Bub0912016 Deepak.chilakabathula Emm

7/30/2019 Bub0912016 Deepak.chilakabathula Emm

1/41

MSRSAS - Postgraduate Engineering and Management Programme - PEMP

Engineering Materials and Manufacturing Management.

vii

ASSIGNMENT

Module Code AME2512

Module Name Supply Chain Management

CourseM.Sc. in Engineering ManufacturingManagement

Department Mechanical and ManufacturingEngineering.

Name of the Student Deepak Chilakabathula.

Reg. No BUB0912016

Batch Full-Time 2012.

Module Leader Prof. P.S.Satish

POSTGRADUATEENGIN

EERING

ANDMANAGEMENTPROGRA

MME

(PEMP)

M.S.Ramaiah School of Advanced StudiesPostgraduate Engineering and Management Programmes (PEMP)

#470-P, Peenya Industrial Area, 4th Phase, Peenya, Bengaluru-560 058

Tel; 080 4906 5555, website: www.msrsas.org


2/41

Supply chain management

ii

Declaration Sheet

Student Name Deepak Chilakabathula

Reg. No BUB0912016

Course M.sc.[Engg] EMM Batch Full-Time 2012.

Batch Full-Time 2012.

Module Code EMM 2506

Module Title Supplay chain management

Module Date 10-12-2012 to 12-01-2013

Module Leader Prof P.S.Satish

Declaration

The assignment submitted herewith is a result of my own investigations and that I have

conformed to the guidelines against plagiarism as laid out in the PEMP Student

Handbook. All sections of the text and results, which have been obtained from other

sources, are fully referenced. I understand that cheating and plagiarism constitute a

breach of University regulations and will be dealt with accordingly.

Signature of the student Date

Submission date stamp(by ARO)

Signature of the Module Leader and date Signature of Head of the Department and date


3/41


Engineering Materials and Manufacturing Management.

vii

Abstract

In first chapter is stated about significant of supply chin management what are the different

strategy used in supply chain management comparison between the three strategy push,pull,and

hybrid strategy

In second chapter a complete study on supply chain management of central mall with clear

illusion of layout and costumer demand review costumer relation and different points are Stated

in this chapter

In chapter three is stated about Customer demand estimation, Improving responsiveness to

Customer, Easy accessibility of items in store to customer including layout Retail stores

decision on make or buy ,Transportation concept with suppliers and Comparative study is

stated in the following chapter


4/41


iv

Contents

Declaration Sheet.................................................................................................................. iiContents.................................................................................................................................ivList of Tables.......................................................................................................................... vList of Figures .......................................................................................................................viList of Symbols.................................................................................................................... viiPART-A .................................................................................................................................. 1CHAPTER 1 .......................................................................................................................... 11 Push Pull Strategy .............................................................................................................. 11.1Introduction to topic: ....................................................................................................... 11.2Push, pull and push-pull systems:................................................................................... 11.2.1 Push strategy : .............................................................................................................. 11.2.2 Pull strategy:................................................................................................................. 11.3 Care study: ....................................................................................................................... 21.3.1 Identify Customer Values ............................................................................................ 31.3.2 Engage the Entire Organization ................................................................................. 31.3.3 Results............................................................................................................................ 31.4 Conclusion :...................................................................................................................... 3PART-B .................................................................................................................................. 4CHAPTER 2 .......................................................................................................................... 42. Supply chain of central ..................................................................................................... 42.1 Rationale for identifying the central store:................................................................... 42.2 Illustration of supply chain: ........................................................................................... 42.2.1Inventory Management: ............................................................................................... 72.2.2 Managing Distribution Centers: ................................................................................. 72.2.3 Warehouse Management System ................................................................................ 72.3.1 In upstream ................................................................................................................... 82.3.2 Internal supply chain ................................................................................................... 82.3.3 Downstream .................................................................................................................. 9PART-C ................................................................................................................................ 10CHAPTER 3 ........................................................................................................................ 103 Role of SCM ...................................................................................................................... 103.1 Demand estimation: ...................................................................................................... 103.2 Improving customer responsiveness:........................................................................... 103.3 Accessibility of Items to customer and layout: ........................................................... 113.4 Make or Buy Decisions: ................................................................................................ 123.5 Transportation concepts with suppliers:..................................................................... 133.7 Conclusion:..................................................................................................................... 15Reference .............................................................................................................................. 16Appendix .............................................................................................................................. 17


5/41


v

List of Tables

____________________________________________________________________________

Table No. Title of the table Pg.No.


6/41


vi

List of Figures____________________________________________________________________________

Figure No. Title of the figure Pg.No.

Chapter 2

Figure2. 1 central supply chain ..................................................................................................... 4Figure2. 2 Phase 1 ......................................................................................................................... 5Figure2. 3 phase 2 ......................................................................................................................... 5Figure2. 4 phase 3 ........................................................................................................................ 6Figure2. 5 Phase 4 ......................................................................................................................... 7Figure2. 6 up stream &down stream ............................................................................................. 8Chapter 3Figure3. 1 central shop layout ground floor ................................................................................ 11Figure3. 2 first floor layout ......................................................................................................... 12


7/41


vii

List of Symbols

____________________________________________________________________________

Symbol Description

SCM Supply chain managementERP Entrepreneur resources planning

ETO Engineer To Order

BTO Build To Order

MTO Make To Order

ATO Assemble To Order


8/41

PART-A

CHAPTER 1

1 Push Pull Strategy

1.1Introduction to topic:

Push and pull systems decide how to move material when to move material and where to

material in a production process. A push system is characterized by a make to stock

environment and a pull system is characterized by make to order. An appropriate system that

would cater to the requirements of the company has to be selected.

The main difference between push and pull production system is based on their active point.

Push system is based on forecast while a pull system is based on customer demand.

Fluctuations in customer demand directly influences in pull system. Most of the production

problems can be solved by using an appropriate push and/or pull system. It is clear that neither

one is always better than the other.

1.2Push, pull and push-pull systems:

1.2.1 Push strategy :

In push strategy demand is forecasted according to the previous records and production is

purely based on the forecast after the production goods are released in to the market according

to the availability of product costumers order the product but in this strategy. Push systems

disregard the production of defective products, machine breakdowns, labor shortages and other.

Inventory levels are very high when compared with pull system.[1]

1.2.2 Pull strategy:

In pull strategy production and distribution is based on customer demand .in pull strategy only

goods and services are ordered by costumer only produced and shipped.[2] In multi stage

productions, small barrier are kept as inventory it is kept in between to offset small imbalance

between them in terms of production rate or demand rate. Typically this buffer is a standardized

size of containers. There will be flow of materials and order signal information. Inventory

levels are minimum..Disadvantage of pull strategy is lead time is more when compared with

push strategy .there are different types of pull strategy ETO (Engineer To Order),BTO (Build

To Order),MTO (Make To Order),ATO (Assemble To Order).


9/41


2Supply chain management.

1.2.3 Push-Pull strategy:

As mentioned in 1.2.1 and 1.2.2 sections, the disadvantages of Push and Pull supply chains

along with changes in worldwide business many of the companies are focused for look for a

new supply chain strategy that takes advantage of the best of both world. This results into a

hybrid of the two systems Push-Pull supply chain system.

Push-Pull is also named as synchronous supply chain. In this strategy, the opening stages of the

supply chain are operated based on Push system, and the final stages are operated on Pull

strategy. The interface between the Push-based stages and the Pull-based stages is referred as

the Push-Pull boundary.[3]

In push pull strategy costumers having their own choice and a wide range of customization The

push/pull strategy outcomes make a balance between the responsiveness (agility) and cost

(lean). Pull systems must be responsive to be effective, push systems are generally more cost

effective though they not have the same amount of flexibility as the pull-systems may have. Of

course, all systems are generally a combination of the push & pull strategies to be most

effective.[4]

1.3 Care study:

Dell responded to changes in the market by influential how different segments of customers

derive value from its products and services. The company's forecast showed that customer

demand had become quite difficult. The B2B market demands speed, customization, services

and precision delivery. Consumers want multiple channel options, the ability to personalize for

function products at low-price options and devices that deliver content. This complexity will

only increase as content and virtualization begin to drive the market. To address these type of

issues, Dell segmented its supply chain as part of a multiyear transformation. Historically, Dell

was organized by products and/or region. As part of globalization, the company aligned

organizations to customer value constantly across territory. In 2008, it began to influence its

partner network of suppliers where capability, quality performance and cost had improved. Dell

would retain its in-house network where strategic differentiation was valued by customers and

provided a competitive advantage. This work was very good for an enabler of supply chain

division. In this research.[4]


10/41



1.3.1 Identify Customer Values

Dell used past customer knowledge from contracts, survey results, business intelligence (BI)

data and platform sales to begin its customer-centric view of value. To provide a robust, outside

in point of view, Dell invested in resources to complete detailed configuration profitabilityanalysis, targeted surveys and external marketing insights from multiple industries

1.3.2 Engage the Entire Organization

Dell's supply chain required wide-ranging cross-functional collaboration: IT transformation had

to occur with supply chain transformation, supply chain had to work with finance to enable a

CTS methodology and process, and supply chain capability had to be fully integrated with

product design throughout the development cycle. Plus, aligning the go-to market plans with

sales and marketing was essential to driving the desired demand patterns.

1.3.3 Results

Stronger connection to customersIn Ms. Clayton's words, "We knew we had toleverage supplier capability and scale, but still control the things that are most important

to the customer. We redeployed our resources focused on controlling imaging, delivery

and parts of design. We enable best value solutions ... giving the customer the exact

value they want."

Complexity reductionproduct options had become too complicated. In response,Dell reduced configuration difficulty in line with customer requirements. As Mr.

Noakes stated, "Product offerings had exceeded customer requirements and were adding

unnecessary cost and responsiveness waste in the supply chain."

Improved internal collaborationIdentifying and managing functional interdependency have driven collaboration across product design, supply chain, marketing,

sales and finance. Dell also simplified.

1.4 Conclusion :

The two predominant models supply chain are push and pull models with increasing global

operations in supply chain. These two models are different at inventory management but this

model alone is not that much effective in satisfying costumer. So to certain extant push model

should be used and rest pull model should be used.

Push-pull strategy is comparatively better than either push or pull strategy.


11/41



PART-B

CHAPTER 2

2. Supply chain of central

2.1 Rationale for identifying the central store:

Central brand has malls all over India. It is owned by Pantaloon Retail that also owns the Indian

Big Bazaar supermarket chain

third-party social auditing and compliance monitoring of supplier working conditionsand health and safety practices

Central store is having many no of suppliers all over India and no of stores all overIndia

Central runs SAP one of the leading ERP providers Located in a mall with high competitors Simple supply chain management

2.2 Illustration of supply chain:

Figure2. 1 central supply chain

In the supply chain of central store half is push system and half is pull system as described in

fig 2.1

In central store all the goods are tagged with RFID tags and everything is centralized. So that

there is no dilay of sending purchase order to the supply order and requesting goods from a

wear house all the things are carried out easyly


12/41



Phase 1

In phase 1 distributer receives purchase order and distributer sends the material to main central

ware house through the logistics which are provided by distributer.

Figure2. 2 Phase 1

Phase 2

in phase 2 when the stock is getting out of stock automatically information is transferred from

main wear house through SAP .then material is transported from main wear house to wear

house at store through own logistics system which are outsourced to 3 rdparty logistics .

Figure2. 3 phase 2

Phase 3

In phase 3 all the goods are re placed when the rack is empty and in the ware house the stock

levels are kept up to 45 days because of un expected errors which may cause stock out

situation


13/41



Figure2. 4 phase 3Phase4

In phase 4 goods are selected by consumers in retile store by picking up all the goods are

tagged with RFID tags through which database centralized and controlled with ERP software

called SAP .after purchasing of goods by customer its place is replaced with another verity.

Demand forecast is done by collecting previous data

Available products

Denims & T-Shirts Fabric & Cut piece Formal Wear Casual Wear Party Wear Ethnic Wear Accessories Under Garments Night Wear Dress Materials Sarees Cosmetics Sunglasses Watches Foot wear


14/41



Figure2. 5 Phase 4

2.2.1Inventory Management:

Inventory management is done at the corporate and individual store levels. In both cases,

computerize systems facilitate proper inventory levels and reordering of goods. Stores manage

their inventories and order goods as needed by using centralized communication center. By

networking with suppliers, a quick replenishment order could be placed via different

communication system. This way, suppliers can quickly deliver the goods directly to the store

concerned or to the nearest distribution center. The suppliers are able to reduce costs and prices

due to better coordination with the store management.

2.2.2 Managing Distribution Centers:

Goods are supplied to these centers by suppliers and then stored. When goods are needed they

start sending the goods in local logistics. Distribution centers are managed with daily labors to

load the goods in to containers. Data receives through SAP systems. Distribution centers are

well managed with in the available recourses and man power.

2.2.3 Warehouse Management System

A warehouse management system(WMS) is a key part of the supply chain that primarily aims

to control the movement and storage of material within the warehouse and process the

associated transactions including receiving, shipping, and in-warehouse picking. The system

also optimizes stock levels based on real-time information about the usage of parts and

materials.


15/41



2.3 Critical analysis:

Figure2. 6 up stream &down stream

2.3.1 In upstream activitiesdeals with the external suppliers dealing with. If somewhere else

better deal can be happened central store shift to different supplier, move the business to a

different company within the upstream segment of the supply chain. "Upstream" refers to the

supply of products from supplier to central store.

In up stream there are many number of supplyrs deals with central store all the goodsare transported to central warehouse through their own logistics if suppliers when the purchase

order is delivered to the suppliers .payment is done with in agreement period.

2.3.2 Internal supply chain activities deals and maintain the data of goods in wards and

outwards data which includes different documentations like purchase order etc, receiving the

materials and entering the data in to the store records managing the recourses etc .

In internal supply chain management material are received form the supplier is

distributed to the stores through distribution centers when the stock limit is going low .


16/41



Internally distribution is managed with outsourced transportation system. in store goods are

segregated and placed in proper manner in a clear manner for easy identification of customer .

After selling the goods that area is replaced with another products the same supplier

2.3.3 Downstream activities deals with relating to earnings or operations at a firm that are near

or at the final stage of consumption. For example, marketing and transportation are downstream

operations for a large form.

In down stream activities marketing is done in different pricing like

Value pricing it sets selling prices on the perceived value to the customer, rather than on the

actual cost of the product, the market price, competitors prices, or the historical price.

Time-based pricing is a special case of price discrimination in which producers charge

different rates for a given good or service depending on the time, day, month, and so on.

Bundlingproducts are bundled together with a attractive pricing

Below line promotion Coupon, discount, more of the product at normal price, gift with

purchase, competition, and prizes, money back offer, exchange offer, special occasion.

Above line promotion Giving advertise in news paper, TV. Internet (own website which give

online shopping service), partnership with Pantaloons, Big FM 92.7

Value merchandizing is art and science of displaying merchandise within store, it is about

implementing effective design, ideas to educate customer, create desire and finally increasestore traffic and sales volume


17/41



PART-C

CHAPTER 3

3 Role of SCM

3.1 Demand estimation:

Demand estimation or demand forecast is the process of forming judgment about the quantities

to a product or service that will be demanded by customers in the future.. Such forecast of

demand are used to forecast the resource requirement

Following Forecasting methods are used in central Store :

Qualitative Time series

Qualitative forecasting methods are primarily subjective: they believe on human judgment andopinion to make a forecast. They are making it more appropriate with using little historical data

available that is critical in making forecast. These methods may be necessary to forecast

demand several years into the future in a new industry.

Time series forecasting methods in this method they are using historical demand to fore cast

they are based on assumptions of past demand history and it a good indicator of feature demand

this method is used when environment situation is stable .this is a simple method to implement

and serve a good starting point of demand

3.2 Improving customer responsiveness:

Giving privilege to costumers by grading them in different categories with introducingloyalty cards

Door delivery of the to costumer door steps with a prompt deliveryE-comers service is provided for on line ordering of products by using future group

website

Being an accurate advisor to customerGood packing of goodsService recovery process in case of problem, with adequate compensation if requiredResponding to internet costumers ,need on timeHelping internet customers in resolving problemCommunication

Prepurchase product informationAfter sales and service information


18/41



Providing accurate and timely information for internal customersAvailability

Being available when neededBeing flexibleMaking use of technology to provide more interactive service

3.3 Accessibility of Items to customer and layout:

Assesbility of goods is very easy all the clothing section is at one side according to the gender

wise all the goods are available in one place so that finding out of products is very easy.

Arranging of goods are done in a clear manner according to the brands.

Figure3. 1 central shop layout ground floor


19/41



Figure3. 2 first floor layout

3.4 Make or Buy Decisions:

The make-or-buy decision is the act of making a strategic choice between producing an item

internally (in-house) or buying it externally (from an outside supplier). The buy side of the

decision also is referred to as outsourcing. Make-or-buy decisions usually arise when a firmthat has developed a product or partr significantly modified a product or parts having trouble

with current suppliers, or has diminishing capacity or changing demand.

Make-or-buy analysis is conducted at the strategic and operational level. Obviously, the

strategic level is the more long-range of the two. Variables considered at the strategic level

include analysis of the future, as well as the current environment.

Central shop is making formal shirts by giving the criteria to supplier and branding the product

as their own. Make decision is taken for the goods which are not costly and freely available

items. Quality and design of the product is supplied by the central shop to the supplier as

criteria. Supplier is selection is done enormously because it is one of the members in same

group.


20/41



3.5 Transportation concepts with suppliers:

Transportation should be done by the supplier in a appropriate manner. For overseas and regional suppliers the mentioned transport concepts will be done via

cross docks.

For local suppliers Ship to the central stores directly . The basic outer dimensions of pallets must be maintained. Protrusions and overhangs

must be avoided.

All shipping units must be packed by SUPPLIER in a manner which is safe fortransportation and protected from unauthorised access.

The pack items should be packed in single-type batches. Parts of different releases mustnot be combined in one pack item.

Packing items are combined to form a safe unit on the shipping unit, and safeguardedagainst slippage in transit.

At least the top layer must be covered.

3.6 Comparative study:

Comparative study with Wall Mart in Demand Forecasting

Wal-Mart introduced a data warehousing model information will have for specific store for

specific period. The system is built to grow when the company needs it to grow. Data

warehouse is used for reporting. The data is offloaded from the operational systems for

reporting. The data may pass through an operational data store for additional operations before

it is used in the DW for reporting.

A data warehouse maintains its functions in three layers: staging, integration, and access.

Staging is used to store raw data for use by developers (analysis and support). The integration

layer is used to integrate data and to have a level of abstraction from users. The access layer is

for getting data out for users.

A data warehouse provides a common data model for all data of interest regardless of the data's

source. This makes it easier to report and analyze information than it would be if multiple data

models were used to retrieve information such as sales invoices, order receipts, general ledger


21/41



charges, etc. Forecasting customer demand is a key to providing good-quality service, we can

refer to the order receipts to see the demand. [6]

Comparative study with Big Bazaar in Costumer Responsiveness

Big Bazaar announced The Great Exchange Offer with a Bring anything o ld and takeanything new concept which started from the 16th of Feb 2008.

Under the exchange offer the customers were given exchange coupons and they werevalid up to a particular date.[7]

26 Jan Republic Day a National Holiday Big Bazaar Marketing Department gave anew thought on this day in 2006 they started a new shopping festival, i.e. Sabse Saste

Teen Din.[8]

There are many programmers conducted by Big bazaar in favor of costumer responsiveness

Comparative study with Shopper Stop in Layout

Figure2. 7 shopper stop layout


22/41



Comparative study with Walmart onTransportation

Wall mart follows Cross-Docking

When it comes to transportation of goods, Walmart owns an extensive fleet of trucks whichensures that all products are delivered to its stores through the network of distribution channels

in the least amount of time possible. By eliminating middlemen and not depending on external

transport supply chains, Walmart cut down heavily on its business costs. Using the technique of

cross-docking effectively, Walmart has eliminated any inventory handling, storage, and

warehousing costs, ensuring products reach the distribution centers and from near by, to its vast

customer base at a faster rate.[9]

Comparatively central depends on external transport .

3.7 Conclusion:

Supply chain of central mall is a bit weaker in no of sections where it can be much stronger

than now .transportation system can be improved for better logistics. Inventory management

can be improved better than present .RFID tags can also introduced in ware house management

For easy identification of goods location. Better layout can be introduced for proper utilization

of free space in the shop floor .Recommendations

Happy hours can be introduced Student plans can be introduced Proper layout in mens section can be done Proper ware house management can be done

Learning out comes

Differentiating between upstream and down streamDemonstrate linkages between theoretical concepts and practical application of Supply

Chain Management (SCM)principles

Apply SCM concepts to the analysis if complicated cases which requires judgement andcombination with appropriate tools

Critically appraise how SCM can contribute to business performance and competitivebenefit including the drivers for change and improvement in SCM performance

Operate an industry standard ERP package SAP Supply Chain module examples andModel Supply Chain


23/41



Reference1. Just-in-Time Manufacturing: An introduction By T.C. Cheng, S. Podolsky 2nd edition .2. Dictionary Of International Trade Handbook Of The Global Trade Community Includes

21 Key Appendices Edward G.Hinkelman, Sibylla Putzi World Trade Press, 2005

3. http://www.fibre2fashion.com/industry-article/11/1067/apparel-supply-chain-and-its-variants4.asp(10-1-2013)

4. http://www.marsdd.com/articles/dell-distribution-and-supply-chain-innovation/ (10-12-2013)

5. Supply Chain Management in the Retail Industry Michael H. Hugos (Network ServicesCompany ), Chris Thomas October 2005, 2006

6. http://indochineyow.blogspot.in/2011/03/forecasting-wal-mart.html(10-1-2013)7. http://www.business-standard.com/india/news/big-bazaar-r-day-offer/235548/ (10-1-

2013)

8. http://futuremedia.in/events.html(10-1-2013)9. http://www.buzzle.com/articles/how-does-walmart-keep-its-prices-so-low.html(10-1-

2013)
http://www.google.co.in/search?tbo=p&tbm=bks&q=inauthor:%22Sibylla+Putzi%22http://www.google.co.in/search?tbo=p&tbm=bks&q=inauthor:%22Sibylla+Putzi%22


24/41



Appendix

Presentation on Transportation


25/41




26/41




27/41




28/41




29/41




30/41




31/41




32/41




33/41




34/41




35/41




36/41




37/41




38/41




39/41




40/41




41/41


Bub0912016 Deepak.chilakabathula Emm

Documents

Transcript of Bub0912016 Deepak.chilakabathula Emm