INVESTIGATE THE

CURRENT STATUS OF
SUPPLY CHAIN
MANAGEMENT IN
INDIA
What is SCM?
 “SCM is an integrative philosophy to manage
the total flow of distribution channel from
supplier to ultimate user.”

 “SCM is a set of approaches utilized to

efficiently integrate suppliers, manufacturers,
warehouses, & stores, so that merchandise is
produced and distributed at right locations, &
at right time, in order to minimize system
wide cost while satisfying service level
requirements.”
 SCOR is structured around five distinct
management processes
Plan

Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source

Return Return Return Return Return

Return Return Return

Your Company Customer’s

Suppliers’ Supplier Customer
Customer
Supplier
Internal or External Internal or External

SCOR Model

Supply Chain Council &

Supply Chain Operations Reference (SCOR) Model Overview
Supply-Chain Council, Inc.
www.supply-chain.org
 SCM in INDIA
 Worldwide interest in SCM increased since 1980s.
 In India--increasing uncertainty of supply networks…
bcoz….

 globalization of businesses
 proliferation of product variety
 shortening of PLC……..
 dramatic & sudden changes in environment

Due to that….
Indian organization forced to look beyond their four walls for
collaboration with supply chain partners.
Logistics cost Estimates for India

 Logistics costs constitute nearly 10% of the

total GNP, of which nearly 40% is due to
transportation.
 Logistics cost for manufactured products in
India 30% of the total expenditure, as against
15-20% globally.
 Almost one-third companies have no supply
chain strategy.
Logistics cost Estimates for India
Sr.no. Description Costs as % total
logistic cost

1. Transportation 35
2. Inventory 25
3. Losses 14
4. Packaging 11
5. Ware housing & handling 9
6. Customer shopping 6
SCM complexity in INDIA
 Inadequacy of basic inputs.
 Indian infrastructure is very poor as compared with other
developed & developing countries ( rating 54th among 59).
 Roads:
 India had a total 24.66 lakhs km of road length network.
 During 1950-51 road carries goods 11%.
 During 1995 road carries goods 60%.
 Rating of India 56th .
 Rail transport:
 Second largest railroad system in the world covering a route
length of 81511km.
 450 million tones goods movement every year.
 25th rating among 59 nation.
 Slow avg. speed of goods movement.
 SCM complexity in INDIA
C. Airports:
 Six international and 87 domestic airports handle 0.22 million
metric tonnes of domestic cargo and 0.468 million metric tonnes
of international cargo.
 Extremely poor in terms of world standards.
 Rating 40th among 59 countries.
E. Seaport:
 11 major ports that handle the total foreign trade of the country
amounting to 271.92 million tonnes.
 The facility and infrastructure of Indian ports are rated 51st among
59 country.
 Lack of storage space and outdated handling equipment.
 Areas where focus is needed…..

A. Supply chain strategy.

B. Supply chain integration.
C. Inventory management.
D. Information technology.
 A. Supply chain strategy:
“A set of dynamic, integrated decisions that one must make in order to
position one’s business in the complex environment ”

Focal area Business Supply chain objective

objectives
Customer Maximize customer •Highly reliable product
satisfaction satisfaction. •Reducing transportation costs

•Expanding width/depth of
distribution.
Profit Maximize profit, •Reducing inventory costs
maximization increase turnover •Reducing order to delivery cycle
on investment. time
•Lowest product costs

Operational Increase earning •Flexibility of production volume

excellence per share. •Flexibility of product mix

•Reducing warehouse costs

B. Supply chain integration:
• The SC strategy cannot truly be overall
business strategy.
• It is based on trust and information sharing,
so that it can quick respond to customer’s
demand.
• Effective integration is the key because if one
of these links fail, the organization’s
performance may suffer and may not meet
expectation of its customers, or the service
level of its competitors.
conclusion
 Indian organizations need to create strong linkages with their
business partners using the concept of supply chain
management.
 Indian organization must concentrate on supply chain strategy,
supply chain integration, inventory management and information
technology.
 Indian organizations should…..
 align supply chain strategy with business strategy in order to
deliver highest customer satisfaction,
 streamline processes for supply chain integration to achieve
operational excellence,
 form partnerships to minimize inventory and maximize profits.
Thank you!