Answer 3

 How Company getting Competitive Advantage through Supply Chain?

Supply chain planning (SCP) is the forward-looking process of coordinating assets to optimize
the delivery of goods, services and information from supplier to customer, balancing supply and
demand. Here are six ways through which a company can achieve competitive advantages.
1. Engage in real-time supply chain planning:
Supply chain analytics solutions can bring real-time data from every part of the business.
Companies can analyze large volumes of contextual data for accurate forecasting and shift plans
according to rapidly changing market demands.
2. Develop a collaborative supply chain strategy
The success of a company translates into success for its suppliers. Building and maintaining
strong relationships with suppliers is equally as important as maintaining customer relations.
3. Adopt innovative supply chain automation solutions
As technology transforms and disrupts industries, organizations may be tempted to embrace
every new development. But the critical check is to ensure any technology that organization’s
employs actually add value to your supply chain.
4. Enable Agile Process Improvement
With technological disruptions spurring the need for constant innovation and transformation in
business, staying at the cutting edge often means improving processes with agility and flexibility.
5. Maximize Supply Chain Partnerships
Supply chain partnerships are poised to make – or break – a company’s competitive advantage,
as these relationships can heavily influence your supply chain sustainability, cost, and ability to
adhere to timeline commitments.
6. Consider cost drivers and business impacts
To obtain maximum supply chain value, you need to be aware of supply chain cost drivers and
their business impacts. To create a robust and cost-efficient supply chain, address the root causes
rather than the symptoms on the surface. In a warehouse, for example, labor costs may be on the
rise. But this might just be a symptom of an underlying cause, such as an increase in picking
errors or sub-optimal pick paths. Replacing employees with lower-wage workers would be
treating the symptom without addressing the root cause and could make the situation worse.

 Explain “Strategic Fit and Strategic Drift: with Dell Industry example. How
Strategic fit achieved, Explain
Strategic Fit: Strategic Fit may be defined as matching resources and capabilities but in
Procurement it means requiring that both the competitive and supply chain strategies of a
company have aligned goals. To provide the highest level of service as a procurement
organization, strategic fit must be achieved.
Strategic drift: Strategic drift can be defined as a gradual deterioration of competitive action
that results in the failure of an organization to acknowledge and respond to changes in the
business environment. The term strategic drift is used to describe a sense of cognitive sloth in the
ability to meet the original objectives of an organization.
Achieving Strategic fit: Achieving Strategic Fit can be as easy as following understandings;
 Customer Requirements & Uncertainties: This process should involve gaining a
comprehensive understanding of the customer’s project scope, goals and budget.
 Procurement’s Capabilities: Once the VOC has been gathered the next step is to build on
the initial discovery in order to generate Critical Customer Requirements (CCR).
 Procurement Responsiveness: The final step in Achieving Strategic Fit is to match
customer requirements to the procurement organization’s capabilities.
Dell Achieving Strategic fit: Dell's competitive strategy is to provide a large variety of
customizable products at a reasonable price. A supply chain strategy that emphasizes flexibility
and responsiveness has a better strategic fit with Dell's competitive strategy of providing a large
variety of customizable products. This notion of fit also extends to Dell's other functional
strategies. For instance, its new product development strategy should emphasize designing
products that are easily customizable, which may include designing common platforms across
several products and the use of common components. This feature allows Dell to assemble
customized PCs quickly in response to a customer demand. Dell clearly has achieved strong
strategic fit between its different functional strategies and its competitive strategy.
 Why OFM, Explain OFM Breifly .... Explain OFM – OTIF as a Logistics KPI
Order Fulfillment Management (OFM): Order fulfillment, also known as supply chain
fulfillment or inventory fulfillment, is the steps between taking new orders and sending the
goods to customers. OFM Process is briefly described below;
Receiving: The first stage of supply chain fulfillment is to receive inventory from suppliers.
Storing Inventory: After the inventory is received, we need to organize and store the products in
your warehouse. The organization of your stock plays a key role in the order fulfillment system.
Order Processing: An order process is started once the order has been placed.
Item Packing: in this step we need to pack the items using corresponding packages, for example,
using bubble wrap for fragile products.
Delivery of Products: after packaging, we need to deliver the products. In this stage we need to
provide customer information to postal or other delivery services to deliver the products.
Managing Returns and Refunds: If the customers are not satisfied with their purchases or when
goods are damaged during delivery, they can request a return or refund. Now we have to
determine if you should put the returned product back into the inventory or discard it according
to its condition.

OFM – OTIF as Logistics KPI:

KPIs for OFM can be broken out into four key areas: Customer metrics, inbound metrics,
outbound metrics, and financial metrics.
1. Customer Metrics
These metrics includes all KPIs that directly relate in some way to the customer. Because these
KPIs all have the potential to impact customer satisfaction and the chance that they will complete
an order or return for additional business in the future.
 On-Time Shipping Percentage: This refers to the percentage of orders which are shipped
on time.
 Total Order Cycle Time: This refers to the average processing time from the point a
customer places an order to the point that it is shipped.
 Internal Order Cycle Time: This specifically refers to the amount of time that it takes for
your operation to internally process an order.
 Perfect Order Percentage: Perfect order percentage looks at a number of different metrics
to determine what percentage of orders ship on-time, complete, damage-free, and with
correct documentation.
2. Inbound Metrics
This category of key performance indicators refers to any metric related to product coming into
the warehouse.
 Dock-to-Stock Cycle Time: This refers to the amount of time required to put away goods.
It is typically measured in hours.
 Inbound Orders Received: This refers to the number of inbound orders that is processed
per person per hour.
 Lines Received & Put Away: This is related to inbound orders received. This metric
specifically measures inbound lines processed per person in an hour at receiving.
3. Outbound Metrics
Outbound metrics relate to the status of orders as they leave your facility. outbound metrics are
more focused on measuring the efficiency of the processes.
 Fill Rate: Fill rate is used as an indication of a perfect order.
  Orders Picked Per Hour: This number measures order fulfillment and shipping
productivity in lines per hour per person. for example, by utilizing automation to reduce
travel time associated with picking.
 Lines Picked & Shipped Per Hour: This refers to the productivity of picking and shipping
in lines per person per hour.
4. Financial Metrics
These KPIs refer to factors which have the potential to directly impact the profitability of your
operation.
 Distribution Costs (as a percentage of sales): This metric refers to the cost of distributing
orders as relative to your operation’s total sales.
 Distribution Costs (per unit shipped): This metric refers to the cost of distributing orders
relative to the total units shipped through the operation.
 Inventory Days of Supply: This refers to the amount of finished goods/inventory that is
on hand to cover a number of days of projected usage.

OTIF is generally used to cover the entire supply chain, and therefore, as delivery to the
customer is the final step, then delivery OTIF is an indicator of performance across the whole
supply chain. Although OTIF can be used throughout the whole chain, when it is looked at as a
whole, it corresponds to delivery. A distributor’s OTIF score depends on three vital components
of the supply chain all working as they should: purchasing, the warehouse and the delivery
operation.

 Purchasing: First off, the items being ordered need to be in stock. If they’re not, customer
is not going to get them on time, and OTIF record will worsen.
 Warehouse: Even if the items are in stock, then there are elements within the warehouse
that could prevent the order going out on time.
 Carrier: Finally, even if the items are in stock, and picked and packed and ready to be
dispatched on time, then the carrier still has to get it to the customer on time and
undamaged.
OTIF identifies where process improvements in final delivery or within the warehouse are
required and where there are any stock issues. It measures the contribution and balance of all
three of these aspects of your supply chain in delivering your orders to your customers on time.

 What is SRFT, Why SRFT – is a important factors to keep Buyer / Customer

Commitment

Shipment Right First Time (SRFT): According to shipment Right First Time, we must give
priority to shipment. Among all other activities, we have to do the shipment first and without any
delay. There will not be any missing commitment or missing the deadline. For example, A buyer
wants 10000 pairs of shoes within a certain date. We must have to make the supply chain
planning in a way so that we do not miss the shipment deadline. We need to ensure that, the
buyer will get the products in time. If we can do such effective plan, we will be able to produce
and deliver the ordered units on time immediately. So here, we can see SRFT as we never miss
any deadline and the first attempt.

Why SRFT – is a important factors to keep Buyer / Customer Commitment

Ensuring SRFT is essential for getting repeat clients & loyal customers. If customers get their
products on time, they will be pleased and it will create possibilities to repurchase. It will create
a positive vibe among the customers and a sense of loyalty will grow. If we cannot ensure timely
delivery, we will probably lose customers. As a result, we will lose market share and it will
hamper company’s profitability and reputation. Through SRFT we can keep ready our product
on time to deliver. Therefore, to keep buyer or customer commitment Shipment Right First Time
is essential.

 What is “Cold Chain management”? Why Cold Chain taking Place in Supply Chain
Functions, Explain It Area and Strategic Importance Managing Product Quality.

Cold Chain management: Cold chain logistics is a temperature-controlled supply chain. In

short, it’s a transportation chain that maintains freight at an agreed upon temperature throughout
the logistics process. For example, ice cream must be kept frozen to preserve its shelf life. If
temperatures go above the sub-zero ranges, the product will lose its solid state and it’ll no longer
be considered to be unusable.

Suppliers of food and pharmaceutical products heavily rely on the cold chain to ensure shipment
doesn’t become compromised before they reach the market.

Reasons Behind Cold Chain: We need to keep certain products cold. It may seem simple but
it’s a very important process. Low temperatures prevent sensitive products from altering their
state and reducing their shelf life. If we cannot do this properly products can be damaged. And
here cold chain management becomes handy.  The two ways to preserve temperature sensitive
products are:

 Freezing - for long-term preservation

 Refrigeration - used to keep a product’s shelf life from deteriorating in the short term,
which is usually days for food and weeks for other products like pharmaceuticals.

Area and Strategic Importance of Cold Chain in Managing Product Quality: The cold chain
ensures that perishable products are safe and of high quality at the point of consumption. Without
cold chain, the fresh or frozen food produce, chemicals and, arguably more importantly, the
vaccines being shipped will likely perish. In 2017, the degradation of temperature-sensitive drugs
during shipping cost $5.4 billion av. globally. So, it’s clear that cold chain is very important in
food, chemical and pharmaceutical etc. sectors.