International Supply Chain

1st Assignment
Submitted To: Submitted By: Capt. Sanjeev Rishi Bulani 185 Hitesh

Q 1) What is the business process between the customer and the supplier? Ans) Integration between customer and supplier is one of the important concepts in supply chain management. Customer- supplier integration (CSI) practices can be explained in four specific business processes new product development, logistics, pricing and knowledge transfer. New product development: Efforts to overcome inter-organizational boundaries in managing negotiation process the new product development process. Measures: information exchange degree on materials/suppliers; interaction types in new product development (e.g. marketed goods, traditional subcontracting, black-box or co-development); use of interfirm teams for new product development; frequency of NPD inter-organizational meetings (no regular vistits, only when there is a problem, weekly, quarterly, annually, guests); usage of I&CT supporting information exchange on NPD process. Logistics: Efforts to overcome inter-organizational boundaries in managing the logistics process. Measures: visibility on supplier/customer inventory; common use of logistical equipment/containers; common use of third-party logistical services; usage of I&CT supporting logistics process; sharing production plans and access to planning systems; adoption of JIT or continuous replenishment. Pricing: Efforts to overcome inter-organizational boundaries in managing the pricing process. Measures: information exchange degree on (1) the supplier production process and system (production phases, planning system, sourcing policies, materials) and (2) the purchased goods cost structure; degree of cooperation in pricing (1 min: price is determined by the market/one party; 5 max: target costing).

Knowledge transfer: Efforts to overcome inter-organizational boundaries in managing the process of technical and technological knowledge transfer. Measures: training at the supplier/customer plant organized by the customer/supplier; frequency of customer/supplier visits during last year (not once, once, 2 to 5 times, 6 to 10 times, adoption of residential engineers at the customer/supplier plants); degree of technical/managerial customer/supplier support.

2) What is JIT, VMI & KANBAV? How does SCM help in the mentioned inventory system? Ans) JIT- Just In Time (JIT) is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand. When Companies use Just in Time (JIT) inventory control system, they purchase materials and produce units only as needed to meet actual customers demand. In just in time manufacturing system inventories are reduced to the minimum and in some cases are zero. VMI Vendor-managed inventory (VMI) is a family of business models in which the buyer of a product provides certain information to a supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location (usually a store). A third-party logistics provider can also be involved to make sure that the buyer has the required level of inventory by adjusting the demand and supply gaps. VMI makes it less likely that a business will unintentionally become out of stock of a good and reduces inventory in the supply chain. Furthermore, vendor (supplier) representatives in a store benefit the vendor by ensuring the product is properly displayed and store staff are familiar with the features of the product line, all the while helping to clean and organize their product lines for the store. KANBAN: Also spelled KANBAM, and literally meaning "signboard" or "billboard", is a concept related to lean and just-in-time (JIT) production. KANBAN is one means through which JIT is achieved. Kanban is not an inventory control system. Rather, it is a scheduling system that tells you what to produce, when to produce it, and how much to produce. It is used as a demand signal that immediately propagates through the supply chain. This can be used to ensure that intermediate stocks held in the supply chain are better managed, usually smaller. Where the supply response cannot be quick enough to meet actual demand fluctuations, causing significant lost sales, then stock building may be deemed as appropriate which can be

achieved by issuing more kanban.