09-07-2014, 10:23 AM
SUPPLY CHAIN MANAGEMENT AND DISTRIBUTION MANAGEMENT
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INTRODUCTION
The concept of Supply Chain Management is based on two core ideas. The first is that practically every product that reaches an end user represents the cumulative effort of multiple organizations. These organizations are referred to collectively as the supply chain.
The second idea is that while supply chains have existed for a long time, most organizations have only paid attention to what was happening within their “four walls.” Few businesses understood, much less managed, the entire chain of activities that ultimately delivered products to the final customer. The result was disjointed and often ineffective supply chains.
Supply chain management, then, is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.
The organizations that make up the supply chain are “linked” together through physical flows and information flows. Physical flows involve the transformation, movement, and storage of goods and materials. They are the most visible piece of the supply chain. But just as important are information flows. Information flows allow the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods and material up and down the supply chain.
There are certain decisions an industry has to make regarding supply chain management which are as follows
Location Decisions
The geographic placement of production facilities, stocking points, and sourcing points is the natural first step in creating a supply chain. The location of facilities involves a commitment of resources to a long-term plan. Once the size, number, and location of these are determined, so are the possible paths by which the product flows through to the final customer. These decisions are of great significance to a firm since they represent the basic strategy for accessing customer markets, and will have a considerable impact on revenue, cost, and level of service. These decisions should be determined by an optimization routine that considers production costs, taxes, duties and duty drawback, tariffs, local content, distribution costs, production limitations, etc.
Production Decisions
The strategic decisions include what products to produce, and which plants to produce them in, allocation of suppliers to plants, plants to DC's[1], and DC's to customer markets. As before, these decisions have a big impact on the revenues, costs and customer service levels of the firm. These decisions assume the existence of the facilities, but determine the exact path(s) through which a product flows to and from these facilities. Another critical issue is the capacity of the manufacturing facilities--and this largely depends on the degree of vertical integration within the firm. Operational decisions focus on detailed production scheduling. These decisions include the construction of the master production schedules, scheduling production on machines, and equipment maintenance. Other considerations include workload balancing, and quality control measures at a production facility.
ADVANTAGES OF SUPPLY CHAIN AND DISTRIBUTION MANAGEMENT
Experience shows that the benefits of a well designed and implemented Supply Chain Management strategy is substantial. Successfully implemented projects have provided benefits such as:
• Reduction of Transportation, Warehousing, and Distribution Costs
• Lean Processing from Supplier to Customer
• Reduced Direct and Indirect Labor Costs
• Optimized Stock Levels
• Increased Material Flow Velocity
• Accurate Job Costing and Scheduling
• Streamlined Purchasing Control
• Increased Decision Making Speed and Responsiveness to Demand Change.
• Increased Customer Service
• Increased Inventory Availability, Customer Order Fill Rates, Accuracies and Services
• Reduced Operations Support Costs
• Reduced Inventory Carrying Costs
• Improved Productivity of Procurement Operations
• Improved Quality of Products and Services
CONCLUSION
Supply chain and distribution management is a very important part for any industry.
For Britannia also, it plays a very important part as Supply chain activities cover everything from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.
Britannia is a very well known established and reputed brand. In the past years Britannia had proven its worth to their consumers and it is one of the most trusted brands of country.
Britannia’s maximum market share is earned by its biscuit industry which is 85 %. And rest with other products.
It makes huge efforts to make their product available at every nook and corner of the country.
Britannia’s main competitors are ITC and PARLE. But, Britannia is heading the race with highest customer outlets and SKUs [5].