inbound logistics are all about moving raw materials, supplies, or finished goods into a supply chain.
Through inbound logistics, a business secures its supply — that is, it obtains the products (or the materials
to make the products) that it will eventually sell. The logistics processes that transport raw materials,
inventory, or supplies from a supplier and into a business’s warehouse, distribution center, fulfillment
center, or retail store are all considered inbound logistics.
Outbound logistics
Outbound logistics are all about moving finished inventory out of a supply chain — that is, moving
inventory out of storage, fulfilling orders, and delivering those orders to end customers.
Any logistics process involved in order confirmation, fulfillment (including picking and packing), shipping,
last-mile delivery, customer service, and troubleshooting qualifies as an outbound logistics process.

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STEPS INVOLVED IN INBOUND LOGISTICS PROCESSES
Sourcing Materials
Purchasing raw materials is often the first step in the manufacturing of goods. As a business, you need to
know which raw material is required in what quantity and find suitable suppliers. It is essential to maintain
records of the same in order to avoid under or overstocking of raw materials. This step also involves
constant coordination with the suppliers and having adequate transportation in place.
Receipt of Goods
Once the order is placed with the supplier, the business needs to make load appointments in advance to
reserve docks for the unloading of inventory. This is done so when the raw materials arrive, the stakeholders
know exactly where to receive the goods, assign an unloading area and store the inventory- all in minimal
time.
Reverse Logistics
Reverse logistics refers to the process that involves the movement of goods from the end-user or customer
back to the seller or manufacturer. It can either be a return from the e-commerce site, or products that need
to be refurbished or remanufactured or disposed of permanently.
STEPS INVOLVED IN OUTBOUND LOGISTICS PROCESSES

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Processing of Order
Firstly, the customer places an order for a product on the e-commerce website which is then confirmed by
the warehouse. This is done through the warehouse management system.
Picking and Packing
After the order is confirmed, the workers then pick the relevant product from the inventory. The warehouse
management system (WMS) then updates the inventory and adjusts the product count and the stock-keeping
units. The picked products are then packaged and labeled with the customer details which are then sorted
by the carrier service.
Sorting and Shipping
Once the packaged goods are sorted, the freight trucks pick up the orders and ship them off at the relevant
distribution center. Once the product reaches the distribution center closest to the customer, the delivery
personnel pick up the orders depending upon their delivery areas.
Final Delivery
The final step in the outbound logistics process is the delivery of the ordered product at the doorstep of the
customer or the end-user. With regards to outbound logistics, customers can range from individual
consumers to supermarkets.
12. BULL- WHIP EFFECT
The bullwhip effect refers to a scenario in which small changes in demand at the retail end of the supply
chain become amplified when moving up the supply chain from the retail end to the manufacturing end.This
happens when a retailer changes how much of a good it orders from wholesalers based on a small change
in real or predicted demand for that good. Due to not having full information on the demand shift, the
wholesaler will increase its orders from the manufacturer by an even larger extent, and the manufacturer,
being even more removed will change its production by a still larger amount.
The term is derived from a scientific concept in which movements of a whip become similarly amplified
from the origin (the hand cracking the whip) to the endpoint (the tail of the whip)

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Example of the bullwhip effect
For instance, imagine a retailer selling hot chocolate that typically sells 100 cups a day in the winter. On a
particularly cold day in that area, that retailer sells 120 cups instead. Mistaking the immediate increase in
sales for a broader trend, the retailer requests ingredients for 150 cups from the distributor. The distributor
sees the increase and expands its purchase order with the manufacturer to anticipate increased requests from
other retailers as well. The manufacturer increases its manufacturing run in anticipation of greater product
requests in the future.
At each stage above, demand forecasts have been increasingly distorted. If the retailer sees a return to
normal hot chocolate sales when the weather returns to normal, it will suddenly find itself with more
supplies than needed. The distributor and manufacturer will have even more excess inventory.
13. DISTRIBUTION AND WAREHOUSING MANAGEMENT
A warehouse is a large, spacious and secured building intended for commerce and government
use. It functions as a storage place for large quantities of goods. Warehousing is not simply about
storage though. It also covers the administration and manual labor required in storage such as
delivery, documentation, examination and certification.
There are three types of warehouses: public, owned by third
party logistics (3PL) and company-owned. The government
through its arm uses public warehouses to store shipments and
contrabands they confiscated temporarily. The business sector
usually resorts to company-owned or 3PL-owned warehouses to
meet their storage needs. Wholesalers, exporters, importers and
manufacturers are the common clients of warehousing service
providers. Raw materials and finished goods alike are kept in
warehouses. There are different reasons for warehousing. The
cheese making and wine-making (also known as viniculture) industries require an extensive time
to produce their products. Warehouses are good places for their products to mature.
This business operation also ensures the sufficiency of supply. As a result, the prices of the goods
involved are less likely to fluctuate. Warehousing may also cover the completion of goods before
distribution. The components and packing materials are just delivered to the building. The
assembly and packing of the goods will be done in the warehouse. By doing so, the product cover
will still look new and enticing upon delivery to distribution centers. If you pack the goods before
bringing them to the warehouse, the packaging may be damaged while on the way.

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DISTRIBUTION
In the business language, distribution refers to the delivery of
finished goods to buying centers such as shopping centres,
markets and retailer stores. Some manufacturers deliver their
goods directly to their accredited retailers. This is
advantageous if the retailers’ business establishments are just
nearby the manufacturers’ places. Direct delivery of goods to
retailers can save you from warehousing costs. However, if
you are far from distribution centers, you have to deal with trucking costs and inventory frequently.
Thus, it is safe to say that warehousing and distribution go hand-in-hand in providing a more cost-
effective way of delivering goods. There are even businesses that literally combined these two
business operations.
Some warehouses are also utilized as a buying or retailing center while maintaining its original
function. In fact, the Germans still have warehouse-like department stores. The architecture of
some of these buildings is one of the causes for their dual functions. Excessive beautification of
warehouses makes them appealing for shopping.
14. TRANSPORT FUNCTIONS AND PARTICIPANTS
Transportation provides two major logistical services: product movement and product storage.
Product movement
 Basic value of transportation is moving inventory to specified destinations throughout the
chain included reverse logistics;
 In-transit inventory: inventory captive in the transport system
 Transportation impacts: environmental resources (direct and indirect), financial resources
(labor, fuel, but also damaged products)
Product storage
 Products are also stored when they are transported.
 Another service having storage implications is diversion: occurs when original shipment
destination is changed after product is shipped.
Participants in transportation
Transportation decisions are influenced by six parties:
1. Consignor (shipper)

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2. Consignee (destination party/receiver)
3. Carries and agents (business that performs transportation service)
4. Government (reliable service to economic and social well-being)
5. Internet (Share real-time information)
6. Public (creates transportation demand by purchasing goods)
ROLE OF TRANSPORTATION IN DISTRIBUTION
 Movement of product from one location to another.
 Products rarely produced and consumed in the same location.
 Significant cost component.
 Shipper requires the movement of the product: cheap, not much handling, easy as possible,
realtime information on container.
 Carrier moves or transports the product: full containers by combining goods from different
shippers, bringing shippers together.
 Transport manager has to decide: do it yourself VS outsourcing to carrier.
15. TRANSPORT INFRASTRUCTURE
Transport infrastructure is the fixed installations, structures, and networks that provide a
framework for the movement of people and goods. Urban transport infrastructure can be collated
under five broad headings: Roads. Bridges and tunnels. Rail and trams. The physical components
on transport infrastructure include bridges, tunnels, pavements, rail tracks, culverts, wharfs, aprons
and pipes. These elements are located on the ground or above or below ground level – but always
associated with or attached to the ground.
Examples of Public Infrastructure
 Transportation infrastructure – Bridges, roads, airports, rail transport, etc.
 Water infrastructure – Water supply, water resource management, flood management,
proper sewage and drainage systems, coastal restoration infrastructure
 Power and energy infrastructure – Power grid, power stations, wind turbines, gas pipelines,
solar panels
 Telecommunications infrastructure – Telephone network, broadband network, WiFi
services
 Political infrastructure – Governmental institutions such as courts of law, regulatory
bodies, etc.; Public security services such as the police force, defense, etc.
 Educational infrastructure – Public schools and universities, public training institutes

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 Health infrastructure – Public hospitals, subsidized health clinics, etc.
 Recreational infrastructure – Public parks and gardens, beaches, historical sites, natural
reserves
Types of Infrastructure
Soft Infrastructure
Soft infrastructure refers to all the institutions that help maintain a healthy economy. These usually
require extensive human capital and are service-oriented toward the population. Soft infrastructure
includes all educational, health, financial, law and order, governmental systems (such as social
security), and other institutions that are considered crucial to the well-being of an economy.
Hard Infrastructure
Hard infrastructure comprises all the physical systems that are crucial to running a modern,
industrialized economy. It includes transport systems such as roads and highways and
telecommunication services such as telephone lines and broadband systems.
Critical Infrastructure
Critical infrastructure makes up all the assets that are defined by the government as being crucial
to the functioning of an economy. It includes assets used for shelter and heating,
telecommunication, public health, agricultural facilities, etc. Examples of such assets: natural gas,
drinking water, medicine.
Financing of Public Infrastructure
Public infrastructure is financed in a number of ways, including publicly (through taxes), privately
(through private investments), and through public-private partnerships.
Taxation
Public Infrastructure may be financed through taxes, tolls, or metered user fees. Since public
infrastructure is open for use by the general public, the general public pays for the infrastructure
facilities through taxes.
Investments
Public infrastructure tends to require high-cost investment projects, the returns on which are also
extremely high. Sometimes, private companies choose to invest in a country’s infrastructure
projects as part of their expansion initiatives. For example, a power and energy company opts to
build railways and pipelines in a country where it wants to refine petroleum. The investment
benefits both the company and the domestic economy.

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Public-Private Partnerships (PPPs)
Public-private partnerships (PPPs) are best described as a partnership or an arrangement between
two or more private organizations and the public sector. A public-private partnership is the most
popular means of financing large public sector projects. It helps to spread risks and makes the
economy prosperous by bringing in investment opportunities, opening up employment
opportunities, and increasing the standard of living.
TRANSPORTATION CYCLE

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16. PACKAGING AND MATERIALS MANAGEMENT
Packaging management is the process of managing materials used in the production of packaging
and the storage, handling, and distribution of the finished product. Effective packaging
management can reduce costs, improve supply chain efficiency, and reduce waste. When it comes
to selecting the best packaging materials for your products, you need to think about the entire
processes involved to get them into the hands of consumers.
First, there will be packaging to contain your products. Next, you will need packaging to ship and
transport your products to authorized resellers. If you are an online-only business and sell direct-
to-consumer, then you will also need packaging solutions for shipping your products to your
customers. There are all sorts of packaging options to choose from based on the types of products
you manufacture and sell.

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Rigid Plastic Packaging
This type of packaging is made from polyethylene terephthalate (PET) plastic or high-density
polyethylene (HPDE) plastic. Some of the more common types of rigid packaging are plastic
bottles like those used for soda, water, shampoo, lotion, etc.
Paper
Paper is a popular packaging choice used with various types of products like the paper your butcher
uses to wrap meat in. Paper bags, product labels, and tissue paper and some other types of paper
packaging are available.
Paperboard
Paperboard is thicker and sturdier than paper packaging. This packaging solution is frequently
used as the primary package that contains products, such as cereal, TV dinners, crackers, etc.
Paperboard can also be produced in different thicknesses, so it is also a good choice for juice boxes,
milk containers, and more.
Cardboard/Fiberboard
Cardboard and fiberboard are considered secondary packaging materials. They are the most
common material used to ship products to retailers and consumers. Some businesses also use
cardboard and fiberboard for primary packaging for products like vacuum cleaners, cooking
utensils, pots and pans, appliances, HD TVs, etc.
Aluminum
From aluminum foil to aluminum cans, aluminum is also a very popular packaging material used
for primary packaging.
Glass
While plastic packaging has become more popular, there is still a wide variety of products that are
packaged in glass. You will find glass containers used for food products like spaghetti sauces and
personal care items like perfume and cologne. With a move for companies to be more eco-friendly,
glass is gradually making a comeback because it is fully recyclable and can be reused an endless
number of times.
Flexible Plastic Packaging
This is another type of plastic packaging used with a variety of products. It is made from linear
low-density polyethylene (LLDPE) or low-density polyethylene (LDPE). LLDPE is commonly
used as shrink wrap, stretch wrap, and other thin plastic packaging types like the plastic wrap used
around pallets or the green plastic bags grocery stores make available in the produce section.
LDPE can be produced in various thicknesses and is typically used as primary packaging, but it
can also be used as secondary packaging. Pet food, pet treats, toilet paper, tools, parts, and bags of
potato chips are some primary packaging products that use LDPE. Secondary LDPE packaging
would be the plastic wrapped around cases of bottled water or canned goods.

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17. CONSUMER AND INDUSTRIAL GOODS PACKAGING
Packaging can have different applications, dependent on the stage of distribution that the product
is in; the product has to go from the producer to the retailer, and from the retailer to the consumer.
Through its long journey, a product might require specialized packaging, so that it gets to its
destination in perfect condition. But what that destination is will determine which type of
packaging it will need. Here, we will explore the difference between consumer and industrial
packaging. Before understanding the difference between consumer and industrial packaging,
however, it is important to know what roles the packaging serves in the product’s journey from
the manufacturer to the consumer. Here are some of the functions of packaging;
 Market the product
 Provide information about the product
 Protect the product against damage and unsanitary conditions
 Contain the product, especially liquids
 Simplify transportation
Industrial Packaging and Consumer Packaging
So what is the difference between industrial packaging and consumer packaging. Industrial
packaging is typically used to deliver goods from the manufacturer to the retailer. There are
instances when the industrial packaging is also the consumer packaging. Take for instance animal
feeds that come in sacks. The sacks are loaded to trucks from the manufacturer directly to the
retailer, and arrive the same way to the consumer. Consumer packaging, on the other hand, is the
packaging that the product gets to the consumer in. This packaging goes from the manufacturer to
the retail outlet, and finally to the consumer.
For example, a package of cookies that leaves the manufacturer arrives at the retail store exactly
as it will be sold to the consumer. Another vital difference between consumer and industrial
packaging is labeling; they have different labeling requirements, such as in declaration of quantity,
responsibility, and identity.
The Three Levels of Packaging
Primary packaging: Wraps the product directly,
which arrives to the consumer as is. The main
purpose for primary packaging is to preserve and
protect the product.
Secondary packaging: Used in addition to, or on
top of, the primary package. This level of
packaging markets the product, and also gathers

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the products for easy handling and sales. It can also be used to group the product.
Tertiary packaging: Typically used in the transportation of the products from the producer to the
retailer; it is also used to define the sales unit that the manufacturer uses to sell to the consumer.
For instance, a crate or corrugated carton containing a certain number of units of the product
within.
18. FACTORS INFLUENCING MATERIALS PLANNING
Price Trends, business cycles, Credit Policy, Government import policy etc. the recent credit
squeeze followed by the interim report submitted by the study group to frame guidelines for follow
ups of bank credit is an excellent case in point. Material planning is the scientific method of
planning and determining the requirements of consumables, raw materials, spare parts and other
miscellaneous materials essential for the production plan implementation.
This plan forms a sub- component of the overall organizational plan, hence it is always derived
from the overall organizational plan. Material planning essentially carries out the process of
forecasting and planning of procurement of materials.
Material Planning Factors
There are two major factors influencing the material planning, they are:
1. Macro factors: These include factors such as business cycles, import and export p [policies,
price trends, credit policy and other global factors.
2. Micro factors: These factors include the internal organization factors such as production plan,
investments, corporate policies, inventory holding. Other essential factors such as the time of
procurement, working capital, acceptable inventory levels, delegation of power seasonality also
influence the material planning.
Materials Planning

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The key factors influencing material planning can also be shown as inputs from:
 Based on the forecasting & project management type.
 Total manufacturing order & service order.
 Capacity which needs to be produced as well as distribution metrics.
 Finally, depending upon the purchase order & customer order
19. PRESERVATION SAFETY
The logistics chain is a complex process involving a series of stages which must run perfectly
smoothly to ensure that the goods arrive at their destination fast and safely. One of those stages is
storage, which plays an essential part in the distribution process. Storage isn’t only about looking
after goods, here are some of the aspects involved in a good warehousing service:
 Goods reception.
 Safekeeping the goods, making them easy to access and handle.
 Maintenance: Managing products, their safety and preservation.
 Inventory of the cargo and available stock.
 Transport: Managing preparation, packaging and shipment to the destination.
Storage plays a vital part in the supply chain given that it helps to guarantee good delivery times
and reduce warehouse losses, making it possible to offer better services, to occupy a position ahead
of competitors and, ultimately, to increase profits. Having a good storage system is therefore vital
for expanding a business. Hence the importance of knowing the different kinds of logistic storage
in order to be able to choose one suited to the specific needs of each business and its target market.
Storage by function in the logistics chain
Central storage
This kind of storage is located near the production plant, aiming to keep the cost of goods transport
to a minimum. It usually stores most of the stock and distributes it to the different regional
warehouses if these exist.
Regional storage
This kind of storage has a strategic location guaranteeing distribution of the product in the shortest
possible time. These are warehouses organised to receive large quantities of goods coming from
the production plants on lorries.
Storage in transit
These are warehouses located mid-way between the regional warehouse and the point of sale. Here
the idea is that the transport time is no more than 24 hours. These are fast-moving warehouses,
prepared to hold the goods for a short time and with a high turnover.

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Temporary storage
These are spaces conditioned for a limited amount of time to meet stock needs in the event of
specific demand.
Free warehouse
This is the name given to the storage space for goods coming from imports or exports. The free
warehouse offers a number of tax benefits, given that the cargo is not subject to import duties or
internal revenue. The goods stored here are tax free both on entering and leaving the depot.
20. MEASURES OF MATERIALS HANDLING
Optimize capacity and layout planning
The capacity of a facility and the state of its shop floor determine its productivity levels, as well
as the level of safety that can be expected. A chaotic facility floor will experience traffic when
transporting materials, and this is a recipe for disaster. Moving materials while operators zigzag
through the pathways of industrial vehicles is also a recipe for disaster. Thus, proper planning is
required.
Implement a safety culture
The culture of ‘profitability no matter what happens’ has negatively impacted the implementation
of safety within the industrial sector. Putting finances first sends a message across to operators,
and that message is ‘we do not really care about your safety, just get the job done’.
Implementing a safety first tradition in place puts the rank and file on the side of management and
motivates employees to do their best. The LyondellBasell story is an excellent example of how
this works. To stave off bankruptcy, the plastics and chemicals refining company hired Jim
Gallogly as its CEO. In his first meeting, the new CEO outlined his commitment to safety before
discussing the dire financial situation the company found itself in. The focus on safety reduced
shop floor accidents, motivated employees, and increased productivity.
Welcome regulators as consultants
The boys in suits or the boys from the government are generally seen as nuisances who make life
difficult for operators. Many operators and managers also believe regulators have no skin in the
game and do not understand operational dynamics…but this is far from the truth. Regulators are
also affected by increasing accident rates as their names are attached to the facilities they visit.
Thus, regulators should be welcomed just like the expensive operational consultants you pay a
premium to for productivity-related advice. The digital transformation of the industrial sector
supports the application of automated solutions to ease the operational challenges operators face.
Some tech-related tips to ensure material handling safety include:

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Automate the material handling process
Removing humans from the material handling process drastically reduces material transportation-
related accidents. Currently, two automation solutions that you can use exist. These are
autonomous guided vehicles (AGVs) and automated mobile robots (AMRs). AGVs reduce
accidents because they have dedicated tracks that do not cross operator pathways, and they can be
controlled using wearables when they go off-track. AMRs navigate the shop floor using collision-
detection technology that ensures they function at safe speeds and navigate the floor without
colliding with objects.
Employ remote monitoring
The need for supervisors who move from station to station to ensure materials get to specified
locations on time has become obsolete. Remote monitoring technology solutions such as IoT and
tracking sensors can easily pinpoint the location of material handling equipment and the speed
they are moving without putting a human in harm’s way. Remote monitoring solutions are subsets
of Industry 4.0 as they leverage the interexchange of data within facilities and data analysis to
calculate risk factors. Understanding the risk factors associated with material handling equipment
in real-time reduces accidents.
Integrate safety implementation technologies
In certain scenarios, even automated guided vehicles can go off-track. When this occurs, there
must be fail-safe solutions to ensure off-track AGVs can be controlled and brought to a stop
without harming workers on the shop floor. Technologies such as wearables provide operators
with a means to control errant vehicles to safety without being in their path.The equipment used
to transport materials across the shop floor must be properly managed to forestall accidents and
deliver increased productivity. To achieve this, operators must understand the proper processes of
handling material handling equipment and taking care of them. The tips provided here can help
with proper material handling equipment management.
Devise predictive maintenance strategies
Industry 4.0 focuses on leveraging historical data to prevent downtime, which can be caused by
faulty material handling equipment. Implementing a predictive maintenance strategy ensures faults
are easily discovered and mitigated in real-time to forestall unplanned downtime. Predictive
maintenance also reduces the possibility of material handling equipment developing a defect while
in operation. Unforeseen faults or defects can lead to accidents within the facility. Achieving
material handling safety starts with training the employees who utilize manual material handling
equipment on proper utilization. Continuous training ensures employees do not make common
errors such as running with carts to speed up delivery or pulling a cart from the front instead of
pushing. Properly trained staff are more likely to avoid the errors that lead to accidents on the shop
floor.

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Secure transportation routes
Securing the routes material handling equipment takes when making deliveries or picking orders
to improve material handling safety. Securing these routes means ensuring obstacles do not
obstruct pathways and the floors are properly graded and built to support the movement of
equipment. The floor should also be properly maintained to ensure snags, holes, and other defects
do not get material handling equipment to go off-track.
Sustained vigilance
Implementing every strategy to improve material handling safety without consistently applying
these measures reduces their efficiency levels. Sustained vigilance and training and retraining
employees are the recommended solution to delivering lasting safety within the shop floor.
Implementation Responsibility – Everyone that works within a facility and has cause to navigate
the shop floor must be responsible for upholding implemented safety strategies.

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UNIT- IV
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, 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.
1. INTRODUCTION
Warehousing serves as the link between production
and distribution in the supply chain. Its primary
function is to store products between the time they
are produced or procured and the time they are
distributed to customers. However, its role extends
far beyond mere storage. The process of storing
goods in a safe and secure environment before they
are made ready for distribution is known as
warehousing. Warehouses take stock of quantity
goods when they arrive, keep a track of where they
are located in the warehouse and for how long they
need to be stored.
2. CONCEPTS OF WAREHOUSING
Storage is crucial to every company While it may appear simple to many, it is full of many options.
Warehouses come in many shapes and sizes, catering to various niches. The variables that impact
your company’s warehouse selection include the industry, geography, and specific business needs.
Choosing the kind of warehouse may significantly influence order fulfilment, which subsequently
has a direct impact on your customer relations. As more orders you complete on time, the more
the client satisfaction grows. eCommerce warehousing is not only storage space, but it is also
important for order fulfilment because of the close connection between online companies and
eCommerce orders. Ecommerce warehouse is vital if you want to succeed in e-commerce. As a
result, researching various kinds of warehouses is essential in order to select the correct one for
your company.

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3. TYPES OF WAREHOUSE
Distribution Centers
While warehouses have a similar level of storage capacity, distribution centres have much more.
These logistics hubs allow for quick transportation of huge volumes of products within a short
period of time. Many suppliers provide products, and those products are rapidly distributed to
different consumers. An essential component of the supply chain are these supply chain facilities,
since they provide rapid and dependable transport of products. This increase in efficiency is due
to the use of electronic controls at most of these locations. Most facilities that improve efficiency
and reduce delivery time are situated near transportation hubs Typically, items with a short shelf
life such as fresh fruits and vegetables are kept in the middle of the shop for about a day since they
arrive in the morning and are delivered to consumers by the evening.
Public Warehouses
Warehouses may be difficult for small companies to afford to buy or lease. Businesses on a month-
to-month basis may utilise public warehouses for short- or long-term storage. For businesses, there
may be a per-pallet cost or an annual square-footage price . Additionally, warehouses often provide
inventory management, control, and transportation services. Using a public warehouse does not
need a warehouse personnel, and vice versa. In addition to the monthly charge, the operator of a
public warehouse will also incur all operational expenses, including building upkeep, and forward
these costs on to the customer. Companies have freedom when they utilise public warehouses to
manage their supply chain needs. Furthermore, for companies who need a more inexpensive
alternative than a private warehouse, they are a viable option.
Private Warehouses
A private warehouse is a storehouse held by distributors, wholesalers, or manufacturers that is not
open to the general public. In addition to publicly-held warehouses, many retail and online
marketplaces also operate their own privately-owned warehouses. When looking at various kinds
of warehouses in the supply chain, private warehouses are a better choice for eCommerce SMBs
if they require a significant, long-term strategic presence in an important area. Private warehouses
nevertheless remain a fantastic warehouse choice, despite being costlier to construct than other
warehouses.
Bonded Storage
The government and commercial entities both own, operate, and regulate these warehouses.
Storage facilities where import duty has not yet been paid are utilised for imported products that
have been stored in bonded warehouses. To acquire a licence from the government, these privately
operated bonded warehouses are required to do so. This lets the government authorities maintain
control over private companies in order to ensure that they pay their taxes on time. Importers will
not be able to either acquire over or open the products if they do not pay tariffs. This observation

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has been shown to be correct when looking at global warehouse data. While bonded warehouses
are subject to two different taxes, they are liable to both excise duty and import duty.
Smart Warehouse
E-commerce has shown that AI is powerful, and warehouses are also changing due to it. For
businesses who want to avoid human mistake in their supply chain, a smart warehouse is highly
recommended. This kind of warehouse eliminates the administration and fulfilment process from
being handled manually. The robots and drones used to execute activities performed by human
workers may be found at warehouses and distribution centers. Though it is possible to improve
production and reduce errors with this type of warehouse, it has certain disadvantages. Redesigning
procedures that demand a higher technical ability necessitates retraining the employees and may
take many years to pay back the original expenditure.
Cold Storage
When it comes to temperature sensitive products, cold storage accomplishes precisely what its
name suggests, and that is to keep these goods at low temperatures. Cold storage warehouses
enable prescription and over-the-counter medications, fresh foods, plants, personal care products,
and so on to have extended shelf life. Inbound and outbound shipments are also done in refrigerated
shipping facilities.
Pick, Pack & Ship Warehouse
The process of receiving an order from either an online shop or a brick and mortar business,
followed by pack, pick, and ship, is referred to as the process at a warehouse. People or automated
systems in the warehouse search for goods using a pick list. After that, they are loaded into a
shipping container, which is then tagged and delivered to the client.
4. FUNCTIONS OF WAREHOUSING
Storage
The primary function of a warehouse is to provide storage space for equipment, inventory or other
items. It offers appropriate facilities to the enterprises for storing their goods when they aren’t
called for a sale. This helps prevent wastage of stock and ensure its protection and safety. Such
goods may be held from the time of their production or purchase till their use or consumption.
The storage may be of two types-
(i) Planned Storage: It refers to the carefully estimated storage required to meet the regular
customer demand.
(ii) Extended Storage: It refers to the storage requirement above the planned storage. Various
factors can cause it, a few of them being –
Demand Seasonality: For example, the demand for confectionery items rises drastically during
the holiday season, requiring additional storage space for that specific period.

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Promotional Campaigns: Generally, because of promotional campaigns such as sales promotion,
extra stock needs to be kept to satisfy the expected higher demand for the product.
Speculative purchases: Sometimes, goods are purchased in bulk due to lower price or higher
price expectations in the future. This calls for more storage space to be arranged.
Hence, the storage function of a warehouse helps in smoothening out the routine operations of the
business as well as takes care of many atypical situations.
Safeguarding of Goods
A warehouse offers protection to goods from loss, theft, or damage due to unfavourable weather
conditions like heat, wind, dust and moisture, etc. A warehouse can make particular arrangements
for different products catering to their nature. For example, it can hire security staff to prevent
theft, arrange cold storage facility for perishable goods, use insecticides for preservation, install
fire-fighting apparatus to avoid any fire accidents. If all of these cases are considered prudently
and addressed carefully, a warehouse can significantly cut down losses due to spoilage of goods
and wastage during storage.
Movement of Goods
Inbound activity– It means unloading of goods received by the warehouse.
Transfer to storage– It refers to transferring the goods from the inbound area to the storage area.
Order selecting–It means choosing the item in the storage corresponding to the order to be shipped
and moving it to the shipment area.
Outbound activity– Lastly, we have ‘outbound activity’, which means inspecting and loading the
goods for shipment.
The movement of goods inside a warehouse must be as seamless as possible to ensure
uninterrupted orders. Hence, the infrastructure of the warehouse, as well as the software systems
used by it, should be upgraded regularly.
Financing
Financing is another one of the diverse functions of a warehouse. Warehouse financing is a type
of inventory financing that involves a loan provided by a financial institution to a manufacturer,
company, or processor. In this case, goods, inventory, or commodities are deposited in a warehouse
and used as collateral for the loan.
When goods are transferred to any warehouse, the depositor gets a receipt, which acts as evidence
about the deposit of goods. The warehouse can also issue a certificate in favour of the owner of
the goods, which is called ‘Warehouse-keeper’s warrant’.
Value-added Services
A value-added service goes beyond conventional warehousing. Such services help optimise the
supply chain management, generate higher value, and deliver products efficiently to customers.

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They include bundling, customisation, re-branding, re-packaging, processing, etc. A few of them
are discussed below–
Processing: It refers to the process that certain goods go through to make them consumable. For
example, seasoning of timber, ripening of fruits, processing of coffee beans, polishing of paddy,
etc. Sometimes warehouses perform such activities on behalf of the owners.
Grading and branding: Warehouses also undertake the functions of grading and branding goods
on behalf of the wholesaler, importer or manufacturer of goods. They also offer services for
mixing, blending and co-packing or repacking service.
Kitting & Product Customisation: Customisation services provided by warehouses give the
flexibility to make bundles or customised product for any customer or market requirements (for
example- bundling, SKU building, localising, product boxing or kitting).
Other services: Other value-added services provided by a warehouse include labelling, stamping,
gift packing, barcode printing, order fulfilment and invoice printing, quality checking, insurance,
and goods disposal. Availability of such services with the warehouse takes a considerable burden
off the entity using the warehouse and helps it focus on its core activities. This results in lower
costs and higher standards.
Price Stabilisation
Warehouses play a crucial role in the process of price stabilisation. They help control violent
fluctuations in prices by Storing goods, when their supply exceeds demand in the market.
Releasing goods, when the demand gains pace. When there is excess demand in the market, the
extra inflow of goods may further decrease their price and lead to losses for the business owners.
Hence, in this case, the warehouses hold the stock back until the demand for such goods rises
again. This is how warehouses ensure a regular supply of goods in the market by matching supply
with demand, hence, stabilising prices.
Information Management
Warehouses keep track of information about goods and materials sent into the warehouse, stored
and shipped out. In addition to that, any other information regarding the warehouse is recorded. It
allows the warehouse managers and other concerned personnel to get accurate insights to ascertain
the availability of stock, stock processing and stock replenishment requirements. The data
maintained by the information system in the warehouse must be precise, timely, and free from
errors. It may then be presented to the higher management for the purpose of making more
informed and better decisions.
Other Functions
Risk bearing- The moment goods are delivered for storage, the liability of these goods transfers
to the warehouse-keeper. Consequently, the risk of loss or damage to goods is borne by the
warehouse keeper. Since it is now its obligation to return the goods in good condition, the

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warehouse becomes responsible for any mishappenings. Thus, it takes all precautions to prevent
any such situation. The stored goods may also be insured for compensation in case of loss.
Rental property- Some warehouses can also serve as a source of rental income for their owners
who rent them out to people or entities that seek to use them for storage or other purposes.
Place utility- Warehouses are mainly located at convenient places, for instance, near a road,
airport, rail or waterways to ease the movement of goods. By examining these functions, it is
logical to claim that a warehouse plays a much more pivotal role in the success of a business than
most people manage to realise. Proper monitoring of these functions is imperative to guarantee
that all warehousing operations take place efficiently.
5. WAREHOUSE OPERATIONS
Warehouse operations is the process of managing the activities associated with receiving, storing,
packing and distributing goods in a warehouse. This can include: Warehouse management systems
(WMS) Workflow processes. Warehouse operations is the process of managing the activities
associated with receiving, storing, packing and distributing goods in a warehouse. This can
include:
 Warehouse management systems (WMS)
 Workflow processes
 Resources such as people, tools, and technology that are required to complete each step of
the cycle
Warehouse Operations Manager: Oversees the daily operations of a company's warehouses and
ensures that they run smoothly and efficiently. They may also oversee staff members who work in
other areas such as purchasing or inventory management.
Warehouse Supervisor: Manages workers at one or more warehouses, ensuring that they
complete all assigned tasks in a timely manner while adhering to company policies and procedures.
The supervisor may also be responsible for training new employees on their duties within the
warehouse operation system (WMS).
Warehouse Clerk: Helps to organize and manage inventory in a warehouse. This includes
receiving and storing goods, as well as packing orders for shipment.
Warehouse Manager: Oversees the daily operations of a company's warehouses and ensures that
they run smoothly and efficiently. They may also oversee staff members who work in other areas
such as purchasing or inventory management.
Warehouse Worker: Performs tasks such as loading and unloading trucks, moving merchandise
around the facility using forklifts or pallet jacks, counting inventory items and other duties related
to the operations of a company's warehouses.

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6. OWNERSHIP ARRANGEMENTS
Ownership Arrangement means any agreement between ION and any Health Care Provider that
owns any percentage, directly or indirectly, whether through shares, membership interests, or other
ownership or investment means, of a Leasing Company or other ION entity. Property ownership
agreements can be used for residential or commercial properties. For businesses, it lets you protect
your interests in your business assets while allowing you to split the financial obligations of
purchasing a property. A well-drafted agreement can help maintain good relationships among
partners by outlining each person's rights and responsibilities within the partnership.
The agreements typically provide for unanimous consent of all parties before major decisions are
made about the property. A real estate lawyer may draft an agreement that defines issues such as
termination provisions, voting procedures, changes in capital contributions, and covenants not to
compete or assign without consent from other party.
Common Sections in Property Ownership Agreements
Below is a list of common sections included in Property Ownership Agreements. These sections
are linked to the below sample agreement for you to explore.
 Sale of property
 Title and survey
 Inspection and due diligence period
 Representations
 Closing
 Termination and default
 Casualty damage or condemnation
 Real estate commission
 Miscellaneous
7. WAREHOUSE DECISIONS
Decision Warehouse is a tool of the Rule Execution Server console for monitoring ruleset
execution. It stores execution traces in a database.The execution trace contains information about
how a decision was made. It records the rule flow, the path of rule flow tasks, and the rules that
were executed. These details are intended to help users, an auditor for example, understand what
happened during the execution process. Users can access Decision Warehouse in the Rule
Execution Server console.
Storage and Inventory Management:
Warehouses are strategically located to store inventory and maintain optimal stock levels. This
helps businesses mitigate the risk of stockouts and meet customer demand effectively. By holding
inventory, warehouses act as buffers between supply and demand fluctuations, ensuring a smooth
flow of goods even during unforeseen disruptions in the supply chain.

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Risk Mitigation:
Warehouses also serve as a form of risk mitigation. By storing goods in a secure environment,
businesses can protect their products from damage, theft, and adverse weather conditions.
Additionally, having multiple warehouses in different geographical locations can reduce the
impact of unforeseen disruptions like natural disasters or transportation breakdowns.
Consolidation and break-bulk:
Warehouses serve as consolidation points, where goods from different suppliers or production
sources are brought together and merged into larger quantities. This helps optimize transportation
costs and reduces the number of shipments required. On the other hand, warehouses also enable
break-bulk operations, where large shipments are divided into smaller orders for individual
customers. This flexibility allows businesses to reach a wider market and fulfill customer
preferences more efficiently.
Value-added services:
Warehouses offer a range of value-added services, including packaging, labeling, and
customization of products. Packaging plays a crucial role in protecting goods during
transportation, and warehouses ensure that goods are properly packed to prevent damage.
Moreover, warehouses can perform labeling and customization tasks as per the specific
requirements of individual customers, thereby enhancing customer satisfaction and meeting their
unique needs.
Order fulfillment:
Warehousing plays a significant role in order fulfillment. When customers place orders,
warehouses are responsible for picking, packing, and shipping the products. With efficient
inventory and order management systems in place, warehouses can minimize order processing
time and ensure accurate and speedy delivery to end customers. This is crucial for maintaining
customer satisfaction and loyalty.
Cross-Docking:
Cross-docking is a technique where goods arriving from suppliers are unloaded from inbound
trucks and loaded directly onto outbound trucks with little to no storage time. This practice
eliminates the need for long-term storage, reducing warehousing costs and enhancing speed to
market. Cross-docking is particularly beneficial for perishable goods and fast-moving consumer
items.
8. WAREHOUSE MANAGEMENT SYSTEMS
A warehouse management system (WMS) is a software solution that offers visibility into a
business’ entire inventory and manages supply chain fulfillment operations from the distribution
center to the store shelf. Warehouse Management (WMS) solutions additionally enable companies
to maximize their labor and space utilization and equipment investments by coordinating and

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optimizing resource usage and material flows. Specifically, WMS systems are designed to support
the needs of an entire global supply chain, including distribution, manufacturing, asset-intensive,
and service businesses.
In today’s dynamic, omnichannel, fulfillment economy, connected consumers want to buy
anywhere, fulfill anywhere, and return anywhere.
Benefits of a modern, cloud-based warehouse management system
With the internet and digital technology having transformed how customers make purchases—
disrupting supply markets, changing customer buying patterns, and adding complexity to the
supply chain—fulfillment operations need to meet the changes with a digitally connected solution
of their own. In moving to the cloud, warehouse management systems can meet the connected
consumer with a connected fulfillment solution that offers real time visibility, scalability, and
market reactivity.
Fulfillment process—Rapid implementation
To stay competitive in the new fulfillment economy, you need to adapt quickly. With a cloud-
based system, you can ramp up your supply chain system fast. Powerful logistics capabilities are
available in weeks, instead of months. Oracle Warehouse Management Cloud comes ready to
integrate with multiple systems to support complex, multichannel fulfillment processes. It delivers
the same level of warehouse management functionality as an on-premises system, but without the
IT overhead. Cloud technology eliminates the need to pay for hardware, software, and IT
specialists to maintain the system. You’re up and running quickly—at a more affordable cost.
Cloud-based WMS—No upgrades required
You’re always on the latest software version with a cloud-based solution. Software-as-a-service
(SaaS) pricing includes regularly scheduled updates and no IT infrastructure costs. Everything
exists in the cloud. Updates work similarly to apps in mobile phones, meaning that customers
always have the latest codebase at work.
Connect logistics—Lower upfront costs
Multitenant, cloud-based solutions have an almost immediate return on investment and a lower
total cost of ownership. With the cloud, there’s no need for hardware, software, and IT specialists.
It comes ready to integrate with multiple systems to connect all your logistics processes from end-
to-end. In contrast, a company with an on-premises WMS could easily have paid for several
customizations and modifications over a five-year period. When it is time to upgrade, that
company is looking at a total reinstallation and configuration.

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Scalability and flexibility of supply chain operations
Today’s global market demands speed. Oracle’s cloud-based solution gives you the scalability to
quickly expand your supply chain operations to meet changing market conditions. Scale as needed
to handle peak seasons and manage other changes. When new opportunities come along, you’ll be
ready. This business agility is yours without paying an on-premises price. Capital expenditures for
in-house hardware, software, and labor are eliminated. Oracle WMS Cloud was built for
integration, not isolation. Data can be sent and received using industry best practice RESTful web
services and XML. These integration points can easily be leveraged by material handling
equipment vendors to build integrations for automated warehouses.
9. PACKAGING PERSPECTIVES
Packaging overview:
Packaging in general term is the science, art and technology of enclosing or protecting products in
a way that it reaches the consumer in its original form when manufactured. So, the basic function
of packaging is to protect and ensure the identity and integrity of a product throughout its shelf
life. In current world, the conventional definition has taken a very different turn making packaging
responsible for many roles, be it product protection or shelf appearance or a way of communication
with the user world. Different product type and marketing strategies define the packaging.
Packaging has evolved significantly over the past several years to meet the product, market,
manufacturers and consumer needs.
Packaging evolution:
The Packaging evolution cycle can be defined in eras, based upon different performance aspects
expected:
Era I: The Protection/Containment
This is the first era where packaging was termed for safe containment of product which supports
shelf life at consumer end. In this the main focus was to design and develop different packaging
systems or materials suitable according to the product to be packed.
Era II: Branding/Marketing
This era aimed at creating a brand identification in the market among many competitors. Be it the
face of packaging or graphic designing, everything revolved around creating a brand value.
Era III: Brand protection
This was a challenging era when different brands were fighting against their counterfeit products.
Here elements were added to the packaging to make it tamper proof and easily identifiable among
many counterfeit products. Companies were following many overt and covert technologies to
prevent their user for getting affected by counterfeit drugs. Tamper evident labels, destructible

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packaging, nanotechnology labels, holograms etc. were introduced and still we are defining
modifications to these systems.
Era IV (Current): Interactive packaging or Digital era
This is the modern era where the packaging is designed to interact with the consumers. Be it
product/brand protection and authentication or consumption pattern. RFID labels, nano technology
labels, QR codes and other digital technologies are the means to communicate the authenticity and
other relative details about the brand and the product.

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10. PACKAGING FOR MATERIAL HANDLING EFFICIENCY
Material handling falls into one of three categories, including manual, semi-automatic and
automatic. Every category comes with its own considerations and best practices. Understanding
the differences between these categories will help you find the right material handling solutions
for your facility.
Manual Material Handling
Manual material handling is when
facility workers move and handle
products with their hands. They will
typically lift, sort and carry
products throughout the facility and
between the facility and the
transportation vehicle. This style of
material handling is more common
among smaller, independent
facilities. Over time, manual material handling can lead to a higher rate of workplace injuries.
According to the National Safety Council, overexertion, including lifting, lowering and repetitive
motions, accounts for 33.5 perc ent of workplace injuries. Contact with objects and equipment
account for 26 percent of workplace injuries. Workers may also get injured walking across the
facility floor. Slips, trips and falls account for 25.8 percent of workplace injuries.
Semi-Automatic Material Handling
Semi-automatic material handling refers to the use of material handling machines that must be
operated by a human, such as mechanical lift trucks, conveyor belts and packing equipment. While
human workers still make up the bulk of material handling processes, workers aren’t responsible
for moving these objects by hand, which can help prevent the number of workplace injuries such
as sprains, muscle cramps and aches and lower back problems.
Automatic Material Handling
Automatic material handling means the entire material handling operation is automized. Machines
such as automatic pickers and stockers, packaging systems and self-driving lift trucks are
responsible for the movement and handling of individual items. Workers may supervise these
operations, but they are not driving or handling the equipment themselves.

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12. SUPPLY CHAIN LOGISTICS DESIGN
Supply chain design is the process by which a company
structures and manages the supply chain in order to identify
the right balance between inventory, transportation, and
manufacturing cost. According to the research article The new
competitive edge by the MIT CTL Supply Chain Design Lab,
“traditional supply chain design methods have become
outdated and companies that follow them risk putting
themselves at a competitive disadvantage.” The report warns
that organisations need to update their approach to supply
chain de sign if they want to improve the efficiency of their
operations and gain competitiveness. “As supply chains
become more global and focused on the end customer, the design of supply chains plays an
increasingly important role as a competitive differentiator,” say the authors.
4 KEYS FOR SUPPLY CHAIN DESIGN
To adapt logistics processes to new market trends and challenges, organisations need to reorient
and enhance their supply chain design. To do this, the report by the MIT CTL Supply Chain Design
Lab highlights four new approaches: Extend the scope of supply chain design beyond the typical
cost-reduction model. When planning the strategy, it’s a good idea to incorporate other factors
such as the projection towards international markets, the creation of added value and new actions
to reinforce sustainability.
Integrate tactical decision-making. The goal here is to narrow the gap between expected and actual
throughput in areas like operational planning, sourcing optimisation, production strategies,
inventory management and transport routes.
Place more emphasis on risk factor analysis in supply chain design. To improve strategic planning,
it’s crucial to integrate analytical tools in decision-making. This mitigates risk and bolsters
resilience in changing environments. Adopt innovative design methods and practices that
incorporate new technologies in planning. The aim is to design supply chains that are digital,
flexible, cost-effective and customer-centric.
13. GLOBAL STRATEGIC POSITIONING
Strategic positioning is all about where a company stands in the market. It's how a business
distinguishes itself from its competitors and how it is perceived by customers in comparison to
other companies in the industry. Global positioning is the method whereby data about the firm
and/or product is connected in such a way that the entity is perceived by the customer to be
separated from the rivalry, to reside Page 12 3 in a specific space in the total market. There are

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four main types of positioning strategies: competitive positioning, product positioning, situational
positioning, and perceptual positioning
A great positioning strategy example would be a computer company that focuses on providing
cutting edge technology at premium costs before their competitors. Another example of
positioning strategy would be a large chain store that focuses on providing popular goods to many
people at a low cost.
14. GLOBAL SC INTEGRATION
Integrating your supply chain refers to the process of connecting and streamlining all stages of a
product’s life cycle, from raw material sourcing and production to distribution and final
consumption. This holistic approach fosters close collaboration between suppliers, manufacturers,
distributors, and retailers. As a result, businesses can optimize their operations, reduce costs,
reduce supply chain lead times, and improve sustainability.
Increasing globalization
As global supply chains become increasingly complex and interdependent, businesses must
synchronize their operations with numerous partners spread across the world.
Changing customer expectations
Consumer expectations have evolved over time due to technological advancements. Today’s
consumers demand a fast, reliable, and personalized experience from companies. Supply chains
that work in harmony with all their business partners can achieve higher resilience and flexibility
to meet changing customer needs.
Rising importance of sustainability
Integrated supply chains allow for better resource management and waste reduction, supporting a
company’s sustainability initiatives. As consumers demand more sustainable products, supply
chain managers need to keep an eye on their suppliers’ practices.
Rising importance of risk mitigation
A well-integrated supply chain allows data sharing to help businesses anticipate and address future
disruptions, ensuring continuity and resilience.
15. SUPPLY CHAIN SECURITY
Supply chain security is management of the supply chain that focuses on risk management of
external suppliers, vendors, logistics, and transportation. It identifies, analyzes, and mitigates risks
associated with working with outside organizations as part of your supply chain. It can include
both physical security and cybersecurity for software and devices. Though there are no established

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one-size-fits-all guidelines for supply chain security, a complete strategy requires combining risk
management principles with cyber defense while also taking governmental protocols into account.
Secure a Supply Chain
 Logging and tracking shipments
 Using locks and tamper-evident shipping seals
 Inspecting factories and warehouses
 Requiring background checks
 Using accredited and certified suppliers
 Performing security strategy assessments
 Performing penetration and vulnerability tests
 Authenticated data transmissions
 Deploying permissions or role-based data access
 Requiring minimum cybersecurity from vendors and resellers
 Regularly auditing open source and vendor source codes
 Using network-level scanning, behavioral analysis, and intrusion detection
 Formulating a response plan when threats are discovered
 Consulting governmental guidelines and regulations
16. INTERNATIONAL SOURCING
Global sourcing is a procurement strategy in which a business buys goods and services from
international markets across geopolitical boundaries to save money by using cheap raw materials
or skilled labor from low-cost countries. Global sourcing can help businesses tap into advanced
skills, resources and technology not available in their home country. Business process outsourcing
(BPO) is a classic example of global sourcing. Several companies have set up their call centers in
Asian countries, such as India and the Philippines, to benefit from the availability of low-cost,
skilled labor.Global sourcing strategy has become a matter of intense debate. With the onset of the
COVID-19 pandemic and the resulting supply chain disruptions, many businesses that relied on a
supplier based in China experienced unforeseen disruption. In several cases, the dependence on a

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single region impacted business continuity. The absence of alternative suppliers meant that some
of these businesses had to temporarily suspend operations, while a few others closed permanently.
Learn more about GEP’s procurement sourcing software and sourcing services.
17. DISTRIBUTION CONTROL AND EVALUATION
Distribution management is the process used to oversee the movement of goods from supplier to
manufacturer to wholesaler or retailer and finally to the end consumer. Numerous activities and
processes are involved, including raw good vendor management, packaging, warehousing,
inventory, supply chain, logistics and sometimes even blockchain.
Evaluation of Supply Chain Management
Supply chain management does not have a long history relative to other business disciplines such
as accounting or economics. The term supply chain management was first introduced by Keith
Oliver of Booz Allen Hamilton in 1982, but did not gain significant traction until the turn of the
21st century (Heckmann, Dermot, & Engel, 2003). However, concepts that underpin supply chain
management have been in existence for many decades.

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UNIT – 5
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 -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: 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.
1. SCM PLAN
Supply chain management (SCM) is the
optimization of a product's creation and flow from
raw material sourcing to production, logistics and
delivery to the final customer. The SCM process is
composed of four main parts: demand management,
supply management, S&OP, and product portfolio
management. Demand management consists of
three elements: Demand planning is the process of
forecasting demand to make sure products can be
reliably delivered.
The five most critical phases of SCM are planning,
sourcing, production, distribution, and returns. A
supply chain manager is tasked with controlling and reducing costs and avoiding supply shortages.
2. DEMAND PLANNING
Demand planning is a cross-functional process that helps businesses meet customer demand for
products while minimizing excess inventory and avoiding supply chain disruptions. It can increase
profitability and customer satisfaction and lead to efficiency gains. Demand planning is a supply
chain management process. It is the prediction of what a company intends to sell in the future (i.e.,
future demand). It involves determining what demand there will be for each product a company

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sells and then building plans to support this estimated demand. The goal is to hit a balance between
having sufficient inventory levels to meet customer needs without having a surplus.
3. SOURCE OF PROCUREMENT
Sourcing in procurement is a process of assessing, selecting, and managing suppliers to acquire
the desired goods and services from them. As the name suggests, sourcing focuses on creating
sources through which an organization can obtain its supplies. Procurement can be categorized in
several ways. It can be classified as direct or indirect procurement, depending on how the company
will use the items being procured. It can also be categorized as goods or services procurement
depending on the items that are being procured.
4. PRODUCTION OR ASSEMBLY STEPS
An assembly line is a production
process that breaks the
manufacture of a good into steps
that are completed in a pre-
defined sequence. Assembly
lines are the most commonly
used method in the mass
production of products. They
reduce labor costs because
unskilled workers are trained to
perform specific tasks. Rather
than hire a skilled craftsperson to put together an entire piece of furniture or vehicle engine,
companies hire wor kers only to add a leg to a stool or a bolt to a machine. Assembly is the process
of combining individual components into a finished product during manufacturing.
The key steps in a supply chain include:
 Planning the inventory and manufacturing processes to ensure supply and demand are
adequately balanced.
 Manufacturing or sourcing materials needed to create the final product.
 Assembling parts and testing the product.
5. SALES RETURN OF DEFECTIVE OR EXCESS GOODS
A sales return is an item that was sold to a customer but was later returned to the business. This
can be due to various reasons such as the item being defective, the customer not being satisfied
with the item, or the customer returning the item for a refund. The other name for sales return is
return inwards. When merchandise purchased for cash is returned, it is necessary to make two

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journal entries. The first entry debits the accounts receivable account and credits the purchase
returns and allowances account. The second entry debits the cash account and credits the accounts
receivable account.
6. USE OF INTERNET IN SCM
Direct Transactions
The Internet also provides managers with the ability to track out-of-stock inventory items in field
depots. The overall benefit of the Internet to firms in managing inventory in their supply chains is
to keep inventory levels low, reduce overall holding costs, and still provide high levels of customer
service. For supply chains in general, the role of the Internet has been to reduce the power of
intermediaries. Suppliers can offer their products and services directly to customers, and
purchasers can find what they need directly from producers. The Internet of Things has
transformed supply chain visibility, enabling companies to optimize their operations, improve
efficiency, and enhance customer satisfaction. From enhanced asset tracking to real-time inventory
management and predictive maintenance, IOT offers a plethora of benefits.
7. BENEFITS OF INTERNET OF THINGS (IOT)
Real-time Location Tracking
Real-time data on the product’s location and transportation environment is provided through the
Internet of Things (IOT). As soon as the product has been transported in the incorrect direction,
you will be informed and you will be able to track the arrival of ready items and raw materials.
Coping with Ambiguity
Because of the large number of stakeholders, supply chain management has always been a difficult
problem to solve. It is impossible to forecast or control the reasons for order delays. Late delivery
and supply shortages are typical causes of traffic delays. Using sensor-enabled IoT systems, the
position and speed of vehicles can be recorded, and maintenance notifications may be sent. For
perishable goods, temperature stability is critical.
Demand Prediction
Companies earlier didn’t have the ability to make better judgments since they didn’t have access
to smart tools. Increasingly, firms are leveraging their databases and the information they have to
create new routes and expand their distribution hubs. There is an efficient flow of items on the
shipping routes based on client preferences, purchase history, and even anticipated future
purchases. In-store sensors collect this information. Many organisations don’t even bother to
collect data from repair shops and manufacturers to gain a better sense of how consumers engage
with their goods and what areas of service improvement they need to work on.

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Locate Goods In The Warehouse
The usage of IoT-based supply chain management systems is one of the most popular warehouse
technology developments at the moment. Warehouse procedures become more efficient, inventory
management becomes more accurate, and staff safety is improved. Employees on-site, for
example, may simply discover items and quickly travel to the correct aisle for a certain product
thanks to real-time location trackers. The Internet of Things makes it possible to maintain a smooth
workflow and provide high-quality results that would otherwise be unattainable. In addition, IOT
is a stepping stone to complete warehouse automation with little to no human oversight when
paired with artificial intelligence.
Storage Condition Monitoring
Environmental sensors allow managers to monitor and react to changes in shipping circumstances.
One popular IoT supply chain system captures data on vehicle temperature, pressure, humidity,
and other conditions that might affect the integrity of the product and prompts automated condition
modification.
Asset Management
The Internet of Things (IoT) may be used to monitor and manage assets. Managers no longer have
to depend on human data entry or conventional inventory devices to keep track of all assets;
instead, software can do it automatically. Connected technology, such as sensors, RFID tags,
beacons, and smart materials, enables supply chain managers to quickly access crucial information
about each delivery, including the contents of the package, storage instructions, and so on.
8. ROLE OF COMPUTER/ IT IN SUPPLY CHAIN MANAGEMENT
IT integrates various operations carried out by different companies in the supply chain. It speeds
up the business processes and prevents bottlenecks. Companies are closer to achieving on-time
procurement, shorter inventory, and better efficiency, especially in manufacturing. By giving real-
time information about inventory levels, production plans, and delivery timelines, it can assist
firms in optimizing their supply chain activities. This can assist firms in making more informed
decisions regarding when to order supplies, how much to order, and when to schedule production
runs.
Integrated and Coordinated Supply Chain
A supply chain can work efficiently when it is properly integrated and well-coordinated. IT is
performing this important task by bringing in multiple technologies and combining them to
optimize the supply chain. These technologies are making data collection possible and much easier
and more accurate. Ultimately, this is allowing precise and detailed data analysis leading to sound
business decisions.

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Increased Productivity
A smooth flow of information, new technologies, and effective communication increases the
productivity of all entities in the supply chain. It is like an initiation for product movement.
Additionally, IT is building the link that passes the needed information continuously.
Cost Reduction
It permits the optimum utilization of assets and resources. Previous data is used to study the trends.
And technology is used to analyze it for refining performance. When resources are being used
optimally, they result in cost reduction. The role of IT in SCM becomes more prominent as it
motivates all parties to use their respective resources in the most cost-efficient approach. When IT
is used as it should be, there is a dramatic decrease in overall expenses.
Product Improvement
Furthermore, IT is consisting of tools and applications which can be used to attain early awareness.
In a market where customers always want something new, the product will either have to evolve
or else it will go out of demand. Therefore, to remain in business, you must present product
improvement and innovation sooner rather than later.
Supply Chain Visibility
Consequently, information builds the whole supply chain visible to supply chain managers. How
the information flows from one collaborator to the other and the effect it has on others is used by
the managers in creating strategic decisions.
9. E- MARKET PLACES
E-marketplace is a virtual online market platform where companies can register as buyers and
sellers to conduct business to business (B2B) or Business to Consumers (B2C) transactions over
the internet. The use of the internet has helped remove intermediaries in a transaction. It is a web
based information system which provides opportunities for both suppliers and buyers. It enables
the buyers to compare various products and services by different measures like performance,
quality, price etc. Buyers get access to a broader range of products and services. On the other hand
the sellers can reach the customers more conveniently and affordably. Sellers gets to enter new
markets, find new buyers and increase sales by generating more value for the buyers.
Types and Examples of E-marketplace
Independent E-marketplace
The basic motive of this model is to generate revenue. A B2B platform which is managed by a
third party and is open to buyers and sellers from a particular industry. When a party registers on
an independent e-marketplace it gets quotations or bids in a particular sector.

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Example- Alibaba
Buyer-oriented marketplace
A bunch of people with similar business interests come together to create an efficient purchase
environment. This helps a party get sufficient bargaining power to purchase at a desired price from
the supplier. A supplier can also benefit from this marketplace as it gives them a customer base
with which they can share their catalogue.
Example - Amazon
Supplier-oriented marketplace
This type of marketplace is also known as supplier’s directory. It provides a platform for the seller
to improve their visibility through different mediums of communication. The suppliers can target
the large number of potential buyers.
Example - E-bay
Horizontal and vertical marketplace
Horizontal marketplace- The buyers and supplier from different industries or regions can come
together to make a transaction.
Example-Amazon
Vertical marketplace- It provides access over the internet to various segments of a particular
industry up and down the hierarchy.
Example-Airbnb
Advantages
 The cost of the customers is reduced significantly as they can access the information about
various alternatives and choose the best that suits their needs.
 It can impose higher switching cost on the buyers and sellers.
 It provides economies of scale and scope.
 Different buyers and suppliers can work in collaboration to reap larger benefits from each
other.
10. E-PROCUREMENT
E-procurement eliminates the need to manually carry out laborious, procurement-related tasks
such as eAuctions and eTenders, exchanging supplier contracts and filling out supplier onboarding
questionnaires. The process works by connecting various entities and processes through a
centralized platform. E-Procurement is a process through which organizations procure goods and
services electronically. It can save time and money and prevent potential errors or mishaps during

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the procurement process. Procurement includes sourcing, obtaining and paying for goods and
services. Supply chain management also covers the logistics involve
d in obtaining goods, such as shipping and warehouse management, as well as transforming the
procured goods into products and distributing them to customers.
11. E-LOGISTICS
E-logistics is defined as the management of all the physical flows of an organisation that sells
goods on an online platform (website, marketplace, etc.). E-logistics is opposed to the traditional
logistics set up by retailers, although the two can be complementary. Because of its many
particularities, e-logistics represents a crucial issue for e-merchants and requires the deployment
of specific actions and processes in order for an e-merchant to benefit from an optimal flow
management.
Several factors explain this:
Buying online has become an
increasingly important part of buyers'
consumption habits in recent years. In
2020, online purchases have raised of
+32% according to FEVAD. Having a
dedicated logistics specific to this sales
channel is therefore no longer an option
for e-merchants. Internet users are
becoming increasingly demanding
when buying on the internet. E-commerce offers future buyers the opportunity to compare offers
on the market in just a few clicks, which means that e-merchants need to stand out from the crowd,
and this largely involves the buying experience, and therefore the delivery process.
The withdrawal period is also much longer in e-commerce than in traditional commerce. It is way
more likely that the product received will not ultimately meet the customer's expectations, hence
the importance of implementing a returns management policy for online merchants.
12. E-FULFILLMENT
E-fulfillment is short for ‘ecommerce fulfillment,’ which is the process of fulfilling and shipping
orders to customers. This part of the retail supply chain entails receiving and storing inventory,
processing orders, picking and packing items, shipping packages to their final destination, and
facilitating ecommerce returns. E-fulfillment can be handled in-house by a brand, but most fast-
growing brands choose to outsource fulfillment to a third-party logistics (3PL) company as they
are the experts and it can be challenging and time-consuming to manage alone.

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There are a lot of different factors that make up a successful e-fulfillment process. From choosing
warehouse location(s) for inventory storage to implementing inventory management tools, it takes
manpower, technology, and resources to optimize fulfillment logistics. Here are some of the major
components of a modern e-fulfillment process.
Order processing automation
By implementing automated order processing software, ecommerce businesses can significantly
increase order management efficiencies and optimize their supply chain. A fully automated order
processing system should integrate easily with your ecommerce platform and other sales channels.
This way, orders can be automatically verified as soon as a customer places one so the e-fulfillment
process can begin, and order status is updated right away.
Inventory management
Inventory management is the process of ordering and restocking inventory, storing products, and
tracking inventory levels. By implementing inventory management software, you can track and
control stock in real time, lower inventory storage and labor costs, set automatic reorder points to
prevent stockouts, and more. By implementing inventory management technology, you can gain
access to valuable data to make better business decisions and prepare for the unexpected.
Demand forecasting
Demand forecasting is important because it allows businesses to better estimate the total sales and
revenue for a future period of time while also planning for inventory needs. By forecasting
demand, you can make decisions like when to run a flash sale or how frequently you need to
reorder inventory based on which items are selling fast or moving slowly. Inventory forecasting
will never be 100% accurate, but the insights gained by collecting historical data can help you
better plan for the future.
Warehousing
Warehousing is a key stage in the e-fulfillment process that involves storing and managing finished
goods before they are sold. There are several key parts to warehouse management, including the
safety and security of products, inventory control processes that help to optimize inventory storage,
and much more. A warehouse management system (WMS) is used in tech-enabled warehouses,
which provides full visibility into real-time inventory levels and storage, staff productivity, and e-
fulfillment workflows within a warehouse. A WMS ultimately eliminates much of the manual
work and speeds up processes without compromising accuracy rate.

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13. OPERATIVE SYSTEMS IN SCM
Supply chain management (SCM) is the process of planning, implementing, and controlling the
operations of a supply chain for the purpose of satisfying customer requirements as efficiently as
possible. Supply chain management spans all movement and storage of raw materials, work-in-
process inventory, and finished goods from the point of origin to the point of consumption. This
definition was suggested by Keith Oliver, a leading British logistician who first mentioned this
concept in an interview with the Financial Times in 1982. Since then, multiple experts have offered
their own definitions of SCM. But in a nutshell, it can be described as supervising the whole flow
of goods and services, from raw materials to final products.
14. SUPPLY CHAIN MANAGEMENT PROCESS
 Planning relates to predicting future demand and building a corresponding strategy for
every department, i.e., sourcing materials, scheduling staff, arranging transportation, and
so on. It’s a crucial stage that has to be based on comprehensive market information and
analytics to make accurate forecasts.
 Procurement is about purchasing the right amount of the right materials at the optimal
price. It’s also about choosing suppliers and maintaining business relationships.
 Manufacturing is transforming raw materials into end products with the help of human
labor, equipment, and sometimes other external factors. Some businesses that deal with
ready-made goods or services (like eCommerce or retail) don’t have this stage as part of
their supply chains.
 Distribution and logistics is about finding customers, making deals, arranging storage and
transportation, and delivering goods. It also involves dealing with returns.
 Inventory management aims at controlling stock assortment and level throughout your
supply chain.
 Analytics is a throughline that goes across all stages and helps control supply chain
performance, find areas for improvement, and make decisions.
Operations and supply chain management
SCM is tightly interwoven with operations management (OM), which focuses on coordinating and
optimizing internal processes, whether it be designing and manufacturing goods or developing
services. To put it simply, both SCM and OM take care of the same product but at different stages
of its lifecycle. There are several areas where SCM and OM functions can overlap. But basically,

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SCM is in charge of outside interactions with suppliers, warehouses, distributors, and end-
customers, while OM supervises everything that happens inside the company.
15. ENTERPRISE RESOURCE PLANNING (ERP)
Enterprise resource planning (ERP) is a
platform companies use to manage and
integrate the essential parts of their
businesses. Many ERP software
applications are critical to companies
because they help them implement resource
planning by integrating all the processes
needed to run their companies with a single
system. An ERP software system can also
integrate planning, purchasing inventory,
sales, marketing, finance, human resources,
and more.
A History of ERP (Enterprise Resource Planning)
The term “ERP” was first used in the 1990s by the Gartner Group, but enterprise resource planning
software and systems have been used in the manufacturing industry for over 100 years and
continue to evolve as industry needs change and grow.
ERP History/Timeline:
 1913: An engineer named Ford Whitman Harris developed the Economic Order Quantity
(EOQ) model, a paper-based manufacturing system for production scheduling.
 1964: Toolmaker Black and Decker adopted the first Material Requirements Planning
(MRP) solution that combined EOQ with a mainframe computer.
 1970s-1980s: Computer technologies evolved and concept software handled business
activities outside of manufacturing, including finance, human resources data, and customer
relationship management (CRM).
 1983: MRP II was developed and featured “modules” and integrated core manufacturing
components, and integrated manufacturing tasks into a common shared-data system.
 1990s-2000s: Gartner Group coins term “ERP” to differentiate from MRP-only systems.
ERP systems expanded to encompass business intelligence while handling other functions
such as sales force automation (SFA), marketing automation and eCommerce.
 2000-2005: Cloud-based ERP software solutions arrive when ERP software makers create
“Internet Enabled” products, providing an alternative to traditional on-premise client-
server models.

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 Today: Software-as-a-Service (SaaS) and Anything-as-a-Service (XaaS) offer new
delivery models for ERP. Remote web-based access for cloud ERP solutions provide
mobile solutions, security, and integration with the changing industries and smart
technologies, including integrations with the Internet of Things (IoT), Internet of
Everything (IoE), and even social media to provide comprehensive solutions for every
industry
16. PERFORMANCE MODELING OF SUPPLY MARKOV CHAINS
Markov Chain Analysis is a probabilistic model that helps businesses make informed decisions
based on historical data and state transitions. In the context of supply chain management, it can be
used to predict inventory levels, lead times, and order quantities, among other things. Finance and
Economics: Markov chains model stock market behavior, asset prices, and economic decision-
making. They provide insights into market regimes, risk analysis, option pricing, and portfolio
optimization.
Supply Chain Models
1. The Continuous Flow Model
The continuous flow model is made for industries and manufacturing businesses that need to
deliver continuously. When there is a continued, steady stream of products and resources going
out to the customers, you need a supply chain that can meet those demands. This is best for
established brands with strong supply chain networks and minimal variation between purchase
orders. For example, Coca-Cola has a large customer base with little to no variety in the demand,
even with changing seasons and markets.
The Agile Model
The agile model requires the business to have four key components: virtual integration, process
alignment, market sensitivity, and a network base. These elements work together to help a business
find trends and quickly put together products that fit into the current market demand and customer
need trends. It works well for brands that need to create custom products but also need to have
core products, like specialty clothing companies such as ZARA.
The Fast Chain Model
The fast chain model is used by businesses that have products with a short lifespan, which need to
be delivered frequently and may be considered trendy. This model helps businesses that need to
change the types of products they send frequently and deliver to market before the product loses
relevance. This might include clothing companies or sporting goods companies like Adidas, who
need to get their products on the shelves before trends change.
The Efficient Chain Model
The next model is the efficient chain model which, as the name suggests, focuses on supply chain
efficiency. It works for businesses that have highly competitive markets and that need to be highly

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efficient within their supply chain logistics. This model prioritizes inventory management and
delivery of goods by making sure that all equipment and machines are working optimally to
produce goods without any unnecessary waste. For example, General Mills sells products similar
to its competitors and has a thin profit margin, making efficiency a key goal for manufacturing.
The Flexible Model
The flexible model is a type of supply chain model built to accommodate peaks and dips in
customer demand over the year. These models need to have part segmentation, accurate stocking
algorithms, and flexible planning in order to work. This is apparent in companies like Office Depot,
which have seasonal increases in demand during the fall for back-to-school shopping. This model
helps the company predict upcoming demand and stock up inventory as needed for these shifts in
demand.
The Custom-Configured Model
The final model is the custom-configured model, which can be considered a combination of the
agile model and the continuous flow model. This model works best when there is a need for
multiple product configurations during the production or assembly of different goods within the
factory. This can help customers get the products they need quickly while allowing them to
customize the product as needed.
17. INVENTORY CONTROL
Inventory control, also called stock control,
is the process of managing a company's
inventory levels, whether that be in their own
warehouse or spread over other locations. It
comprises management of items from the
time you have them in stock to their final
destination (ideally to customers) or disposal
(not ideal). inventory control consists of
systems and procedures for managing
inventory items in a company’s warehouse. It monitors the movement and storage of goods in a
warehouse to help businesses maintain a sufficient supply in good condition. Establishing an
inventory control system enables them to satisfy customer demands and maximize profits.
Inventory control is a key element of an inventory management system. Warehouse managers and
production planners should adhere to the following activities and procedures in controlling their
inventory:
 Receiving, storing, and transferring goods
 Placing items in strategic locations
 Tracking inventory items and their locations in the warehouse
 Documenting product details and histories

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 Monitoring the condition of items in stock
 Fulfilling purchase orders with stock on hand
 Integrating barcode scanners
18. INVENTORY CONTROL IMPORTANCE
Manage Customer Demand
If you do not have the stock on hand to manage the needs of your customers, you will miss vital
sales. Not only that but decreased inventory may also cause customers to seek out their needs
elsewhere–and in some cases, which may mean that your customers stick with that new business,
rather than return to you.
Maintain Your Supply Chain
Part of the inventory control process is ensuring that you have adequate levels of all inventory
stages, including raw materials and the materials needed to help keep your business running
effectively. With adequate inventory control measures, you can ensure that you have a supply
chain in place that will allow you to keep up with the needs of your business.
Manage Working Capital
Many businesses, especially small businesses, often struggle with working capital. When you
purchase stock, you have the expectation that the stock will sell within a reasonable period,
allowing you to keep that steady flow of capital through your business.
Avoid Overstock
While you want to make sure you have enough inventory on hand to meet the demands of your
customer base, you also want to make sure that you do not have too much inventory on hand.
Overstock may mean that you end up having goods go bad before they are purchased, which can
mean financial losses for your business. Often, you will end up selling off overstock at much lower
prices, which can lead to financial losses.
Keep Up with Current, Real-Time Inventory
Ideally, your inventory control measures should allow you to keep up with real-time inventory.
Your inventory needs can change dramatically and unexpectedly. By tracking real-time changes
in inventory, you can often do a better job of keeping up with immediate needs–and you can adjust
your ordering accordingly.
Maintain Better Overall Inventory Quality
By keeping tight control over your inventory, you can often do a much better job of maintaining
your inventory quality. Inventory control can help avoid unnecessary damage and make it easier
for you to ensure that perishable items do not go bad before you have a chance to sell them. With
an effective inventory control system in place, you can do a much better job of managing your

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business's and your customers' ongoing needs. With inventory control, you will know what goods
you have on hand, what items you need, and where those items are in your system–and with real-
time tracking, you can adapt to any needs immediately.
19. PARETO’S LAW
The Pareto principle, named after economist Vilfredo Pareto, describes an unequal relationship
between inputs and outputs. The rule states that 20 percent of
the invested input is responsible for 80 percent of the achieved
results. Summary. The Pareto principle (also known as the
80/20 rule) is a phenomenon that states that roughly 80% of
outcomes come from 20% of causes.8 Dec 2022
20. EMERGING TECHNOLOGIES IN LOGISTICS AND SCM
AI led automation in warehousing and customer service
Artificial Intelligence is one technology that has impacted all industries and business functions –
and logistics is no different. It has been adopted across multiple logistics and supply chain
functions including inventory calculations, warehouse management, customer support service and
many others. AI-lead sub technologies – machine learning, NLP, computer vision, wearable
technology etc. has redefined the need for AI in warehouses. Some of the ways AI solutions are
used in warehouses are:
 Task automation: There are several routine tasks that can be automated with AI. For
instance, to streamline palletised shipping operations, ML algorithms can be used to
calculate stock and pallet requirements, forecast inventory requirements, optimise
expenses, and manage materials handling.
 Supply chain visibility: Visibility across the supply chain is possible as AI tools and IoT
sensors can capture, analyse and provide insights from real-time data. AI and ML can
recognise visual patterns that makes physical inspection of goods faster and more reliable.
When it comes to inventory, RFID technology and scanners can be used to organise and
manage inventory, moving away from manual, paper-based documentation.
 AI Chatbots and voice assistants: Customers can have multiple queries about their
packages and logistics services in general. Using AI chatbots and voice assistant
applications, these conversations can be streamlined. AI software, driven by NLP and ML
algorithms can be taught and fed with the required information to answers diverse queries,
error-free. From queries on pricing, to packaging, timelines, cancellations, refunds and
others, AI chatbots can reply correctly to queries instantly, 24×7. They can even engage
customers, upsell and cross-sell services, and enhance overall customer satisfaction.
Among the many ways logistics companies can improve customer services using AI
chatbots is the smart way of doing so.

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 Booking a shipment process: AI led
automation can also enable customers to
streamline the logistics booking process. For
instance, AI tools can record and save
customer details and auto-fill booking forms
to save time. They can also calculate
shipping costs, recommend shipping and
packaging solutions, provide ETA on
delivery timeline, send notifications on
order status, payment details and more.
Customers can have greater visibility on
their orders, shipment and payment status,
without having to check emails or follow up through calls.
Blockchain technology in logistics operations
A blockchain is a digital database or ledger that tracks all transactions made in real-time. It stores
data in a decentralised database and can be used across industries. Blockchain data is immutable,
that is, data once added to blocks cannot be changed. This makes it a secure, safe and transparent
tech to use. Quite naturally, blockchain is an emerging logistics technology that many shipping
and transportation companies are adopting. So, what can blockchain do for logistics processes:
 Secures payments: Blockchain tech can record all payment transactions in real-time and
reduce errors. All transactions are secure and transparent, with end-to-end details on
payments made. Any anomaly on unrecognised transactions triggers alerts reducing the
scope of fraud. Smart contracts and blockchain in logistics are often used to record
international payments to keep it secure and track monetary details.
 Simplifies shipment tracking: Since blockchain tech records every transaction in its
ledger without modifications, it brings transparency in cargo tracking. This is more for
international shipments and those that are being shipped over long distances.
 Inventory management: Blockchain adds value to all the goodness AI tech is bringing to
logistics and supply chain management. For instance, most businesses work with multiple
vendors, suppliers and distributors. Tracking products enables businesses to manage
inventory and make payments in time. Blockchain enables businesses to accurately track
the status of goods, measure inventory, predict demand/track sales and recorder in time and
more. Most eCommerce businesses use this technology and SKU enabled labels to track
movement of goods and record them automatically.
Cloud logistics technology in supply chain
Cloud technology is being used across all industries and logistics is no different. Cloud computing
provides logistics companies the flexibility to access, monitor and manage data remotely, without
having to make large investments in infrastructure. It also allows ease of scalability, saves
businesses time, and provides data in real time.

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Logistics and supply chain is a complex business. Goods move round the clock and gaining access
to the right information is vital for all stakeholders. Some of the benefits of cloud computing in
logistics and supply chain management are:
 Higher collaboration: Between global/remote teams and with vendors, suppliers, freight
companies and other stakeholders
 Demand-based scalability: For logistics companies to scale as per demand, e.g., demand
based forecasting to add/remove resources and infrastructure support based on demand
 Better transparency: Between all stakeholders as user access can be controlled,
monitored and denied as required
Internet of Things (IOT) technology adoption
There are multiple ways how IoT is being used in logistics and supply chain operations.

 Security and safety: Thefts, loss or damages to goods,
machinery malfunction, etc. are not uncommon in
warehouses. This is more common in large warehouses
that’s not manned sufficiently to keep watch 24×7. IoT
solutions and connected devices have enabled logistics
companies to largely resolve this challenge. For
instance, CCTV cameras and apps can alert supervisors
of any unauthorised access to data or entry points; IoT sensors and digital tools can detect
changes in temperature or send reminders on timely machine maintenance (predictive
maintenance); GPS enabled vehicles can be monitored to prevent rash driving or respond
to emergencies.
 Tracking and data: It’s always a comfort to know where your goods are. An e-Commerce
customer has the benefit of tracking their shipment, thanks to IoT sensors in vehicles
(GPS). For businesses, it’s necessary to understand the pace at which goods are moving,
within the warehouse and CFS (i.e., container freight station) and to the end-customer. This
data tracked in devices can be analyses for insights which can help businesses plan
purchase, understand delivery timelines and performance and reduce lead time, optimise
routes, forecast demand, facilitate timely decision making, and more.To put it briefly, IoT
connected devices enable businesses to minimise human intervention and bring logistics
efficiency through digital logistics technology.
Digital twins and innovative logistics systems
Digital Twins are the next emerging technologies in logistics and supply chain management that
we are going to talk about. Put simply, digital twin technology creates a replica of an asset. It can
be a product or process and uses real-time data and ML technology to study its behaviour, to predict
future outcomes. Some of the ways in which digital twins impact logistics and SCM are:

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Warehouse layout design: Digital twin tech can reimagine how the warehouse can operate with
a more planned and structured layout; how to optimise space and storage solutions; what
technologies to use, and more.
Supply chain planning: Digital twins in logistics can also enable businesses to plan supply chains
better. In in evolving world, it’s necessary for businesses to plan ahead of time and stay prepared.
Road blockage? Take an alternative route. Packaging issues? Have environmentally friendly
packaging solutions ready. In brief, logistics firms have to predict, forecast and anticipate supply
chain challenges and have solutions for them. Logistics technologies like digital twins enable
businesses to build scenarios, plan and test, to come up with solutions that minimise disruptions
across the supply chain.

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21. CRM Vs SCM
CRM
CRM (short for Customer Relationship Management) systems help you engage your customers
with personalized relationships. They collect and analyze data such as contact information,
previous interactions, and completed purchases. Using this data, you can get an insight into your
customers’ tastes. This will help you to plan and execute marketing strategies that they will find
attractive. Different verticals of your organization can benefit from CRM systems. Your marketing
team can track their campaigns and get an insight into the effectiveness of each one. Your sales
team can use data about past interactions to improve their communication with your customers. In
addition, you can log customer complaints and feedback into the system, which will help your
customer service representatives handle issues better.
SCM
SCM (short for Supply Chain Management) systems help streamline your supply chain processes.
They do this by offering you functions such as inventory management, product distribution and
tracking, and supply and demand forecasting.
Like CRM, multiple departments in your organization can benefit from SCM software. For
example, customer service representatives can use the tracking function to respond to customer
queries about shipments. The inventory management feature can help your manufacturing
department ensure you never run low on stocks. Even your accounting department can use data
from SCM systems to budget and forecast for the future.The principal objective of SCM systems
is to ensure a smooth flow of production, right from raw materials to your customers’ homes.
Customer Relationship Management Supply Chain Management
Manages customer relationships with the
help of data and analytics features as well
as communication tools.
Manages product and service inventory with
the help of a data-driven approach that helps
you track deliveries and forecast sales.
Generates revenue through new customers
and by ensuring the closing of existing
sales.
Streamlines and reduces costs by simplifying
parts of the supply chain.
Drives new sales through targeted
marketing and retains customers through
personalized relationship management.
Improves existing sales processes by
overcoming bottlenecks and speeding up
delivery times with the help of automation.
Aims to ensure customers are satisfied
with your organization’s products and
services.
Aims to ensure that your products and services
are available when required and delivered on
time.

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22. BENCHMARKING CONCEPT
Benchmarking measures the performance of a
company’s supply chain by considering quantity,
value, and time. Benchmarking formulates a
tangible measure of the efficiency of main processes
in the supply chain and creates a solid foundation for
an organization’s performance. It also measures the
impact of each manager’s improvement subject to
proper measurement indicators.
To start benchmarking your supply chain, first, pick
an area within the supply chain to focus on. Supply
chain management can be broken down into five
components: planning, sourcing, manufacturing,
delivery, and returning. Focusing on an individual
segment of your supply chain will help you develop specific key performance indicators (KPIs).
Quantitative Data
Quantitative benchmarking examines the supply chain by gathering data on performance metrics.
Most KPIs are quantitative and focused on metrics and improving the supply chain’s bottom line.
Perfect order rate, inventory turnover, and on-time delivery percentages are all examples of
quantitative KPIs your supply chain should benchmark.
Qualitative Data
Unlike quantitative benchmarking, qualitative benchmarking gathers data based on best practices,
not performance. Qualitative benchmarking uses the best practices of competitors or similar
organizations and their data on successful techniques for improving supply chain performance. It
analyzes differences in practices such as production techniques, quality testing, training methods,
and morale without measuring results.
Components of a Benchmarking Study
After data and standards are projected, one can note which components of the supply chain will be
benchmarked. Some benchmarking studies will measure single or multiple components.
Financial benchmarking
Financial benchmarking is the analysis of supply chain operations that are observed and recorded.
For financial benchmarking, review income statements, balance sheets, and key ratios such as asset
and inventory turnover.
Functional benchmarking

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Functional benchmarking is the most traditional and common form of benchmarking, analyzing a
single operation at one or several locations to identify where efficiencies can be improved.
Performance benchmarking
Performance benchmarking compares the efficiency of performing a task in one company location
to another (branch vs. branch) or a competitor. Note that benchmarking performance against
competitors can be complex since information will not be easily accessible.
Product benchmarking
Product benchmarking compares the manufactured product of one company against another or
between facilities in the same company.
Strategic benchmarking
Strategic benchmarking observes how other companies compete strategically. Determines critical
areas of focus amongst the competition. This can be within the same industry or outside of the
company’s industry.
23. LEVELS OF SUPPLY CHAIN BENCHMARKING
Benchmarking is a continuous and fluid process where internal business practices matter just as
much as external practices and competitive pressures in the industry. Therefore, three levels of
benchmarking can be observed and measured.
Internal Benchmarking
Internal benchmarking is a tactical process focusing on
opera tions. It allows companies with multiple facilities,
divisions, or branches to compare how functions are
performed—for example, comparing three different
warehouses within one company. Smaller companies can
compare shift performances amongst employees to
benchmark internal data.
External Benchmarking
External benchmarking is a conscious level that takes a company outside its industry and exposes
it to different methods and techniques. This exploratory research method reveals and applies the
best practices in other firms to your business. Because external benchmarking requires diving into
unknown industries, hiring a consulting firm to perform proper research is recommended.
Competitive Benchmarking
Competitive benchmarking compares a company’s operational performance against competitors.
This benchmarking technique helps gain market share, but it can be challenging to collect data.

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Competitors are unlikely to share their knowledge of best industry practices, so using industry-
standard metrics could be an option.
24. FEATURES AND IMPLEMENTATION
Effective implementation requires leadership, coordinated effort and a team with a range of skills.
It involves solid governance arrangements, detailed planning and project management and
continued stakeholder engagement, including through communication and participation in project
implementation activities. The Policy adoption stage should have established some clarity about
the authority, competence and accountabilities for implementation. Further clarification and
delegation of responsibilities may be needed at the institutional level. The relevant accountable
government agency may have standard implementation tools with clear rules and steps to be
followed, including for reporting.
Step 1- Feature Design
This is where you would come up with the user story for this feature. Design what the feature will
do, who will use it, and how. This part can involve some user feedback as well. What are the
priorities of the user? What features do they want? However, you can't rely solely on user feedback
since users don't always know what they want.
Step 2- Build and Test
This is the development phase. Using a feature flag, the feature’s progression through multiple
development environments can be tracked. Once the feature is completed, a software testing and
QA phase are involved here.
Step 3- Implement Phased Release
Now it's time to start releasing the feature and conduct essentially user tests. After all, putting the
new feature in front of users is the best way to validate it and gather feedback. There are many
ways to do this but most companies here will do a limited rollout or phased release. This allows
for controlling the size and types of users. The feature is only accessible to a subset of users and
this is determined on factors such as usage time, account type, or geography. It could be released
to a certain percentage or target individual groups of users. It is a good idea to keep the sample
sizes small to start to allow for quick feedback and development.
Types of phased releases include: dogfooding (employees only), beta testing, invite-only rollout,
or A/B testing.
Step 4- Continue Rollout or Decide Against Implementation
If all goes well with the first phase of users, the feature can begin to be released to more and more
users. It could go from 5% to 50% to 90% users over time. However, if the metrics show the feature

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is not doing so great it might be time to redesign, shelf the feature for a later time, or throw it away
altogether.
Stage 5- Full Rollout
If the feedback to this point is positive, it is time for a full rollout of the new feature. The feature
can now be considered fully rolled out and all users have access. Sometimes, companies leave 1–
5% of users without the feature even at the final stage to monitor long-term impacts and aid in
troubleshooting. This is normally called the holdback group. Additionally, not all features are
released in a phased manner. Some features skip the above steps when it is a major product launch
or the feature cannot bring value without consistent experience for all users (eg. some social media
features).
25. OUTSOURCING
The term “outsourcing” refers to: the practice of a business contracting with a third-party supplier
to provide products or services that are currently handled in-house by staff. Because of
outsourcing, many businesses have been able to reduce expenses, gain access to specialized
expertise, and improve overall performance. Outsourced supply chain refers to hiring a third-
party logistics company to manage, improve, and optimize ecommerce the supply chain, starting
at receiving and warehousing, to inventory and order management, to fulfillment and shipping,
and even ecommerce returns.
26. BASIC CONCEPTS OF OUTSOURCING
 Organisational Driven Reasons
 Improvement Driven Reasons
 Cost Driven Reasons
 Revenue Driven Reasons
 Employee Driven Reasons
Organisational Driven Reasons
The contact a company or organisation takes with the outsourcing firm determines the amount of
the risk the company faces. For eg, looking at it from a CIO’s perspective, in a fixed price contract,
the amount of risk the outsourcer faces is more than the time and material contract. Regardless of
the type of contract, the CIO will be sharing the responsibility for the future direction of the
technology within his/ her company with the outsourcer. The CIO responsibility is to ensure the
technology integration with business processes within the company, the outsourcer will assist by
introducing the new technology with proper skills to implement.
Outsourcing in this aspect enhances effectiveness by allowing the outsourcer focus on what he/
she knows how to do best. Increase product and services value customer satisfaction and share
holder value to transform the organisation.

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Improvement Driven Reasons
One of the strategic initiatives of an outsourcing firm is to stay current with new technologies and
system. With the help of the outsourcing firm a company is able to stay current. The outsourcer is
in a position to provide experienced personnel and to access the value of the new application. The
company will spend less time, effort and risk because the outsourcing firm is familiar with the new
technology. Most times a company will embrace the “centre of expertise” concept, just to have
highly specialised personnel work on the new technology and provide support for the existing
systems.
This helps solve issues and facilitate the knowledge transferred to the organisation/ company
development. In this aspect outsourcing helps the company to;
 Acquire initiatives ideas
 Improve in the operating performance
 Improve credibility and image by associating with superior providers
 Cost Driven Reasons
In this aspect there are many reasons why a company will want to save cost; some of these reasons
are stated below;
The size of the staff in the company
 The company size at a whole
 Hardware and software maintenance agreement, etc.
 Strategic direction of the company
One of the primary reasons why a company will want to save is the ability to take advantage of
economies of scale. Outsourcing firms are able to consolidate data centre operations, which
provides lower overhead cost on a per-customer basis. Outsourcing firms acts as aggregator for
telecommunication networking and cost reduction. The outsourcing firm also helps in re-
engineering and maintaining application for the company. Cash can be generated by reducing
investment in assets and free up the resources for other purposes; turning fixed cost into variable
cost.
Revenue Driven Reasons
Through outsourcing, a company gain market access and business opportunities through the
provider’s network. Provides flexibility needed to stabilize the various demands needed by the
company. The sales and production capacity are expanded during period when such expansions
could not be financed in the company. Outsourcing accelerates expansion by tapping into the
provider’s developed capacity, process and systems. It gives rooms for exploiting the skills
commercially. All this leads to the improvement of the company.
Employee Driven Reasons

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Outsourcing give employees a stronger career path, they get to know what they are good in and
then with the knowledge that they know what they can do, makes them to be committed and energy
in non-core area. It provides the ability for an employee core to focus on the core business, most
necessary and peripheral operations are outsourced and this gives the employees an ability to
concentrate instead of getting disturbed by minor issues
27. VALUE ADDITION IN SCM
Value addition in supply chain management is important as it helps companies to enhance the
value of their products and services, improve the quality and efficiency of the supply chain, and
increase customer satisfaction. The use of value-added warehousing and 3rd party distribution are
examples of ways to add value to the supply chain, as they provide additional services and
expertise that can help improve the supply chain’s overall performance. Value of a business is
defined differently by investors, customers, suppliers, employees and other stakeholders. At the
corporate level, value involves identifying and understanding the stakeholders relevance and
importance to the organization and assessing their expectations.
At the business level, providing value for customers and end users is a key objective. But the
objective is to maximise the Value Added; that is the amount that customers are willing to pay for
the product above the total cost of purchased items and services. This is a measure of the
contribution to the business by all employees.
Providing Value
The term ‘supply chain’ was first mentioned in
the early1980s and began its acceptance in
business about ten years later. The definition of
supply chain used by Learn About Logistics is:
The effective flows of items, money,
transactions and information between an
organisation and its supplier and customer
enterprises, through ‘activity nodes’ and
‘movement links’, to provide value for end
users at the lowest total cost.
The Supply Chains group adds value through improving the attributes of time and place. Time
utility is
 Reducing the process time from receiving to delivering a customer order
 Minimising the time for all upstream steps in a supply chain to reduce inventory and the
total cost of ownership (TCO)
 Making products physically available to serve current and potential customers

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 The location of facilities – distribution centres, warehouses and factories
 Customer service in relation to an an after-sales service parts service, the provision of
technical assistance and an available, easy to use and informative website
28. CONCEPT OF DEMAND CHAIN MANAGEMENT
Meaning of a Demand Chain
The demand chain is an important part of a company’s overall operations because it is responsible
for generating revenue. If the demand chain is not effective, a company will have difficulty
generating sales and may eventually go out of business. As it starts with market intelligence and
demand planning, the process of Market intelligence helps a company understand consumer needs
and preferences while demand planning involves creating a plan to meet customer demand.
DEMAND CHAIN MANAGEMENT
Elevate the customer experience
Your customers want a memorable experience that keeps them coming back for more. And you
need customers. No customers, no growth, no more business. By improving demand chain
management, your customer satisfaction will naturally improve too. This turns those folks into
raving fans of your brand. That’s because demand chain management delivers the best value to
your customers by accounting for buyer behavior, preferences, and needs.
Optimize your processes
Demand chain management allows your company to quickly pull levers that respond to changes
in demand. That’s why it’s best suited for optimizing inventory management and replenishment.
And you can always use typical supply chain management practices to respond when things go
wrong like you get stuck with excess inventory. Imagine this: You’ve mis-forecasted demand
during your slow season, and you’ve over-ordered a SKU that customers don’t want as much
anymore. In this scenario, you can use a supply chain management lens to tweak your marketing
efforts and drive an influx of orders. That’s because demand chain management delivers the best
value to your customers by accounting for buyer behavior, preferences, and needs.
Boost supply chain efficiency
Supply chain efficiency is best achieved by getting rid of operational silos. And that’s exactly why
every business textbook will tell you the most successful DTC brands connect the supply side of
their business with the demand side.Demand chain management is ideal for omnichannel selling
since it connects the dots between relevant sales and marketing channels within your business.
This includes your direct channels (like your Shopify and Amazon stores), indirect channels (like
wholesale), and add context on how your customers interact with each channel.
Create long-term value

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Improving your customer experiences through demand chain management can often cause a nice
ripple effect for your brand’s long-term success.
At a high level:
 Demand chain management delivers exceptional customer experiences
 Exceptional customer experiences lead to long-term customer value
 Demand chain management generates value over time
Operate with more agility
The pandemic has been a crash course in supply chain disruptions. And retailers have all learned
1 big lesson: We need to be able to quickly respond to short-term changes in demand when they
arise.
29. GROWTH OF SCM
The supply chain and logistics sector in India is one of the largest globally. According to industry
experts, the country’s logistics sector is valued at $160 billion and employs more than 22 million
people. Despite the disruptions due to the pandemic, the sector is expected to grow at a CAGR of
10% by 2022.
The pandemic has given the industry an opportunity to redefine its global supply chain operations.
The sector has now leveraged its workforce and resources to increase efficiency and tackle
disruptions. India’s logistics industry has an abundance of manpower and resources needed to
expand its operations abroad. This rapidly expanding sector also offers several job opportunities
and an academic degree related to this domain helps in making a mark.
 Let us now explore the future of the supply chain industry in India, the current trends and
career opportunities.
 First, we will look at the scenarios and factors that are likely to affect the logistics and
supply chain industry.
Adoption of Technology:
Advancements in technology and rapid digitalization of supply chain management are gradually
bringing a change in how products and services are delivered. Companies are increasingly
adopting technologies like Machine Learning, Blockchain and Augmented Reality to stay ahead
in the game.
Climate change and scarcity of resources:

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The supply chain mechanism is subject to changes because of the impact of climate change.
Weather occurrences and natural disasters affect the availability of raw materials, disrupt supply
mechanisms and affect the well-being of workers.
Migration of Labour:
This causes changes in the availability and distribution of labour. Mass migration leads to a shift
in the country’s economic potential. It puts forth new challenges but also creates opportunities.
Further in this blog, we will look at how the supply and logistics industry has shown the potential
to attain immense growth. There are several factors that have aided in this progress. Below are
some of the prominent ones:
Improved Logistics:
Automation and better coordination have helped the logistics industry to function smoothly and
efficiently. With every new opportunity to grow, businesses must come up with ways to streamline
logistics and operations.
Better Infrastructure:
The sector has been witnessing consolidation, process standardization, technological upgrade and
digital transformation. These have enabled better integration between modes of transportation,
users and service providers.
Improvement in Marketing Strategies:
In order to grow further, logistics companies need to market themselves and increase their reach.
They can promote efficient time management and proficiency in delivering goods on time as the
USPs.
Optimizing Asset Utilization through Cloud Computing:
Data is a valuable component of logistics and it is necessary to have actual data to make informed
decisions. In order to ensure that there is no hindrance in accessing the right amount of data,
logistics companies are increasingly relying on cloud computing. This technology also helps in
managing a supply chain in a more efficient manner. Cloud computing has also helped logistics
companies in ensuring that they are able to store as much data as required.
Big Data Analytics:
Big Data has been powering the logistics domain by resolving bottlenecks in the supply chain. Big
Data helps in optimizing routing, streamlining factory functions and ensuring transparency in the
entire supply chain.
New-Age Technologies:
The introduction of new-age technologies in the logistics sector has made it more robust and
efficient. Industry experts say the logistics sector is bound to get more innovative with customized
and technological advancements.

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Improvement in Trade Policies:
The logistics industry is directly connected to trade policies. The Indian government has over the
past few years worked on improving bilateral trade and foreign investment policies. This has
helped the logistics industry to increase its business opportunities.
Significant Reduction in Manual Intervention:
The pandemic has reduced manual intervention in a lot of processes. In the logistics sector too, the
need for manual functions has been reduced. The quality of delivery has improved to a large extent
with more automatic processes.

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