International Journal of Applied Engineering Research, ISSN 0973-4562 Vol.7 No.

11 (2012)
© Research India Publications; http://www.ripublication.com/ijaer.htm

Increasing sale, Profit rate and Productivity Improvement Using Supply Chain
Management: A Case Study
Mohd javaid, Assistant Professor,
Department of Mechanical Engg.
National Institute of Technology Kurukshetra (HR), INDIA.
mohdjavaid0786@gmail.com

Dixit Garg, Professor,

Department of Mechanical Engg.
National Institute of Technology Kurukshetra (HR), INDIA.
dixitgarg@yahoo.co.in

Ashif Ali, Assistant Professor,

Department of Mechanical Engg.
Dev Bhoomi Group of Institute, Saharanpur (U.P.)
ashifali777@gmail.com

Abstract: Supply Chain Management is a set of synchronized decisions

The key effective to supply chain management is the process
of moving goods from the customer order through the raw
materials stage, supply, production and distribution of
products to the customer in good quality and less cost having
customer almost satisfaction.
In today’s global economy, effective supply chain
management is vital to the competitiveness of manufacturing
enterprises as it directly impacts their ability to meet changing
market demands in a timely and cost effective manner. The
objectives of the study to learn the strategic importance of
good supply chain design, planning and operation for every
firm. This study helps when we using to supply chain
management there is increase in sale, productivity, profit rate,
and reduced in production cost by using some technique in
XYZ Pvt. Ltd.
The evolution the quality role in supply chain management will
be shaped by the goals of reducing procurement risk and
overhead. This involves reducing the effects of sub-standard
materials on process efficiency, product quality, and exposure
to product liability. Overhead reduction involves transferring
incoming inspection responsibilities to vendors and moving the
customer’s quality function to an audit mode. Critical health
and safety issues still require inspection. The procurement
model evolves from lowest price to a lowest total cost, highest
value model. This process requires ever closer vendor-customer
data interchange and process integration.
and activities utilized to efficiently integrate suppliers,
manufacturers, warehouses, transporters, retailers, and
customers so that the right product or service is distributed at
the right quantities, to the right locations, and at the right time,
in order to minimize system-wide costs while satisfying
customer service level requirements[1].
A supply chain is the process of moving goods from the
customer order through the raw materials stage, supply,
production and distribution of products to the customer.
In the simplest terms, supply chain management is the method
of creating products for the end user. It spans the suppliers of
raw materials, the manufacturing units, warehouses,
transporters, distributors, retailers and finally selling.
2. HISTORY AND BACKGROUND OF SCM
The origins of the technique we now know as supply chain
management are thought to lie in the shipyards of Japan and
were first used in the early 1950s. The technique was later used
in the car manufacturing industry and in particular was
pioneered, again in Japan, by Toyota. It is true to say that there
are many people throughout the World who believe that it is
the peculiarities and uniqueness of Japanese culture that
permitted not only the wide spread adoption of SCM in
Japanese manufacturing but also restricts its application and
transfer to other countries and other cultures outside of
Japan[2].

1. INTRODUCTION 3. WHY SUPPLY CHAIN MANAGEMENT

The term “supply chain management” arose in the late 1980s
and came into widespread use in the 1990s. A supply chain
consists of a network of facilities and distribution options that
performs the functions of procurement of materials,
transformation of these materials into intermediate and
finished products and the distributions of these finished
products to customers.
Supply chain management is the practical expression of such a
concepts of how to manage the enterprise strategically and
operationally so as to retain and gain competitive edge in the
market place.
In 1980’s companies discovered new manufacturing
technologies and strategies that allowed them to reduce cost
and better compete in different market. Strategies such as just
in time manufacturing, kanban, lean manufacturing, total
quality management and others become very popular and vast
quantities of resources were invested in implementing these
strategies. In the last few years, however, it has become clear
that many companies have reduced manufacturing cost as such
as is practically possible. Many of these companies are
discovered that effective supply chain management is the next
 International Journal of Applied Engineering Research, ISSN 0973-4562 Vol.7 No.11 (2012)
© Research India Publications; http://www.ripublication.com/ijaer.htm
step they need to take, in order to increase profit and market
share [1].
4. THE OBJECTIVE OF SCM
The most important objective of every supply chain should be
to maximize the overall value generated. The value a supply
chain generates is the difference between the final products is
worth to the customer costs the supply chain incurs the filing
the customer request. For most commercial supply chains value
will with supply chain profitability (also known as supply chain
surplus), the difference between the revenue generated from the
customer and the overall cost across the supply chain [3].
5. LITERATURE REVIEW
Keith Goffin[4] [1996] performed case study on four
companies related to supplier base management and also
stated that Supplier Management is key and much of the
literature talks about the trend to reduce supplier base. Further
research at four companies looked at their experiences with
suppliers and established that a key reason for supplier base
reduction is to free time to more effectively manage the
remaining suppliers. The exploratory case studies identified
some of the key factors related to supplier base reduction and
extend the understanding of supplier management in the
electronics and process sectors, on which there was only scant
previously published material. The main reason for supplier
base reduction was the need to more effectively manage
suppliers.
Qin Lu [5] [2000] dealt with the technology, production and
sales of consumer electronics has increased dramatically in
recent years. As a result, the volume of discarded products
also continues to grow rapidly. Thus, it is important to divert
end-of-life products from landfill disposal for reuse or
materials recycling via product take-back. A systematic and
practical framework is needed for the reverse supply chain.
The review exists models, identify gaps and overview several
new models and developed a practical framework to address
the challenges in the reverse supply chain. At each level of the
decision hierarchy, analyzed the problems and review existing
and new research and presented an inventory control heuristic
for returned low-value products and also presented the results
of a simulation model to address the batching strategy problem
in the material recovery center.
Marc Chouinard6] [2005] dealt to benefit from the
complementary nature of material and information flows of
the supply chain and reverse logistics, a total network vision
should be used to improve the coordination and collaboration
among the various actors. They also require complete
information about products (constitutive parts, condition, etc.)
and the state of the network (order, inventory level, etc.). This
explained why it is important to support and control all the
activities of the organization in order to optimize the use of the
products through their life cycle, while respecting the quality
standards fixed by the organization.
Yaqin Zheng[7] [2005] stated that integrated supply chain
management has gained popularity in recent years due to both
environmental necessity and the potential for increased profits.
Information systems are key to integration processes as they
can reduce coordination problems and create improved
visibility. For reverse logistics to be successful, information
integration between the supply chain partners is even more
important. Enterprises involved in reverse supply chain should
choose suitable and flexible managerial mechanism of
information integration in the whole closed-loop supply chain
to gain overall profits.
Sanjay Kumar[8] [2007] described that material is one of the
important resources without which not even a single industry
will function and therefore, optimum utilization of this
resources will contribute a lot in over all improvement in
material productivity. Optimization of utilization of materials
becomes critical task because lot of capital is consumed in
terms of materials. Therefore company is looking for new
techniques to reduce the cost and increase the productivity
Research showed that in global competitive environment
industry is looking for new methods and new techniques to
increase their efficiency.
Olivier Lavastre [9][2011] State that Supply Chain Risk
Management (SCRM) plays a major role in successfully
managing business processes in a proactive manner. Supply
chain risk has multiple sources including process, control,
demand, supply and environment. Supply chain management,
faced with these risks, requires specific and adequate
responses such as techniques, attitude and strategies for
management of risk.
Daniel Rexhausena [10][2012] viewed as the key (physical)
link between a company’s internal supply chain activities and
its customers. More recently, demand management has
emerged as a new dimension at the customer interface.
Although it has become increasing popular in industry, it has
not yet been analyzed in depth with respect to its impact on
supply chain performance. Both distribution management and
demand management entail customer-facing processes and
practices and that are interrelated and (may) jointly determine
supply chain performance
6. WHAT IS SUPPLY CHAIN?
Supply Chain Management is the management of a network
of interconnected businesses involved in the ultimate provision
of product and service packages required by end customers.
Harland definition [11]: Supply chain management spans all
movement and storage of raw materials, work-in-process
inventory, and finished goods from point of origin to point of
consumption
Mentzer et al definition [12]: Supply chain management is the
systematic, strategic coordination of the traditional business
functions and the tactics across these business functions within
a particular company and across businesses within the supply
chain, for the purposes of improving the long-term
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© Research India Publications; http://www.ripublication.com/ijaer.htm
performance of the individual companies and the supply chain
as a whole
Hines definition [13]: Supply chain strategies require a total
systems view of the linkages in the chain that work together
efficiently to create customer satisfaction at the end point of
delivery to the consumer. As a consequence costs must be
lowered throughout the chain by driving out unnecessary costs
and focusing attention on adding value. Throughout efficiency
must be increased, bottlenecks removed and performance
measurement must focus on total systems efficiency and
equitable reward distribution to those in the supply chain
adding value. The supply chain system must be responsive to
customer requirements.
Lambert definition [14]:- Supply chain business process
integration involves collaborative work between buyers and
suppliers, joint product development, common systems and
shared information. According to Lambert, operating an
integrated supply chain requires a continuous information flow.
However, in many companies, management has reached the
conclusion that optimizing the product flows cannot be
accomplished without implementing a process approach to the
business.
7. IMPLEMENTATION OF SUPPLY CHAIN
MANAGEMENT:-
In today global market managers are realizing that their
supplier have a major influence on the customer satisfaction
level. A quality product is not enough by itself, a company
must get the product to its customer when where and how they
it and what quality and cost they want.
8. BENEFITS OF SUPPLY CHAIN MANAGEMENT:-
Supply chain management can cover the entire product cycle,
from the introduction of raw materials to the points at which
the consumer purchases the product. Supply chain management
is a collaborative-based strategy to link across enterprise
business operations to achieve a shared vision of market
opportunity. It is a comprehensive arrangement that can span
from raw material sourcing to end — consumer purchase. A
company should implement supply chain management because
of its powerful impact of short and long term goals like profit, 10. CUSTOMER BASE:-
market share, and customer satisfaction.
XYZ PVT LIMITED, ROORKEE (UTTARAKHAND)
9. COMPANY PROFILE
XYZ Pvt. Ltd. initiated in 2006. The Company has earned all
these years to acquire a distinctive identity for its brand as
well as company name XYZ Pvt LTD is a private limited
company, manufacturing stone crushers. It is located at Raipur
Industrial Area, Bhagwanpur, Roorkee, Uttarakhand. It is
approximately 200 kms from Delhi.
XYZ Pvt. Ltd is a part of the Taurian group companies
owned and managed by the promoters, the Bajla family.
Taurian Iron & Steel Co. Pvt. Ltd. is the flagship
company of this group.
XYZ Pvt. Ltd was originally incorporated in 1999 to
Import, export, manufacture & market leather articles.
Following globalisation, the company promoters decided
to diversify and restructure the entire group. They chose
to move from XYZ Pvt. Ltd’s business of trading leather
items to Manufacturing & Marketing of Crushing &
Screening Plants for mining and aggregate industry in
2006.
Company is leading manufacturer of Mobile Crusher &
Screening Plant up to 350 TPH, Stationery Plant, Cone
Crusher, Jaw crusher, VSI (Sand Making Machine). Company
crushing plant is very competitive in price as compare to other
brands in market. Stable performance and easy maintenance:-
The mobile crushing station in JAMBO series and VSI series
crushers. It has the features of high efficiency, multifunction,
good quality of crushers, reasonable structure and brilliant
crushing capability. It can furthest satisfy the crushing and
screening requirement of coarse, medium coarse, fine
materials. The technical is mature. It is easy maintenance. The
adaptability and the stability is good in transporting quantity,
materials size and causticity. The integration unit is easy for
installation and maintenances and this makes the unit take the
features of longer working time and higher durability.
The total land area: – 80,000 Sq.ft
The total covered area: - 60,000 Sq.ft
Employee strength: – 140
Product profile: – 100% Stone crusher
Annual production volume: - 18
Type of equipments:- lathe, MIG, Arc welding, Die casting,
heat treatment, molding, Machining, Grinding, Bore milling
machine, Milling machine, Surface grinding machine Shaper
machine, Turning, Shaving etc.
Work schedule operations: One shift
Business Year (2010 – 2011): 40 crores
Work timings:- 9:00AM to 5:30PM
Type of product made by the company
1. Mobile crusher
2. Fixed plant
3. Verticle shaft impector
4. Jaw crusher
5. .Cone crusher
The product of XYZ has public sector dealing.
11. ORGANISATIONAL STRUCTURE OF XYZ:
Organisational structure of XYZ is shown in figure1
 International Journal of Applied Engineering Research, ISSN 0973-4562 Vol.7 No.11 (2012)
© Research India Publications; http://www.ripublication.com/ijaer.htm
Figure1:- Organizational structure of XYZ
12. LAYOUT OF PLANT—XYZ:
XYZ Pvt. Ltd has many kind of processes. Equipments are
arranged in such order that production flow does not stop.
Layout of XYZ Pvt. Ltd is shown in fig 2
Fig 2:-Plant layout of XYZ
13. WHAT IS STONE CRUSHER?
A stone crusher is a machine designed to reduce large rocks
into smaller rocks, gravel, or rock dust. Crushers may be used
to reduce the size, or change the form, of waste materials so
they can be more easily disposed of or recycled, or to reduce
the size of a solid mix of raw materials (as in rock ore), so that
pieces of different composition can be differentiated. Crushing
is the process of transferring a force amplified by mechanical
advantage through a material made of molecules that bond
together more strongly, and resist deformation more, than
those in the material being crushed do. Crushing devices hold
material between two parallel or tangent solid surfaces, and
apply sufficient force to bring the surfaces together to generate
enough energy within the material being crushed so that its
molecules separate from (fracturing), or change alignment in
relation to (deformation), each other. The earliest crushers
were hand-held stones, where the weight of the stone provided
a boost to muscle power, used against a stone anvil. Querns
and mortars are types of these crushing devices.
14. TYPE OF STONE CRUSHER
1. Jaw crusher
2. Gyratory crusher
3. Cone crusher
4. Impact crusher
5. Hydraulic cone crusher
6. Hammer crusher
7. Horizontal shaft impactor (HSI) / Hammer mill
8. Vertical shaft impactor(VSI)
15. SUPPLY CHAIN IN XYZ
XYZ have different department like engineering, R&D,
purchase, quality, production, heat treatment and logistic and
have good collaboration in each department. XYZ is getting
good response from its customer. Whole supply chain in XYZ
is divided into different part as shown in fig 5.7. Firstly
purchase department and then engineering or R&D department
receive order its customer. When customer require that
product before about 1 year left to start the production. It
receive order from its customer and along with it’s receives
drawing of all part that it has manufacture for its customer.
Now XYZ study this drawing and give order to supplier for
material. Customer requires development plan and give a fix
date to submit it. After this company submit its plan of all
process and drawing and get approved from its customers.
Then the product is made according to customer requirement
that what type of product he need such as he want to need jaw
crusher. After manufacturing customer check the product and
purchase it. Supply Chain in XYZ is shown in figure 3
Fig3:- Supply chain in XYZ
16. ROLL OF VENDER IN SCM
XYZ depends on other vender, and yearly give rating to them
according to their performance.
In this for buying specific part XYZ have to depend
permanently on that vender. It buys raw material from vender
according to requirement and sometime customer asked to buy
material from some specific supplier’s. So SCM plays a big
role in vender development. XYZ makes a schedule for its
 International Journal of Applied Engineering Research, ISSN 0973-4562 Vol.7 No.11 (2012)
© Research India Publications; http://www.ripublication.com/ijaer.htm

entire vender for continuous supply of raw material and final 19. SCM TARGETS
product to avoid line break down. Taking the objectives in to consideration we set the following
target as shown in Table 1
17. INBOUND LOGISTIC IN XYZ

Fig4:- Inbound logistic in XYZ

18. OUTBOUND LOGISTIC IN XYZ

Table1:- SCM Target

20. SALE TURNOVER OF XYZ:-

Fig5:- Outbound logistic in XYZ

Fig 6 :- Sale turnover of XYZ

 International Journal of Applied Engineering Research, ISSN 0973-4562 Vol.7 No.11 (2012)
© Research India Publications; http://www.ripublication.com/ijaer.htm

Area of the company is not so big when company is started .It

21. OPERATING PROFIT RATE OF XYZ:- create problem in inventory. So company should increase its
floor area. So that inventory can make maximum and help in
continuous supply of material and final product to the
customer.
Generally company is using 3 month inventory of raw
material that require more floor area and also increase the
overall cost of final product.
Company has not trained employees, so training should be
provided by the company to its entire employees and
coordination of workers is also not good in the company, so
coordination is improved by the workers.
Company is not serious about the continuous visiting to its
vender customer sites that create problem in the continuous
supply of product from vender due to its stoppage of assembly
line in the company. So company should make schedule
visiting customer production site.
Sometimes due to erosion. It damage the product so company
do the packaging carefully and increase the packaging
standard.
Company is not serious about development of product. So
Fig 7:- Operating profit rate of XYZ
company has to decrease the weight of product. So it is easy to
handling and also decreases the cost of product.
From the above reseach it conclude that, by applying Supply
22. PRODUCTION COST OF XYZ:-
chain management company has to increase profit,
productivity, sales and decrease in manufacturing cost of
100 product.
80
25. CONCLUSION AND FUTURE SCOPE OF WORK
% of sales

60 In today’s global economy, effective supply chain

management is vital to the competitiveness of manufacturing
40 enterprises as it directly impacts their ability to meet changing
market demands in a timely and cost effective manner. With
20 annual worldwide supply chain transactions in the trillions of
dollars, the potential impact of performance improvements is
0 tremendous. While today’s supply chains are essentially static,
2005 2006 2007 2008 2009 2010 2011 2012 relying on long-term relationships among key trading partners,
Year more flexible and dynamic practices offer the prospect of
better matches between suppliers and customers as market
Fig8:- Production cost of XYZ conditions change. Adoption of such practices has however
proven elusive, due to the complexity of many supply chain
23. Productivity in XYZ:- relationships and the difficulty in effectively supporting more
dynamic trading practices.
100
26. CONCLUSION
80 Management of a supply chain means managing all the
different processes and activates that produces value in the
60 ultimate consumer. Companies that intend to compete globally
should implement supply chain management. It is a vital that
%

40 they must continually reach new customers and attract their

existing customers. The leading companies, who have
20 implemented the approach, are found to operating with lower
logistics cost than the average. Management of supply chain
0 requires the planning and control of activities a desired goal
and shaping the organization by coordinating activities, goal
2005 2006 2007 2008 2009 2010 2011 2012 interest and relationship to be able to resolve conflicts and
Year make good decision.
The success of SCM at this strategic level requires
Fig9:- Productivity in XYZ
considerably more integration with other enterprise systems.
Since many business targets and performance indicators are
24. RESULTS AND DISCUSSION
 International Journal of Applied Engineering Research, ISSN 0973-4562 Vol.7 No.11 (2012)
© Research India Publications; http://www.ripublication.com/ijaer.htm

established in the budgeting process, efficiency demands that [9] Olivier Lavastre , 2011, “Supply chain risk
the planning, budgeting, sales and marketing, and SCM system management in French companies”, Decision support
talk with one another. system, pp.828-838.
[10] Daniel Rexhausen, 2012, “The impact of demand and
27. FUTURE TRENDS IN SUPPLY CHAIN distribution management on supply chain success ”,
MANAGEMENT Journal of Operations Management pp. 269–281.
The evolution the quality role in supply chain management will [11] Harland, C.M. (1996) Supply Chain Management,
be shaped by the goals of reducing procurement risk and Purchasing and Supply Management, Logistics,
overhead. This involves reducing the effects of sub-standard Vertical Integration, Materials Management and
materials on process efficiency, product quality, and exposure Supply Chain Dynamics. In: Slack, N (ed.) Blackwell
to product liability. Overhead reduction involves transferring Encyclopedic Dictionary of Operations Management.
incoming inspection responsibilities to vendors and moving the UK: Blackwell.
customer’s quality function to an audit mode. Critical health [12] Mentzer, J.T. et. al. (2001): Defining Supply Chain
and safety issues still require inspection. The procurement Management, in: Journal of Business Logistics, Vol.
model evolves from lowest price to a lowest total cost, highest 22, No. 2, 2001, pp. 1–25.
value model. This process requires ever closer vendor-customer [13] Hines, T. 2004. “Supply chain strategies: Customer
data interchange and process integration. driven and customer focused”. Oxford: Elsevier.
Supply chain management remain a high priority for [14] Lambert, Douglas M. “Supply Chain Management:
manufacturers as a way to improve margins and retain and Processes, Partnerships, Performance,” 3rd edition,
increase market share. 2008.
The vendor needs information on how their raw material ran in
the customer’s process to make necessary improvements to
their system. The enabling data handling and reporting systems
will incorporate greater quality management capabilities. The
systems which affect SCM will expand integration and
communication capabilities. This includes greater use of web
technology for both quality data collection and reporting.
Accompanying the increase in SCM quality technology,
companies need to train staff to be aware of how to effectively
use the increased visibility of quality information.
SCM today consists of two sets of processes with different time
horizons. Supply chain planning is the process of managing
strategic and tactical operation planning, while supply chain
execution involves the tactical steps necessary to meet the
demands of plan by managing the transaction.

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