Supply chain visibility, a term that like two sides of coin brings with it potential for tremendously improved supply chain performance on one side and a level of vagueness & uncertainty on other side. The concept of supply chain visibility in late 1990’s and is still new to many organizations. Art Mesher, then an analyst at Gartner gave the concept of “The 3V’s of supply chain”. The 3 V’s of supply chain stands for velocity, variability and visibility. Corporates and companies have worked upon the velocity and variability of supply chain but still have very little understanding of visibility.
Visibility not only means on-shelf inventory but also means inventory piled up at all levels of supply chain including in transit inventory and inventory piled up across company’s network. Visibility allows concerned people in supply chain to forecast problems before they occur and taken necessary steps to avoid expense in the real time. Two drivers of this savings through visibility come from PO lifecycle and ASN (Advanced Shipped Notice, Inventory) accuracy.
Figure Source: Supply Chain Digest Letter, April 2012
Supply Chain Visibility Vectors – A case of Reliance Fresh
Visibility vectors are basically the factors that affect the visibility of products and services across various layers of organization’s network. We will take the case of Reliance fresh stores as example for better understanding of supply chain vectors. There can be seven major vectors which are as follows:-
(a) Demand Management
(b) Supply Management
(c) International Sourcing
(d) Domestic Sourcing
(e) Inventory
(f) Distribution and Logistics
(g) Risk Management
Demand Management
Proper demand management with proper demand forecasting based on ...
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...here are different logistics partners even within the same cities. It makes difficult to estimate the in transit inventory. There is no sharing of data between logistics partners which makes demand and supply estimation more difficult.
Earlier Reliance had a dedicated Reliance Logistics as their logistics partner but it could not survive for long. There should be uniform dedicated logistics partner at least on city level as it will increase the response time and information can easily be shared about the demand and supply.
Risk Management
Constant review of risk management and mitigation plan both at strategic and tactical level should be done depending upon the degree of risk involved in the business and the nature of the product.
Based on the above mentioned secondary research, the following supply chain visibility matrix for Reliance Fresh has been suggested.
Over the years role of supply chain has been altered. The distribution has switched from shipping from one focal point, now technology has shortened the process that will to ship directly from the manufacture to the customer that will tie in to the distribution channels. Though distribution is costly, a person would think all the risk will be eliminated. Contrarily to what people may think, distribution have many risk it must account. When the product is unloaded onto the truck, it’s the trucker sole responsibility to ensure the customer receive their product. Distribution initially start at beginning when it is
A supply chain is a system through which organizations deliver their products and services to their customers. The network begins with the basic ingredients to start the chain of supply, which are the suppliers that supply raw materials, ingredients, and so on. From there, it will transfer the supplies to the manufacturer who builds, assembles, converts, or furnishes a product. The chain now needs to get the product to the consumer by transporting the finished product from the manufacturer through a warehouse or distribution center. An example is that Wal-Mart has a nearby distribution center where products are delivered there and then split up to be delivered to a retail Wal-Mart. “Wal-Mart will take responsibility for breaking down larger loads and delivering the product to other Wal-Mart stores” (Ehring 1).
The inventory issue also ties in with transportation problems where accurate lead and delivery times are non-existent. The inventory turnover is not at its full potential because if the DC has merchandise yet the stores are stocked out, the inventory is frozen and will become obsolete.
It is suggested for any organization to review, reassess any existing supply chain management or any delivery techniques, before developing a new supply chain method so that any exposure to high risk of failure is reduced. Somerset as a company taken advantage of outsourcing and transferred it product manufacturing to China leveraging low cost labor and raw material. The labor cost and other cheap material reduce Somerset overhead cost, but there is always the risk of not delivering product on time due to the foreign country political climate, change in tax and tariff and local
Boundary spanning is a business term where it means the efforts by an organization to establish connections both within and outside the organization.Boundary spanning is vital to the effectiveness of cross functional teams and change management initiatives because as we work with others,two elements are key to success.The ability to establish and maintain healthy relationship with others as well as the skill to tackle disordered data and potentially a high degree of ambiguity in order to meet objectives,deadlines and goals.Business processing from product planning to distribution need an efficient management.In order to make sure the supply chain is efficient.The important of supply chain efficiency is ,it can cut down operating costs,enable shorter production period,faster distribution thus will enhanced productivity of the whole business.Supply chain efficiency is the main factor that contribute an organisations to maintain their competitive advantage.Organisations need to align internal organizational resources with external market needs in order to make sure the supply chain flows are smooth.
The risk mitigation activities for this company should involve learning on the trends of the industry so as to make sure that they remain competitive. This will make their finances to perform consistently well and investors will be impressed and invest even more. As well, the company should do research on shows hat that
Even with such pressing requirements, warehousing has seen very little investment in the country. Currently, spending in organized warehousing in India is only 9% of the total logistics spending (its 25% in the US). Logistics costs account for around 6-10% of total retail cost which is higher than the global average of 4-5%. Improvements in the supply chain and logistics can bridge this gap. An integrated supply chain (including the cold supply chain) can save more than ₨ 300 Billion for the country. This along with saving perishable horticulture produce should be an incentive to develop logistics infrastructure in a country like India plagued with inflation and
The risk management process needs to be flexible. Given that, we operate in the challenging environment, the companies require the meaning for managing risk as well as continuous improvement in identifying new risks that will evolve and make allowances for those risks that are no longer existing.
Logistics is a concept used to define issues and arrangements related to transportation of products from the supplier to the buyer across international borders (Trepins S50). Current global trends have seen an upsurge of freight traffic as companies seek raw materials from middle to low income countries. On the other hand, many companies are seeking to diversify their target markets making it possible to send thei...
Logistics has played important role in the business competition and is one of important factors in the production cost increase. World Bank has made a survey on logistics performance (Logistics Performance Index: LPI) to measure the efficiency of logistics system of each country [1] as shown in Figure 1.
A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system [1]. The basic objective of supply chain is to “optimize performance of the chain to add as much value as possible for the least cost possible.
All choices made by Seven-Eleven are structured to lower its transportation and receiving costs. For example, its area-dominance strategy of opening at least 50 to 60 stores in an area helps with marketing but also lowers the cost of replenishment. All manufacturing facilities are centralized to get the maximum benefit of capacity aggregation and also lower the inbound transportation cost from the manufacturer to the distribution center (DC). Seven-Eleven also requires all suppliers to deliver to the DC where products are sorted by temperature. This reduces the outbound transportation cost because of aggregation of deliveries across multiple suppliers. It also lowers the receiving cost. The information infrastructure is set up to allow store managers to place orders based on analysis of consumption data. The information infrastructure also facilitates the sorting of an order at the DC and receiving of the order at the store. The key point to emphasize here is that most decisions by Seven-Eleven are structured to aggregate transportation and receiving to make both cheaper.
A supply chain may be characterized as a coordinated procedure wherein various different business elements (i.e., suppliers, makers, wholesalers, and retailers) cooperate with an end goal to: (1) gain raw materials, (2) change over these raw materials into indicated complete items, and (3) convey these last items to retailers. This chain is generally portrayed by a forward stream of materials and a retrogressive stream of data. For a considerable length of time, scientists and professionals have basically researched the different procedures of the supply chain separately. As of late, in any case, there has been expanding consideration put on the execution, configuration, and examination of the supply chain in general. From a reasonable outlook,
Logistics is the designing and managing of a system in order to control the flow of material throughout a corporation. This is a very important part of an international company because of geographical barriers. Logistics of an international company includes movement of raw materials, coordinating flows into and out of different countries, choices of transportation, cost of the transportation, packaging the product for shipment, storing the product, and managing the entire process. The concept of logistics is fairly new in the business world. The theoretical development was not used until 1966. Since then, many business practices have evolved and logistics currently costs between 10 and 25 percent of the total cost of an international purchase.
Ordering is one of the main factors in the supply chain. The real success of the supply chain management starts from of a customer order. Any ‘waste’ that would lead to delay or disruption need to be eliminated. The orders need to be compiled correctly using accurate data and sent at agreed timings with jointly agreed delivery timings. All orders need to be electronically communicated using EDI or the Internet.