A PROJECT REPORT ON

“SUPPLY CHAIN MANAGEMENT”

Submitted in the partial fulfillment of the requirement for the award of the Degree
Of Master of Business Administration (MBA)

SUBMITTED BY
KAMAKSHI

BHARATI VIDYAPEETH UNIVERSITY

SCHOOL OF DISTANCE EDUCATION
Academic Study Center: BVIMR, New Delhi
An ISO 9001:2008,14001:2004 Certified Institute
NAAC Re-Accreditation Grade “A” University
 STUDENT UNDERTAKING
I KAMAKSHI MBA I SEM would like to declare that the project report entitled
“SUPPLY CHAIN MANAGEMENT” Submitted to Bharati Vidyapeeth
University Pune, School Of Distance Education Pune, Academic Study Center
BVIMR New Delhi in partial fulfillment of the requirement for the award of the
degree.
All respected guides, faculty member and other sources have been properly
acknowledged and the report contains no plagiarism.
To the best of my knowledge and belief the matter embodied in the project is a
genuine work done by me and it has been neither submitted for assessment to the
university nor to any other university for the fulfillment of the requirement of the
course of study.

KAMAKSHI
 BHARATI VIDYAPEETH (DEEMED TO BE) UNIVERSITY, PUNE
(Established u/s 3 of UGC) (Re- accredited with ‘A’ Grade by NAAC

SCHOOL OF DISTANCE EDUCATION

CONSTITUENT UNIT: BVIMR, NEW DELHI

Certificate from Guide

This is to certify that the SUMMER TRAINING PROJECT REPORT
TITLED “SUPPLY CHAIN MANAGEMENT” Submitted to BHARATI
VIDYAPEETH (DEEMED TO BE) UNIVERSITY PUNE, SCHOOL OF
DISTANCE EDUCATION PUNE, AND Academic Study Center New Delhi is
partial fulfillment of the requirement for the award of the MBA Is an original work
carried out by KAMAKSHI under my guidance. To the best of my knowledge and
belief the matter embodied in this project is a genuine work done by the student
and has been submitted neither to this University nor to any other University for
the fulfillment of the requirement of the course of study.

Signature
 ACKNOWLEDGEMENT
Project work is never the accomplishment of one individual. Rather it is annual
graduation of the efforts, ideas and co-operation of a number of individual.

It gives me immense pleasure to take this opportunity to thank all those who
helped in successfully completing the project.

KAMAKSHI
 TABLE OF CONTENTS
Student Undertaking
Certificate from Guide
Acknowledgement

S.NO PARTICULARS PAGE NO

1 INTRODUCTION 1- 9
2 ACTIVITIES 10-11
3 SUGGESTION 12-27
4 CONCLUSION 28
 INTRODUCTION
Supply Chain Management can be defined as the management of flow of products
and services, which begins from the origin of products and ends at the product’s
consumption. It also comprises movement and storage of raw materials that are
involved in work in progress, inventory and fully furnished goods.
The main objective of supply chain management is to monitor and relate
production, distribution, and shipment of products and services. This can be done
by companies with a very good and tight hold over internal inventories, production,
distribution, internal productions and sales.

In the above figure, we can see the flow of goods, services and information from
the producer to the consumer. The picture depicts the movement of a product from
the producer to the manufacturer, who forwards it to the distributor for shipment.
The distributor in turn ships it to the wholesaler or retailer, who further distributes
the products to various shops from where the customers can easily get the product.
Supply chain management basically merges the supply and demand management.
It uses different strategies and approaches to view the entire chain and work
efficiently at each and every step involved in the chain. Every unit that participates
in the process must aim to minimize the costs and help the companies to improve
their long term performance, while also creating value for its stakeholders and
customers. This process can also minimize the rates by eradicating the unnecessary
expenses, movements and handling.
Here we need to note that supply chain management and supply chain event
management are two different topics to consider. The Supply Chain Event
Management considers the factors that may interrupt the flow of an effective supply
chain; possible scenarios are considered and accordingly, solutions are devised for
them.
Supply Chain Management - Advantages
In this era of globalization where companies compete to provide the best quality
products to the customers and satisfy all their demands, supply chain management
plays a very important role. All the companies are highly dependent on effective
supply chain process.
Let’s take a look at the major advantages of supply chain. The key benefits of
supply chain management are as follows −
 Develops better customer relationship and service.
 Creates better delivery mechanisms for products and services in demand with
minimum delay.
 Improvises productivity and business functions.
 Minimizes warehouse and transportation costs.
 Minimizes direct and indirect costs.
 Assists in achieving shipping of right products to the right place at the right
time.
 Enhances inventory management, supporting the successful execution of just-
in-time stock models.
 Assists companies in adapting to the challenges of globalization, economic
upheaval, expanding consumer expectations, and related differences.
 Assists companies in minimizing waste, driving out costs, and achieving
efficiencies throughout the supply chain process.
These were some of the major advantages of supply chain management. After
taking a quick glance at the concept and advantages on supply chain management,
let us take a look at the main goals of this management.
Supply Chain Management - Goals
Every firm strives to match supply with demand in a timely fashion with the most
efficient use of resources. Here are some of the important goals of supply chain
management −
 Supply chain partners work collaboratively at different levels to maximize
resource productivity, construct standardized processes, remove duplicate
efforts and minimize inventory levels.
 Minimization of supply chain expenses is very essential, especially when
there are economic uncertainties in companies regarding their wish to
conserve capital.
 Cost efficient and cheap products are necessary, but supply chain managers
need to concentrate on value creation for their customers.
 Exceeding the customers’ expectations on a regular basis is the best way to
satisfy them.
 Increased expectations of clients for higher product variety, customized
goods, off-season availability of inventory and rapid fulfillment at a cost
comparable to in-store offerings should be matched.
 To meet consumer expectations, merchants need to leverage inventory as a
shared resource and utilize the distributed order management technology to
complete orders from the optimal node in the supply chain.
Lastly, supply chain management aims at contributing to the financial success of an
enterprise. In addition to all the points highlighted above, it aims at leading
enterprises using the supply chain to improve differentiation, increase sales, and
penetrate new markets. The objective is to drive competitive benefit and
shareholder value.
Supply chain management is a process used by companies to ensure that their
supply chain is efficient and cost-effective. A supply chain is the collection of steps
that a company takes to transform raw materials into a final product. The five basic
components of supply chain management are discussed below −
Plan
The initial stage of the supply chain process is the planning stage. We need to
develop a plan or strategy in order to address how the products and services will
satisfy the demands and necessities of the customers. In this stage, the planning
should mainly focus on designing a strategy that yields maximum profit.
For managing all the resources required for designing products and providing
services, a strategy has to be designed by the companies. Supply chain management
mainly focuses on planning and developing a set of metrics.
Develop(Source)
After planning, the next step involves developing or sourcing. In this stage, we
mainly concentrate on building a strong relationship with suppliers of the raw
materials required for production. This involves not only identifying dependable
suppliers but also determining different planning methods for shipping, delivery,
and payment of the product.
Companies need to select suppliers to deliver the items and services they require to
develop their product. So in this stage, the supply chain managers need to construct
a set of pricing, delivery and payment processes with suppliers and also create the
metrics for controlling and improving the relationships.
Finally, the supply chain managers can combine all these processes for handling
their goods and services inventory. This handling comprises receiving and
examining shipments, transferring them to the manufacturing facilities and
authorizing supplier payments.
Make
The third step in the supply chain management process is the manufacturing or
making of products that were demanded by the customer. In this stage, the products
are designed, produced, tested, packaged, and synchronized for delivery.
Here, the task of the supply chain manager is to schedule all the activities required
for manufacturing, testing, packaging and preparation for delivery. This stage is
considered as the most metric-intensive unit of the supply chain, where firms can
gauge the quality levels, production output and worker productivity.
Deliver
The fourth stage is the delivery stage. Here the products are delivered to the
customer at the destined location by the supplier. This stage is basically the logistics
phase, where customer orders are accepted and delivery of the goods is planned.
The delivery stage is often referred as logistics, where firms collaborate for the
receipt of orders from customers, establish a network of warehouses, pick carriers
to deliver products to customers and set up an invoicing system to receive payments.
Return
The last and final stage of supply chain management is referred as the return. In the
stage, defective or damaged goods are returned to the supplier by the customer.
Here, the companies need to deal with customer queries and respond to their
complaints etc.
This stage often tends to be a problematic section of the supply chain for many
companies. The planners of supply chain need to discover a responsive and flexible
network for accepting damaged, defective and extra products back from their
customers and facilitating the return process for customers who have issues with
delivered products.

Supply chain management can be defined as a systematic flow of materials, goods,

and related information among suppliers, companies, retailers, and consumers.
Types
There are three different types of flow in supply chain management −

 Material flow
 Information/Data flow
 Money flow

Let us consider each of these flows in detail and also see how effectively they are
applicable to Indian companies.
Material Flow
Material flow includes a smooth flow of an item from the producer to the consumer.
This is possible through various warehouses among distributors, dealers and
retailers.
The main challenge we face is in ensuring that the material flows as inventory
quickly without any stoppage through different points in the chain. The quicker it
moves, the better it is for the enterprise, as it minimizes the cash cycle.
The item can also flow from the consumer to the producer for any kind of repairs,
or exchange for an end of life material. Finally, completed goods flow from
customers to their consumers through different agencies. A process known as 3PL
is in place in this scenario. There is also an internal flow within the customer
company.
Information Flow
Information/data flow comprises the request for quotation, purchase order, monthly
schedules, engineering change requests, quality complaints and reports on supplier
performance from customer side to the supplier.
From the producer’s side to the consumer’s side, the information flow consists of
the presentation of the company, offer, confirmation of purchase order, reports on
action taken on deviation, dispatch details, report on inventory, invoices, etc.
For a successful supply chain, regular interaction is necessary between the producer
and the consumer. In many instances, we can see that other partners like
distributors, dealers, retailers, logistic service providers participate in the
information network.
In addition to this, several departments at the producer and consumer side are also
a part of the information loop. Here we need to note that the internal information
flow with the customer for in-house manufacture is different.
Money Flow
On the basis of the invoice raised by the producer, the clients examine the order for
correctness. If the claims are correct, money flows from the clients to the respective
producer. Flow of money is also observed from the producer side to the clients in
the form of debit notes.
In short, to achieve an efficient and effective supply chain, it is essential to manage
all three flows properly with minimal efforts. It is a difficult task for a supply chain
manager to identify which information is critical for decision-making. Therefore,
he or she would prefer to have the visibility of all flows on the click of a button.
Supply Chain Strategy
In this phase, decision is taken by the management mostly. The decision to be made
considers the sections like long term prediction and involves price of goods that are
very expensive if it goes wrong. It is very important to study the market conditions
at this stage.
These decisions consider the prevailing and future conditions of the market. They
comprise the structural layout of supply chain. After the layout is prepared, the tasks
and duties of each is laid out.
All the strategic decisions are taken by the higher authority or the senior
management. These decisions include deciding manufacturing the material, factory
location, which should be easy for transporters to load material and to dispatch at
their mentioned location, location of warehouses for storage of completed product
or goods and many more.

Supply Chain Planning

Supply chain planning should be done according to the demand and supply view.
In order to understand customers’ demands, a market research should be done. The
second thing to consider is awareness and updated information about the
competitors and strategies used by them to satisfy their customer demands and
requirements. As we know, different markets have different demands and should
be dealt with a different approach.
This phase includes it all, starting from predicting the market demand to which
market will be provided the finished goods to which plant is planned in this stage.
All the participants or employees involved with the company should make efforts
to make the entire process as flexible as they can. A supply chain design phase is
considered successful if it performs well in short-term planning.
Supply Chain Operations
The third and last decision phase consists of the various functional decisions that
are to be made instantly within minutes, hours or days. The objective behind this
decisional phase is minimizing uncertainty and performance optimization. Starting
from handling the customer order to supplying the customer with that product,
everything is included in this phase.
For example, imagine a customer demanding an item manufactured by your
company. Initially, the marketing department is responsible for taking the order and
forwarding it to production department and inventory department. The production
department then responds to the customer demand by sending the demanded item
to the warehouse through a proper medium and the distributor sends it to the
customer within a time frame. All the departments engaged in this process need to
work with an aim of improving the performance and minimizing uncertainty.
 ACTIVITIES

Functions of Supply Chain Management (SCM)

While discussing an eCommerce or online business, we commonly come across th
e term supply chain management. It is an integral part of an online business and if
you are an online entrepreneur you need to have some idea of the whole process. In
simple terms, supply chain management or commonly known as SCM deals with t
he management related to the flow of goods and services at various stages. It may s
tart from the manufacturer to the retailer, and ultimately to the customer. At each le
vel, proper management is required in order to ensure seamless flow of the product
s.
The main goal of supply chain management involves management of a wide range
of components and processes, such as storage of raw materials, managing the inven
tory, warehousing, and movement of finished from the point of manufacture to the
point of consumption. In economic terms, it can be referred to as the design, planni
ng, management, and execution of supply chain activities from the point of product
ion to the point of sale.
Supply Chain Management Functions
On a broader level, supply chain management consists of these four major function
s and key element components, such as:

Integration: This forms the crux of the supply chain and is meant to coordinate co
mmunications to produce effective and timely results. It can include innovation of
new software or advanced technological processes to improve communications.
Operations: This involves management of the day to day operations in the eComm
erce business. For example, it may deal with keeping an eye on the inventory or co
ming up with marketing approaches.
Purchasing: This deals with the purchasing decisions and management, such as pu
rchasing raw materials, source materials and so on.
Distribution: This deals with the management of logistics across wholesalers, retai
lers, and customers. This may mean keeping an eye on the shipment, and other deta
ils.
In addition to these, there are also some subsidiary functions that an effective suppl
y chain management process fulfills, such as:

 Aligning distribution flows

 Integrating the functions from manufacture to delivery
 Designing complex and advanced systems
 Managing an coordinating resources

If you get the basics right and manage your supply chain in the right way, you will
surely enjoy good profits. Always remember that proper planning and implementat
ion are the keys to a successful supply chain
 SUGGESTIONS
According to the Council of Supply Chain Management Professionals, the cost of
US business logistics is over one trillion dollars a year. That is seven percent of the
United States GDP, which is larger than the entire GDP of Mexico. The financial
health of the U.S. economy and your business depends on networks of smoothly
running supply chains. One of the best ways to improve your supply chain strategy
is through utilizing ERP (Enterprise Resource Planning) software. Below are the
different ways that ERP software can increase your business profits and efficiency
while reducing costs and wastes.

1. Automatic Purchasing
Continually monitoring inventory levels takes up too much time. Newer ERP
systems with Supply Chain Management (SCM) functionality feature automated
purchasing. This means that the ERP software can be programmed to automatically
place orders with vendors when inventory levels drop below a certain level. A
critical part of any supply chain strategy is being able to preemptively maintain
inventory levels. Automatic purchasing will free up employees to concentrate on
other important duties.

2. Standardize
Process standardization is central to the success of any supply chain strategy.
Having a standardized ERP system will increase efficiency while saving time and
money. Another benefit is that employees will share a standardized system of
tools, which will increase accuracy, encourage teamwork and reduce
miscommunication.

3. Increase Transparency
Waste, mistakes and even fraud are permanent supply chain strategy problems that
can be fixed with the right ERP system. One of the biggest problems of inventory
management is reconciling the software numbers with a physical inventory count.
There are always products or units that are forgotten about or simply disappear.
Increasing internal SCM transparency is critical to reducing unexplained inventory
and financial losses.
4. Gain Data Insight
Decision making for your supply chain strategy depends on accurate and timely
data and information. Having real-time reports available at all times will provide
valuable insight into the supply chain health of your manufacturing business. ERP
software allows both users and management to be able to instantly access
inventory, purchasing and production data for critical decision-making purposes.

5. Real-Time Inventory Management

Traditional inventory management involves the overuse of spreadsheets and hand
checked lists. However, modern ERP software offers inventory features that
provide real-time visibility of exact inventory levels. In addition to this, traditional
inventory management software has limited scalability, while modern ERP
software has unlimited flexibility that will match your businesses’ growth and
unique needs.
6. Monitor Vendor Performance
A smoothly running supply chain system depends on outstanding vendor
performance. Therefore, vendor performance needs to be monitored and rated
through robust metrics available through ERP systems. With a few clicks of a
mouse, management can review vendor cycle times and error rates. This data is
invaluable during vendor re-negotiations.

7. Raise Cost Awareness

There are many uncontrollable factors and variables with supply chain
management. As a result, different managers along the supply chain often are
unaware of each other’s expenses. Having centralized financial data pinpoints
exactly when and where the organization spends money. This will encourage cost
related communication and strategies for consolidating expenses and streamlining
processes.

8. Improve Returns Management

Every solid supply chain strategy needs an efficient returns management system.
Manufacturers must be able to effectively handle returns so they can quickly re-
process or re-manufacture returned products or units. Many manufactures
understandably focus on continually moving new products out the door and
therefore, returns often fail to get the attention they deserve. Being able to better
manage returns will reduce waste and identify consistent product problem factors.

9. Just-in-time (JIT)
ERP systems naturally work well with both just-in-time manufacturing and JIT
Inventory Management to decrease inventory costs and increase inventory turn
around. As a result, there will be less overhead costs and order fulfillment
communication mistakes. Operate at the optimal inventory levels and reduce
warehouse costs.

10. Streamline Accounting

ERP systems are often integrated with different business areas, such as HR,
management and finances. An ERP system will reduce excessive paperwork and
invoice mix-ups. In addition to this, ERP systems are integrated with Electronic
Data Interchange (EDI) and Electronic Funds Transfers (EFT), which will
drastically reduce payment processing administration and associated wait times.
supply chain is not any business function. It’s a network of companies. Supply

chain management involves implementing the cross-functional relationships with

suppliers and key customers in the network. It’s a new and important business

model imperative for a company’s success where every function must be involved.

Over the past few decades, most of the companies in sectors like high tech to

automotive, retail to consumer goods, have realized that a supply chain involves

more cost than getting the products in the hands of their customers. They seem to

have finally realized that it’s the supply chain management which translates

corporate strategies into day-to-day actions both inside and beyond the company.

It’s the supply chain system which ultimately satisfies or disappoints the

customers. The companies prefer to use a broader supply chain definition: one that

involves information sharing, planning, and value additions to activities, right from

raw materials to the final distribution, and not just the logistics.
Many leading companies have carried out strategic investments in supply chain

management to raise effective and efficient organizations that can overcome cross-

functional silos. These companies have outperformed the overall maturity level in

their sectors. Many have even managed to disrupt them, like Amazon did in online

retail. These organizations have redefined customer expectations of service with

their ability to usher in market innovation, turning their supply chain management

quality to a powerful resource of competitive advantage.

The best companies, critically, continue evolving and reinventing their supply

chains, regardless of their position in the market. In this way, these companies

manage risks better, respond to any change in the technological, economic, and
competitive environment, and exploit fresh opportunities far more efficiently way

than their peers.

Supply Chain Management: A Management Priority

Many senior executives have told us, supply chain management issues have started

to increasingly demand their attention. Nevertheless, achieving a supply chain

distinction is getting more difficult by the day. Manufacturing and distribution

networks have become more complex. But their successful operation is imperative

for revenue generation and profitability. Risks in the supply chain system, at the

same time, have increased. Improved transparency is thus critical to coordinate

effective responses. Making the supply chain system work at its best requires a

robust cross-functional control, and taking correct decisions across all vertical of

the company. More importantly, the correct supply chain system, is playing an

important role to allow companies exploit the emerging opportunities to bolster

growth and profitability.

The following three examples will explain what difference a highly functional

supply chain management system can make.

A leading manufacturer of packaged consumer goods uses a supply chain

management system to manage the input price volatility. The company has created

several formulae and supply chains for a brand of home and industrial cleaning

products. Determining the prevalent market price of ingredients, the company

switches between the formulae and supply chains. This allows the company hedge

against the increasingly unstable raw material prices.

The second company, a market leader in cosmetics, has set up a fast and

specialized supply chain system for its new products. The system, which gives

incentives only on time for marketing and product launching excellence, enables

the company to reach the latest products to the hands of the customer, ahead of its

competitors. Its traditional supply chain system, meanwhile, controls the cost of

products that already have a steady demand.

Or consider the burgeoning online retail market which is transforming consumer

expectation of product availability and delivery time. The online market in China

could be a nice example in this regard. Companies like GOME Electrical and

Suning Commerce Group, two major players in the el

electronics market, deliver their products within hours of placing an order, to

customers in big cities. The speed of delivery has now become a major necessity

because customers are increasingly ordering the exact similar item from other

retailers. The equation is simple, take the one which is delivered first. Reject the

others.

Nine strong interventions

If the above examples mean anything, it’s the ways in which a supply chain system

can steer business performance. But when we actually think of supply chain

optimization, we typically think to improve delivery time and accuracy, and

customer service. Many companies, sadly, fail to understand that a smarter supply

management can generate hidden savings. Most of them fail to set up a link

between financial information and the logistics process and miss out on revenue.
We have identified the following actions that the top management can adopt for

maximizing the supply chain system’s potential of their company.

1. Inventory management
Let’s say you have only a two-hour worth of sitting stock in your car

manufacturing unit, with an aim to keep the storage costs low. But what will

happen when a particular part of your cars, say headlights, are delivered an hour

late? It could lead the tightly coupled production line to come to a standstill. So

what are the delay costs that you have to factor in? Focusing solely on limiting

stock is a myopic strategy, and in terms of your bottom line, the result is likely to

be incurring more costs than the revenue it brings in. Organizations have to strike

the correct balance between minimizing their stock and the stomach to meet

customer demands. Threats to stock shortage must be contemplated well in

advance, before it actually strikes. Remember, you can say “no” to you customer

only if the crisis is really big.

2. Improve your distribution network

The distribution network of your company is the operational fulcrum around which

your supply chain management system is built. Distribution affects everything

including sales strategy and delivery tracking. Improving the distribution network

should be your main aim, which you can do with a cluster view or a holistic

approach. In the latter, you have to review the essential parts of your distribution
network and figure out how they work in tandem. For instance, look at the

purchasing software and to see how it works with the delivery system. Does it

communicate well with the warehouse manager and production foreman? If it’s not

as efficient as you like it to be, identify the areas where the changes should be

incorporated. The cluster view, on the other hand, groups graphs, charts and other

details together and helps to keep watch on the process for a specific company

function.

3. Devise a distribution strategy

A good distribution strategy is integral to the supplier management framework. It

reduces product decay, while improving the customer service. The broader field of

supply chain management can help an organization plant seeds for long-term

financial stability. Supply chain management experts Frank F Britt, Donavon J

Fabre, and David L Anderson, have indicated that devising a good blueprint for

distributing your products and services will help in achieving profitable growth,
particularly when corporate managers strategically think about cost, revenue, and

asset utilization.

While making your distribution strategy, keep a close watch on issues like

production facilities, cross-docks, warehouses, and above all customers, along with

number, location and the network of suppliers. Set a proper goal for your

distribution. Put in place tactics in sync with your overall supply chain strategy.

For instance, if you want to get an industry award for timely delivery, find out all

major stakeholders i.e. production supervisors, delivery teams etc. for the essential

process to improve.

4. Segregating your corporate and supply chain strategies

Whether your business strategy involves product innovation, superior service, or

cost leadership, always ensure that the supply chain is playing its role in the

delivery of the key points of the strategy. Fetch leaders from all sections of your

business to a common platform for defining the supply chain management system

which would work for you. Make sure they give the data which your organization

has to deliver. The marketing section would tell you what the customers demand

most from you, and how the needs vary among them. What will set you apart from

your peers? Your company’s commercial functions must identify the customers

who justify the price of the best service, which can be served better using a greater
standardized approach. Your manufacturing functions and supply chain system

must find ways to come up with innovative products or services that cater to the

demands of all customers, and at the same time, keep the costs under control.

5. Supplier cash control

You can find great insights in your supply and payment contracts with suppliers.

There are several elements to consider, including how to avoid buying unnecessary

stock (via automated order processing), avoiding costs for correction in both orders

and supplies and optimizing the payment behavior of suppliers. Partnerships with

vendors usually contain many automatic processes that should be analyzed and

optimized carefully.

6. Controlling operational expenses

In many companies, there’s a great deal to improve on the operational side of

things. There could be reasons for incorrect supplies. Instead of just correcting the

relevant order, it’s imperative to search for the particular point in the process

where the discrepancy arose to prevent recurrence of the same mistake.

7. Creating a modern supply chain organization
Managing supply chain in discrete tiers is a dated process. Sophisticated data

analyses have now enabled organizations manage supply chains end-to-end. In

industries like retail, this happens almost real time. A single leader can be given

the responsibility of such performance and to deliver improvement projects across

various tiers and carry out traditional functions like manufacturing, marketing, and

procurement. Ensure that the supply-chain system merges operational excellence

with a strong analytical capability, and data driven, multifunctional decision

making. Set up analytical teams for supporting the decision making and identifying

hidden opportunities and risks in unstructured data. Always ensure that your

information technology function supports them with platforms and applications

that facilitate collaboration as well as analytical decision making.

8. Customer cash control
While improving profitability of customer relationship and orders, it’s important to

measure order processing and optimizing the settlement of payments. You have to

constantly measure whether the right product is delivered to the right place in the

right quantity as desired by the client. Supply processes can be optimized to avoid

expensive errors. Settling payments with clients is one factor which is equally

important for saving costs. Reducing the time between orders and payment,

resolving late payments, making a missing payment visible and invoicing them,

can greatly reduce costs.

9. Set performance benchmarks for your company

Give incentives to the supply chain organization for working in ways which would

deliver the biggest value for your company, and at the same time, securing against

the biggest risks. It means resorting to more than the conventional metrics of

capital, cost, and service. The key performance indicators (KPIs) strongly depend

on the demands of the business, as well as the product or service, and the particular

market segment. These include the production cost for value players, stable supply

of critical products and staple items, agility to deal with fluctuating demand in

volatile markets, and a perfect launch of a new product is essential. When a

particular metric doesn’t matter to your business, don’t forcibly impose it upon

your organization.

Final words
In order to realize the real improvements to a supply chain, it’s important

that logistics experts and controllers work more closely together. In several

companies, optimization of the supply chain management system is considered

largely from the logistical point of view, sans looking into what could be the exact

economic consequences of some of the decisions.

With a simple analysis, it’s clear that a company can gain much in quick time. But

most companies, unfortunately, still miss out on a lot of opportunities because they

don’t have the full picture in front of them, nor do they think in a detailed manner.
If you want to realize the actual savings, you must calculate the effect of carrying

out changes in your supply chain management system on operational costs, service

provision, working capital, and most importantly, the revenue of the company.

Only then you can possibly determine to what extent which supply chain

optimization will truly trigger your profits.

 CONCLUSION
Efficient material & supply chain management is crucial for the success of any sma
ll scale manufacturing & fabrication project and can be the deciding factor between
a successful project and a project full of delays and claims. Better material manage
ment methods and decision models are needed to improve the electrical industry cu
rrent practices, thus increasing efficiency and minimizing costs. An effective suppl
y management system is essential for managing efficient material management to a
void material shortages, misplacements, loss, and theft which might result in increa
ses in crew idle times, loss of productivity and delay of activities. Small scale Elect
rical industry should implement an efficient material management system due to th
e fact that in most of the cases they are asked to squeeze their bids in order to keep
the costs of project under budget. In such a case, failures to effectively manage mat
erials could result in decreases in profit or even a loss. The primary goal is to have
the material needed, in the amounts needed, with the quality required, and the time
that they are needed. Most electrical companies have a material management syste
m that serves their needs, although it could be improved. Standardization of the ma
terial management system could be a step forward in improving the system and eli
minating some of the bottlenecks. The research presented in this document aimed a
t designing an integrated system of decision- support tools for material procuremen
t for the small scale industry particularly an electrical industry. An integrated appr
oach for material procurement provides better decisions on what to order, how muc
h to order and where to deliver. Future research will be needed to develop a more c
omplete framework integrating other decisions needed in areas such as supplier sel
ection and preliminary material scheduling during the prefabrication phase. A fully
integrated approach will better improve communication and minimize gaps in infor
mation flow among all the parties and departments involved.