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