SUBJECT: SUPPLY CHAIN MANAGEMENT

INDICATIVE QUESTION BANK

PGDM BATCH 2021-23, SEMESTER-II

Note: CO refers to Course Outcome i.e., what student will be able to learn at the end of
the course. The course has 5 COs. From CO1 to CO5 the level of cognitive ability
required to answer question gets difficult, so, as per the COs questions are framed. In
end sem exam questions will be from different COs.

Question Bank of Supply Chain Management as per COs

CO 1 REMEMBERING DESCRIBE the key concepts of Supply Chain

Management and the – driving forces in contemporary
Supply Chain Management

Short Notes
1) Three Flows in Supply Chain
2) Agribusiness Supply Chain Management.
3) Future of Logistics.
4) Customer Service Phases.
5) Warehousing Functions.
6) Types of Warehouses.
7) Storage Principles.
8) Material Handling Systems
9) Inventory carrying Reasons.
10) Vendor Managed Inventory.
11) Transportation Models.
12) Containerization.
13) Logistical Packaging.
14) 3 PL
15) Bull Whip Effect
 CO 2 UNDERSTANDING EXPLAIN the structure of modern-day supply chains.

1) Explain the concept of Bull Whip Effect and outline your suggestions for reducing the
effects of Bull Whip Effect.

Ans. The bullwhip effect is a supply chain phenomenon describing how small

fluctuations in demand at the retail level can cause progressively larger
fluctuations in demand at the wholesale, distributor, manufacturer and raw
material supplier levels. The effect is named after the physics involved in
cracking a whip. When the person holding the whip snaps their wrist, the
relatively small movement causes the whip's wave patterns to increasingly
amplify in a chain reaction.
Causes of the bullwhip effect
Companies must forecast customer demand based on insufficient information, and try to
predict how much product customers will actually want while accounting for the complex
factors that enable that amount to be delivered correctly and on time. At every stage of the
supply chain there are possible fluctuations and disruptions, which in turn influence the
myriad supplier orders. Changes in customer demand directly influence all the other
factors along the chain, including inventory. However, the bullwhip effect can occur even
in relatively stable markets where the demand is essentially constant.

Foster supply chain communication and collaboration.

Better alignment around supply chain issues both within the company and among customers,
suppliers, distributors, manufacturing and the rest of the partners is needed. In particular, when
suppliers work to understand customer needs, they can work to help reduce excessive inventory.
Supplier and project portals, Electronic Data Interchange (EDI) transactions and other capabilities
of supply chain management software can help.

Use better forecasting and visibility tools.

A wide range of software helps enable more accurate demand forecasts and visibility into what is
happening along the supply chain. These include demand sensing software, forecasting software,
inventory optimization software and tools that use analytics (especially predictive analytics),
artificial intelligence (AI) and Internet of Things (IoT) connectivity.
Explore a demand-driven approach to supply chain management.

A demand-driven approach relies on a system of coordinated technologies and processes to gain

insight into supply chain occurrences and react to them quickly. It uses many of the approaches
mentioned above, especially collaboration and communication and new technologies to
enable supply chain visibility, for a coordinated holistic approach. Each company will need to
decide on the right push-pull approach to its strategy, where a push approach is used for stable
products and a pull approach is used for those with more erratic demand.

Lessons on the bullwhip effect using the beer game

Developed at the MIT Sloan School of Management in the 1960s, the beer game, also called the
beer distribution game, is a role-play simulation game in which players experience firsthand the
complexity of supply chain management. It simulates the beer supply chain using retailer,
wholesaler, distributor and brewer. The goal is keeping operating costs as low as possible and
teams are penalized for having too much inventory.

Players can only communicate by relaying orders through the normal channels, mimicking a real-
life supply chain, and they must deal with inventories and backlogs, and their impact on the bottom
line. Among its lessons, it illustrates the complexity of the system as a whole, the difficulty of
making correct choices with limited information, and quickly brings to life the bullwhip effect in
action.

2) A multiproduct organization has undertaken an exercise of classification of their

Inventory. Outline the different methods of Inventory Controls which could be adopted
by this organization.

some of the popular inventory control methods are as follows-

Economic order quantity-

Economic order quantity, also called EOQ, refers to a formula. It is the ideal inventory
quantity that a company must purchase considering various variables such as total
production costs, demand rate, etc.

It helps to free up any tied cash in inventory for most entities and reduces the direct costs.
ABC analysis-

It involves categorising inventory into three buckets called A, B and C depending upon the
importance of the inventory to its profit. A category consists of expensive items, and
hence a small inventory is held. B category has average-priced inventory with medium
sales frequency. Category C inventories are low in value but with high sales frequency. It
requires less inventory control compared to A or B.

Just-in-time (JIT) inventory management-

It is a technique to arrange raw material orders from suppliers in sync with the production
schedules to reduce inventory costs. There will be no excess inventory stored beyond the
production requirements, and hence it leaves no scope for deadstock in the organisation.

Safety stock inventory-

Businesses can order an extra quantity of inventory as buffer stock above the projected
demand. It acts as a correction for underestimating demand.

Fast, slow, and non-moving (FSN)-

It involves the classification of inventories into fast-moving, slow-moving and non-moving

stock for deciding the pace at which a business can place orders.

Implementing Inventory control systems-

Organisations can use technology-based inventory control systems. Such systems

integrate various inventory tasks such as purchasing, shipping, receiving, warehousing or
storage, tracking, and re-ordering. The system will ensure the availability of the right
inventory at the required locations when needed to meet product demand. Two types of
inventory control systems are available to choose from. These are perpetual and periodic
systems depending upon whether a business wants to track inventory daily or not.
 3) The Logistics manager has options of different modes of transportation to select from.
Compare the various means of transportation available with their pros and cons.
Ans. The term ‘modes of Transportation is utilized to differentiate between various ways of
Transportation or transporting goods or people. The multiple modes of transport include water, air,
rail, road, and pipeline.
Advantages of Modes of Transportation
Each mode of Transportation has its advantages, so we have added a few benefits of the four
primary methods of Transportation.

Road Transportation:

1. Flexible Service: For road transportation, timings and routes can be tuned and changed
to suit individual requirements easily; this gives road Transportation a great advantage
over all different vehicles.
2. Door-to-door assistance: The best benefit of road transportation that makes it the
salvation of the transport industry is its character to offer door-to-door services from
destination to destination or warehouse to warehouse.
3. Service in Rural areas: It is most adaptable and flexible with a reach into the most
remote areas that are not accessible by rail, air, or water.

Rail Transportation:

1. High speed covering huge ranges: Its speed over long ranges is higher than any
distinct modes of transport (aside from airways). Therefore it is the best choice for long-
distance traffics.
2. Dependable: It is the most reliable mode of transport as it is least affected by weather
conditions compared to other methods.
3. Suitable for heavy and bulky goods: It is economical, and faster, and best suited for
bulky and heavy goods transportation over huge distances.

Water Transportation:

1. Helpful in Defence: For the vigorous defense of the country, the development of
shipping is vital as it is known as the second line of defense.
2. Essential for Foreign Trade: Water transportation plays a critical role in foreign trade as
many countries depend mainly on water transportation for foreign trading, such as India.

Air Transportation:

1. Rapid speed: Among all the modes of transportation, air transportation is the fastest.
2. Unbroken Journey: Air transportation offers an unbroken journey over sea and land,
due to which it can take you from one distinct destination to another quickest.
3. Can operate for emergency services: It can operate even when every other means of
transport can’t due to floods or other natural calamities. So at that time, it is the only
mode of Transportation that can be employed to do the relief work and offer the essential
commodities of life.
Pipeline:

1. Low maintenance cost: Both the maintenance and operation cost is meager.
2. Less energy requirement: The consumption of energy is deficient.
3. Less rate of delays: The losses of carrying mineral oil and natural gas and delays are
minimized with a pipeline system.

5 Modes of Transportation and Their Advantages

and Disadvantages
Modes of Transportation and Their Advantages and Disadvantages: The term ‘modes of
Transportation is utilized to differentiate between various ways of Transportation or transporting
goods or people. The multiple modes of transport include water, air, rail, road, and pipeline.

The field can be parted into vehicles, operations, and infrastructure. Modes of Transportation are
essential as it facilitates commerce between people, which is crucial for the progress of the human
civilization.

Students can also find more Advantages and Disadvantages articles on events, persons, sports,
technology, and many more.

Mode of Transportation, also called transportation mode, alludes to different ways by which
individuals or goods are transported from one distinct location to another through air, sea, or land.
There are also other available modes which include pipelines (for oil or gas transportation), space
(satellite), and cable (energy supply, internet).

Each mode of Transportation has a primarily different technological solution, and some need a
different environment. Each method has its transport in India operators, infrastructure, vehicles, and
operations.

In this post, we discussed at length some of the upsides and downsides of Modes of Transportation.

 Advantages of Modes of Transportation

 Disadvantages of Modes of Transportation
 Comparison Table for Advantages & Disadvantages of Modes of Transportation
 FAQs on Pros & Cons of Modes of Transportation

Advantages of Modes of Transportation

Each mode of Transportation has its advantages, so we have added a few benefits of the four
primary methods of Transportation.

Road Transportation:
 1. Flexible Service: For road transportation, timings and routes can be tuned and changed
to suit individual requirements easily; this gives road Transportation a great advantage
over all different vehicles.
2. Door-to-door assistance: The best benefit of road transportation that makes it the
salvation of the transport industry is its character to offer door-to-door services from
destination to destination or warehouse to warehouse.
3. Service in Rural areas: It is most adaptable and flexible with a reach into the most
remote areas that are not accessible by rail, air, or water.

Rail Transportation:

1. High speed covering huge ranges: Its speed over long ranges is higher than any
distinct modes of transport (aside from airways). Therefore it is the best choice for long-
distance traffics.
2. Dependable: It is the most reliable mode of transport as it is least affected by weather
conditions compared to other methods.
3. Suitable for heavy and bulky goods: It is economical, and faster, and best suited for
bulky and heavy goods transportation over huge distances.

Water Transportation:

1. Helpful in Defence: For the vigorous defense of the country, the development of
shipping is vital as it is known as the second line of defense.
2. Essential for Foreign Trade: Water transportation plays a critical role in foreign trade as
many countries depend mainly on water transportation for foreign trading, such as India.

Air Transportation:

1. Rapid speed: Among all the modes of transportation, air transportation is the fastest.
2. Unbroken Journey: Air transportation offers an unbroken journey over sea and land,
due to which it can take you from one distinct destination to another quickest.
3. Can operate for emergency services: It can operate even when every other means of
transport can’t due to floods or other natural calamities. So at that time, it is the only
mode of Transportation that can be employed to do the relief work and offer the essential
commodities of life.

Pipeline:

1. Low maintenance cost: Both the maintenance and operation cost is meager.
2. Less energy requirement: The consumption of energy is deficient.
3. Less rate of delays: The losses of carrying mineral oil and natural gas and delays are
minimized with a pipeline system.

Disadvantages of Modes of Transportation

Each mode of Transportation has its disadvantages, so we have added few drawbacks to the five
primary methods of Transportation.

Road Transportation:
 1. Accidents and breakdowns: There is a high risk of breakdowns and accidents in the
instance of road transport, due to which it is not a safe or predictable option.
2. Vulnerable to season and weather conditions: It is very susceptible to weather
conditions and seasonal changes or, in the case of natural calamities such as floods or
heavy rains.
3. Not best for heavy cargo and long distances: It is not very appropriate for transporting
heavy cargo over long distances, which is a considerable drawback.

Rail Transportation:

1. Huge capital outlay: Rail transportation needs a considerable investment of capital. The
funds for building, sustaining, and hanging expenses are enormous compared to other
modes of Transportation.
2. Centrally administrated: Being the public utility service, rail transportation has a
monopoly, and there is centralized administration, so the authorities fail to meet the
personal needs of the people as compared to roadways.
3. No rural service: It cannot be operated economically in rural areas due to substantial
capital needs and traffic, which causes much inconvenienced to the people living in rural
areas.

Water Transportation:

1. Riskier: It is more dangerous than other modes of transport as there is always the
danger of sinking boats or ships.
2. Slow speed: It is a quiet mode of transport. Failure of monsoon might result in the fall of
rivers’ water level, making navigating the ship or boat difficult.

Air transport:

1. Very expensive: It is the most costly mode of Transportation. The fare of transport is
very high, which is difficult to afford for the ordinary person.
2. Unreliable and uncertain: Air transport is not very reliable and is unsure as it is
controlled mainly by weather conditions. Fog, snow, or other unfavorable weather
conditions might cause suspension of air service or cancellation of scheduled flights.
3. Specialized skills needed: Air transportation requires a specialized skill and a high
degree of training for its operation.

Pipeline:

1. Leakage: If there is a leakage, the repairing has to be done as soon as possible, so you
can’t desert leakage.
2. High initial cost: The cost of construction and laying of pipelines is high.
3. Security: The security of pipeline transportation is complex.

4) Material handling equipment calls for heavy investment and a cross functional team take
the final decision Explain the various material handling guidelines to be considered by
the team before making the final decision of selecting the appropriate handling
 equipment.
The following factors are to be taken into account while selecting material handling
equipment.
1. PROPERTIES OF THE MATERIAL
Whether it is solid, liquid or gas, and in what size, shape and weight it is to be
moved, are important considerations and can already lead to a preliminary
elimination from the range of available equipment under review. Similarly, if
the material is fragile, corrosive or toxic this will imply that certain handling
methods and containers will be preferable to others.
2. LAYOUT AND CHARACTERISTICS OF THE BUILDING
Another restricting factor is the availability of space for handling. A low-level
ceiling may preclude the use of hoists or cranes, and the presence of
supporting columns in awkward places can limit the size of the material-
handling equipment. If the building is multi-storied, chutes or ramps for
industrial trucks may be used. The layout itself will indicate the type of
production operation (continuous, intermittent, fixed position or group) and can
indicate some items of equipment that will be more suitable than others. Floor
capacity also helps in selecting the best material handling equipment.
3. PRODUCTION FLOW
If the flow is fairly constant between two fixed positions that are not likely to
change, fixed equipment such as conveyors or chutes can be successfully
used. If, on the other hand, the flow is not constant and the direction changes
occasionally from one point to another because several products are being
produced simultaneously, moving equipment such as trucks would be
preferable.
4. COST CONSIDERATIONS
This is one of the most important considerations. The above factors can help
to narrow the range of suitable equipment, while costing can help in making a
final decision. Several cost elements need to be taken into consideration when
comparisons are made between various items of equipment that are all
capable of handling the same load. Initial investment and operating and
maintenance costs are the major cost to be considered. By calculating and
comparing the total cost for each of the items of equipment under
consideration, a more rational decision can be reached on the most
appropriate choice.
5. NATURE OF OPERATIONS
The selection of equipment also depends on the nature of operations like
whether handling is temporary or permanent, whether the flow is continuous
or intermittent and material flow pattern-vertical or horizontal.
 6. ENGINEERING FACTORS
The selection of equipment also depends on engineering factors like door and
ceiling dimensions, floor space, floor conditions, and structural strength.
7. EQUIPMENT RELIABILITY
The reliability of the equipment and supplier reputation and the after-sale
service also plays an important role in selecting material handling equipment.
Types of Material Handling Equipments
Material handling equipment can be classified into two categories, namely:
1. Fixed path equipment, and
2. Variable path equipment.
a. Fixed path equipment which moves in a fixed path. Conveyors, monorail
devices, chutes, and pulley drive equipment belong to this category. A slight
variation in this category is provided by the overhead crane, which though
restricted, can move materials in any manner within a restricted area by virtue of its
design. Overhead cranes have a very good range in terms of hauling tonnage and
are used for handling bulk raw materials, stacking and at times palletizing
Variable Path equipment
b. Variable path equipment has no restrictions in the direction of movement
although their size is a factor to be given due consideration trucks, forklifts mobile
cranes and industrial tractors belong to this category. Forklifts are available in many
ranges, they are maneuverable and various attachments are provided to increase
their versatility.
Material Handing Types of equipment may be classified into five major categories.
1. CONVEYORS
Conveyors are useful for moving material between two fixed workstations,
either continuously or intermittently. They are mainly used for continuous or
mass production operations indeed, they are suitable for most operations
where the flow is more or less steady. Conveyors may be of various types,
with rollers, wheels or belts to help move the material along: these may be
power-driven or may roll freely. The decision to provide conveyors must be
taken with care since they are usually costly to install; moreover, they are less
flexible and, where two or more converge, it is necessary to coordinate the
speeds at which the two conveyors move.
2. INDUSTRIAL TRUCKS
Industrial trucks are more flexible in use than conveyors since they can move
between various points and are not permanently fixed in one place. They are,
therefore, most suitable for intermittent production and for handling various
sizes and shapes of material. There are many types of a truck- petrol-driven,
electric, hand-powered, and so on. Their greatest advantage lies in the wide
 range of attachments available; these increase the truck’s ability to handle
various types and shapes of material.
3. CRANES AND HOISTS
The major advantage of cranes and hoists is that they can move heavy
materials through overhead space. However, they can usually serve only a
limited area. Here again, there are several types of crane and hoist, and within
each type, there are various loading capacities. Cranes and hoists may be
used both for intermittent and for continuous production.
4. CONTAINERS
These are either ‘dead’ containers (e.g. Cartons, barrels, skids, pallets) that
hold the material to be transported but do not move or ‘live’ containers (e.g.
wagons, wheelbarrows or computer self-driven containers). Handling
equipments of this kind can both contain and move the material and is usually
operated manually.
5. ROBOTS
Many types of robots exist. They vary in size, and in function and
maneuverability. While many robots are used for handling and transporting
material, others are used to perform operations such as welding or spray
painting. An advantage of robots is that they can perform in a hostile
environment such as unhealthy conditions or carry on arduous tasks such as
the repetitive movement of heavy materials.
The choice of material-handling equipment among the various possibilities that exist
is not easy. In several cases, the same material may be handled by various types of
equipments, and the great diversity of equipment and attachments available does
not make the problem any easier. In several cases, however, the nature of the
material to be handled narrows the choice.

CO 3 APPLYING IDENTIFY the various flows in real world supply chains.

1) They are various factors considered for the site selection of a Warehouse. Identify these
 factors and choose the relevant ones for products of your choice making your own
assumptions.
2) Select appropriate packaging material for any two of the following products and justify your
choice:
a) Laptop
b) Edible Oil
c) Cement.
d) Heavy Machinery.

3) Identify the various benefits of a good storage design with suitable examples.

BENEFITS OF A GOOD STORAGE SYSTEM:

December 02, 2014

The following would be some objectives of setting up a good storage system:

a)      To use space efficiently

b)      Allow for most efficient material handing
c)      Provide the most economical storage in relation to cost of equipment, use of space, damage to material,
handling labour and operational safety
d)      To provide maximum flexibility in order to meet storage and handling requirements
e)      To make the store/warehouse a model of good housekeeping
f)        It should be located at a convenient place from where it is easy to receive issue and transport the materials.
g)      Professional appeal. Customers or clients picking goods from the store should get the impression that the stores
are professional laid.

The following should be the benefit of a good storage system:

Cost Factor.
The cost factor is vital in terms of the operational costs, profits and the overall cost of production.
Handling materials is very expensive in terms of equipment, plant, time and labour.  Therefore the more
efficiently and quickly materials can be moved, the less the cost per unit. Efficient use of space reduces waste
of space hence reducing cost of each unit.

Reduce or eliminate damages

Every time an item is moved, it costs money, takes time, and gives an opportunity for damage or
mistake. Efficient warehouses reduce the amount of movement to a minimum, and make the necessary
movements as efficient as possible. The less items are handled or moved, the less likely they will be damaged,
stolen or otherwise mislaid and the less cost will be incurred also when moving items around internally.
Materials damage can be very expensive and will undoubtedly reduce the stock life of
many                                                                                                                                                                           
                                                                                               materials. It can also produce problems of premature
deterioration and the costs that go with it.

Reduce movement
 Materials flow has to be maintained if output and distribution have to be effective.  Transportation starts
from the point of offloading to the storage to the point of production moved through the process back to the
storage and then to distribution. Good storage system plan layout and handling simultaneously for example by
planning layout to ensure that fast moving items have the least length of travel reduces overall handling costs.
Similarly ensuring heavy materials are never placed directly on a floor, but are raised using suitable blocks or
rails reduces handling effort.

Safety of personnel
Health and safety of many members of staff depend a great deal upon the type of materials handling and
storage systems employed, the equipment operated and the level of training among operators.  A faulty system
of poorly trained personnel working in the storage system can lead to serious accidents.

Production Interruptions:
Where manufacturing is involved, proper MHS reduces interruptions in the production. Delays in
delivering materials in the production system result to machines and labour idle time resulting in inefficiencies.
A good storage system ensures that materials are delivered as and when required in the most efficient manner.

Customer satisfaction.
A good storage system ensures that goods are located in the shortest time possible in the store. It takes a
long time to locate an item in a poor storage system. With changing dynamics and stiff competition in the
market, most customers would not wait for long before they move to the competitors. A good storage system
ensures that goods are readily available.

Stock records.
Stock records should be available for any good storage system. The storekeeper can tell how much is
held in stock at any one time. This reduces holding of too much or too little inventory. Stock forms a large part
of working capital and should be well managed to reduce tying a lot of resources in inventory. This can only be
managed when stock records are available.

4) Organizations have various reasons for carrying inventories, identify these reasons citing suitable
examples.

4 Primary Reasons for Carrying Safety Stock

Safety stock inventory is more than just a “nice thing to have”; it’s a necessity. These

are the top four reasons why even small- and mid-sized businesses should carry safety

stock inventory.

1. Protect against unforeseen variation in supply

For example, if your supplier is unexpectedly closed for a week or if there is a disruption

of your order in transit, you don’t waste time fulfilling orders to your customers with
safety stock. Supply chains are longer and more globalized, with more forces causing

disruptions than ever before.

2. Compensate for forecast inaccuracies (only

when demand exceeds the forecast)
Perhaps you have a consistent demand for a certain item but one month you sell more

than you forecasted; with safety stock inventory in place, you don’t sacrifice your

customer service level while you replenish.

3. Prevent disruptions in manufacturing or

deliveries
The purpose of safety stock is to make sure your customer service levels stay high –

and your supply chain runs smoothly. With safety stock in place, your workers are not

running around trying to constantly locate and reorder parts – they’re fulfilling orders to

your customers.

4. Avoid stock outs to keep customer service and

satisfaction levels high
The real goal of safety stock? Keeping customers happy. While safety stock also helps

to keep your warehouse and supply chain running smoothly, the end goal is to make

sure that your customers will be satisfied and keep coming back.

But it’s important to keep in mind that, like the rest of your inventory, safety stock

requires more than just a “one size fits all” approach. With rule-based approaches, the

safety stock inventory determinations are relatively static and not linked to other

important factors, such as service level, forecast accuracy and lead time variability.
Since each SKU in your inventory has a unique demand pattern, you need to adjust

your safety stock levels accordingly.

Rule-based approaches are proven to be less effective in determining optimal inventory

levels for many operations. Plus a sound, mathematical approach to safety stock

calculations will not only justify the required inventory levels to business leaders, but

also balance the conflicting goals of maximizing customer service and minimizing

inventory cost.

CO 4 ANALYSING IDENTIFY the various flows in real world supply chains.

1) A service organization is covering a broad spectrum of activities. Distinguish between the

various Customer Phases and analyze the various activities coming under these phases.

Stages of the customer life cycle

The customer life cycle comprises five stages. We’ll walk through each here, but keep in mind that
customers may actually drift back and forth between stages, and even repeat some, such as when
the client takes into consideration the value delivered by a new product offering even if they bought
other products from you in the past.

1. Awareness

The first stage in the customer life cycle is the awareness phase. This is the point where a consumer
first becomes aware of your business offerings.

A customer may find your business in many ways. For example, they may use a search engine like
Google, and come across your business in the search results. Other common means of discovery are
for the consumer to see an advertisement for your business, or get a referral through word of mouth
or social media.

All customers start in the awareness stage. They must learn about your business before they can
engage with you, so it is typically considered the most important phase in the customer life cycle.

It can also be the most expensive for your business from a cost per acquisition perspective,
especially if you run ads to raise awareness among your target audience of consumers.

Therefore, you want to make sure any outreach to potential customers, called prospects, is done in a
coordinated, planned fashion. Build out a small business marketing plan. Think about your product
positioning. You may even need to create a marketing proposal if you have to sell your plan to others
in the organization.

As part of this, ask yourself how you want to go about creating awareness with new clientele by
considering which small business marketing tactics you want to leverage as part of your marketing
plan. Do you choose to go with advertising?

Do you want to try inbound marketing through methods such as search engine optimization (SEO)? If
you’ve constructed buyer personas, a profile of your target customers, it becomes easier to know
which marketing tactics will likely work best to reach your intended audience.

Maximizing awareness:
Because this is one of the key stages of the customer life cycle, take time to consider your options
based on your budget and what kinds of objectives you want to achieve, for example, if you want to
grow new acquisitions by 5% for the month. Here are some tips to help.

 Collect data: When you’re building an acquisition strategy for the first time, you don’t know which tactics
will ultimately work best to raise awareness and bring customers into your sales funnel. Therefore, set
up a means to capture data that you can analyze to help you zero in on the tactics that ultimately work
best. For instance, if you want to set up a website, you’ll need to set up tracking software such as
Google Analytics on your site to identify where consumer traffic is coming from. This data collection can
also be as simple as asking customers how they heard about your business.
 Use different tactics: Try a variety of methods to acquire customers. Test different tactics one at a time
until you have a body of data that helps you identify the ones that work best in terms of meeting your
objectives. For instance, perhaps advertising on Facebook works better at delivering customers than
SEO. You won’t know unless you try various methods, so keep an open mind and be willing to spend
even a modest amount of your budget on different tactics.

2. Consideration

In the consideration stage, the consumer has discovered your business and is now collecting
information to weigh the pros and cons of your offerings. Sometimes, this assessment is against your
competition.

Other times, the consumer is contemplating how well your solutions fit their needs whether that be
their budget, the outcomes they’re looking for by using your offerings, or other factors like ease of
use.

Consumers will use the information on your website as the primary means of determining whether or
not to buy. They will also examine consumer review sites, social media, or even call your business to
collect answers they cannot get otherwise.

It’s at this stage that a consumer might enter your sales funnel as a prospect or lead. To encourage
that, your business website should be set up to engage with the customer in a genuine way so that
they don’t feel sales pressure. The website should also make it easy for consumers to provide
contact info in order to enter your sales funnel.

It’s also a good idea to use a marketing campaign to tip consumers in the consideration stage into the
purchase stage. At this point in the customer life cycle, be sure you’re using an integrated
marketing campaign so that the outreach doesn't become disjointed given that the consumer is
already aware of your company.

Maximizing consideration:
The key at this stage is to tailor your communication with the client so that it’s personalized. If the
customer has sent an email requesting a quote, your response should incorporate their name.
On your website, offer the ability to sign up to a free newsletter as a means of capturing customer
contact info, then be sure the newsletter and any subsequent outreach is personalized to that
prospect by again referencing them by name or tailoring the newsletter content to their interests.

Here are additional suggestions to help make this phase a success.

 Leverage a CRM: CRM software, such as HubSpot, is key to the success of a business, particularly at
this and the post-purchase phases. The reasons are many, including a CRM’s ability to inject
personalized messaging at scale. A CRM also tracks customer interactions with your business and
helps you segment consumers into the various stages of the customer life cycle, making it easier for
you to track where each customer is at, and to engage them accordingly.
 Provide access to information: Provide the information on your website necessary to help customers
make decisions about your products or services. Post case studies or customer testimonials on the
site. Also, make sure your website design is laid out to facilitate a smooth, engaging experience. One
way of doing this is to leverage a content management system (CMS) to build your website, or if your
site is already in place, to create landing pages that tie into the tactics you used in the awareness
phase. In this way, the landing page can speak to the customer in a more specific manner. For
instance, if customers arrive through search engines using the keyword "best dentist," provide a
landing page with information on your credentials and any awards or high customer ratings you may
have received on sites like Google Maps and Yelp as well as the factors that differentiate your dentistry
from competitors.
 Offer a carrot: To help move customers from the consideration phase to a purchase, give them some
type of benefit for entering your sales funnel. For instance, offer a discount on their first purchase if they
sign up for your newsletter or provide you with contact info.

3. Purchase

Here, we arrive at the point where a prospect becomes a customer. They’ve evaluated your offerings
and decided to buy from you.

But just because a customer reaches this stage does not mean the purchase is guaranteed. If you’re
an e-commerce business, it’s possible for a customer to abandon their selection in your website’s
digital shopping cart.

Or if your website doesn’t clearly state how to make a purchase, or that purchase process involves
too many steps, the customer’s likelihood to give up increases.

Therefore, take a look at your purchase workflow and track how many customers drop off before the
purchase is complete. This insight allows you to find and fix those points where customers are getting
stuck.

Maximizing purchases:
Once your hard work in the prior stages results in a sale, it’s not time to rest on your laurels. Every
purchase should be followed with a thank-you email. This can be executed automatically if you
employ a CRM. This deepens the relationship with the customer and motivates them to come back.
Here are other suggestions to help.

 Collect more data: You want to collect data about the kinds of customers who make a purchase so you
can find more like them to target during the earlier stages. Therefore, you want to use sales tracking
software to collect this information. A CRM can offer this as well as Google Analytics and perhaps also
the advertising platform employed in the earlier stages of the client life cycle.
 Remove purchase barriers: Adding functionality such as chat to your website can help remove barriers
for customers to make a purchase. Through a chat box, customers can ask questions and receive an
instant response. Look for chat software that can automatically respond to the most frequent questions,
and pass harder questions to your team.
  Perform follow up: If you’re an e-commerce business, adopt e-commerce software that automatically
follows up with customers who abandoned items in their digital shopping carts to remind them to
complete their purchase.

4. Retention

The retention phase is all about deepening the relationship with the customer after the purchase so
that they are more likely to buy from you again. This happens by providing follow-ups, reminders, and
promotions to customers, usually via email.

Once a customer makes a purchase, consider what related products they might be interested in and
recommend those to the client. Your client management software will come in handy again, here, to
keep all of your information about a customer in one place.

Also, keep the customer engaged in your business by providing regular updates, such as offering
promotional discounts for additional purchases or sharing information about the latest happenings
with your business. It’s about keeping the customer connected to your company.

One method of doing so is to apply various marketing channels to perform outreach. Because you’re
targeting consumers who are already customers, your costs are lower and your conversion rate is
typically better than those consumers at the awareness or consideration phases.

Maximizing retention:
You can employ several techniques to grow retention.

 Hand-hold customers: If your offering requires some type of onboarding, you want to hand-hold your
customers as quickly as possible so they are able to make use of their purchase. This can include
sending customers links to online video tutorials or scheduling a time to offer training.
 Provide support: At this point in the customer service life cycle, it’s about ongoing support and service.
Proactively reach out to customers via email or phone call to check in with them and answer questions
about their purchase. Also include FAQs or other helpful documentation on your website.
 Personalize communication: It’s important to personalize your communication with customers at the
retention stage. You know what the customer bought, so base your outreach on this, such as
suggestions for related products. A CRM can track this kind of detailed information at the individual
customer level to help you scale your business.
 Encourage additional sales: Pay attention to the types of follow-up that evoke additional purchases. For
example, casinos know that sending an offer for a free hotel room generates a response in some
customer segments while a free lunch buffet is all it takes for others. If you see customers tend to make
further purchases when you provide an email with a discount code, that’s the approach you want to
take. Just be sure not to use the technique too frequently or it will stop working due to customer fatigue.

5. Advocacy

The last stage is when a customer becomes so fond of your organization that they become advocates
for your brand. They tell friends and colleagues, and recommend your business to others through
online reviews.

These brand loyalists are the means by which you can not only generate additional sales, but also
expand your customer base.

Maximizing advocacy:
It takes time and careful effort to build brand loyalty. Once a customer reaches this level, you want to
move them to a special client category where they receive unique perks or other incentives to keep
them actively engaged in your business.
 Implement a loyalty program: Create a loyalty program that rewards customers for shopping at your
business. Starbucks employs this tactic, offering free drinks and food items once customers
accumulate enough points through purchases.
 Create a referral program: Sometimes a loyalty program does not make sense for your business type,
such as a service business like a dentist. Therefore, instead of a program based on purchase
frequency, create a referral program that rewards customers for bringing in new business.
 2) An established apparel brand is setting up a new store in a upcoming location in Hyderabad.
Examine the various Storage principles considered while constructing the new stores.

Safe storage principles

 Store heavy and frequently used items in the ideal zone - between shoulder and mid thigh.
 Store smaller, lightweight or infrequently used items in lower or higher areas.
 Organise cupboards and storage areas to lessen clutter and allow easy access to shelves. Plan for
regular audits of storage areas. Assign responsibility within a work group for maintenance of storage
areas.
 Frequently handled items should be within easy access and reach.
 A sturdy step or stepladder should be easily available to access items stored above shoulder height.
 If a ladder is required an intermediate support point may be necessary to allow lifting and lowering of
items safely in stages.
 Keep a clear bench for delivery of goods to avoid lifting from ground level (if applicable).
 Consider current and likely future storage needs in any workspace redesign or before new equipment
is purchased.

3) The new trend of Buyers and Sellers seeking the help of 3PL for supporting their supply chain
activities is prominently seen. What is the motive of going towards 3PL? List the various
activities wherein they can utilize the services of 3PL service providers.

What is Third Party Logistics (3PL)?

Third party logistics or 3PL is a service that enables enterprises to outsource or make use of third -
party businesses to carry out tasks to completion in its supply chain.

 3PL providers are companies that offer comprehensive and even one-stop solutions for enterprise
supply chains in packaging, warehousing, transportation and order fulfilment.
 3PLs can identify and fill the gaps in your supply chain.
 Their expertise, best practices and technologies can integrate into your business processes to solve
the most complex challenges in logistics management and make your supply chain a more agile,
responsive function — a necessity in today’s uncertain market environment.

Working with a 3PL provider is a partnership and must be treated as such rather than as a
transactional relationship.

Why to use Third Party Logistic Services?

It could be to expand customer base, venture into new markets, or create positive consumer
experiences, but more and more businesses — big and small — are looking for external support and
expertise to run their supply chain more efficiently and gain competitive advantage. And that’s where
a third-party logistics (3PL, also known as TPL) provider comes in.

Here are the 6 key benefits of 3PL in supply

chain management:
Drive Cost Savings
Third Party Logistics firms specialize in logistics and thus have a more extensive network than your
company’s supply chain function. They have exclusive relationships within the logistics sector, and
can have greater influence during negotiations, They can also help to offer greater volume discounts
to clients. All of this can minimize overhead costs.

By partnering with a 3PL supply chain management firm, you can also save on making huge
infrastructure investments as it can provide transportation, warehouse space, staff and tracking
technology, among other things.

Get Access to Expertise and Experience

In today’s complex global market scenario, it is tough to anticipate and accommodate internal
expertise in all the capacities and regions required. A 3PL service provider has knowledge and
experience in matters such as transport documentation, import and export, international compliance
and economic regulations, for instance. Businesses looking to expand into international markets can
benefit from the logistics support and know-how that their partner can provide, thereby reducing
costly delays, cutting down the cycle time, and making the entry into a new region smoother.

Focus on Core Competencies

Outsourcing logistics will give your organization the leeway to focus on its core competencies
instead of getting involved in the management of non-core but critical functions. Your business can
enjoy the benefits of logistical expertise without deploying internal resources.

Gain Flexibility and Scalability

Another advantage of third-party logistics in supply chain management is that it offers enterprises the
flexibility and scalability to utilize supply and distribution resources based on current business needs.
Thus, when sales are down, there are no redundant investments and unutilized resources, and when
there’s a surge in demand, enterprises can upscale. 
Enable Business Growth and Market Expansion
The role of third-party logistics in supply chain management is to drive business growth by giving
companies access to markets where they don’t have established presence. Being able to manage
inventory in a new market without having to spend money on warehousing, equipment, and labor can
save money, as well as the effort of learning the logistical nuances of a new market.

Improve Customer Satisfaction

All of the aforesaid 3PL benefits will lead to improved services and response time, timely deliveries
and greater brand reliability. This translates to satisfied customers — the fundamental goal of all
businesses.

4) Examine the various components of Supply Chain Management and list the activities coming
under the three areas.
Supply chain management is made up of a few components that are very important as well as critical
to the system. We shall discuss each of the components in brief.

1. Planning
This is one of the most important stages. Before the beginning of the entire supply chain, it is
essential to finalise the strategies and put them into place. Checking the demand for the product
or service, checking the viability, costing, profit, and manpower etc., are vital. Without a proper
plan or strategy in place, it will be well-nigh impossible for the business to achieve effective and
long term benefits. Therefore, enough time has to be devoted to this phase. Only after the
finalisation of the plans and consideration of all pros and cons, can one proceed further. Every
business needs a plan or blueprint or a roadmap based on which the strategies are made.
Planning helps to identify the demand and supply trends in the market and this, in turn, helps to
create a successful supply chain management system.
2. Information
The world today is dominated by a continuous flow of information. In order to be successful, it is
essential that a business stays abreast with all the latest information about the various aspects of
its production. The market trends of supply and demand for a particular product can be best
understood if the information is properly and timely disseminated through the many levels of the
business. Information is crucial in a knowledge-based world economy, and ignorance about any
aspect of business may actually spell doom for the prospects of the business.
3. Source
Suppliers play a very crucial role in supply chain management systems. Products and services
sold to the end user are created with the help of different sets of raw materials. It is therefore
necessary that suitable quality raw materials are procured at cost effective rates. If a supplier is
unable to supply on time, and within the stipulated budget, the business is bound to suffer losses
and gain a negative reputation.
It is crucial that a company procures good quality resources so it can create good quality products
and maintain its reputation in the market. This necessitates a strong role for suppliers in the supply
chain management system.
4. Inventory
For a highly effective supply chain management system it is essential that an inventory is kept and
thoroughly maintained. An inventory means the ready list of items, raw materials and other essentials
required for the product or service. This list has to be regularly updated to demarcate available stock
and required stock. Inventory management is critical to the function of supply chain management,
because without proper inventory management the production, as well as sale of the product, is not
possible. Businesses have now started to pay more attention to this component simply because of its
impact on the supply chain.
5. Production
Production is one among the most important aspects of this system. It is only possible when all the
other components of the supply chain are in tandem with each other. For the process of production to
start it is essential that proper planning and supply of goods, as well as the inventory, are well
maintained. The production of goods is followed by testing, packaging and the final preparation for
delivery of the finished product.
6. Location
Any business, that wants to survive as well as flourish, needs a location which is profitable for the
business. Take for example, a carbonated drink factory is set up in an area where water supply is
scarce. Water is a basic necessity of such business. The lack of water could hamper the
production as well as affect the goodwill of the company. A business cannot survive if it has to
share an already scarce raw material with the community. Hence, a suitable location, which is
well connected, and very close to the source of essential resources for production is vital to a
business’ prosperity. The requirement and availability of manpower must also be considered while
setting up a business unit.
7. Transportation
Transportation is vital in terms of carrying raw materials to the manufacturing unit and delivering
the final product to the market. At each stage, timely transportation of goods is mandatory to
sustain a smooth business process. Any business which pays attention to this component, and
takes good care of it, will benefit from the production and transportation of its goods on time.
It is essential that a company works towards a safe and secure transportation process. Be it in-
house or a third-party vendor, the transportation management system must ensure zero damage
and minimal loss in transit. A well-managed logistics system along with flawless invoicing are the
two pillars of secure transportation.
8. Return of goods
Among the various components that create a strong supply chain is the facility for the return of
faulty/malfunctioning goods, along with a highly responsive consumer grievance redress unit.
No one is infallible. Even a machine may malfunction once in a million times if not more. As a part
of a strong business process, one may expect the return of goods under various circumstances.
Even the best quality control processes may have unavoidable momentary lapses. In the case of
such lapses, inevitably followed by consumer complaints, a business must, instinctively, recall the
product/s and issue an apology. This not only creates a good customer bonding, but also
maintains goodwill in the long run.
The eight components discussed here are interdependent and ensure a smooth supply chain
management system. It ensures the success and reputation of a business. A business must focus
on all these components in order to create a flawless supply chain.
Businesses that have a strong supply chain management system in place always put great
emphasis on all the components listed, and also ensure that management, as well as the teams
at various levels, play by the rules. Profit is the bottom line and to make sure that the business
achieves it, it is essential that the supply chain does not have any gaps. Any snag should be dealt
with immediately and the weak links repaired or removed.
Demand and supply are two of the most important aspects of a business. For any business to be
successful, trends, with respect to demand and supply, need to be studied carefully while
 implementing an effective plan of execution. A supply chain management system is required not
just for the timely manufacture of goods; it is also a very critical system for ensuring that
consumer requirements are met effectively.

CO 5 EVALUATING EXPLAIN the Reverse Logistics and its linkage to

Sustainability in Supply Chain Management.

1) Supply Chain Consultant of ABC company is discussing with the management team the design of
the Supply chain of a newly launched product. Evaluate the three flows of Supply Chain considering
a product of your choice and appraise the management about the new proposed supply chain.
2) The stores team at a leading Home Appliances manufacturing firm is discussing their last two years
Inventory reports. The team is having the data of the Inventory under the heading of Current Assets.
Few team members are criticizing about the Inventory valuation done as assets. They have an
opinion that few of these figures are liabilities. Interpret the situation and cases wherein the
Inventory could be explained as liabilities.
3) Hind Logistics is a leading transportation company. Their management has decided to
diversify and enter into Warehousing business and are seeking your advice. You as a
consultant recommend the various services of Warehousing they can offer to their clients.

4) Determine the various short term and long-term benefits for the buying and selling organizations
to go for Vendor Managed Inventory model. Assess the challenges to adopt this model in
practice.