MATUSHRI PUSJPABEN VINUBHAI VALIA DEGREE

COLLEGE OF COMMERCE

BORIVALI (WEST), MUMBAI-400092

A STUDY ON DISTRIBUTOR SUPPLY CHAIN

SUBMITTED BY: RISHI JAIN

ROLL NO.- 628

PROJECT GUIDE: PROF. MANJULA KAMATH

UNIVERSITY OF MUMBAI

TYBMS (MARKETING)

SEMESTER VI

ACADEMIC YEAR: 2018-2019

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 DECLARATION

I, RISHI JAIN the student of T.Y. BMS Semester VI (2018- 2019) hereby
declare that I have completed the project on “DISTRIBUTORS SUPPLY
CHAIN”

The information submitted is true and original to the best of my knowledge.

_____________________

(Signature of Student)

RISHI JAIN

628M

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 CERTIFICATE

This is to certify that RISHI JAIN, Roll no: 628 of Third Year BMS, Semester
VI (2018 - 2019) has successfully completed the project on DISTRIBUTORS
SUPPLY CHAIN under the guidance of Prof. Mrs. MANJULA KAMATH

Course Coordinator Principal

Project Guide/ Internal Examiner

External Examiner

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 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the
depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance
to do this project.

I would like to thank my Principal, V. Manikandan for providing the necessary

facilities required for completion of this project.

I take this opportunity to thank our Coordinator Prof. Manoj Upadhay, for her
moral support and guidance.

I would also like to express my sincere gratitude towards my project guide,

Prof. Mrs. Manjula Kamath whose guidance and care made the project
successful.

I would like to thank my College Library for having provided various reference
books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my parents and peers who
supported me throughout my project.

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 TABLE OF CONTENT

CHAPTER No. TOPIC PAGE No.

EXECUTIVE SUMMARY 06
1 INTRODUCTION 08
2 INTRODUCTION – SUPPLY CHAIN MANAGEMENT 16
3 IT IN SCM 28
4 INTRODUCTION TO DISTRIBUTORS 33
5 LOGISTICAL NETWORK ANALYSIS 42
6 LITERATURE REVIEW 49
7 DATA ANALYSIS 57
8 CASE STUDY 61
9 CONCLUSION 63
REFERENCES 65
APPENDIX 66

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 EXECUTIVE SUMMARY

Starting from the basic, knowing what is logistics? Logistics is a Greek word “logistiki”. It is
said to be originated from Military. It is the application of time and space factor. Logistics is
concerned with getting the product and service where they are needed and when they are
desired. It is difficult to complete any marketing or manufacturing work without logistical
support. It involves the integration of information, transportation, inventory, warehousing,
material handling and packaging.

• Transportation: Transportation is an activity which is common to all

manufacturing organisation. Every manufacturing organisation requires
transportation which can be either inbound or outbound logistics. Transportation
is the vital link between the supply chain participants.

“Transportation Management is the process of planning, implementation and control of

transportation service to achieve organisational goals.”

• Inventory Management: The term ‘inventory’ refers to any idle resource that can
be put to some future use. Hence, inventory can be man-hours, machine hours,
materials, spare product, packages, tools, etc. In the context of logistics, the word
inventory is applied to describe stock.

The purpose of logistics management is to reduce the inventory cost and by doing this
reduces the total inventory cost.

• Warehousing: A warehouse is a place to store inventory. Warehousing is a part of

development of facility structure is a part of logistical infrastructure which
supports one or more logistical function. Warehousing is a support for
manufacturing as well as physical distribution activities.
• Material Handling: Material handling system (MHS) decides speed of movement
of goods, service and information within organisation and between seller and
customer. It determines company’s response level to internal or external
customer’s requirement. This process starts from receipt of material followed by
storage of material followed by moving to production and then further moving to
finished goods to the warehouse and finally it reaches the final customer.

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 • Packaging: Packaging is a logistical management function, which is performed at
factory or the warehouse and it begins immediately post production. It is done for-
o Product protection
o Easy handling and movement
o Customer service.

The comparison of online logistics companies is between FLIPKART and SNAPDEAL. Both
are distinct in their own way.

• Flipkart: Flipkart is an e-commerce company founded in 2007, by Sachin and

Binny Bansal. It operates exclusively in India, where it is headquartered in
Bangalore, Karnataka. It is registered in Singapore, and owned by a Singapore-
based holding company. According to Alexa Internet, Flipkart's website is one of
the 10 most visited websites in India. Flipkart has launched its own product range
under the name "DigiFlip", offering camera bags, pen-drives, headphones,
computer accessories, etc.
• Snapdeal: Snapdeal.com is an online marketplace, headquartered in New Delhi,
India. The company was started by Kunal Bahl, a Wharton graduate as part of the
dual degree M&T Engineering and Business program at Penn, and Rohit Bansal,
an alumnus of IIT Delhi in February 2010. It was started in February 2010 as a
daily deals platform inspired by Groupon.com but expanded in September 2011.

Thus this project is complied with the information on logistic and the two leading companies
of online marketing and the major facts on them.

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 CHAPTER 1 -
INTRODUCTION

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WHAT IS A SUPPLY CHAIN?

A supply chain is a collection of suppliers required to create one specific product for a
company. The chain is made up of nodes or “links,” which can include multiple
manufacturers for parts, then the completed product, then the warehouse where it is stored,
then its distribution centers, and finally, the store where a consumer can purchase it. The
concept of the chain is important, because each link is connected in a specific direction and
order, and the next link cannot be reached without going through the previous one. Each link
adds time and costs, and can involve labor, parts, and transportation. Every product a
company carries may have its own supply chain, though they may use certain suppliers for
multiple products. You can see why this gets so complicated, especially for international
supply chains.

The process described above was that of a typical retail supply chain. However, there are
many different types in practice. Here are three examples from well-known masters of supply
chains:

WHAT IS SUPPLY CHAIN MANAGEMENT?

As the name implies, supply chain management (SCM) is handling and optimizing all the
many complicated facets of a supply chain, involving goods and services. Even ensuring
timely handoff from manufacturer to shipper to supplier to shipper to buyer is a massive task,
but to do it cost effectively and build net value is truly a challenge.

Supply chain management is so important because modern commerce exists in a networked

global economy. Most businesses are specialized - even department and big box stores are
only really equipped to sell to customers, despite their wide variety of products. The value of
vertical integration is hard to justify when communication costs and SCM tools are so
inexpensive - it almost always makes more sense to outsource for price efficiency.

Supply Chain Management (SCM) in simple words can be described as a network of facilities
and distribution options. Wherein SCM involves functions such as material procurement,
transformation of the material into intermediate and finished products, and then distribution
of the finished product to consumer. Supply chains are found to exist in both service and
manufacturing sectors, although the complexity of the supply chain may vary vastly from
industry to industry and firm to firm, however it represents a logical advance in our evolving
understanding of business performance (Smith and Budress, 2005).
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A very simple example of supply chain can be explained involving a single product. The
chain involves procurement of raw material from vendors, transformed into finished goods in
a single step, then transported to distribution centers and ultimately to consumer. Realistically
supply chains are always very complex having multiple end products with shared
components, facilities and capacities. The flow of materials is not always along a simple
network, various modes of transportation gets involved and the cost of material for the end
items may become exorbitant (Bertodo, 2002).

In any organizational setup the supply chain refers to a wide range of functional areas which
include SCM-related activities, such as inbound and outbound transportation, warehousing,
inventory control, sourcing, procurement, supply management, forecasting, production
planning & scheduling, order processing, and customer service are all part of the same aspect
including the information systems which is necessary to monitor all of these activities. Thus
it can be simply stated that, "The supply chain encompasses all of those activities associated
with moving goods from the raw-materials stage through to the end user."

Traditionally planning, procurement, manufacturing, marketing and the distribution set ups in
the organizations along the supply chain operate independently having their own objectives
and generally these are conflicting. Marketing objective of high consumer service and
attainment of maximum sales output, always conflicts with manufacturing and distribution
goals. Many manufacturing operations are designed to maximize output and lower costs with
little consideration for the impact on inventory levels and distribution capabilities. Purchasing
contracts are often negotiated with very little information beyond historical buying patterns.
The resultant of these factors is creation of a void with respect to an integrated plan in the
organization. There is a definite need for a system through which these different functions
can be coordinated and integrated together (Bertodo 2002) and

SCM is a strategy through which such integration can be achieved.

Management experts for this business process realized that significant productivity
enhancement could only come from managing relationships, information and material flow
across enterprise borders. One of the best definitions of SCM offered to date comes from

Bernard J. (Bud) LaLonde, Professor emeritus of SCM at Ohio State University. SCM has
been defined as, "The delivery of enhanced customer and economic value through
synchronized management of the flow of physical goods and associated information from

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sourcing to consumption.” The aspect, "from sourcing to consumption" last part of the
definition suggests, though achieving the real potential of SCM requires integration not only
of these entities within the organization, but also of the external partners. The latter include
the suppliers, distributors, carriers, customers, and even the ultimate consumers. All are
central players in what James E. Morehouse of A.T. Kearney calls the extended supply chain.
"The goal of the extended enterprise is to do a better job of serving the ultimate consumer,”
Superior service, he continues, leads to increased market share. Increased share, in turn,
brings with it competitive advantages such as lower warehousing and transportation costs,
reduced inventory levels and lower transaction costs.

The customer ultimately is the key to both quantifying and communicating the supply chain's
value as stated by, Mr Shrawan Singh, Vice President of Integrated SCM at Xerox. "If you
can start measuring customer satisfaction associated with what a supply chain can do and also
link customer satisfaction in terms of profit or revenue growth, then you can attach customer
values to profit & loss and also to the balance sheet." The best companies around the world
are discovering a powerful new source of competitive advantage. It is called SCM and it
encompasses all of those integrated activities that brings product to market and creates
satisfaction among customers. The SCM integrates manufacturing operations, purchasing,
transportation, and physical distribution into a unified program. Successful SCM then
coordinates and integrates all of these activities into a seamless process. It embraces and links
all of the partners in the chain. In addition to the departments within the organization, these
partners include vendors, carriers, third party companies, and information systems providers.

HISTORY

The concept of supply chain management was in effect long before the term was created in
1982. In the colonial era, international trade by ship was already making for complicated
transportation issues and the need for efficiency. During the Industrial Revolution, the ability
to quickly produce goods with machine assistance led to the need to manage significant
inventory and constant consumption. By the time history arrives at Henry Ford’s famous
assembly line for the world’s first car production in 1913, supply chain management had
become an art.

As the century wore on, more companies were producing more goods and looking for ways
to reduce costs. They vertically integrated into owned supply chains to try reducing costs at
each stage. In the 1980s and on, globalization became a realistic dream for many companies,
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because of computer systems, easier communication, and commerce-friendly trade laws.
Around the 1990s, it became a common practice for firms to specialize, and focus on core
competencies and outsourcing the rest, abandoning the vertical integration of the previous
era. At this point, supply chains became truly complex, in order to coordinate hundreds of
otherwise unrelated and geographically-distant manufacturers, suppliers, shippers,
warehousers, and retailers.

Now, in the “SCM 2.0” era, the Internet and new methodologies have led to collaborative
platforms and democratized processes. This is allowing smaller competitors to use some of
the same manufacturers as major players, and reducing inefficiencies for those manufacturers
as a result. Better communication and planning tools are providing a way for small and large
companies alike to manage even more complex supply chains.

SCM TODAY

General

The logistics or the SCM industry in India has been receiving greater attention in the last few
years. In-spite of its huge potential the growth of the sector has not kept pace with India’s
wider economy, thereby being a threat to our future competitiveness.

The acceleration in industrial production and changes in consumption patterns have resulted
in a high demand for basic and specialized logistics management, both at the local and cross-
border levels. A recent study report suggests that the Indian logistics industry is likely to
grow at 10-15 per cent per annum between now and 2015 and by which point it is likely to be
worth $385 billion.

Growth Drivers

There are two major reasons for this growth. Firstly the demand has been fuelled by the
growth in industries that tend to outsource such as automobiles, consumer packaged goods,
hi-tech, telecom and retail, among others. The movement of basic commodities domestically
and globally, has also led to an increase in so-called ‘multinodal’ and bulk transportation due
to the emergence of many new ports and port-related service providers. This growth should
be driven further by the impending change in the

Indian tax system from state-level Value added Tax (VAT) to a national and uniform Goods
and Services tax (GST), which will help create a national market for many goods and
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services. The logistics sector is likely to respond by making more use of hub-and-spoke
systems, large-scale warehousing and specialized services. A gradual opening up of key
sectors such as retail, aviation, defense, etc, will also help drive expansion. Secondly the
entry of Multinational Companies (MNCs) in sourcing, manufacturing and distributing can be
attributed as the other growth driver.

Hurdles

Challenges persist that threaten this growth trajectory. However it is estimated that India
currently spends around 12 per cent of its GDP on logistics despite the huge scale of
industrial base that has been built up. The SCM industry as a whole is very fragmented and
disorganized. The inefficiency of Indian logistics acts as another challenge versus its
international peers. Presently approximately 57 per cent of the freight in India still moves on
the road network. The main reason for this heavy dependence on a mode which is in many
ways inefficient and has high carbon intensity is the lack of a railway system capable of
responding to the needs of the industry. This puts a real strain on our infrastructure as
national highways account for only two per cent of the road network but transports around 40
per cent of freight tonnage. Lack of coordinated planning, Intra-State border issues,
cumbersome documentation, bureaucracy and corruption leave the average speed of trucks at
only 21 km/hour. In India a truck covers only 300-500 km per day versus almost double that
figure in the developed countries. The capacity and turnaround times in the ports are well
below global benchmarks and logistics parks, warehousing and other support infrastructure
are also at an primitive development stage.

Policy Priorities

To ensure development of Indian logistics system into a modern and of world-class standard
though, will be tough but by no means an impossible task. The World Economic Forums,
Global Agenda Council on Logistics & Supply Chain helps identify policy priorities that lead
to meaningful improvements on an international scale. In India there are three policy
priorities:-

(a) Firstly the government needs to draw up a comprehensive national logistics policy.
Currently various components of logistics (surface transport, railways, shipping, air,
commerce, finance) are all separate entities. There is a need to drive the policy in a
synchronized manner.

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(b) Second national priority should be focused on investment in logistics infrastructure. This
means direct investment into alternative traffic modes to road, particularly rail and coastal
shipping in order to ease traffic congestion, bring down costs and minimize carbon emission.

(c) Thirdly there is a need to invest more in our people with the growing complexity of
supply chains; we need more skilled people to manage supply chains. There is a clear need
for both the government and private entities to create well focused and sustained skills and
training programmes.

(d) There are several other areas, such as technology adoption and policy simplification for
trade facilitation that are also worthy of attention and focus. Getting this right, too, will put
our country firmly on the right track. It’s time for all stakeholders to pull in the same
direction.

Important Aspects

If we take the view as to what people do for SCM, then it emerges that SCM has a firm role
to be played in all aspects of physical distribution and materials management. Seventy-five
percent or more of respondents included the following activities as part of their company's
SCM department functions:-

(a) Inventory management.

(b) Materials handling.

(c) Transportation Service Management - Procurement, inbound transportation and

transportation operations management.

(d) Warehousing Management. The SCM Department is expected to increase its range of
responsibilities, most often than not in line with the thinking that sees the order fulfillment
process as one co-ordinated set of activities.

(e) Customer service performance monitoring, order processing and customer service.

(f) SCM Budget Forecasting. There are certain important functions which logically belong to
SCM; however some companies feel that these may be in domain of other departments. The
aspects difficult to bring under the umbrella of SCM are:-

(i) Third party invoice payment/audit.

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 (ii) Sales forecasting.

(iii) Master production planning.

(g) Operational Analysis and Design Materials Handling.

(h) Distribution Strategy, Operational Improvements and Distribution Management.

(i) I T. Computer Systems and Computer Simulation.

(j) Warehouse Design Project Management.

(k) Operational Commissioning.

(l) Technical seminars in SCM

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 CHAPTER 2 – SUPPLY
CHAIN MANAGEMENT

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CONCEPT OF SCM

There is a subtle difference between the concept of SCM and the traditional Logistics
Concept. Logistics typically refers to activities that occur within the boundaries of a single
organization and supply chains refers to network of companies that work together and
coordinate their actions to deliver a product to the consumer.

Traditionally logistics focuses its attention on activities such as procurement, distribution,

maintenance, and inventory management. Salient aspects are discussed below:

(a) SCM acknowledges all facets of traditional logistics and also includes activities such as
marketing, new product development, finance, and customer service. In the wider view of
supply chain thinking, these additional activities are now seen as part of the work needed to
fulfill consumer requirement.

(b) SCM also views the supply chain and the organizations involved in it as a single entity. It
brings a systems approach to understand and manage the different activities required to
coordinate the flow of products and services to best serve the ultimate consumer.

(c) The systems approach provides the frame work in which the effort is to provide best
response to the business requirements that seem to be in conflict with each other. Effective
SCM requires simultaneous improvements in both customer service levels and the internal
operating efficiencies of the companies in the supply chain.

(d) If considered individually different supply chains often have conflicting needs, for
instance requirement of maintaining high levels of customer service calls or maintaining high
levels of inventory or to operate efficiently asks for reducing inventory levels. It is only when
these requirements are seen in totality as part of a larger picture then the ways can be found to
balance their different demands.

(e) Effective SCM requires simultaneous improvement in both customer service levels and
the internal operating efficiencies of the companies in the supply chain. Customer service at
its most basic level means consistently high order fill rates, high on-time delivery rates and a
very low rate of products returned by customers which may be for whatever reason.

(f) Internal efficiency for organizations in a supply chain means that the organizations get an
attractive rate of return on their investments in inventory and other assets and can find
effective ways to lower their operating and sales expenses.
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There is a basic pattern to practice SCM and each supply chain has its own unique set of
market demands and operating challenges, yet the issues remain essentially the same in every
case. Companies in any supply chain must make decisions individually or collectively
regarding their actions in following five areas:-

(i) Production. What products does the market want and in what quantity?

Which products should be produced and by when? This activity includes the creation of
master production schedules that takes into account, the plant capacities, workload balancing,
quality control and equipment maintenance.

(ii) Inventory. What inventory should be stocked at each stage of a supply chain? How much
inventory should be held as raw material, semi finished or as finished goods? The primary
purpose of inventory is to act as a buffer against uncertainty in the supply chain. However,
holding inventory can be expensive, so what are the optimal inventory levels and reorder
points?

(iii) Location. Where should the facilities for production and inventory storage be located?
Where are the most cost efficient locations for production and for storage of inventory?
Should existing facilities be used or new ones be built? Once these decisions are made they
determine the possible paths available for products to flow for delivery to the final consumer.

(iv) Transportation. How should inventory be moved from one supply chain location to
another? Air freight and truck delivery are generally fast and reliable but they are expensive.
Shipping by sea or rail is much less expensive but usually involves longer transit times and
also involves more uncertainty. This uncertainty must be compensated for by stocking higher
levels of inventory. When is it better to use which mode of transportation becomes critical.

(v) Information. How much data should be collected and how much information should be
shared? Timely and accurate information holds the promise of better coordination and better
decision making. Availability of good information, ensures people can make effective
decisions about what to produce and how much, about where to locate inventory and how
best to transport it.

TYPES OF SUPPLY CHAIN MANAGEMENT:

a. Service supply chain management:

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The process of proper fulfillment of customer best while preserving your profit margins to
continue in a business at a high level of satisfaction. This will include from information about
product till delivery about the product.

Components of service supply change management:

 Delievery of product
 Returns of product if customer is unhappy
 Guaranteed delivery time
 Quick delivery
 Information of product

b. Manufacturing Supply Chain Management:

Efficient supply chain management helps forward-thinking manufacturing companies reduce

their costs. The need for a tighter integration i and data standards, better manufacturing
intelligence and visibility becomes readily apparent. Capgemini draws on expertise in master
data management and supplier relationship management to help you improve your
manufacturing supply chain.

Components of manufacturing supply chain management:

 Production of the product

 Order of product
 Timing of production
 Supply of product

VARIANTS OF SCM

 Global SCM: The combination of global manufacturing with supply chain

management, which must account for tariffs and local taxes as goods and services
travel internationally to ultimately provide greater value at the end of the chain.
 SAP SCM: Systems, Applications, and Products (SAP) is a software company that
revolutionized logistics and enterprise resource planning. It provides an automated
way to manage supply chain networking, supply chain planning, and supply chain
execution, along with production planning, business forecasting, and demand
planning.

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  Logistics and SCM: The art of coordinating efforts between every member of the
supply chain to get products from their source to the consumer.
 Purchasing and SCM: The focus on the monetary aspect of SCM, from costs to
value added at each link in the supply chain.

PRINCIPLES OF GOOD SUPPLY CHAIN STRATEGY

a. Segment Customer Based on Service Needs. Companies traditionally have grouped

customers by industry, product, or trade channel and then provided the same level of
service to everyone within a segment. To have effective SCM there is a need to group
customers by distinct service needs, regardless of industry and then tailor the services
for those particular segments accordingly.
b. Customize the SCM Network. In designing the SCM network, companies need to
focus intensely on the service requirements and profitability of the customer segments
identified. The conventional approach of creating a "monolithic" SCM network runs
counter to successful management. It is important to listen to signals of market
demand and plan accordingly. Sales and operations planning must span the entire
chain to detect early warning signals of changing demand in ordering patterns,
customer promotions, and so forth. This demand-intensive approach leads to more
consistent forecasts and optimal resource allocation.
c. Differentiate Product Closer to the Customer. Companies today no longer can
afford to stockpile inventory to compensate for possible forecasting errors. Instead,
they need to postpone product differentiation in the manufacturing process closer to
actual consumer demand.
d. Strategically Manage the Sources of Supply. Companies by working closely with
their key suppliers try to reduce the overall costs of owning materials and services.
SCM enhances margins by gain sharing both for themselves and their suppliers as
beating multiple suppliers over the head for the lowest price is outdated. Andersen
advises that "Gain sharing" is the way in.
e. Develop Supply-Chain-Wide Technology Strategy. Development of a supplychain-
wide technology strategy as one of the cornerstones of successful SCM is possible
only if IT supports multiple levels of decision making. It also must provide a clear
view of the flow of products, services, and information.

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 f. Adopt Channel-Spanning Performance Measures. Effective supply-chain
measurement systems perform more than just monitor internal functions; they adopt
measures that apply to every link in the supply chain. Importantly, these measurement
systems embrace both service and financial metrics, such as each account’s true
profitability. The principles are not easy to implement as they run counter to ingrained
functionally oriented thinking about how companies organize, operate, and serve
customers. The organizations that do preserve and build a successful supply chain
have proved convincingly that you can please customers and enjoy growth by doing
so.
g. Methodology of SCM Project. Intense focus on actual customer demand is
important, instead of forcing into the market a product that may or may not sell
quickly and thereby inviting high warehousing costs; ideally there is a need to react to
actual customer demand. The supply-chain leaders by reacting to customer demand
minimize the flow of raw materials, finished product, and packaging materials at
every point in the pipeline. Responding more accurately to actual customer demands
and by keeping inventory levels to the minimum, leading companies have adopted a
number of speed-to-market management techniques. The models which have become
part of the SCM are :-

(i) JIT manufacturing and distribution.

(ii) Quick Response and efficient consumer SCM.

(iii) Vendor Managed Inventory (VMI) and more.

In view of the importance of SCM to be a commercial success, making the right decision
about which system is best is important and before deciding how to develop new service
SCM chain with economical distribution centers, factors to be considered are such as,
required customer service levels, optimum location, stock holding policies and Electronic
Data Processing (EDP) systems. The organizations to make the best decisions, employs an
integrated planning approach, consisting of four steps from planning to realization as given
below:-

(a) Potential analysis.

(b) Concept study.

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 (c) Detailed planning.

(d) Project or change management.

THE BASICS OF SUPPLY CHAIN MANAGEMENT PROCESSES

There are key supply chain processes that you must take into consideration to effectively
understand and manage them. These processes are all at play regardless of the type of supply
chain you’re using.

Customer relationship management (CRM) comes first, because as the principles of SCM
state, you must adapt everything in the supply chain to the customer. If no one is buying,
there’s no need to produce anything. At the front of your supply chain, where a store’s staff
interacts with its consumers, they must have plans in place for ongoing relationships. They
need CRM tools to gather customer information for marketing and market research, all to
determine the products and services to offer in the future.

Customer service management is another process that ties in, as it is where you gather
negative and positive feedback to determine future needs.

Demand management is closely linked with the previous two, as it takes customer
interactions and orders into account to determine the workload all the way up the supply
chain. At its core, customers buying more means make more, and customers buying less
means make less. Customer forecasting is an important task that analysts must perform well
to determine the current demand and what it will be in the future, to prevent waste in the
supply chain.

Product development is an important part of the supply chain that is informed by consumer
demand. You must work with CRM and customer service data to determine what they want,
which influences new products, product line extensions, and also what to stop making. You
must integrate suppliers in this process because it affects cost, quality, and delivery time.

Supplier relationship management goes without saying - if you want to produce your
products on time and on budget, you need a solid rapport with everyone you’re outsourcing to
in the chain. This impacts manufacturing flow management, which ensures everything gets
where it needs to go without delay, and at the correct spec.

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Order fulfilment involves coordinating with distribution centers and either retail locations or
3PL to get the product direct to consumers. You’ve now made it all the way back to the
beginning of the cycle, and need to pay attention to new CRM and customer service data.

Returns management, also known as the “reverse supply chain,” is a vital part of the flow of
products that doesn’t fit perfectly into the clean supply chain cycle. It involves picking up
online orders from 3PL locations or from consumers’ addresses and accepting returns at retail
locations. Once these items are put back into inventory, they must be ready to get to a
different customer while the product run is still live.

WHAT SUPPLY CHAIN MANAGERS LOOK FOR WHEN MANAGING SUPPLIER

RELATIONSHIPS

One of the most complex parts of SCM is handling all the other people in the supply chain.
They have their own needs and motivations, and to keep them all happy and working together
with partners they are only loosely affiliated with is a challenge - especially when trying to
meet deadlines and turn a profit. The following are what managers should focus on most in
such relationships:

 Org Chart and Leadership Style: How is the supplier’s organization set up? Is it a
vertical or horizontal structure? Is the leadership strong and long lasting, or fickle and
prone to change? You need to know who you’ll be interfacing with, and who will be
the next one in line should some shakeup occur. Business relationships are always
between people, and don’t always survive a reorg.
 Management Style: How do the leaders at this supplier run their shop? Make sure it
works with your crew. A micromanager at a relatively replaceable link in your supply
chain will waste inordinate time, just as a hands-off manager at a vital link could
result in sloppy delivery or substandard product quality.
 Company Culture: Always important for working with suppliers, determine what
kinds of people rise to the top, and how everyone acts when nobody's watching. If, for
example, middle managers are constantly in fear for their jobs because of ruthless
quarterly performance reviews, they may over-promise, make excuses, or otherwise
be unstable work partners.
 Product Flows: Once you know that you can work with the people, make sure their
facilities are in order. Are they equipped for orders of the size and frequency you plan

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 to make? How do they handle emergency, fast-turn around orders? What about other
customers - are they only able to use their facilities for your product flows at certain
portions of the month due to full inventory? Leave no stone unturned.
 Information Flows: Just as vital is the ability to control information about the day-to-
day flow of materials, and to communicate and coordinate long-term plans. Is the
supplier up on their product details, inventory, and SKU organization? Is their
security and encryption up to the standards of your company, and your industry? Big
data is useless if the right people don’t see it in time.
 Rewards and Risks: Take into account opportunities and threats of working with this
supplier. Maybe they’re well-equipped to handle your exact product because they also
work with your competitors. Perhaps they are new and establishing themselves, so
offer a substantial discount, but may not be able to deliver on time? Do what’s best
for the company, and use risk assessment to keep your whole supply chain operable.

VITAL SUPPLY CHAIN MANAGEMENT CONCEPTS TO KNOW

Having a passing familiarity with the following terms will help you see just what kind of
skillset and abilities will be required when working in supply chain management:

 Border Adjustment Tax: Also known as a destination-based cash flow tax

(DBCFT), it is a tax levied on imported goods which is important to know in global
supply chains.
 Customer Relationship Management: Also known as CRM, this concept refers to
providing ongoing service to customers and collecting data about their likes and
purchases. There are also CRM tools that help automate and record interactions with
customers.
 Cumulative Mean: A figure for knowing how much or how little to produce in
advance, involving mean orders with all previous data treated as equally useful.
 Demand Management: Understanding customer behavior and patterns to control
how much is ordered and produced at each link in the supply chain, with the goal of
eliminating wasted production.
 Financial Flows: Credit terms, payment schedules, accounts payable and receivable,
and other factors that you must monitor to determine if a supply chain is profitable or
not.

24
 Information Flows: Transmission of orders, delivery status, and other data that
influence the supply chain’s responsiveness to demand.
 Integrated SCM: This is a method of SCM wherein all of the links are tightly
integrated, operating almost as one company rather than a loose association of buyers
and sellers.
 Inventory Management: Monitoring and controlling orders, storage, and use of
owned components to create the products your company sells.
 Lean Six Sigma: A data-backed philosophy of continuous improvement that focuses
on preventing defects and mistakes rather than discovering them later, which reduces
waste and production time via standardization. Read Everything You Need to Know
About Lean Six Sigma to learn more about this methodology.
 Logistics: The physical movement of products from one link in the supply chain to
the next, and the practice of improving their efficiency.
 Make vs. Buy: A simple evaluation of whether it is more cost-effective and time-
efficient to produce a required product with your company’s existing resources, or to
outsource the need.
 New Product Development: The creation of new products both in response to and in
anticipation of customer demand, using data gleaned from CRM and the whole supply
chain. Read Innovation for Everyone: Everything You Need to Know About New
Product Development to learn more about this process.
 Operational Accounting: Accounting for a company that focuses on planning,
directing, and controlling of daily activities by their costs and eliminating waste.
 Physical Flows: The actual movement of parts and products throughout the supply
chain, which the Logistics team must manage and analyze to keep going without
pause.
 Project Management: The process and tools involved in ensuring that a codified
piece of work (project or product) gets done on time while keeping all contributors
aware of their next step.
 Reverse Supply Chain: Aftermarket customer service, which may involve accepting
returns, refurbishing and discounting, or otherwise finding use for the reacquired
inventory.
 Risk Management: Identifying, evaluating, and then choosing which risks to address
first, with the goal of reducing overall risk in a supply chain.

25
  S&OP: Sales and Operations Planning is a management process that aligns its
constituent parts to ensure that the organization is only focused on operations that
improve sales. Learn more about S&OP here.
 Strategic Sourcing: Formalizing a company’s information gathering in order to use
its purchasing power to take advantage of the best values in the marketplace of
suppliers.
 Theory of Constraints: A methodology that identifies the largest limiting factor in
production, then finding a way to remove it to improve the efficiency of the entire
production.

CURRENT ISSUES IN SCM

In addition to the major terms, it’s important to keep aware of legal, political, and social
events which affect supply chain management when seeking a career in the field. Here are
some of the bigger issues of the day:

 Dodd-Frank Decision: This was a 2010 law which included a clause on “Conflict
Minerals.” It requires companies to audit their supply chains in order to determine
whether gold, tungsten, tantalum, and tin came from the Democratic Republic of the
Congo, and report on their due diligence. It adds an extra layer of complexity and
costs to SCM for those involved in chains with those minerals.
 NGO Actions: Activist groups of all kinds work to end common practices within
major companies’ supply chains, such as sweatshop labor, or push consumers towards
less complicated supply chains by encouraging them to support local businesses and
farms.
 SEC Regulations: Whereas NGO actions can force a company’s hand for PR reasons
or changing the marketplace of ideas, the Securities and Exchange Commission can
slap that same company with fines, making company’s quick to comply. Third-party
audits of supply chains are an important part of keeping in step with these regulations.
 SECH Ratings: This is a rating that involves economic, social, and environmental
judgements to gauge a company’s overall sustainability.
 Transparency: Though protecting data is important, certain measures of transparency
can improve company performance. Among consumer products, many younger,
disruptive brands make their supply chain a selling point in marketing by being
upfront about how and where they get their components, and where they make their

26
 products. The reasoning goes, if a company is hiding something, there must be an
unethical component to it.
 Sustainability Measures: As major companies and countries around the globe move
towards sustainable production, all supply chains become impacted. Whether due to
changing regulations or seeking good PR, many companies are working to reduce
pollution and other issues in their chain.

27
CHAPTER 3 – IT IN SCM

28
INFORMATION TECHNOLOGY IN SCM

Information Technology (IT)

Manufacturers, distributors, and some carriers effectively use IT to reduce cycle time and
improve the quality of freight handling. Package handlers use the technology to great
competitive advantage. Less than Truckload (LTL) carriers are beginning to adapt their
information systems to provide on-line, real time data on the movement of freight through
their systems. Successful use of IT to speed the movement of freight is only possible if these
carriers have low cost methods to accurately gather and disseminate data. Bar code and radio
frequency technologies provide the tools for LTL carriers to survive and thrive as discussed
below:-

(a) Bar Codes. Traditional bar codes uniquely identify every package in the pipeline.
Scanning the packages positively confirms custody transfer from shipper to carrier to
consignee. Two dimensional bar codes on shipping documents record the entire Bill of
Loading. Scanners in drivers’ hands provide error-free entry of the Bill of Loading in less
than a second. Radio communication from the truck cab to central operations/ control centre
immediately informs dispatchers of incoming freight.

Similar scanning during delivery shortens the billing cycle and provides positive
confirmation of delivery. IT enhances the information speeds of cargo movement through
every phase of LTL operations. Dock management systems speed cross docking operations.

(b) Combination. A combination of radio communication and bar code scanning enhances
delivery of control information to people who need it. The information is required by the
dispatcher, fork operators and the recipient are every effected member of the dock team who
receives immediate information where they work.

The system efficiently tracks all packages from inbound docks through staging to outbound
docks. No package waits for information. Yard management systems ensure the delivery of
the right equipment to the right location at the right time.

Radio communication to yard tractors keeps shuttle drivers working on the highest priority
tasks. Real-time communication between yard drivers, hub managers, and information
support systems provides positive control of all moving stock.

29
Consistent application of appropriate IT throughout the SCM pipeline results in shortened
cycle times and lowered effort. Immediate, reliable information allows managers to optimize
their physical and human resources. While maximum benefit comes to those carriers who
implement a consistent information strategy throughout their operations, segmentation of the
problem allows carriers to phase in their transformation. Each phase provides immediate
economic benefits, while improving the strategic position of the carrier.

Coordinating Multiple Initiatives through IT

The SCM Model of LTL carries the greatest advantage and the fundamental vulnerability of
the mode. City terminals break bulk consolidation and other cargo transfer techniques allow
LTL carriers to sell economies of scale to transporters with small cargo consignments.
However, the same process requires multiple handling and offers frequent opportunities for
delays, incorrect transportation, and cargo damage. Effective use of IT maximizes the
advantages and minimizes the risks inherent in LTL transportation, as each package needs to
be positively identified every time it is handled. Information about every destination must be
checked and double checked to maximize cargo speed while minimizing empty trailer
kilometers. Implementation of competitive IT begins wherever carriers feel they need the
most assistance and for many, dock management represents a logical starting point. Positive
tracking of every package in and out of every hub drastically reduces the possibility of cargo
delays and damage.

Automatic optimization techniques simultaneously reduce handling expenses and allow some
trailers to bypass consolidation hubs entirely. When carriers augment a dock management
system with yard management support, the two projects amplify each other's advantages.
Yard management initiatives closely control the movement of trailers and drivers based on
information provided by the dock management system. The dock management system in turn
profits from data provided by pickup and delivery automation.

In case where load information from city drivers flows to the hubs, support systems and
supervisors, they can well anticipate future requirements. Incoming cargo stays in motion
because dock managers already know what is on each inbound truck. If pickup and delivery
systems are not immediately automated, carriers can implement intermediate systems to
efficiently feed information to hub management support projects. Dockside data collection
allows operators to enter all data about an inbound truck's cargo at the dock even as operators
strip the cargo for consolidation. Dockside data collection becomes more efficient when
30
carriers encourage their shippers to produce scan-able bills of loading, printers with
specialized software. A two-dimensional bar code encodes all necessary shipment
information. In less than one second, a dockside scanner captures an entire bill of loading.
The same scan-able documents can be used when the carrier later implements a pickup and
delivery management system. Effective SCM may be the best way to achieve reduced order-
to delivery cycle time. Instead of treating each function as consisting of discrete activities,
SCM considers all functions to be linked and interdependent. As a result, SCM can reveal the
cumulative effect of problems anywhere in the chain, not just within SCM areas of
responsibility.

CHALLENGES IN SCM

The world has become like a global village with barriers falling apart because of global
movement of goods and labour. In today’s global economy a computer chip may be designed
in America, fabricated in Europe, and finally assembled and packaged in Asia, to be sold
again in America. Currently the various components of logistics such as surface transport,
railways, shipping, air, commerce, finance are all separate entities. The Indian consumer
today has access to fruit grown in Australia and China, which was unheard off even two
decades ago. Even within individual countries there is far more extensive movement of goods
and labor than before. The modern food supply industry also has a global “Supply Chain,”
which brings along a new set of challenges, particularly in India. For example, every day, a
food supply company operating here has to deal with volatile fuel prices, increasing raw
material costs, and mounting price pressure, and ensuring that materials are delivered to the
factory for production and then products are sent to the customers on time. Ensuring with
prompt and economical delivery of products is a challenge in India. Unlike European or other
Asian countries, we have limited number of cost-effective and quick alternatives.

Coastal waterway systems in India are still in a primitive stage. The wide Indian rail network
is still unable to provide effective service to industry. The government’s initiative to invest in
the development of arterial roads connecting major parts of the country has resulted in
strengthening of the road network every passing year, and so things are improving, although
they are still far from optimal. The challenges in the supply chain are to achieve global
optimization for conflicting objectives in the complex network of facilities and to minimize
the system variations over time. The term SCM has been coined to describe the changes

31
within SCM itself as well as the evolution of the processes, methods and tools that manage it
in this new "era".

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 CHAPTER 4 –
INTRODUCTION TO
DISTRIBUTORS

33
DISTRIBUTOR

A distributor is an intermediary entity between a the producer of a product and another entity
in the distribution channel or supply chain, such as a retailer, a value-added reseller (VAR) or
a system integrator (SI). The distributor performs some of the same functions that a
wholesaler does but generally takes a more active role.

At a minimum, distributors handle payment and procurement but, unlike wholesalers, their
roles can be much more complex. For example, vendors that lack the means to build out a
channel program by themselves often outsource that work to distributors. Distributors also
frequently take a more proactive approach in educating resellers about new products, through
such activities as presales training, road shows, and demos on behalf of vendors. Distributors
may provide services around the procurement process, such as contract negotiation,
marketing for resellers and SIs, and warrantees. Increasingly, distributors also host network
operations centers (NOCs).

Although the specific entities and order involved can vary, the supply chain or distribution
channel involving a distributor is generally: vendor to distributor, distributor to reseller or SI,
reseller or SI to end customer.

DISTRIBUTORS & THEIR ROLE

Often looked on as middlemen that add costs to material purchases, distributors are, in fact, a
vital link in the composites industry, bringing tangible benefits to both material suppliers --
those manufacturing the materials -- and end-users. Composites industry veteran Ben
Rasmussen, president of market research firm BMR Assoc. (Plainfield, N.J.) says that
distributors fill a void that most suppliers simply can't, because of the sheer numbers of
customers and their geographic diversity. "Distributors are riding a wave of business growth
and maturation that should continue for several years to come," he adds.

HPC decided to take a look at composite material wholesale distribution and how it works for
the broader commodity product markets and the aerospace industry. (Watch for our article on
distribution for non-aerospace markets in our sister publication Composites Technology, in
its upcoming April issue.)

The functions of a distributor

34
In industries such as composites, where many of the materials are made continuously and/or
in large batches, shipments also must be large, in the form of truckloads or railcars, to make
economic sense. From a practical standpoint, it's not feasible for a single supplier to fulfill
many thousands of small orders to customers around the world. Enter the distributor, who
buys large material quantities from a supplier/manufacturer, then creates smaller material
units and delivers those units to many customers, in a timely fashion. They are distinct from
brokers, who neither take delivery or nor title to the material, and surplus buyers, who
typically buy aged material or overage and resell it at a discount.

Unlike big users that can buy truckload quantities direct from a supplier, most composites
manufacturers have neither the cash flow nor the storage space to make that approach viable.
The distributor, however, has both storage space and the resources to purchase product in
quantity, as well as the equipment and personnel necessary to sort and package it in small
orders. They can, in effect, manage the small manufacturer's inventory for him. Good
communication between the distributor and customer ensures an unbroken supply chain, and
helps the distributor manage his own warehouse inventory, to ensure timely material turnover
and no dead stock or stock outs. Successful distributors, therefore, are shipping experts, using
either their own truck fleets or cost-effective common carriers.

An important benefit provided to end-users is financing and credit, critical to both small and
large businesses, particularly during down cycles, says one distributor's spokesman. Another
is assuming the responsibility for product quality. The distributor's relationship both with the
material supplier and hundreds (or thousands) of customers gives him leverage to resolve
quality issues -- the supplier doesn't want to risk losing his customer base. Third, the
distributor is knowledgeable about all of his suppliers' products, and can offer technical
advice and training to his customers, to help them make the right material choices. He also
can provide market intelligence, alerting end-users to price trends or impending shortages.
The suppliers benefit as well, using use that intelligence to forecast demand or develop new
products based on the distributor's widespread customer base.

WHAT IS THE VALUE OF DISTRIBUTORS?

A Customer's Perspective

Customers may sometimes wonder, Why buy from a middle man when I can just go direct at
a lower cost? There are several answers, the most straightforward being that either the buyer

35
or seller in a direct relationship will have to perform the function of the distributor. This adds
cost to the equation, which can be seen in several key areas.

In addition, distributors can typically offer a greater level of flexibility than manufacturers,
including quicker turnaround times on orders - often as little as two hours. Most
manufacturers today supply orders based on 7–30-day lead-times, excluding transit time to
import products to the United States. With just-in-time manufacturing principals in place at
many customers’ facilities, not to mention ever-changing production schedules, customers do
not have the luxury of waiting four to eight weeks for materials to arrive. With customers
focused on increasing inventory turns and improving working capital and revenue through
operational efficiencies, the distribution channel is critical to maintain inventory strategically
located near the customer base.

Distributors must also be flexible in financial considerations, such as extended payment terms
and consignment programs. Publicly traded, multi-billion-dollar chemical manufacturers are
often unwilling to extend payment terms and rarely consider consignment programs.
International suppliers often demand payment prior to shipment delivery. Agile, privately
held distributors have more flexibility to implement programs that bring greater value to
customers.

From a sourcing standpoint, distributors greatly reduce risk for customers. As our industry
continues to expand globally, small- and mid-sized customers have to take advantage of
global sourcing to realize cost benefits and technology advancements. However, customers of
this size oftentimes do not have the resources available to visit facilities that are located
thousands of miles away to qualify materials, audit plants, manage international logistics and
establish the supply relationship. Furthermore, it is cost-prohibitive for customers to buy full-
container quantities of products when they only need a few thousand pounds per month.
Good distributors can fill this role by bridging the “international gap” through a systematic
approach of identifying new sources for products, conducting regular plant audits, having
local representatives active in developing countries, and importing full-container quantities of
products but selling pallet or bag quantities.

Distributors can offer product bundling, allowing customers to purchase several items from
one supplier. This greatly reduces administrative and freight costs. Most successful
distributors offer a complementary portfolio of products that can be combined in quantities
smaller than truckload sizes. If a customer requires resin, additives, pigment and containers,
36
they can combine them into one order from one supplier and pick them up on the day they are
needed.

Finally, due to their geographic proximity, distributors can maintain close relationships with
customers to gain an in-depth understanding of their processes, formulations and competitive
advantages. Most distributors visit customers more often than manufacturers can. This is
prevalent in today’s economy, where the cost of business travel has skyrocketed. Customers
don’t have to wait weeks to see someone in case of emergency; distributors can be in a plant
by the end of a shift. In addition, this relationship allows distributors to provide innovative
end products that can generate new revenue and profitability; because of their range of
market knowledge, distributors can often help customers better tailor their research dollars.

A Supplier's Perspective

Distributors can offer unique advantages to suppliers. Effective sales channel management
will lead to greater profitability, increased market share and higher customer satisfaction.
Distributors may be viewed as an extension of a supplier’s sales force in markets where it is
not economically viable to establish a permanent facility or direct staff. This outsourcing of
the sales function results in lower costs and allows the manufacturer to concentrate on R&D
and manufacturing. With rising health-care costs, travel expenses and language barriers, some
manufacturers simply would not be able to access the North American market without local
distribution partners.

Furthermore, due to their established market presence, distributors can typically develop
business in a much shorter timeframe than suppliers new to a market. The ability to gather
market intelligence is more likely to be achieved by a distributor than a new face. Continuity
of long-standing geographic coverage creates business relationships that are built on trust and
mutual dependency. Where a direct sales force is employed, distributors can still offer an
advantage because of these relationships.

The Internet allows manufacturers throughout the world to be easily identified; establishing a
logistics flow is more complex. Navigating a sea of federal, state and local regulations can
affect the transport of certain products and introduces hurdles that cannot be readily
overcome. In addition, most distributors offer the ability to provide samples, custom labels or
contract packaging. With facilities equipped to handle hazardous goods, distributors certified
in the National Association of Chemical Distributors’ Responsible Distribution ProcessSM

37
are qualified to deal with damages, spills or other unexpected occurrences safely and
efficiently.

Distributors are often the first call chemists make when they are developing new
formulations, as they can provide a breadth of knowledge based on experience supplying
multiple components for formulations. Distributors are able to cross-fertilize from one
product group to another and one industry to the next.

There are significant financial advantages to working with a distributor. Manufacturers are
able to optimize production capacity, rather than trying to sell a couple of bags or single
pallets to 100 different customers who speak different languages, who want custom labeling
and who need immediate delivery. Furthermore, when it’s time to get paid, contacting one
distributor is more cost effective than trying to collect from multiple customers.

The role of Network design in the supply chain

Supply Chain Network design for many firms include, the assignment of facility role,
manufacturing location, storage or transport-related facilities, and the allocation of capacity
and markets to each facility. A framework must then be established and the various solutions
and methodologies must then be discussed. Supply chain network design decisions can be
classified as follows.

 Facility role: this refers to the part each facility plays, and what processes are
performed at each facility.
 Facility location: where should the facility be located
 Capacity allocation: how much capacity should be allocated to each facility
 Market and supply location: this refers to what markets should each facility serve
and which supply sources should feed each facility.

Meindl (2010) describes how network design decisions have a significant impact on the
overall performance of a firm, as it not only develops the structure of their supply chain, but
sets its constraints, which can then be used to increase supply chain responsiveness and
reduce overall costs.

Factors influencing Distribution Network design

38
There are two main dimensions based on which the performance of a distribution network is
evaluated:-

 Customer needs that are met.

 Cost of meeting customer needs

The customer needs that are met have an influence on the company’s revenues, which along
with cost decide the profitability of the delivery network. The customer service components
that are mainly influenced by the structure of the distribution network are:

 Response time: it is the time taken for a customer order to reach the customer.
 Product variety: it is the number of different products or configurations that are
offered to the customer.
 Product availability: it is the probability of having a product in inventory when any
customer order arrives.
 Customer experience: the convenience for the customer to place and receive an
order as well as the extent to which this experience is customized.
 Time to market: it is the amount of time needed for the launch of a new product into
the market.
 Order visibility: it is the ability of a customer to track his/her order from placement
to delivery.
 Return ability: it is the ease with which any customer can return a product if
unsatisfied.

Firms like Amazon target customers that can wait longer for their order or can tolerate a long
response time, these firms require only a few locations that may be far from the customers.
They can focus on improving the capacity of each location. Whereas firms that target
customers who value short response times need to have many facilities that too located near
the customers. Thus we can conclude that a decrease in the response time results in higher
number of facilities.

Following are the costs affected by changing the distribution network design:

 Inventories
 Transportation
 Facilities and handling

39
  Information

As the number of facilities increase in a supply chain, the inventory cost also increases so
firms try to try to limit and consolidate the number of facilities in their supply chain network.
For example, Amazon is able to turn its inventory 12 times a year because of fewer facilities,
whereas Borders with about 400 facilities turns its inventory 2 times only.

Inbound transportation costs are the costs incurred in bringing material into a facility and
outbound transportation cost is the one incurred in sending material out of a facility. Inbound
lot sizes are larger hence inbound cost per unit is lower than outbound costs. Increasing the
number of warehouse locations makes the outbound transportation distance a smaller fraction
of the total distance travelled thus increasing the number of facilities decreases the
transportation cost as long as the inbound economies of scale are maintained. If the number
of facilities is increased to a point that the inbound lot sizes are very small and result in a
significant loss of economies of scale, then increasing the facilities increases the
transportation cost.

The consolidation of facilities allows a firm to exploit economies of scale hence facility costs
decrease as the number of facilities is reduced.

As the number of facilities increases, total logistics costs (inventory costs + transportation
costs + facility costs) first decrease and then increase. Hence any firm should have at least the
number of facilities that minimize total logistics costs.

In general no distribution network outperforms the others along all dimensions. Hence it is
important to see to it that the strengths of the distribution network fit with the firm’s strategic
position.

DESIGN OPTIONS FOR A DISTRIBUTION NETWORK

There are two key decisions that the managers should consider in order to design a
distribution network:

 Will the product be picked up from a predetermined site or has to be delivered to the
customer location?
 Will the product be flowing through an intermediary?

40
Based on the answers to these questions and also the company’s industry, any one of the
following distribution network designs may be used:

 Manufacturer storage with direct shipping

 Manufacturer storage with direct shipping and in-transit merge
 Distributor storage with package carrier delivery
 Distributor storage with last-mile delivery
 Manufacturer/distributor storage with customer pickup
 Retail storage with customer pick up

Selecting a Distribution Network Design

A network designer needs to consider product characteristics as well as network requirements

when deciding on the appropriate delivery network. The various networks considered earlier
have different strengths and weaknesses.

Only niche companies will end up using a single distribution network. Most companies are
best served by a combination of delivery networks. The combination used will depend upon
product characteristics as well as the strategic position that the firm is targeting.

An excellent example of a hybrid network is W.W. Grainger that combines all the above
options into its distribution network. The network, however, is tailored to match the
characteristics of the product or the needs of the customer. Fast moving and emergency items
are stocked locally and customers can either pick them up directly or have them shipped
depending upon the urgency. Slower moving items are stocked at a national distribution
center from where they are shipped to the customer within a day or two. Very slow moving
items are typically drop shipped from the manufacturer and involve a longer lead time.
Another hybrid network is Amazon where some items are stocked at their warehouse while
other slow moving items may be drop shipped from distributors or publishers.

41
 CHAPTER 5 -
LOGISTICAL NETWORK
ANALYSIS

42
LOGISTICAL NETWORK ANALYSIS

Two main objectives are –

• To provide superior customer service

• To reduce overall logistical costs

Logistical network includes facilities like – manufacturing, storing, warehousing &

distribution centers & retail stores. Analysis of these activities is known as Logistical
Network Analysis (LNA)

LNA helps to identify location of plants, warehouses, thereby reducing costs & resulting in
network design which increases effectiveness & efficiency of logistical system.

Factors influencing modification of network design are –

• Change in demand & supply

• Product assortment
• Change in supplier`s supplies
• Manufacturing requirements

Objectives of Logistical Network Analysis

 Quick response – an organization must be able to respond quickly to the market

changes
o Changing customers service requirements
o Changing customer expectations
o New market segment or geographic location
o New product entry
 Changes in Corporate Policy –
o Change in product line
o Re-engineering
 Revitalize customer service –
o Reduction in lead time
o Reduction in response time
o Reduction in costs

Transportation Network Options

43
  Milk Run – it is a route on which a truck either delivers product from single supplier
to multiple buyers or goes from multiple supplier to a multiple buyer locations.
Concepts leads to reduction in transportation costs as trucks runs with full load
capacity. It also helps in reducing inventory levels thereby reducing inventory costs. It
also enhances coordination between suppliers & retailers. Thus leading to a win-win
strategy.
 Direct Shipment / Direct Shipment with Milk Run: In this, manufacturer supplies
goods directly from manufacturing plant to retailers without using distribution centers
leading to increase in transportation cost & increase in inventory carrying costs.
 Direct Shipment via Distribution Centers: In this all suppliers supplies goods to
distribution centers. Distribution centers then arranges for shipments to individual
retailers as per their orders. Thus it combines all orders of single retailers into single
shipment & delivers it. This helps in reducing transportation costs due to movement
consolidation
 Shipping via Distribution Centers using Milk Run: In this system all suppliers
supply the goods to distribution center. Then, in return will supply goods or retailers.
Then one retailer will supply goods to the other retailers. All shipments via
distribution center using milk run will increase coordination among members which
lead to completely thus reducing outbound transportation costs
 Land Bridge – It is a way of transporting cargo from part or inland point of origin in
shippers country to inland point or part of final destination in consignees country
using combination of usually sea & land or air & land or air, land & sea transport
instead of relying fully on any one mode using a multi-modal transport documents
known as through od Bill of Landing or combined transport Bill of Lading. Three
processes of land-bridge are –
 Micro-bridge: shipment from country`s port to another country`s inland destination &
vice versa
 Mini-bridge: shipment from country`s port to another country`s port with overland
journey in first country.

MODERN LOGISTICS INFRASTRUCTURE

Container Corporation of India Ltd. (CONCOR)

44
It was set up under Company`s Act in the year 1988 with takeover of seven ICDs suppliers
by Indian Railways. It provides inland transportation for containers by railways & manages
ports & air-cargos complexes. Company provides & promotes containerization in India with
the help of railway wagon fleet, uses IT & follows consumer friendly trade practices.

Functions –

• To provide cost-effective, responsive, reliable, efficient logistics solutions

to customers
• To be the first choice among customers
• To be result oriented organization

Objectives –

• To be the result oriented, driven by performance, customer focused

• To provide consumer with the value of their money
• Productive utilization of resources to be maximized
• To provide high service to customers
• To be the benchmark in standards of service provided
• To work as a dedicated team
• To follow values & ethics of the industry
• To provide all round development for the country

Containerization

It is a system of freight transport. They are built to standardized dimensions & can be loaded
& unloaded, stocked, transport efficiently over long distances & transferred from one mode
of transport to another without being opened.

After containerization, large crews of longshoremen were no longer necessary at port

facilities & profession changed drastically.

Dedicated Freight Corridor

Dedicated Freight Corridor Corporation of India is a corporation run by Government of India

to undertake planning & development, mobilization of financial resources & construction,
maintenance & operation of Dedicated Freight Corridors

Deep Water Ports

45
A port is usually an area or platform entered into from the sea, by vessels, boats, ship which
also allows for protected staging & anchoring or docking for these ships to load & unload
consignment & continue up towards its destination.

Deep water ports are also defined as any part which has capability to accommodate a fully
loader ship. For sake of safety measures latest technology, available are used in constructions
& operations of deep eater ports which also impose economic, social & environmental effects
for national interest.

Concerned authority of deep water ports are responsible of oil spill prevention, containment
& cleans up, effect on oceanographic current patterns, potential dangers from waves, weather
& geographical conditions etc.

Highlights –

• Modern diversified facilities

• Used for loading & unloading
• Premier cruise destination
• Skilled labor force
• 24 hrs. access

Logistics Parks

It is a logistic organization & management nodes relative concentration of construction &

development, with economic development nature of urban logistical functional areas, it is
also relying on related logistic services & facilities to reduce logistics cost & improve
logistics efficiency & improve the flow of business services processing, RM procurement, to
facilities direct contact & consumption in production & other activities, with economic
function of nature of industrial development zones.

Components of Logistics Park –

• Strategic location with good connectivity

• Large amount of warehousing space
• Ample truck & office parking space
• Space for future expansion
• Immediate container terminal
• Food processing zones
46
 • Open stocking zones
• Ancillary production

Maritime Logistics

It is concern with shipping activities & other related logistics pertaining to water as mode of
transportation. It acts as third-party maritime logistics provider (3PL) which offers SCM &
transportation management services to their clients. These activities may include –

• Freight forwarding
• Ocean, air & inland transportation
• Customs house brokerage
• Cargo insurance
• Warehousing
• Distribution

Scope –

• Ship assist & escort

• Salvage & emergency response
• Petroleum & chemical transportation
• Ocean towing & transportation
• Ship management
• Marine technical consulting
• Energy support services

Cold Chain

It is a logistic system that provides a series of facilities for maintaining ideal storage
conditions for perishables from the point of origin to point of consumption n food supply
chain. Chain needs to short at farm level & cover up to the consumer level or at least the
retail level. A well-organized cold chain reduces spoilage, retains quality of harvested
products & guarantees a cost efficient delivery to consumer gives adequate attention for
customer services.

Cold chain logistics infrastructure generally consists if –

• Pre-cooling facilities

47
 • Refrigerated carriers
• Warehousing
• Cold storage
• Packaging
• Information management systems

Objectives – temperature controlled supply chain or cold chains are a significant proportion
of retail food market, success of implementing cold chain management involves continual
monitoring of product temperature throughout the distribution & having appropriate
corrective action plans in place. A well maintained cold chain helps to –

• Reduce costs
• Increase customer satisfaction
• Reduce wastage & return of expired stock
• Improve product integrity

Golden Quadrilateral (GQ)

It is a highway network in India connecting Delhi, Mumbai, and Kolkata & Chennai thus
forming a quadrilateral of sorts. Vast majority of GQ is not access controlled although safety
features such as guardrails, shoulders & high visibility signs are used.

Economic benefits –

• GQ projects enables better & faster transport networks between cities &
ports
• It provides impetus to smoother movement of products & people
• It enables industrial & job development in smaller town through access to
markets
• It provides opportunities for farmers through better transportation of
produce from agricultural hinterland to major cities & ports for exports
through lesser wastage & spoils
• It drives economic growth directly through construction as well as through
indirect demand for cement, steel & other construction materials.

48
 CHAPTER 6 –
LITERATURE REVIEW

49
The following chapter will discuss the relevant literature concerning supply chain
management, manufacturing strategy and logistics strategy. As the importance of managing a
proper Inventory control has grown investors with an appetite for risk can consider exposures
in the stock of Retailing of Apparels.

Supply Chain Management

Researchers and managers have debated for approximately the last 15 years about the
definition of supply chain management. Some believe that SCM is just integrated logistics
properly implemented. Others view SCM as the integration of more functions that just
logistics (e.g. manufacturing with marketing and R&D, etc.).

Cooper, et al. (1997) point out the need for ―the integration of business operations in the
supply chain that goes beyond logistics.‖ Discussion with members of the Global Supply
Chain Forum (GSCF) resulted in the following definition of SCM:

―Supply Chain Management is the integration of key business processes from end user
through original suppliers that provides products, services and information that add value for
customers and other stakeholders‖ Lambert and Cooper (2000).

The eight key processes identified are shown in Table 2.1. Each process is customerfocused
and aims to achieve product flows through the efficient use of information along the supply
chain.

 Customer relationship management - In the customer relationship management

process, key customers are identified and worked with closely to establish product
and service agreements that specify the levels of expected performance. Also,
customer service teams work with customers to further identify and eliminate sources
of demand variability.
 Customer service management - A single source of customer information is provided
in this process. A key point of contact for administering the product/service
agreement is established.
 Demand management - Point-of-sale and key customer data is used to reduce
uncertainty and provide efficient flows throughout the supply chain.

50
  Order fulfilment - Integration of the firm‘s manufacturing distribution and
transportation plans is performed in this process in order to guarantee timely and
accurately filled orders.
 Manufacturing flow management - Ideally, orders are processed on a just-in-time
(JIT) basis where required delivery dates drive production priorities. Furthermore,
manufacturing processes must be flexible enough to respond quickly to market
changes.
 Procurement - Long-term strategic alliances with a small core group of suppliers are
utilized in conjunction with rapid communication mechanism (e.g. EDI, Internet, etc.)
 Product development and commercialization - Customer Relationship Management is
coordinated with this process to identify customer-articulated and unarticulated needs.

―The supply chain refers to all those activities associated with the transformation and flow
of goods and services, including their attendant information flows, from the sources of raw
materials to end users. Management refers to the integration of all these activities, both
internal and external to the firm.

Also emphasizing the importance of functional coordination and strategic congruence,

Mentzer, DeWitt, Keebler, Min, Nix, Smith and Zacharia (2001) define supply chain
management as

―The systemic, strategic coordination of the traditional functions and the tactics across these
business functions within a particular company and across businesses within the supply
chain, for the purposes of improving the long-term performance of the individual companies
and the supply chain as a whole.‖

Other definitions of supply chain management are offered in

Tan et.al.(1998) SCM encompasses materials / supply management from the supply of basic
raw materials to final product (and possible recycling and re-use). SCM focuses on how firms
utilize their suppliers‘ processes, technology and capability to enhance competitive
advantage. It is a management philosophy that extends traditional intra-enterprise activities
by bringing trading partners together with the common goal of optimization and efficiency.

51
Berry et al. (1994) SCM aims at building trust, exchanging information on market needs,
developing new products, and reducing the supplier base to a particular OEM so as to release
management resources for developing meaningful, long term relationship.

Jones and Riley (1985) An integrative approach to dealing with the planning and control of
the material flow from suppliers to end-users.

Saunders (1995) External Chain is the total chain of exchange from original sources of raw
material, through the various firms involved in extracting and processing raw materials,
manufacturing, assembling, distributing and relating to ultimate and customers.

Ellrams (1995) External Chain is the total chain of exchange from original source of raw
material, through the various firms involved in extracting and processing raw materials,
manufacturing, assembling, distributing and retailing to ultimate and customers.

Ellram (1991) A network of firms interacting to deliver product or service to the end
customer, linking flows from raw material supply to final delivery.

Christopher(1992) Network of organizations that are involved, through upstream and

downstream linkages, in the different processes and activities that produce value in the form
of products and services in the hands of the ultimate consumer.

Lee and Billington(1992) Networks of manufacturing and distribution sites that procure raw
materials, transform them into intermediate and finished products, and distribute the finished
products to customers.

Kopezak(1997) The set of entities, including suppliers, logistics services providers,

manufacturers, distributors and resellers, through which materials, products and information
flow.

Lee and Ng (1997) A network of entities that starts with the suppliers‘ supplier and ends with
the customers‘ custom production and delivery of goods and services.

Though these definition differ slightly in wording, all communicate the importance of
integration, communication and coordination between functions and organizations that will
create value for the customer.

Other researchers have attempted to develop math models to address coordination in the
supply chain. Many of these models attempt to minimize inventory in the supply chain.

52
However, these analyses are dyadic in nature, examining the interaction of only to supply
chain members, a buyer and a supplier. Thus, the entire supply chain as given by the previous
definitions is not modeled using these analytical methods. In addition, inventory is not the
only consideration or motivation for supply chain coordination. Thomas and Griffin (1996)
reviewed the literature that uses math models to address supply chain coordination issues.

Several authors have proposed frameworks for the design and control of supply chains (Davis
1993). Beamon and Ware 1998; Boman 1997, Sengupta and Turnbull 1996).

However, much of this work is geared toward the manager and does not give theoretical
insights as to how supply chain management relates to functional strategies. One of the goals
of this study is to examine the relationship among the type of supply chain a firm participates
in and two of the firm‘s functional strategies, namely their manufacturing and logistics
strategies.

One of the seminal papers on supply chain management provides a framework for
determining what type of supply chain is appropriate for a particular product. Fisher (1997)
recommends first examining a product‘s demand nature in order to determine what type of
supply chain to use. Product fall into one of two categories according to

Enterprise Resource Planning (ERP) system software packages are highly integrated,
complex systems for businesses, and thousands of businesses are running them successfully
worldwide (Koch,1996).

Wallace and Kremzar (2001) described ERP as an enterprise-wide set of management tools
that balances demand and supply, containing the ability to link customers and suppliers into a
complete supply chain, employing proven business processes for decision-making, and
providing high degrees of cross-functional integration among sales, marketing,
manufacturing, operations, logistics, purchasing, finance, new product development, and
human resources, thereby enabling people to run their business with high levels of customer
service and productivity, and simultaneously lower costs and inventories, and providing the
foundation for effective e-commerce.

ERP evolution started with MRP (Material Requirement Planning) as universal

manufacturing equation (Wallace and Kremzar, 2001). Its logic applies wherever things are
being produced whether they are jet aircraft, tin cans, machine tools, chemicals, cosmetics...

53
or a dinner. MRP improved to Closed-loop MRP. Further, tools were developed such as Sales
& Operations Planning. Master scheduling.

Demand management and Rough-Cut Capacity Planning (Wallace and Kremzar, 2001). The
next step in this evolution is called Manufacturing Resource Planning or MRP II. It involves
three additional elements (Wallace and Kremzar, 2001):a) Sales & Operations Planning, b)
Financial interface and c) Simulation.

The fundamentals of ERP are the same as with MRP II. However, thanks in large measure to
enterprise software, ERP as a set of business processes is broader in scope, and more
effective in dealing with multiple business units. Financial integration is more robust. In
order to understand the attraction of enterprise systems, as well as their potential dangers, we
first need to understand the problem they‘re designed to solve: ―the fragmentation of
information in large business organization‖ (Davenport, 1998). At its core is a single
comprehensive database. The database collects data from and feeds data into modular
applications supporting virtually all of a company‘s business activities-across functions,
across business units, across the world.

Maintaining many different computer systems leads to enormous costs-for storing and
rationalizing redundant data, for re-keying and reformatting data from one system for use in
another, for updating and debugging obsolete software code, for programming
communication links between systems to automate the transfer of data (Davenport, 1998).

ERP goals include high levels of customer service, productivity, cost reduction, and
inventory turnover, and it provides the foundation for effective supply chain management and
e-commerce. It does this by developing plans and schedules so that the high resources –
manpower, materials, machinery, and money – are available in the right amount when needed
(Wallace and Kremzar, 2001).

Enterprises Resource Planning is a direct outgrowth and extension of Manufacturing

Resource Planning and, as such, includes all of MRP II‘s capabilities ERP is more powerful
in that it:a) applies a single set of resource planning tools across the entire enterprise, b)
provide real-time integration of sales, operating, and financial data, and c) connects resource
planning approaches to the extended supply chain of customers and suppliers (Wallace and
Kremzar, 2001).

54
The primary purpose of implementing Enterprise Resource Planning is to run the business, in
a rapidly changing and highly competitive environment, far better than before.

An effective business strategy centers on an aggressive, efficient use of information

technology, for this reason the ERP systems have emerged as the core of successful
information management, and the enterprise backbone of the organization (Nash, 2000a, b).
A successful ERP system will streamline processes within a company and improve its overall
effectiveness, while providing a means to externally enhance competitive performance,
increase responsiveness to customers, and support strategic initiatives (Sandoe et al. 2001).

ERP implementation is a socio-technical challenge that requires a fundamentally different

outlook from technologically-driven innovation, and will depend on a balanced perspective
where the organization as a total system is considered ERP implementation is considered to
rely on behaviour processes and actions (AlMudimigh et al:2001).

Lucas(1981) defined implementation as the whole process of introducing a system into an

organization, from conception of an idea, to analysis, design, installation and operation.
Olson and Davis (1984) defined implementation as preparing an organization to receive an
information system for its effective use.

THE FUTURE OF SUPPLY CHAIN MANAGEMENT

Aside from the issues of the day, it’s also vital to see where the field is going. The future of
SCM is bright, but certainly evolving.

Prospects

India is a highly attractive market for multinational companies and to successfully source or
sell products, there is a need to realize that conditions may differ greatly from the more
developed economies; this is especially true when it comes to the supply chain. The
framework offered can help companies pursue the right supply chain strategy to advance their
business goals. Supply chain challenge, enhancement of various components of logistics and
growth of SCM activities and innovations can take place in the following:-

(a) The sea mode is one of the most eco-friendly modes of transport with vast water bodies
available, the sea mode of transport can be developed and used effectively.

55
(b) A modern highway infrastructure with tracking technologies like Global Positioning
System (GPS), techniques such as cross docking, and state-of-the-art container ports have all
become the norm for supply chains in the developed world. They are far from the norm,
however, in the lesser developed countries of the world.

(c) The focus is essentially required to be on supply chain conditions in the emerging
economy that has enormous long-term growth opportunity. In addition to a rapidly growing
market India possesses a workforce that is considerably younger and larger than more
developed regions like Europe and North America. These factors have prompted
multinationals to seriously consider India both as a source for manufacturing and as a market
for their goods.

Challenges

Doing business in India brings its own set of challenges, a slow and cumbersome bureaucracy
and infrastructural constraints such as shortages in electricity and skilled labour, and road and
port congestion are among them. Particularly with respect to supply chains, what may be
taken for granted in developed economies is often the exception rather than the rule in India.
Shipments by road that can be completed in three days in the U.S., for example, could take as
long as nine days in India. Similarly ships can wait up to five days to dock at an Indian port,
compared to little or no wait time in Europe.

Further, there are few logistics firms in India with a fleet size larger than 100 trucks.
Moreover, very few trucks are fitted with a GPS tracking device, thereby preventing any real-
time tracking of shipments.

56
 CHAPTER 7 - DATA
ANALYSIS

57
1. Are you currently meeting the weekly, monthly and annual financial goals you have
for your retail business? (in percentage)
• Yes
• No

FINANCIAL GOAL TARGETS

Yes No

2. What’s the #1 lead generator for you to gain new customers?

• Schemes
• Attractive Entrance
• Large shop
• Other:

No. of Respondents (in Percentage)

Schemes Attractive Entrance Large shop Other:

3. Are your customers most often

58
 • one-time customers
• loyal customers
• walk-by/drive-by customers

No. of Respondents (in percentage)

one-time customers loyal customers walk-by/drive-by customers

4. What are you currently doing to attract new customers?

• Schemes
• Mouth to Mouth publicity
• Brochures
• Other:

No. of Respondents (in Percentage)

Schemes Mouth to Mouth publicity Brochures Other:

5. Does their location help influence their customer attraction?

59
 • Yes
• No

No. of Respondents (in percentage)

YES NO

6. Are all employees familiar with your store or business policies?

• Yes
• No
• Maybe

POLICY FAMILIARITY

Yes No Maybe

60
 CHAPTER 8 - CASE
STUDY

61
Example: Walmart and “Big Box” Retailers

The “Big Box” store, which represents one of the major disruptions of the retail model from
the last century, thrives on size, ubiquity, and well-planned supply chains to drive out the
competition. How else would a company like Walmart make a profit on a t-shirt made
overseas that retails for $5.00?

Walmart succeeds by having fewer links in its supply chain, and buying more generic goods
directly from manufacturers, rather than from suppliers with brand names and markup. It uses
“Vendor Managed Inventory” to mandate that manufacturers are responsible for managing
products in warehouses owned by Walmart. The company is also is particularly choosy with
suppliers, partnering only with those who can meet the quantity and frequency it demands
with low prices, and with locations that limit transportation needs. They manage their supply
chain like one firm, with all partners operating on the same communication network.

By buying at large enough quantities to take advantage of economies of scale, moving

products directly from manufacturers to warehouses, and then delivering to stores which are
large enough to be distribution centers, it reduces links in the supply chain and cost per item,
translating to low prices for consumers.

Example: Amazon and “Ecommerce Platforms”

Having overtaken Walmart as the world’s largest retailer in the last decade, Amazon’s
“online big box” concept is a perfect example of unique supply chains. As an e-commerce
shop, obviously they cut the retail store out and ship from distribution center to consumer’s
homes directly. Where Amazon innovates is both in its supplier-side and its final supply
chain link - delivery.

Just about anyone can sell things on Amazon because it’s a platform, not just a shop. As a
result, Amazon has more things than any other online store, so when people shop online, they
think of Amazon. Then, it produces everyday goods cheaply, and underbids suppliers. Next,
their warehouses make serious use of automation to store items going to like destinations
together, ready for immediate transport. Finally, its investments in delivery staff and
technology make 2-day shipping a basic expectation, and even same-day delivery a
possibility. Amazon ditches third-party logistics (3PL) and fulfills orders itself.

62
 CHAPTER 9 -
CONCLUSION:

63
Given the increasing importance of the service sector service spending will only increase.
The spending will not only include transactions within the service industry, but also the
manufacturing services being traded in the market.

Hence, more research attention will be needed in order to improve supply chain management
effectiveness and operational efficiencies. There are many commonalities of service and
manufacturing supply chains. The tangible aspects of service supply chains can be considered
as a service extension of the traditional manufacturing supply chain, and thus can be managed
in Similar manners.

So the over all conclusions is that there is need a lot of effort to increase effectiveness of both
service and supply chain management. And if we talk about which is better among supply
and service chain management than is necessary to understand that these both are very
important for any business. Because no business can be run effectively without these even
some business required both of these i.e information technology industry like Dell and
Hewlett Packard.

64
REFERENCES:

1. Supply chain management and solution by Thomas Wailgum and Ben Worthen
2. 99 Number 1 Elliott Taylor, Differences in Supply Chain Designs for a
Manufacturing Industry vs. a Service Industry
3. Pete Abilla, Difference Between Manufacturing and Service, December 20, 2010
4. examples of service and manufacturing supply chain management (walmart-Dell and
Hewllet Packard)

65
APPENDIX

Email address * ______________________

1. Are you currently meeting the weekly, monthly and annual financial goals you have
for your retail business?
 Yes
 No

2. What’s the #1 lead generator for you to gain new customers?

 Schemes
 Attractive Entrance
 Large shop
 Other:

3. Are your customers most often

 one-time customers
 loyal customers
 walk-by/drive-by customers
 Other:

4. What are you currently doing to attract new customers?

 Schemes
 Mouth to Mouth publicity
 Brochures
 Other:

5. Does their location help influence their customer attraction?

 Yes
 No

66
6. Are all employees familiar with your store or business policies?
 Yes
 No
 Maybe

67