Various flow in supply chain-Supply Chain is the management of flows.

There are Five major flows in any

supply chain : product flow, financial flow, information flow, value flow & risk flow.

The product flow includes the movement of goods from a supplier to a customer, as well as any customer
returns or service needs. The financial flow consists of credit terms, payment schedules, and consignment
and title ownership arrangements. The information flow involves product fact sheet, transmitting orders,
schedules, and updating the status of delivery.

THE PRODUCT FLOW :Product Flow includes movement of goods from supplier to consumer (internal as
well as external), as well as dealing with customer service needs such as input materials or consumables or
services like housekeeping. Product flow also involves returns / rejections (Reverse Flow)

THE FINANCIAL FLOWS:The financial and economic aspect of supply chain management (SCM) shall be
considered from two perspectives. First, from the cost and investment perspective and second aspect
based on from flow of funds. Costs and investments add on as moving forward in the supply chain.

THE INFORMATION FLOW :Supply chain management involves a great deal of diverse information–bills of
materials, product data, descriptions and pricing, inventory levels, customer and order information,
delivery scheduling, supplier and distributor information, delivery status, commercial documents, title of
goods, current cash flow and financial information etc.

THE VALUE FLOW:A supply chain has a series of value creating processes spanning over entire chain in
order to provide added value to the end consumer. At each stage there are physical flows relating to
production, distribution; while at each stage, there is some addition of value to the products or services.

THE FLOW OF RISK :Risks in supply chain are due to various uncertain elements broadly covered under
demand, supply, price, lead time, etc. Supply chain risk is a potential occurrence of an incident or failure to
seize opportunities of supplying the customer in which its outcomes result in financial loss for the whole
supply chain.

Key issues in scm-Three Key Issues in Supply Chain Management

Key Issue #1: Globalization
Globalization presents several critical supply chain management challenges to enterprises and
organizations:
First, to reduce costs across the supply chain, enterprises are moving manufacturing operations to
countries which offer lower labor costs, lower taxes, and/or lower costs of transport for raw materials. For
some companies, outsourcing production involves not only a single country, but several countries for
different parts of their products.
Key Issue #2: Fast-changing Markets
According to EduCBA, consumer behavior is affected by cultural, social, personal, and psychological factors
that are quickly being changed by technology and globalization. Social media is creating new pressures for
consumers to conform while putting pressure on enterprises to utilize these sources of information to
respond to changing preferences in order to stay interesting and relevant.
Key Issue #3: Quality and Compliance
Aside from influencing consumer behavior, social media highlights the importance of having high-quality
products. According to research conducted by eMarketer, reading reviews, comments, and feedback is the
top social media activity that influences online shopping behavior. Furthermore, social media has not only
raised consumers’ expectations of product quality, but has also amplified the damages caused by product
recalls
Supply chain planning-
Supply chain planning (SCP) is the forward-looking process of coordinating assets to optimize the delivery
of goods, services and information from supplier to customer, balancing supply and demand. An SCP suite
sits on top of a transactional system to provide planning, what-if scenario analysis capabilities and real-
time demand commitments, considering constraints. Typical modules include:

 Available/capable to promise
 Sales and operations planning/integrated business planning
 Collaborative planning (including forecasting and replenishment)
 Vendor-managed inventory/direct point of sale
 Event planning (promotion, life cycle)
 Demand planning
 Inventory planning
 Production/factory planning and scheduling

Various view of supply chain

a) Cycle view: processes in a supply chain are divided into a series of cycles, each performed at the
interfaces between two successive supply chain stages
b) Push/pull view: processes in a supply chain are divided into two categories depending on whether they
are executed in response to a customer order (pull) or in anticipation of a customer order (push).
Cycle View of Supply Chains.

 Each cycle occurs at the interface between two successive stages

 Customer order cycle (customer-retailer)
 Replenishment cycle (retailer-distributor)
 Manufacturing cycle (distributor-manufacturer)

Push/Pull View of Supply Chains

  Supply chain processes fall into one of two categories depending on the timing of their execution
relative to customer demand
 Pull: execution is initiated in response to a customer order (reactive)
 Push: execution is initiated in anticipation of customer orders (speculative)
 Push/pull boundary separates push processes from pull processes

Process view of a supply chain management Its process includes managing, storage and movement of raw
material from producer to distributor than the retailer and finally to the end consumers through a flow of
information, physical distribution, and cash. In other words, all parties are involved whether it be directly
or indirectly to carry out the customer's requirements (Cecere, 2014). In the supply chain, customers are
extremely n integral part of the process because without them there would be no process and no business
so the processes of making products and services are designed according to the preferences of the
customers for getting profits with minimum cost possible for making the services and products. In the
supply chain process there are mostly five parties involved that are customers, suppliers, distributors,
manufacturers and retailers sometimes warehouses, transporters and customers themselves are also
included in the process.

Introduction of logistic management- Logistics management is a supply chain management component

that is used to meet customer demands through the planning, control and implementation of the effective
movement and storage of related information, goods and services from origin to destination. Logistics
management helps companies reduce expenses and enhance customer service.
The logistics management process begins with raw material accumulation to the final stage of delivering
goods to the destination.
By adhering to customer needs and industry standards, logistics management facilitates process strategy,
planning and implementation.
Logistics management involves numerous elements, including:

 Selecting appropriate vendors with the ability to provide transportation facilities

 Choosing the most effective routes for transportation

Logistic as a part of the scm-Logistics management is that part of supply chain management that plans,
implements, and controls the efficient, effective forward and reverses flow and storage of goods, services
and related information between the point of origin and the point of consumption in order to meet
customers' requirements.
Logistic cost-Companies need to manage their logistics with a balance between cost and performance,
since the lowest-cost transportation path is not necessarily the fastest. Logistics costs relate to the charges
for various transportation methods, including train travel, trucks, air travel and ocean transport. Additional
logistics costs include fuel, warehousing space, packaging, security, materials handling, tariffs and duties.
Logistic sub system-The tasks carried out within the framework of supply logistics subsystem rely primarily
on providing the required raw materials (including support and maintenance), intermediates, spare parts,
products and other resources with accompanying information. Goods are delivered to the warehouse of
the recipient or directly to the places of their use.

The decisions in terms of supply can not be taken without taking into account conditions on
the market that are shaped primarily by the following factors:

 Characteristics of the purchased goods - mainly concerning requirements in the fields

of transport (means of transport, its accessories), storage (surface area, location, conditions of
storage), packaging (size, material) and labelling
 Providers activity - including especially the quantity, degree of compliance with the requirements,
opportunity to ensure a long term cooperation, focus on closer cooperation with the customer and
mutual improving actions

Inbound or outbound logistic-Inbound and Outbound Logistics term is comes under the transportation of
goods. Inbound Logistics is the transportation storing and delivering of goods which are coming into the
location of the business whereas Outbound Logistics is the transportation of goods which is going out of
the business location. It is essential for the Logistics managers to ensure the efficiency of networks
distributing the goods and reduce the transportation and storage costs associated with the company.

Most organizations rely on different supply chain and logistics partners for carrying out inbound and
outbound logistics. The logistics between suppliers and the company is the concern for inbound logistics
whereas it will be between companies and customers in the case of outbound logistics. It is also possible
for the companies to work with third parties for logistics management.

In the case of both inbound and logistics, the agreement made between the suppliers and customers will
be pointing out which party will have to bear the cost of damage at various points of the supply chain.
Most of the Inbound logistics include the raw materials and tools which are ordered from the suppliers. In
the case of outbound logistics, it will be the end goods which will be transferred to the customers.
Bullwhip effect in logistic-The bullwhip effect is a supply chain phenomenon describing how small
fluctuations in demand at the retail level can cause progressively larger fluctuations in demand at the
wholesale, distributor, manufacturer and raw material supplier levels. The effect is named after the physics
involved in cracking a whip. When the person holding the whip snaps their wrist, the relatively small
movement causes the whip's wave patterns to increasingly amplify in a chain reaction.

In supply chain management, customers, suppliers, manufacturers and salespeople all have only partial
understanding of demand and direct control over only part of the supply chain, but each influences the
entire chain with their forecasting inaccuracies (ordering too much or too little).
Warehousing and distribution management-

Warehousing-A warehouse is a large, spacious and secured building intended for commerce and
government use. It functions as a storage place for large quantities of goods. Warehousing is not simply
about storage though. It also covers the administration and manual labor required in storage such as
delivery, documentation, examination and certification.

There are three types of warehouses: public, owned by third party logistics (3PL) and company-owned. The
government through its arm uses public warehouses to store shipments and contrabands they confiscated
temporarily.

Distribution-In the business language, distribution refers to the delivery of finished goods to buying centers
such as shopping centres, markets and retailer stores. Some manufacturers deliver their goods directly to
their accredited retailers. This is advantageous if the retailers’ business establishments are just nearby the
manufacturers’ places.Direct delivery of goods to retailers can save you from warehousing costs. However,
if you are far from distribution centers, you have to deal with trucking costs and inventory frequently.Thus,
it is safe to say that warehousing and distribution go hand-in-hand in providing a more cost-effective way
of delivering goods. There are even businesses that literally combined these two business operations.

WHAT ARE CENTRALIZED & DECENTRALIZED PURCHASES?

Centralized Purchase refers to purchasing of all the requirements under the central point of the organization.
Like wise, Decentralized Purchase refers to purchasing of requirements of each production centre in an
organization.

Important points to be considered

There is no hard and fast rule to follow either centralized purchase system or decentralized purchase system.
But, the management should consider the following points before deciding either centralized purchase or
decentralized purchase for their purchase department.
1. The distance between the production centre and the storage.

2. The nature of materials used i.e. bulky, heavy, fragile etc.

3. The cost of transport.

4. Policy of the company with regard to the materials purchase.

Function of purchasing department and purchase policy-Most major companies and even some
government organizations have a purchasing or procurement department as part of everyday operations.
These departments provide a service that is the backbone of many manufacturing, retail, military and
other industrial organizations. Many individuals, even some who work for these companies, are unaware
of what the purchasing department does, why it exists or what purposes it serves. To understand better
what the role of the purchasing department is, consider some functions it performs.

Procuring Raw Materials and Other Resources

One role of the purchasing department is to procure all necessary materials needed for production or daily
operation of the company or government organization. For a manufacturing company, this might include
raw materials such as iron, steel, aluminum or plastics, but it also might include tools, machinery, delivery
trucks or even the office supplies needed for the secretaries and sales team.
Achieving the Best Possible Price
A purchasing department also is charged with continuously evaluating whether it is receiving these
materials at the best possible price in order to maximize profitability. This can be challenging for a small
business that may purchase in lesser quantities than a larger vendor and which thus may not receive the
same type of bulk discounts
Purchase policy-The purchasing policy involves the procurement of goods and services that meet
community needs at the lowest possible cost consistent with the quality needed for the proper operation
of the various departments. In general, purchases should be handled in a manner that creates the greatest
ultimate value per dollar expended.

Budget officers are responsible to insure that all purchases incurred by their department are made in
accordance with the University’s purchasing policies and practices. Therefore, all budget officers and other
departmental staff involved in purchasing should be familiar with the guidelines as set forth in this policy.

Use of mathematical model for vendor rating / evaluation-

Vendor evaluation In this section a VE model, based on the Linear Weighting Method (LWM), is presented.
Starting from a hierarchical structuring of all the evaluation criteria, the model provides for a procedure
which aims to contextualize the general structure to the specific cases. This is obtained through a
calculation method based on the AHP logic which assigns opportune weights to the criteria, basing on
experts judgment.

Vendor rating-Vendor rating is a tool used by the organizations to assess the performance of their vendors
to ensure efficient and effective upstream supply chain. The paper presents the views expressed by the
experts in literature and studies vendor-rating methodologies used by industries requiring supplies of
mechanical engineering components. Weightages recognized during study would help organizations to
understand the explicit and implied requirements of their customers. Apparently, basis of vendor rating is
quality and delivery reliability.

Single vendor concept-A Single vendor marketplace is basically a website where there is a single
seller/vendor sells its products to multiple customers. Thus it's a kind of one to many relationships
between the vendor and customer. The main disadvantage of a single vendor marketplace is that it does
not provide a large range of products to its customers. Due to this, there is less number of traffic on such
websites in comparison with the Multivendor Marketplace.
Management of stores- It is defined as that aspect of material control concerned with the physical storage
of goods. It is concerned with ensuring that all the activities involved in storekeeping are carried out
efficiently & economically.
Principle facets of store management:-
Managing the stores.
Store layout, design & visual merchandising.
Customer service.
Retail selling.
Factors affecting location of stores.
Proximity with user departments. Security considerations. Types of materials. Ease of transport.
Good material control. Scope for future expansion. Avoidance of boredom
Store Layout
Defined : Physical arrangement of storage facilities for efficient receipt, storage and issue of materials is
called layout of stores. Factors affecting store layout:  Type of stock: Deciding on nature and size of
materials to be stored.  Volume of stock: Sufficient passages for uninterrupted handling.  Availability of
space: Inadequate space leads to congestion. Too much space increases cost.  Physical factors: Lighting,
ventilation, controlled noise.
Accounting for material-Materials management is a cluster of processes used to plan for and control
the flow of inventory into, through, and out of a business. These processes are concerned with
identifying the need for inventory, procuring and storing it, scheduling the inventory into production,
and warehousing and distributing the finished product. An essential materials management function
is determining the amount of finished goods to be deployed at each distribution point for sale to
customers. Ideally, materials management strives to have inventory available when it is needed, while
minimizing the cost of holding inventory.