MSRSAS - Postgraduate Engineering and Management Programme - PEMP

Module Code Module Name Course Department

AME2512 Supply Chain Management M.Sc. in Engineering Manufacturing Management Mechanical and Manufacturing Engineering.

Name of the Student Reg. No Batch Module Leader

Deepak Chilakabathula. BUB0912016 Full-Time 2012. Prof. P.S.Satish

M.S.Ramaiah School of Advanced Studies

Postgraduate Engineering and Management Programmes (PEMP)
#470-P, Peenya Industrial Area, 4th Phase, Peenya, Bengaluru-560 058 Engineering Materials and Manufacturing Management. Tel; 080 4906 5555, website: www.msrsas.org

POSTGRADUATE ENGINEERING AND MANAGEMENT PROGRAMME (PEMP)

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ASSIGNMENT

Declaration Sheet Student Name Reg. No Course Batch Module Code Module Title Module Date Module Leader Deepak Chilakabathula BUB0912016 M.sc.[Engg] EMM Full-Time 2012. EMM 2506 Supplay chain management to 10-12-2012 Prof P.S.Satish 12-01-2013 Batch Full-Time 2012.

Declaration The assignment submitted herewith is a result of my own investigations and that I have conformed to the guidelines against plagiarism as laid out in the PEMP Student Handbook. All sections of the text and results, which have been obtained from other sources, are fully referenced. I understand that cheating and plagiarism constitute a breach of University regulations and will be dealt with accordingly.

Signature of the student Submission date stamp

(by ARO)

Date

Signature of the Module Leader and date

Signature of Head of the Department and date

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Abstract In first chapter is stated about significant of supply chin management what are the different strategy used in supply chain management comparison between the three strategy push,pull,and hybrid strategy

In second chapter a complete study on supply chain management of central mall with clear illusion of layout and costumer demand review costumer relation and different points are Stated in this chapter

In chapter three is stated about Customer demand estimation, Improving responsiveness to Customer, Easy accessibility of items in store to customer including layout Retail stores decision on make or buy ,Transportation concept with suppliers and Comparative study is stated in the following chapter

Engineering Materials and Manufacturing Management.

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Contents Declaration Sheet .................................................................................................................. ii Contents .................................................................................................................................iv List of Tables ..........................................................................................................................v List of Figures .......................................................................................................................vi List of Symbols.................................................................................................................... vii PART-A ..................................................................................................................................1 CHAPTER 1 ..........................................................................................................................1 1 Push Pull Strategy ..............................................................................................................1 1.1Introduction to topic: .......................................................................................................1 1.2Push, pull and push-pull systems: ...................................................................................1 1.2.1 Push strategy : ..............................................................................................................1 1.2.2 Pull strategy: .................................................................................................................1 1.3 Care study: .......................................................................................................................2 1.3.1 Identify Customer Values ............................................................................................3 1.3.2 Engage the Entire Organization .................................................................................3 1.3.3 Results............................................................................................................................3 1.4 Conclusion :......................................................................................................................3 PART-B ..................................................................................................................................4 CHAPTER 2 ..........................................................................................................................4 2. Supply chain of central .....................................................................................................4 2.1 Rationale for identifying the central store: ...................................................................4 2.2 Illustration of supply chain: ...........................................................................................4 2.2.1Inventory Management: ...............................................................................................7 2.2.2 Managing Distribution Centers: .................................................................................7 2.2.3 Warehouse Management System ................................................................................7 2.3.1 In upstream ...................................................................................................................8 2.3.2 Internal supply chain ...................................................................................................8 2.3.3 Downstream ..................................................................................................................9 PART-C ................................................................................................................................ 10 CHAPTER 3 ........................................................................................................................10 3 Role of SCM ......................................................................................................................10 3.1 Demand estimation: ......................................................................................................10 3.2 Improving customer responsiveness:...........................................................................10 3.3 Accessibility of Items to customer and layout: ...........................................................11 3.4 Make or Buy Decisions: ................................................................................................ 12 3.5 Transportation concepts with suppliers: .....................................................................13 3.7 Conclusion:.....................................................................................................................15 Reference ..............................................................................................................................16 Appendix ..............................................................................................................................17

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List of Tables ____________________________________________________________________________

Table No.

Title of the table

Pg.No.

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List of Figures ____________________________________________________________________________ Figure No. Title of the figure Pg.No.

Chapter 2 Figure2. 1 central supply chain .....................................................................................................4 Figure2. 2 Phase 1 .........................................................................................................................5 Figure2. 3 phase 2 .........................................................................................................................5 Figure2. 4 phase 3 ........................................................................................................................6 Figure2. 5 Phase 4 .........................................................................................................................7 Figure2. 6 up stream &down stream .............................................................................................8 Chapter 3 Figure3. 1 central shop layout ground floor ................................................................................11 Figure3. 2 first floor layout .........................................................................................................12

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List of Symbols ____________________________________________________________________________

Symbol SCM ERP ETO BTO MTO ATO

Description Supply chain management Entrepreneur resources planning Engineer To Order Build To Order Make To Order Assemble To Order

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PART-A CHAPTER 1 1 Push Pull Strategy 1.1Introduction to topic:

Push and pull systems decide how to move material when to move material and where to material in a production process. A push system is characterized by a make to stock environment and a pull system is characterized by make to order. An appropriate system that would cater to the requirements of the company has to be selected.

The main difference between push and pull production system is based on their active point. Push system is based on forecast while a pull system is based on customer demand. Fluctuations in customer demand directly influences in pull system. Most of the production problems can be solved by using an appropriate push and/or pull system. It is clear that neither one is always better than the other.

1.2Push, pull and push-pull systems:

1.2.1 Push strategy :

In push strategy demand is forecasted according to the previous records and production is purely based on the forecast after the production goods are released in to the market according to the availability of product costumers order the product but in this strategy. Push systems disregard the production of defective products, machine breakdowns, labor shortages and other. Inventory levels are very high when compared with pull system.[1]

1.2.2 Pull strategy:

In pull strategy production and distribution is based on customer demand .in pull strategy only goods and services are ordered by costumer only produced and shipped.[2] In multi stage productions, small barrier are kept as inventory it is kept in between to offset small imbalance between them in terms of production rate or demand rate. Typically this buffer is a standardized size of containers. There will be flow of materials and order signal information. Inventory levels are minimum..Disadvantage of pull strategy is lead time is more when compared with push strategy .there are different types of pull strategy ETO (Engineer To Order),BTO (Build To Order),MTO (Make To Order),ATO (Assemble To Order).

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1.2.3 Push-Pull strategy: As mentioned in 1.2.1 and 1.2.2 sections, the disadvantages of Push and Pull supply chains along with changes in worldwide business many of the companies are focused for look for a new supply chain strategy that takes advantage of the best of both world. This results into a hybrid of the two systems Push-Pull supply chain system. Push-Pull is also named as synchronous supply chain. In this strategy, the opening stages of the supply chain are operated based on Push system, and the final stages are operated on Pull strategy. The interface between the Push-based stages and the Pull-based stages is referred as the Push-Pull boundary.[3]

In push pull strategy costumers having their own choice and a wide range of customization The push/pull strategy outcomes make a balance between the responsiveness (agility) and cost (lean). Pull systems must be responsive to be effective, push systems are generally more cost effective though they not have the same amount of flexibility as the pull-systems may have. Of course, all systems are generally a combination of the push & pull strategies to be most effective.[4] 1.3 Care study:

Dell responded to changes in the market by influential how different segments of customers derive value from its products and services. The company's forecast showed that customer demand had become quite difficult. The B2B market demands speed, customization, services and precision delivery. Consumers want multiple channel options, the ability to personalize for function products at low-price options and devices that deliver content. This complexity will only increase as content and virtualization begin to drive the market. To address these type of issues, Dell segmented its supply chain as part of a multiyear transformation. Historically, Dell was organized by products and/or region. As part of globalization, the company aligned organizations to customer value constantly across territory. In 2008, it began to influence its partner network of suppliers where capability, quality performance and cost had improved. Dell would retain its in-house network where strategic differentiation was valued by customers and provided a competitive advantage. This work was very good for an enabler of supply chain division. In this research.[4]

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1.3.1 Identify Customer Values Dell used past customer knowledge from contracts, survey results, business intelligence (BI) data and platform sales to begin its customer-centric view of value. To provide a robust, outside in point of view, Dell invested in resources to complete detailed configuration profitability analysis, targeted surveys and external marketing insights from multiple industries

1.3.2 Engage the Entire Organization Dell's supply chain required wide-ranging cross-functional collaboration: IT transformation had to occur with supply chain transformation, supply chain had to work with finance to enable a CTS methodology and process, and supply chain capability had to be fully integrated with product design throughout the development cycle. Plus, aligning the go-to market plans with sales and marketing was essential to driving the desired demand patterns.

1.3.3 Results Stronger connection to customers In Ms. Clayton's words, "We knew we had to leverage supplier capability and scale, but still control the things that are most important to the customer. We redeployed our resources focused on controlling imaging, delivery and parts of design. We enable best value solutions ... giving the customer the exact value they want." Complexity reduction product options had become too complicated. In response, Dell reduced configuration difficulty in line with customer requirements. As Mr. Noakes stated, "Product offerings had exceeded customer requirements and were adding unnecessary cost and responsiveness waste in the supply chain." Improved internal collaboration Identifying and managing functional inter dependency have driven collaboration across product design, supply chain, marketing, sales and finance. Dell also simplified.

1.4 Conclusion : The two predominant models supply chain are push and pull models with increasing global operations in supply chain. These two models are different at inventory management but this model alone is not that much effective in satisfying costumer. So to certain extant push model should be used and rest pull model should be used.

Push-pull strategy is comparatively better than either push or pull strategy.

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PART-B CHAPTER 2 2. Supply chain of central 2.1 Rationale for identifying the central store:

Central brand has malls all over India. It is owned by Pantaloon Retail that also owns the Indian Big Bazaar supermarket chain third-party social auditing and compliance monitoring of supplier working conditions and health and safety practices Central store is having many no of suppliers all over India and no of stores all over India Central runs SAP one of the leading ERP providers Located in a mall with high competitors Simple supply chain management

2.2 Illustration of supply chain:

Figure2. 1 central supply chain

In the supply chain of central store half is push system and half is pull system as described in fig 2.1

In central store all the goods are tagged with RFID tags and everything is centralized. So that there is no dilay of sending purchase order to the supply order and requesting goods from a wear house all the things are carried out easyly

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Phase 1 In phase 1 distributer receives purchase order and distributer sends the material to main central ware house through the logistics which are provided by distributer.

Figure2. 2 Phase 1

Phase 2 in phase 2 when the stock is getting out of stock automatically information is transferred from main wear house through SAP .then material is transported from main wear house to wear house at store through own logistics system which are outsourced to 3 rd party logistics .

Figure2. 3 phase 2

Phase 3 In phase 3 all the goods are re placed when the rack is empty and in the ware house the stock levels are kept up to 45 days because of un expected errors which may cause stock out situation

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Figure2. 4 phase 3

Phase4 In phase 4 goods are selected by consumers in retile store by picking up all the goods are tagged with RFID tags through which database centralized and controlled with ERP software called SAP .after purchasing of goods by customer its place is replaced with another verity. Demand forecast is done by collecting previous data Available products Denims & T-Shirts Fabric & Cut piece Formal Wear Casual Wear Party Wear Ethnic Wear Accessories Under Garments Night Wear Dress Materials Sarees Cosmetics Sunglasses Watches Foot wear

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Figure2. 5 Phase 4

2.2.1Inventory Management: Inventory management is done at the corporate and individual store levels. In both cases, computerize systems facilitate proper inventory levels and reordering of goods. Stores manage their inventories and order goods as needed by using centralized communication center. By networking with suppliers, a quick replenishment order could be placed via different communication system. This way, suppliers can quickly deliver the goods directly to the store concerned or to the nearest distribution center. The suppliers are able to reduce costs and prices due to better coordination with the store management.

2.2.2 Managing Distribution Centers: Goods are supplied to these centers by suppliers and then stored. When goods are needed they start sending the goods in local logistics. Distribution centers are managed with daily labors to load the goods in to containers. Data receives through SAP systems. Distribution centers are well managed with in the available recourses and man power.

2.2.3 Warehouse Management System A warehouse management system (WMS) is a key part of the supply chain that primarily aims to control the movement and storage of material within the warehouse and process the associated transactions including receiving, shipping, and in-warehouse picking. The system also optimizes stock levels based on real-time information about the usage of parts and materials.

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2.3 Critical analysis:

Figure2. 6 up stream &down stream

2.3.1 In upstream activities deals with the external suppliers dealing with. If somewhere else better deal can be happened central store shift to different supplier, move the business to a different company within the upstream segment of the supply chain. "Upstream" refers to the supply of products from supplier to central store. In up stream there are many number of supplyrs deals with central store all the goods are transported to central warehouse through their own logistics if suppliers when the purchase order is delivered to the suppliers .payment is done with in agreement period. 2.3.2 Internal supply chain activities deals and maintain the data of goods in wards and outwards data which includes different documentations like purchase order etc, receiving the materials and entering the data in to the store records managing the recourses etc . In internal supply chain management material are received form the supplier is distributed to the stores through distribution centers when the stock limit is going low .

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Internally distribution is managed with outsourced transportation system. in store goods are segregated and placed in proper manner in a clear manner for easy identification of customer . After selling the goods that area is replaced with another products the same supplier

2.3.3 Downstream activities deals with relating to earnings or operations at a firm that are near or at the final stage of consumption. For example, marketing and transportation are downstream operations for a large form. In down stream activities marketing is done in different pricing like Value pricing it sets selling prices on the perceived value to the customer, rather than on the actual cost of the product, the market price, competitors prices, or the historical price. Time-based pricing is a special case of price discrimination in which producers charge different rates for a given good or service depending on the time, day, month, and so on. Bundling products are bundled together with a attractive pricing Below line promotion Coupon, discount, more of the product at normal price, gift with purchase, competition, and prizes, money back offer, exchange offer, special occasion. Above line promotion Giving advertise in news paper, TV. Internet (own website which give online shopping service), partnership with Pantaloons, Big FM 92.7 Value merchandizing is art and science of displaying merchandise within store, it is about implementing effective design, ideas to educate customer, create desire and finally increase store traffic and sales volume

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PART-C CHAPTER 3 3 Role of SCM 3.1 Demand estimation: Demand estimation or demand forecast is the process of forming judgment about the quantities to a product or service that will be demanded by customers in the future.. Such forecast of demand are used to forecast the resource requirement Following Forecasting methods are used in central Store : Qualitative Time series

Qualitative forecasting methods are primarily subjective: they believe on human judgment and opinion to make a forecast. They are making it more appropriate with using little historical data available that is critical in making forecast. These methods may be necessary to forecast demand several years into the future in a new industry.

Time series forecasting methods in this method they are using historical demand to fore cast they are based on assumptions of past demand history and it a good indicator of feature demand this method is used when environment situation is stable .this is a simple method to implement and serve a good starting point of demand

3.2 Improving customer responsiveness: Giving privilege to costumers by grading them in different categories with introducing loyalty cards Door delivery of the to costumer door steps with a prompt delivery E-comers service is provided for on line ordering of products by using future group website Being an accurate advisor to customer Good packing of goods Service recovery process in case of problem, with adequate compensation if required Responding to internet costumers ,need on time Helping internet customers in resolving problem Communication Pre purchase product information After sales and service information 10
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Providing accurate and timely information for internal customers Availability Being available when needed Being flexible Making use of technology to provide more interactive service

3.3 Accessibility of Items to customer and layout: Assesbility of goods is very easy all the clothing section is at one side according to the gender wise all the goods are available in one place so that finding out of products is very easy. Arranging of goods are done in a clear manner according to the brands.

Figure3. 1 central shop layout ground floor

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Figure3. 2 first floor layout

3.4 Make or Buy Decisions: The make-or-buy decision is the act of making a strategic choice between producing an item internally (in-house) or buying it externally (from an outside supplier). The buy side of the decision also is referred to as outsourcing. Make-or-buy decisions usually arise when a firm that has developed a product or partr significantly modified a product or parts having trouble with current suppliers, or has diminishing capacity or changing demand.

Make-or-buy analysis is conducted at the strategic and operational level. Obviously, the strategic level is the more long-range of the two. Variables considered at the strategic level include analysis of the future, as well as the current environment.

Central shop is making formal shirts by giving the criteria to supplier and branding the product as their own. Make decision is taken for the goods which are not costly and freely available items. Quality and design of the product is supplied by the central shop to the supplier as criteria. Supplier is selection is done enormously because it is one of the members in same group.

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3.5 Transportation concepts with suppliers: Transportation should be done by the supplier in a appropriate manner. For overseas and regional suppliers the mentioned transport concepts will be done via cross docks. For local suppliers Ship to the central stores directly . The basic outer dimensions of pallets must be maintained. Protrusions and overhangs must be avoided. All shipping units must be packed by SUPPLIER in a manner which is safe for transportation and protected from unauthorised access. The pack items should be packed in single-type batches. Parts of different releases must not be combined in one pack item. Packing items are combined to form a safe unit on the shipping unit, and safeguarded against slippage in transit. At least the top layer must be covered.

3.6 Comparative study: Comparative study with Wall Mart in Demand Forecasting Wal-Mart introduced a data warehousing model information will have for specific store for specific period. The system is built to grow when the company needs it to grow. Data warehouse is used for reporting. The data is offloaded from the operational systems for reporting. The data may pass through an operational data store for additional operations before it is used in the DW for reporting.

A data warehouse maintains its functions in three layers: staging, integration, and access. Staging is used to store raw data for use by developers (analysis and support). The integration layer is used to integrate data and to have a level of abstraction from users. The access layer is for getting data out for users.

A data warehouse provides a common data model for all data of interest regardless of the data's source. This makes it easier to report and analyze information than it would be if multiple data models were used to retrieve information such as sales invoices, order receipts, general ledger

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charges, etc. Forecasting customer demand is a key to providing good-quality service, we can refer to the order receipts to see the demand.[6] Comparative study with Big Bazaar in Costumer Responsiveness Big Bazaar announced The Great Exchange Offer with a Bring anything o ld and take anything new concept which started from the 16th of Feb 2008. Under the exchange offer the customers were given exchange coupons and they were valid up to a particular date.[7] 26 Jan Republic Day a National Holiday Big Bazaar Marketing Department gave a new thought on this day in 2006 they started a new shopping festival, i.e. Sabse Saste Teen Din.[8] There are many programmers conducted by Big bazaar in favor of costumer responsiveness

Comparative study with Shopper Stop in Layout

Figure2. 7 shopper stop layout

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Comparative study with Walmart on Transportation Wall mart follows Cross-Docking When it comes to transportation of goods, Walmart owns an extensive fleet of trucks which ensures that all products are delivered to its stores through the network of distribution channels in the least amount of time possible. By eliminating middlemen and not depending on external transport supply chains, Walmart cut down heavily on its business costs. Using the technique of cross-docking effectively, Walmart has eliminated any inventory handling, storage, and warehousing costs, ensuring products reach the distribution centers and from near by, to its vast customer base at a faster rate.[9] Comparatively central depends on external transport . 3.7 Conclusion: Supply chain of central mall is a bit weaker in no of sections where it can be much stronger than now .transportation system can be improved for better logistics. Inventory management can be improved better than present .RFID tags can also introduced in ware house management For easy identification of goods location. Better layout can be introduced for proper utilization of free space in the shop floor . Recommendations Happy hours can be introduced Student plans can be introduced Proper layout in mens section can be done Proper ware house management can be done Learning out comes Differentiating between upstream and down stream Demonstrate linkages between theoretical concepts and practical application of Supply Chain Management (SCM)principles Apply SCM concepts to the analysis if complicated cases which requires judgement and combination with appropriate tools Critically appraise how SCM can contribute to business performance and competitive benefit including the drivers for change and improvement in SCM performance Operate an industry standard ERP package SAP Supply Chain module examples and Model Supply Chain

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Reference 1. Just-in-Time Manufacturing: An introduction By T.C. Cheng, S. Podolsky 2nd edition . 2. Dictionary Of International Trade Handbook Of The Global Trade Community Includes 21 Key Appendices Edward G. Hinkelman, Sibylla Putzi World Trade Press, 2005 3. http://www.fibre2fashion.com/industry-article/11/1067/apparel-supply-chain-and-itsvariants4.asp(10-1-2013) 4. http://www.marsdd.com/articles/dell-distribution-and-supply-chain-innovation/ (10-122013) 5. Supply Chain Management in the Retail Industry Michael H. Hugos (Network Services Company ), Chris Thomas October 2005, 2006 6. http://indochineyow.blogspot.in/2011/03/forecasting-wal-mart.html(10-1-2013) 7. http://www.business-standard.com/india/news/big-bazaar-r-day-offer/235548/ (10-12013) 8. http://futuremedia.in/events.html(10-1-2013) 9. http://www.buzzle.com/articles/how-does-walmart-keep-its-prices-so-low.html(10-12013)

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Appendix Presentation on Transportation

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