Contents

Q1: Discuss the goal of a supply chain and explain how supply chain decision affect the success of a
firm........................................................................................................................................................2
Goals:.................................................................................................................................................2
How supply chain decision affects the success of a firm...................................................................2
Q2: Explain the factors that influence supply chain network design decisions...................................3
1. Strategic Factors........................................................................................................................3
2. Technological factors.................................................................................................................3
3. Macroeconomic factors.............................................................................................................3
4. Political Factors..........................................................................................................................3
5. Infrastructure factors.................................................................................................................3
6. Competitive Factors...................................................................................................................3
7. Customer response time and local presence.............................................................................4
8. The cost of logistics and facilities...............................................................................................4
Q3: A speciality chemical company is considering expanding its operations into Brazil, when five
companies dominate the consumption of speciality chemicals. What sort of distribution network
should this Company utilize?................................................................................................................4
Q4: Explain the various decision phases in supply chain?...................................................................5
1. Supply chain strategy or design:................................................................................................5
2. Supply chain planning:...............................................................................................................5
3. Supply chain operations............................................................................................................5
Q1: Discuss the goal of a supply chain and explain how supply chain
decision affect the success of a firm.
 Supply chain management is an important business activity for any company that sells
products. From a simple one-man Amazon business to a multinational corporation selling
millions of units yearly, supply chain management is an absolute necessity to making sure
that both the financial model and the distribution model are as good as they can be.

Goals:

 Supply chain partners work collaboratively at different levels to maximize resource

productivity, construct standardized processes, remove duplicate efforts and minimize
inventory levels.
 Minimization of supply chain expenses is very essential, especially when there are
economic uncertainties in companies regarding their wish to conserve capital.
 Cost efficient and cheap products are necessary, but supply chain managers need to
concentrate on value creation for their customers.
 Exceeding the customers’ expectations on a regular basis is the best way to satisfy
them.
 Increased expectations of clients for higher product variety, customized goods, off-
season availability of inventory and rapid fulfilment at a cost comparable to in-store
offerings should be matched.
 To meet consumer expectations, merchants need to leverage inventory as a shared
resource and utilize the distributed order management technology to complete orders
from the optimal node in the supply chain.

How supply chain decision affects the success of a firm.

Supply chain decisions have a large impact on the success or failure of each firm
because they significantly influence both the revenue generated and the cost incurred.
Successful supply chains manage flows of product, information, and funds to provide a
high level of product availability to the customer while keeping costs low.
Q2: Explain the factors that influence supply chain network design
decisions.
 Factors that influence supply chain network design decisions are as follows:

1. Strategic Factors
A company's competitive strategy has a significant impact on decisions in the supply
chain network design. Companies that focus on cost leadership will try to find or create
the lowest cost for facilities manufacturing. Companies that focus on response rate tends
to place a facility that closed in the market and may choose a location to high cost if they
meet the company's choice to react quickly to changing market needs. Global supply
chain network to support corporate strategic objectives with the role of different
facilities in different places.

2. Technological factors
Characteristics contained in production technology have a significant impact on network
design decisions. If the production technology displays economies of scale are significant,
few high-capacity sites will be more effective. Unlike the case with fixed-cost facilities is
lower, many local facilities are prepared because this will help lower transportation costs.
Flexibility in production technology have an impact pad level of consolidation that can be
achieved by the network.

3. Macroeconomic factors
These factors include taxes, customs duties, exchange rates, and other economic factors
that do not exist within the company. This factor has a significant impact on the success
or failure of the supply chain network.

4. Political Factors
Political stability in a country is of paramount consideration because it has a significant
impact on role in the choice of location. Companies prefer to place the facility at a
location or state which has a stability that provide clarity in terms of trade rules and
ownership.

5. Infrastructure factors
The existence of good infrastructure is an important prerequisite in allocating facilities in
certain areas. Poor infrastructure will further add to business costs.

6. Competitive Factors
Companies must consider the strategy, size, and location of competitors when designing
their supply chain network. Making important decisions the company is now set for the
company's facilities are not accessible by competitors or in other words away from
competitors.
 7. Customer response time and local presence
Companies that have targeted customers who can respond in a quick time to put the
facilities that are closed to the customer. If the company sends its products to customers,
it means that transportation should be slightly built and continue to increase response
time is short. This choice resulted in an increase or increase in transportation costs.

8. The cost of logistics and facilities

Logistics and facilities costs that occur in the supply chain can undergo changes such as
the number of facilities, location and capacity allocation. Companies should consider,
supplies, transportation and facility costs as the company's supply chain network design.
The increasing cost of supplies and facilities, the greater the number of facilities used in
the supply chain. The lower the transportation cost, the greater the number of facilities.
If the number of facilities increased at a point where the journey economics of scale is
lost, then the transportation cost increases. The total number of logistics is the entire
inventory, transportation and facility costs.

Q3: A speciality chemical company is considering expanding its

operations into Brazil, when five companies dominate the
consumption of speciality chemicals. What sort of distribution
network should this Company utilize?
 The specialty chemical company has five companies that are the consumers of the specialty
chemicals. Therefore, it is a Business-to-Business transaction between the specialty
chemical company and their target business customers.
The company should utilize an indirect distribution network. It can be sales operations only
where the chemical is manufactured and being supplied to companies in Brazil. There
should be carefully selected distributors who have their locations near the five companies.
This network will reduce lagging time of order delivery and sales efficiency will increase.
Q4: Explain the various decision phases in supply chain?
 Decision phases can be defined as the different stages involved in supply chain management
for taking an action or decision related to some product or services. Successful supply chain
management requires decisions on the flow of information, product, and funds that fall into
three decision phases.
The three decision phases in supply chain are as follows:

1. Supply chain strategy or design:

In this decision phase, a company decides how to design the supply chain over the next
several years. The company decision includes – what’s the chain configuration will be? How
resources will be allocated? And what processes each stage will perform. Moreover, there
are some strategic decisions that a company should decide.

 In-house vs. outsource – managing order, subcontracting

 Location &capacities – production cost plus warehouse
 Transportation networking
 Strategic change – brick mortar vs. online
 Strategic change = supply chain surplus

2. Supply chain planning:

Time is considered in a quarter to a year. Supply chain planning is used for solving the
constraints. Therefore, this decision phase has a goal. This is to maximize the supply chain
surplus. Besides, this surplus can be achieved through supply chain planning phase.

The company starts its decision on forecasting demand for the coming year or other factors
or costs and prices in different markets. Planning includes subcontracting of manufacturing,
inventory policies, timing, and size of marketing and price promotions.

 Demand forecasting
 Procurement planning and control
 Production planning and control

3. Supply chain operations

Here, the time horizon is weekly or daily. In this phase, companies make decisions on
managing individual customer orders. Here, the supply chain configuration is considered
fixed. And planning policies are already defined. Besides, the goal of Supply chain operations
is to handle incoming customer orders in the best possible manner. During this phase,
companies do-

 Inventory management
  Transportation management
 Customer order processing
 Relationship management

There is less uncertainty about demand information. The design, planning and operation
phases work in one frame. However, there is a strong influence on profitability and success.
It is fair that successful companies have a strong supply chain decision phases.

Q5: What is supply chain management? Discuss the need, importance

and functions of supply chain management.
What is Supply Chain Management?

 Supply chain management is the management of the flow of goods and services and
includes all processes that transform raw materials into final products. It involves the
active streamlining of a business's supply-side activities to maximize customer value and
gain a competitive advantage in the marketplace.

Need / Importance of Supply Chain Management

I. Boost Customer Service

 Customers expect the correct product assortment and quantity to be delivered.
 Customers expect products to be available at the right location.
 Right Delivery Time – Customers expect products to be delivered on time
 Right After Sale Support – Customers expect products to be serviced quickly.

II. Reduce Operating Costs

 Decreases Purchasing Cost – Retailers depend on supply chains to quickly deliver
expensive products to avoid holding costly inventories in stores any longer than
necessary. For example, electronics stores require fast delivery of 60” flat-panel
plasma HDTVs to avoid high inventory costs.
 Decreases Production Cost – Manufacturers depend on supply chains to reliably
deliver materials to assembly plants to avoid material shortages that would shut
down production. For example, an unexpected parts shipment delay that causes an
auto assembly plant shutdown can cost $20,000 per minute and millions of dollars
per day in lost wages.
 Decreases Total Supply Chain Cost – Manufacturers and retailers depend on supply
chain managers to design networks that meet customer service goals at the least
 total cost. Efficient supply chains enable a firm to be more competitive in the
marketplace. For example, Dell’s revolutionary computer supply chain approach
involved making each computer based on a specific customer order, then shipping
the computer directly to the customer. As a result, Dell was able to avoid having
large computer inventories sitting in warehouses and retail stores which saved
millions of dollars. Also, Dell avoided carrying computer inventories that could
become technologically obsolete as computer technology changed rapidly.

III. Reduce Operating Costs

 Decreases Purchasing Cost – Retailers depend on supply chains to quickly deliver
expensive products to avoid holding costly inventories in stores any longer than
necessary. For example, electronics stores require fast delivery of 60” flat-panel
plasma HDTVs to avoid high inventory costs.
 Decreases Production Cost – Manufacturers depend on supply chains to reliably
deliver materials to assembly plants to avoid material shortages that would shut
down production. For example, an unexpected parts shipment delay that causes an
auto assembly plant shutdown can cost $20,000 per minute and millions of dollars
per day in lost wages.
 Decreases Total Supply Chain Cost – Manufacturers and retailers depend on supply
chain managers to design networks that meet customer service goals at the least
total cost. Efficient supply chains enable a firm to be more competitive in the
marketplace. For example, Dell’s revolutionary computer supply chain approach
involved making each computer based on a specific customer order, then shipping
the computer directly to the customer. As a result, Dell was able to avoid having
large computer inventories sitting in warehouses and retail stores which saved
millions of dollars. Also, Dell avoided carrying computer inventories that could
become technologically obsolete as computer technology changed rapidly.

Need / Importance of Supply Chain Management