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05 SCM Drivers and Models

Study Notes AFMI -SCM -BL01M02-Day05-30Oct20

What are the objectives of SCM?

The purpose of the supply chain is to make product available to meet customer demand – and that includes delivery to the appropriate location, on time, in sufficient quantity. Supply chain management is focused on doing that in the most efficient and effective way

Examples of supply chain activities include farming, refining, design, manufacturing, packaging, and transportation.

What are the six drivers of supply chain excellence?

These six drivers are as facilities, inventory, transportation, information, sourcing and pricing.

What are the four types of supply chains?

Supply chain models and simulations in SCM Globe are composed of just four types of entities: PRODUCTS; FACILITIES; VEHICLES; ROUTES. These entities relate to each other and their interactions are what drive supply operations and produce the simulation results.

What are the 5 basic components of supply chain management?

The Top-level of this model has five different processes which are also known as components of Supply Chain Management –

  1. Plan,

  2. Source,

  3. Make,

  4. Deliver and

  5. Return.

Planning is imperative to control inventory and manufacturing processes

The 6 Supply Chain Models

  1. The continuous flow models.

  2. The fast chain models.

  3. The efficient chain models.

  4. The custom configured model.

  5. The agile model.

  6. The flexible model.

What are the 3 foundations of supply chain?

Our three pillars (or fundamentals) of great supply chain management excellence are

  1. strategy,

  2. service, and

  3. cost.

Types of supply chain management software and SCM software vendors

  1. Product Development.

  2. Sales & Operations Planning.

  3. Procurement.

  4. Production.

  5. Logistics.

  6. Warehouse Management.

What are the five major supply chain drivers?

5 main drivers of supply chain costs

1) Investment Costs.

2) Transportation Costs.

3) Procurement Costs.

4) Production Costs.

5) Inventory Costs.

The journey to cost efficiency.

Thus a typical supply chain may involve a variety of stages discussed as under:

(i) Customers.

(ii) Retailers.

(iii) Wholesalers/Distributors.

(iv) Manufacturers.

(v) Component/Raw material supplier.

Benefits of Supply Chains:

(1) It bridges the gaps between the suppliers and the customers.

(2) It helps manufacturers in reducing inventories as finished goods are stored nearer to the customers.

(3) It allows firms to conduct operations at an appropriate time and place for the benefits of suppliers and customers.

(4) Effective supply chains results in enhanced customer service as retailers get a choice of goods and also carry less stock.

(5) Supply chains make movements simple, cost-effective and efficient as transport is simpler.

6) Expertise can be developed in a particular type of operation.

(7) It allows firms to conduct operations at an appropriate time and place for the benefits of suppliers and customers.

Skills required in future supply chain managers include:

  1. Project management.

  2. Technical understanding.

  3. Cost accounting skills.

  4. Ability to understand financial statements.

  5. Understanding of e-business / e-procurement systems.

  6. Troubleshooting, problem solving.

  7. Understanding of cross-cultural / global issues.

  8. Business ethics.

The 5 Pillars of Procurement and Supply Chain Management

  1. Value for Money. In short this means that it is not necessarily the tender with the lowest price that is going to win the bid. ...

  2. Open and Effective Competition. Government departments must take care that everybody has a reasonable chance to compete for tenders. ...

  3. Ethics and Fair Dealing. ...

  4. Accountability and Reporting. ...

  5. Equity.


Sowri Chand Estates Ltd is an Food processing unit for Aloe Vera Products. Till now they were directly selling the produce to middle men, whereas recently you came to know that extract is costing 10 times more in the market. There is very less investment required and the same is funded by Grameena Bank. the amount of Wastage due to transport is also reduced. the cost of Transfer of extract on every 1000 kgs production has improved by 50%. What will be your first steps as a Manager of SCEL for SCM Capabilities and distribution.

AFMI SCM students Response 30-Oct-2020

  1. Direct selling to pharmaceutical industry

  2. Creating a online portal for selling their products directly to the customers

  3. Extract the middle man , grab the loan and supply directly to the market and also own a transport vehicle

  4. I would ask the buyer to bare the transportation charges as the profit of the product is extremely high so that in initial phases we can reduce the transportation charges for the SCM .

  5. Instead of middleman, selling the produce directly to customers

  6. As a manager I would suggest to start direct selling instead of middle men

  7. As the company has already been under good control by the use of middle men it will be difficult to abolish that system completely. As a manager i would continue using the middle men for the distribution to some extent until the company has achieved the target of more profits. Coming to selling directly in the market, it will be the best thing to do as there is 10 times more value but the transport cost has been improved by 50% which clearly indicates there will be loses if we are not managing it correctly. So in my view it is always better to keep the old working model intact and try new working models slowly until we are sure about the mew model.

  8. IN order to gain more profit, selling the produce directly to the middle men will be an option because of reduction in the transportation cost installation of stalls or selling the product directly to the customers through online method will be the best option according to me

  9. Without middleman the produce is directly sent to market and sold to the costumers ..

  10. At first I will eliminate the middle men, and make direct contact with the market which will get maximum returns. As described earlier the investment is founded by Grameena Bank ,I will make to increase the area of production to improve the production and productivity I will help to gain maximum net return and aslo the reduce the cost of production eg. Transportation.

  11. Conduct the meeting on this problem and I try to find another buyer who buys our products at current market price.

  12. The company should directly sell the extract in the market avoiding the middlemen. For this the company needs spread awareness about their product through advertisements.

  13. To made proper marketing channels to create a online marketing of the products that's will help to avoid the middle man it's directly connected to customer.

  14. "Ohk sir as you say that investment is funded by Grameena we go for survey in several area where the product have demand .and set up our small office there for retailing the product..

  15. Or we choose some interested person who are interesting to tie up with our company"

  16. Instead of selling products to middlemen it's better to have own stores in the cities or selling the product in online market.

  17. "Online marketing.. Rather than through the middle man

  18. Creating online application for direct selling of products to customers

  19. Online marketing and advertising

  20. If we sell our products in direct market then it's advantage that what ever profite will get us directly

  21. Firstly I will develop a plan Or strategy in order to address how the product will satisfy the demand s and necessities of customers.

  22. Direct supply to market

  23. Rising the prices of products that we sell to middlemen or choosing alternative that will help us sell them directly in the market

  24. Create online marketing app

  25. Instead of middle men I opt for selling directly which is way better to increase the profits

  26. Tracking and managing of availability of the material for the product and the logistic and the shipping status for improving performance of the product to the customers.

Lakshminarasimman V Rao | SCM| Class notes | Study Material | AFMI | Corporate Neeti Consulting | Mysuru

All data above is a combination of data from Internet, purpose of this doc is for research and education only and responses received from Class students and interaction.

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