Key operations in supply

chain management
Unit 4
4.1 Supply Chain Network Design

 Meaning
A supply chain network is a pattern of sequential
and interconnected processes carried out at
facility nodes and distribution channels for
providing value addition to customers through the
manufacturing and delivery of products more
efficiently
Supply chain network Design
Designing supply chain involves following
elements
Procurement Cost of Raw materials
Market Structure
Market Segment
Product /conversion costs
Demand plotting or estimation
Logistics cost including inventory costs
Overheads
Cost of sales
4.2 Factors Influencing Network Design

 Best fit procurement model

 Production processes
 Manufacturing facility design
 Finished goods supply chain network
 Sales and marketing decisions
4.3 Channel Designs

 The link between the manufacturer and consumer is the distribution channel
Process of channel Design

 Recognising the need for a channel Design Decision

 Setting and coordinating Distribution objectives
 Specifying the distribution tasks
 Developing possible Alternative Channel structures
 Evaluating the variable affecting channel structure
 Choosing the best channel structure
Approaches

 Financial Approach
 Heuristic Judgmental Approach
 Management Approach
 Transaction Analysis (TCA)
 Management of Channels
Selection of Channel member
 Channel motivation
Channel conflict
Management of channels

 Selection of channel member

 Channel motivation
 Channel conflict
 Sources of conflict
Conflict management Techniques
O
Outcome of
Causes of level of conflict
Conflict
 Cases of conflict conflict
level of conflict --


 Competing Roles  Vertical conflicts

 Clashes over Domains  Horizontal Conflicts
 Differing perceptions of reality  Multi
Channel conflict Model

 Goal incompatibility
 Differing perceptions of Reality
 Clashes over Domains
 Product Range
 Population and territory coverage
 Performance of Channel outcomes
Types of conflicts

 Pre contractual conflicts

 Post contractual conflicts
 Channel level Conflicts
 vertical channel conflicts
 Horizontal channel conflicts
 Multi channel conflicts
Strategies for conflict resolution

 Negotiation
 Persuasive strategies
 Problem solving strategies
 Political strategies
 Personal relationships
Techniques to resolve channel conflicts

 Negotiation
 Initial Bids
 Extent of flexibility
 Time of negotiation
 Communication content
 Negotiation outcome
 Persuasive mechanism
Problem solving strategies

 Political strategies
 Diplomacy
 Mediation
 Arbitration
 Co -optation
Problem solving strategies

Personal Relationships
Error clarification
Distribution Indicators
Meetings
Appreciate each channel member Requirements
Communication
4.4 Distribution Network In supply chains
 Importance of Channels of Distribution
 Reach
 Cost
 Customer Base
 Market Knowledge
 Internet
 Distribution analysis can be performed prior to the distribution activity or
distribution can be evaluated for the measure of performance. Distribution
analysis is the assessment of how and where the products reach the
customers.
Distribution Strategies for effective
management of the channels of distribution

 Identification of the length of the channel / intermediaries

 Identification of the method/Strategy of distribution
 Distribution control
 Distribution management
 Distribution assessment/ standard of performance
Identification of the length of the
channel/intermediaries

Direct Channel
Distributor/ wholesalers as intermediaries
Combination of both
Factors for Analyzing the distribution
network
 Product
 Market Structure
 Cost
 Competitor’s channels
 Marketing Environment
Identification of Method/Strategy of
distribution
 Distribution strategy
 Intensive Distribution
 Selective Distribution
 Exclusive distribution
4.5 Role and Importance of Distributors in
supply chain
 Distributors play a vital role in smoothly connecting manufacturers and customers.
 Significant role of distributors
 Warehousing
 Customer usage pattern
 Service Availability
 After sales product support
 Reduction in freight and inventory
 Continuous supply chain
 Servicing small customers
 Servicing large orders
 Maintaining product quality
 Educating Resellers
 Procurement support
 Market intelligence
 Intermediary Entity
 Financing
4.6 Role of Human resource in supply
chain management
S.NUMBER ROLE
1 Logistics manager
2 Business
Development
manager
3 Research officer
4 Sales officer
5 Material manager
PRIMARY FUNCTION
In charge of coordinating the
transportation ,storage and delivery of goods
Define long term organizational strategic
goals ,identify business
opportunities ,knowledge of current market
conditions
Coordinates with colleagues and check all
ventures are on plan
Offer retail items ,Merchandise and services
to clients
In charge of material stream and of keeping
control and accuracy over all products
inventories ,all
transactions ,planning ,procurement
scheduling ,warehouse .cost receiving and
Role of Human resource in supply chain
management
SERIAL ROLE PRIMARY FUNCTION
NUMBER
6 Warehouse manager Oversees the functions of material
storage ,safety ,internal control and
dispatch
7 Operations manager In charge of day to day activities of
supply chain
8 International logistics manager Responsible for global supply chain
management including shipping and
freight managements
4.7 Linkages between HRM and SCM

 HRM ACTIVITIES WITHIN SUPPLY CHAIN MANAGEMENT

 Development of different strategies
 Recruitment and selection process
 Development and rewarding of workforce
 Change management
 Labour relations
4.8 Issues in workforce management and
relationship management with suppliers customers
and Employees
 Issues in workforce management in SCM
 Talent shortage
 Over expectations by the HR Recruiter
 Too many requirements with different skills sets
 Relationship with contract staffing agencies
 Lack of optimum utilization of resources
 Inaccurate allocation of resource as per required skills
 Lack of visibility on the work
Supplier relationship management

 Issues and challenges in Supplier Relationship management

 Supplier culture
 Communication challenges
 Lack of process transparency
 Delay in deliveries
 Damaged deliveries
 Disloyalty
Customer relationship management

 Issues and challenges of Customer relationship

management
 1)loss of customers due to bad sales
 2)loss of customers to competitors
 3)loss of customers due to delayed shipping
 4)loss of customers due to lack of returns management
 5)Improper handling of customer complaints
 6)lack of financial support
Employee relationship management
 Importance of employee relations
 Issues related to employee relations
 Lack of communication
 Lack of well defined roles
 Rigidity in Environment
 Lack of good managerial leadership
 Lack of motivation
 Conflicts between employees
 Conflict between employee and customers or suppliers
Benefits of CRM
 Cost reduction
 Increase Customer satisfaction
 Ensures that the focus of the organization
 Maximize Customer database
 Increase in opportunities
 Information on competitors
 Information on customers
 Highlights areas of poor performances
 Provides sustainability
 Improves customer services
 Helps in gaining customer loyalty
Employee Relationship management

 Employees are the most important assets

Importance of Employee Relationship
An organization is happy place to work
together. Unhealthy employee relations lead
to conflicts and fights among individuals. A
healthy employee relation reduces the
problem of absenteeism and increase
productivity.
Some Issues related to Employee
Relations
 Lack of Communication
 Lack of well defined roles
 Rigidity in environment
 Lack of Good managerial Leadership
 Lack of Motivation
 Conflicts between Employees
 Conflict between Employee and customers/Suppliers
Importance of quality circles for
employee relationship management
 Quality circles is a group of 6 to 12 employees engaged in
similar work and who voluntarily participate together
regularly to identify improvements in their respective
work
 Circle membership
 Circle size -6 to 12 members
 Voluntary participation
 QC Meetings
 Autonomy
Basic problem solving techniques

 Brain storming
 Pareto diagrams
 Ishikawa Diagram (fishbone diagram)
 Cause and effect analysis
 Data collection
 Data Analysis
 Tables, Bar charts ,Histograms ,Circle ,line graphs ,control charts
Assignment no 4

 Make a PowerPoint presentation on issues related to customers, employers

and Supplier management.
 Write a research report on Quality Circles.