Supply Chain and Logistics Management: An Integrated Approach

Cover
Endorsements
Half Title
Title
Copyright
Dedication
Contents
Detail Contents
Lists of Figures
List of Tables
Foreword
Preface
Acknowledgements
List of Abbreviations
About the Author
1 Understanding the Supply Chain: The Core Concepts
	Introduction
	SCM and Business Performance
	Key Challenges
	Chapter Summary
2 Evolution of Integrated Supply Chain and Logistics Management
	Introduction
	Scope of SCM
		Evolution of SCM: The Historical Perspective
		Key Objectives and Challenges of Supply Chain Integration
		Objectives and Challenges of SCM
		Role of SCM
		Why Is SCM So Important?
		Logistics: A Neglected Area – Now an Integral Part of SCM
		Why Is Logistics Important?
		Core Concept, Definition and Scope of Logistics
		Basic Elements of Logistics
		Logistics as a Discipline
		Types of Logistics
		Logistics Activities and Goals
		Evolution of Logistics – The Historical Perspective
		Procurement and Outsourcing Key Focus for Cost Competitiveness in Past Decade
		Incremental Value Delivery through Effective Logistics Management
	Strategic Triangle of 3Cs (Kenichi Ohmae, 1982)
		Theoretical Foundations of International Logistics
		Importance of Logistics in Economy
		World Competitiveness
	Growing Indian Logistics Industry to Support Country’s Economic Growth
		Air Cargo Sector Witnessed Significant Growth
		Hurdles Still to Overcome
		Government Initiatives
		Some Mega Trends Paving the Way for Logistics Sector Growth
		E-Commerce Logistics: Driving the Change
		Inland Waterways
		Ocean Shipping
		India Road Trasport: Adapting Digitisation
		The Future
		Cochin Shipyard Chalks Out Biggest Expansion with INR 17.99 Billion Dry Dock
		Technology Applications in Indian Logistics Industry
		Logistics Infrastructure Helping Economic Growth
		Physical Infrastructure and SCM Performance
		Cold Chain Facilities
		Field Heat Removal Facilities
		Warehousing Facilities
		Innovations in Supply Chain
		Dell’s Direct Business Model of Virtual Integration
	Chapter Summary
3 Demand Estimation in a Supply Chain
	Introduction
	Unrealistic Demand Can Make Supply Chain Management Inefficient
	Forecasting in Supply Chain
	Characteristics of the Forecasts
	Factors Influencing Forecast
	Why Forecast
	Market Potential
	Types of Forecasts
	Levels of Forecasting
	Seasonal Variations
	Demand Forecasting
		Consumer User Survey Method
		Panel of Expert Opinion
		Sales Force Composite
		Delphi Method
		Bayesian Decision Theory
		Quantitative Forecasting Techniques
	Naive Forecasting
	MAPE Method
		Moving Average Method
		Exponential Smoothing
		Linear Regression
	How P&G Forecasted Its Detergent Sales in Italy
		Multiple Regression
		Trend and Seasonality Corrected Holt – Winter Exponential Smoothing
	When to Use Quantitative Forecasting Methods
	Changing Business Environment
	Forecasting in Practice
	What Industry Practises
	Demand Management
	Efficient Demand Management
	Estimating the Total Market Demand
		Define the Market
		Divide the Industry Demand into Its Principal or Main Components
		Forecast the Key Drivers of Demand in Each Segment and Project How They Are Likely to Change
		Conduct Sensitivity Analyses to Understand the Most Critical Assumptions and to Gauge Risks to Base Line Forecast
	Case Study
	Case Study: Apollo Pharmacy
		Forecasting Methods
		Results
		For Stamlo Beta (Non-seasonal Demand)
		Sales Data
	Appendix 3.1
		Sales Data of Apollo Pharmacy
	Chapter Summary
4 Warehousing and Distribution Management: Complexity and Challenges
	Introduction
	Warehousing Purpose and Scope
	Primary Functions of Warehouse
	Efficient Warehouse Management
	Types of Warehouses
	Warehouse Layout Design Criteria
	Warehousing Cost
	Warehouse Activities
	Factors Influencing Effectiveness of Warehouse
	WMS as an Enabler
	Why and When It Is Necessary
	Advantages of Implementing WMS
	Implementation and Setting Up WMS
	When WMS Can Be Advantageous
	Developing a Responsive WMS
	New Trends in WMS
	Productivity Improvement Tools of WMS
		Barcode
	Distribution Management
	Distribution Task
	Definition and Scope
	Distribution Channels
	Distribution Methods
	Distribution Channel Strategy
	Customer Service Level
	Distribution Objectives
	Distribution Organisation
	Activities in Distribution
	Distribution Policy
	Key Performance Indicator
	Critical Success Factors
	Sales Target
	Geographical Area to Be Covered
	Typical Channel Partners
		C&F Agents and Carrying and Selling (C&S) Agents
	Distributors, Dealers, Stockists, Value-added Re-sellers
	Super-stockists
	Agents and Brokers
	Franchisees
	Electronic Channels
	Wholesalers
	Retailers
	Distribution Cost
	Efficiency of Distribution
	Factors Impacting Distribution Network Design
	Distribution Management – Key Challenges
	Complexity in Logistics Management in India – A Case of FMCG Industry
	India as a Country Adds to Complexity
	Entry of Organised Retailers and E-Retailers
	Distribution Challenge for the Base of the Pyramid Population
		Drivers of Distribution Complexity
	Current Scenario – A Mixed System
	Developing Efficient Sales and Distribution Structure
	Measuring Sales Force and Distribution Effectiveness
	Impact of the Corona Pandemic on the Operations and Supply Chain of the Agriculture and Food Processing Sectors With Reference to MSME in India and the Expected Recovery Prospects
		Acute Shortage of Trained Temporary Workforce and Impact of Other Factors on Cost of Goods
		Impact on the Food and Beverage Industry
		Post-Lockdown Scenario
		Industry Learnt New Lessons from the Pandemic
		New Food Safety Standards Post-Pandemic and Compliance With New Standards
		Agriculture Sector Delivered Higher GVA
		Way to Recovery Needs New Strategic Direction26
	Chapter Summary
5 Managing Inventory for Satisfying Customer Demand
	Introduction
	Inventory Management
	Inventory Management Goal
	Why Do We Need Inventory?
	Inventory Impacts Business Performance
	Types of Inventories
	Alternative Approach for Classification of Inventories
	Components of Inventory Decisions
		Cycle Inventory
		Safety Inventory
		Seasonal Inventory
		Level of Product Availability
	Inventory Cost Management
	Inventory Control
	Effective Inventory Management
	Order Fill Rate and Pack Fill Rate
	Inventory Transaction
	Stock-keeping Unit
	Bullwhip Effect
	Causes That Lead to the Bullwhip Effect
		The Effect on Supply Chain Performance
	Reducing Impact of Bullwhip Effect
	Business Response to Stock-out
	Replenishment of Inventory
	Inventory Position
	Average Inventory
	Order Cycle Time
		Interval between Orders
	Implications of Economic Ordering Quantity
	Materials Requirements Planning (MRP)
	What MRP Indicates
	Components of MRP II
		Master Production Schedule
		Bill of Materials
		Inventory Status File
	Output of MRP
	MIN–MAX Replenishment System
	How Much Should Be Ordered?
	Total Cost of Inventory
	Out-of-Stock Costs
	Inventory-carrying Cost
	Total Cost Approach
	Structure of Inventory-carrying Cost
	Demand Estimation
		Reorder Point (ROP)
		Exercise 1: When Demand and Lead Time Are Constant or Fixed
	Case Study: Vendor-managed Inventory at Tata Steel
		ABC Classification
	Managing Uncertainty in Supply Chain
	Measuring Product Availability
	Estimating Safety Stock
		Example 5.1: Estimating Safety Stock from Replenishment Policy
		Example 2: Estimating Safety Stock from Desired Cycle Service Level (CSL)
	Reorder Point (ROP)
		Example 1: When the Demand Is Variable but Lead Time Constant
		Service Level
		Example 2
		Solution
		Example 3
		Solution
		Example 4
		Solution
	Single-period Model
	Continuous Stocking Levels
		Example 5
	Impact of Uncertainties
	Walmart Outperforms Its Competitors
	Chapter Summary
6 Transportation
	Section I: Transportation in Integrated Supply Chain
		Introduction
		Role of Transportation
		Functions of Transport
		Mode of Transportation and Criteria of Decision
			Road Transport
			Water Transport
			Ocean Transport
			Air Transport
		Package Carriers
		Pipeline
		Intermodal
		Major Mode of Transportation
		Transportation Infrastructure
		Key Considerations on Decision on Type of Transport to Be Used
		Factors Impacting Road Transport Cost
		Mode of Transportation – India
			Domestic Cargo
		International Transportation
		Hazards in Transportation
		Hazards and Risks
		What Is Risk?
		State of Ocean Transport
		Highly Fluctuating Business
		Large Shipping Lines and Global Alliance
			P3 Network-Global Politics
			The G6 Alliance
			The CKYH Alliance
		New Global Alliances in Ocean Transport
			New Ocean Alliance
		Shipping Route and Competition
		The Future of the Canals
		Suez and Panama Canals
		Other Important Ship Canals
		Current Issues
			Shake Out Ahead
			The Next Few Years
		Global Trends in Transportation and Logistics
			Bringing Production Location Closer to the End Customers
		Investments in Larger Vessels Created Overcapacity in Container Shipping
		Sustainability and Compliance Becoming Important Issues in the Global Transport Industry
		Major Acquisitions in the Global Logistics Industry
		How Acquisition Helps Global Logistics Company
		Green Transport Solutions Preferred Over Air Freight
		Major Shift to Surface Transport
			Impact of Growing E-commerce on the Supply Chain
			Increased Internet Shopping Changes the Supply Chain
		Increased Demand on Containerisation
		Reasons for Containerisation
			Global Shift in Trade Pattern
		Custom Bonded Warehouse
		Customs-bonded Warehousing Solutions to Shorten Lead Times
		Buyer’s Consolidation Service and E-solutions to Keep Track of the Goods
		Future of Green Carrier and the Logistics and Transport Market in China
		The Global Shipping Industry Will Face New Sulphur Regulations
		Ocean Freight
		Air Freight
		Hazards of Air Freight Transport
		Road Transport
		Rail Transport
		Case Study: Maersk Line
			Maersk’s Business Strategy
			Reliability
			Simplicity
			Environment Sustainable Strategy
			Financial Performance
			Making Loss in a Decade
			Performance in 2017
		Market Share Price Movement
		Financial results for the last 5 years
		Maersk’s Commitment to Environment and Sustainability
			Maersk Is Sponsoring Corals’ Plantation and Preservation
			Decarbonising Logistics
			Customer Engagement
			Partnership
			Visibility
		Cost Management
			India’s ‘One Country, One Price’ Fulfilment Solution Launched
			One Country, One Price and One Billing India Initiative
			Business Development Strategy
			Denmark’s Maersk Changes Ownership Structure to Boost Finances
		Maersk Acquires Hamburg Süd
			Crippling Overcapacity
	Section II: Packaging Issues in Transportation
		Introduction
		Importance of Packaging in Transportation
		International Packaging Issues
		Functions of Packaging
			Packaging Protects Goods
			Packaging Provides Information about the Product
			Facilitating Storage and Warehousing
			Packaging Is Indicative of Quality of the Product Packed
		Ensure the Right Transport Packaging Solution
		Packaging and Safety Regulations for Hazardous Goods
			Packaging Regulations
		Case Study: Container Corporation of India Ltd (CONCOR)
			Main Functions of CONCOR
			Case Discussion Questions
	Chapter Summary
7 Total Logistics Cost Management for Competitive Advantage
	Introduction
	Organisations Are Huge Cost Centres
		The Law of Lowest Total Cost
		Logistics Cost – Brief History
		Elements of Logistics Cost
		Financial Accounting
	Management Accounting
	Logistics Cost Management Models
	Logistics Is Omnipresent
	Logistics Improves Business Performance
	Difficulty in Estimating Logistics Cost
	Analysis of Logistics Cost
		Activity-Based Costing
	When ABC Method IS More Useful
		Total Logistics Cost
	Total Cost Approach in Logistics
		Holistic View of Total Logistic Cost
	Inventory Cost
	Warehousing Cost
		Production and Supply Cost
	Channel Distribution Costs
	Total Distribution Cost
	Supply Chain and Logistics Cost
	Cost Associated with Assets and Return on Investment
	Information Processing Cost
	Communication and Data Processing Costs
	Administrative Costs
	Transportation Costs
	Material-handling Costs
	Packaging Costs
	Customer Service Costs
		Examples of Customer Service
		Levels of Customer Service
		Elements of Customer Service
	Cost Audit
	Benchmarking Logistics Cost and Performance
	Case Study
	Outsourcing Logistics Services
	Reason Why Logistics Cost Management Programme Is Not Always Effective
	Key Task to Improve Logistics Cost
	Case Study
		Maruti Suzuki – How They Reduced Their Logistics Cost
	Chapter Summary
8 Sustainable Transport Logistics and Supply Chain
	Introduction
		Defining Sustainability
		Transportation Impacts on Sustainability
		Simple Sustainability Indicators
	Sustainable Transport in Global Trade
	Economic Benefits of Sustainable Transportation
	Key Issues in Sustainable Transportation
	Sustainability Helps Business
	Case Study: Volvo’s Strategy for Sustainability
		Corporate Overview
	Sustainability as a Central Strategic Issue
	Key Drivers of Sustainability Strategies
		Legislative Pressures
	Life-cycle Perspective
		Genuine Caring
		New Business
	Volvo’s Curitiba Story
	Chapter Summary
9 Global Logistics Value Chain Management
	Introduction
	International Logistics
	Key Drivers for Evolution of International Logistics
		First: Global Sourcing of Components
		Second: New Product Development – Global Expertise
		Third: Mining Companies Driving the Process
		Fourth: High Level of Customer Satisfaction
		Fifth: High Degree of Process Orientation
		Sixth: Driven by Cost Quality Considerations
		Seventh: Channel Linked to Expertise in the Areas
	Methods and Tools Facilitating International Logistics
	Storage Facility
	Logistics Centres (Nodal Points)
	Decentralised Logistics System
	Outsourcing Logistics Services
	Logistics and Environment
	Firm’s Value Chain
	Transforming the Value Chain
		Linkages within Value Chain
	International Business
	Features of International Trade
	International Logistics Challenges
	Barriers to Global Logistics
	Impact of Globalisation on International Logistics
	Role of Global Logistics
	Supply Chain and the Internet
	Global Logistics Capabilities
	Global Operating Levels of Logistics Companies
	Arm’s Length
	Internal Export
	Internal Operations
	Insider Business Practices
	Denationalised Operations
	Global Operations Level
	Stages of Regional Integration
	Free Trade Agreement
	Customs Union
	Common Market
	Economic Union
	Complexity of Logistics Management
	Entry of Global Retailers in Indian Market
	Logistics – A Source of Competitive Advantage
	Value Chain in Sales
	Integrated Supply Chain and Logistics Value Chain
	Management Challenges for Integrated Supply Chain
	Optimising the End-to-end Value Chain through an Integrated Solution
	Multifaceted Analytical Functions
	Integrated Logistics System
	Integration of Logistics with the Organisation
	Stages of Integration
	Benefits of Integration
	Logistics and Security
	Logistics Security Issue
	Supply Chain Security Initiatives in USA
	Technology to Tackle Security
	Logistics Industry in India
	Case Study: Anand Milk Producers Union Limited (AMUL)
	Logistics Challenge of AMUL
		Procurement Logistics
		Logistics/Coordination
	Coordination between Participating Entities
		Main Function of VDCS
		State Cooperative Milk Federation – Main Function
		Upstream Procurement
		Cold Storage Network
		Distribution Downstream
		Complexity of Distribution Operation
		Technology to the Rescue
		Automatic Milk Collection System
		Transformation
	Chapter Summary
10 Sourcing Decision in Global Supply Chain Management
	Introduction
	Sourcing Challenges and Strategies
	Future Factories
	Four Levels of Global Sourcing
	Global Sourcing Challenge and Sustainability of Supply Chain
	Models and Frameworks for Sourcing
	Characteristics for Successful Global Sourcing
	Global Sourcing and Logistics
		Methodologies for Measuring Savings
	Global Sourcing Trends
	Global Sourcing and Business Performance
	Degree of Outsourcing and Performance
	Key Issues in Global Sourcing
	Technological Performance and Sourcing Decisions
	Factors Influencing Outsourcing
	Case Study A: Industry Sector: Retail
		Global Sourcing Strategy: (Perspective of Global Sourcing Director)
		Positive Factors
		Negative Factors
		Main Mode of Transport
		Key Priorities of Global Sourcing Strategy
		Supply Chain Risk Management Tools and Techniques
		Major Risk Identified in Global Sourcing Decisions
		Environment and Infrastructure Considerations
	Case Study B: Industry Sector: FMCG Food and Drink
		Global Sourcing Strategy: (Perspective of Global Head of Procurement)
		Positive Factors of Global Sourcing Strategy
		Negative Factors of Global Sourcing Strategy
		Main Mode of Transport
		Key Priorities of Global Sourcing Strategy
		Supply Chain Risk Management Tools and Techniques
		Major Risk Identified in Global Sourcing Decisions
		Environment and Infrastructure Considerations
	Chapter Summary
11 Supply Chain Performance Management
	Introduction
	11.1 Supply Chain Management Performance Criteria
	11.2 The Key Elements of Supply Chain Management
	11.3 Supply Chain Performance Management as a Basis for Industry 4.0
	11.4 Digitalisation of Supply Chain Changing Today’s Performance Management
	11.5 Current State of Supply Chain Performance Management
	11.6 Implementing Robust Performance Management System
	Key Differentiators in Implementation
		1. Supply Chain Strategy Sets the Direction and Defines the Steering Focus
		2. Supply Chain Management Processes Must Be Linked with Transparency of Inventories and Supply Chain Cost
	Trends in Management Reporting on Supply Chain Performance
	11.7 Performance Measurements and Metrics in SCM
		Order Entry Method
		Order Lead Time
		The Customer Order Path
		Evaluation of Supply Link
		Evaluation of Suppliers
		Performance Measures and Metrics at Production Level
		Evaluation of Delivery Link
		Measures for Delivery Performance Evaluation
		Number of Faultless Notes Invoiced
		Flexibility of Delivery Systems to Meet Particular Customer Needs
		Measuring Customer Service and Satisfaction
		Customer Query Time
		Post-transaction Measures of Customer Service
		Starting Performance Management Programme in the Organisation
		Planning Performance Evaluation Metrics
		Sourcing Performance Evaluation Metrics
		Production Performance Evaluation Metrics
		Delivery Performance Evaluation Metrics
		A Framework for Performance Measurement in a Supply Chain
		Maturity Models to Measure Supply Chain Performance
		Overview of SCM Maturity Models
		SCM Process Maturity Model
	Chapter Summary
12 Benchmarking Supply Chain Performance
	Introduction
	What Is Benchmarking?
	Benchmarking Supply Chain Performance
	How to Start
	Scope of Supply Chain Benchmarking
	Supply Chain Performance Metrics for Benchmarking
	Supply Chain Benchmarks of Standard Processes
	Importance of Identifying Right Companies to Be Benchmarked
	Improving Performance
	Some Common Misconception in Benchmarking
	Case Study
		Supply Chain Performance Measurement of an Automotive Industry: Applicability of SCOR Model
	Introduction
	The Supply Chain Operations Reference (SCOR) Model
		Basic Approach to Determine Performance
		Brief Description of the Company
	Supply and Production Control
		Administration of the Sales
		Establishing Performance Metrics
	Best Practices Proposed by the SCOR Model
	Conclusion
	Chapter Summary
Index