East Delta University

MBA Program : Summer 2021

Course Title: Supply Chain Management
Course Code: MBA- SCM- 659.1

Continuous Assessment ( CA) -03 :

Individual  Student Assessment   for Mid Term- Summer 2021

Submitted by :

Full Name: Mohammed Imtiaz Shayek

Student ID: 212003606
Date of Submission: 5/8/2021

Submitted to :
Syed M. Tugril Esteyak
Adjunct Faculty, School of Business Administration
East Delta University
&
Group Assistant General Manager ( Supply Chain)
Clifton Group
Bangladesh

Student Sign: Faculty Sign:

 Answer 1
 Define Logistics, How Logistics act as a Value adding Segment across the Supply
Chain? “Logistics and Supply Chain both are Inseparable and not contradictory
each other” –Explain this Statement
Logistics: Logistics refers to the entire process of managing how resources are acquired,
stored, and transported to their ultimate destination. Logistics management involves finding
prospective distributors and suppliers and determining their efficacy and accessibility.
The word "Logistics" was originally a military-based term used in reference to how military
personnel obtained, stored, and moved equipment and supplies. The term is now used widely
in the business sector, particularly by companies in the manufacturing sectors, to refer to how
resources are handled and moved along the supply chain.
Logistics act as a Value adding Segment across the Supply Chain: As the global economy
moved into the 21st Century, logistics became an essential part of supply chain management.
By creating partnerships with suppliers, shipping services and warehousers, and connecting
these services through automated systems, the logistics of getting products to the consumer
are improved with reduced overhead costs and faster delivery. Logistics is adding value to
Supply chain in many ways.
Transportation and Delivery: Today’s world economy is connected through social media
and the Internet and has raised customer expectations for faster product delivery. Efficient
logistic system ensures fast transportation and right time delivery to the customers with
manageable cost. So that customers become satisfied and company get its deserved profit.
Warehousing: Managing warehouses in affordable cost and in perfect location helps a
business to turn around. Efficient logistics ensure such things and help the supply chain to
attain its goal.
Getting the Right Product to the Right Place at the Right Time: Logistics within supply
chain management is constantly changing to meet consumer demands. Consumers frequently
order products expecting to receive their product within 24-48 hours. To meet these
expectations, companies must have ideal logistics. An ideal logistics ensures the right
products to the right time and place. Thus, supply chain attains excellency with the value
addition of logistics.
Logistics and Supply Chain both are Inseparable and not contradictory each other: The
terms logistics and supply chain management are sometimes used interchangeably. Some say
there is no difference between the two terms.
Supply chain management is a predominant concept that links together multiple processes to
achieve competitive advantage, while logistics refers to the movement, storage, and flow of
goods, services and information within the overall supply chain.
Supply Chain Management Professionals defines logistics as “A part of the supply chain
process”. They denote logistics is a set of activities that plans, implements and controls the
efficient, effective forward and reverses flow and storage of goods, services and related
information between the point of origin and the point of consumption in order to meet
customer’s requirements. So, it is clear that Logistics is a part of Supply Chain process.
 Though Logistic is a Part of Supply chain, they have some differences too. Those are as
follows,
 Supply chain management is a way to link major business processes within and across
companies into a high-performance business model that drives competitive advantage.
 Logistics refers to the movement, storage, and flow of goods, services and
information inside and outside the organization.
 The main focus of supply chain is a competitive advantage, while the main focus of
logistics is meeting customer requirements.
 Logistics is a term that has been around for a long time, emerging from its military
roots, while supply chain management is a relatively new term.
 Logistics is an activity within the supply chain.
From the above discussion, we can understand that Logistics and Supply Chain both are
Inseparable and not contradictory each other.

 Explain Key Logistics Goals in SCM. What is Your Understanding on “Physical

Supply Flow and Physical Distribution “in Logistics.
Key Logistics Goals in SCM: The primary goal of logistics management is to move the
inventory in a supply chain effectively and efficiently to extend the desired level of customer
service at the least cost as done parallel with waste management.
The following points are some key goals of logistics in SCM;
 Inventory reduction: Inventory is the biggest thing that affects the objectives of
logistics management adversely at the bottom line of an enterprise. Inventory as an
asset requires investment to possess it. The funds invested are blocked and cannot be
used for any other productive purpose. First goal of logistics is to avoid this type of
unnecessary blockage. Over inventory causes waste of money, space, time and
resources.
 Reliable and consistent delivery performance: On-time delivery is crucial to the
customer to maintain his production schedule. The customer is not interested in a
faster delivery of the material ahead of the production schedule. Controlling this area
is another goal of logistics.
 Freight economy: Freight is a major cost element in logistics cost. This can be
reduced by adopting measures such as freight consolidation, transport mode selection,
route planning, load unitizing and long-distance shipments.
 Minimum product damages: Product damages add to the logistics cost. The reason
for product damages is improper logistical packaging, frequent consignment handling
the absence of load unitizing, and so on. Efficient logistic system aims to reduce these
types of occurrences.
 Quick response: This is related to the capability of a firm to extend the service to the
customer in the shortest time frame. Efficient logistic system ensures use of the latest
technologies to ensure Realtime response and to take prompt actions.
 From the above discussion we can understand that, logistics aims to reduce all types
of misuse, mismanagement and wastage of resources, so that the supply chain process
goes smooth and achieve excellence in its performance.
Physical Supply Flow and Physical Distribution:
Physical Supply flow: Transfer of goods and services from the business sector to the
household sector and the transfer of resource services from the household sector to the
business sector is addressed as Physical flow. The physical flow is usually illustrated as a
counter-clockwise flow for a model with the product markets at the top, resource markets at
the bottom, household sector at the left, and business sector at the left. The payment flow
moves in the opposite direction.

Physical distribution refers to the movement of finished goods from a company’s

distribution and fulfillment network to the end user. In ecommerce, physical distribution
involves several ecommerce supply chain activities including warehousing, inventory control,
order processing, retail fulfillment, and shipping.

 Supply Chain Drivers Play a very vital Role for “ Supply Chain and Logistical
Excellency across the Company “ – How Explain Briefly.
There 2 types of supply chain drivers, Logistical drivers and cross functional drivers. These
paly very vital role in Supply Chain and Logistical Excellency across the Company. These
drivers greatly influence the performance of a company’s supply chain. Companies can
develop and manage each of these drivers to emphasize the ideal balance between
responsiveness and efficiency, depending on changing business and economic requirements.
Logistical drivers are;
 Facilities: The two main facilities are storage and production sites.
 Inventory: Inventory denotes all raw materials, WIP, and finished goods in a supply
chain.
 Transportation: transportation involves moving inventory from point to point.
Cross functional drivers are;
 Information: Information is data about facilities, inventory, transportation, costs,
prices and customers throughout the supply chain, also gives shipping option to
managers.
 Sourcing: Sourcing is the particular supply chain activity should be done inside a
firm or procures from other entities.
 Pricing: ricing drivers determine the price of goods and services which the supply
chain produces.

 How Supply Chain define Agility viz-a- vis Responsiveness? Briefly discuss How
You explain Supply Chain Excellency through Performance of Supply Chain
Drivers (Especially Efficient & Efficiency Vs Responsiveness in Supply Chain
and.
Supply Chain Agility: The shift from enterprise to supply chain competition has increased
the need to better understand the determinants that lead to successful results for the entire
supply chain and not just for individual members. agility has been suggested as a means by
which the supply chain is able to adapt to the changing needs of the market.
Supply Chain Responsiveness: Supply Chain Responsiveness is defined as the ability of a
manufacturing system to make quick and balanced adjustments to the predictable and
unpredictable changes that characterize today's manufacturing environment.
Supply Chain Excellency through Performance of Supply Chain Drivers (Especially
Efficient & Efficiency Vs Responsiveness in Supply Chain and:
Supply Chain Efficiency in Action: Efficiency saves money and increases profits throughout
your business, but an efficient supply chain can be particularly beneficial to your bottom line.
An efficient supply chain gets products to their destinations in the most cost-effective way. In
today's global marketplace, this is essential. Features of an efficient supply chain:
 Optimization. This can include optimized shipping routes, warehouse locations,
personnel and even your computer network to get the best and fullest use out of your
existing infrastructure. Half empty trucks, unused warehouses and redundant
computer systems are simply a waste of Company’s assets.
 Inventory management. Too much inventory is costly to purchase, handle, store and
track. Too little inventory can be costly, as well. It can mean lost production time,
expensive last-minute orders and even angry customers. An efficient supply chain
finds the right balance when it comes to inventory.
 Customer satisfaction. Supply chain efficiency is directly linked to customer
satisfaction. It gets your products into the hands of the people who need them quickly
and at the best price.
The Responsive Supply Chain: A responsive supply chain has to do two things: it has to be
responsive to your needs, and it has to be responsive to the needs of your customers.
 Order-fill accuracy. In today's highly competitive market, a guarantee of quick
deliver is a real selling point. If that order arrives quickly but is inaccurate or
incomplete, then you've wasted time and money and may have lost a customer as
well.
 Scalable fulfillment. All businesses experience ups and downs. Sales can be affected
by the season, the weather and the economy. A responsive supply chain is one that
can accommodate changing sales volumes.
 Communication. When Company or customers have questions, problems or concerns,
it's vital that there be open lines of communication.
 Customer satisfaction. People can sometimes throw a monkey wrench into to the best
supply chain. They order the wrong thing. They change their minds. They need
something sooner, not later. This is when a responsive supply chain really shines.

 Write Down Comparison between Efficient and Responsive Supply Chain –

Based on SCM Drivers

Supply Chain Drivers Responsiveness Efficiency

Production  It concentrates on  It relies on a small
overcapacity. amount of surplus
energy.
 Its manufacturing is  Manufacturing is
adaptable. not adaptable.
  It contains a large  It has a limited
number of smaller number of core
plants. plants.
Inventory  It means the inventory  It has a poor
is kept at a high inventory ratio.
standard.
 Just hold a few
 Maintain a variety of things.
products.
Location  Set up a variety of  There are fewer
locations near your sites, but they
clients. cover a wider
market.
Transportation  Frequent deliveries  Concentrate on
are made. massive
shipments.
 Concentrate on the
versatile and fast  Maintain the
mode. slower, less
expensive mode.
Information  Collect reliable data  While other costs
and disseminate it in a are that, the cost
timely manner of knowledge is
decreasing.
Example  Coopers  Kings
Confectionery
 Answer: 2
✔ What is Your understanding on “Milk Run Logistics” and “Last mile Delivery
“Explain Focusing on these concepts how Company get Logistical Excellency,
discuss with example?
Milk Run Logistics: The term milk run comes from milk delivery. Milkmen would drive a
route, delivering milk to people’s homes and picking up empty bottles. Milk runs also
described trains that would stop at multiple farms to pick up cans of fresh milk to take to a
central dairy for processing.
Milk run in logistics is a process for inbound deliveries to warehouses or distribution centers.
These deliveries can involve internal or external supply chains. In a Milk Run logistics &
transportation approach, a route is designed based on the customer-demand and along the
way there are pickups and deliveries, which can be done in secondary distribution.
Last mile Delivery: Last mile delivery, also known as last mile logistics, is the transportation
of goods from a distribution hub to the final delivery destination — the door of the customer.
The goal of last mile delivery logistics is to deliver the packages as affordably, quickly and
accurately as possible. last mile delivery is relevant for businesses that deliver products
directly to their consumers.
Logistical Excellency through Milk Run Logistics and Last mile Delivery: Milk run
logistics is a type of inbound logistics. In this system goods are delivered to ware house or
distribution centers. On the other hand, Last mile Delivery refers to the process where
products are distributed to its final delivery destination. In short, it is a part of outbound
logistics.
These two concepts are widely used in today’s efficient supply chain system. This is the time
where fastest delivery is the necessity. Upsurge of internet-based business modules such as e
commerce etc are widely dependent on delivery system. In this segment, Milk Run Logistics
and Last mile Delivery module can work as game changer. Lets take Suzuki India as an
example. Maruti Suzuki spends about 2.5% of net sales on inbound logistics, as it relies
mainly on vendor-managed inventory. Maitra admits that milk run processes had previously
been indigestible for him. However, the company has moved more towards using 3PLs to
manage parts of inbound logistics. “Toyota has gone in for the total 3PL route. We decided to
get into these modern concepts too,” he says. “But our experience has been that when the
vendor manages his supply, the cost is lowest when compared to the 3PL route.” The
carmaker has experimented with milk runs from Faridabad, close to Gurgaon, with Ceva.
Maitra says all suppliers can track supplier movement on a handset. Now he is deliberating
whether to introduce milk runs at other locations, including Bawal, Rohtak and Manesar. Use
of this process improved their distribution process smooth and lag free. As we know there
are so many advantages for which Milk Run Logistics can add value to an SCM process. The
advantages of milk run logistics can be felt soon after its implementation. It Decreases
inactive loads, brings reduction in the rate of malfunctions, it is Flexible and agile.
On the other side, Last mile delivery has its own sets of pros. Streamlined shipping &
delivery process, route optimizations, flexible deliveries and improved order management all
of this can bring smile to the last miles. For example, Amazon officially launches its last-
mile delivery services with “Amazon Logistics” in 2018. This was a step to reduce the
eCommerce giant’s fulfilment and shipping costs, which reached $34 billion and $27 billion
respectively by 2018. The Last Mile team helps get customer packages from delivery stations
to a customer’s doorstep. Amazon has grown its Last Mile delivery efforts helping to speed
up customer delivery times and provide new innovations to customers. Amazon deliver
packages (and groceries, Prime Now, 3P, and Restaurant orders) to homes, businesses,
Amazon Lockers, and even cars all over the world! This network is powered by hundreds of
small businesses and tens of thousands of drivers that leverage Amazon technology to deliver
millions of smiles to customers each day. Last mile delivery process made their delivery
system a game changer.
So from the upper discussion and industry examples, we can say that Company can achieve
Logistical Excellency through both of this concepts.

✔ How “Milk Run Logistics” Concept developed in Bangladesh by Pran Group ,

Arrong , Milkvita Etc and these companies are supplying “ Liquid Milk” across
this country – Explain Its Logistical System based on this concept
Milk Run Logistics” Concept developed in Bangladesh: In Bangladesh Dairy farmers are
the most numerous and weakest of the value chain participants in the traditional milk supply
chain. In the traditional milk supply chain, the milk collectors are key actors who link farmers
to the market. Hence, collectors have the most influence on pricing and product quality. In
the secondary and emerging milk zones, the collectors set the prices at which they collect raw
milk from farmers. The price can be very low (30TK/L or lower) in areas where the industrial
dairies are not established, or where milk is in high supply. The quality of raw milk is low,
sometimes adulterated, without any governing standards. When the raw milk flows to the
traditional processors, there is a wide range of prices in sweetmeats. The prices generally
depend on regions, varieties, even sellers (with longer history or better reputation). The
processors can adjust the prices of the final products and gain the highest margins and
income. To ensure milk supply, many of the sweetmeat makers have collectors as their
employees, or independent collectors who work primarily with them. In this case, the market
power shifts to the sweetmeat markers who have more influence on the price setting. In milk
zones, the traditional processors face significant challenges because the farmers and
collectors gradually shift to the industrial dairies to get a fair payment based on the milk test.
Major milk supply chains are related to Milk Vita, BRAC Dairy and Food Project (Aarong),
Pran Dairy Ltd, Akij Dairy, Rangpur Dairy, etc. Milk Vita has the largest market share
followed by Aarong and Pran.
The retail of milk and traditional processed products in rural areas is very much direct.
Consumers can easily obtain the raw milk from their own cattle or purchase in local markets.
Traditional processors sell sweets directly from their own stores or selling points attached to
restaurants. The products are usually sold with paper-made packaging and kept for a
maximum of 3 days. Refrigeration is only used for curd if it cannot be sold within the same
day. A complete distribution and retail system is essential for industrial processors. Whether
SMEs or leading dairy companies, they often have specific channels to distribute the
products. Some companies and SMES work mainly through independent distributors
targeting a particular territory. The distributors collect the products either from the processing
factory, or from their own receiving sites. Products are packaged by dairy companies and
transported by refrigerated trucks, and finally delivered to retail points or directly to
consumers by order. With regards to large dairy companies like PRAN, Milk Vita or BRAC
dairy, they have their own distribution channels with complete cool chain. Take PRAN as an
example, refrigerated trucks load processed products from PRAN’s processing plants, and
deliver to supermarkets (in urban areas) and its own retail shops. For industrial sweet
companies, such as Rosh, the processing factory is located in the periphery zones near Dhaka
and its own retail stores can be found in most parts of the city.
Discuss briefly the Concepts , Features and Area of Green Logistics and Green
Transportation with Example sharing
Green Logistics: Green logistics, also referred to as Eco-logistics, is a measure and
sustainable policy taken by the logistics industry to minimize the environmental impact on
transportation, warehousing, and other logistic activities. This policy is aimed to create a
sustainable value that balances the economic and environmental efficiency.
Features and Area of Green logistics:
 Green logistics is considered compatible and beneficial to the environment.
 It helps in an environmentally friendly and efficient transport and distribution system.
 It helps in material handling, waste management, packaging and transport.
 It is related to the eco-efficient management of flow of product and information
between the point of origin and the point of consumption
Example: DB Schenker supports the DB Group to reduce specific CO2 emissions by 30
percent until 2020 and CO2e emissions by 50 percent until 2030 compared to 2006.Acting
with the environment in mind is a key issue at DB Schenker, which we support through a
variety of initiatives in our business units. We seek to reduce transport miles by
consolidation, shift to the most environmentally friendly mode of transport and increase
efficiency by continuous fleet renewals. We are focused on developing environmentally-
sustainable logistics solutions.
Currently, DB Schenker offers Eco Solutions for every mode of transportation, allowing
customers to reduce or compensate for CO2 emissions along the entire supply chain. As such,
we can cut CO2 emissions by up to 20 percent in air freight and up to 50 percent in ocean
freight. Environmentally-friendly solutions are also available for land transport regarding
innovative engines and fuels and by using energy-efficient, sustainable measures in all our
buildings. As a global leader focused on green logistics, DB Schenker is able to calculate and
provide the CO2 footprint of our customers’ supply chains in a transparent way, and can offer
recommendations for optimization.

Green Transportation: It is a concept which identifies the relationship between the supply
chain operations and the natural environment. The main aim of the green transportation is to
reduce or cut the amount of gas emission which leads to decrease in pollution rates. Most of
the green transportation modes are made from low-cost materials and it's using low-cost
energy
Features of green Transportation: Green transportation revolves around efficient and
effective use of resources, modification of the transport structure and making healthier travel
choices. For this to bear any fruit, it requires dedicated public awareness and participation,
management of privately owned vehicles and innovation and production of vehicles that
utilize renewable sources of energy such as wind, solar, biofuels and hydroelectricity.
Example: United Parcel Service is known worldwide, not just for their shipping but also for
the variety of environmental initiatives. UPS has over 2,200 alternative fuel vehicles, which
is the largest fleet in the industry. UPS also provides the opportunity to allow customers to
make the switch to paperless billing and invoices. Since 2000, UPS has recycled more than
24 million points of used electronic equipment.
✔ Explain “ Logistics must therefore be seen as the link between the marketplace
and the supply Chain”- How.
Logistics is an essential component of supply chain management. Companies see logistics as
a critical blueprint of the supply chain. It is used to manage, coordinate and monitor resources
needed to move products in a smooth, timely, cost-effective and reliable manner.
If we systematize all areas of logistics that need to be developed for the rational management
of production resources, we can single out the following functions:
▪ Warehouse design and management. This role of logistics in supply chain
management covers several tasks at once: from the design of storage facilities to the
 requirements for storage of products and ending with the introduction of various
automation solutions (for example, for machinery intended for transporting goods
within warehouses);
▪ The formation of packages. Packaging, tracking and accounting - all of these tasks
allow for end-to-end control of goods on the way to the customer/distributor;
▪ Transportation of products. This includes work with cargo carriers and vehicles listed
in the company's fleet: planning their routes, calculating fuel costs, etc.;
▪ Working with customs. When an enterprise plans international delivery of goods, it is
very important that during their transportation the goods fully comply with customs
requirements and contain all the necessary documentation;
▪ Working with intermediaries. Intermediaries in logistics are all third-party, non-
company resources that are directly involved in the implementation of supply chains.
In turn, finding intermediaries with the most acceptable ratio of quality to cost of
services, as well as establishing long-term, reliable relations with them are also
included in the list of tasks for efficient logistics management;
▪ Working with written off and returned goods. There is also such a thing as “reverse
logistics”, which establishes the rules and routes for transporting the
returned/discarded goods, as well as ways to dispose of them.

✔ Explain how supply chain can be effective in a multichannel operation to meet

four Key Logistics Goals in SCM , Explain the four Key Goals.
Multichannel operations increase competition for sales and customers.  In multichannel
operation four key logistical goals must be attained for an efficient supply chain. For the
supply chain to be effective in a multichannel operation, it is necessary for management to
meet four logistic goals. Each of these goals includes definitive and specific objectives
required within an operation. Fortunately, there are proven best practices to help you achieve
those objectives.
▪ Increased Efficiency: Increased efficiency reduces inventory and total overhead,
while developing cost-effective transportation rates. All facets of the company should
work well together, with the warehouse, transporters, and executive team sharing
issues, opportunities, and ideas. While many companies focus their energy on internal
logistics (warehouse), it’s important to remember transportation as a crucial piece of
the puzzle. Efficient transportation enables you to gain control of inbound and
outbound logistics.
▪ Increased Sales: Increased sales are, of course, a major goal of inbound and outbound
logistics. By keeping products in stock, delivering shipments on time, and efficiently
moving products through the warehouse, you can avoid losing sales and capitalize on
existing orders.
▪ Better Relationships: Because the transportation of goods is one of the last
interactions a retailer has with a supplier, it’s important to focus on relationships. By
hiring drivers with good interaction skills, you can better ensure a positive business
relationship will result between your company and your clients.
▪ Improved Customer Service. Going hand in hand with the idea of better relationships
through healthy interactions is a focus on customer service. Whether dealing with
inbound or outbound logistics, satisfying customers should be at the heart of
everything you do.
 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.
 Answer: 4
 What is your own understanding on Inventory Planning and Control , What is
BOM and its relation with Inventory . Why do companies maintain inventories

Inventory Planning: The process of determining the optimal quantity and timing of
Inventory for the purpose of aligning it with sales and production capacity.
Inventory planning has direct impact a company's cash flow and profit margins especially for
smaller businesses that rely upon a quick turnover of goods or materials.
Inventory Control: Inventory Control is the supervision of supply, storage and accessibility
of items in order to ensure an adequate supply without excessive oversupply.
Bill of Materials (BOM): BOM is a listing of all the subassemblies, intermediates, parts, and
raw materials that go into a parent assembly showing the quantity of each required to make
an assembly. Basically, a bill of material (BOM) is a complete list of the components making
up an object or assembly. Bills of materials come in different types specific to engineering,
manufacturing etc.
Relationship between BOM and inventory: The importance of a BoM to inventory control
is that it provides a complete and accurate picture of what is required, all the materials needed
for planned work and the processes associated with creating a single product.
A BoM provides a description of the individual components and the relationship between
each separate part used in production. All components required to manufacture a complete
shippable item are listed by part number, description and quantity.
An effective BoM should also include detail of the tools and equipment required for
assembly, sub-assembly and any consumables needed in the manufacture of the final
shippable product.
Having an all-inclusive measure of total assembly optimizes inventory control, enables better
decision-making, highlights areas for improved efficiency, cost-effectiveness and enhanced
quality. So, we can say that, relationship between BOM and Inventory is
Why do companies maintain inventories: Keeping inventory well-stocked is a crucial
aspect of keeping business operations running smoothly. There are a few main reasons why
companies choose to keep inventories stocked in their facilities.
First, keeping inventory on hand allows a company to meet any expected increases in
demand. It also ensures that the appropriate amount of products are available, should there be
an unexpected increase in demand. Plus, keeping a strong inventory supply allows a company
to benefit from periodic price reductions when making bulk purchases of needed raw
materials.
And in the event that a facility’s systems fail or break down, having inventory available
means the company won’t take too large of a hit in sales, as there will be a supply of products
that can still be sold while systems are down. Lastly, steady inventory allows a company to
regularly ship products to retailers as needed, instead of having to send periodic batches
based on the production cycle or individual orders.
In addition to these key reasons, there are financial motivations for companies to keep their
inventories well-stocked. Not only does inventory figure into a company’s cost of goods, it
also contributes to a business profit margin. For accounting purposes, inventory counts
toward a company’s total assets, and it even determines a company’s liability when it comes
to taxes. Because inventory is so integrally tied to companies’ financial operations,
understanding how it affects business is critical for ensuring future success.
 Explain at your own Factors affecting Inventory Management Decision

There are 6 Factors Affecting Inventory Management. Those are;

When managing inventory processes, there are a variety of factors which we need to
consider. Both external and internal factors can affect inventory management in different
ways, and it is important to be aware of these variables.

 Financial Factors: Factors such as the cost of borrowing money to stock enough
inventory can greatly influence inventory management. In this case, finances may
fluctuate according to the economy, and it is wise to keep an eye on changing
interest rates to help plan your spending.
 Suppliers: Suppliers can have a huge influence on inventory control. Successful
businesses require reliable suppliers in order to plan spending and arrange
production. An unreliable or unpredictable supplier can have huge effects for
inventory control.
 Lead Time: Lead time is the time it takes from the moment an item is ordered to
the moment it arrives. Lead time will vary widely depending on the product type
and the various manufacturing processes involved, and therefore changes in these
factors can require changes to inventory management.
 Product Type: Inventory management must take into consideration the different
types of products in stock. For example, some products may be perishable and
therefore have a shorter shelf life than others. In this case inventory must be
managed to ensure that these items are rotated in line with expiration dates.
 Management: Finally, responsibility for managing business’ inventory sits with
the owner, co-owners and the people who manages. While we may have multiple
employees acting as managers to oversee inventory processes, they typically will
not have the same stake in the business as the owners do.
 External Factors: There are multiple external factors that may affect inventory
control. For example, economic downturns may occur and this is something that
you will generally have very little control over. Assessing the economy is a must
in order to guard against stock outs or a buildup of excess inventory.
  Explain “BOM and Why BOM is important and Explain difference between
Inventory and Stock, How it is help to manage Inventory Planning and Control
across the Supply Chain.

Bill of Materials (BOM): A bill of materials (BOM) is an extensive list of raw materials,
components, and instructions required to construct, manufacture, or repair a product or
service. A bill of materials usually appears in a hierarchical format, with the highest level
displaying the finished product and the bottom level showing individual components and
materials.
Importance of a BOM:
 Improve material management by responding to changes in production.
 Reduce inventory levels and obsolete parts.
 Reduce manufacturing costs.
 Minimize clerical and engineering efforts by optimizing the tasks of maintaining and
changing multi-level bills.
 Supports variable length part numbers and unlimited descriptive text.
 Easy methods for accessing part information.

Differences between Inventory and Stock:

Stock items are the goods which are for sell to customers. Inventory includes the products we
sell, as well as the materials and equipment needed to make them. Inventory includes finished
products and all the assets a business owns or uses to complete production. there are four
main types of inventories: raw materials, work in progress, MRO supplies and finished
goods. Stock includes finished products, parts, materials—whatever you sell to customers.
The more stock—or products—you sell, the more revenue your business generates.
How BOM helps to manage Inventory Planning and Control across the Supply Chain
The Bill of materials used in businesses mostly functions as the roadmap to the functioning of
a finished product.
 Plans the purchasing with the help of automation.
 Keeps a tab on the total purchases of all the materials required sequentially, helping a
cost-effective plan to materialize.
 Maintains proper records and plans materials requirements.
 It also helps in keeping a tab on inventory control, thus preventing and reducing
waste.
 Bills of materials designed for any product pave a path ahead and also allow scope for
rising productivity and yield, thus resulting in more profit.

BOM Example: While building a racing bike, the builder will need an assortment of various
tools required to make the bike from scratch. Items like wheels, brakes, seat, handles, a
pulley, a chain, plenty of small nuts, and screws along with various other things. A BOM for
building a racing bike would also contain the quantities required for each of the items. Now,
based on the type of Bill of materials, it might also contain the steps to build up the bike,
along with the labor and time consumed by each step. The BOM is like the basic blueprint
laid out to build, rebuild, or repair any item or product of interest. All the workers involved in
the manufacturing and post-production processes as well must be aware of the manufacturing
BOM. It connects the various units required for the final product to be ready.
In this case, the final product is the racing bike. The bike preparation completes when
assembling all parts of the bike along with the seat, handles, and brakes complete. Even one
item missing might stop the product from being viable, such as the cycle here might not work
without the chain, might not even start without the wheels, and might not stop without the
brakes.
 If Supply Chain Control over Inventory / Material Management is Failed,
Inventory become a Liability - are you agreeing with That? In what case
Inventory considered as Liability.

The finished goods that a company gathers before selling them to end users are known as
inventory. But not only the finished goods but also the raw materials used in production are
regarded as inventory because they go through the production process or goods that are in
transit.
Inventory is an element of current asset since it’s typically sold off within a year or less.
Since there’s an expectation that the inventory will be used or sold off within the one year or
within the accounting period. For this reason, it is always listed as a current asset in the
balance sheet.
We know, a good inventory management can make supply chain both efficient and
responsive and give good financial results thus making it a great asset for the company.
But, if inventory management is not efficient enough, the same inventory can turn into a huge
liability.
Unsold and surplus inventory can become a huge liability for the business as there are costs
that the business may have to incur to store it. Besides, some inventory items have a limited
shelf life and can soon become spoilt, obsolete or may lose their value.
Again, with most goods or materials, there is significant cost involved in storing and
preserving them, such as the cost of warehouse space, depreciation, maintenance, manpower,
utilities, insurance, handling, statutory compliances, physical verification, losses, and
obsolescence. Thus, the longer the goods or materials are stored, the higher would be their
costs incurred on them, or increasing cost of goods under storage.
For example, if one has excess inventory of slow-moving product at warehouse, it will take
up some space. As a result, the money is also stuck which could have been put to some
productive use (buying raw material/ increasing distribution channel/ simply earn interest
from bank). In that Case Inventory is considered as Liability.
So If Supply Chain Controls over Inventory or Material Management is failed, in that case
the Inventory becomes a Liability.
 Explain How Inventory Play Role in Competitive Strategy in Managing “
Cost”. Secondly - “ Though inventory is an Asset for a Company but
Inventory Considered as a Waste – Why , How – Explain in details according
to your Strategic Vision

Inventory Plays Role in Competitive Strategy in Managing “ Cost”: Every business

inventory requires a lot of focus, and such attention is provided through Inventory
Management and control. Through efficient inventory management and control, a company
can formulate its competitive strategy mainly in cost management. We know inventory
usually involves the most considerable cash-flow in any business, both concerning
purchasing and selling stock.
Some of the most important roles that inventory management plays in formulating
competitive strategy in managing cost are as follows;
 Better Inventory Accuracy: With solid inventory management, we can know what’s
in Stock and order only the amount of inventory you need to meet demand. Through
this wastage of finished goods or raw material can be reduced.
  Resource wastage reduction: A perfect inventory management can decrease wastage
of various resources. Over stocking of inventory, causes over expense of energy, time
and human resources and thus it generates extra costs for the company. An efficient
inventory management can reduce such wastage and decrease these types of unwanted
cost.
 Storage cost Reduction: As the inventory management controls the size of inventory,
it
reduces cost related to storage. Uncontrolled inventory needs extra storage which
usually causes a very large amount of rental expenditure. Solid Inventory
management can control this cost.
 Avoids costly interruptions in operation: Inventory Management and control are
beneficial in limiting the misuse of inventory and resources. By avoiding these types
of costly interruptions, businesses can reduce any ‘hidden’ costs.
 Brings Potential Saving: Proper Inventory Management and control can Bring in
Potential Saving as benefits of inventory management. These benefits of inventory
management provide businesses with monetary and real-time benefits.
 Facilitates Purchase Economies: Good Inventory Management and control helps in
Facilitating Purchase Economies and maintaining steadiness in production operations.
This reduces purchase cost.

So from the above discussion we can say that, Inventory management controls wastage,
resource mismanagement and reduces unwanted costs. Thus, it plays a very vital role in
Competitive Strategy in Managing Cost.
Though inventory is an Asset for a Company but Inventory Considered as a Waste:
Inventory is regarded as an asset because this are the goods which are expected to be sold or
used up within the year or the accounting period. If the goods are sold within the expected
period, it becomes cash and that can be inject into the company’s finance as investment. But
scenario is not always like this. If the goods remain as surplus or unsold, those become a
headache for the company. Because this surplus or unsold inventories incur significant cost
and wastages. Not only that, some of those inventories have short shelf time, if extensive
storing measures aren’t taken, those inventories could be damaged. And that causes a huge
amount of loss.
When the inventory adds no value and has significant costs associated with it; it is a “waste”.
For example, the cost of steel is significant, and that cost generates no return if it sits on the
floor, a rack or shelf. The longer it sits there the more it hurts your cash flow. Another
example could be of food industry. If the unsold food are not kept in proper storage facility,
those could be perished and this will create huge loss for the company.
So we can say that, when inventories are not sold or remains surplus. It creates loss or
significant cost and doesn’t add any value, it becomes a waste.
 Answer 5
 “Inventory in one of Supply chain costs Driver” - from this Statement How
Supply Chain Taking over Control for total business performance of any
company minimizing inventory
Inventory is one of the Supply chains costs Drivers: The last major driver of supply chain
costs is inventory costs. Companies across the supply chain spectrum – from retailers to
manufacturers to suppliers – rely on inventory as a buffer against supply and demand
uncertainty and volatility. Efficient inventory cost management is vital for the successful
functioning of manufacturing and retailing organizations. Inventory consist of raw materials,
work in progress, spare parts or consumables, goods in transit and finished goods. It is not
necessary that an organization will have all these inventory classes, but whatever may be the
inventory items, they need efficient management as, generally, substantial share of the
company’s funds is invested in inventory.
The following are the benefits of strong inventory management:
 Better Inventory Accuracy: With solid inventory management, we can know what’s
in stock and order only the amount of inventory you need to meet demand.
 Reduced Risk of Overselling: Inventory management helps track what’s in stock and
what’s on backorder, so you don’t oversell products.
 Cost Savings: Stock costs money until it sells. Carrying costs include storage
handling and transportation fees, insurance and employee salaries. Inventory is also at
risk of theft, loss from natural disasters or obsolescence.
 Avoiding Stockouts and Excess Stock: Better planning and management helps a
business minimize the number of days, if any, that an item is out of stock and avoid
carrying too much inventory.
 Greater Insights: With inventory tracking and stock control, you can also easily spot
sales trends or track recalled products or expiry dates.
  Better Terms with Vendors and Suppliers: Inventory management also provides
insights about which products sell and in what volume. Use that knowledge as
leverage to negotiate better prices and terms with suppliers.
 More Productivity: Good inventory management solutions save time that could be
spent on other activities.
 Increased Profits: A better understanding of both availability and demand leads to
higher inventory turnover, which leads to greater profits.
 A More Organized Warehouse: An efficient warehouse with items organized based
on demand, which items are often sold together and other factors reduces labor costs
and speeds order fulfillment.
 Better Customer Experience: Customers that receive what they order on time are
more loyal.
So, from the above discussion we can say that, inventory cost management plays a very vital
role in business performance. A good inventory cost management can reduce wastage,
minimize costs, retain existing customers, acquire new customers and thus it drives the
company towards profitability. On the other hand, an inefficient inventory cost management
system can turn a profitable company into a failed one.
For Example, Toyota was the first to implement the inventory management system named
JIT effectively in 1970 and is still one of the most successful companies practicing JIT
systems. Their method, also known as the Toyota production strategy, sees that raw materials
are not brought to the production floor until the order is received from the customer and the
product is ready to be built. During the production process, no parts are included in the next
node or station unless they are required to. This keeps the amount of inventory to a minimum
which as a result, lowers costs. This also allows Toyota to adapt quickly to customer’s
demands, significantly reducing the risk of having excessive inventory at its disposal. This
system reduced inventory cost and gave Toyota competitive advantages. Thus, Toyota
became successful.

 What do You Understand by Maritime Logistics? Mention it Features? What do

You mean by Cargo and Consignment ... Mention the International Standard
Size and CBM of Container? What is CBM and How it is Calculate?
Maritime Logistics: “Maritime logistics is referred to as the process of planning,
implementing and. managing the movement of goods and information involved in the ocean
carriage.” There are three important actors in maritime logistics system: shipping,
port/terminal operating, and freight forwarding.
Features of Maritime logistics: Maritime logistics is responsible for the managerial
proceedings of systematically managing the ocean movement of goods and information in the
most efficient and effective way in order to be successfully integrated into the logistics
system. Features of maritime logistics are as follows;
 Shipping: The act of carriage of cargo from point A to point using the ships which
falls under the Maritime industry.
 Port/Terminal Operating; A terminal is an area or location which serves as a
pathway for handling transport process (loading and/or unloading cargo) or it can also
act as a transfer point for passengers. Any of the place where goods are loaded or
unloaded onboard a vessel/vehicle for transport is referred to as a terminal.
 Freight Forwarding: The cargo that is carried using the shipping services offered by
the shipping lines using the ships which falls under the Maritime industry.
Cargo: Cargo refers to goods or produce being transported from one place to another – by
water, air or land. Originally, the term “cargo” referred to goods being loaded onboard a
vessel. These days, however, cargo is used for all types of goods, including those carried by
rail, van, truck, or intermodal container.
Consignment: Consignment is an arrangement between a reseller (consignee) and their
supplier (consignor), that allows the reseller to pay for their products after the products have
been sold. To start, the supplier sends the reseller some products without collecting any
payment for them, and the reseller puts them up for sale in their store. Even though the
products are at the reselling business, the supplier retains ownership of them until they are
sold. The reseller eventually pays the supplier for the products they’ve sold and returns the
products they have not sold.
International Standard Size and CBM of Container:
ISO containers are the ideal shipping container as their dimensions are regulated by the
International Standards Organization (ISO). These regulations allow ISO containers to use
space as efficiently as possible regardless of the method of transport.
Height: Standard ISO containers measure 8 ft. 6 in., but they are available in several discrete
heights measuring from 4 ft. to 9 ft. 6 in. Containers that measure 9 ft. 6 in. tall are called
extended height or high cube containers while 4 ft. and 4 ft. 6 in. containers may be
referenced as half height containers.
Width: The majority of all ISO containers measure 8 ft. or 2,438 mm wide. ISO Containers
that exceed this dimension are grouped into two other size ranges. Alpha characters C, D, E,
and F identify containers that are greater than 2,438 mm, but less than 2,500 mm. Containers
that exceed 2,500 mm are referenced by L, M, N, and P.
Length: The most common lengths are 20 and 40 ft. Other lengths include 24, 28, 44, 45, 46,
53, and 56 ft.
CBM: CBM, as known as Cubic Meter, is the freight volume of the shipment for domestic
and international freight. This measurement is calculated by multiplying the width, height and
length together of the shipment.
The conversion rate depends on shipping method
 By air: 1 CBM = 167 Kg
 By road: 1 CBM = 333 Kg
 By sea: 1 CBM = 1000 Kg
How to calculate CBM?
The CBM formula is a simple calculation
CBM = (Length x Width x Height) x Quantity of items
*The unit of length, width, heigth must be exchanged into meter (m)

 What is your Understanding on “DRP” and “VRP” in Logistics Planning? How

both Concept play a vital role in Logistics Performance
Distribution Requirements Planning (DRP): The Distribution Requirements Planning
process ensures that goods are delivered in the most efficient manner. This includes
considering the quantity of the various materials required in production and the direct
location that it is needed to arrive at in a given time.
Vehicle route planning: Vehicle Route planning is a planning process in which vehicle and
route for distribution process are determined to execute DRP in efficient way. VRP analyses
the following data traffic updates, vehicle size, and driver schedules. It also monitors
performance at all times reporting driver information, fuel efficiency, carbon emissions, and
various other business KPIs.
Role of DRP and VRP in Logistics Performance:
DRP and VRP plays very vital role in logistics performance.
 DRP always connects to the current inventory and forecasts of field demand to
manufacturing’s MPS and MRP. DRP allows for a fully integrated system and a
continuous flow of information throughout the network. This pushes for a much more
efficient and adequate production process/flow that ultimately cut costs and waste
within a manufacturing operation.
 DRP is also accurately able to anticipate future requirements in the field. This enables
for decreased inventory and costs within an operation and ultimately increases the
organization’s profit. Anticipation of future requirements is by far one of the most
beneficial aspects pertaining to distribution requirements planning (DRP).
 DRP matches material supply to demand, once again ultimately matching inventory to
the customer service requirements and cutting costs within an operation. DRP also
pushes for faster decision making, utilization of demand forecasting, planning
initiation accuracy, and enhances overall customer service.
Vehicle Route planning is essential for logistics and distribution companies as it allows them
to provide a more efficient delivery service. There are many transportation challenges in the
delivery industry and multiple factors can cause delays, resulting in poor service and
customer complaints.
 Cuts Transportation Costs: Through VRP, distribution route and actual need of
vehicle can be determined. So, through VRP companies can cut their transportation
related costs.
 Improves Customer Service: Improving customer satisfaction is crucial for
maintaining a fruitful business, and a great way to do that is by eliminating wasteful
practices. Through VRP companies can determine the fastest delivery route, thus,
customer service improves.
 Increases Productivity: Every business has thousands of tasks that need to be
accomplished, and businesses that are constantly hitting the road are no different.
With the growing list of destinations to reach every day, it’s very easy to let a few
tasks slip through the cracks. Route planner solutions not only help you avoid
backtracking, as it organizes your stops based on location, but also ensure your
business is reaching all set destinations - with time to spare.
So, from the upper discussion, we can say that DRP and VRP play vital role in logistics
performance.
 What do you mean by “ Strategic Fit and strategic drift in Supply Chain, Discuss
“ Strategic Drift” taking a example of Dell / Kodak / Nokia etc.
Strategic fit: Consistency between customer priorities of competitive strategy and supply
chain capabilities specified by the supply chain strategy – Competitive and supply chain
strategies have the same goals.
Strategic Drift: Strategic Drift is a critical concept within the realms of Strategic
Management. Strategic Drift usually occurs when organizations are unable to keep pace with
the changes that happen in their immediate environment which in turn leads to their slow and
gradual demise. Organizational changes such as ‘transformation’ take place over a fixed time
period and can be sensed. On the other hand, strategic drift happens over an extended period
of time and usually cannot be felt until it is too late.
Kodak and Strategic drift: Kodak’s failure to seriously pursue digital photography in favor
of film photography, their established business line, plunged them into bankruptcy. They had
the talent, capital, technology and had close to a decade to adapt their business to the true
demand of their customer: easily accessible photos without the hassle of purchasing film. But
their failure wasn’t overnight, management knew that digital photography represented a
serious threat to their existing business and neglected the reality of their environment until
they lost most, if not all, of their competitive advantage. Kodak’s failure was rooted in
strategic drift: the gradual deterioration of competitive action that results in the failure of an
organization to acknowledge and respond to changes in the business environment.
Nokia and Strategic drift: Organizations that do not align with the external environment
and not respond rapidly to changes face the risk to undergo strategic drift. Strategic drift can
be described as the phenomenon where the strategy of an organization gradually fails to keep
in line with the environment in which the organization operates. As a result of the above, the
organization fails to keep its strategic position, which leads to an organization crisis and
frequently is followed by a transformation or a bankruptcy. The aim of this dissertation is to
study the case of Nokia Corporation and support the hypothesis that Nokia had undergone a
strategic drift. Nokia, after a successful course in the mobile phone market from the late 90’s
to late 00’s, ended to the sale of its mobile phone division to Microsoft in 2014. To examine
whether the hypothesis is true or not, financial data and market share figures were collected
and analyzed from various sources. Additionally, SWOT and Porter’s five forces analysis
were conducted. As per the results of the study, Nokia Corporation, from 2009 onwards had
indeed passed through all the 4 stages of strategic drift, as a consequence of wrong strategic
decisions and internal weaknesses. Inability to detect the changes that occurred in the external
environment and adapt accordingly was the main reason, where factors such as the inability
to foresee the future of the market, the bad management, lack of expertise and
underestimation of the competition gave the final hit.
 Explain “How Strategic fit” is achieved.
A company need to achieve that all-important strategic fit between the supply chain and
competitive strategies A competitive strategy will specify, either explicitly or implicitly, one
or more customer segments that a company hopes to satisfy. To achieve strategic fit, a
company must ensure that its supply chain capabilities support its ability to satisfy the
targeted customer segments
There are three basic steps to achieving strategic fit:
 Understanding the customer and supply chain uncertainty. First a company must
understand the customer needs for each targeted segment and the uncertainty the
supply chain faces in satisfying these needs. These needs help the company define the
desired cost and service requirements. The supply chain uncertainty helps the
company identify the extent of disruption and delay the supply chain must be
prepared for.
 Understanding the supply chain capabilities. There are many types of supply chains,
each of which is designed to perform different tasks well. A company must
understand what its supply chain is designed to do well.
 Achieving strategic fit. If a mismatch exists between what the supply chain does
particularly well and the desired customer needs, the company will either need to
restructure the supply chain to support the competitive strategy or alter its strategy.