Superior College London

STRATEGIC SUPLY CHAIN MANAGEMENT AND LOGISTIC

Submitted To: Mr. Bangash Khan

Submitted By: TAUQEER ISMAIL

2nd semester

QUESTION 16: Define the acronyms and explain?

MPS
Master production schedule Bill of that material used in production. It tells that how amount is charged to production.

MRP
Material requirement planning This planning is made to visit the supplier to see his raw material quality.

MRP ii
Manufacturing resource planning This tells about last time visit to supplier (time and date).

JIT
Just in time In this organization demand raw material and make production when consumer demand in.
DRP

Distribution requirement planning This is a paper planning which tells that how we will work.

ECR
Efficient consumer response This planning is customer-oriented & in-corporate in supply chain while making production and in it all parties involved work together.

ERP
Enterprise resource planning It is a planning approach which tells about the strength of all departments and their functions in organization.

APS

Advance planning and scheduling This tells us about the capacity of new production and raw material use for that production.

SCM
Supply chain management SCM is a management approach that coordinates business processes across companies to better serve and consumer. (Managerial a/c Ray H. Garrison & Eric W. Noreen)

MGT
Management It processes which deals all the level of production and supply chain managements

QUESTION 17 What are the three main objectives of SCM explain and justify with relevant examples?

1-Cost reduction 2-Maintain quality and performance 3-Adhere to agreed delivery times (timely fashion)
Cost reduction Cost reduction always helps in your business and increase the profit. Example: Mr Ali have god relation with supplier and supplier give him discount, but on the other hand suppler give the raw material to Mr Martian at higher rate so automatically Mr Ali reduce the price and earn high profit Maintain quality and performance In supply chain management the organizations try to make a quality oriented goods for consumer because there are many things for a common need of any consumer so consumer select those which are best in quality. So quality is important thing for profit. Example: Nana setup new business for coffee for working women who are used sugar free coffee. So if she gives good quality for them than she have a competitive advantage in market. Adhere to agreed delivery times (timely fashion) In SCM organizations main objective is to produce quality oriented product on time. If they are not able to do this work than they will lose market share which leads them to loss. Seeking good Time is great money so if we reduce the cost then we earn profit. Example: Lorra give the order to TCS courier but the company didnt make delivery on time so Lorra didnt make his production. Deliver should be on time.

QUESTION18 Global logistic has its large on SCM explain and give daily life example for its illustration? The management of the movement, storage, and processing of materials and information in the supply chain. Logistics encompasses the acquisition of raw materials and components, manufacturing or processing, and the distribution of finished products to the end user. Each organization focuses on a different aspect of logistics, depending on its area of interest. For example, one might apply logistics to find a way of linking physical distribution management with earlier events in the supply chain, another to plan its acquisition and storage, while a third might use logistics as a support operation. Example:

QUESTION 19 Explain various types of inventory with live life examples?

1-Stock in the pipeline:

Those products which are not introduce to consumer in market. Example: Organization made a new type of mobile phone and complete it production complete but this stock is kept in market.

2-speculative stock:
Stock with high risk relative to any potential positive returns. Speculative stocks are often purchased by those who believe the stock will appreciate in value without performing a detailed analysis.
Example:

Penny stocks are an example of a speculative stock.

3- Cycle stock:
Those stock in which involves both inbound and out bound logistics. 4- Safety and buffer stock: These are those stocks which company kept in warehouse for uncertainty demand of consumers. Buffer stock does not finish.

5- Promotional stock:
Those stock which offer for increasing market share. In it mostly company make a special offer like save 40 on purchasing family offer. Example; Stock of out fashion laptops offer in low price as compare to its actual price.

6-Dead Stock (Obsolete)

That stock which are out of fashion. Not able to sold to market. Example

Microsoft Company has some Pentium 1 computers which are not able to sold in market. Such type of stock called dead stock.

7-Shrinkage Stock (Lost or Stolen):

Those stocks which are stolen are burn in fire. Which not sold to consumers? Example: In oil and petroleum company that quantity of petroleum which waste in evaporation.

QUESTION 9 Why we are holding the inventory? Explain with life example? Protection against supply and demand uncertainties by holding buffer and safety stock.
The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets those are ready or will be ready for sale. Inventory represents one of the most important assets that most businesses possess, because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's shareholders/owners.
Example Company have 500 units in still work in processes but 50% portion is completed. In organization only upper level management know about it. In upper level its called inventory but in low level in its called stock.

1- To speculate in order to make Profit at favourable market conditions.

Organization kept it for some favourable condition which gives him much benefit. To achieve economy of scale through: Quantity purchase discount. Reduce of volume transport per unit price. Reduction of production runs and cycle for single product.

2- To link supply with demand such in seasonal situations

Example Ice cream industry considered that summer season is there best in term of sale and profit.

QUESTION 4 Explain the logistic flow in logistic form raw material till consumption of your product/services by end user?

Logistics is the management of the flow of materials and services between the point of origin and the point of use in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and often security. Logistics is a channel of the supply chain which adds the value of time and place utility. In business, logistics may have either internal focus (inbound logistics), or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption (see supply chain management). The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation and the organizing and planning of these activities. Logisticians combine a professional knowledge of each of these functions to coordinate resources in an organization. There are two fundamentally different forms of logistics: one optimizes a steady flow of material through a network of transport links and storage nodes; the other coordinates a sequence of resources to carry out some project.
Supplier of raw material provide the initial material for making the products etc. inbound transport is coming in our company either in shape of raw material. Raw material, customer, and finished goods they all are customized according the need of the customer. In this phase we can improve our quality of the product, change the packaging of the product. We can make more comfortable it according to the customer need. Outbound transport it is going to your ware house it is outsourcing. In production our goods are in final shape and we delivered it in to ware house and after that we will distribute it in market. We have different distribution channel. In logistic flow CRM and after sale service is very important for any logistic firm or company. At the end your product reached to your end user. End user is your receiver.

QUESTION10 Define and explain the following with the help of Re-Order approach. Lead time:
This is time period between any order place in organization for production and units after production to send those people who make order.

Consumption at faster rate:

It means that strategy which company made to sale out inventory at very fast rate.

Level of inventory:
This show that how much company should used the invert for his achieving goals.

Safety stock:
It means that stock which company kept for uncertainty Oder which company not able to produced units at that time.

Stock out:
When customer demand increase and we cannot fulfil the customer need. This have bad impact on company repo, image etc.

QUESTION 11 Explain MRP with the help of diagram? Give live examples?

Master scheduling:
In this budget the company assume that how much we should need raw material for production. Example We want to make a shirt than we try to know the cost of clothes that used in it. The labour cost and other utility charges.

Bill of material:
This bill show that how much we need material for units productions. Example We assume that raw material for shirt is 25. It is bill of material.

Lead time:
This is time period between any order place in organization for production and units after production to send those people who make order. Example: First organization asked for raw material that makes production. Those time use in it is led time.

Other order information:

Means they working in right way to achieve good production. Example

H2O is the formula of water. When we take H3O it is not in proper way. So information must
be in proper way.

Inventory method:
With the help of following methods organization control their inventory for his benefit. stock in pipeline, speculative stock, cycle stock, safety

 Buffer stock promotional stock etc. Example One organization sells the inventory on time but on the other hand other organization sells the inventory after sometimes so every business have own idea about the inventory.

Time table for orders:

In it company make a time table for production and shipment it.. Example Some time company offer some special offer when they stand at public place but in evening they didnt offer such thing.

Change to order:

In it organization postponed the order due to any certainty condition. Example Once organization received a order from consumer but after some time it received that consumer cancel the order. That is called cancel of order.

Plans upgrade/update:
It means that company add a new product in production for attracts their customer. Example London transport they upgrade the plan in every Sunday and they inform the people before 3days through sign boards and advertisement.

Performance and exception reports:

Means that how a origination is performing their task. Example DHL received the award. They provide good performance and services to customer. They have all record in white and black form.

Inventory transaction:
MRP control the inventory record using an Item master file, A transaction file Allocation file.

Inventory must be in circulation.

QUESTION 12 Define and explain saw tooth diagram? Give the example.

In this we no longer have a re order point based on quantity. Instead we have re order date. Reordering is done at some regular interval for example once a month, at the end of month, at the end of this week, once a day at the end of the day. Inventory purchased and delivered include in saw tooth diagram. You can check how many inventory consumed in week 1, week 2 and week 3 etc. saw tooth diagram tell us about the inventory stock.
Example

Company X check inventory every week. When they check they have no inventory in stock then they order for more inventories. They check the inventory weekly or monthly. Every companys check the stock monthly weekly or day after tomorrow.

QUESTION 2 Define SCM and logistic elaborate your answer with live life example?

Logistics - ...the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements." Note that this definition includes inbound, outbound, internal, and external movements, and return of materials for environmental purposes. -(Reference: Council of Logistics Management, http://www.clm1.org/mission.html, 12 Feb 98) Logistics - ...the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements." Note that this definition includes inbound, outbound, internal, and external movements, and return of materials for environmental purposes. -(Reference: Council of Logistics Management, http://www.clm1.org/mission.html, 12 Feb 98) A supply chain is the stream of processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. All organizations have supply chains of varying degrees, depending upon the size of the organization and the type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer.
Supply chain management spans all movement and storage of raw material, work in process inventory and finished goods from point of origin to point of consumption.

Example Tesco is one of the largest retailers in UK. They provide the different product /services and are involved in supplying and manufacturing. These processes follow Supply Chain Management and Logistic rules. Example Live examples of climatic conditions affecting food and beverage industry (in any parts of the world)

I am doing a project on food and beverage industry. Live examples of climatic conditions affecting food and beverage industry will be contributing to the study.

http://en.wikipedia.org/wiki/Supply_chain_management http://www.logisticsworld.com/logistics.htm http://rockfordconsulting.com/supply-chain-management.htm