Thrust Areas in Supply Chain Management From the above discussions, we identify the 15 key trust areas of Supply Chain Management which would lead to specific decision areas: 1. Minimizing Uncertainty: Supply uncertainty due to unreliability of vendors, process uncertainty due to internal processes and demand uncertainty are some of the major hurdles to effective supply chain management. Supply uncertainty can be addressed through a number of initiatives such as vendor development and certification, sharing of production planning information and joint attention to transport arrangements. Process uncertainty is due to machine breakdowns, uncertain yields and absenteeism, which can be addressed through good maintenance practices, better technology, etc. Demand uncertainty can be reduced to some extent by forecasting techniques and by better communication with customers. 2. Reduced Lead Times: Lead time is the time elapsed between placing an order and its arrival in the inventory. Lead times at the stages of procurement, conversions and distribution can be cut down by faster modes of transport, better planning practices and process technologies. 3. Minimizing the number of Stages: In general, the number of stages that goods and services flow through adds to the complexity of supply chain management. Unification of tasks and reducing the number of stages make the coordination of decisions easier. This is the essence of another management concept, namely Business Process Engineering. 4. Improving Flexibility: Reducing set-up or changeover times in various processes and the use of flexible manufacturing and assembly techniques improves the flexibility of responses. In transport, the use of smaller vehicles provides flexibility in making dispatches at short notice without being constrained by batching economies. As an extended principle, wherever possible, batch processes should be made continuous processes. 5. Improving Process Quality: A prerequisite to effective supply chain management in the light of reducing inventories and wastage is to do things right the first time. This is ideal for improving process quality. The techniques for this include statistical process control, root cause analysis of poor quality and improvement of process capability. 6. Minimizing Variety: Variety is one of the major cause for inventory in the downstream part of supply chains. One response is to modularize product design so that variety is offered in a controlled way and some economies of scale can be exploited. Another is to standardize product and service offerings. 7. Managing Demand: Uncertainty and anticipated variations in demand should be dealt with by appropriate promotion and branding. This will enable a better control of the supply chain, right from demand generation. 8. Delaying Differentiation: The value addition through product differentiation should be postponed as far as possible so that precise customer needs can be met without holding committed stocks in the entire chain. There are numerous examples of how this can be done, such as shipping of components level goods to major points and assembling according to customer needs, postponing finishing operations like grinding and mixing of additives to cement till near the final point of consumption, etc. 9. Kitting of Supplies: In assembly systems, a major source of delay is the staging delay where some components for assembly have to wait since matching components are not available. Vendors or internal facilities that supply components can be arranged so that all components required for an assembly for major sub-assembly are manufactured or supplied to one stage where they are kitted into sets of matching components, ready for assembly and further operations. This could involve some restructuring of vendors of internal activities an some vertical integration. 10. Focusing on ‘A’ Category: This is a well known idea from classical economics and inventory theory, where items that account for a large part of the value, or which are critical, and /or customers who are significant, and /or territories that are important receive special attention. 11. Planning for Multiple Supply Chain: Doing better supply chain management would often require different supply chain for different customer segments based on responsive requirements. The tendency to club supply chains in the interest of efficiency can be counter productive for effectiveness. 12. Modifying Performance Measures: These need to move from being single-actor focused to multi-actor focus in the supply chain. For example, in the context of a warehouse, instead of warehouse space utilization as the primary measure of warehouse performance, the retrieval time would be more in tune with supply chain, since this focuses on both the warehouse and the downstream actor. Similarly, a transporter like the railways would focus more on time taken for delivering a wagon/rake to a customer from the time indent is placed, rather than wagon utilization. 13. Competing on Service: The big opportunity in supply chain for long-term competitive advantage is on the service aspect of value delivery to the customer. Product quality and features can only be short-term advantage. 14. Moving from Functions to Processes: Improved supply chain practices will require integrated process orientation rather that functional organization. Job rotation, flatter and lean organizations will help. 15. Taking Initiatives at an Industry Level: This is very essential, especially in dealing with poor infrastructure. Industry – level initiatives in specific product categories can focus on say transport and / or warehousing inadequacies and help develop appropriate service providers. There is a big opportunity for third party logistics service here

Definitions of Supply Chain Management According to Beamon (1998), "SCM is an integrated process wherein suppliers, manufacturers, distributors and retailers work together in an effort to acquire raw materials, convert these raw materials into specified final products and deliver these final products." According to Christopher (1992), "A supply chain is the network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services delivered to the ultimate consumer." According to Mentzer et al. (2001), "A supply chain is defined as a set of three or more entities (organisations or individuals) directly involved in the upstream and downstream flows of products, services, finances and/or information from a source to a customer." What is revealed from these definitions? SCM is an integrated process to acquire and convert raw materials into final products and deliver them. It is defined as the integration of the supplier, distributor and customer logistics requirements into one cohesive process. As per the CLM, "Supply Chain Management (SCM) is the systemic, 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 performance of the individual companies and the supply chain as a whole." And as per the Supply Chain Council, "Supply chain management... encompasses every effort involved in producing and delivering a final product or service, from the supplier's supplier to the customer's customer. Supply chain management includes managing supply and demand, sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry and order management, distribution across all channels and delivery to the customer." The traditional view of a supply chain entails raw materials, supplier, manufacturing, distribution, customer and consumer on a linear path where material from supplier to customer moves on in the same order. However, in reality, a supply chain entails movement from and to many warehouses. There are many steps involved, many inventories involved and a lot of time consumed. SCM is actually so vast that it can be difficult to exemplify each and every component of it. As in the example of the assembled computer's supply chain, various supply chains are connected to each other through links, forming yet another case of SCM. Each added link of the supply chain brings more competence. When all of the links are in place, and when the information, goods and finances are flowing properly, the benefits are huge. Executives from a group of multi-national companies formed the Global Supply Chain Forum (GSCF) and included in their framework the following SCM processes. Posted by Dr. Parikshit Joshi at 9:54 PM 0 comments Mc Donald's Supply Chain In India The lure of 300 million consumers, coupled with a wide range of economic reforms, brought McDoanld Corporation of USA to India in the mid 1990’s. Companies like McDonald’s, whose operations are centered on supply chain efficiency, are rapidly expanding their outlets in India. Apart from speedy expansion, the company is also focusing on delivering high quality food to its customers. It is putting all its efforts into managing the supply chain and ensuring that the products reach the outlets in the best condition. The various ingredients that the company requires for its fast food items come from different local sources. For example, iceberg lettuce comes from Talegaon near Pune, Nainital and Ooty; cheese from Dynamix Dairy Industries in Baramati, Maharashtra; buns from Phillaur in Punjab and Khopoli near Mumbai; and chicken, vegetable patties, pies and pizza puffs from Taloja near Mumbai. Since all the 60 outlets are situated in the north and western parts of India, the company is sourcing its raw materials from these regions to ensure maximum efficiency. Although the company started searching for suppliers way back in 1991, it took around six years before it was able to set up its first outlet in India. During this period, the company spent around Rs 500 million to set up a proper supply chain. Before actually deciding to enter the fast food business in India, McDonald’s did a lot of ground work. For instance, it studied the local tastes, analyzed the government regulations on food and health, and conducted soil and climate tests, to ensure the feasibility of the fast food business in India. It was a tough job for the company to identify local suppliers who would match international standards, by delivering quality raw materials in good condition regularly and on schedule. It procured refrigerated trucks to transport vegetables and meat. These trucks maintain temperatures between one and four degrees centigrade and are fitted with tracking devices that monitor the temperatures at all times. Further, the quality of the materials is checked at various points. These trucks transport the products to distribution centers from where they are delivered to the outlets. In addition to the refrigerated trucks, the distribution centers are equipped with non-refrigerated trucks to transport paper cups, napkins, and plastic cutlery. And as McDonald’s grows in India, its suppliers face new supply chain management challenges. Questions: What took McDonald to invest Rs.500 million before its launch? Design the transportation network used by McDonald