Assignment: 1

Submitted by: Sagar Arora A00118051

Submitted to: Prof. Chetan Pagare

Q.1 Define supply chain and supply chain management

Ans: A supply chain is the web of people, businesses, resources, activities, and technologies that
come together to create and sell a product or service. The distribution of raw materials from a
supplier to a manufacturer begins the supply chain and finishes with the finished product or
service to the end consumer.

Through supply chain management (SCM), suppliers strive to build and operate supply chains as
efficiently and cost-effectively as feasible through supply chain management (SCM). Supply
chains encompass everything from manufacturing to product creation and the information
systems required to coordinate these activities. Typically, SCM aims to centralize or link a
product's manufacturing, shipment, and distribution. Companies can decrease costs and deliver
items to customers faster by optimizing the supply chain. Internal inventories, manufacturing,
distribution, sales, and company vendor inventories are all under tighter supervision.

Q.2 Different parts of SCM?

Ans: Management of the entire supply chain is an arduous task; however, it can be partitioned
into five major parts, which we will examine below.

1: Planning

One of the most critical concerns procurement teams must address is whether the firm intends to
create things in-house or purchase ready-made goods. If the company produces completed goods,
the next question is sourcing raw materials. Is it going to come from local, regional, or
worldwide vendors? This question is also asked if the corporation buys ready-made products and
sells them to the customer as finished goods. Where are these items going to come from?

2: Sourcing

This is one of the essential steps in the supply chain because it is at this point that the highest
cost savings can be realized. You've struck gold if you can find the appropriate vendor at the
correct pricing who can provide the required volumes promptly. If you choose an inept supplier,
it will impact your entire supply chain. This procedure will necessitate the identification of
vendors and their evaluation and qualification.

3: Inventory

It's critical to have multiple suppliers so you can get enough raw materials and finished goods to
stay fully stocked. Examining purchasing and supply chain management in 2020 might yield
many insights. The necessity of getting this component right was highlighted in 2020. According
to RetailNext, 28% of firms polled experienced severe shortages and were even out of stock of
certain essential commodities. Sixty-six percent of these businesses were forced to renegotiate
contracts.

The ability to meticulously manage inventories and guarantee that manufacturing schedules are
in sync with consumer demand is both a skill and an art.

4: Production and Transportation

Production, warehouse, and transportation are the following critical aspects of supply chain
management. This section of the supply chain examines what is required to verify that the
company is generating the right amount of goods and that the quality of the product fulfills
defined criteria. This component also considers where the products will be stored, such as in
warehouses and transportation from those warehouses to businesses that will keep the products.

5: Return of Goods

What should you do if a consumer returns a defective product? What is the procedure for dealing
with a situation like this? The supply chain's final component, 'Return of Goods.' Because
customer satisfaction is so crucial, the returns process must be well-defined. The greater your
customer satisfaction scores, the more effective your return of faulty goods operations are.

Q.3 Explain how companies decide the supply chain?

Ans: Supply Chain Decisions

Supply chain management decisions are divided into two categories: strategic and operational.
As the phrase implies, strategic decisions are often made over a longer time horizon. These are
intimately tied to the corporate strategy and govern supply chain policies from a design
standpoint. On the other hand, operational decisions are made in the short term and are focused
on day-to-day activity. The goal of these decisions is to effectively and efficiently control
product flow in a supply chain that has been "strategically" designed.

In supply chain management, there are four primary decision areas: There are strategic and
operational factors in each of four decision areas: 1) site, 2) manufacturing, 3) inventory, and 4)
transportation (distribution).

Location Decisions

The obvious first step in establishing a supply chain is to locate production sites, stocking points,
and sourcing points. The location of facilities necessitates a long-term investment of resources.
The alternative channels via which the product travels through to the final client are defined once
the size, number, and placement are determined. These decisions are critical to a company's
success since they represent its primary strategy for entering client markets and will significantly
impact revenue, cost, and service quality. Production costs, taxes, levies and duty drawbacks,
tariffs, local content, distribution costs, production limits, and other factors should all be factored
into these decisions. Choosing a place is essentially a strategic decision.

Production Decisions

What items to create and which plants to produce them and the allocation of suppliers to plants,
plants to DCs, and DCs to consumer markets are critical strategic decisions. These decisions, as
before, have a significant impact on the firm's revenues, costs, and customer service levels.
These choices presume that the facilities exist, but they specify the particular path(s) via which a
product flow to and from them. Another important consideration is the production facility's
capacity, which is mainly determined by vertical integration within the company. The focus of
operational decisions is on precise production scheduling. These choices include creating master
production schedules, scheduling production on machines, and maintaining equipment.
Workload balancing and quality control procedures are also important issues.

Inventory Decisions

These are the methods for managing inventories. Raw materials, semi-finished items, and final
goods are all have listed at various stages of the supply chain. They could be in the middle of a
transfer between locations. Their primary goal is to protect the supply chain from any potential
unpredictability. Inventory management is crucial in supply chain operations since keeping
stockpiles can cost anywhere from 20% to 40% of their value. It is strategic in that top
management establishes objectives. On the other hand, most scholars have tackled inventory
management from an operational standpoint. They comprise deployment tactics, control rules,
determining the ideal levels of order quantities and reorder points, and setting safety stock levels
at each stocking location.

Transportation Decisions
These decisions are more strategic in terms of mode selection. These are inextricably tied to
inventory decisions. The optimal mode of transport is frequently determined by balancing the
cost of employing that means of transportation against the indirect cost of inventory associated
with that mode. While air shipments are quick, dependable, and require fewer safety stocks, they
are also costly. Meanwhile, while transportation by sea or rail is less expensive, it necessitates
the storage of a considerable volume of goods to compensate for the inherent risk involved. As a
result, customer service levels and geographic location are important considerations in such
judgments. Transportation accounts for more than 30% of logistics costs, so operating effectively
makes financial sense.

Q.4 Performance measures of the supply chain?

Ans: A supply chain performance metric is a method for evaluating the efficiency of a supply
chain system. Measures of supply chain performance can be divided into two groups.

Customer satisfaction and product quality are examples of qualitative measures.

Order-to-delivery lead time, supply chain reaction time, flexibility, resource utilization, and
delivery performance are examples of quantitative measures.

Only quantitative performance measures will be considered here. A multi-dimensional approach,

which addresses how the organization needs to provide services to varied consumer expectations,
can improve the performance of a supply chain.

Quantitative Evaluations

Although the measures used to evaluate performance are often identical, the goals of each
section are vastly different.

Quantitative measures are assessments used to assess, compare, and track the performance of
products. The quantitative metrics of supply chain performance can be divided into two types.
They are

a) Financial and non-financial measures

b) Non-financial indicators.

Cycle time, customer service level, inventory levels, resource utilization ability to perform,
adaptability, and quality are examples of non-financial measures.

In a nutshell, essential modules such as activity-based costing, inventory costing, transportation

costing, and inter-company financial transactions can be used to combine financial performance
indices into one.
Q.5 critique the ability of a company's supply chain strategy to meet customer's need

Ans: All customer experience improvement activities embedded in transporting finished

products from suppliers to customers are referred to the customer-centric supply chain.
Embedding, or integrating, real-time market signals and customer information into all supply
chain activities and processes is a critical component of developing an actual customer-centric
supply chain. Customer-centric businesses are frequently found at the forefront of industry
innovation simply because they pay attention to the things that others overlook.

AMAZON's supply chain strategy

The components of the Amazon distribution strategy

 Warehousing
 Delivery
 Technology
 Manufacturing

Warehousing: All of the company's warehouses are strategically located near major cities and
population centers, and inventory is distributed among them to guarantee that supply can keep up
with demand. There are mini-warehouses in smaller locations to ensure that orders are
transported and delivered quickly, regardless of what is bought.

Delivery: One of the most significant differences between Amazon's supply chain strategy and
other online retailers is the wide range of delivery options available. Sure, there are options like
free two-day Prime delivery and Prime Now, which get things from point A to point B in under
two hours.

Technology: Amazon's approach to supply chain management is to embrace technology. To

select and pack orders and stack and store inventory, the company employs a variety of
automation and robotic technologies. These tools improve productivity and delivery times for the
organization, but they also reduce warehouse and employee costs, freeing up funds for other
logistics and supply chain needs. Amazon Prime Air, a drone service, is another example of the
company's embracing of drones.

Manufacturing: Although Amazon still enables third-party sellers, it appears that the business
has realized that many of those third-party products may be produced for far less money — and
profitably. The store has begun making its low-cost items as well as white-labeling products
from other vendors.
Amazon has branded lines for everything from household items to dogs and newborns, and the
number of brands is growing all the time. This allows Amazon to control the whole product
lifecycle, from production to marketing to storage and transportation.

References
https://www.investopedia.com/terms/s/scm.asp

https://blog.procureport.com/components-of-supply-chain-management/

https://gtl.csa.iisc.ac.in/scm/supply_chain_intro.html

https://www.tutorialspoint.com/supply_chain_management/
supply_chain_management_performance_measures.htm

https://tinuiti.com/blog/amazon/amazon-supply-chain/