Supply chain management in

Fashion Industry
Lecture : 1-3
Understanding the Supply chain
Prep. By – Amit Gupta
Introduction, Historical perspectives,
Objectives, Decision Phases, Process
views

Today’s Topics of discussion……

What is Supply chain and management ?
Ideas?

…
 Supply chain by def.
• Supply chain management is the
handling of the entire production
flow of a good or service to
maximize quality, delivery,
customer experience and
profitability.

• SCM consists of all parties

involved
• Directly or Indirectly
• To fulfil customer request.
Flows in a supply chain
Why SCM required in Fashion Industry?

Raw material Fabric Dyeing and

from Fields / Yarn production / finishing of
Factory Weaving fabric

Disposing/ Using the Distribution Garment

Recycling product and selling making
Stakeholders in supply chain?
Consumer
Manufacturer
Distributors
Retailers
Raw material suppliers
Logistics partners

…
Some worthy Supply chain failures …
• KFC ran out of chicken - In 2018, the KFC supply chain crisis closed
more than half of the company's 900 U.K. restaurants. KFC had shifted
to a new delivery partner, causing major disruptions to their food
supply chain. It cost KFC up to £1 million daily.
• Covid transistor issues with cars, Mahindra reduced features in XUV
700.
• Parle G denied selling of biscuits directly to Udaan.
• Dark stores set up by Blinkit.
Why you should join SCM
Export Import manager
Logistics manager
CHA
Forwarders
Transport Manager
Supply chain planner
Demand Planner
Production planner / manager

Areas can be explored : -

1. Ecom industry
2. Export houses
3. Buying houses
4. Buyers
5. Entrepreneur
Historical Perspective of SCM
• 3 Principal streams of SCM

• Sourcing, Procurement and supply management

• Materials management
• Logistics and distribution
Historical Perspective of SCM
1. Sourcing, Procurement and supply management
• Efforts required are much higher to increase sales compared to prices
reduction.

• Sourcing, Supply side management, inbound logistics and supplier

relationship management with materials, cash flow management.
Historical Perspective of SCM
2. Materials management –
Forecasting
Inventory management
Stores management
Warehousing
Stock Keeping
Production planning and control.
Historical Perspective of SCM
• Logistics and distribution
• It covers all functions related to movement and maintenance.
• It plans , implements and controls the efficient, effective, forward and reverse
flow and storage of goods, services and related information between the
point of origin and the point of consumption.
• Transportation accounts of 50% of total logistics.
Objective of a supply chain
• Maximize overall value created
• Supply chain surplus = Customer value – Supply chain cost

• Customer is the only source of Positive cash flow. Rest all are – in
SCM. For eg. Customer purchasing a detergent.

• Effective scm involves the management of supply chain assets and

product, information, and fund flows to maximize total supply chain
profitability.
Supply chain decisions
• 1. Product + Information + Funds – Historical view
• 1) location, 2) production, 3) inventory, and 4) transportation
(distribution). - Retail/ Hybrid view
• Supply chain management operates at three levels:
strategic, tactical, and operational. 
Supply chain decision – strategic
• Supply chain strategy or design – How to structure the supply chain
over upcoming years,
• Location and capacities of facilities.
• Products to be made or storage at various locations.
• Modes of transport.
• Information systems
• Things to be taken care of
• Difficult and expensive to reverse or alter once finalised and implemented.
• Must taken market uncertainty
Supply chain decision – Planning
• Generally the time frame considered is quarter of year.
• Planning includes making decisions regarding which markets will be
supplied from which locations, the subcontracting of manufacturing,
the inventory policies to be followed, and the timing and size of
marketing and price promotions. Eg. P&G supply decisions
• Companies must include uncertainty in demand, exchange rates, and
competition over this time horizon in their decisions.
• As a result of the planning phase, companies define a set of operating
policies that govern short-term operations.
Supply chain decision – Operations
• The time horizon here is weekly or daily. Eg. Daily customer orders
serving in best possible way.
• At the operational level, supply chain configuration is considered fixed
and planning policies are already defined.
• Firms allocate inventory or production to individual orders, set a date
by which an order is to be filled, generate pick lists at a warehouse,
allocate an order to a particular shipping mode and shipment, set
delivery schedules of trucks, and place replenishment orders.
•
Process views of supply chain
• Cycle View - The processes in a supply chain are divided into a series
of cycles, each performed at the interface between two successive
stages of the supply chain.
• Push/pull view: The processes in a supply chain are divided into two
categories, depending on whether they are executed in response to a
customer order or in anticipation of customer orders. Pull processes
are initiated by a customer order, whereas push processes are
initiated and performed in anticipation of customer orders.
 Cycle view -
• When customers shop online at Amazon, they are part of the
customer order cycle—with the customer as the buyer and
Amazon as the supplier. In contrast, when Amazon orders
books from a distributor to replenish its inventory, it is part of
the replenishment cycle—with Amazon as the buyer and the
distributor as the supplier.
• Within each cycle, the goal of the buyer is to ensure product
availability and to achieve economies of scale in ordering.
• The supplier attempts to forecast customer orders and reduce
the cost of receiving the order. The supplier then works to fill
the order on time and improve efficiency and accuracy of the
order fulfillment process. The buyer then works to reduce the
cost of the receiving process. Reverse flows are managed to
reduce cost and meet environmental objectives.
 Push/Pull view
• With pull processes, execution is
initiated in response to a customer
order. With push processes, execution
is initiated in anticipation of customer
orders based on a forecast.
• Pull processes operate in an
environment in which customer
demand is known. They are, however,
often constrained by inventory and
capacity decisions that were made in
the push phase.
 Diff. in push and pull
• Ethan Allen makes customized
furniture, such as sofas and chairs, for
which customers select the fabric and
finish. In this case, the arrival of a
customer order triggers production of
the product. The manufacturing cycle
is thus part of the customer order
fulfillment process in the customer
order cycle. There are effectively only
two cycles in the Ethan Allen supply
chain for customized furniture:
• (1) a customer order and
manufacturing cycle
• (2) a procurement cycle,
Supply chain macro process -

• Supply chains to be discussed –

• Mumbai dabba wala , Amul, Zara, Domino's, BlinkIT, Cisco systems
Rivigo, walmart
Task for next class..
• List Aims/ Motto/ Targets of 2-3 of your favorite companies/Groups