EMERGING TRENDS IN SUPPLY CHAIN MANAGEMENT

By- Group 4 (YATISH PATIL, KANTANU PATIL, ABHINAV BHATT)

EXECUTIVE SUMARRY
Supply chain management, in recent times, has emerged as the basis in many
industries (small or large) for creating the integrated relationship between suppliers and
customers. Due to continuous growth in last few years in supply chain management the
environment has become competitive. So in order to respond to competitive pressures
companies need to know and understand the new trends in SCM. This paper focuses
the emerging trends of SCM in current scenario, and it provides broader awareness of
SCM concepts.
1. INTRODUCTION
Supply Chain Management 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) [1]. 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 In the words of The Supply Chain Council,” SCM is
defined as managing supply and demand, sourcing raw materials and parts,
manufacturing and assembly, warehousing, order entry and order management,
distribution across all channels, and delivery to the customers”.

SCM is constantly evolving and there are always new trends. With companies investing
ever greater resources in their supply chain there is a distinct trend to have the best and
brightest employees managing those supply chains. Supply chain professionals are
always evaluating possible inefficiencies and shortcomings of their supply networks to
improve their ability to deliver to the customer. This is especially true in today’s fast
paced, highly competitive environment where supply chain performance can provide
manufacturers with a necessary edge .In order to face a number of challenges and to
be at the forefront, companies are required to update their skills and introduce new
innovations in their Supply Chain.

2. CURRENT TRENDS IN SUPPLY CHAIN

2.1 GREEN SUPPLY CHAIN

Green Supply Chain Management is the process of using environmentally friendly
inputs and transforming these inputs into outputs that can be reclaimed and re-used at
the end of their life cycle thus, creating a sustainable supply chain.
Organizations worldwide still use toxic chemicals, wasteful packaging, and
transportation practices that affect the environment in the form of Air, Water, Soil and
Noise Pollution.
However, from materials acquisition and manufacturing to packaging, logistics, and
distribution, every stage of the supply chain offers opportunities to reduce waste and
pollution. As shown in Fig. 1, at every stage of the cycle there is pollution in terms of air,
water and waste.

Figure 1: Impact of Supply Chain on environment

Here recycling and effective and efficient use of the resources can drastically help in
reducing the pollution.
The companies should take note of the fact that GSCM measures can not only improve
their performance levels but also help in protecting the environment.
GSCM = Green purchasing + Green manufacturing/materials management + Green
Distribution / marketing + Reverse logistics.

2.1.1 Traditional versus Green supply chains

In a traditional supply chain as shown in figure 2 the flow of materials and information is
linear and from one end to the other. Each supply chain partner has limited information
regarding, for example, the carbon footprint and greenhouse gas emission of the other
partners. Hence, each player may be concerned about his own footprint and may try to
reduce this, irrespective of the impact on upstream and downstream supply chain.
There may be some focus on end-to-end supply chain costs but due to limitations of
information sharing, the costs are far from optimized in most cases.
In contrast, Green Supply Chains consider the environmental effects of all processes of
supply chain from the extraction of raw materials to the final disposal of goods as shown
in figure 3. Within the Green Supply Chain each player motivates other players to go
Green and provides the necessary information, support, and guidance. Environment
objectives and performance measurement are then integrated with financial and
operational objectives.
Green Supply Chains will minimize waste; minimize environmental impact while
assuring maximum consumer satisfaction, and healthy profits. As consumers have
become more aware of environmental issues, they have now started asking questions
about the products they are purchasing. Nowadays, organizations routinely face queries
about how Green their manufacturing processes and supply chain are, how wide the
carbon footprint is, how wasteful their packaging is, and how they will recycle.

Figure 2: Traditional Supply Chain Figure 3: Green Supply Chain

2.1.2 Advantages of Green SCM

Green SCM can help organizations in the following ways:-

 Savings: There are long term savings opportunities through green movement.
The corporate should not expect huge benefits upon implementing Green SCM
immediately but it can definitely proclaim to become a competitive advantage for
firms marketing goods with environmental characteristics.

 Lower risk: Some of the supplier communities have very poor environmental
track records like using illegal means to supply/ extract raw materials. These
risks can be sidelined by using and adhering to environmental friendly practices.

 Increase in revenue: Companies are competing to improve efficiency of their

business processes, reduce energy and material consumption by utilizing green
supply-chain management. Industry has been the prime investor in energy
efficiency, renewable energy and green projects thus satisfying stakeholder
demands, enhance brand image, and improve customer loyalty.

 Indirect yield: - Organization can reduce considerable waste and protect the
natural resources thus enhance the brand image of the company and will
indirectly benefit the motivational levels of the employees, suppliers and other
stakeholders.
2.1.3 Challenges to Green SCM

Implementing GSCM Organizations will face certain challenges some of which include:
 Cost is considered as the biggest hindrance in implementing Green SCM.
 Companies are reluctant to implement GSCM as it is a new concept hence
becomes relatively difficult to exploit any measurable data to check the value
chain effectiveness.
 No proper technology in place to compliment business with the Green Practices.
 Due to lack of green practitioners available, the organizations are apprehensive
to go ahead with the investment.
 It’s a major challenge for many companies to integrate the waste (recycling) as
raw materials to again be used in manufacturing unit.
 Another challenge is the fear of failure. The organizations are not confident
whether the Green initiative will lead to success or a major failure.
 Lack of awareness regarding the implementation process and best practices.
 Due to lack of confidence on the concept and high initial investment, the top
management becomes apprehensive in implementation of green practices.
 As supply chain has lot of participating stakeholders, anyone’s reluctance to
accept and get involved in the design process and technology affects the overall
performance of the whole chain.
 Lastly, due to lack of customer awareness towards GSCM and Green products
the companies are hesitant to go ahead with the implementation.

2.2 SUSTAINABLE SUPPLY CHAIN

Sustainability is generally defined as using resources to meet the needs of the present
without compromising the ability of future generations to meet their own needs. It raised
more questions than answers. These questions include:
 What resources will future generations require?

 At what levels would pollutants be able to be discharged without negatively affecting

future generations?

 What exactly degree will new sources of depletable resources be distinguished later
on?

 At what level can renewable resources be misused while guaranteeing that these
resources stay renewable?

 Whatever degree would technology be able to address feasible utilization of

resources with continued increments of material wealth?

 Whatever degree can market forces drive sustainability?

 Do ways of life need to change and if so how?

 Which kinds of strategies are required to accomplish sustainability?

2.2.1 The interaction between sustainability and supply chains

Amid the most recent two decades, the emphasis on enhancing activities has moved
from a particular office or association to the whole inventory network. By advancing
along the whole succession of steps that are engaged with the creation of an item
whether it is a decent or administration, the best esteem can be delivered at the most
reduced conceivable cost. Much of the time, this approach expects associations to work
sub-ideally from a cost point of view to make the best conceivable incentive along the
whole inventory network.
An emphasis on supply chains is a stage towards the more extensive selection and
improvement of supportability, since the inventory network thinks about the item from
beginning handling of crude materials to conveyance to the client. Nonetheless,
manageability additionally should incorporate issues and streams that stretch out past
the center of store network administration: item configuration, fabricating by-ace
channels, side-effects delivered amid item utilize, item life expansion, item end-of-life,
and recuperation forms at end-of-life.

1. Product design
Methods, for example, life cycle assessment are utilized to aid the assurance of how to
design a product to limit its environmental effect over its useable life and a while later.
This field at the interface of engineering, product design and engineering considers
resource depletion and in addition environmental impacts.

2. Manufacturing by-products
Thought of the expanded supply chain incorporates the decrease and end of side-
effects through cleaner process advancements and quality and lean generation
procedures From the modern nature writing and progressively considered by makers is
the utilization of results of assembling, for example, the utilization of waste warmth for
moulding space or the utilization of nourishment squander for delivering new
sustenance items This is a component of both process plan and ceaseless change
exercises.

3. By-products produced during product use

The management of item sustainability isn't just a component of outline, yet additionally
item management. The potential for incredible chances and benefit have been
perceived by numerous who have called for expanded maker inclusion and duty. This
contribution has showed up in requires the arrangement of an item as an administration
or for manufacturers to give a progression of administrations to help and supplement
offer of the first item.
4. Product life extension
There are assortments of strategies that are utilized to expand the life of items. Through
the expansion of item life, the exhaustion of resources through the creation of new item
is evaded. This approach neutralizes the plan for out of date quality run of the mill in a
consumption oriented society. Be that as it may, it expands the esteem made by an
individual item. The test for the supplier of the item is to create contributions that take
into account them to catch a greater amount of the item esteem. Such methodologies
are talked about by the creators of work identifying with side-effects delivered amid item
use above. While a few manufacturers have benefited from circumstances made side-
effect life expansion, the disappointment of Original Equipment Manufacturers to gain
by circumstances has prompted energetic exceptionally beneficial organizations in such
territories as remanufacturing.

5. Product end-of-life
The manner of the item toward the finish of its life depends, as it were, on moves made
at before stages. The underlying item configuration has awesome effect on how much
an item can be reused, remanufactured, reused, burned or discarded. For instance, the
high lead content in cathode beam tube and gadgets items results in confusions for
transfer because of the poisonous quality of lead. On account of gadgets, eliminate of
lead use in binds in process confounded transfer choices. While on account of cathode
beam tubes, a few purviews have acquainted uncommon controls with occupy these
items from metropolitan landfills with the purpose of coordinating the lead into new
items. Approaches that have been created with the plan of delivering all the more
naturally great methods of item end-of-life transfer need to-date brought about more
stockpiling of item and less redeployment of parts and materials into new items than
planned. Wanted results not just require changes in the process related with the
advancement of natural strategies, directions, motivations and disincentives; yet
additionally the related operational viewpoints: anticipating, coordination, handling and
different activities related capacities. To date generous research has concentrated on
the catch of significant worth staying in items toward the finish of an items life through
remanufacturing.

6. Recovery processes at end-of-life

The recuperation of utilized items has turned into a field of quickly developing
significance. Various papers have been distributed on plan contemplations for item
recuperation organizes various examinations have discovered that an expanded
accentuation on supportability in the store network is identified with bring down
expenses and a nonpartisan or constructive outcome on esteem However, others have
recognized exchange offs between what is financially reasonable for production network
individuals and what is of most prominent incentive to the whole framework or populace
Extending the inventory network to incorporate issues, for example, remanufacturing,
reusing and revamping includes an extra level of multifaceted nature to existing
inventory network outline notwithstanding another arrangement of potential vital and
operational issues, which thusly can build costs, in any event for the time being. Two
essential issues offers ascend to these issues:
(a) the vulnerability related with the recuperation procedure concerning quality, amount,
and timing of returned items, holders, beds and bundling and
(b) the accumulation and transportation of these items, compartments, beds and
bundling. Expanded expenses can mirror the exchange of outside expenses from
society to inventory network accomplices. On the off chance that saw extensively,
maintainability opens a bigger arrangement of chances for development that may
require here and now speculation.

2.3 LEAN SUPPLY CHAIN

The lean supply chain is planned, stable, visible and collaborative. The lean supply
chain relentlessly focuses on lead-time reduction by eliminating all non-value creating
activities (waste). This is accomplished through rigorous process discipline, inventory
reduction and first-time quality. The goal of the lean supply chain is to deliver the
highest value to the customer at the least total systems cost.
Elements of Lean Supply Chain are:

Procurement

Businesses are looking to new technologies to assist them in improving procurement

processes. These include internet-based purchasing that allows requisitioners to
purchase items from vendor's catalogs containing company-wide contract prices.
Changes in payment options to vendors can also streamline processes. Companies that
use a two-way match, which is payment on receipt rather than payment on
an invoice will reduce resources in their purchasing department as well as improve
supplier relationships.

Lean Manufacturing

Lean supply chain management gained popularity in the manufacturing area, as this is
where significant improvement can be achieved. Manufacturing processes can be
improved to reduce waste and resources while maintaining operational performance.
Quality is an important part of lean manufacturing. Having zero defects in the
manufacturing process reduces waste and increases efficiency within the organization
as a whole. With greater quality, customers will no longer return goods, which means
fewer resources will be needed for returns and quality issues.

Companies who have adopted lean supply chain practices have examined each of their
routings, bill of materials and equipment to identify where improvements can be
achieved.
Warehousing

Warehouse processes should be examined to find areas of eliminating waste of

resources and non-value added steps. One area the companies should always be
working on is the reduction of unnecessary inventory. The accumulation of inventory
requires money and resources to store and maintain it. By reducing unnecessary
inventory, a company can minimize warehousing space and handling, in turn reducing
overall costs.

Transportation

Businesses who want to implement lean processes often look to their transportation
procedures to see where they can be streamlined. In many instances, companies find
that their efforts to improve customer satisfaction leads to poor shipping decisions.
Orders are shipped without combining additional orders to minimize costs or expensive
shipping options are selected because of a customer request. Businesses often find that
they are using a number of shippers unnecessarily when they could be reducing their
shipping options and reduce overall costs.

Logistics and Supply Chain Management Creating the lean supply chain is a strategic
undertaking that requires the same level of vision, planning and discipline as any other
major business initiative.

2.4 RESILIENT SUPPLY CHAIN

A resilient supply chain is a competitive advantage, reduces customer perception of
assumed risks and moves companies from simple risk management to
risk resilient growth.
2.4.1 Key Attributes of a Resilient Supply Chain
  Visibility encompasses a company’s ability to track and monitor supply chain
events and patterns and proactively turn these insights into actions.

 Flexibility refers to a company’s ability to adapt to disruptions without

significantly increasing its operational costs.

 Collaboration refers to a company’s ability to develop symbiotic, trust-based

relationships with supply chain partners and other key strategic networks.

 Control refers to a company’s ability to implement policies and execute

processes that prevent disruptions.

2.4.2 Steps to building supply chain resilience

1) Understand the risk

This is the vital starting point. Understand what risks each supplier brings to you. What
are the risks, their significance and likelihood, and how you can offset them. Look at the
benefits of supply chain diversification. For example, in biotech, we see the selection of
suppliers who can manufacture materials you need at more than one site in order to
reduce the impact of failure of a manufacturing line e.g. Thermo Fisher manufacture the
same materials in Grand Island in the USA, and Glasgow in Scotland.

Understanding the risk associated with each supplier means you can take proactive
steps to safeguard against it. It’s about understanding the maturity of your suppliers
and how capable they are of managing any threats, rather than a tick-box mentality
that’s about getting something off your to-do list. You can then ensure they have
processes in place to mitigate any risk themselves.

2) Be open from the outset

Set expectations from the outset and encourage dialogue where your suppliers feel they
can be honest, with the confidence you are looking for a win-win outcome. This will
build trust and confidence into the relationship on both sides. Having these
conversations means you minimise the chances of surprises. Where risks are
identified, ask your supplier to talk you through how they plan to respond to it, which
could even involve factoring you into that management process.

Being open from the outset may require a fundamental shift from you in terms of how
you manage your suppliers, and being prepared to have those early-stage
discussions. A good time to have these conversations is at the outset of the
relationship. Culturally, we see organisations taking a tough, uncompromising attitude
to suppliers. This can create a defensive response from suppliers.

As the buyer, you have the opportunity to make that first move to create an environment
which allows for those difficult discussions. Often, suppliers hold back from highlighting
potential risk as they’re concerned they could lose out on the contract. Taking a joint
approach to identifying and responding to risk will drive better outcomes as will agreeing
responsibilities before things actually go wrong.

3) Take the long-term view

Take a proactive, long-term view to building your supply chain. A reactive focus on just-
in-time procurement and managing cash flow increases the risk of business disruption.
Organisations often fail to recognise that incentives to save money can introduce
significant risk, focusing instead on the perceived short-term benefits.

Instead, ask suppliers to be transparent about risk in their bid submissions. In this way
you can review possible threats and ensure that you aren’t in fact, over-paying for
possible risks. From your perspective this means you might be able to lay out a better
deal for both parties. You can also have the conversation around who’s best placed to
manage the threats e.g. who has the specialist expertise.

4) Do the analysis
Investing time in supplier analysis can deliver real returns when it comes to creating that
resilient supply chain. Yes, your supplier should be looking at their own risk analysis –
this doesn’t mean they are.

Again, when you’re setting up your contract, understand how far the supplier is risk
aware. You may have a handle on the risk involved in what you’re asking them to do for
you. But do they really understand this in terms of what they need to do to deliver for
your organisation? Have they recognised the new risk? How have they mapped the
risks out and how does this correspond to your perceptions? Do they have the capability
to handle them?

There is a real advantage too in understanding your suppliers’ supply chain as, like you,
it’s the links further down the chain that could be the most at risk of breaking.

5) Evolve your approach through lessons learned

Inevitably, things will go wrong. However, it’s how you respond to hitches in your supply
chain that will keep it evolving – and flowing. Capture any lessons learned on the risks
that occurred and how you responded to them, to create that database of best
practice. You can then apply these learnings to feed into your wider supply chain
management strategy, driving chances of future success.

If risk is at the centre of your supply chain, then collaboration is the most effective way
to safeguard against it. Understand where your Achilles heel is, map out a joint
response, work in partnership and drive that resilience through mutual understanding
and shared goals.
 3. RECOMMENDATION AND SUGGESTIONS

1. Environment friendly product and package

Companies should use environmentally-safe product components and finished goods.
Usage of biodegradable material for packaging can reduce the harmful effect on the
environment.

2. Adoption of clean technologies

With the abundance of young engineering talent and low cost of manufacturing
products, India is well balanced to create a hub of clean technology products. The open
areas of land can be aptly utilized for tapping solar energy. It can also take a lead in
investing in LED lighting, electric automobiles and smart grids technology etc.

3. Green Stakeholders
It should become a necessary clause that the companies should do an audit of their
suppliers and suppliers should do the same to their suppliers. A guideline regarding
GSCM should be devised so that all the stakeholders comply with it.

4. Waste Management
Waste generated by the companies during operations should be used as an input
material in some other operations after treatment. Hazardous wastes which cannot be
reused should be disposed of securely. Proper mechanism should be devised so that
waste is segregated at the source to avoid contamination of non-hazardous waste with
hazardous waste.

5. Reverse logistics
Lot of regulations and laws has been designed of late to prevent the companies from
disposing waste arbitrarily.
Companies are generally concerned only about the quality of the product produced but
does not show the same interest in harnessing the post end of the life of the product.
Therefore the time has come for the reverse logistics to take shape. The supply chain of
the company should now start accepting and accommodating the products being
returned for recycling or disposal. Thus there will be a closed ended loop of the supply
chain starting from sourcing, making, manufacturing and recycling / disposing of the
product.

6. E-waste
E-waste forms an important part of all the IT and electronic companies. All obsolete
computers, peripherals, batteries, cartridges etc. should be returned to e-waste vendors
or to the suppliers who are authorized to dispose them appropriately.
7. Driver not a barrier
Companies have to recognize the Green concept as a driver rather than a barrier for
innovation. This will enable them to see opportunities and growth areas where others
apprehend risks and increased costs.

8. 3 I and 2 C approach
 Incorporate – Initiatives should become a part of corporate strategy and
business goal.
 In Total –The implementation and initiative should focus the entire cycle from the
start till the finish (designing to recycling)
 Intensive – Implementations should be intensive and no comprise should be
made on behalf of the upcoming opportunities.
 Continuous –Creating benchmark and publishing new innovations, ideas and
impact of initiative.
 Computable – Success should be measured in numbers, thus defining a
parameter metrics to quantify the success.

4. CONCLUSIONS

Gone are the days where customer service was merely a buzz word. With the focus on
customer service, companies have moved away for a supply driven business towards a
demand driven business. Companies are also constantly searching for ways to reduce
inventory and holding cost. The increase in speed has forced companies to search for
ways to reduce product cycle time and move product quickly and cost effectively. With
this the concept of Supply chain has emerged to be one of the important sectors across
worldwide. It is so considered because of the time utility factor concerned with it. Supply
Chain Management with its innovations has completely changed the outlook of how
companies manage their supply Chain and how they maintain their collaborative
relationships with their suppliers and satisfy the needs of their customers.

REFERENCES
 Chung-Hsiao, (2008). The Green supply chain management in the electronic
industry. International Journal of Environmental Science & Technology, 5(2),
205-216.
 Creating a Green Supply Chain - Information Technology as an Enabler for a
Green Supply Chain, 2008,Cognizant white paper.
 https://www.supplychain247.com/article/from_risk_to_resilience_using_analytics
_visualization
 Jaume Ferre, Johann Karlberg, and Jamie Hintlian, Integration: (March 2007),
Key to Global Sucess, Supply Chain Management Review see in . Chopra Sunil
and Meindl Peter, (2009), "Supply Chain Management: Strategy, Planning and
Operation‟, Prentice Hall, New Jersey.
 https://www.rmagreen.com/rma-blog/what-is-sustainable-supply-chain-
management