Aim:

Sustainable supply chain management

 Logistics at the center of the world trade

Logistic is an information based process on perfect material flow in an enterprise from suppliers
to the manufacturing unit and then to the final consumers through a physical distribution system.

Logistics has 3 functional areas.

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Due to globalization world trade has increased exponentially the new technologies came into
practice, the customers are demanding value for their money. In this competitive environment
business firms are not only fighting for growth but also for their survival. Therefore, the business
firms around the world are focusing more on outsourcing of raw materials or the manufacturing
process. Global buying and sourcing resulted in international supply chain and innovative
logistics management practices to ensure consumers satisfaction and elimination of unnecessary
time and cost from the supply chain cycle.

Coming to the current scenario: the table shows the percentage of logistics in GDP

Country Percentage of logistic in GDP Share of 3rd party logistics

(percentage)
India 13 < 10
China 13 - 15 <10
U.S.A 9.9 57
Europe 10 30-40
Japan 11.4 80
Source: logistics in India, sski

At International level logistics plays great role the country GDP. India and China has the major
percentage of logistics in their GDP.
If we see the share of logistics cost in total sales for various industries in percentage we found
that apparel sector contributes 3%

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Cement Steel F&B FMCG Durables Apparels Auto

Source: skill gap in Indian logistics sector

Functional areas of logistics: logistics deals with all the activity which involves material
movement in an enterprise.

The main aim of logistics is to facilitate the flow of material across the supply chain focusing on
delivery of right product at right place at right time with least cost.

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Delivering the product to the final customer involves three logistical phases

1. Inbound logistics: this phase involves movement of raw materials from suppliers to the
manufacturers.
2. Process logistics: it involves storing and movement of raw material within the factory
premises for manufacturing.
3. Out bound logistics: it involves warehousing, inventory management and transportation
of finished products.

Supply chain management

SCM is an information based process which integrates various activity from raw material supply
to manufacturers for manufacturing and supplying finished products and services to the end
consumer.

Role of logistics in supply chain management

Logistics role is to connect the source of supply with he source of demand. It is a bridge between
market demands with supplier. Logistics mainly focuses on customer service and cost efficient
delivery of the products. Logistics fills the gap between demand and supply.

Where as SCM is an information based process that integrates the various activities from raw
material supply to manufacturing and supply of finished product and service to end consumer. It
is an effort to control physical flow of product and services to the end consumer starting from
suppliers to end consumers through coordination with suppliers, manufacturers and end
consumer.

Supply chain tries to understand the demand of customer and based on the demand tries to adjust
itself for planning and executing customer requirement. Therefore we can say logistics
supplement supply chain operations. The effective movement of material in supply chain
depends upon logistics. Cost reduction and customer service enhancement in supply chain is not
possible without efficient logistics operations such as warehousing, transportation, packaging
and inventory control. Logistics operation is carried out irrespective of presence of supply chain
management in the organization. In a nut shell one can say logistics is the key success to SCM
and the degree of success depends on the level of integration of both.
Source: vv sople.2007, logistics management Pearson publication, 2nd edition, pg-5-18,37-39

Environmental issues in SCM

As the consumer is becoming more aware of the environmental issues and global warming so
while buying the products consumers take care of the environmental issues like green
manufacturing process, supply chain, carbon footprint etc.

By studying the supply chain of garment industry it is clear that the process starting from
procurement of raw material and delivery of finished product has many process that adversely
affect the environment. The given diagram shows environmental life cycle of supply chain

Environment is affected at each and ever stage of the supply chain the given diagram shows the
impact on environment.

In the article air and water waste are given more emphasis. The supply chain should focus more
on recycling of waste water and minimizing air pollution.
Carbon and environmental foot print

Carbon footprint is a process by which one can measure the impact of the industrialization on
environment and climate change. It also talks about the amount of green house gas produce by
burning fossil fuels for electricity, heating and transportation.

The life cycle of the garment has considerably affected environmental foot print the main area of
focus is

1. Design and development

2. Supply chain
3. Product disposal

Design and development stage: at this stage least capital is involved and is very efficient in
reducing negative impact on environment. Using correct raw materials and production process
can help to minimize environmental hazard.

Supply chain: helps in saving energy. In spite of procuring raw materials from places which is
far from the factory should be replaced by the local vendor. This can cut down the cost of
transportation. These savings can be used for purchasing green raw materials.