Agile Supply Chains

8/8/2019 Agile Supply Chains

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Agile Supply Chains -Reverse Supply chain. Agricultural Supply Chains.

Supply Chain Management Approaches

Agile Approaches or Adaptive methods

Plan Driven Approaches Or Predictive methods

Traditional Methods

There are a number of approaches in Supply chain management activities which can be broadly

classified as

Plan Driven Approaches Or Predictive methods

PERT Model (Program Evaluation and Review Technique)

CPM Model (Critical Path Method)

PRINCE Methodology

Agile Approaches or Adaptive methods

Scrum Model.

Extreme Programming models.

Crystal Clear,

Lean Development,

Feature Driven Development,

Dynamic Systems Development Method

Traditional Methods

Waterfall Model

Regardless of the methodology employed, careful consideration must be given to the overall

project objectives, timeline, and cost, as well as the roles and responsibilities of all participants

and stakeholders.

Plan Driven Approaches:

Effective management and technical support are required for the success of large-scale projects.PERT packaged programs provide scheduling capability. However, many tasks must still be

performed by a human being, including activity plan generation, construction of activity

networks, modification of a schedule produced by PERT program, and project monitoring. To

support these tasks, we believe that the application of artificial intelligence techniques to this
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area has great potential. Accordingly, we are developing an experimental project management

expert system named EPM (Electronic Project Management).

The main tasks that EPM supports are

Activity plan generation,

Activity scheduling,

Project monitoring.

Agile software development:

Agile software development refers to a group ofsoftware development methodologies based on

iterative development, where requirements and solutions evolve through collaboration betweenself-organizing cross-functional teams.

Agile methods generally promote a disciplined project management process that encourages

frequent inspection and adaptation, a leadership philosophy that encourages teamwork, self-organization and accountability, a set of engineering best practices intended to allow for rapiddelivery of high-quality software, and a business approach that aligns development with

customer needs and company goals.

Conceptual foundations of this framework are found in modern approaches to operationsmanagementand analysis, such as lean manufacturing,soft systems methodology,speech act

theory (network of conversations approach), and Six Sigma.

Agile Supply Chains :Objective:

The objectives of agility may put higher emphasis on the flexibility and quick

delivery to the customers. Therefore, the agile manufacturer needs to

maintain a certain degree of buffer capacity to cope with the volatile demand

and high variety of products.
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Market Sensitive: Supply chain is capable of reading and responding to real demand.

Virtual: Information-based supply chain, rather than inventory-based.

Network based: EDI and internet enable partners in the supply chain to act upon the real

demand.

Process Integration: Collaborative working between buyers and suppliers, joint product

development, common systems and shared information.

Seven steps to agility:

Substitute information for inventory

Work smarter, not harder (eliminate or reduce non-value adding activities)

Partner with suppliers to reduce in-bound lead-times

Seek to reduce complexity (not necessarily variety)

Postpone final configuration/assembly of products

Manage processes not just functions

Utilize appropriate performance metrics, e.g. end-to-end pipeline


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Concept of agility:

Agricultural Supply Chains:


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Reverse Logistics in scm

The Increasing Necessity for Reverse LogisticsAbout Reverse Logistics

"Forward Logistics" describes the conventional manufacturer-to-

customer supply chain.

"Reverse Logistics" is the process of returning goods from

consumers back to suppliers.


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Due to environmental regulations and consumer pressures to

increase customer service, companies are focusing on Reverse SCM or

reverse logistics. Reverse logistics can lead to improved relationships

with supply chain partners, improved profits through reduced costs, andimproved efficiencies and higher recovery rates for returns .

In An Examination of Reverse Logistics Practices, Rogers and

Tibben-Lenbke define reverse logistics as:

The process of planning, implementing, and controlling the

efficient, cost effective flow of raw materials, in-process inventory,

finished goods, and related information from the point of consumption to

the point of origin for the purpose of recapturing or creating value or

proper disposal .The concept of reverse logistics is very important in the European

business environment and is slowly gaining importance to American

businesses (3). In both regions, the cost of land filling and increased

restrictions on what can be placed into a landfill are causing companies

to invest in reverse logistics processes (1). In Europe for example,


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environmental regulations require tire manufactures to recover and

recycle one old tire for every tire produced (4). Manufacturers must have

an efficient system to recover the tires to comply with this regulation.

Some statisticsReverse logistics accounts for 3 percent to 4 percent of a companys

total logistics costs. Companies can save 10 percent from their annual

logistics bill by implementing an efficient reverse logistics system.

Twenty percent of this amount is saved in labor costs and the remaining

80 percent is saved in lowered freight costs and reduced pipeline

inventory (5).

Process to implement reverse logistics system

Reverse logistics includes handling, storage, transportation, inspection,

repair, repackaging, refunds, and customer service. Retrieving the

product is the first step in the process. The quality and quantity of

products retrieved must be coordinated with other distributors and

customers. Then the product must be efficiently transported to a central

location, where it is inspected and sorted. In this step, processes must be

in place to determine what products can be saved, reworked,remanufactured, resold or disposed. Automated tracking and testing

systems can be used for parts of the sorting process.

Then, the appropriate products can be reconditioned. Design for

disassembly (DFD) is a method of designing products, such as electrical

devices, so they can be easily pulled apart, reconditioned, and reused (5).

The products that are not reconditioned are recycled, resold for parts, or

disposed. The final step is distribution and sales of the reconditioned

products. Companies must create a market for the refurbished products,which can be sold to the general public at cost or at a discounted price,

or sold to foreign markets.

Companies with successful reverse logistics processes

Bosch, an automotive and industrial technology company, builds sensors


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into its power tools that indicate if the motor is worth reconditioning.

The sensors reduce inspection and disposition costs, allowing the

company to realize profits on the remanufactured power tools (4).

General Motors (GM) simplified its process for returning automotiveparts by allowing parts to be returned to a single facility using GMs pre-

printed shipping labels. This less costly process enhanced GMs

relationships with its customers and supply chain partners (2).

Volvo, a Swedish car manufacturer, anticipated the Swedish government

passing a resolution holding auto manufactures accountable for disposal

of vehicles. Volvo implemented a reverse logistics process of salvaging

and dismantling cars. The company generated revenues by selling theused metal, plastics and car parts (2).

Reverse logistics is a growing area of emphasis by many companies.

Each company, regardless of industry, can implement a reverse logistics

process that saves money or even generates new profits. A company can

also recycle products or packaging to improve its environmentally

friendly practices.

Reverse logistics in Supply Chain Management

Reverse logistics is "the process of planning, implementing, and

controlling the efficient, cost effective flow of raw materials, in-process

inventory, finished goods and related information from the point of

consumption to the point of origin for the purpose of recapturing value

or proper disposal. More precisely, reverse logistics is the process of

moving goods from their typical final destination for the purpose of

capturing value, or proper disposal. Remanufacturing and refurbishingactivities also may be included in the definition of reverse logistics."

Introduction

The evolution of reverse logistics for manufactured products is

developing in direct proportion to the rapid advancements in technology


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and the subsequent price erosion of products as new and improved

products enter the supply chain at a faster pace. With such thin margins

and so much competition, mismanagement of the supply chain can be

devastating.

Those organisations with the infrastructure to capture and compare

the composite value of components with real time intelligent analysis

and disposition based on changes in refurbishment cost, resale value,

spare parts, repair and overall demand will not only become more

profitable, but such flexibility and scalability will allow them to

outmaneuver and eliminate the competition.

Early days

The early days of Reverse Logistics were measured by

convenience and customer accommodations. The focus was on the front

end of the return process, the ability for consumers to be able to return

unwanted or defective merchandise. The ability to facilitate a consumer

return was a courtesy that turned into a compelling competitive

differentiator in retail.

The companies that did not support consumer returns found

themselves at a strategic disadvantage to those that did, and were

eventually forced to adopt the same consumer conveniences or lose

those customers to the competition.

It did not take long for retail merchants to seek the same

concessions from manufacturers and distribution channels. Stock

rotation became a normal condition of business, and processes for

returning defective merchandise became standard practice. Although thisis accepted as commonplace today, it has not always been this way.

Even today there are cultural differences with regards to consumer

returns, especially for product that is not defective and returned because

of 'customer remorse'.


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The next step

As the cost of Reverse Logistics continued to increase, and as the

methods of transportation became more sophisticated, manufacturers

and distributors began to look for alternatives in transportation for

savings. Planning and consolidating freight for return products wasidentified as a way to reduce expenses related to fuel and labor. This

also led to detailed analysis of transportation options, like truck, air and

railway. In Supply Chain Logistics business you are either the one

driving the truck, the one pumping the gas, or the one paying the other

two.

The next step in the evolution of Reverse Logistics was the

experimentation and cost comparison between multiple local hubs andsingle consolidated returns centers. The simple analysis for savings

contrasted the costs of warehouse space and manpower to the amount of

freight and transportation fees for handling the back end of the Supply

Chain. Other factors also played a significant role in the financial

analysis, including volume, material costs and inventory controls.

As the costs of Reverse Logistics continued to rise, the importance

of returning refurbished merchandise to market also became moresignificant. Organisations began to place financial significance on the

devaluation of product for every day lost in transportation, handling,

processing or warehousing.

As technology and features improved, price and demand for aging

product diminished, as did the ability to recoup costs from returns.

Speed to return to market could be measured in resale value.

Awakening

In the next step of Reverse Logistics evolution, there was anawakening and realization that reverse logistics is only a portion of the

entire back-end services solution. Consolidation meant more than merely

consolidating returns, it meant consolidation of activities related to back-

end support operations.


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Manufacturers began to consolidate spare parts and materials in the

same warehouse as the returned merchandise, discovering that it is less

expensive to move parts and packing materials across an aisle than

across state lines. Spare parts used to refurbish returns were placed in the

same building.

Taking this concept one step further, manufacturers began to

consolidate depot warranty repair operations inside the same facility to

maximize the utilization of parts, labor, warehouse and materials. This

activity often required collaboration between previously diverse

management and operational groups within large organizations. The

collaborative effort reduced expenses for all participating departments

and groups within the organizations.

Collaboration

The next major step in the evolution of Reverse Logistics is

collaboration with partners and external resources. It is a greater

awakening and realization of integration with the entire Supply Chain by

leveraging data exchange.

It begins with an understanding of the value of the components thatcomprise a completed manufactured product, the Bill of Materials

(BOM). The Bill of Materials is also used by manufacturers to forecast,

procure and manage an inventory of spare parts that are used for repair.

Frequently, the combined cost of the individual components exceeds the

cost of the original retail product. Furthermore, due to price erosion, the

cost to repair some products exceeds the cost of replacing the entire unit.

Manufacturers must make quick financial decisions regarding the

return on investment to refurbish returned products, repair or replacedefective warranty products, and the potential resale value for

refurbished products returned to market. Manufacturers must also weigh

the potential cost if inventory for procuring spare parts to support

warranty, extended warranty and out of warranty regulations. To be truly


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effective, manufacturers must make these decisions before the returned

product enters the reverse logistics supply chain, not after it is in it.

Manufacturers have the ability to gather data on activities that

drive demand. Contributors to demand planning include failure rate orrate of repairs that require spare parts. At the very front end, potential

return trends and potential repair trends can be identified by customer

technical support or customer care phone calls. Quality analysis of

returns and defective products can also be used to identify demands for

spare parts planning.

Resale value trends for refurbished products and seasonal sales

cycles can be used to predict demand and resale value for refurbishedproducts, and if the product is cost effective to refurbish or repair. In

some cases the parts can actually be sold for more greater margin than

the whole product. At the very least, parts can be harvested from return

products to mix and match repair of other defective return products,

avoiding expensive spare parts procurement when applicable. All of

these factors contribute to planning the demand for a refurbished product

or the component parts.

Once you know the demand and resale value for component parts

and whole units, then it is only a matter of maintaining an intelligent

planning engine that uses the input to analyze the Bill of Materials for

returned products. Before the merchandise enters the Reverse Logistics

Supply Chain, make an immediate and intelligent decision regarding the

value and intended disposition of the whole unit or the component parts.

In some cases the product will be scheduled for de-configuration to

feed refurbishing activities or develop a spare parts inventory forwarranty repairs. In other cases, the units may be expedited for

refurbishing and resale. Some products may be scheduled to be

environmentally scrapped for materials. Product may even be de-

configured at the retail location to support local customer demands and

thereby avoid freight entirely.


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Whatever the final result may be, the decision can be made before

the product enters the Reverse Logistics Supply Chain cycle, as long as

the intelligent engine is provided with continuously updated and

accurate information. The new problem and the new solution is knowingwhat you sold, who wants to return it and what it is really worth, before

you own it again.

Compliance

It's hard to believe that there are still companies that invest millions of dollarseach year in tools to forecast procurement and inventory management of spareparts, without accurately forecasting and managing the largest single source ofsurplus components that results from return merchandise. There are stillorganisations that struggle to achieve freight savings purely by negotiation orconsolidation, without a achieving a balanced approach to freight avoidance,localisation and intelligent de-configuration disposition.

In the competitive landscape of rapidly evolving technology, mass production anderoding profit margins, managing the total cost of the supply chain and thecomposite value of the components is essential to cost reduction and financialsurvival. To ignore this aspect of reverse logistics can not only be costly, it canbe fatal for an organization.

For Consumer Electronics and Computer products, the Reverse Logisticshandling requirements are further complicated by compliance and regulations likeRoHS, WEEE, controls on Lead based and Mercury materials, just to name afew. Recognising these component parts is absolutely essential to the propermanagement of the intelligent engine that directs the disposition of returnsimmediately upon notification that merchandise may enter the returns cycle.Proper management is not only financially rewarding, but in the case ofhazardous materials, it is the law.

Conclusion

In service, to be competitive is to be the first to provide the services that wouldotherwise put you out of business. If you can do this, you will place yourcompetitors out of business, or at least have them working for you. Gathering thedata that pertains to customer call centers, extended warranty services, spareparts, resale value, parts procurement costs and impending returns oftenrequires extensive collaboration, integration and data exchange.


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To be successful, it is often necessary to partner with multiple organisations andexperts to leverage best practices in a collaborative environment. The companiesthat collaborate, integrate and optimize data exchange will enjoy the competitiveadvantages of improved profit margins and precision management. Theorganizations that do not participate will be remembered as fabulous fossils.

"The old ways are dead. And you need people around you who concur. Thatmeans hanging out more with the creative people, the freaks, the real visionaries,than you're already doing. Thinking more about what their needs are, andresponding accordingly. Avoid the dullards; avoid the folk who play it safe. Theycan't help you any more. Their stability model no longer offers that much stability.They are extinct, they are extinction." - Hugh Macleod

Agri scm:SCM has emerged as recently as 1990s and has grown rapidly due to

various internal and external factor in the agriculture sector.

The main drive is to check the competitive behaviour in the agriculture

production side which based on the consumer requirement which is ever

changing ,affecting the agriculture business chain.

Here from the agriculture sector - Farmers, Processors, Marketers and

Distributors and finally the consumers are the major players in this

system.

Advantages:

1. Fair price for farmers and consumers

2. Agriculture transforming to Agri business Status.

3. Availability of different products from various agro climatic underone roof.

Disadvantages:


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1. If there happens any breakage or little distubances in the chain the

entire system collapsed.

. Inspite the total process is aimed to cut the overall cost,the service has

to be maintained. That is called as the Global Optimization.

2. The inherent uncertainity in the Agribusiness.

3. Continuous implementation of improvement and having proper

vigilance on the whole system.

feel that the first thing that is needed is broadening the concept of

Commodity Exchange where almost every agri commodity can be

traded. I have once had an opportunity to see the plans of a very big

corporate house. I hope it sees the light of the day.

Having said that I feel that the broad guideline of a e-market place

should be in line with Tea Auction House where speculative trading is

almost nil and every bidder has to take delivery, if he wins the bid,

otherwise his membership is cancelled.

The necessary infrastructure needed, in my opinion is:

a) A Regulatory Authority like Tea/ Coffee Board

b) Dedicated warehouses in all corners of the country to store items.

c) Good Quality Control modules along with dedicated Inspecting

Agencies

c) Good Transport System to ship in and ship out the products without

much damage

d) Last but not the the least educated Growers and Traders

Thanks for highlighting the points that are required for making the

SCM ,a success.

As Narmata have told,cold chain is a must for perishables and to meet

out the odd requirements.

Yes,SCM do need proper planning,implementation & efficient


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controlling of the products for effective flow of storage goods,services

and related information from the point of origin to the point of

consumption.

For this as you said,Agribusiness educated traders and growers arenecessary.

Basically harnessing the technical know-how will work effectively.

Agribusiness should to IT enabled too.

Then the big corporate players like Reliance, ITC, Tata has to come

forward taking up this project as not just a business opportunity but

something more. You can refer to the e-choupal project of ITC which ismost probably the best example of a "Win-Win"game.

Agile Supply Chains

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