LM Thapar School of Management

(LMTSM)
TIET, Patiala, Punjab
Managing Supply chains

Time: 24/02/2021 TO 25/02/2021

Maximum: 30 marks

Instructions:
1) Kindly do submissions in word document (font size-12, Times New Roman) on
my official email address (anjali.shishodia@thapar.edu).
2) Write your name and roll no. properly.
3) Attempt all questions. Each question contains 10 marks. Please be precise in
your answers.
4) No plagiarism is allowed. Explain in your own words.
6) Cite references used (books/journal articles/reports)
7) Submissions will no longer be acceptable after 10 PM on 25 Feb. 2021.

Q1. Logistics plays a critical role in sustaining the supply chain and inventory management. What are
the key enabling factors that make logistics an important area of focus? Do Government policies play
a role in this sector? Elaborate with the help of a SWOT analysis.

Q2. What is sustainable inventory management? What are the key technologies that help
organizations to take steps towards sustainability in inventory management? Illustrate with the help of
suitable examples from the industry (any sector).

Q3. What are the current paradigm shifts in logistics and inventory management? Are technology and
the push towards sustainability playing a major role in this paradigm shift? Illustrate with the help of
suitable examples from the industry (any sector).

Submitted by: - Anant Kumar

(401706003)
Answers

Answer 1. Logistics is the planning, carrying out and management of goods, services, and
information from the point of origin to the point of consumption. By improving the efficiency
and effectiveness of several operational activities in business, such as traffic and
transportation, warehousing and storage, order processing, material handling and others,
logistics helps in sustaining supply chain and inventory management.
Factors that make logistics an important area of focus:
 COST: low-cost for components, labour and expertise. Outsourcing allows the
organizations to focus on their core business and can create a competitive advantage
by reducing the operational costs. The low-cost sourcing is an objective of many
organizations as they want to go global to increase revenue opportunities.

 Market Value: Effective management of logistics can increase a company’s market

value with a strong impact on revenues and costs. In logistics and supply chain
management, continuous development and growth are improvement.

 Global logistics: Global logistics helps an enterprise in making decisions for

forecasting growth and demand planning.

 Improved customer service: Technology has simplified the logistic and supply chain
management that helps an organisation to operate efficiently. With technology and
internet based software, the supply process reduces the errors during the ordering of
the product. Hence delivering the right product to the right person at the right time
and place helps in converting a customer into a loyal customer.

 Time of Shipping: Just-in-time inventory management is an inventory control system

in which the products are manufactured or purchased and stocked in the warehouse
only when there is actual customer demand with this there is reduction in wastage and
saving the cost of purchase or manufacture.

Several govt. policies have huge impacts on Indian logistics and inventory management, one
of them is GST. Besides the advantages from the tax point-of-view, there will be a major
impact on logistics sector. Majority of Indian corporate today organize their supply chain
with an eye on the indirect-tax cost. After GST is implemented, the determining factors of
planning logistics will be the fundamental principles of logistics such as - demand, supply,
near-to-customer, sourcing, transportation costs and inventory costs. This cause a major shift
and/or consolidation in warehousing locations, transportation costs and will also impact the
trends of certain commercial vehicle classes.
SWOT Analysis of logistics sector.
Strengths:-
 Critical for manufacturing industries
 Critical factor in ongoing operations in almost every possible industry
 Plays a major role in customer satisfaction.
Weakness:-
 Limited global tie-ups
 Dependence on govt. rules and regulations.
Opportunities:-
 Better storage and handling practices
 Innovative use of technologies to make the process smooth and efficient
 Growth in online retail sector
Threats:-
 Sudden change in govt. policies
 Taxation
 Import and export rules variation in every country

Answer 2. Sustainable inventory management can be defined as the use of techniques and
technologies used in a way that they are safe for environment and have no negative social
impact without hampering the productivity and profitability of the process of inventory
management
While the inventory is the most valuable asset, handling it produces a ton of waste materials
that gets dumped into open land and water bodies, making it a potential liability for Nature.
To overcome this problem the concept of green supply chain came into existence.
Following are the few techniques that can be used by the organizations to have sustainable
and eco-friendly inventory management:-
  Make changes inside the warehouse to make it more eco-friendly which can be done
by Increasing the life of packing material, setting up sortable bins near all trash
receptacles, and at every station in the warehouse.
 Start the use of e-invoice as default as tons of paper is wasted in invoice and bills. So
save the paper and opt for only e-invoice.
 Set up as proper solar panel system to carry out the maximum electricity need. Solar
powered panel is the best source of energy which is eco-friendly and provides safer
and sustainable lighting.
 Make proper use of the geo thermal energy. Do not let the heated or cooled air escape
instead set up proper ways to utilize them in a form of energy which will not only
help the business but will also prevent the spike in environmental temperature
 Make use of IOT software’s and technologies in the warehouse and machines to
reduce waste, conserve energy, and mitigate maintenance issues quickly.
Example of Food and beverage industry-
In the food and beverage industry, it makes sense to implement a just-in-time delivery and
inventory system as finished products for human consumption have a lifespan beyond which
they can’t be consumed. McDonald’s show us what this system looks like in the real world
where they have components onsite for the immediate future, although nothing is assembled
or made until a customer places an order. This ensures that when a customer places an order,
the product is assembled in exactly the same way every time with exactly the same
experienced being offered.

Answer 3. A paradigm shift comes about when a new technology is introduced that
significantly changes the production process of a good. Over the years supply logistics and
inventory management have experienced a tremendous shift in technologies used and
methods involve in the process. The current paradigm shifts are as following:-

 Supply Chain Digitization

Digitization of the supply chain is the movement toward a completely integrated
sequence of planning and production solutions that work in tandem to create a more
visible supply stream across each touch point of the value chain. Creating real time
solutions for a problem faced and increased transparency which provides better and
easier management.
 Supply Chain Solutions Will Continue to Move to the Cloud
While many organizations still rely on legacy on-premise supply chain software, the
future is in the cloud. Available in many forms, including Software as a Service
(SaaS), Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), supply
chain cloud computing offers flexibility, scalability and a global reach while doing
away with the need to maintain extensive, expensive on-premise computing
infrastructure

 Multi-channel Supply Chains

Allowing customers to seamlessly shop from online or offline stores. Omnichannel
supply chains place greater demands on logistic and supply chains with the
simultaneous requirements of supplying individual customer orders as well as
replenishing stock at retail outlets.

 Sustainability
Sustainability has become one of the key global supply chain trends, with customers
demanding green products and sustainable practices. These trends highlight the
importance of eco-friendly supply chain practices, such as switching from plastic to
cardboard packaging and using smaller packaging.

 Growth in Circular Supply Chains

There's a move away from the traditional linear supply chain to the circular supply
chain where manufacturers reuse and rework discarded and worn out products
through refurbishment or by recycling components into raw materials. There's a clear
indication that customers favor businesses that recycle materials, and many leading
companies are discovering additional value through circular supply chains.

 Agile Supply Chains

To effectively compete, supply chains need to be flexible and agile, as well as able to
respond to changes on short notice and the implementation of just-in-time (JIT)
technology This is a huge change from traditional supply chain thinking that focuses
on reliability, consistency and low cost. One of the notable supply chain management
trends is a switch from off-shore manufacture to local or near-shore supply.

 Internet of Things
Internet of Things (IoT) is the future. IoT allows organizations to monitor inventory,
automate stock reordering and keep track of deliveries, all in real time. Sensors can
predict wear and tear on equipment, allowing timely ordering of spare parts. IoT
increases supply chain transparency.
These shifts are mainly caused by the introduction of new and better technology, increased
awareness and need of sustainability in every industry. So yes, these new changes in
technology play a major role in the paradigm shift mentioned above.
Taking the example of the Food and beverage industry:-
In warehouses, with the help of automation, foodstuffs can be stored in discrete and specific
zones to minimize waste through poor handling, pest infestations and environmental factors.
Specialized systems – such as, ultrasonic systems, or randomly-moving robots triggered by
IoT sensors – could then monitor these zones for any pest control and hygiene issues.