Distribution and Supply Chain Management

CIA-3B

End to End Supply Chain Framework Report

A Report submitted in partial fulfillment of the requirements for Master of
Business Administration

Submitted by
Prajwal S Divate
21121035

Submitted to
Dr. Sanjeev Kadam

CHRIST (Deemed to be University)

Lavasa, Pune
MAY 2022
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Table of Contents

Sl.No. Title
1 Introduction
2 Upstream Vs Downstream
3 The Benefits Of E2e Supply Chain Visibility
4 Best Practices For End-To-End Supply Chain Planning
5 Supply Chain Planning For Specific Company Needs
6 Amazon Supply Chain
7 What Happens After You Click The Buy Button
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Introduction
➔ END-TO-END SUPPLY CHAIN
End-to-end (also known as E2E) in supply chain management refers to the end-to-end process in
the supply chain. It involves the process in its entirety, starting at the procurement of materials
from suppliers and ending when the product reaches the customer. The process needs to be
tracked with data logging and condition monitoring, and the collected data must be analyzed.
In most instances, the E2E supply chain will follow this formula:
● Procurement and inventory management
● Finance
● Logistics and Planning
● Operations
● Quality
● Sales and customer service
When we bring visibility into the picture, E2E supply chain visibility is a necessity for
businesses to communicate, solve problems, and provide service to partners and customers.

In addition to visibility, it is also important to understand supply chain collaboration, as it is the

main way to gain visibility along your supply chain. Supply chain collaboration is the act of
having a collaborative multi-tier supply chain planning and managing solution. For the sake of
visibility, collaboration is a solution to getting more insight into the ordering process, inventory
that is in motion or at rest, supply chain issues or risks, and stand-alone supply chain analytics.
Collaboration also aids in supply chain event management. To put it simply, collaboration among
the necessary teams, warehouses, suppliers, and stakeholders is necessary to have better visibility
of your supply chain.

➔ UPSTREAM VS DOWNSTREAM
In many cases, businesses focus solely on downstream visibility. This is because downstream
visibility focuses primarily on the customers, which should naturally be a priority. However, the
idea that a business should only focus on downstream visibility is actually quite damaging and
narrows the business focus. It’s also a very old-school way of looking at supply chain visibility.

Downstream visibility can be defined as a pure understanding of how one’s products are
traveling down the chain to the customer. Downstream covers each process and action involved
in getting the complete product from the warehouse to the customer. Upstream visibility is a pure
understanding of how all the parts necessary to make the product are moving through the supply
chain. It covers all of the processes, actions, and movements involved in getting each part to
create the final product.
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➔ THE BENEFITS OF E2E SUPPLY CHAIN VISIBILITY

There are a number of benefits to having better visibility in the context of your end-to-end supply
chain:
● Improved customer service on the shipper’s end
● Overall enhanced and improved customer experience
● Cost controls via management of inventory in motion
● Proactive status tracking and updates as close to real-time as possible
● Fewer disruptions
● Better risk mitigation
● Better prevention of order errors
● Better customer retention
● Fewer errors
● Improved view of business functions
● Improved insight into demand for OEMs
● Improved planning opportunities and capabilities
● Better reporting
● Tangible data analysis potential
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➔ BEST PRACTICES FOR END-TO-END SUPPLY CHAIN PLANNING

The most important principle in end-to-end supply chain management is collaboration. That’s
according to the white paper “End-to-End Supply Chain Collaboration Best Practices” released
by the Global Supply Chain Institute (GSCI) at the University of Tennessee, Knoxville’s Haslam
College of Business. True collaboration comprises a range of thoughtful measures to improve
supply chains, but with challenges that, surreptitiously, appear to be beneficial on the surface.

New technology, particularly in the areas of shipping and transportation times, have introduced
complexity that has increasingly become unmanageable by any isolated team or division.
Likewise, most supply chain management theories are built on the principle of cutting costs. But
research out of the GSCI suggests that though companies continue to seek improved
cost-efficiency, “the opportunities to improve appear to be dwindling.” The solution to these
problems lies in the development of collaborative practices.

One important principle in designing an effective end-to-end supply chain is to form good
relationships with your suppliers. It’s important to establish positive, long-term partnerships.
These relationships should be built systematically and maintained with care. Think of your
suppliers as strategic partners, not simply vendors. The greater degree to which your suppliers
can become invested in the outcomes of your business, the greater your ability to manage the
supplier relationship.

There are many best practices for implementing an end-to-end supply chain. Here are a few other
things to consider as you start looking at the bigger picture:

➔ Take a lean approach to inventory management to reduce waste and unnecessary actions,
leading to faster and more accurate order fulfillment.
➔ Engage in demand planning to better predict your customer needs, enabling a more
effective planning process for your supply chain.
➔ Do human capital planning to ensure that your workforce is capable of managing the
supply chain and responding to sudden changes.
➔ Use root cause analysis to get a data-driven picture of weaknesses and challenges in the
supply chain and to design effective solutions.
➔ Implement a benchmarking process to measure the efficacy of the supply chain at
intervals. You will be better positioned to monitor progress and identify problems in areas
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such as productivity, inventory management, shipping accuracy, storage density, and

quality control. Benchmarking can be done qualitatively or quantitatively. Qualitative
benchmarking involves applying best practices and using data from others in your
industry, while quantitative benchmarking analyzes key performance indicators.

➔ SUPPLY CHAIN PLANNING FOR SPECIFIC COMPANY NEEDS

How a business designs its supply chain will depend on its products. Two key factors are
inventory volume and inventory turn rate. Start at the end of the chain and work backward to
measure how long it takes and how much it costs for goods to flow to customers. Based on a
combination of these factors, you’ll be able to figure out whether to maintain low or high
inventory volume and engage in low or high inventory turns.

You can design a supply chain appropriate for your business and your products by focusing on
tactical supply chain management, which implies a focus on logistics and processes. Tactical
planning can zoom in on any aspect of the supply chain, including procurement, manufacturing,
suppliers, and product design and development.

The tactical planning process will prompt informed decision-making on a variety of issues, such
as which suppliers to work with and how to manage risks associated with procurement, where
and how to manufacture and warehouse goods, which market segments to target with which
products, and how distribution channels are to be established and maintained.

These tactical decisions should ideally be taken in the context of strategic thinking about the
business’s goals. But it’s only possible to align your supply chain with corporate strategy if that
strategy is clearly defined and articulated. Failure to specify why you are better than your
competitors will lead to a failure to design a supply chain that supports such a vision of the
business.
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➔ SUCCESSFUL END-TO-END SUPPLY CHAIN PLANNING

Planning an end-to-end supply chain requires mapping out a series of functions, each of which
requires considered action. Here are the basic elements of collaborative end-to-end supply chain
planning:

● Collaboration is top-down. Supply chain leaders have to take responsibility for driving
collaborative efforts. This manifests in many different forms, among them: one-on-one
discussions, leadership meetings, performance reviews, organizational information
meetings, monthly scorecard reviews, and strategic action plans.
● Develop supply chain leaders with varied experience. Professionals in supply chain
management need opportunities to learn and grow. GSCI research gives the example of a
company’s workforce that needed to improve customer relations. They were able to do
so, but only after management implemented real-time systems to keep employees aware
of customer needs.
● Create a collaboration culture. Though difficult, a key element is to ensure that model
collaborative behavior is routinely seen by your workforce and external partners. This
can be displayed in action planning meetings, reviews, picnics, hiring, and promotions to
name a few areas.
● Think total-value, not just price-value. The increasingly rare opportunities for effective
cost-management exist through more sophisticated overall management. Supply chain
planning has to work hand in hand with an institution’s financial department in a holistic
look at the business’s value.
● Employ tools, systems, and data. Supply chain managers will never face a shortage of
new technological solutions for virtually any problem. The paramount concerns when
deciding upon a particular system are 1) is it easy to understand and b) can it be
consistent across internal and external teams. McKinsey & Company offers further
insightful advice on how to move toward ” Supply Chain 4.0,” including being vigilant
about managing data and digital waste.
● Strengthen external team structures. The more you want out of a relationship, the more
you have to risk. And with that greater investment, you gain the advantage of a
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committed partner. Make sure to evaluate every node of external contact to ensure that
you are linking your business with your third-parties in the most advantageous way.
Share information, make confidentiality agreements equitable, and arrange for you and
your partners to tour facilities jointly.
● Effective sales and operations planning. Demand and supply integration is the ultimate
test of a collaborative enterprise and, unfortunately, no method is one-size-fits-all.
However, any business benefits from making sure they have clear and open
communication at all stages of decision-making. Conversely, any business will suffer if
its system of rewarding employees promotes behavior that undermines collaboration.

➔ AT AMAZON, SUPPLY CHAIN INNOVATIONS DELIVER RESULTS

When Jeff Bezos launched Amazon.com in July 1995, few realized how apt the name would
become. The company’s original tagline was “Earth’s Biggest Bookstore

Amazon today sells more than 480 million products, some of its own creations and many
drop-shipped by others. Amazon’s supply chains carve an unmistakable path through the
logistics industry landscape.

In its pursuit of faster delivery, lower costs, and greater market share, Amazon continues to
reinvest all of its free cash flow into growth initiatives rather than shareholder dividends and
pioneer innovative approaches, such as delivery drones

➔ Amazon Supply Chain

The term Amazon supply chain essentially refers to Amazon’s entire process from product
warehousing to inventory management, pricing, delivery, and more. Amazon has optimized each
of these elements to ensure that everything is working smoothly and efficiently.

With third-party sellers being responsible for 55% of all sales made on Amazon, Amazon offers
two fulfillment options to sellers – FBA and FBM.
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➔ AMAZON FBA AND FBM

FBA (Fulfillment by Amazon) – With this option, Amazon will take care of all logistics and
customer support. Third-party sellers will just have to send bulk products to Amazon’s
fulfillment centers for them to pick, pack, and ship. For third-party sellers who don’t have
logistics in place and are handling small and lightweight products, FBA is usually the better
choice.
In addition to the above, Amazon also has an FBA Onsite program where Amazon uses its own
warehouse management software to help with optimizing the third-party seller’s warehouse.
While third-party sellers will take care of the inventory of their own products, Amazon is in
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charge of picking up orders from the seller’s warehouse and selecting the most efficient and
effective fulfillment method.

FBM (Fulfilment by Merchant) – In this option, third-party sellers will be in charge of listing
their products on Amazon and handling all of the storage and fulfillment aspects of the process
on their own.

Here’s a chart showing the usage of Amazon FBA among top sellers worldwide:

➔ TWO MAIN ELEMENTS OF THE AMAZON SUPPLY CHAIN

When it comes to Amazon’s supply chain, there are two main elements critical to its success –
Amazon Fulfilment Centers and the Amazon Delivery Fleet.
➔ AMAZON FULFILLMENT CENTERS

With 112 million of Amazon’s customers having a Prime membership and utilizing two-day
shipping, it’s vital that Amazon has the fulfillment and logistics network to accommodate these
orders.
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Currently, Amazon has more than 175 fulfillment operating centers globally in more than 150
million square feet of space. California alone has 21 fulfillment centers while Texas is not far
behind with 14. Worldwide, Amazon has an estimated 500 warehouses located near major
metropolitan areas.
With the COVID-19 pandemic generating a boom in e-commerce, Amazon has experienced
record growth within the last year. In 10 months, Amazon has had to hire 427,300 employees to
keep up with demand. Third-party sellers experienced a 60% annual increase in sales, with this
trend expected to continue into 2021. In a bid to respond to growing demand and a capacity
crunch in its fulfillment centers, Amazon will open around 50 new warehouses and fulfillment
centers in the US and more globally.

➔ AMAZON DELIVERY FLEET

While having the capacity to store inventory and fulfill orders is key, Amazon’s delivery fleet is
just as important. To deliver orders to its customers, Amazon has various transportation and
delivery partners that help keep up with demand.

To start, Amazon’s trucks help carry about 2,000 boxes or more from the fulfillment centers to
the sort centers. There, Amazon then distributes the packages according to location and the
delivery speed required. After that, the company selects the most efficient transportation mode to
transport these packages.

If you’ve always wondered how Amazon meets its one or two-day delivery window for Prime
members, Amazon has an airplane fleet that helps with delivery. These airplanes fly from more
than 20 airports around the United States and can carry about 30 or more containers. On the
ground, Amazon uses trucks, vans, bikes, and at times – even robots. Interestingly, Amazon is
now exploring the use of drones to deliver items to locations that are near their fulfillment
centers.

Recently, Amazon has also launched the Delivery Service Partners company that provides its
employees with $10,000 in start-up costs and three months of pay to launch their own delivery
business. This not only helps with strategically expanding Amazon’s delivery network, but it is
also an awesome way to make money with Amazon.

➔ WHAT HAPPENS AFTER YOU CLICK THE BUY BUTTON

How does an Amazon Fulfillment Center work? These are the steps that take place after a
shopper has clicked the buy button.

1. Receiving Products

At Amazon Fulfillment Centers, products are either taken off trailers by forklift or manually built
into pallets. The separation of freight occurs between those that are coming from an Amazon
facility and those from third-party vendors using FBA. Unsurprisingly, half of the items currently
sold on Amazon are from small businesses and entrepreneurs.
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2. Storing of Items

Unlike other warehouses that store their items by type, Amazon stores its items randomly.
Amazon has yellow-tiered bins with random items – all tracked by computers. These bins are
then ferried to Amazon associates based on the product size.

3. Picking Orders

When you’ve clicked the “buy button”, and your order comes in, a robot will bring pods full of
items to Amazon associates working at pick stations. These pickers will read the screen, retrieve
the item and place it into a yellow plastic box – also known as a tote.

4. Quality Assurance

For robots and humans to work cohesively together, there’s a great deal of quality assurance
required. There’s a need to make sure that the item’s physical location matches what’s in the
computer, and that the robots function correctly. Fine-tuning occurs throughout the entire process
as technological innovation is vital in a large-scale supply chain business like Amazon.

5. Packing Orders

Lastly, items that belong to different shipments are both organized and scanned before being sent
to the pack station. There, the system will recommend box sizes to Amazon associates and
measure out the amount of tape required. Third-party vendor items are shipped in original boxes,
but Amazon works with third-party vendors to reduce packaging.