SUPPLY CHAIN MANAGEMENT

1. 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. For example, today’s supply chain strategies continue to draw upon
the customer focus of early 20th century catalog retailers and the military’s logistics goal of “getting the
right people and the appropriate supplies to the right place at the right time and in the proper condition”
(U.S. Department of the Army, 1949).
From a business perspective, the origins of supply chain management lie in a wide variety of related but
initially fragmented activities. As Figure 1-3 indicates, purchasing, inventory management, warehousing,
order processing, transportation, and related functions were conducted independently. Each one had its
own budget, processes,priorities, and key performance indicators, but this disaggregated approach was
suboptimal and did not lead to lowest total costs.

2. Eventually, company leaders came to realize the problems of fragmentation and began to integrate related
activities. Inbound transportation, purchasing, and production related activities were coordinated in
support of manufacturing. Inventory management, order processing, outbound transportation, and related
activities comprised the physical distribution function.
Later,these two areas evolved into the logistics function or process that coordinates and integrates the
inbound and outbound flows of the organization.
A true supply chain emerges when multiple organizations synchronize their respective processes and
adopt a more holistic supply chain management philosophy that includes strategic consideration of related
areas. This includes finance, marketing, planning, and technology.
MEANING AND OBJECTIVE OF SUPPLYCHAIN MANAGEMENT
Supply chain management (SCM) is the combination of art and science that goes into improving the way
your company finds the raw components it needs to make a product or service and deliver it to customers.
The following are five basic components of SCM.
1. Plan—This is the strategic portion of SCM. Companies need a strategy for managing all the resources
that go toward meeting customer demand for their product or service. A big piece of SCM planning is
developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high
quality and value to customers.
2. Source—Next,companies must choose suppliers to deliver the goods and services they need to create
their product. Therefore,supply chain managers must develop a set of pricing, delivery and payment
processes with suppliers and create metrics for monitoring and improving the relationships. And then,
SCM managers can put together processes for managing their goods and services inventory, including
receiving and verifying shipments, transferring them to the manufacturing facilities and authorizing
supplier payments.
3. Make—This is the manufacturing step. Supply chain managers schedule the activities necessary for
production, testing, packaging and preparation for delivery. This is the most metric-intensive portion of
the supply chain—one where companies are able to measure quality levels, production output and worker
productivity.

3. 4. Deliver—This is the part that many SCM insiders refer to as logistics, where companies coordinate the
receipt of orders from customers, develop a network of warehouses,pick carriers to get products to
customers and set up an invoicing system to receive payments.
5. Return—This can be a problematic part of the supply chain for many companies. Supply chain planners
have to create a responsive and flexible network for receiving defective and excess products back from
their customers and supporting customers who have pro blems with delivered products.
OBJECTIVE

4. Characteristics of Global Supply Chain Management
The actuality of global supply chain management increases together with the growing
rates of globalization and the extending specialization of organizations which makes
them dependant on each other. The ways to increase the effectiveness of material,
information, financial and knowledge flows management in the global supply chains are
based on the proper evaluation of a great number of factors from the international
environment, the strategic configuration of the supply chain concerning its members,
the functions they perform and the location of their operations, as well as on the
continuous coordination of the activities in the chain through information and
knowledge exchange and the development of relationships of trust and cooperation. On
the basis of a research, carried out in Bulgarian organizations participating in global
supply chains, the paper reveals the integration practices applied in the relationships
with their foreign partners. There are proofs for the absence of readiness amongst the
researched organizations to apply practices characteristic for the highly developed
countries as well as to make efforts for integration with their Bulgarian contracting
parties.
Generalized SupplyChain Model
Order processing
Large companies have a huge number of customers. Every of these customers
have stock of hundreds or thousands of different products. Customers are
ordering products at different cycles in different amounts. So, how can company
keep all of this information correct? The answer fro this question is effective

5. order processing. The DIFOTAI greatly depends on correct invoicing.
Order processing is related with three main components of the supply chain:
manufacturers, distributors, and retailers. The retailers are placing orders,
manufacturers and distributors work in collaboration with one another in order
to fulfill these orders.
Order processing involves the following steps:
 Customer is placing order
 Order is received by manufacturer
 Order is processed
 Credit checked ( credit department ) and verified
 Order is picked and loaded to truck
 Order is shipped to the customer
 Order is received by customer and added to the customer's inventory
MATERIAL HENDLING
Material handling is the movement, protection, storage and control of materials and products throughout
manufacturing, warehousing, distribution, consumption and disposal. As a process,material handling
incorporates a wide range of manual, semi-automated and automated equipment and systems that support
logistics and make the supply chain work. Their application helps with:
• Forecasting
• Resource allocation
• Production planning
• Flow and process management

6. • Inventory management and control
• Customer delivery
• After-sales support and service
A company’s material handling system and processes are put in place to improve customer service,
reduce inventory, shorten delivery time, and lower overall handling costs in manufacturing, distribution
and transportation.
WAREHOUSES AND TRANSPORTATION
The warehouse is an essential part of any supply chain. Effective supply chain management is impossible
without considering all parameters of the warehouse, its resources and product movement dynamics. The
performance of the entire logistics structure substantially depends on the efficiency of warehouse
logistics. One of the most substantial simulation modeling applications is the analysis of
warehouse/terminal networks. Simulation models help you analyze various options of warehouse/terminal
locations, evaluate terminals response to traffic growth, and define the priority of terminal development.
An Anylogic analysis would be based on real stochastic characteristics, delivering accurate results.
Transportation and fleet management includes many different aspects:transportation acquisition,
transportation planning, routine maintenance planning, fleet maintenance and scheduling, and risk
management as well as human resources management. AnyLogic helps users to deal with any these
complicated issues, including the most challenging task - transportation management. Simulation
modeling will allow you to maximize the transportation load, minimize your costs, and also calculate the
probability of traffic costs overrun. You will be able to “play” various schemes of transportation and fleet
management, which will allow you to reveal and prevent potential problems.
Decision support in transportation logistics is one of primary areas of AnyLogic usage. Typical tasks are:
 longer-term planning of warehouse infrastructure based on business dynamics
 day-to-day warehouse resource management
 detailed simulation modeling of warehouses based on physical dimensions of buildings, fork-lift-
trucks, shelves, products and pallets, aimed at finding the optimal management policy
 strategic and operational transportation and fleet control based on the real-time data monitoring,
accumulated statistics and simulation-based forecasts
 optimal fleet management: planning of maintenance, purchases, renting or leasing of trucks, rail
cars,ships, airplanes
 risk assessment and risk management in transportation logistics
3PL and 4PL

7. 3rd
party logistic and 4th
party logistic
The term “3PL” was first used in the early 1970s to identify intermodal marketing companies (IMCs)
in transportation contracts. Up to that point, contracts for transportation had featured only two parties, the
shipper and the carrier. When IMCs entered the picture—as intermediaries that accepted shipments from
the shippers and tendered them to the rail carriers—they became the third party to the contract, the 3PL.
Definition has broadened to the point where these days, every company that offers some kind of logistics
service for hire calls itself a 3PL. Preferably, these services are integrated, or “bundled,” together by the
provider. Services they provide are transportation, warehousing, cross-docking, inventory management,
packaging, and freight forwarding. In 2008 legislation passed declaring that the legal definition of a 3PL is
“A person who solely receives, holds, or otherwise transports a consumer product in the ordinary course
of business but who does not take title to the product.”
Third-party logistics providers are:
 Freight forwarders
 Courier companies
 Other companies integrating & offering subcontracted logistics and transportation services
The CSCMP defines 4PL as follows:
Differs from third party logistics in the following ways; 1)4PL organization is often a separate entity
established as a joint venture or long-term contract between a primary client and one or more partners;
2)4PL organization acts as a single interface between the client and multiple logistics service providers;
3) All aspects (ideally) of the client’s supply chain are managed by the 4PL organization; and, 4) It is
possible for a major third-party logistics provider to form a 4PL organization within its existing structure.

8. However, 4PL was oringally defined by Accenture as a trademark in 1996 and defined as “A supply chain
integrator that assembles and manages the resources, capabilities, and technology of its own
organization with those of complementary service providers to deliver a comprehensive supply chain
solution.”, but is no longer registered.
4PLs have also been referred to as “Lead Logistics Providers”. Now a new crop of companies have
emerged who are actual transportation companies too. While a 4PL is sometimes described as non-
asset-owning service provider, their role is to provide broader scope managing of the entire supply chain.
CHAPTER 2
Centralized and Decentralized purchasing,
Concept And Meaning Of Decentralized Purchasing
Decentralized purchasing refers to purchasing materials by all departments and branches independently to
fulfill their needs. Such a purchasing occurs when departments and branches purchase separately and
individually. Under decentralized purchasing, there is no one purchasing manager who has the right to
purchase materials for all departments and divisions. The defects of centralized purchasing can be
overcome by decentralized purchasing system. Decentralized purchasing helps to purchase the materials
immediately in case of an urgent situation.
Advantages OfDecentralized Purchasing
- Materials can be purchased by each department locally as and when required.
- Materials are purchased in right quantity of right quality for each department easily.
- No heavy investment is required initially.
- Purchase orders can be placed quickly.
- The replacement of defective materials takes little time.
Disadvantages OfDecentralized Purchasing
- Organization losses the benefit of a bulk purchase.
- Specialized knowledge may be lacking in purchasing staff.
- There is a chance of over and under-purchasing of materials.
- Fewer chances of effective control of materials.
- Lack of proper co-operation and co-ordination among various departments.
WAREHOUSING
Ware housing’s Role in the Supply Chain

9. Warehousing played a role in the storage and exchange of goods for centuries. Long-term storage to
provide product for future consumption has been a utility of warehousing both past and present. Transit
sheds, warehouses connected to a wharf, have facilitated the movement and storage of goods embarking
or disembarking merchant and military vessels supplying domestic and world trade. Rail transportation
set in motion the industrial era with the transport of agriculture commodities and livestock; warehousing
was leveraged to store such cargo prior to processing and then distribute finished products traveling to
other parts of North America.
Long-term storage and places to interchange products may have been enough utility prior to and during
the initial stage of industrial development; however, U.S. involvement in World War II required the
manufacturing of products to support military efforts. Increased manufacturing demanded more storage
and organization of raw materials and parts, as well as more room for the stockpiling and strategic
positioning of completed military products from ammunition and vehicles, to food stores.
INVENTORY MANAGEMENT CONCEPT
Inventory managementand supplychain management are the backbone ofany business operations.With the
developmentoftechnology and availability of process driven software applications,inventory managementhas
undergone revolutionarychanges.In the lastdecade or so we have seen adaptation ofenhanced customer service
concepton the part of the manufacturers agreeing to manage and hold inventories attheir customers end and
thereby effect JustIn Time deliveries.Though this conceptis the same in essence differentindustries have named
the models differently.Manufacturing companies like computer manufacturing or mobile phone manufacturers call
the model by name VMI - Vendor Managed Industry while Automobile industryuses the term JIT - JustIn Time
where as apparel industrycalls such a model by name - ECR - Efficient consumer response.The basic underlying
model ofinventory managementremains the same.
Let us take the example of DELL, which has manufacturing facilities all over the world.They follow a conceptof Build
to Order where in the manufacturing or assemblyof laptop is done only when the customer places a firm order on the
web and confirms payment.Dell buys parts and accessories from various vendors.DELL has taken the initiative to
work with third party service providers to setup warehouses adjacentto their plants and manage the inventories on
behalfof DELL’s suppliers.The 3PL - third party service provider receives the consignments and holds inventoryof
parts on behalfof Dell’s suppliers.The 3PL warehouse houses inventories ofall of DELL’s suppliers,which might
number to more than two hundred suppliers.When DELL receives a confirmed order for a Laptop,the system
generates a Bill of material,which is downloaded atthe 3PL, processed and materials are arranged in the cage as
per assemblyprocess and delivered to the manufacturing floor directly. At this point of transfer,the recognition ofsale
happens from the Vendor to Dell. Until then the supplier himselfathis expense holds the inventory.
Let us look at the benefits of this model for both Dell as well as Its Suppliers:
1. With VMI model,Dell has reduced its in bound supplychain and thereby gets to reduce its logistics and
inventory managementcosts considerably.
2. DELL gets to postpone owning inventoryuntil at the time of actual consumption.Thereby with no inventories
DELL has no need for working capital to be invested into holding inventories.
3. DELL does not have to set up inventory operations and employteams for operations as well as
managementofinventory functions.
Supplier Benefits
1. Supplier gets to establish better relationship and collaboration with DELL with long-term business prospect.
2. By agreeing to hold inventories and effect JIT supplies atthe door to DELL,supplier will be in a better
position to bargain and get more business from DELL.
3. With VMI model,supplier gets an opportunityto engage in better value proposition with his customer DELL.

10. 4. Supplier gets confirmed forecastfor the entire year with commitments from DELL for the quantity off take.
5. VMI managed is managed by3PL and supplier does nothave to engage himselfin having to setup and
manage inventory operations atDELL’s premise.
6. 3PL Managed VMI holds inventories ofall suppliers therebycharges each supplier on per palletbasis or per
sq.ft basis.Supplier therebygets to pay on transaction basis withouthaving to marry fixed costs of inventory
operations.
VARIOUS COSTS ASSOCIATED WITH INVENTORY
Inventory procurement,storage and managementis associated with huge costs associated with each these
functions.
Inventory costs are basically categorized into three headings:
1. Ordering Cost
2. Carrying Cost
3. Shortage or stock out Cost& Costof Replenishment
a. Costof Loss,pilferage,shrinkage and obsolescence etc.
b. Costof Logistics
c. Sales Discounts,Volume discounts and other related costs.
1. Ordering Cost
Costof procurementand inbound logistics costs form a partof Ordering Cost.Ordering Costis dependant
and varies based on two factors - The cost of ordering excess and the Costof ordering too less.
Both these factors move in opposite directions to each other. Ordering excess quantity will resultin carrying
costof inventory. Where as ordering less will resultin increase ofreplenishmentcostand ordering costs.
These two above costs together are called Total Stocking Cost. If you plot the order quantity vs the TSC,
you will see the graph declining graduallyuntil a certain pointafter which with every increase in quantity the
TSC will proportionatelyshow an increase.
This functional analysis and costimplications form the basis ofdetermining the Inventory Procurement
decision byanswering the two basic fundamental questions - How Much to Order and When to Order.
How much to order is determined byarriving at the Economic Order Quantity or EOQ.
2. Carrying Cost
Inventory storage and maintenance involves various types of costs namely:
 Inventory Storage Cost
 Costof Capital
Inventory carrying involves Inventory storage and managementeither using in house facilities or external
warehouses owned and managed bythird party vendors. In both cases,inventory managementand process
involves extensive use of Building,Material Handling Equipments,IT Software applications and Hardware
Equipments coupled managed byOperations and ManagementStaffresources.
c. Inventory Storage Cost

11. Inventory storage costs typicallyinclude Costof Building Rental and facility maintenance and
related costs.Costof Material Handling Equipments,IT Hardware and applications,including cost
of purchase,depreciation or rental or lease as the case maybe. Further costs include operational
costs,consumables,communication costs and utilities,besides the costof human resources
employed in operations as well as management.
d. Cost of Capital
Includes the costs of investments,intereston working capital,taxes on inventory paid,insurance
costs and other costs associate with legal liabilities.
The inventory storage costs as well as costof capital is dependantupon and varies with the
decision ofthe managementto manage inventoryin house or through outsourced vendors and
third party service providers.
Currenttimes,the trend is increasinglyin favor of outsourcing the inventory managementto third party service
provides.For one thing the organizations find that managing inventoryoperations requires certain core
competencies,which maynot be inline with their business competencies.They would rather outsource to a supplier
who has the required competencythan build them in house.
Secondly in case of large-scale warehouse operations,the scale ofinvestments maybe too huge in terms of cos tof
building and material handling equipments etc.Besides the projectmayspan over a longer period of several years,
thus blocking capital of the company,which can be utilized into more importantareas such as R & D, Expansion etc.
than by staying invested into the project.
LEAD TIME REDUCTION
The most effective way for businesses to reduce stock is by reducing the supply lead time. Lead
time can be defined as the time it takes from when you first determine a need for a product until
it arrives on your doorstep. If lead time was zero, inventory could be zero.
In a perfect world, imagine how simple business would be with a lead time of zero and
orders being filled instantly. A customer could walk through the door of your business, place
their order, and walk out happy with no delay. If business was this easy, you would require no
warehouse space, no order follow-up, no inventory counting, no forecasting, no product
damage, no obsolete inventory, fewer employees, less risk of theft, and less cost overall.
Of course the real world does not work like this, but the shorter the lead times, the less complex
our inventory management will be. In general, you can expect the following reductions in
inventory as lead times are reduced:
Note that lead time can be separated into three components:
 review time
 manufacture time
 transit time.
Review time is the time it takes for your company to generate an order. Changing your order
frequency from twice a month to once a week or even daily can cut total effective lead times
substantially.
It should be clearly understood that lead time reliability is just as important as lead time itself.
Short lead times with a high degree of uncertainty can force necessary inventories upward.
Obviously this is something to keep in mind when selecting suppliers.
Reduction of product replenishment lead times is a core element of our supply chain
management services.

12. A crucial activity for planners is to when to decide to place an order. There are a
number of reorder methodologies that can be adopted. Although most computer
systems are based on the materials requirement planning (MRP) method, there are
other methods that planners can use.
Reorder Point Method/reorder level fixation
The reorder point ("ROP") is the level of inventory when an order should be made
with suppliers to bring the inventory up by the Economic order quantity ("EOQ").
The reorder point for replenishment of stock occurs when the level of inventory drops
down to zero. In view of instantaneous replenishment of stock the level of inventory
jumps to the original level from zero level.
In real life situations one never encounters a zero lead time. There is always a time lag
from the date of placing an order for material and the date on which materials are
received. As a result the reorder point is always higher than zero, and if the firm
places the order when the inventory reaches the reorder point, the new goods will
arrive before the firm runs out of goods to sell. The decision on how much stock to
hold is generally referred to as the order point problem, that is, how low should the
inventory be depleted before it is reordered.
The two factors that determine the appropriate order point are the delivery time stock
which is the Inventory needed during the lead time (i.e., the difference between the
order date and the receipt of the inventory ordered) and the safety stock which is the
minimum level of inventory that is held as a protection against shortages due to
fluctuations in demand.
Therefore:
Reorder Point = Normal consumption during lead-time + Safety Stock .
CHAPTER 3
THE IMPORTANCE OF SCM IN MODERN BUSINESS
Supply Chain Management (SCM) as defined by Tom McGuffog is "Maximising added value
and reducing total cost across the entire trading process through focusing on speed and
certainty of response to the market." Due to globalization and ICT, SCM has become a tool for
companies to compete effectively either at a local level or at a global scale. SCM has become a
necessity especially for manufacturing industry when it comes to deliver products at a
competitive cost and at a higher quality than their competitors. Here are some of the reason
SCM has become important to today's manufacturing industry:-

13. Competitive Edge through Core Competencies
Today's business climate has rapidly changed and has become more competitive as ever in
nature. Businesses now not only need to operate at a lower cost to compete, it must also
develop its own core competencies to distinguish itself from competitors and stand out in the
market. In creating the competitive edge, companies need to divert its resources to focus on
what they do best and outsource the process and task that is not important to the overall
objective of the company. SCM has allowed company to rethink their entire operation and
restructure it so that they can focus on its core competencies and outsource processes that are
not within the core competencies of the company. Due to the current competitive market, it is
the only way for a company to survive. The strategy on applying SCM will not only impact their
market positioning but also strategic decision on choosing the right partners, resources and
manpower. By focusing on core competencies also will allow the company to create niches and
specialization of core areas. As stated in the Blue Ocean Strategy outlined by Chan Kim, in
order to create a niche for competitive advantage, companies must look at the big picture of the
whole process, and figuring out which process can be reduce, eliminate, raise and create.
As an example stated by Chan Kim, the Japanese automotive industries capitalise on its
resources to build small and efficient cars. The Japanese automotive industries gain competitive
edge by utilising their supply chain to maximise their core competencies and position itself in a
niche market. The strategy works and now Toyota Motor Corporation, a Japanese company, is
considered to be the number one auto car maker in the world beating Ford and General Motors
of the United States.
Value Advantage
SCM has allowed business nowadays to not just have productivity advantage alone but also on
value advantage. As Martin Christopher in his book, Logistics and Supply Chain Management:
Strategies for Reducing Cost and Improving Service' states, 'Productivity advantage gives a
lower cost profile and the value advantage gives the product or offering a differential 'plus' over
competitive offerings.' Through maximizing added value and also reduce the cost in the same
time, more innovation can be added to the product and process. Mass manufacturing offers
productivity advantage but through effective supply chain management, mass customization can
be achieved. With mass customization, customers are given the value advantage through
flexible manufacturing and customized adaptation. Product life cycles also can be improved
through effective use of SCM. Value advantage also changes the norm of traditional offerings
that is 'one-size-fits-all.' Through SCM, the more accepted offerings by the industry to the

14. consumers would be a variety of products catered to different market segments and customers
preferences.
As an example, the Toyota Production System practiced in Toyota, evaluates its supply chain
and determines what is value added activities and what is not value added activities. Non added
value activities are considered to be 'Muda' or waste and therefore must be eliminated. Such
non added value activities are overproduction, waiting, unnecessary transport, over processing,
excess inventory, unnecessary movement, defects and unused employee creativity. The steps
taken to eliminate waste are through Kaizen, Kanban, Just-in-time and also push-pull production
to meet actual customer's demands. The Toyota Production System revolutionise the Supply
Chain Management towards becoming a leaner supply chain system that is more agile and
flexible towards meeting the end users demands.
Razamith Sovereign is undergoing his Masters in Engineering Business Management in
University of Warwick, United Kingdom. A General Manager in a technology company, he
provide useful advice through his articles that have been found very useful in managing his daily
operation of the company.
UNDERSTANDING the importance of supply chain
Importance of Supply Chain Management
Before knowing importance of Supply Chain Management, there is need to understand what actually
SCM is? Supply chain management is the systematic and the strategic coordination management for
supplying goods and products required by the end customer. Or we can say that a practice of products that
reaches to an end user and represents the efforts of the organization is known as supply chain
management. It represents a conscious effort by the supply chain firms to develop and run supply chains
in most effective and efficient ways possible.
Supply chain management activities cover almost everything such as from products to its development,
sourcing, logistics and even information system also. The main objective of SCM is creating net value,
building a competitive infrastructure, synchronize the goods supply, measures the performance globally
and leveraging worldwide logistics etc.
Today most of the global companies are forced to keep looking for a production center where cost of
labor and raw material is cheap and in order to compete in the global market and networked economy,
SCM is very helpful for organizations. Various activities are there in an organization which needs
strategic management like sourcing of raw materials from different place and then from different
locations these finished goods are passed through different chains of distribution network which includes
retailers, distributors and end customers.
Importance ofSCM

15. SCM plays a vital role in organization activities and an essential element to operational efficiency which
can be applied to customer satisfaction and company’s success. You can say that it is just like the
backbone of an organization which manages the critical issues of the business organization such as rapid
growth of multinational corporations, global expansion and environmental concerns which indirectly or
dramatically affects the corporate strategy.
Other benefits and importance ofsupply chain management are:
• Reduces inventory costs
• Provides better medium for information sharing between partners
• Improves customer satisfaction as well as service
• Maintains better trust between partners
• Provides efficient manufacturing strategy
• Improve process integration
• Improves bottom line (by decreasing the use of fixed assets in the supply chain)
• Increase cash flow
• Improves quality and gives higher profit margin
SCM offers various tools and techniques that help business organization to diagnose the problems and
also provide solutions of these disruptions around the business environment. It plays an important role in
moving goods more quickly to their destinations. The most important thing in today’s business is
managing competition among partners and in order to win this competition SCM helps business
organization in a very efficient manner. All the benefits and importance of SCM makes its future so bright
and because of emerging trends in organization SCM becomes the most critical business discipline in the
world today.
FUNCTIONS AND SUPPLY CHAIN IN RETAIL &MARKETING BUSINESS
The role of supply chain in Indian organized retail is very significant for on it depends the
growth of this sector. The Indian Supply Chain Council have been formed to explore the
challenges that a retailer faces and to find possible solutions for India.
The role of supply chain in the organized retail sector in India should be a shelf- centric
partnership between the retailer and the manufacture for this will create supply chains that are
loss free. This will also give rise to top and bottom line growth. In the organized retail sector in
India the presence of fresh produce (vegetables and fruits) is very small. This is so for the nature

16. of supply chain is very fragmented. This shows the important role of supply chain in the
organized retail sector in India.
In the organized retail market in India the role of supply chain is very important for the Indian
customer demands at affordable prices a variety of product mix. It is the supply chain that
ensures to the customer in all the various offerings that a company decide for its customers, be it
cost, service, or the quickness in responding to ever changing tastes of the customer.
The infrastructure in India in terms of road, rail, and air links are not sufficient. And so
warehousing plays a major role as an aspect of supply chain operations. To overcome these
problems, the Indian retailer is trying to reduce trans portion costs and is investing in logistics
through partnership or directly. The Indian organized retail sector is growing so the role of
supply chain becomes all the more important. It should become all the more responsive and
adaptive to customers demand. There is also need for the supply chain to be more cost efficient
and collaborative to win the immense competition in this sector.
The role of supply chain in Indian organized retail has expanded over the years with the boom in
this industry. The growth of the Indian retail industry to a large extent depends on supply chain,
so efforts must be made by the Indian retailers to maintain it properly.