Q:1- How does SCM helps in inventory systems?

Ans: Supply chain management is a essential part for inventory systems. firms hold inventory for two main reasons, to reduce costs and to improve customer service. The motivation for each differs as firms balance the problem of having too much inventory (which can lead to high costs) versus having too little inventory (which can lead to lost sales). A common perception and experience is that supply chain management leads to cost savings, largely through reductions in inventory. Such cost savings have led many to pursue inventory-reduction strategies in the supply chain. Effective inventory management in a supply chain can play a vital role in cutting inventory holding costs across the different stages of the supply chain, thus emphasizing the need of a general model for managing inventories within a supply chain. Inventory management for supply chains could be effective only when the information flow from top to bottom of a supply chain is streamlined. So inventory management in a supply chain has to consider all inventories that are spread out in a product supply chain. Just in time (JIT) concepts can be applied in a supply chain to achieve minimum levels of inventory at the same time satisfying the market demand. In order to develop an efficient supply chain one the most important factor is achieving good customer-supplier relationships by conducting programs that bind the two ends of the supply chain. Q:2- What are JIT, VMI and KANBAN? Ans: An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. A good example would be a car manufacturer that operates with very low inventory levels, relying on their supply chain to deliver the parts they need to build cars. The parts needed to manufacture the cars do not arrive before nor after they are needed, rather they arrive just as they are needed. Benefits: - Excess or shortages of inventory can be wasteful. The just-in-time method seeks to minimize inefficient uses of inventory, and increase profitability and return on investment by reducing carrying costs. Ideally, just in time eliminates traditional inventory because the business only produces items that are set to be delivered to customers. Just-in-time aims to reduce work-in-progress inventory as well by improving the efficiency of input materials between workstations on the manufacturing floor. The JIT process uses signals between different points in the manufacturing process that tell production when to make the next part. Vendor Management Inventory: - means of optimizing Supply Chain performance in which the manufacturer is responsible for maintaining the distributors inventory levels. The manufacturer has access to the distributors inventory data and is responsible for generating purchase orders. The manufacturer receives electronic data (usually via EDI or the internet) that tells him the distributors sales and stock levels. The manufacturer can view every item that the distributor carriers as well as true point of sale data. Benefits: - One of the benefits of VMI is that the vendor is responsible for supplying the customer when the items are needed. This removes the need for the customer to

have significant safety stock. Lower inventories for the customer can lead to significant cost savings. The manufacturer can gain some benefits from vendormanaged inventory as they can gain access to a customers point of sale (POS) data makes their forecasting somewhat easier. Manufacturers can also work their customers promotional plans into forecasting models, which means enough stock will be available when their promotions are running. As a manufacturer has more visibility to their customers inventory levels, it is easier to ensure that stock-outs will not occur as they can see when items need to be produced. KANBAN: - A Kanban system is a means to achieve just in time (JIT) production. It works on the basis that each process on a production line pulls just the number and type of components the process requires, at just the right time. The mechanism used is a Kanban card. This is usually a physical card but other devices can be used. Two kinds of Kanban cards are mainly used: A Withdrawal Kanban - specifies the kind and quantity of product, which a manufacturing process should withdraw from a preceding process. The withdrawal Kanban illustrated (right) shows that the preceding process, which makes this part, is forging. A Production-ordering Kanban - specifies the kind and quantity of product, which the preceding process must produce. Q:3- What is the business process between customer and supplier? Ans: There is a one flow of goods or services from manufacturer or supplier to the end customer and these all are essential part for any supply chain. It also includes whole supply chain network from inbound logistics to outbound logistics. This network describes the flow and movement of materials & information, by linking organizations together to serve the end-customer. So the process between supplier and customer are: 1. Supplier: - This is the first stage of flow and he will me the manager of raw material. Supplier manages the quantity and quality of raw material and supplies on the based of demand of manufacturer. 2. Customer Service Management: - This is the second element of supply chain. Its whole responsibility is to provide good service to suppliers customer. And they try to retain customer and also tries to pull new customers. 3. Demand Management: - This is a separate department, which focuses on the demand from manufacturer. That means its work is to take feedback from manufacturer as might be in the form of new order or may be in the form of previous orders service and quality. 4. Manufacturing Management: - Manufacturer is the mediator and also most important element of supply chain. Manufacturer manufactures goods and provides service to customer. And other all comes between supplier to manufacturer and then manufacturer to customer. 5. Distribution or Order Fulfillment Management: - This departments work is to fulfill order or demand from customer with additional cost. In this additional cost is, includes extra cost from supply of raw material to the end packaged products. 6. Research and Development: - R&Ds work is to search market for their product and give feedback to manufacturer about customers priority and their preferences and then supply final good to the end customer. That means segmentation of market according to company and customers demand.