A CRITICAL STUDY OF CHANGING PHASES OF SCM IN FMCG SECTOR

MMS(Operations) Project Thesis 2011

A STUDY ON STOCKIST WITHIN MUMBAI

“A CRITICAL STUDY OF CHANGING PHASES OF SCM IN FMCG

SECTOR”

MASTER OF MANAGEMENT STUDIES

(OPERATIONS)

By:

Sudhir Kumar Singh

(Roll No. 50)

Guide By:

Prof. Vikram Shikhare

BES’s Institute of Management Studies and Research

(Affiliated to University of Mumbai)

May 2011

Page | 1BES’s Institute Of Management Studies and Research

10- Nesbit Road, Mazgaon


DECLARATION

I, Mr. Sudhir Kumar Singh,

Hereby declare that this project report is the record of authentic work carried out by me

during the academic session of MMS 4th semester 2011 and has not been submitted to any other

University or Institute for the award of any degree/diploma.

Signature of Internal Guide Signature of Student

Prof. Vikram Shikhare Sudhir Kumar Singh




CERTIFICATE

This is to certify that the dissertation titled “A CRITICAL STUDY OF CHANGING PHASES

OF SCM IN FMCG SECTOR” is the bonafide research work carried out by Mr. Sudhir Kumar

Singh student of MMS, at BES’s Institute of Management Studies and Research (Affiliated to

University of Mumbai) during the year 2009 -2011, in partial fulfillment of the requirements for the

award of the Degree of Master of Management Studies of University of Mumbai and that the

dissertation has not formed the basis for the award previously of any degree, diploma, associate ship,

fellowship or any other similar title.

Date:

Signature of Director Signature of Guide

(Prof. Vikram Shikhare) (Prof. Vikram Shikhare)




ACKNOWLEDGMENT

It is a pleasure to record my thanks and gratitude to the Director Prof. VikramShikhare,

Prof. MrinaliTikare and Prof. QureshMoochala who provide me the opportunity to conduct this

research. I am also thankful to all my responders and my friends whose generous help and support

enable me to complete this study with in the stipulated time period.

I am very thankful to the Course Coordinator Prof. VikramShikhare for consult and

guidance provides me which I am necessary for completing this study.

Lastly, I want to gratitude the god who provide me this opportunity and always help me in

life.

However, I take the responsibility of all my shortcomings.

Sudhir Kumar Singh

MMS-IV (Operations)

Roll No.50




PREFACE

SCM in a nutshell focuses on these values and enable the creation of an ambience for

effective SCM. The world of SCM is progressing very rapidly indeed. There have been

technological advancements and high speed evolution that have forced organizations to restructure

their business progress. This basic objective of this research is to study impact of changing phases of

SCM for FMCG for this I had studied challenges, willingness, limitations, satisfaction level and

advantage for FMCG stockiest, so that they can apply better supply chain management solutions.

This research has been proved very beneficial for me to provide practical knowledge towards

various aspect of SCM solutions for FMCG stockiest. It was a great opportunity for me to conduct

such type of research.

Really, this project research was quite interesting, inspiring, satisfying, knowledge, gaining

and academically rewarding for me.

Sudhir Kumar Singh

MMS-IV (Operations)

Roll No.50




TABLE OF CONTENT

PART-

A

A.1 Executive Summary 9

A.2 Objectives of the study 11

A.3 Limitations 12

A.4 Research methodology 13

PART-

B

THEORITICAL FRAMEWORK

B.1 Introduction to the SCM 15

B.2 Supply Chain Management Problems 16

B.3 Activities and functions of SCM 18

B.4 Strategic orientation of SCM 19

B.5 Strategic Management in Global context 21

B.6 Phases & Development in Supply Chain Management 29

B.7 Functional and Scope of SCM 43

B.8 An overview of FMCG in India 51

B.9 Implementation of SCM Practices in Indian FMCG Industry 58

PART-

C

C.1 Literature Reviews 69

C.2 Questionnaire 87

PART-

D

ANALYSIS AND INTERPRETATIONS

D.1 Observation and analysis 90

D.2 Findings 105

D.3 Conclusions 107

D.4 Bibliography 109




List of Tables

Tables Page no.

India’s top 10 companies in FMCG sector 53

Awareness Level towards Supply chain Management Fundamental 90

Options for a better Supply chain Solutions 91

Willingness level to accept the Supply chain Management advantage for better

profitability achievement

92

Level the cost deficiency hinders to implement Supply chain solution 93

Level of conservative approach hinder to implement Supply chain solutions. 94

Level the unavailability hinders to implement Supply chain solutions. 95

Level of satisfaction with Supply chain solutions. 96

Observation level of the Supply chain solution is advantages for the scope of

business.

97

Option preferred as advantages in implement Supply chain solutions. 98

Level new emerging technologies are beneficial in providing better Supply chain

solutions

99

Role SCM play in the total performance 100

Level of desire to ask for supplier for much better Supply chain solution 101

Which option is most important for much better Supply chain solution 102

Level of willingness to go for outsourcing Supply chain services 103

Level of requirement for FMCG sector in comparison with othercommodity for a

supply chain solution

104

List of Charts




Charts Page no.

Awareness Level towards Supply chain Management Fundamental 90

Options for a better Supply chain Solutions 91

Willingness level to accept the Supply chain Management advantage for better

profitability achievement

92

Level the cost deficiency hinders to implement Supply chain solution 93

Level of conservative approach hinder to implement Supply chain solutions. 94

Level the unavailability hinders to implement Supply chain solutions. 95

Level of satisfaction with Supply chain solutions. 96

Observation level of the Supply chain solution is advantages for the scope of

business.

97

Option preferred as advantages in implement Supply chain solutions. 98

Level new emerging technologies are beneficial in providing better Supply chain

solutions

99

Role SCM play in the total performance 100

Level of desire to ask for supplier for much better Supply chain solution 101

Which option is most important for much better Supply chain solution 102

Level of willingness to go for outsourcing Supply chain services 103

Level of requirement for FMCG sector in comparison with other commodity for

a supply chain solution

104

Executive Summary




Global Competitiveness today means that the customer is supreme. As the customer .is supreme,

only those enterprises are going to be successful which are able to provide goods and services to the

customer in timely, cost effective manner and also provide quality, which not only satisfies him but

delights him. If the supply chain is not properly managed, the delivery chain is automatically bound

to be affected resulting in customer dissatisfaction and finally loss of business. With the changing

scenarios, there is need for organization to survive in the fierce global competition. Companies will

have to fine tune the processes and clean out the flab like high inventories, and longer lead times in

supply chain. Effective management of supply chain provides a possible solution to handle such

issues.

Here in this report, study of leading FMCG company is reported. In particularly if we take example

of Dabur India Ltd, This company is involved in manufacturing of natural juices. The supply chain

of this company includes raw materials, manufacturing operations and the distribution network. The

product range includes natural juices, ethnic pastes, capsico sauces and lemoneez. The main

problems being faced by the company are:

Errors in Forecasting Demand

High inventory levels

Imbalance in the Distribution Network

The importance of addressing these above problems have been discussed in this report. In case of

perishable products, where the life of the product is short, an accurate forecasting, in line with

market demand becomes very important. The products under study are fast food like, natural juice,

which has a very short shelf life. Since the product is of health care nature, its salvage value is zero




once its shelf life is over. This puts heavy pressure on supply chain for an appropriate forecasting,

adequate inventory level and proper distribution network.

Another important element of supply chain is of warehousing, which plays a vital role in

consumer goods industry. The decision for set-up warehouse is a very crucial job for operation

managers, this is very important in terms of distribution & transportation cast.




A.1- OBJECTIVES OF STUDY

To diagnose the limitation faced by different FMCG stockiest of Mumbai city in the utilizing

the full advantage of supply chain management.

To study the strategic advantage of supply chain management among FMCG stockiest.

To study the willingness among different FMCG stockiest to apply better supply chain.

To know the satisfaction level of supply chain management services among FMCG stockiest.

To know the challenges in the field of supply chain management under changing

technological scenario.




A.2 - LIMITATIONS

o Good results depend upon FMCG stockiest willingness to give good and fair response then we

can say concretely the result is good.

o Results of this study and findings are applicable only for Mumbai city and nearby areas. The

results may be different of this study in another place.

o One of the limitation of this study is that of time limitation due to which it is not possible to do

the detailed study.

o The sample size was taken only 50; it is difficult to say anything concretely.

o Absence of professional researcher and team was another limitation of the study.




A.3 - RESEARCH METHODOLOGY

Research methodology is a description explanation and justification of various methods of

conducting research.

TYPE OF RESEARCH USED IN THE STUDY

MARKET RESEARCH

Market research has a broad scope and includes all aspects of the business environment. It asks

questions about competitors, market structure, government regulations, economic trends,

technological advances, and numerous other factors that make up the business environment.

Sometimes the term market research refers more particularly to the financial analysis of companies,

industries, or sectors. In this case, financial analysts usually carry out the research and provide the

results to invest advisors and potential investors.

SAMPLING

The sampling plan for the study decides the work area that is the population, which has to be

surveyed. A Brief idea about the sampling for this research consisting of its different parameters is

given below:

TYPE OF SAMPLING METHOD USED IN THE STUDY

JUDEGEMENTAL SAMPLING

In this type of the sampling the researcher uses his judgment to select population members who are

good source for accurate information




SAMPLING UNIVERSE

The sample universe is taken Mumbai and nearby areas.

SAMPLE SIZE

In this study sample size is of 50 FMCG stockiest. Due to the shortage of time and un-availability of

expert team the research size is taken short so that the research can be done easily.

METHOD OF DATA COLLECTION

The research was carried out through survey method with the help of a QUESTIONNAIRE

consisting of closed ended question. Due to flexibility, questionnaire method is ideally suited for

collection of primary data.




B.1 - Supply chain management (SCM) (definitions):

Supply chain management (SCM) is the management of a network of interconnected businesses

involved in the ultimate provision of product and service packages required by end customers

(Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-

in-process inventory, and finished goods from point-of-origin to point-of-consumption (supply

chain).

The definition one American professional association put forward is that Supply Chain Management

encompasses the planning and management of all activities involved in sourcing, procurement,

conversion, and logistics management activities. Importantly, it also includes coordination and

collaboration with channel partners, which can be suppliers, intermediaries, third-party service

providers, and customers. In essence, Supply Chain Management integrates supply and demand

management within and across companies. More recently, the loosely coupled, self-organizing

network of businesses that cooperates to provide product and service offerings has been called the

Extended Enterprise.

Supply Chain Management can also refer to Supply chain management software which is tools or

modules used in executing supply chain transactions, managing supplier relationships and

controlling associated business processes.

Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring

events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can

be created and solutions can be planned.



http://en.wikipedia.org/wiki/Supply_chain_management_software

http://en.wikipedia.org/wiki/Extended_Enterprise

http://en.wikipedia.org/wiki/Supply_and_demand

http://en.wikipedia.org/wiki/Channel_partner

http://en.wikipedia.org/wiki/Supply_chain

http://en.wikipedia.org/wiki/Supply_chain

http://en.wikipedia.org/wiki/Raw_material

http://en.wikipedia.org/w/index.php?title=End_customers&action=edit&redlink=1

http://en.wikipedia.org/wiki/Service

http://en.wikipedia.org/wiki/Product

http://en.wikipedia.org/wiki/Business

http://en.wikipedia.org/wiki/Supply_chain_network


B.2 - Supply Chain Management Problems

Supply chain management must address the following problems:

Distribution Network Configuration: Number, location and network missions of suppliers,

production facilities, distribution centers, warehouses, cross-docks and customers.

Distribution Strategy: Including questions of operating control (centralized, decentralized or

shared); delivery scheme (e.g., direct shipment, pool point shipping, Cross docking, DSD (direct

store delivery), closed loop shipping); mode of transportation (e.g., motor carrier, including

truckload, LTL, parcel; railroad; intermodal, including TOFC and COFC; ocean freight;

airfreight); replenishment strategy (e.g., pull, push or hybrid); and transportation control (e.g.,

owner-operated, private carrier, common carrier, contract carrier, or 3PL). Trade-Offs in

Logistical Activities

The above activities must be coordinated well together in order to achieve the least total logistics

cost. Trade-offs exist that increase the total cost if only one of the activities is optimized. For

example, full truckload (FTL) rates are more economical on a cost per pallet basis than less than

truckload (LTL) shipments. If, however, a full truckload of a product is ordered to reduce

transportation costs there will be an increase in inventory holding costs which may increase total

logistics costs. It is therefore imperative to take a systems approach when planning logistical

activities. These trade-offs are key to developing the most efficient and effective Logistics and SCM

strategy.



http://en.wikipedia.org/wiki/3PL

http://en.wikipedia.org/wiki/Common_carrier

http://en.wikipedia.org/wiki/Private_carrier

http://en.wikipedia.org/wiki/Railroad

http://en.wikipedia.org/wiki/Parcel

http://en.wikipedia.org/wiki/Less_than_truckload

http://en.wikipedia.org/wiki/Motor_carrier

http://en.wikipedia.org/wiki/Cross_docking

http://en.wikipedia.org/wiki/Strategy

http://en.wikipedia.org/wiki/Distribution_(business)


Information: Integration of and other processes through the supply chain to share valuable

information, including demand signals, forecasts, inventory, transportation, and potential

collaboration etc.

Inventory Management: Quantity and location of inventory including raw materials, work-in-

progress (WIP) and finished goods.

Cash-Flow: Arranging the payment terms and the methodologies for exchanging funds across

entities within the supply chain.

Supply chain execution is managing and coordinating the movement of materials, information and

funds across the supply chain. The flow is bi-directional.



http://en.wikipedia.org/wiki/Inventory


B.3 - Activities/functions of SCM

Supply chain management is a cross-function approach to manage the movement of raw materials

into an organization, certain aspects of the internal processing of materials into finished goods, and

then the movement of finished goods out of the organization toward the end-consumer. As

organizations strive to focus on core competencies and becoming more flexible, they have reduced

their ownership of raw materials sources and distribution channels. These functions are increasingly

being outsourced to other entities that can perform the activities better or more cost effectively. The

effect is to increase the number of organizations involved in satisfying customer demand, while

reducing management control of daily logistics operations. Less control and more supply chain

partners led to the creation of supply chain management concepts. The purpose of supply chain

management is to improve trust and collaboration among supply chain partners, thus improving

inventory visibility and improving inventory velocity.

Several models have been proposed for understanding the activities required to manage material

movements across organizational and functional boundaries. SCOR is a supply chain management

model promoted by the Supply Chain Council. Another model is the SCM Model proposed by the

Global Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategic, tactical,

and operational levels of activities.




B.4 - Strategic orientations of SCM

Strategic intent:

Strategic network optimization, including the number, location, and size of warehouses,

distribution centers, and facilities

Strategic partnership with suppliers, distributors, and customers, creating communication

channels for critical information and operational improvements such as cross docking, direct

shipping, and third-party logistics

Product lifecycle management, so that new and existing products can be optimally integrated into

the supply chain and capacity management

Information Technology infrastructure, to support supply chain operations

Where-to-make and what-to-make-or-buy decisions

Aligning overall organizational strategy with supply strategy

Tactical intent:

Sourcing contracts and other purchasing decisions.

Production decisions, including contracting, scheduling, and planning process definition.

Inventory decisions, including quantity, location, and quality of inventory.

Transportation strategy, including frequency, routes, and contracting.

Benchmarking of all operations against competitors and implementation of best practices

throughout the enterprise.

Milestone payments

Focus on customer demand.



http://en.wikipedia.org/wiki/Best_practice

http://en.wikipedia.org/wiki/Benchmarking

http://en.wikipedia.org/wiki/Information_Technology

http://en.wikipedia.org/wiki/Product_lifecycle_management

http://en.wikipedia.org/wiki/Third-party_logistics

http://en.wikipedia.org/wiki/Cross_docking

http://en.wikipedia.org/wiki/Strategic_partnership

http://en.wikipedia.org/wiki/Distribution_center


Operational intent:

Daily production and distribution planning, including all nodes in the supply chain.

Production scheduling for each manufacturing facility in the supply chain (minute by minute).

Demand planning and forecasting, coordinating the demand forecast of all customers and sharing

the forecast with all suppliers.

Sourcing planning, including current inventory and forecast demand, in collaboration with all

suppliers.

Inbound operations, including transportation from suppliers and receiving inventory.

Production operations, including the consumption of materials and flow of finished goods.

Outbound operations, including all fulfillment activities, warehousing and transportation to

customers.

Order promising, accounting for all constraints in the supply chain, including all suppliers,

manufacturing facilities, distribution centers, and other customers.




B.5 - Supply chain Management (in global context)

Organizations increasingly find that they must rely on effective supply chains, or networks, to

successfully compete in the global market and networked economy.[2] In Peter Drucker's (1998) new

management paradigms, this concept of business relationships extends beyond traditional enterprise

boundaries and seeks to organize entire business processes throughout a value chain of multiple

companies.

During the past decades, globalization, outsourcing and information technology have enabled many

organizations, such as Dell and Hewlett Packard, to successfully operate solid collaborative supply

networks in which each specialized business partner focuses on only a few key strategic activities

(Scott, 1993). This inter-organizational supply network can be acknowledged as a new form of

organization. However, with the complicated interactions among the players, the network structure

fits neither "market" nor "hierarchy" categories (Powell, 1990). It is not clear what kind of

performance impacts different supply network structures could have on firms, and little is known

about the coordination conditions and trade-offs that may exist among the players. From a systems

perspective, a complex network structure can be decomposed into individual component firms

(Zhang and Dilts, 2004). Traditionally, companies in a supply network concentrate on the inputs and

outputs of the processes, with little concern for the internal management working of other individual

players. Therefore, the choice of an internal management control structure is known to impact local

firm performance (Mintzberg, 1979).

In the 21st century, changes in the business environment have contributed to the development of

supply chain networks. First, as an outcome of globalization and the proliferation of multinational



http://en.wikipedia.org/wiki/Dell

http://en.wikipedia.org/wiki/Information_technology


companies, joint ventures, strategic alliances and business partnerships, there were found to be

significant success factors, following the earlier "Just-In-Time", "Lean Manufacturing" and "Agile

Manufacturing" practices.[3] Second, technological changes, particularly the dramatic fall in

information communication costs, which are a significant component of transaction costs, have led

to changes in coordination among the members of the supply chain network (Coase, 1998).

Many researchers have recognized these kinds of supply network structures as a new organization

form, using terms such as "Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global

Production Network", and "Next Generation Manufacturing System".[4] In general, such a structure

can be defined as "a group of semi-independent organizations, each with their capabilities, which

collaborate in ever-changing constellations to serve one or more markets in order to achieve some

business goal specific to that collaboration" (Akkermans, 2001).

The security management system for supply chain is described in ISO/IEC 28000 and ISO/IEC

28001 and related standards published jointly by ISO and IEC.



http://en.wikipedia.org/wiki/Keiretsu










PERISHABLE GOODS











B.6 - Phases &Developments in Supply Chain Management

Six major movements can be observed in the evolution of supply chain management studies:

Creation, Integration, and Globalization (Lavassaniet al., 2008a), Specialization Phases One and

Two, and SCM 2.0.

1. Creation Era:

The term supply chain management was first coined by an American industry consultant in the early

1980s. However the concept of supply chain in management, was of great importance long before in

the early 20th century, especially by the creation of the assembly line. The characteristics of this era

of supply chain management include the need for large scale changes, re-engineering, downsizing

driven by cost reduction programs, and widespread attention to the Japanese practice of

management.

2. Integration Era:

This era of supply chain management studies was highlighted with the development of Electronic

Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of

Enterprise Resource Planning (ERP) systems. This era has continued to develop into the 21st century

with the expansion of internet-based collaborative systems. This era of SC evolution is characterized

by both increasing value-added and cost reduction through integration.




3. Globalization Era:

The third movement of supply chain management development, globalization era, can be

characterized by the attention towards global systems of supplier relations and the expansion of

supply chain over national boundaries and into other continents. Although the use of global sources

in the supply chain of organizations can be traced back to several decades ago (e.g. the oil industry),

it was not until the late 1980s that a considerable number of organizations started to integrate global

sources into their core business. This era is characterized by the globalization of supply chain

management in organizations with the goal of increasing competitive advantage, creating more

value-added, and reducing costs through global sourcing.

4. Specialization Era -- Phase One -- Outsourced Manufacturing and Distribution:

In the 1990s industries began to focus on “core competencies” and adopted a specialization model.

Companies abandoned vertical integration, sold off non-core operations, and outsourced those

functions to other companies. This changed management requirements by extending the supply

chain well beyond the four walls and distributing management across specialized supply chain

partnerships.

This transition also re-focused the fundamental perspectives of each respective organization. OEMs

became brand owners that needed deep visibility into their supply base. They had to control the

entire supply chain from above instead of from within. Contract manufacturers had to manage bills

of material with different part numbering schemes from multiple OEMs and support customer

requests for work -in-process visibility and vendor-managed inventory (VMI).




The specialization model creates manufacturing and distribution networks composed of multiple,

individual supply chains specific to products, suppliers, and customers, who work together to design,

manufacture, distribute, market, sell, and service a product. The set of partners may change

according to a given market, region, or channel, resulting in a proliferation of trading partner

environments, each with its own unique characteristics and demands.

5. Specialization Era -- Phase Two -- Supply Chain Management as a Service:

Specialization within the supply chain began in the 1980s with the inception of transportation

brokerages, warehouse management, and non-asset based carriers and has matured beyond

transportation and logistics into aspects of supply planning, collaboration, execution and

performance management.

At any given moment, market forces could demand changes within suppliers, logistics providers,

locations, customers and any number of these specialized participants within supply chain networks.

This variability has significant effect on the supply chain infrastructure, from the foundation layers

of establishing and managing the electronic communication between the trading partners to the

more-complex requirements, including the configuration of the processes and work flows that are

essential to the management of the network itself.

Supply chain specialization enables companies to improve their overall competencies in the same

way that outsourced manufacturing and distribution has done; it allows them to focus on their core

competencies and assemble networks of best in class domain specific partners to contribute to the

overall value chain itself – thus increasing overall performance and efficiency. The ability to quickly

obtain and deploy this domain specific supply chain expertise without developing and maintaining




an entirely unique and complex competency in house is the leading reason why supply chain

specialization is gaining popularity.

Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has taken

root in transportation and collaboration categories most dominantly. This has progressed from the

Application Service Provider (ASP) model from approximately 1998 through 2003 to the On-

Demand model from approximately 2003-2006 to the Software as a Service (SaaS) model we are

currently focused on today.

6. Supply Chain Management 2.0 (SCM 2.0):

Building off of globalization and specialization, SCM 2.0 has been coined to describe both the

changes within the supply chain itself as well as the evolution of the processes, methods and tools

that manage it in this new "era".

Web 2.0 is defined as a trend in the use of the World Wide Web that is meant to increase creativity,

information sharing, and collaboration among users. At its core, the common attribute that Web 2.0

brings is it helps us navigate the vast amount of information available on the web to find what we are

looking for. It is the notion of a usable pathway. SCM 2.0 follows this notion into supply chain

operations. It is the pathway to SCM results – the combination of the processes, methodologies, tools

and delivery options to guide companies to their results quickly as the complexity and speed of the

supply chain increase due to the effects of global competition, rapid price fluctuations, surging oil

prices, short product life cycles, expanded specialization, near/far and off shoring, and talent

scarcity.




SCM 2.0 leverages proven solutions designed to rapidly deliver results with the agility to quickly

manage future change for continuous flexibility, value and success. This is delivered through

competency networks composed of best of breed supply chain domain expertise to understand which

elements, both operationally and organizationally, are the critical few that deliver the results as well

as the intimate understanding of how to manage these elements to achieve desired results, finally the

solutions are delivered in a variety of options as no-touch via business process outsourcing, mid-

touch via managed services and software as a service (SaaS), or high touch in the traditional

software deployment model.

Supply chain business process integration:

Successful SCM requires a change from managing individual functions to integrating activities into

key supply chain processes. An example scenario: the purchasing department places orders as

requirements become appropriate. Marketing, responding to customer demand, communicates with

several distributors and retailers as it attempts to satisfy this demand. Shared information between

supply chain partners can only be fully leveraged through process integration.

Supply chain business process integration involves collaborative work between buyers and suppliers,

joint product development, common systems and shared information. According to Lambert and

Cooper (2000) operating an integrated supply chain requires continuous information flow. However,

in many companies, management has reached the conclusion that optimizing the product flows

cannot be accomplished without implementing a process approach to the business. The key supply

chain processes stated by Lambert (2004) are:



http://en.wikipedia.org/wiki/Process_integration


Customer relationship management

Customer service management

Demand management

Order fulfillment

Manufacturing flow management

Supplier relationship management

Product development and commercialization

Returns management

Much has been written about demand management. Best in Class companies have similar

characteristics. They include the following: a) Internal and external collaboration b) Lead time

reduction initiatives c) Tighter feedback from customer and market demand d) Customer level

forecasting

One could suggest other key critical supply business processes combining these processes stated by

Lambert such as:

Customer service management

Procurement

Product development and commercialization

Manufacturing flow management/support

Physical distribution

Outsourcing/partnerships

Performance measurement



http://en.wikipedia.org/wiki/Service_management

http://en.wikipedia.org/wiki/Customer_relationship_management


a) Customer service management process:

Customer Relationship Management concerns the relationship between the organization and its

customers. Customer service provides the source of customer information. It also provides the

customer with real-time information on promising dates and product availability through interfaces

with the company's production and distribution operations. Successful organizations use following

steps to build customer relationships:

Determine mutually satisfying goals between organization and customers

Establish and maintain customer rapport

Produce positive feelings in the organization and the customers

b) Procurement process:

Strategic plans are developed with suppliers to support the manufacturing flow management process

and development of new products. In firms where operations extend globally, sourcing should be

managed on a global basis. The desired outcome is a win-win relationship, where both parties

benefit, and reduction times in the design cycle and product development are achieved. Also, the

purchasing function develops rapid communication systems, such as electronic data interchange

(EDI) and Internet linkages to transfer possible requirements more rapidly. Activities related to

obtaining products and materials from outside suppliers requires performing resource planning,

supply sourcing, negotiation, order placement, inbound transportation, storage, handling and quality

assurance, many of which include the responsibility to coordinate with suppliers in scheduling,

supply continuity, hedging, and research into new sources or programs.



http://en.wikipedia.org/wiki/Quality_assurance

http://en.wikipedia.org/wiki/Quality_assurance

http://en.wikipedia.org/wiki/Service_management


c) Product development and commercialization:

Here, customers and suppliers must be united into the product development process, thus to reduce

time to market. As product life cycles shorten, the appropriate products must be developed and

successfully launched in ever shorter time-schedules to remain competitive. According to Lambert

and Cooper (2000), managers of the product development and commercialization process must:

coordinate with customer relationship management to identify customer-articulated needs;

select materials and suppliers in conjunction with procurement, and

Develop production technology in manufacturing flow to manufacture and integrate into the best

supply chain flow for the product/market combination.

d) Manufacturing flow management process:

The manufacturing process is produced and supplies products to the distribution channels based on

past forecasts. Manufacturing processes must be flexible to respond to market changes, and must

accommodate mass customization. Orders are processes operating on a just-in-time (JIT) basis in

minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times,

meaning improved responsiveness and efficiency of demand to customers. Activities related to

planning, scheduling and supporting manufacturing operations, such as work-in-process storage,

handling, transportation, and time phasing of components, inventory at manufacturing sites and

maximum flexibility in the coordination of geographic and final assemblies postponement of

physical distribution operations.




e) Physical distribution:

This concerns movement of a finished product/service to customers. In physical distribution, the

customer is the final destination of a marketing channel, and the availability of the product/service is

a vital part of each channel participant's marketing effort. It is also through the physical distribution

process that the time and space of customer service become an integral part of marketing, thus it

links a marketing channel with its customers (e.g. links manufacturers, wholesalers, retailers).

f) Outsourcing/partnerships:

This is not just outsourcing the procurement of materials and components, but also outsourcing of

services that traditionally have been provided in-house. The logic of this trend is that the company

will increasingly focus on those activities in the value chain where it has a distinctive advantage and

everything else it will outsource. This movement has been particularly evident in logistics where the

provision of transport, warehousing and inventory control is increasingly subcontracted to specialists

or logistics partners. Also, to manage and control this network of partners and suppliers requires a

blend of both central and local involvement. Hence, strategic decisions need to be taken centrally

with the monitoring and control of supplier performance and day-to-day liaison with logistics

partners being best managed at a local level.

g) Performance measurement:

Experts found a strong relationship from the largest arcs of supplier and customer integration to

market share and profitability. By taking advantage of supplier capabilities and emphasizing a long-

term supply chain perspective in customer relationships can be both correlated with firm



http://en.wikipedia.org/wiki/Logistics


performance. As logistics competency becomes a more critical factor in creating and maintaining

competitive advantage, logistics measurement becomes increasingly important because the

difference between profitable and unprofitable operations becomes more narrow. A.T. Kearney

Consultants (1985) noted that firms engaging in comprehensive performance measurement realized

improvements in overall productivity. According to experts internal measures are generally collected

and analyzed by the firm including

Cost

Customer Service

Productivity measures

Asset measurement, and

Quality.

External performance measurement is examined through customer perception measures and "best

practice" benchmarking, and includes 1) customer perception measurement, and 2) best practice

benchmarking. Components of Supply Chain Management are 1. Standardization 2.Postponement 3.

Customization

Theories of Supply Chain Management:

Currently there exists a gap in the literature available in the area of supply chain management

studies, on providing theoretical support for explaining the existence and the boundaries of supply

chain management. Few authors such as Halldorsson, et al. (2003), Ketchen and Hult (2006) and

Lavassani, et al. (2008b) had tried to provide theoretical foundations for different areas related to

supply chain with employing organizational theories. These theories include:






Resource-based view (RBV)

Transaction Cost Analysis (TCA)

Knowledge-based view (KBV)

Strategic Choice Theory (SCT)

Agency theory (AT)

Institutional theory (InT)

Systems Theory (ST)

Network Perspective (NP)

Supply chain sustainability:

Supply chain sustainability is a business issue affecting an organization’s supply chain or logistics

network and is frequently quantified by comparison with SECH ratings. SECH ratings are defined as

social, ethical, cultural and health footprints. Consumers have become more aware of the

environmental impact of their purchases and companies’ SECH ratings and, along with non-

governmental organizations ([NGO]s), are setting the agenda for transitions to organically-grown

foods, anti-sweatshop labor codes and locally-produced goods that support independent and small

businesses. Because supply chains frequently account for over 75% of a company’s carbon footprint

many organizations are exploring how they can reduce this and thus improve their SECH rating.



http://en.wikipedia.org/wiki/Carbon_footprint

http://en.wikipedia.org/wiki/Supply_chain_sustainability


Components of Supply Chain Management Integration:

The management components of SCM:

The SCM components are the third element of the four-square circulation framework. The level of

integration and management of a business process link is a function of the number and level, ranging

from low to high, of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985).

Consequently, adding more management components or increasing the level of each component can

increase the level of integration of the business process link. The literature on business process re-

engineering,[7] buyer-supplier relationships,[8] and SCM[9] suggests various possible components that

must receive managerial attention when managing supply relationships. Lambert and Cooper (2000)

identified the following components which are:

Planning and control

Work structure

Organization structure

Product flow facility structure

Information flow facility structure

Management methods

Power and leadership structure

Risk and reward structure

Culture and attitude

However, a more careful examination of the existing literature[10] will lead us to a more

comprehensive structure of what should be the key critical supply chain components, the "branches"




of the previous identified supply chain business processes, that is, what kind of relationship the

components may have that are related with suppliers and customers accordingly. Bowersox and

Closs states that the emphasis on cooperation represents the synergism leading to the highest level of

joint achievement (Bowersox and Closs, 1996). A primary level channel participant is a business that

is willing to participate in the inventory ownership responsibility or assume other aspects of financial

risk, thus including primary level components (Bowersox and Closs, 1996). A secondary level

participant (specialized) is a business that participates in channel relationships by performing

essential services for primary participants, thus including secondary level components, which are in

support of primary participants. Third level channel participants and components that will support

the primary level channel participants, and which are the fundamental branches of the secondary

level components, may also be included.

Consequently, Lambert and Cooper's framework of supply chain components does not lead us to the

conclusion about what are the primary or secondary (specialized) level supply chain components

(see Bowersox and Closs, 1996, pg. 93). That is, what supply chain components should be viewed as

primary or secondary, how these components should be structured in order to have a more

comprehensive supply chain structure, and to examine the supply chain as an integrative one (See

above sections 2.1 and 3.1).

Reverse Supply Chain:

Reverse logistics is the process of planning, implementing and controlling the efficient, effective

inbound flow and storage of secondary goods and related information opposite to the traditional

supply chain direction for the purpose of recovering value or proper disposal. Reverse logistics is



http://en.wikipedia.org/wiki/Reverse_logistics


also referred to as "Aftermarket Customer Services". In other words, anytime money is taken from a

company's Warranty Reserve or Service Logistics budget that is a Reverse Logistics operation.

SCOPE: The scope of SCM is functional and organizational. The functional scope of SCM refers to

which traditional business functions are included or excluded in the implementation and the process

of SCM. The organizational scope of SCM concerns what kinds of inter-firm relationships are

relevant to the participating firms in the implementation and the process of SCM.




B.7 - Functional Scope of SCM

Since process refers to the combination of a particular set of functions to get a specific output, all of

the traditional business functions should be included in the process of SCM. The supply chain

concept originated in the logistics literature, and logistics has continued to have a significant impact

on the SCM concept (Bowersox, Carter, and Monczka 1985; Dwyer, Schurr, and Oh 1987; Jones

and Riley 1985; Monczka, Trent, and Handheld 1998). In this context, Tyndall et al. (1998) propose

that "SCM logistics" is the art of managing the flow of materials and products from source to user.

SCM-or the logistics system-includes the total flow of materials, from the acquisition of raw

materials to delivery of finished products to the ultimate users, as well as the related counter-flows

of information that both control and record material movement.

According to Lambert, Stock, and Ellram (1998), however, there exist important differences between

the definition of supply chain management and the Council of Logistics Management's (1985)

definition of logistics: "Logistics is the process of planning, implementing and controlling the

efficient flow and storage of raw materials, in-process inventory, finished goods, services, and

related information from point of origin to point of consumption (including inbound, outbound,

internal and external movements) for the purpose of conforming to customer requirements." CLM

(1998) apparently agreed, since its new definition states, "Logistics is that part of the supply chain

process that plans, implements, and controls the efficient flow and storage of goods, services, and

related information from the point of origin to the point of consumption in order to meet customers'

requirements" (emphasis added). Thus, CLM has also distinguished between logistics and supply

chain management, and acknowledged that logistics is one of the functions contained within supply

chain management.




Ross explains that the role of logistics spans from warehousing and transportation to integrating the

logistics operations of the entire supply chain, whereas SCM merges marketing and manufacturing

with distribution functions to provide the enterprise with new sources of competitive advantage

(Ross 1998). Logistics puts more emphasis on efficient movement and storage to fulfill customer

requirements. Customer value and satisfaction that help a supply chain improve competitive

advantage and profitability, however, require more than logistics (Giunipero and Brand 1996).

Top Ten Trends in SCM and Logistics:

Global supply chains displayed gains in efficiency and customer service during 2007, but many

companies took supply chain management (SCM) a few steps further by enhancing flexibility,

responding effectively to demand variation, and adopting environmentally friendly practices. As for

2008, AMR Research has identified the top ten trends in SCM and logistics for the coming year.

1. SCM and logistics technology markets will enjoy healthy growth. The average increase on

spending this year will be 12 percent.

2. Near-shoring presents a viable alternative to low-cost country off shoring. Companies are

reviewing nearby outsourcing to enhance speed. Plus, nearby outsourcing may actually be less

expensive when the hidden costs of low-cost manufacturing are factored in.

3. Best-of-breed vendors regain some ground lost to ERP competitors. ERP may be easy, but users

still show a preference for best-of-breed.

4. SCM outsourcing alleviates the SCM talent shortage in increasingly complex global supply

chains.



http://www.amrresearch.com/Content/View.asp?pmillid=21064


5. Companies manage risk for business continuity and competitive advantage. Emphasis on supply

chain risk mitigation will grow in 2008.

6. Impressive returns on investment from current projects nudge RFID back into the spotlight. Now

that the wave of compelled adoption has passed, RFID is ready to prove its worth on its own

terms.

7. Software vendors expand their managed-services offering to deliver results.

8. S&OP technologies – not just processes – take center stage. Expect a wider adoption of sales and

operations planning (S&OP) functionality in 2008.

9. Connectivity grows in importance as companies extend their value networks.

10. What-if analysis and simulation-based tools see growing adoption.

1. SCM and logistics technology markets enjoy healthy growth. In our supply chain spending report,

twice as many companies say they will increase spending on supply chain technologies, projecting to

grow their budgets by nearly 12% for 2008 (See The Supply Chain Management Spending Report,

2007-2008). The 12% growth in supply chain technology spending will target controlling costs,

raising productivity, and improving customer service. Companies can no longer make due with their

10-15 year old SCM systems. The research shows that an application replacement cycle is in

progress as competition and globalization are driving the move to newer technologies.

2. Near shoring presents a viable alternative to low-cost country off-shoring. AMR believes that the

trend of near shoring will continue to gather steam in 2008 for multiple reasons. Companies are

discovering hidden costs of low-cost country outsourcing ranging from the loss in their ability to be

demand driven or to manage product quality and protect their brand image. Additionally, focus will

remain on the goal of protecting domestic producers against unfair trade practices of countries like




China and encouraging US manufacturing through tax incentives, especially in this presidential

election year. Expect near-shore sourcing, manufacturing and design in the US and in the western

hemisphere to be more closely analyzed as a more cost-effective – not just faster – alternative to

low-cost country sourcing.

3. Best-of-breed vendors regain some lost ground from ERP competitors. In the same AMR

Research spending report, respondents were evenly divided on which category of vendors they will

rely on for new technologies and replacement of existing applications. ERP vendors have gained a

strong foothold in areas like demand planning and inventory management, but users still prefer best-

of-breed solutions – either packaged or custom-built – in areas like transportation management,

warehouse management, and network design, as well as for collaborative processes such as Vendor

Managed Inventory (VMI) that extend outside of the four walls of the enterprise.

4. SCM outsourcing alleviates SCM talent shortage in increasingly complex global supply chains.

When combined, several current industry factors are propelling the growth of logistics and greater

supply chain outsourcing. A decade of staff downsizing, the globalization of supply chains, the

complexity of operating today’s demand driven networks, and the rise of the offshore, low-cost,

back-office outsourcing firms have naturally produced an awareness and, frankly, a new level of

acceptance, of outsourcing. 2008 will prove to be a fertile year for outsourcing. Look for a slow

expansion of additional supply chain services beyond the traditional transportation and warehousing

offerings.

5. Companies manage risk for business continuity and competitive advantage. Whereas cost

efficiencies, customer service improvement, inventory reductions, and other fundamental goals will




remain top priorities for supply chain organizations, emphasis on supply chain risk mitigation will

grow in 2008. Realizing that risk in global supply chains is unavoidable; companies will build a risk-

conscious culture, to ensure business continuity. Leading companies will take risk mitigation a step

further, building competitive advantage by continuously balancing risk and reward to expand their

market presence, improve their profitability, or capture bigger market share from their competitors.

6. Impressive returns on investment from current projects nudge RFID back into the spotlight.

Whereas from arm’s length the RFID solution market looks listless, closer examination shows a

different picture. Early adopters have been building hands-on experience in implementing RFID, a

better understanding of its potential value, as well as limitations, and they are becoming less

concerned about the risk of the technology obsolescence. Technology providers have been working

hard to keep pace with end user expectations. Along with ongoing tag and reader development,

enterprise software solutions have focused on easier management and distribution of RFID data

collected. Look for wider adoption of item level tracking, ranging from pharmaceutical e-pedigree to

apparel and footwear inventory management. Having demonstrated value, the use in asset tracking

and management will continue to expand. More exciting will be the adoption of RFID in emerging

markets such as India and Brazil, where companies are defining their supply chain processes from

the ground up with RFID as a foundational technology enabler.

7. Software vendors expand their managed services offerings to deliver results. Software

implementations often fail to deliver the benefits expected because oftentimes skills within the

organization are insufficient to maximize the value that sophisticated technology can potentially

provide. To help companies reach their goals, many software vendors and service providers are

coupling domain expertise along with deep application knowledge to not only conceptualize, but




actualize the benefits their software and services can bring to an organization. The menu of managed

services runs the gamut from B2B electronic connectivity to demand planning, forecasting, and

transportation management. In fact, in some of the SaaS transportation networks and managed

services, offerings are being adopted by the more mature users, suggesting that increasingly, it does

not matter who presses the keys as long as process performance is being achieved.

8. S&OP technologies – not just processes – take center stage. Viewed as the make-or-break process

for profitably matching demand with supply, designing S&OP processes and building a supporting

organization were high on business priority lists in 2007. But now, more companies are realizing that

building S&OP excellence is constrained by their existing S&OP technologies. Look for better

definition of the S&OP technology market space and wider adoption of S&OP functionality that

enables fast what-if analysis, profitable demand and supply shaping, and structured internal and

external user collaboration and consensus building.

9. Connectivity grows in importance as companies extend their value networks. Companies are

increasingly realizing that electronic connectivity is necessary to sustain and scale up collaborative

relationships with trading partners. But cost and complexity of building this connectivity had

traditionally limited the scope of integration to just a small segment of a company’s trading

community. In 2008, we expect to see a growing acceptance of third party networks, created by

integration hubs and Software as a Service (SaaS) providers that enable companies to more rapidly

and easily connect to a broader segment of their customer, supplier, and service provider bases. We

will also see some game-changing strategies in the B2B connectivity market that will alter pricing

structures and deployment options.




10. What-if analysis and simulation-based tools see growing adoption. Gone are the days when

users’ expected a black-box optimization engine to churn their data, model their problem and

generate a definitive optimal solution. User companies are now more interested in decision support

tools that – while still leveraging optimization techniques – can allow them to conduct scenario

planning, what-if analysis, and compare the trade-offs among multiple options. Similarly, simulation

techniques will see wider adoption as the emphasis continues to shift from the ever elusive “single

optimal solution” to better understanding of the impact of different supply chain decisions on the top

line, customer service levels, and other business priorities.

Traditional supply chain management:

Salesperson is becoming an outdated term in today's Internet economy. Before the Internet, before

Electronic Data Interchange (EDI), even before the advent of the personal computer, businesses

bought and sold raw materials and finished goods through salespeople. Fifteen years ago, your

chemical company purchased raw materials by calling up your sales representative of the supplier

you wanted to buy from. The salesperson took your order, processed the order internally, and a week

or so later your raw materials were delivered. You had a large catalog of items from each supplier

and had to manually search to find the items you needed. Most of your frequently ordered items

were bookmarked, but to order something new usually required more time. You also did not have a

quick, easy way to compare prices and product specifications between your suppliers.

It is not that your company has not tried to keep up with technological changes and advancements in

supply chain management (SCM). You watched your information technology department deploy a

personal computer (PC) to each employee. You were on the team that oversaw the development of



http://publib.boulder.ibm.com/iseries/v5r2/ic2924/info/rzalg/scm.htm

http://publib.boulder.ibm.com/iseries/v5r2/ic2924/info/rzalg/edi.htm


an EDI system between your company and your three major buyers. When the Internet became an

industry standard, your company gave access to all employees.

However, in the early 1990s, the Internet was only seen as an information source. Most web sites

were static; they only provided information about a company and its products and a way to contact a

company. Some companies began placing their product lines on the Internet, but customers still had

to call or fax their orders. Searching for items became easier, but both the vision and the technology

to use the Internet as a business tool were absent. You prefer the personal sales call or the now-

familiar EDI technology to manage your supply chain. You do not see the Internet as a potential way

to buy and sell for your company.

Although EDI can be considered a form of B2B e-commerce, there has been much technological

development in modern B2B e-commerce and SCM that takes advantage of the relatively

inexpensive and ubiquitous nature of the Internet. The first step to understanding B2B, however, is

to take a look at business-to-consumer (B2C) transactions. This is where the business revolution

truly began.



http://publib.boulder.ibm.com/iseries/v5r2/ic2924/info/rzalg/b2c.htm


B.8 - An Overview of the FMCG Industry in India

What are Fast Moving Consumer Goods (FMCG)?

Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer

Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG

generally include a wide range of frequently purchased consumer products such as toiletries, soap,

cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables

such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include

pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and

chocolate bars. A subset of FMCGs are Fast Moving Consumer Electronics which include

innovative electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems

and Laptops. These are replaced more frequently than other electronic products. White goods in

FMCG refer to household electronic items such as Refrigerators, T.Vs, Music Systems, etc.

In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing industries in India.

According to the AC Nielsen India study, the industry grew 5.3% in value between 2004 and 2005.

Indian FMCG Sector:

The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1

billion. Well-established distribution networks, as well as intense competition between the organized

and unorganized segments are the characteristics of this sector. FMCG in India has a strong and

competitive MNC presence across the entire value chain. It has been predicted that the FMCG

market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle class and




the rural segments of the Indian population are the most promising market for FMCG, and give

brand makers the opportunity to convert them to branded products. Most of the product categories

like jams, toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as well as

low penetration level, but the potential for growth is huge. The Indian Economy is surging ahead by

leaps and bounds, keeping pace with rapid urbanization, increased literacy levels, and rising per

capita income.

The big firms are growing bigger and small-time companies are catching up as well. According to

the study conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and the balance

by Indian companies. Fifteen companies own these 62 brands, and 27 of these are owned by

Hindustan Lever. Pepsi is at number three followed by Thumps Up. Britannia takes the fifth place,

followed by Colgate (6), Nirma (7), Coca-Cola (8) and Parle (9). These are figures the soft drink and

cigarette companies have always shied away from revealing. Personal care, cigarettes, and soft

drinks are the three biggest categories in FMCG. Between them, they account for 35 of the top 100

brands.




THE TOP 10 COMPANIES IN FMCG SECTOR

S. NO. Companies

1. Hindustan Unilever Ltd.

2. ITC (Indian Tobacco Company)

3. Nestlé India

4. GCMMF (AMUL)

5. Dabur India

6. Asian Paints (India)

7. Cadbury India

8. Britannia Industries

9. Procter & Gamble Hygiene and Health Care

10. Marico Industries

The companies mentioned in are the leaders in their respective sectors. The personal care category

has the largest number of brands, i.e., 21, inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks, and

Ponds. There are 11 HLL brands in the 21, aggregating Rs. 3,799 crore or 54% of the personal care

category. Cigarettes account for 17% of the top 100 FMCG sales, and just below the personal care

category. ITC alone accounts for 60% volume market share and 70% by value of all filter cigarettes

in India.




The foods category in FMCG is gaining popularity with a swing of launches by HLL, ITC, Godrej,

and others. This category has 18 major brands, aggregating Rs. 4,637 crore. Nestle and Amul slug it

out in the powders segment. The food category has also seen innovations like softies in ice creams,

chapattis by HLL, ready to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. This

category seems to have faster development than the stagnating personal care category. Amul, India's

largest foods company has a good presence in the food category with its ice-creams, curd, milk,

butter, cheese, and so on. Britannia also ranks in the top 100 FMCG brands, dominates the biscuits

category and has launched a series of products at various prices.

In the household care category (like mosquito repellents), Godrej and Reckitt are two players.

Goodknight from Godrej, is worth above Rs 217 crore, followed by Reckitt's Mortein at Rs 149

crore. In the shampoo category, HLL's Clinic and Sunsilk make it to the top 100, although P&G's

Head and Shoulders and Pantene are also trying hard to be positioned on top. Clinic is nearly double

the size of Sunsilk.

Dabur is among the top five FMCG companies in India and is an herbal specialist. With a turnover

of Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur has brands like DaburAmla,

DaburChyawanprash, Vatika, Hajmola and Real. Asian Paints is enjoying a formidable presence in

the Indian sub-continent, Southeast Asia, Far East, Middle East, South Pacific, Caribbean, Africa

and Europe. Asian Paints is India's largest paint company, with a turnover of Rs.22.6 billion (around

USD 513 million). Forbes Global magazine, USA, ranked Asian Paints among the 200 Best Small

Companies in the World Cadbury India is the market leader in the chocolate confectionery market

with a 70% market share and is ranked number two in the total food drinks market. Its popular

brands include Cadbury's Dairy Milk, 5 Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380




Million) Marico is a leading Indian group in consumer products and services in the Global Beauty

and Wellness space.

Challenges before the Indian FMCG Sector:

Markets all over the world have been on a roll in 2003 and the Indian bourses are no exception

having gained almost 60% in 2003. During this period, while there are sectors that have

outperformed this benchmark index, there are also sectors that have underperformed. FMCG

registered gains of just 33% on the BSE FMCG Index last year.

At the macro level, Indian economy is poised to remained buoyant and grow at more than 7%. The

economic growth would impact large proportions of the population thus leading to more money in

the hands of the consumer. Changes in demographic composition of the population and thus the

market would also continue to impact the FMCG industry.

Recent survey conducted by a leading business weekly, approximately 47 per cent of India's 1 +

billion people were under the age of 20, and teenagers among them numbered about 160 million.

Together, they wielded INR 14000 Cr worth of discretionary income, and their families spent an

additional INR 18500 Cr on them every year. By 2015, Indians under 20 are estimated to make up

55% of the population - and wield proportionately higher spending power. Means, companies that

are able to influence and excite such consumers would be those that win in the market place.

The Indian FMCG market has been divided for a long time between the organized sector and the

unorganized sector. While the latter has been crowded by a large number of local players, competing

on margins, the former has varied between a two-player-scenario to a multi-player one.




Unlike the U.S. market for fast moving consumer goods (FMCG), which is dominated by a handful

of global players, India's Rs.460 billion FMCG market remains highly fragmented with roughly half

the market going to unbranded, unpackaged home made products. This presents a tremendous

opportunity for makers of branded products who can convert consumers to branded products.

However, successfully launching and growing market share around a branded product in India

presents tremendous challenges. Take distribution as an example. India is home to six million retail

outlets and super markets virtually do not exist. This makes logistics particularly for new players

extremely difficult. Other challenges of similar magnitude exist across the FMCG supply chain. The

fact is that FMCG is a structurally unattractive industry in which to participate. Even so, the

opportunity keeps FMCG makers trying.

Challenges:

The government needs to firm up its FDI plans for retail sector as some of the international

chains like Wal-Mart, Carrefour, Tesco and Home Depot are making a beeline for India.

The emergence of organized retailing in India presents both opportunities and challenges for

leading FMCG companies.

The industry must be in a position to effectively tackle price wars, improve distribution, boost

exports and sell more in villages.

Small regional companies are flooding retail shelves across the country with their brands. The

bigger brands must learn to tackle the problem.

The industry must focus on villages as they hold the potential to grow to a market size of Rs

70,000 crore by 2010 from Rs 50,000 crore at present.




Companies must also ensure better return on their investments and spend money to introduce

new products instead of cutting prices to gain market share.

The industry needs to explore neighboring as well as African markets to achieve the full

potential that this sector.

By focusing more on the operational efficiency, the industry must try to achieve further

reduction in expense to sales ratio.

Food as well as cosmetic and personal care segment are some of the fastest growing category in

the sector and the industry must learn to leverage from this.

The industry must further try to bring down supply and distribution costs.

Further, it needs to leverage the potential presented by India's agricultural production in areas

like food and beverage in order to grow the processed foods part of the business.

According to a study the Indian food processing industry requires investments to the tune of $40

billion for upgrading technology and capital expenditure to compete in global markets.

FMCG companies must intensify their approach to target the rural markets for their growth.

The number of traditional retail stores grew rapidly, and the trend is likely to continue for the

next three years. By 2007, the number of stores is likely to be 7.8 million with bulk of the growth

coming from grocers and street corner stores.




B.9 - Implementation of SCM Practices in Indian FMCG Industry

In recent years, the basis for global competition has changed. No longer are organizations competing

against other organizations, but rather supply chains are competing against supply chains. The

success of an organization is now invariably measured neither by the sophistication of its products

nor by the size of the market share. It is usually seen in the light of the ability, sometimes forcefully

and deliberately harnesses its supply chain and to opt for innovative approaches of supply chain

flows such as single-piece-flow, to deliver responsively to the customers as and when they demand

it.

This paper tries to identify and analyze the importance and adoption of various SCM practices in

Indian FMCG industry. The paper is based on empirical study conducted by the author in Indian

FMCG industry and various SCM practices are clubbed in different factors through Factor analysis.

Introduction:

It is rightly said that manufacturers now compete less on product and quality – which are often

comparable – and more on inventory turns and speed to market. This statement shows the beliefs

that supply chain management will increasingly be the principal determinant of the ability to

compete. Every link in it can add up to a competitive advantage. There was time when companies

looked at their supply chains – the upstream part of their value chain from the company’s

perspective as a means of focusing on their own core competencies, and of leveraging those of

vendors and lowering their cost to increase their responsiveness towards consumers . Those goals

can not be swept away by supply chain but they will be superseded by a single super objective as to

compete on the basis of how well organization manage its supply chain – thus the competitive

advantage is shifting from the shop floor. The question arises why it is so important to optimize the

supply chain. It is so because inefficiencies in the supply chain leads to higher inventories at all




points of the chain. This adds costs related to wastages, blocked funds and risk of holding obsolete

products with chances of quality depletion.

SCM in Indian Business Scenario:

Indian organizations are still juggling among the Material Resource Planning (MRP-II), Enterprises

Resource Planning (ERP), Logistics and Supply Chain Management (SCM). However, it is quite

evident that Indian corporate sector is fast recognizing the need of SCM, which can integrate all

other practices and processes. SCM in India offers one of the fastest growth areas in revenues as well

as employment. According to ETIG, there is no reliable estimate of the market opportunities for

supply chain and its components exist in India today. Even though, ETIG estimates the Indian

market value for supply chain. Logistics at 13 percent of GDP is more than US $50 billion, a lion’s

share of which is accounted for by transportation and warehousing. India started a little late for

restructuring and reformulating the strategies related with supply chain. However, there is no doubt

that Indian industries are fast catching and gearing up for meeting the new business environment. A

study of available literature related with Indian business practices after 1991’s liberalization policies

shows that organizations are concerned about their value chain and identifying that competition is

shifting towards the efficiency and effectiveness of entire supply chain activities. The traces of SCM

adoption by Indian organizations are given as:

Until 1990, logistics was treated as the management of transportation, inventories and

warehousing and organizations had to perform these activities individually in an efficient

manner.

Before opening of Indian market, Indian business giants were enjoying the solo play with

continuous expansion of capacities. Later on when they heard the music of competition, they




found themselves with excess capacities with huge cost burdens. This forced organizations to

control the cost factor for the survival at marketplace.

At the same time of 1990’s, Indian organizations got fascinated by Business Process Re-

engineering (BPR). Organizations treated BPR as remedy of their illness across the

organizations’ processes and functions by eliminating the non-value adding activities and

streamlining the operations with a promise of higher returns.

Later on, the emergence of Enterprises Resource Planning (ERP) gave boost to BPR. For the first

time, organizations could have an integrated view of the various ‘silos’ that existed in their

businesses, giving an opportunity to rationalize, remove duplication and speed up the processes.

Rapid growth and improvement of telecommunication networks and wide spread of information

technology tools and techniques after mid 1990s posed the biggest challenge in handling well-

informed customers. Nevertheless, these changes also provided the biggest boost to Indian

industries because organizations found themselves able to reach out vendors or suppliers on one

end, and customers to the other. Due to this revolution only, ERP-II integrated the internal

departments into a seamless organization, whereas, SCM attempts to integrate the external

factors and processes into the internal processes.

Changes can be implemented easily when tough times reign. Companies in India have been looking

at ways of cutting costs and improving process efficiencies, in their quest to become globally

competitive through taking initiatives for supply chain management practices because SCM

recognizes that distinct functions like purchases, inventory management, distribution and production

planning work best when integrated. At the same time, supply chain management in India seems to

be following the path of more advanced industrial countries, involving not only the customers,




manufacturers, and vendors but also the third party service providers, consultants, software providers

etc.

Indian Fast Moving Consumer Goods (FMCG) Industry:

Indian Fast Moving Consumer Goods (FMCG) industry has a long history. However, the Indian

FMCG industry began to take shape only the last fifty years. Even today, the Indian FMCG industry

continues to suffer from a definitional dilemma as well as the exact estimation of market size.

Nevertheless, more than Rs. 43,000 crores( in organized sector) fast moving consumer goods

(FMCG) industry is a critical component of the Indian economy. The actual size of industry is

phenomenal, if one adds the turnover of unorganized sector. That is why, this sector has potential to

drive growth, enhance quality of life and create jobs. The Indian FMCG sector is primarily a low

margin business, where success depends on the volume. Presently, the FMCG sector is one of the

largest in the country, which accounts for more than 14.5 per cent of GDP with whooping sum of

domestic consumption capacity of nearly 20 billion U.S. Dollar. With the average growth of Indian

economy in the range of 6-8% per year will witness a consistence rise in demand and purchasing

power of Indian market. Following the trend, the FMCG sector will grow by 5-6% per year in

mature categories and 8-10% per year in upcoming categories. However, factors such as low rural

penetration, dependence on monsoon, the price sensitivity of the consumers and increased level of

competition could result in decreasing profit margins in the industry.

The following section examines the different philosophies related to development of SCM.

Subsequent sections describe the research construct, which provides details of sample design, design

of questionnaire, survey methodology, followed by an analysis of the results and the managerial

implications of the study along with the future research directions.




Supply Chain Management: an overview since past:

The concept of supply chain management first appeared in the literature in the mid-1980 by Keith

and Webber. However, the fundamental assumptions on which SCM rests are significantly older.

The management of inter-organizational operations can be traced back to channel research in the

1960’s by Bucklin and systems integration research in the 1960’s by Forrester. According to Cooper

et.al. (1997), the term supply chain management has risen to prominence over the past ten years. La

Londe (1997) identified positions at forty-three different companies that carry ‘supply chain’ in their

titles. By now, SCM has become such a hot topic that it is difficult to pick up any periodicals on

manufacturing, marketing, distribution, customer management, or transportation without seeing an

article about SCM or its related topics.

Despite the popularity of the term supply chain management, managers and researchers have

considerable confusion over the actual meaning of the term. Some authors such as Tyndall et.al.

(1998) defined SCM in operational terms involving the flow of materials and products. Ellram and

Cooper (1990) viewed SCM as management philosophy and still others as La Londe (1997) viewed

it in terms of management process. In fact, some have questioned the existence and benefits of the

SCM phenomenon, for example, Bechtel and Jayaram (1997) asked ‘Is the concept of SCM

important in today’s business environment or is it simply a fad destined to die with other short-lived

buzzwords?’

Research in SCM evolved along three separate paths that eventually merged into a common body of

literature, with a primary focus on integration, customer satisfaction and business results i.e. creation

or enhancement of value of the products or services. Jones and Riley (1985) stated that supply chain

management deals with the total flow of materials from suppliers through end users. Three




differences between supply chain management and classical materials and manufacturing control are

identified by Houlihan (1988) as:

The supply chain is viewed as a single process. Responsibilities for the various segments in the

chain are not fragmented and relegated to functional areas such as manufacturing, purchasing,

distribution and sales.

Supply chain management calls for and in the end depends on strategic decision making.

Supply chain management calls for different perspective on inventories which are used as

balancing mechanism of last, not first, resort. A new approach to systems is required –

integration rather than interfacing.

SCM as a Management Philosophy:

The philosophy of SCM emphasized to extend the concept of partnerships into a multiform effort to

manage the total flow of goods from the supplier to the ultimate customer. Ellram and Cooper

(1990) emphasized that SCM as a management philosophy takes a systems approach to viewing the

channel as a single entity, rather than a set of fragmented parts, each performing its own function.

Langley and Holcomb (1992) suggested that the objective of SCM should be the synchronization of

all channel activities to create customer value. Mentzer et.al. (2001) proposed that SCM as

management philosophy has the following characteristics:

A systems approach to viewing the channel as a whole and to managing the total flow of goods

inventory from the supplier to the ultimate customer.




A strategic orientation toward cooperative efforts to synchronize and converge intrafirm and inter-

firm operational and strategic capabilities into a unified whole and

A customer focused orientation to create unique and individualized sources of customer value,

leading to customer satisfaction.

SCM as a Set of Activities:

For adopting the supply chain management philosophy, organization has to establish management

practices that permit them to act or behave consistently. Bowersox and Closs (1996) argued that to

be fully effective in today’s competitive environment, firms must expand their integrated behaviour

to incorporate customers and suppliers. So supply chain management activities such as mutually

sharing information, risks and rewards with chain members (Ellram and Cooper, 1990), integrated

behaviour and processes and an effort to build and maintain long term relationship are vital for

realization of the management philosophy behind SCM. Gentry and Vellenga (1996) argued that it is

not usual that all the primary activities in a value chain – inbound and outbound logistics, operations,

marketing, sales and service – are performed by any one of firm to maximize customer value. Thus,

forming strategic alliances with channel partners such as suppliers, customers, or intermediaries e.g.

logistics service providers, provides competitive advantage through creating customer value

(Langley and Holcomb, 1992).




SCM as a Set of Management Process:

Davenport (1993) defined a process as a structured and measured activities designed to produce a

specific output for a particular customer or market. LaLonde (1997) proposed that SCM is the

process of managing relationships, information and materials flow across enterprise borders to

deliver enhanced customer service and economic value through synchronized management of the

flow of physical goods and associated information from sourcing to consumption. Ross (1998)

defined supply chain processes as the actual physical business functions, institutions and operations

that characterize the way a particular channel system moves goods and services to market through

the supply pipelines. The same idea was reflected by Cooper, Lambert, et al. (1997), a process is a

specific ordering of work activities across time and place, with a beginning, an end, clearly identified

inputs and outputs and a structure of action. Lambert et al. (1998) suggested that the key processes

would typically include customer relationship management, customer service management, demand

management, order fulfillment, manufacturing flow management, procurement and product

development and commercialization.

SCM Practices in Indian FMCG Industry:

In a low margin and high volume business like FMCG, it requires a very close attention on the

planning and operational part of the entire value chain activities because these minutes details can

change the fortune of any organization. While branding differentiates the image of the product, the

distribution system will determine the faith of the organization up to a very large extent in FMCG

industry. The diversity of India and existence of vast untapped markets of rural areas provide the

bundle of opportunities to companies. The best price or quality product offerings combined with

heavy promotional and advertising budgets will not help the product succeed if one of the major




ingredients of the marketing mix as distribution is not properly focused. The table1 shows the types

of FMCG outlets are available across the India. Every Organization needed to serve a large

percentage of these outlets to reap the economies of the scale.

Table-l: Types of Outlets in Indian FMCG Retail Industry (Source: ORG-MARG, 2003)



TYPES OF OUTLETS PERCENTAGE TERMS (%)

Total Outlets 100

Grocer 34.6

General Store 12.8

Food Store 7.1

Cosmetic Store 4.5

Chemist 5.9

PaanBidi 16

Others 19


The traditional basic structure of FMCG supply chain has not changed over the years. The basic

supply chain related with distribution side of FMCG industry. The competitive scenario has changed

the importance of each element of the chain operation i.e. a detailed planning and analysis of every

activity of the chain so that to make the same efficient and effective.

Despite the importance and theoretical development of SCM, there is little empirical research on

how practitioners define and incorporate SCM practices into overall corporate strategy and

functioning. Similarly, little is known about the specific practices or concerns of successful SCM

implementation in Indian FMCG organizations. This research paper investigates these issues by

means of empirical data.

Nutshell:

The clubbing of various SCM practices of Indian FMCG organizations emerged as few exclusive

factors through research study, which were different on agreement continuum and adoption

continuum from each other. The result of study revealed that supply chain partnership and supply

chain networking are considered to be dominating factors for Indian FMCG organizations. This

seems to be quite true with the rapid spread and development of IT and telecommunication tools and

techniques throughout India, which is facilitating the bi-directional flow of information and

enhanced level of coordination and collaboration. Besides that leanness or operational efficiency

factors have high degree of agreement but low level of adoption. The reasons behind the same are

basically infrastructural bottlenecks and the presence of unskilled and semi-skilled suppliers at

backend and distributors at front end of the supply chain. However, cross functionality and strategic

outsourcing are leading on adoption continuum. A truly integrated supply chain requires a huge

amount of commitment by all members of the supply chain. The focal firm might require to overhaul




the purchasing process and integrate suppliers’ R&D teams directly into its own decision making

processes so as to leverage on it’s own core competency and partners’ core capabilities. Integrating

the purchasing and logistics processes with other key corporate processes creates a closely linked set

of manufacturing and distribution processes. It further allows focal firm to deliver products and

services to both internal and external customers in a more timely and effective manner




C.1 - LITERATURES REVIEW

1: Lead time management in supply chains

Author: Ray, Saibal, Ph.D., University of Waterloo (Canada), 2001 ,page- 210

Abstract:

In recent years speed and cost have emerged as important competitive priorities in supply chains.

Firms are now investing substantially in lead time reduction; however, the focus of such investments

has been quite different for make-to-stock (MTS) and make-to-order (MTO) firms. The demand for

MTS items tends to be deterministic but price-sensitive, while demand for MTO items is more

variable and sensitive to both price and delivery lead time. These differences in market

characteristics require that MTS firms focus on supplying predictable demand at the lowest possible

cost while MTO firms focus on reducing the delivery lead time. Our research deals with the costs

and benefits of lead time management in supply chains, taking into account the differences in

competitive environments. In particular, we develop separate lead time management models for

profit-maximising MTS and MTO firms.

For the MTO firm, we assume that customer demand is stochastic and the mean demand rate is

decreasing in both price and a uniform guaranteed delivery lead time offered by the firm. To further

model the premium for lower delivery lead times, we assume that price is decreasing in the length of

the guaranteed delivery lead time. We also capture economies of scale by assuming the unit

operating cost to be a decreasing convex function of the demand rate. The MTO firm may invest in

increasing capacity in order to reduce delivery lead time, but must be able to satisfy customers

according to a pre-specified service level. Our analytical model for delivery lead time management




of such MTO firms trades off the costs of investment against the resultant benefits. Our model

allows a MTO firm to determine the optimum level of the guaranteed delivery time, processing rate

and investment that maximize its profit. We show that ignoring: (i) the dependence of market price

on the lead time offered and economies of scale, when they exist, and (ii) the inherent preference of

customers for price or lead time, can lead to potentially large profit losses.

Normally MTS firms invest in developing more efficient processes that reduce operating costs.

While the process-improving investments can be of various types, we focus on investments in

reducing supplier lead time and develop models for supply lead time management for MTS firms.

We show that such investments in lead time reduction can, after accounting for all the associated

costs and benefits, result in substantial reduction of inventory costs. We examine different types of

investment and amortization schemes in supplier lead time reduction and the different cost models

they generate. We compute the cost-minimizing inventory and supply lead time levels for each type

of model. We also perform comparative statics with respect to model parameters, and find several

"apparently" counter-intuitive results.

We then assume that a MTS firm sets its price as a percentage mark-up over its total operating costs

per unit. In that case, any investment in reducing operating costs can lower price and help the firm to

gain a greater market share. For the case of investment in set-up time (cost) reduction, we are able to

formulate an integrated production-marketing model for a profit-maximizing MTS firm where price

and demand, and hence profit, are functions of the firm's operating variables. We show that when

demand depends on the operating variables in a profit maximization model, some of the best known

properties from classical inventory management no longer hold. We are also able to show that if a

MTS firm ignores the explicit dependence by either assuming demand to be constant or price to be

an independent decision variable, sub-optimality occurs and the firm can lose substantial profits. For




the case of investment in supply lead time reduction, we are also able to formulate the profit-

maximizing problem in terms of the operating variables of the firm and to indicate how it can be

solved.

Review: In recent years speed and cost have emerged as important competitive priorities in supply

chains. Firms are now investing substantially in lead time reduction; however, the focus of such

investments has been quite different for make-to-stock (MTS) and make-to-order (MTO) firms.

2: Finding the Right Fit

Ron Cain. Journal of Commerce. New York: May 10, 2010.

Abstract:

As a result, many companies are turning to third-party logistics providers to customize solutions that

will streamline their supply chains so they can focus on core competencies. According to IBM's

Small and Medium Business Center Web site, www-304.ibm.com/businesscenter/smb/us/en/,

"Logistics companies are pressuring the cost structure of traditional wholesale distribution channels

by offering a la carte supply chain services without the constraints of a buy-and-resell business

model."

SaaS systems also deliver a near immediate return on investment, given the relatively low cost for

implementation and maintenance. "There seems to be a consensus emerging that SaaS thrives in a

cost-conscious, capex-constrained economic environment, such as we're currently experiencing,"

said Phil Wainewright, CEO of strategic consulting firm Procullux Ventures.

The use of wireless networks in the warehouse is an IT strategy that, if implemented correctly, can

have outstanding results. "In the warehouse, the productivity improvements from wireless networks

come from substituting technology for potentially error-prone human activities such as order




processing, inventory control or picking," said supply chain expert Adam J. Fein, founder and

president of Philadelphia-based Pembroke Consulting.

Review: Many companies are turning to third-party logistics providers to customize solutions that

will streamline their supply chains so they can focus on core competencies.

3: STRATEGIC ALIGNMENT AND PURCHASING EFFICACY: AN EXPLORATORY

ANALYSIS OF THEIR IMPACT ON FINANCIAL PERFORMANCE

Christian Baier, Evi Hartmann, Roger Moser. Journal of Supply Chain Management. Tempe:

Oct 2008. Vol. 44, Iss. 4; pg. 36, 17 pgs

Abstract:

Purchasing and supply management (PSM) has become a discipline of major strategic importance

for effectively competing in today's global marketplace. Literature recognizes that the full value-

creation potential of the purchasing function can only be realized if its decisions and activities are

aligned with the organization's overall strategic orientation. Despite general agreement on this

matter, research and practice lacks knowledge on how exactly such an alignment can be achieved

and what performance implications it has. Therefore, this article empirically investigates the

alignment-performance link in PSM in a comprehensive manner. Drawing on the theory of

production competence, we suggest that the relative fit between business strategy and purchasing

strategy, labeled as strategic alignment, and between purchasing strategy and purchasing practices,

referred to as purchasing efficacy, is key to achieving superior financial performance. Results from

profile deviation analysis on data collected globally from 141 strategic business units (SBUs) with

revenues greater than US$3 billion support our hypotheses. Findings provide clear guidance to




managers on how to design their purchasing strategies and practices to achieve maximum alignment

and thus to effectively contribute to the SBU's financial success.

Review: Purchasing and supply management (PSM) has become a discipline of major strategic

importance for effectively competing in today's global marketplace.

4: Top Retail Companies Unite to Expand Supply Chain Best Practices Review

Business Wire. New York: Apr 20, 2005. pg. 1

Abstract:

The Soleus Group is a consulting services company focused on assisting clients in achieving world-

class supply chain execution. Core offerings enable supply chain management to gain insights into

what is possible through a sharing of best practices and value-based benchmarks. The Soleus

Group's role is to provide supply chain management with insights into incremental and quantum

improvement opportunities that uniquely fit their enterprise strategies. Services include both

industry-centric and multi-industry forums for sharing experiences, performance metrics, trends, and

innovative processes. The company is headquartered in Atlanta, GA. Visit www.soleusgroup.com

for more information.

Tompkins Associates is the leading operations-focused consulting and integration firm, specializing

in end-to-end supply chain solutions. Customers look to Tompkins' expertise to develop and

implement strategies for intelligent solutions in distribution center design, warehouse strategic

planning, distribution network configuration, transportation system planning, system integration and

implementation, logistics and manufacturing outsourcing, and supply chain optimization. As

consultants and integrators for more than 30 years, [Jim Tompkins] offers a proven track record and




deep industry expertise for solutions that reduce costs and improve overall supply chain

performance.

Review: Core offerings enable supply chain management to gain insights into what is possible

through a sharing of best practices and value-based benchmarks.

5: Title: A swift response tool for measuring the strategic fit for resource pooling: a case study

Author(s): Kobe Naesens, (Centre for Industrial Management, KatholiekeUniversiteit,

Leuven, Belgium), LudoGelders, (Centre for Industrial Management, KatholiekeUniversiteit,

Leuven, Belgium), LilianePintelon, (Centre for Industrial Management,

KatholiekeUniversiteit, Leuven, Belgium)

Abstract:

A literature review, confirmed by in-depth interviews in industry, indicated a high level of

reluctance to implement horizontal collaboration in business. One of the main reasons is the lack of a

strategic decision support framework for the implementation of horizontal collaboration. An

appropriate feasibility or fitness test could be helpful here. Two companies strategically ready to

work together should first test whether any insurmountable practices (e.g. difference in culture)

inhibit the collaboration. If such practices are present, the collaborative initiative will probably be a

waste of time and effort. This paper therefore aims to present a method to check the strategic fit.

Review: Implementation horizontal collaboration is one of the main reasons that are responsible for

lack of strategic decision support framework.




6: Book- Logistics and Supply Chain Management, page- 345

Author- K. ShridharaBhat

Abstract:

For a company’s competitive strategy to be successful, a strategic fit must be created between its

competitive strategy and its supply chain strategies. A company’s competitive strategy defines a set

of customer need that it seeks to satisfy through its products and/or service. For example, a large

chain store may aim at providing high availability of a variety of products of reasonable quality at

low prices. On the other hands a retailer selling automobile spare parts (

Maintenance, repair and operating supplies) may offer a large number of different products through

both a catalog and a website. Such a company has a competitive strategy built around providing

customer convenience and not based on low price. Customer can either personally visit the store and

place an order for their requirement or place order through internet. The retailer delivers the products

to the customer next day at the promises.

7: Book- Supply Chain Management in the twenty-first century

Author – B.S. Sahay pages -88-89

Abstract:

A company may fail either because of a lack of strategic fit or because it’s overall supply chain

design, processes, and resources do not provide the capabilities to support the designed strategic fit.

In thinking of the major tasks of a chief executive officer (CEO), there are few greater than job of

aligning the supply chain design and all of the core functional strategies with the overall competitive

strategy to achieve strategic fit. If this alignment is not achieved, conflicts arise between different

functional goals within the firm, or between the goals of different supply chain stages. Such conflicts




result in different functions within the firm and stages across the supply chain targeting different

customer priorities. This conflict within the firm or across the supply chain leads to conflicts during

supply chain operation.

Review: Aligning the supply chain design and all of the core functional strategies with the overall

competitive strategy to achieve strategic fit to make business success in current competitive.

8: Supply Chain Management: Modeling and Decision Making

Author: Y. Narahari and S. Biswas

Abstract:

Supply chains are now at the center-stage of business performance of manufacturing and service

organizations. In this article, we have provided a bird's eye view of major decision issues in the

design and operation of high performance supply chains. We have surveyed the use of mathematical

and simulation models can play in supply chain management. We have also outlined a current

research effort at the Indian Institute of Science in building an object oriented decision support

system for supply chain management.

Review: Mathematical and simulation models play important role in supply chain management.




9: Title: The strategic fit of supply chain integration in the TFT-LCD industry

Author(s): D.Y. Sha, (Department of Industrial Engineering and System Management,

Chung Hua University, HsinChu, Taiwan), P.K. Chen, (Department of Industrial Engineering

and Management, College of Management, National Chiao Tung University, HsinChu,

Taiwan), Yung-Hsin Chen, (Department of Business Administration, Asia University,

Taichung County, Taiwan)

Abstract:

The purpose of this paper is to identify what kind of supply chain integration strategies can support

TFT-LCD manufacturers seeking to break through the cost constraints and complex co-operation

relationships between manufacturers, suppliers and set plants/distributors, and further satisfy the

market requirements in terms of cost, quality, delivery, and flexibility. Several different supply chain

integration strategies have been identified for operational-level improvement of TFT-LCD

manufacturing, including direct or indirect investment in suppliers; “made in-house” and “made by

resident suppliers” arrangements, “quasi-cluster” formation, and new module assembly line set-up at

set plant.

Review: Supply chain integration strategies can support TFT-LCD manufacturers seeking to break

through the cost constraints.

10: COOPERATION AND STRATEGIC FIT IN THE SUPPLY CHAIN OF THAI FRUIT

Authors: S. Vellema, L Admiraal, J.O. Naewbanij, J.S. Buurm

Abstract:

Maneuvering as an individual actor seems to be common practice in the competitive Thai fruit

sector. This paper reflects on a participatory methodology used in a multi-stakeholder process




initiated to create linkages and to explore a possible strategic fit between different actors in the

supply chain of Thai fruit. Fundamental to the approach was the idea that understanding diversity of

interests, building new relationships, enhancing collaboration and combining individual strategies

may strengthen the integral performance of a supply chain. From our practitioners’ perspective,

robust and responsive networks of chain actors might be better equipped to create value and to deal

with market demands. Underlying this practitioners’ perspective lies the question whether individual

behavior enables small and medium enterprises to cope with the requirements of competition and

regulation or whether a focus on relations with other businesses and public agencies may enhance

their performance. An insight generated during this process was that a viable supply chain or sector

strategy requires a feasible balance between market-driven strategies, i.e. standards of food safety

and quality, and production-driven strategies, i.e. management of seasonal oversupply in specific

production regions and technology development. Consequently, resilient collaboration between

partners needs capacity to construct a strategic fit, while acknowledging individual behaviors.

Review: Fundamental to the approach was the idea that understanding diversity of interests, building

new relationships, enhancing collaboration and combining individual strategies may strengthen the

integral performance of a supply chain.




11: Journal of International Business Studies (2005) 36, 254–269.

The performance implications of strategic fit of relational norm governance strategies in global

supply chain relationships

Author: David A Griffith and Matthew B Myers

Abstract

The search for strategic fit has become a core concept in normative models of strategy formation.

The issue of strategic fit is becoming increasingly important in global supply chain relationships as

managers and academics examine the effectiveness of culturally founded relational governance

strategies across multiple supply chain relationships. This study empirically examines the

performance implications of strategic fit of relational norm governance strategies in global supply

chain relationships between US firms and their primary Japanese and US partners. The performance

implications of fitting relational norm governance strategies (i.e., information exchange, flexibility

and solidarity) across culturally diverse partners are tested. Results indicate that firm performance is

enhanced when the relational norms of information exchange and solidarity are fit to culturally

founded norm expectations across culturally diverse relationships simultaneously. Implications for

theory and practice are discussed.

Review: Firm performance is enhanced when the relational norms of information exchange and

solidarity are fit to culturally founded norm expectations across culturally diverse relationships

simultaneously.




12: Supply chain configuration for diffusion of new products: An integrated optimization

approach

Mehdi Amini, Haitao Li. Omega. Oxford: Jun 2011. Vol. 39, Iss. 3; pg. 313

Review:

Abstract

We develop an integrated/hybrid optimization model for configuring new products' supply chains

while explicitly considering the impact of demand dynamics during new products' diffusion. The

hybrid model simultaneously determines optimal production/sales plan and supply chain

configuration. The production and sales plan provides decisions on the optimal timing to launch a

new product, as well as the production and sales quantity in each planning period. The supply chain

configuration provides optimal selection of options and safety stock level kept at each supply chain

function. Extensive computational experiments on randomly generated testbed problems indicate

that the hybrid modeling and solution approach significantly outperforms non-hybrid alternative

modeling and solution approaches under various diffusion and supply chain topologies. We provide

insights on optimal production/sales plan and supply chain configuration for new products during

their diffusion process. Also, managerial implications relevant to effectiveness of the hybrid

approach are discussed

Review: Author consider the importance of an integrated/hybrid optimization model for configuring

new products' supply chains while explicitly considering the impact of demand dynamics during new

products' diffusion.




13: European Journal of Operational Research. Nov 16, 2010. Vol. 207, Iss. 1; pg. 456

Author(s): HakanYildiz, R Ravi, Wayne Fairey

Abstract:

Large automotive supply chains typically involve manufacturers pulling materials from their

suppliers along the chain, usually by using round-trip truckload routes. The return trips on these

routes are used to return empty containers back to the suppliers. The mismatch between the amount

of materials and empty containers results in underutilization of the return trips. A supplier can utilize

this unused capacity by identifying a subset of promising customer routes that can be combined with

its existing supplier routes to save overall costs of the system. Such integration also leads to other

supply chain coordination benefits such as the potential of using cross docks, more frequent milk

runs and ensuing reductions in inventories. We undertake such an integrated study of the inbound

logistics from suppliers and the outbound logistics to customers at Robert Bosch LLC, a leading

automotive parts manufacturer. We identify the opportunity for significant cost savings by using a

mixed-integer programming model that matches opposite flows from and to the customers and

suppliers. We consider the problem from a supply chain coordination perspective, where Bosch

makes all the transportation arrangements for its customers and suppliers based on the centralized

optimum solution, and outline its additional benefits.

Review: Large automotive supply chains typically involve manufacturers pulling materials from

their suppliers along the chain, usually by using round-trip truckload routes.




14: M Melo, S Nickel, F Saldanhadagama in European Journal Of Operational Research

(2009)

Abstract:

Facility location decisions play a critical role in the strategic design of supply chain networks. In this

paper, a literature review of facility location models in the context of supply chain management is

given. We identify basic features that such models must capture to support decision-making involved

in strategic supply chain planning. In particular, the integration of location decisions with other

decisions relevant to the design of a supply chain network is discussed. Furthermore, aspects related

to the structure of the supply chain network, including those specific to reverse logistics, are also

addressed. Significant contributions to the current state-of-the-art are surveyed taking into account

numerous factors. Supply chain performance measures and optimization techniques are also

reviewed. Applications of facility location models to supply chain network design ranging across

various industries are presented. Finally, a list of issues requiring further research are highlighted.

Review: I agree with author view that Facility location decisions play a critical role in the strategic

design of supply chain networks.

15: Managing Diversity in the Hotel Industry: The case of Yogyakarta, Indonesia

Author: James J. Spillane S. J

Abstract:

FMCG Sector in India is characterized by cut throat competition, which leads to brand proliferation

in various categories. In matured urban markets consumer sales promotion to differentiate one's offer

is a very common practice. In fact consumers are lured by the ever increasing budget allocated to

these activities. In such a scenario it is very essential to study how consumers make their choices in

FMCG category where there are several brands in the consideration set of the consumer. Since the




final risk being low, consumers do not mind switching from one brand to another due to sales

promotion offers. Thus it becomes imperative to the marketer to learn about consumer preferences

with respect to sales promotion offers, what schemes do the consumers prefer for what kinds of

brands, which media they prefer to learn about the schemes, whether they prefer incentives

immediately or at a later date

Review: It is very essential to study how consumers make their choices in FMCG category where

there are several brands in the consideration set of the consumer.

16: Implementing IT in SCM—Understanding the Challenges

Author: AnkitMehrotra is Senior Lecturer at Jaipuria Institute of Management,

Abstract:

Technology offers the potential to change supply chain networks and processes to reduce non-value

adding time spent and to support alternative ways of working. An efficient supply chain network can

offer substantial improvements in productivity and in customer satisfaction by making available

online, real-time information networked around the organization, giving full supply chain visibility.

Thus, information is shared within and between the organization and decisions are made on the basis

of this shared information. The technology needed to promote and support change, be it large or

small, strategic or operational, if used appropriately offers the chance to improve supply chain, in

turn, leading to increased productivity and profitability.

Review: Technology offers the potential to change supply chain networks and processes to reduce

non-value adding time spent and to support alternative ways of working.




17: Design of closed-loop supply chain and product recovery management for fast-moving

consumer goods; The case of a single-use camera

David B Grant, Ruth Banomyong. Asia Pacific Journal of Marketing and Logistics.Patrington:

2010. Vol. 22, Iss. 2; pg. 232

Abstract:

The purpose of this paper is to qualitatively investigate how product recovery management (PRM)

activities affected the strategic design and implementation of a closed-loop supply chain for a fast-

moving consumer good. The paper employs a case study approach with in-depth interviews and

structured observation of PRM processes at the focal company. The focal company was able to

design an efficient and effective product recovery and recycle manufacturing system by

standardizing high-quality raw materials, using a modular structure for the product and maintaining

control over the entire process and bypassing the temptation to use third-party collectors and

processors. Primary research relates to the single case study and the focal company; however, the

findings may not generally apply to other fast-moving consumer goods (FMCG). The comparison of

the focal company's processes to an extant product recovery model provides firms with a structured

way of implementing product recovery and recycling. This paper adds to our knowledge of PRM and

closed-loop supply chain design by investigating its practical application to a fast-moving consumer

good; this topic has not previously received much attention by academics and practitioners.

Review: Product recovery management (PRM) activities affected the strategic design and

implementation of a closed-loop supply chain for a fast-moving consumer good.




18: Floating stocks in FMCG supply chains: using intermodal transport to facilitate advance

deployment

Rommert Dekker, Eelco van Asperen and GeertenOchtman

Abstract:

The purpose of this paper is to consider the use of temporary storage offered by intermodal

transshipment points to position some stock of fast moving consumer goods in advance of demand;

this floating stock concept combines transport and inventory management. Intermodal transport is

compared with direct road transport for a supply chain.

Review: I agree with author that floating stocks combines transport and inventory management in

FMCG.

19: Applying Supply Chain Visibility - A study at a company in the paper and pulp industry

Author: FilipAdielsson; Erik Gustavsson; [2011]

Abstract:

The study has showed that the information sharing is working relatively well at the company and

they have quite good visibility in the supply chain. It can be concluded though, that increased

visibility can help reduce the inventory levels. However, the factors affecting the inventory levels are

very complex and it has been found information sharing is just one small part of the process. The

main thing that needs to be improved is the managerial support on collaboration in order to establish

routines and schedule regular meetings which enable a more efficient information sharing.

Review: The study has showed that the information sharing is working relatively well at the

company and they have quite good visibility in the supply chain. I agree with author view that

information sharing have quite visibility in supply chain.




20: Extranet in Development of Supply Chain

Author: Maria Leivo; [2006]

Abstract:

Extranets as they have come to be termed are revolutionizing supply chains and their management.

Companies and organizations with quite different internal information systems can now access data

from other supply chain members. Information can be shared easily and at relatively low cost. A

major benefit that flows from this greater transparency is that internal operation of the business can

become more efficient as a result.

Review: Intranets are termed as revolutionary supply chain management and their mamagement.

21: Dabur India Ltd.: Operational Excellence and Competitive

Author: Deepak Gupta, Srinivas D.

Abstract:

Dabur India Ltd. is no exception and realized it needed to perform better and make faster decisions

in order to outpace its peers in revenue and profitability growth. To meet its goals, Accenture

proposed that Dabur improve its supply chain management, sales and distribution capabilities and

use IT as a strategic enabler for its business strategy. This included migration to a nimbler

outsourcing model that would generate value through agility and support business initiatives and

maintenance of its SAP ERP system.

Review: Accenture proposed that Dabber improve its supply chain management, sales and

distribution capabilities and use IT as a strategic enabler for its business strategy.




C.2 - Questionnaire:

Dear Respondent,

I am Sudhir Kumar Singh student of S.Y.MMS from B.E.S. Institute of Management Studies and

Research. I am conducting a project entitled ‘A CRITICAL STUDY OF CHANGING PHASES OF

SCM IN FMCG SECTOR’. I need your cooperation which will help to draw conclusive inference.

Your opinion and suggestion shall be kept confidential and will be used for academic purpose.

Name of Stockiest:

Occupation: Designation:

Q1.What is your awareness Level towards Supply chain Management Fundamental as a

Strategy to take the advantage in supply of FMCG products?

a. Good b. Average c. Poor

Q2.How many option do you have for a better Supply chain Solution?

a. Many b. Moderate c. Minimum

Q3. What is your willingness level to accept the Supply chain Management advantage of Better

profitability achievement?

a. Higher b. Average c. Low

Q4. Up to what level the cost deficiency hinder you to implement Supply chain solution?





Q5. Up to what level your conservative approach hinder you to implement Supply chain

Solution?


Q6. Up to what level the unavailability hinder you to implement Supply chain solution?


Q7. Up to what level you satisfied with Supply chain solution?


Q8.what is the observation level of the Supply chain solution is advantages for the scope of

business?


Q9.Which option do you prefer as advantages in implement Supply chain solution?

a. Better time delivery b. Better Inventory management

c. Better cost Effectiveness

Q10. Up to what level new emerging technologies are beneficial in providing better

Supply chain solution?

a. Higher b. Moderate c. Low




Q11.In your business strategy what role SCM play in the total performance?


Q12. Level of your desire to ask for your supplier for much better Supply chain solution?


Q13.Which component do you feel is most important for much better Supply chain solution?

a. Better Inventory management b. Better location Decision

c. Better transportation Decision

Q14. Level of your willingness to go for outsourcing Supply chain services?


Q15.What is level of requirement for FMCG sector in comparison with other commodity for a

supply chain solution?





D.1 - OBSERVATIONS AND ANALYSIS

Awareness Level towards Supply chain Management Fundamental.

Good 50 %

Average 30 %

poor 20 %

Good Average Poor0

10

20

30

40

50

60

50

30

20

Response(In %)

Most of the stockiest across Mumbai well aware about the Supply Chain Management fundamental

but approximately 20 % stockiest don’t aware Supply Chain Management fundamental; they follow

traditional way to deliver good to their customers. This research survey will have positive impact on

perception of stockiest regarding Supply Chain Management fundamental.




Options for a better Supply chain Solutions.

Many 50 %

Moderate 26 %

Minimum 24 %

Many50%

Moderate26%

Min-imum

24%

Response(In %)

ManyModerateMinimum

On the basis of above response, most of the stockiest have many options for Supply

Chainsolutions,some have moderate level of options for supply chain solutions. But 24 % stockiest




have only few options for alternative Supply Chain Solutions. Those who have only few options for

Supply Chain feel trouble when they want to increase supply chain performance.

Willingness level to accept the Supply chain Management advantage for better profitability

achievement.

Higher 42 %

Average 30 %

Low 28 %

Higher Average Low0

5

10

15

20

25

30

35

40

45 42

3028

Series3




Supply chain management is one of the most tools to increase total profitability. Particularly in case

of stockiest business supply chain contribution is major part of total profit. But in Mumbai 28 %

stockiest don’t belief that supply chain is major part of their total profit.

Level the cost deficiency hinders to implement Supply chain solution.

Higher 32 %

Average 48 %

Low 20 %

Higher32%

Average48%

Low20%

Response(In %)

HigherAverageLow




Supply chain cost is major part of total cost in stockiest business, effective supply chain management

will helpful in reduction of cost and increase profit. But in survey 20 % stockiest response low for

cost deficiency hinders to implement supply chain solutions.

Level of conservative approach hinder to implement Supply chain solutions.

Higher 40 %

Average 20 %

Low 40 %

Higher

40%

Average20%

Low40%

Response

HigherAverageLow




Level the unavailability hinder to implement Supply chain solutions.

Higher 54 %

Average 28 %

Low 18 %

Higher Average Low0

10

20

30

40

50

60

54

28

18

Series3




Level of satisfaction with Supply chain solutions.

Good 50 %

Average 28 %

poor 22 %

Good Average Poor0

5

10

15

20

25

30

35

40

45

50

50

28

22Response(In %)

Satisfaction is derived from performance of business, those who have implement better supply chain

solution have better performance than those who have not implement effective supply chain




solutions. In the survey 22 % stockiest are not satisfy with their business performance they have to

implement effective supply chain solutions.

Observation level of the Supply chain solution is advantages for the scope of business.

Good 50 %

Average 28 %

Low 22 %

Good 50%

Average28%

Low22%

Response(In %)

Good AverageLow

Success of business motivates people to increase scope of business. In particularly stockiest business

track of good performance motivates stockiest to include some new product to deliver their

customers. Scope of business depends on flexibility of supply chain solution. But in survey 22 %

stockiest have low Observation of the Supply chain solution is advantages for the scope of business.




Option preferred as advantages in implement Supply chain solutions.

Better Time Delivery 48 %

Better Inventory Management 20 %

Better Cost Effectiveness 32 %

BTDBIM

BCE

0

5

10

15

20

25

30

35

40

45

50

Response(In %)

Series2

Series3

48

20

32

Response(In %)

FMCG products are perishable in nature at some extent, so delivery at time is important, some

products got perished if we keep it normal temperature so it require cryogenic store to keep it safe

for future use, it means that delivery time and inventory management is equally important. More

over better inventory management is also reduce total cost. But in survey only 20 % stockiest choose

Better Inventory Managements advantages in implement Supply chain solutions.




Level new emerging technologies are beneficial in providing better Supply chain solutions.

Higher 44 %

Moderate 34 %

Low 22 %

Higher44%

Moderate34%

Low22%

Response(In %)

HigherModerateLow

Emerging technologies are beneficial in providing better Supply chain solutions, for example

tracking and tracing system. In survey 22 % stockiest responses low as emerging technologies are

beneficial in providing better supply chain solutions which shows that either they don’t aware or not

interested to use emerging technologies in their business process.




Role SCM play in the total performance.

Good 57 %

Average 28 %

Poor 18 %

Good55%Av-

erage27%

Poor17%

Response(In %)

GoodAveragePoor

In the business of stockiest, role of supply chain is most important because it is all about supply

chain business, but survey result shows that 18 % stockiest consider poor role of supply chain

management in their total performance.




Level of desire to ask for supplier for much better Supply chain solution.

Higher 50 %

Average 30 %

Low 20 %

Higher Average Low0

5

10

15

20

25

30

35

40

45

50

50

30

20 Series3

As we all know that there are number of big companies in FMCG sector eg- ITC, Pepsi, and Coca

Cola. They can provide better supply chain solutions if stockiest ask them to improve their supply




chain solutions. But in survey 20 % stockiest have low desire to ask them to improve their supply

chain solutions.

Which option is most important for much better Supply chain solution.

Better Inventory Management 48 %

Better Location Decision 28 %

Better Transportation Decision 24 %

BIM BLD BTD0

5

10

15

20

25

30

35

40

45

5048

28

24Response(In %)




Inventory management, location decision and transportation decision are all equally important for

effective supply chain solutions. Result of study is satisfactory.

Level of willingness to go for outsourcing Supply chain services.

Higher 26 %

Moderate 22 %

Low 52 %

Higher26%

Moderate22%

Low52%

Response(In %)

HigherModerateLow




Stockiest don’t like to outsource supply chain solutions because their business is all about supply

chain business if they outsource supply chain solutions from third party supply chain service

provider it directly impact their total profit. But 26 % stockiest like to outsourcesupply chain

solutions.

Level of requirement for FMCG sector in comparison with other commodity for a supply

chain solution.

Higher 50 %

Moderate 28 %

Low 22 %




Higher Moderate Low0

10

20

30

40

50

60

50

28

22

FMCG sector is one of the most competitive sector in today’s business world, it products are also

perishable in nature at some extent. So it re

D.2 - FINDINGS

1. People are not well aware about SCM scope because still 20% dealer is having poor awareness

level.

2. Dealer are not having much opinion as a supply chain solution services because this service sector

is not well incorporated by service sector icons In the area of Mumbai so well.

3. Willingness level to accept the supply chain management advantage of better profitability

achievement is also not very satisfactory.




4. Still in days globalized scenario cost play a major hindrance agent in the better SCM options by a

dealer.

5. The approach is now future looking but still 40% dealers are conservative.

6. Only few better SCM providers are available in the Mumbai region.

7. Satisfaction level is quite balances with still 22 % people are not well satisfied.

8. Dealers feel SCM may provide advantage to them and their prospects in business.

9. Timely delivery of product is most important advantage factor.

10. Dealer is technology focus and they feel that emerging technologies are beneficial to them.

11. Role of SCM as a strategy is high.

12. Level of desire to ask their supplier for better supply chain solutions is good but still 20% are not

having better mindset.

13. Inventory management is most important component felt by the dealers of the SCM.

14. Willingness for the outsourcing is not quite satisfactory.

15. FMCG dealers feel that there need urgency is quite higher in comparative to other factor.




D.3 - CONCLUSION

Still the FMCG dealer is not well aware they are conservative and believe in traditional SCM

practices. Their approach is now changing but cost factors and unavailability of better SCM

solutions provided hinder their chances of better SCM services accessibility.




As per result of the survey many stockiestsare not aware of supply chain management fundamental

as a strategy to take the advantage in the supply chain of FMCG products. This shows that FMCG

stockiest using traditional way in product distributions.

Number of supply chain options available influence the overall performance but many dealers are

not having much number of supply chain solutions because this service sector is still in growing

stage, many alternative service providers have increased by increasing the popularity of supply chain

as a strategy to make business success.

In today’s business supply chain management plays an important role which directly affects total

profitability of business, effective supply chain management is useful in total cost reduction so many

business organizations consider it as serious decision. But survey shows that few stockiest don’t

accept supply chain management advantage of better profitability achievement.

Successfultrack record of business motivates stockiests to include some new products to serve their

clients.Flexible supply chain management helps to add new product in their service. But some

stockiest have poor flexibility in their supply chain management which cause trouble to include

some new product in their service, which means scope of business is limited.

I have considered three criteria (Better time delivery, better inventory management and better cost

effectiveness) in implementing supply chain solutions, out of these three criteria better time delivery

and better inventory management are important for FMCG products. However the result of study

shows that many stockiest still consider better cost effectiveness are important criteria in

implementation of supply chain solutions.




In addition to above three basic criteria location and transportation decision are also important issue

in implementing and conducting better supply chain service. Most of the stockiest consider it equally

important as above three criteria.

New emerging technologies are beneficial in providing better supply chain solutions, eg. Tracking

and tracing system. But some dealer don’t think that new emerging technologies are beneficial in

providing better supply chain solutions, this is due to poor awareness of application of technologies

in supply chain service to dealer.

There are many big business organizations in FMCG sector, eg. ITC, HUL. They can cooperate their

dealer to implement effective supply chain solutions, if dealer ask them for that purpose, but survey

result shows that approximately 20 % dealer don’t like to ask their supplier to improve or implement

supply chain solutions.

So need is to create a better promotional awareness by FMCG key players to offer different

version of SCM solutions because dealer feel that they can offer better time bound delivery of

product to their customer and can manage their inventory in a better and a strategic advantage to

their business.

D.4 - BIBLOGRAPHY

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19. Book: “Supply Chain Management and Logistics”

Author: Mendel, peter

20. Book: “Logistics and Supply Chain Management”

Author: Saxena, Anurag



http://www.essays.se/essay/259ccedd5b/

http://www.essays.se/essay/3cf1c4a84c/










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A CRITICAL STUDY OF CHANGING PHASES OF SCM IN FMCG SECTOR

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