Submitted To : Dr. Jagathy Raj S.M.S.

CUSAT

Submitted By: Krishna Prasad 2nd Semester M.B.A. Travel & Tourism

 INTRODUCTION INVENTORY WAREHOUSING TRANSPORTATION FACILITIES INFORMATION CONCLUSION REFERENCES.

Supply chain management is an integrated management of various functions in the areas of materials, operations, distributions, marketing, and services after sales with a customer focus in perspective so as to synergize various process in the organization with a view of optimizing the total cost. Supply chain managements performance is depend upon the inventory, warehouse, transportation, facilities and information. For a company to improve its supply chain performance in terms of responsiveness and efficiency, they must examine these factors and its functioning.

element which deals supply, manufacturing and distribution of goods and services. Idle material resource of an enterprise. Stocking of raw materials, finished goods, tools and equipments, spares and others. Inventory may be; Stock on hand of materials at a given time. An itemized list of all physical assets.
Important

because of mismatch between supply and demand. Helps in providing the product ready available condition. Have significant impact at the rate at which sales to the end consumer. Have impact in material flow time in supply chain. Impact on responsiveness Its a major source of cost.
Exist

 Significant

role in a supply chains ability to support firms competitive strategy.

Inventory

helps in achieving the responsiveness of a company. can use inventory to make more

Company

efficient

 Cycle

Inventory It is the average amount of inventory used to satisfy demand between receipt of supplier shipments. Size of cycle inventory is as a result of production or purchase of materials in large lots. Increase in lot size leads to increase in carrying costs. e.g.: Online book retailer

 Safety

Inventory It is the inventory that held just in case demand exceeds expectation. Companies hold safety inventory to satisfy an unexpectedly high demand. If world is predictable, only cyclic inventory is needed. Choosing a safety inventory involves making a trade off between the costs of having too much inventory and the cost of losing sales due to not having enough inventory.

 Seasonal

Inventory Seasonal inventory is inventory that is built up to counter predictable variability in demand. Will build up inventory in low demand period and store it for periods of high demand. It is a key decision to determine whether to build it or not. If a company can rapidly change the rate of production at very low cost, then it doesnt need seasonal inventory.

 Changing

inventory policies can dramatically alter the supply chains efficiency and responsiveness. So inventory is a crucial component of s.c.m. infrastructure.

produces the need of warehousing. Ware houses are the godowns for keeping and storing goods and providing other related services in order to keep traders and manufacturers to preserve the goods in a scientific and systematic manner so as to maintain their original value, quality and usefulness. Goods may be raw materials, parts, components, finished goods etc.
Inventory

is a necessary evil. Adds costs to the distribution process. Ware houses are broadly classified into two: On the basis of ownership. On the basis of services. Basis of ownership: Private & Public. Private warehouse: ware housing facilities operated by and owned or leased by a company. Used by firms. Major benefits: Control, flexibility, cost and other intangible benefits.
It

 Public

Warehouse: Ware houses are owned and operated by organizations like government, cooperatives, or a company in the private sector. On the basis of services, warehouses are classified into bonded, field, cold storage, distribution, buffer storage.

of geographical locations of the market targeted by the firm. Location and facilities of the production centers. Transportation and infrastructure facilities Nature and quality of goods to be stored Financial soundness of the firm. Possibility of change in the use of warehouse facility.
Number

 Difficult

land acquisition process Land prices: abnormally high No dedicated fund for development of infrastructure in logistics sector High risk of business: dependency Legal status to ware housing receipts

 Even

cross docking requires transit points; even if for few hours. Zero inventory is still a myth now. So ware housing is an important component of the supply chain management.

 Main

artery of logistics and supply chain management. It refers to the movement of product from one location to another. Plays a key role because products are rarely produced and consumed in the same location. The mission of logistics can be achieved by proper planning of goods and use of transportation services.

 40

% of total logistical costs.

Faster

transportation allows supply chain to be more responsive. type affects the inventory and facility locations in the supply chain.

Transportation

 Mode

of Transportation Manner in which a product is moved from one location in the supply chain network to another. Air: the most expensive mode but also very fast. Truck: a relatively quick and inexpensive mode with high levels of flexibility. Rail: Inexpensive mode used for large quantities.

 Ship:

slowest mode. Economical choice for large overseas shipments. Pipeline: Used primarily to transport oil and gas. Electronic Transportation: Transports goods which previously sent solely by physical modes, but now through electronic medium.

 Route:

It is the path along which a product is shipped. Network: It is the collection of locations and routes along which a product can be shipped. Companies make routing decisions at the supply chains design stage or in a daily or in a short term basis.

 Whether

the customer is willing to pay for the companys responsiveness or it for the price, transportation helps to fulfill these targets of company. Ecommerce and online selling demands highly responsive transportation mode.

ensures speedier and timely physical movement of goods from point inception to point of consumption. It creates core competency by preventing stock-out and consumer annoyance. It provides protective storage during transit. It ensures cost efficient better customer service. It fulfils specific service requirements of the corporate enterprises for improvement of logical capabilities and harmonious supply chain relationships.
It

are the places in the supply chain network where inventory is stored, assembled or fabricated. Facility decisions include the location of manufacturing, storage, or transportationrelated facilities and the allocation of capacity and roles to each facility. Classification of facility decisions: Facility Role: What role should each facility play? What processes are performed at each facility?
Facilities

Location: Where should facilities be located? Capacity Location: How much capacity should be allocated to each facility? arket and supply allocation: What markets should each facility serve? Have a long term impact on supply chains performance.
Facility

 Locations:

Deciding where a company will locate its facilities constitutes a large part of the design of a supply chain. Companies must consider issues related to various characteristics of the local area in which the facility is situated. It includes economic factors, strategic factors, quality of workers, cost of workers, cost of facility, tax effects etc.

 Capacity:

Decide what a facilitys capacity to perform its intended or functions will be. Excess capacity, costs money and it decreases efficiency. Little excess capacity facility will be more efficient per unit of product. anufacturing methodology: Must decide whether to design a facility with a product focus or functional focus.

Warehousing Methodology: Stock keeping unit storage:. A traditional warehouse that stores all of one type product together. Job lot storage: A methodology in which all the different types of products needed to perform a particular job or satisfy a particular type of customer are stored together. Cross docking: A methodology in which goods are not actually warehoused in a facility. Instead, trucks from suppliers, each carrying a different types of product, deliver goods to a facility

consists of data and analysis regarding inventory, transportation, facilities, and customers throughout the supply chain. Dont have a physical presence. Information is crucial to supply chain performance. Information gives the opportunity to make supply chain more efficient and responsive. eg: IT systems
Information

 Serve

as the connection b/w supply chains various stages. Helps in coordinating supply chains actions and maximizing supply chains profitability. Crucial to the daily operations of each stage in a supply chain. For e.g: Usage of information by production scheduling system, usage by ware house management system.

information

Global scope

Good Decisions

Supply Chain Success.

 Growth

of I.T. shows the importance of information.

Most

valuable in reducing cost and improving responsiveness within a supply chain. Decision will vary depend on the supply chain structure and the market segments served.

Push versus pull: Push systems generally require information in the form of elaborate material requirements planning systems to take the master production schedule and roll it back, creating schedules for suppliers with part types, quantities and delivery dates. Pull systems require information on actual demand to be transmitted extremely quickly throughout the entire chain so that production and distribution of parts and products can accurately reflect the real demand.

 Coordination

and Information sharing: Lack of coordination can result in a significant loss of supply chain profit. Forecasting : Obtaining forecasting information frequently means using sophisticated techniques to estimate future demand or market conditions. Enabling Technologies: Electronic Data Interchange(EDI) allows companies to place instantaneous, paperless purchase orders with suppliers.

Internet: It has critical advantages over EDI with respect to information sharing. The Internet can be accessed by all and conveys much more information and therefore offers much more visibility than EDI. Enterprise Resource Planning: ERP systems provide the transactional tracking and global visibility of information from any part of a company and its supply chain that allows intelligent decisions to be made. Supply chain management software: It adds a higher layer to ERP systems. This software provides analytical decision support in addition to the visibility of information.

Inventory: Setting optimal inventory policies require information that includes demand patterns, cost of carrying inventory, cost of stocking out, and costs of ordering. Transportation: Deciding on transportation networks, routings, modes, shipments and vendors all requires information including costs, customer locations and shipment sizes to make good decisions. Facility: Determining the location, capacity, and schedules of a facility requires information on the trade-offs between efficiency and flexibility, demand, exchange rates so on.

The relevant capture of data, its transmission to facilitate decision making and ability to communicate the decision to many people in time for effective implementation at various places simultaneously is the need of the hour so as to meet the objectives of logistics and supply chain management. In the presence days environmental complexities, the success of logistics and supply chain management is largely conditioned to the extent of use and development in information technology.

The success of supply chain management is largely dependent upon the best contribution from their other supply chain partners to achieve organizational objectives of core competency. A company achieving strategic fit has found the right balance between responsiveness and efficiency. Each infrastructure component of S.C.M. affects this balance. Giving more importance to any component and avoiding the other will affects the organization seriously. The right balance of each component (inventory, transportation, warehouse, facilities, and information) in S.C.M. will help the organization to gain advantage over its competitors.

Meindi, Peter., Chopra, Sunil.,2002, Supply Chain Management , Pearson Education Asia., Third Edn., New Delhi. Agarwal, D.K.,2003, Text book of Logistics and Supply Chain Management, Macmillan., First Edn., New Delhi. Zigiaris, Sotiris., January 2000, Supply Chain Management, Ivakovic, Marinko., 2008, The Role of Human Factors in Supply Chains, Faculty of Transport and Traffic Sciences, Croatia. Gunasekaran, A., 2004, Information systems in supply chain integration and management, www.sciencedirect.com. Raghuram., G., Warehousing to Supply Chain Management- Complementary or Supplementary Indian Institute of Management Ahmedabad.

Anonymous, Supply Chain Management: An Evolutionary View,www.worldscibooks.com Anonymous, Sep 2006, Background Note-Logistics, www.cygnusindia.com. Anonymous.,Aug 2011, Infrastructure supply chains: barriers and opportunities, www.bis.gov.uk. Anonymous, Logistics: Delivery, Storage& Handling, www.sabarescm.com. www.egyankosh.com/scm www.scribd.com www.authorstream.com Anonymous, Logistics Notes, www.ziddu.com. Anonymous, Supply Chain Infrastructure Technology, www.slideshare.net.

Venakatasamy, Vijayaragavan., Role of Inventory Management in Supply Chains, Wichita State University. Tomlin, Brian T., The Role of Inventory in Superior Supply Chain Performance, University of North California. Lancioni, Richard A., Smith, Michael F., 2000, The Role of Internet in Supply Chain Management, www.elsevierscience.inc. Anonymous, Supply Chain Management, www.wikipedia.org. Anonymous, Components of Supply Chain Management, www.big-topics..com.