CLARAS COLLEGE OF COMMERCE

2015-2016

NAME: INSHA GHASWALA

ROLL NO: 13

TYBMS

SEMESTER 5

BUSINESS MANAGEMENT STUDIES

SUBJECT: LOGISTICS AND SUPPLY CHAIN MANAGEMENT

PROFESSOR: FAISAL TANWAR

CERTIFICATE

THIS IS TO CERTIFY THAT THE PROJECT REPORT TITLED

SUPPLY CHAIN MANAGEMENT

IS PREPARED BY MS.INSHA GHASWALA, STUDENT OF BACHELOR OF MANANGEMENT STUDIES (BMS) DEGREE, UNIVERSITY OF MUMBAI CONDUCTED BY OUR COLLEGE

IMPORTANT SOURCES USED IN THIS HAVE BEEN DULY ACKNOWLEDGE IN THIS REPORT.THE PROJECT REPORT IS SUBMITTED IN PARTIAL FULFILLMENT OF THE BACHELOR

MANANGEMNET STUDIES (BMS) DEGREE CIRCULATION AS PER THE RULES OF THE UNIVERSITY OF MUMBAI

(DR .MAMATA RAJANI) (DR.ZAHIDA SHAIKH)

BMS CO-ORDINATOR PRINCIPAL

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INDEX

SR NO TOPIC

1 DFINATION

2 WHAT IS SUPPLY CHAIN MANAGEMENT

3 OBJECTIVE SUPPLY CHAIN MANAGEMENT

4 PARTICIPANTS OF SUPPLY CHAIN MANAGEMENT

5 IMPORTANCE OF SUPPLY CHAIN MANAGEMENT

6 LOGISTICS V/S SUPPLY CHAIN MANAGEMENT

7 GLOBAL SUPPLY CHAIN MANAGEMENT

8 BULLWHIP EFFECT

9 EXTENDED ENTERPRISE

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Defination

• Definition of Supply Chain Management by ‘The Council of Supply Chain Management Professionals’:

Supply Chain Management may also be defined as “the integrated management of all linkages and value added activities from the supplier’s supplier to the customer’s customer in such a way that enhanced customer value is achieved at lower costs.”

What is Supply Chain Management ?

• “It is networking activities which directly or indirectly meets customer needs.”

• Supply chain consists of all stages that are required to meet the customer requirement.

• It starts with the supplier and passes through manufacturing, distribution, customer and final consumer.

Supply Chain Management flows

• There are mainly 3 flows in SCM:

• Product flow : It is physical movement of product from the factory to the final consumer.

• Information flow :

Forecasting

Order Management

• Financial flow : It consists of credit terms, payment schedule, discount information and consignment

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Objectives of supply chain management

To maximise the over all profitability

The most important objective of supply chain management is to maximise the over all supply chain profitability is a difference between amount paid by customer to purchase the product and the cost incurred by organisation to produce and supply the product to consumer at right time . Higher the supply chain profitability ,more successful is the supply chain .

Enhancing customer service

One of the major objective of supply chain management is to provide superior customer service . it aims at avoiding any kind of service failure and provides efficient service to customer there by leading to customer satisfaction.

Reduce inventory cost

One of the objective of supply chain management is to reduce inventory cost . Due to efficient supply chain management , there is greater co-ordination and co-opration among the member which help to reduce inventory there by reducing inventory cost .

Reduce the ware housing cost

Due to reduction in the level of inventory there will be a reduction in ware housing cost as there will be less held up of inventory .

Reduce transportation cost

Another objective of supply chain management is to reduce transportation cost through proper planning and network by using transportation principles like economics of scale and economics of distance

Reduce lead time

Efficient supply chain management should reduce the time required to convert order in to cash proper communication , co-ordination .

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Minimising variance

Supply chain management through standardization of activities and process helps to reduce variance between actual results and perceived results .

Ensuring on time delivery to customers

All the member of supply chain should work efficiently and there by ensure on time delivery to customers

Reducing working capital

Effective supply chain management will help to reduce various cost such as inventory cost , ware housing cost , and transportation cost there by reducing working capital .

Participents of supply chain management 8 | P a g e

Suppliers

These are the organization that provide goods and services to purchasing organization . suppliers provide raw material to manufacturers who need the

Manufacturers        These are the organization that are engaged in the production of goods and services. Manufacturers sell there goods to other like distributor / wholesalers/ retailers in the supply chain for re sale .

Distributors           Distributors are typically middlemen that purchases goods from manufacturers with the intention of reselling them to others in the supply chain .

Customers  Customers are the end receiver or user of the product or service. They are essential part of supply chain as they are the ultimate consumers of the product and services . 

Important of supply chain management    Reduced inventories along with chain         Efficient supply chain management helps to reduce the inventory level to be maintained by each member in the chain . This is possible due to good co-operations among the members in the chain .Better flow of information      Supply chain leads to a better flow of information among the members of the chain right from the supplies of raw materials up to the final consumers           In supply chain management the information flow from top to bottom as well as from bottom to top . Hence , the firm is able to adapt to changes and provide response when ever needed 

Competition edge    Scm provides a competitive edge to the company in the market by making the goods available at the right time , at right place , and in right quality. Scm facilities the availability of goods in all the convenient location easily accessible to customers. 

Customers satisfaction 

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      When a particular product is introduced and advertised in the market , then that product has to be made available in all the market of the country so as to make product accessible to the customer. Thus supply chain management helps in customer satisfaction by creating place utility and providing the customer with demanded products at convenient location .

Build trust       Scm builds trust and cooperation among members of supply chain by sharing true information. Better trust among member leads to a win win situation.  Avoid wastage         Due to adaptation of supply chain management techniques, the level of wastage get reduce which reduces the manufacturing cost , inventory cost , labour cost , etc 

Quick response       The scm helps the company in giving quick response to their customers due to better flow of information. Quick response system can positively influence the inventory management. 

Difference Between Logistics and Supply Chain Management

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Logistics Management is a small portion of Supply Chain Management that

deals with management of goods in an efficient way. Although, if we talk about

Supply Chain Management, it is a broader term which refers to the connection,

right from the suppliers to the ultimate consumer. People are quite puzzled

between these two concepts.

It has been noticed that, there has been a drastic change in the manner in which

business is conducted many years ago and now. Due to the improvement in the

technology, you can see all the areas of business has been developed. Supply

Chain Management also evolved as an improvement over Logistics

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Management, from past years. Now coming to the point, let’s start

understanding the difference between Logistics and Supply Chain Management.

 

Logistics Vs Supply Chain Management

 

Comparison Chart

BASIS OF COMPARISON

LOGISTICS MANAGEMENT

SUPPLY CHAIN MANAGEMENT

Meaning The process of integrating the movement and maintenance of goods in and out the organization is Logistics.

The coordination and management of the supply chain activities are known as Supply Chain Management.

Objective Customer Satisfaction Competitive Advantage

Evolution The concept of Logistics has been evolved earlier.

Supply Chain Management is a modern concept.

How many organizations are involved?

Single Multiple

One in another Logistics Management is a fraction of Supply Chain Management.

Supply Chain Management is the new version of Logistics Management.

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Definition of Logistics Management

The management process which integrates the movement of goods, services,

information and capital, right from the sourcing of raw material, till it reaches

its end consumer is known as Logistics Management. The objective behind this

process is to provide the right product with the right quality at the right time in

the right place at the right price to the ultimate customer. The logistic activities

are divided into two broad categories they are:

Inbound Logistics: The activities which are concerned with procurement

of material, handling, storage and transportation

Outbound Logistics: The activities which are concerned with the

collection, maintenance and distribution or delivery to the final consumer.

Apart from these, other activities are warehousing, protective packing, order

fulfillment, stock control, maintaining equilibrium between demand and supply,

stock management. This will result in savings in cost and time, high quality

products etc.

 

Definition of Supply Chain Management

Supply Chain Management (SCM) is a series of interconnected activities related

to the movement and transformation from raw material to the finished goods till

it reaches to the end user. It is the outcome of the efforts of multiple

organizations that helped in making this chain of activities successful. These

organizations may include the firms with whom the organization is currently

working like partners or suppliers, manufacturers, wholesalers, retailers and

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consumers. The activities may include integration, sourcing, procurement,

production, testing, logistics, customer services, performance measurement, etc.

Supply Chain Management has a multi-dimensional approach which manages

the flow of raw materials and work in progress (semi finished goods) within the

organization and the end product outside the organization till it reaches the

hands of the final consumer with a complete emphasis on the customer

requirement.

 

Key Differences Between Logistics and Supply Chain Management

The following are the major differences between logistics and supply chain

management:

1. The flow and storage of goods inside and outside the firm is known as

Logistics. The movement and integration of supply chain activities is

known as Supply Chain Management.

2. The main aim of Logistics is full customer satisfaction. Conversely, the

main aim behind Supply chain Management is to gain

substantial competitive advantage.

3. There is only one organization involved in Logistics while a number of

organizations are involved in Supply Chain Management.

4. Supply Chain Management is a new concept as compared to Logistics.

5. Logistics is only an activity of Supply Chain Management.

 

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Conclusion

Logistics is a very old term, firstly used in the military, for the maintenance,

storage and transportation of army persons and goods. Nowadays, this term is

used in many spheres, not specifically in military after the evolution of the

concept of Supply Chain Management. It has also been said that SCM is an

addition over Logistics Management as well as SCM comprises of logistics.

Both are inseparable, hence they do not contradict but supplement each other.

SCM helps Logistics to be in touch with the transportation, storage and

distribution team.

Global Supply Chain Management Major

Every successful organization owes some of its success to effective supply chain management and logistics.

These processes focus on the flow of goods and information from the source of raw materials through the distribution channels to the final consumer, and beyond, to recycling and disposal.

In today's competitive environment, managing transportation, inventory, product plans and schedules, and information flows are critical to satisfying customers and creating competitive advantages.

Organizations compete globally by working with international suppliers, outsourcing, and marketing to consumers worldwide. This global reality places even more importance on successful supply chain management.

The global supply chain management major focuses on global business and prepares students for success. And with the flexibility of multiple campuses and online courses, you can personally tailor your educational experience.

Courses provide insight into many subjects, including:

Managing raw materials and finished products Developing transportation and logistics strategies Merging transportation policies with production and marketing plans Global supply chain analysis and planning

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Problems in Global SCM

• Different currency and valuation.• Different tax law.• Different trading protocols.• Lack of transparency of cost and profit.

• A supply chain has various stakeholders i.e. retailer, dealers, distributor, suppliers, etc.

• Each of the chain’s outlooks, functions and judgments are different.• It is important as actions of one stage has its impact on the other stage of

supply chain.• Further on, if a retailer has different objectives then the dealer will have

confusion.

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Causes of Bullwhip Effect

• No communication up and down the supply chain.• Lack of co-ordination between value chain members.

• Demand forecast will be incorrect.

Impact of Bullwhip Effect

• Increase in manufacturing cost.• Increase in inventory cost.• Increase in lead time.• Increase in transportation cost.• Increase in labour cost.

Solution for Bullwhip Effect

• Know your Consumers.• Proper forecasting.• Better information.• Better supplier.• Proper inventory flow.• Perfect logistics.• Better technology.

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Bibliography

Refer logistics text book

• http://keydifferences.com/difference-between-logistics-and-supply-chain-management.html#ComparisonChart

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