Supply Chain1

8/8/2019 Supply Chain1

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SUPPLY CHAIN MANAGEMENT

DR. V.K. GUPTA

SUPPLY CHAIN MANAGEMENT

Supply Chain is a sequence of suppliers, warehouses, operations andretail outlets.Material and information flow both up and down thesupp y c a n.

Supply Chain Management is the integration of all activities associatedwith the flow and transfer of goods from raw materials stage throughto the end user, as well as the associated information flow by improvedsupply chain relationship, to achieve a sustainable competitiveadvantage.

Supplier Storage Mfg. Storage Distributor Retailer Customer

Supplier

Dr.V.K.Gupta


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Raw Materials

Seamless

Supply chain

Material flow channel

Order flow channel

End Customer

Seamless supply chain

RawMaterials

Primary

TRADITIONAL LOGISTICS SUPPLY

Information

Manufacturing

Secondary

Manufacturing

Material Flow Order Flow

Material/

productRetail Outlet

Customer

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INTEGRATED SUPPLY CHAIN MODEL

Customer Product and

material flowRetailers

Distribution Centres Information flow

Assembly / Mfg. SBU

2nd Tier Supplier 2nd Tier Supplier 2nd Tier Supplier

Corporate

THREE TIER PHILOSOPHY

APPLIED TO LOGISTICS

CONCEPTUAL Logistics STRATEGY

Strategy

Material and Product Flow

FUNCTIONAL SUPPLY CHAIN

INVENTORY TRANSPOR STORAGE, LOGISTIC SECONDARY

-TATION HANDLING, SUPPORT LOGISTICS

PACKING SERVICE

SUBJECT OPERATIONAL ELEMENTTRANSAC OPERATIONAL

-TIONAL LOGISTICS

NITYA KARMAKAR


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Raw Materials

Primary Marketing and

Manufacturing Sales

Assembly CUSTOMER

Distribution Retail

LogisticsMaterial Flow Information

Flow

Logistics Supply Chain ModelNITYA KARMAKAR

STRATEGIC LOGISTICS MANAGEMENT

Vendor Mana ed Inventor - As a vendor ets com letevisibility of stock position with the manufacturer andworks on synchronized schedules, inventory holding withmanufacturer is greatly reduced. This is successfullypracticed in retail industry.

Distribution Network Optimization - Determining thebest location for facility, setting proper system

reduce inventory carrying and transportation costs. Usingthese methods, IBM saved 15-20% in transport cost and15% reduction in inventory.

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Shipment consolidation and cross docking - Hub andspoke structure is used to effectively utilize all resources -Courier Service - use of real time information systemimproved fleet efficiency.

-as adding product labels, hanging clothes on hanger etccarried out at distribution centers.

Category Management - Handling a different customersegments through teams responsible for strategy, operationand performance.

Channel partnership - Popular in apparel industry. Co.have formed channel partner with discount stores /distributors. This allow manufacturer to manage inventory

levels based on data from POS and replenishing.

Dr.V.K.Gupta

THE GENERIC VALUE CHAIN

MARGIN

Infrastructure

Support Human Resource Management

activities Corporate communication

Product / technology development

Procurement

Inbound Production Outbound Marketing Service

logistics Operations logistics & sales

Primary Activities MARGIN

Production interrelationship Market interrelationship


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Stage 1Financial IntegrationAutomation of routine functions

Applications such as payroll

Stage 2Cross Functional Integration

Focus ResultCost reduction Competition

Increased human based on price

roductivitFunctional coordinationMRP II - coordination ofmaterial management

Stage 3Firm wide integrationReal time information flowBusiness transformation and processredesign

,

efficiency

Focus

Increased

Future

Prime focus-

Stage 4Decision making toolSupplier customer integrationAgilityEDI, Intranet

profitability,

market

share

service,

Innovation

IT Evolution - Focus and Results

Dr.V.K.Gupta

REDISCOVERY OF LOGISTICS - POST 1980

Proliferation of product lines

Balance of Power in the channel shifted from

manufacturing to trade

Value added by manufacturer declined as cost of materials

and distribution increased

Many companies relocated their facilities on a global basis Low cost, high volume information processing and

transmission revolutionized logistics control systems

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DEVELOPMENT OF MARKETING CONCEPT

1950/60s

Product ( Technology Impact )

1960 / 70s

Promotion ( Promotional parity )

s

Place ( Availability )

1980 / 90s

Dr.V.K.Gupta

TOTAL UTILITY CONCEPT

Primar Process

Production Functional Utility

Marketing Possession utility

Logistics Place / Time utility

, , , ,Resources

Training, Budgeting, Maintenance

Secondary Process

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ELEMENTS OF LOGISTICS

1. Inventory2. Transportation

Air

4. LogisticsClearing

Forwarding

Road

Sea

Pipe

3. Storage, Handling, Packaging

Bulk liquid terminal

Bulk dry terminal

Silo

Warehouse

p s agent

Surveyors

Insurance

Consultants

Infrastructure

5. Secondary logistics

Travel service

Open store

Port

Depot

Distribution center

Drumming

Bagging

Service transport

Courier service

Dr.V.K.Gupta

ISSUES IN SUPPLY CHAIN MANAGEMENT

1. INFORMATION SYSTEMS AND SUPPLY CHAINMANAGEMENT

Centralized coordination of information flows.

Total logistics management

Order change notices that trigger a cascading series modifications toproduction schedules, logistics plans, warehouse operations

Global visibility into transportation resources across business units andnational boundaries

Global inventory management - ability to locate and track movement ofevery item

o a sourc ng - conso at on o purc as ng unct on acrossorganizational lines, facilitating purchasing leverages across SBUs/

Inter-company information access - clarity of production and demandinformation residing in organizations both upstream and downstreamthroughout the chain.

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Data interchan e - between affiliates and nonaffiliated throu h standard

telecom chinless.

Data capture - ability to acquire data about an order at the point of origin,

and to track products during movement as their characteristics change.

Transformation of business from within - managers who can see the big

picture and accept new forms of business processes and systems

Improvement in supplier-customer relationships - to justify investment in

technolo linka es.

Dr.V.K.Gupta

2. INVENTORY MANAGEMENT ACROSS THE SUPPLY CHAINTime based competition is here to stay.

Quick response and flexibility has been imbibed in day to day culture.

A number of companies have experienced major improvement incorporate results by focusing on cycle time - Toyota, Wall Mart,

erox, otoro a .

Many company follow Dock to Dock system for component supply likeFORD where supplier delivered parts are delivered directly on thelines.

3. SUPPLY CHAIN RELATIONSHIPS

Close relationship is the key to Supply Chain Management.

Commitment of company to use single or dual source of supply for alon er eriod. Few select su lier is better to work with.

A degree of trust is essential for smooth flow of materials andinformation.

A key element in improving performance is the presence of objectiveperformance measures, both parties are operating acoding toexceptions and meting stated objectives.

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CORPORATE PROFITABILITY LINK TO SUPPLY CHAIN

Reduction in costs - Concept of supply chain crosses over theboundaries of an organization. Collaborative efforts with the upstreamvendors and suppliers, and with downstream distribution channelpartners and customers offer opportunities to avoid non value addingact v t es, re uce transact on costs, r ng econom es to operat ons.

Total sourcing - Manufacturers have focused on minimizing price byhaving many vendors each fighting for his share. Holistic view ofsupply chain reveal that suppliers cost are in effect the cost of themanufacturer. If a supplier is forced to hold more inventory, its costwill find its way in supplier's price.

Gain sharing - Companies striving to become lean manufacturershave started recognizing the need to develop co-operative relationshipwith vendors to reduce costs and improve efficiency. ChryslersSupplier cost reduction program, where they agreed to share gains

with suppliers. 185 suppliers submitted proposals to save $ 1.23billion, out of which Chrysler retained $320 million. Rest was sharedby others.

Dr.V.K.Gupta

Information sharin - Vendors are iven access to roduction

schedules while buyers monitor stock levels with vendors. Based on

agreed schedule vendor manage raw material, manufacture and deliver

them just in time.

Collaborative partnership - Radical steps of jointly creating business

plans. M&M reduced its first tier suppliers and rationalized suppliers

in three tiers. Companies work closely with first and second tier

suppliers to redesign even the manufacturing process.

Working capital - Reduced working capital across chain Reduced Assets - Less assets across the supply chain due to better

utilization of assets.

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Competitive Manufacturing

Proactively contributing to making total supply chain moreefficient and flexible

--- mass customization.

Place agility - Firm that is manufacturing same product at a number oflocations, benefits by investing a little more in excess capacity. Thisextra capacity enables manufacturer to shift base quickly based oncurrency fluctuations or other changes.

Postponement - Individual customers need can be fulfilled bypostponement, in place of stocking many SKU with similar items.

xamp e - rac e was pac e n our com na ons w c n urnwas packed in four packing for 4 different customers making 16 SKU.Solution was to manufacture bracket but pack at distribution centre.Similar strategy is now used by paint companies to handle numerousshades and colors without adding to the inventory.

Dr.V.K.Gupta

Mer e in transit - This can be defined as co-ordination of com lete

shipment to a customer, done through a pre-consolidation of

components at an established point, free of any inventory and

strategically located in the supply chain. Benefit is in inventory

reduction, cycle time reduction and reduction in transportation cost.

Production in consumption - Sell one - build one. Product is not

assembled till order is processed. This concepts is used for high value

consumer durable so that production closely follows consumer

preferences and avoids high finished good. It needs fast orderprocessing, optimum inventory levels, sophisticated forecasting,

modular design and flexible manufacturing.

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Role of Information Technology in Supply Chain

Management

Inventory Management

Distribution Management

Channel Management

aymen anagemen

Financial ManagementSales Force Management

Dr.V.K.Gupta

Information Technology Degree of integration of IT with Supply Chain

EDI (Electronic Data Interchange) - The electronic transaction setsEDI - invoice, quotes, purchase orders, standard business

,communicate with computer in another organization, eliminatinghuman involvement and effort. Systems in both companies can bedifferent.

ERP - Comprehensive planning and control framework. Has built inRDBMS, JIT practices, CIM concepts, client server architecture, andproven good management practices and internet.

APS -Advanced Planning Systems work on theory of constraint., can

oo a a e resources s mu aneous y an g ve op m ze so u ons.Solutions are available for Advanced forecasting, DemandManagement, Manufacturing and scheduling, warehouse management,transportation management.

Internet - Intranet, Extranet, WWW

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Why E-SCM?Globalization - SC is no longer bounded by geographical boundary.

Industry and Product Convergence - Mega mergers and the use bycompanies to move into new sectors ( like retailers into banking ) ischanging the way business view competition and cooperation.

Increasing sophistication in the supply chain - Shareholders value can beenhanced through integration of the supply chain.

Greater information integration - Now more companies are adoptingstandard software like ERP and specific supply chain software. It shouldbe easy to plug in new elements of supply chain with speed and ease.

Rise in B2B e-Commerce - Companies prepared for an e-synconized SCwill be best positioned in future.

- -into partnerships to maximize their returns. E-SC makes company moreattractive partner.

New types of employees incentives - Leading companies encourageemployees to satisfy customers needs through collaboration.

Dr.V.K.Gupta

E-SC

Reducing operating costs

Improving management and control

Decreasing cycle time

Delivering bottom line befits.

In future following will drive E-SC

Highly sophisticated customers with high expectations

Waning days of reengineering

Simplicity in technology

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TRADITIONAL ORGANIZATION STRUCTURE

CEO

Marketing Manufacturing Finance Information

Systems

Customer Service Logistics

Transport Warehouse

Dr.V.K.Gupta

LOGISTICS IN THE MIDDLE ORGANIZATION

Information system Corporate strategy Customer

control development

Human Facilitating Supply Chain

Resources interaction Manager

Procurement MaterialsLogistics & inventory

operations

Supplier Manufacturing

Service provider

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THIRD PARTY RELATIONSHIP

A planned ongoing relationship where both parties have needs that

other party can fulfill and both parties share values, goals and

corporate strategies for mutual benefits.

Outsourcing (Functional relationship)

A specific defined relationship that is contractual and dependent on

supplier meeting the shippers defined performance criteria.

Operational ( Transactional relationship )

An operational relationship based on a single event or a series of

separate single events.

Dr.V.K.Gupta

INTERDEPENDENT KEY DIMENSIONS

Process integration

In-depth knowledge of each others

business

Open information exchange

Compatible value

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OPPORTUNITIES FOR STIMULATING

FOCUS ON LOGISTICS

Service

Customer service

Added value

Customization

Costs

Warehousing

Inventories

Administration

Trans ortation

Environment and Safety

Storage and transportation Responsive care

Packaging

Dr.V.K.Gupta

COMPETITIVE SUPPLY CHAIN

Competitive position

Organizational complexity

Total cost or long term profitability

End customer satisfaction

Supply chain alignment

Im roved customer service

Shorter lead times

Lower costs

Dr.V.K.Gupta


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Sourcing Strategy

1. Make or buy 2. Manufacturing M.

3. Capacity Management

1. Channel Selection, 1. Demand forecasting

2. Supply chain configuration 2. Facility planning

3. Distribution planning 3. Inventory planning

Strategic Supply chain

Management

Customer Service Integration Strategy

Strategy 1. Information integration1. Service needs 2. Decision integration

2. Service cost 3. Financial integration

3. Revenue management

ELECTRONIC VALUE CHAIN MANAGEMENT

Inbound supply chain management -

TELCO used its VCM, a web based solution for itsinbound logistics. 1000 suppliers.

-- Online PO

Online delivery schedules

Real-time goods status information

Payment information

Instant delivery schedule change notifications

Downloads reports in various formats for integrating with suppliers.

Benefits Effective inventory control

Fewer stock outs

Saving in administrative costs - telephone, fax, visits

Increased operating efficiency


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KINETIC MOTORS - Online Solution

Online solution based on Value Chain Management , a web basedsolution, covering Vehicle Sales, Warranty and Spare parts.

System features

Online ordering

Vehicle order processing and tracking

Real-time statement of account

Payment information

Workflow automation, chat, board, email

Online warranty registration

Online warranty claim

Download of re orts

Benefits

Faster ordering and delivery

Lower transaction cost

Saving in administrative cost

Increase in operational efficiency

ELECTRONICS CO. REDUCES INVENTORY & COST

ABC took warehouse usage as a measure to reduce inventories. It was

running at 16 days in 98-99. Problem identified was lack of reliable

forecast which was being compensated by excess production. The

distribution efficiency was 68% measured by model mix and JIT

delivery. Even though the company was linked to sales points and

depots, it looked for solution. One of this was to optimize warehouse

space. 5S system was adopted to improve the warehouse floor space

and visual management. Floor space index linked storage was

introduced. It was 2.2 ft. per unit in the beginning. Every year Co.

allocated limited space for each product line in the warehouse based on

. .

adjusted based on actual sales of relevant line. This slashed the

inventory to 7 days from 16 Days.


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Inbound logisticsIndigenous- 5 days Raw Material Manufacturing

Supplier Stores 10days process -5 days 7 daysImported - 30 days

are ous ng10 days

1 day 3 days 8 days

District centers Zonal Centers

Dealers 10 days 15 days

Operations

Supply chain of a tyre company

Dr.V.K.Gupta

TYRE CO. REDUCES INVENTORY & COST

A tyre Co. had finished inventory of 50 days in 96. The co. system was

plagued by transit time delays as it had multiple manufacturing

locations, 125 selling points, 300 SKUs. There was a mismatch

between tyre and tube production and the production was not in sync

with planning. Due to lack of coordination's even local dispatches took

3 days.

Co. set up 6 divisional dispatch centers in metros across the country.

This was done after plotting location of all 125 sales points and

drawing circles with radii of 48 hours travelling time to cover all the

po nts. o on y ours not ce was nee e to rep en s t e stoc .network was set up to enable distribution centers to communicate

demand to the plants on JIT basis. They have been able to reduce

inventory to 25 days and now aim at 10 days.


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SC Solutions in Automobile Industry

Caterpillar's Performance Engine Products Divisionimplemented I2 solutions for demand management,

,

scheduling. They have reduced product inventory by $ 32

million, cut assembly cycle time by 38% and eliminated

80% of their assembly line changes.

DaimlerChrysler links multidisciplinary platform teams

together using I 2 collaborative solutions. DaimlerChrysler

both new and existing products reducing time to market

and saving a projected more than $ 1 billion indevelopment and new vehicle launch costs.

Dr.V.K.Gupta

Fords Woodhaven Stamping facility implemented I 2solutions to reduce work in process inventories by $ 3million, plus another $ 2 million in increased throughputand reduced overheads.

General Motors CAMAS project proactively managessuppliers capacities to resolve excesses and shortages inthe supply chain and create visibility into the capacityconstraint. The system handles GMs 20 plants in Europeand 40,000 parts manufactured by 2000 Tier 1 suppliers.

Toyota Motor Sales USA accessories and replacementparts business uses I 2 software to provide total inventory

dealers. Accurate delivery date quoting, improvedforecasting, optimized inventory replenishment areexpected to save $ 30 million.

Dr.V.K.Gupta


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Renault used I 2 demand lannin and collaborativesolutions for its new distribution project targeted atdelivering cars within 15 days of taking customer order,cutting car inventory by half and reducing delivery costs.

Engine manufacturer Cummins employed assembly linesequencing and factory panning solutions to dramaticallyincrease throughput. While reducing overheads. It reduced

shortages.

Volkswagen in using I 2 to build global digitalmarketplace to its suppliers. Goal is to achieve a saving of& 200 per vehicle.

Dr.V.K.Gupta

Shell Chemicals- Lotus notes as its Extranet

Shell Inventory Managed Order Network

e ore

Customer ordered based on reorder level,

usually late, resulting in rush order.

It takes about 2 weeks of order to be delivered

to customer through rail car, which is weighed

at both ends. Billing for each rail car was difficult and late.

Dr.V.K.Gupta


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Now with SIMON - System( NOTES based )

The amount of product consumed in last 24

hours

The amount of new product the arrived and was

unloaded

urren an an c pa e pro uc on sc e u es

Known changes in the schedules

It is automatically reconciled with SAP MRPsystem.

Shell Account service rep ( ASR ) is presentedwith the supply plan. If plan indicates inventorylevels at customer low, ACR fills a electronic POand informs new shipment to customer.

SIMON was introduced to 23 main customers. In12 months 20 million additional sales re orted.

Now it will be extended to 50 customers.


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SIMON, a Lotus NOTES based system, enablesthe transfer of responsibly for inventorymanagement rom customer to supp er.

Through SIMON, we are able to proactively keepvital inventory on their shelves.

Customers pay for only what they consume.

Shell is the sole supplier.

s us ness mo e s u on rus an mu uarelationship and a belief that both would benefit

significantly by this initiative.

Benefits to customers - Eliminates expensive excess inventory

Facilitates timely, low cost re-synching ofsupply chain

Ensures the product is on site whenever needed

Ensures quick response for changing conditions

Eliminates erratic pattern

Reduces order processing overheads Streamline financial statement and

reconciliation processes.

Dr.V.K.Gupta


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DISTRIBUTOR - MANUFACTURER

INTEGRATION

Thomas & Betts, manufacturer of electrical.

What Thomas & Betts committed to do under theprogram was amazing. But the distributor had tocommit also.

The distributor gains through inventory levels, serviceperformance, receiving efficiency and accountspayable productivity.

Total operating cost could drop by 8-10% of the dollarsales. The distributor had to agree to 75% of his stockwith T & B products.

Dr.V.K.Gupta

How it works T & B and distributor identified the slow moving

products.

.

If a competing line is replaced, T & B allowsdistributor to replace gradually the old products.

T & B takes over the job of deciding when and howmuch to ship to the distributor.

Five full time planners evaluate distributors salesfigures, forecast needs, set replenishment controls in

T & B computer, automatically send replenishmentstock when time comes.

Distributor must transmit end of day stock on eachitem via EDI or personnel computer.


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There are no requirements in terms of

how large a shipment must be. Weekly of

twice / week.

T & B pays all freight.

Approximately 1000 items are designed

as super stock. These are shipped in 48

hours.

Order Performance in pilot was 98%.

Shipment accuracy was 99.7%.

Dr.V.K.Gupta

T & B packages each item separately and prints oneach carton distributors warehouse locations.

Distributor does not receive each item separately.e recor o a s pmen as arr ve . ac ng s p s

99.7% accurate. Items are received directly in stock.

Each carton is taken directly to warehouse locationfor opening, unpacking and put away. It saves 90%in labour.

If a shortage is discovered, T & B acceptsdistributors word and ad ust the invoice

immediately. Five days are allowed to report error.

Involving is delayed till system shows all items arereceived OK.

This avoids issuing of credit notes etc. Each invoiceis correct.


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Invoice reconciliation is automatic, hence it isposted in distributors account payable withoutany tem y tem c ec . nvo c ng s one oncea month.

Distributors reported 80% saving in accountpayable activity.

Material can be returned 4 times a year with norior a roval of T & B. Distributor does not

have to worry about when purchased, at what

cost, OK ot not etc. Distributor does not have to pay freight.

Dr.V.K.Gupta

Benefits

Distributors - In addition to Receiving, warehousing and

accounting savings, average inventory dropped by 45%.

T & B - As a result of savings, distributors started lowering

price. One distributor increased sales of T & B products by

80% in one year.

Commitments made by distributor

75% of T & B items in their stock.

.

Will inform additional market / trend information to T & B

planner not appearing in analysis of past sales.


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B-2-C VALUE CHAIN

Component BE DIRECT

Supplier DELL CUSTOMER

Money Money

Prof. Ushio Sumita

Globalizing TraditionalJapanese Procurement System

Case of Toyota

Fair and impartial activity based on open door

policy

Win-win relationship with suppliers based onmutual trust and long term prosperity

To be ood cor orate citizen in localcommunity - social and economic contributionto local community

Achieve global optimal through above

Prof. Ushio Sumita


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Core of Toyotas Global Procurement

System

,

supplier to compare its price with prices of other

suppliers for all parts

New Supplier / New Technology for finding new

competitive suppliers and new technologies

-

make current suppliers more competitive

Prof. Ushio Sumita

New Suppliers / Global Price Kaizen-Support

New Technology Comparison System System for

Development Program Current Suppliers

New Suppliers Current

Suppliers

Development Global Price

Program Comparison Database Support

Program

oyota expectat onSystem

Procurement Supplier Selection

Strategy and Order

Prof. Ushio Sumita


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SUPPLY CHAIN IN THE FUTURE

Recycled supply chain - Using sully chain as a closed loop to collectproducts at end of its life and recycle parts and materials -

Refurbishing and recycling used parts can be source of revenue.

Supply chain designed for flexibility and responsiveness - Normally

supply chains are static. It is better to design supply chain for

flexibility since conditions keep on changing quite fast.

Virtual supply chain - The future supply chain will create a virtual

organization based on intellectual capital. These organizations may not

have any assets of their own. Each of these may be outsourced.

Naturally aligning components - Today components of supply chain

are designed to produce a best overall performance. In future it may be

modular where components may adjust to changes in other

components and external environment of supply chain.

Dr.V.K.Gupta

Efficient and Responsive Supply Chain

External Perspective Internal Perspective

Improved Improved Value added Reduced costs Increased Improved quality

delivery responsiveness services flexibility

Reduced order cycle Reduced product Reducing Mater ia l Offer var ious Improved

time development time customer Labour product types reliability

On-time and Flexible product inventory Overheads Expand Doing things

complete delivery design Providing spl. Corporate offering more right first time

Customised delivery Better after sales packaging overheads frequently

service Improving

customers

business system

Increased

profitsAccelerated

growth

Customer

delight

Greater

share


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ISSUES FOR AUTOMOTIVE INDUSTRY

Order taking and Production planning

Dealers send orders to regional offices, which in turn are sent to- , , .

Bull Whip Effect ).

Based on sales plans, 6 month production plans and monthlyschedules ( Firm + Tentative ) are made and sent to vendorsthrough fax or conventional means.

Local replenishment

For direct resources, push system of replenishment based i.epurchase orders in advance based on production plans andforecast. No EDI or IT. At best email.

Very few items on JIT ( 20%) . Delivery 3-4 times a day.

For indirect resources, procurement tender based. Orderingperiodically using paper.

For JIT items, inventory 4 hours, for other 2-4 days.

Dr.V.K.Gupta

Overseas replenishment

10-15% components imported from parent company /collaborator. Kit ordering for 6 month ( rolling) using email.

Payments

As per terms ays most y ). ayment proce ure manua .Internal process automated.

Logistics

The transportation is vendor arranged.

Mix of spoke and wheel and milk round for planed orders.

No EDI for information on impending delivery.

Vendor structure

Few tired vendors. Mostly direct vendors. Cost of quality onus lies on vendors.

None of the vendors have EDI or any other links withmanufacturer.

Dr.V.K.Gupta


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How the Quality is changing the chain?

Customers are defining quality standards that entire

supply chain must meet

Suppliers are conforming to their buyers JIT and lean

manufacturing systems

Manufactures are partnering their vendors in determining

designs and product specification upfront

Com anies are assin on the cost of oor ualit to their

vendors instead of taking them on themselves

Dr.V.K.Gupta

How cost management is changing the chain?

Demand forecast tools are being used to micro tailor orders

for suppliers

Inventories are being decimated as companies are soucing

on need based system

Manufactures are setting target costs to their suppliers

instead of asking for the price

Companies are helping their vendors lower their

production costs so as to pay lower prices

Dr.V.K.Gupta

Documents

Supply Chain1