INSTITUTE OF INNOVATION IN TECHNOLOGY AND MANAGEMENT

NEW DELHI - 110058 BATCH (2009 -2012)

SUMMER PROJECT REPORT ON A COMPARATIVE STUDY BETWEEN SUPPLY CHAIN MANAGEMENT IN INDUSTRIAL MARKET AND CONSUMER MARKET

SUB MIT T ED I N P ART I AL FU LFI LLME NT OF T HE RE QUI R EME NT O F B AC HE LO R O F B USI NE SS ADMI NI ST R AT I O N ( C OMP UT E R AIDE D M AN AG EME NT ) GU R U G OB IN D SI N GH I N D R AP R AST H A U NIV ER SIT Y

PAPER CODE (BBA (CAM) 213)

SUBMITTED TO: MRS. SARMISTHA SARMA

SUBMITTED BY: AKSHIT ARORA ENROLLMENT NO: 04190301909 COURSE BBA (CAM)
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ACKNOWLEDGEMENT

M y gratitude is due to m y revered teacher, Mrs. Sarmistha sarma (marketing facult y), INSTITUTE OF INNOVATION IN TECHNOLOGY AND

MANAGEMENT NEW DELHI. Her valuable suggestions and deep involvement in the project motivated me to complete the study with great zeal. I am also thankful to the institute for providing us with a resourceful library through which I could create a better understanding of the subject and conduct an in depth study of the topic.

PROJECT GUIDE: MRS SARMISTHA SARMA

AKSHIT ARORA Roll No. 04190301909

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INDEX

Serial No. 1. 2. 3. 4. 5. 6. 7. 8.

Title
Introduction What is supply chain management? Objective of Study Research Methodology Analysis of the Study Conclusion Bibliography Annexure

Page No. 4 9 25 26 30 39 40 41

Signature:

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INTRODUCTION

What is market?
A market is any one of a variet y of different systems, institutions, procedures , social relations and infrastructures whereby businesses sell their goods, services and labor to people in exchange for money. Goods and services are sold using a legal tender such as fiat money. This activit y forms part of the econom y. It is an arrangement that allows buyers and sellers to exchange items. Competition is essential in markets, and separates market from trade. Two persons may trad e, but it takes at least three persons to have a market, so that there is competition on at least one of its two sides. Markets vary in size, range, geographic scale, location, t ypes and variet y of human communities, as well as the t ypes of goods and services traded. Some examples include local farmers' markets held in town squares or parking lots, shopping centers and shopping malls , international currency and commodit y markets, legall y created markets such as for pollution permits, and illegal markets such as the market for illicit drugs. In mainstream economics , the concept of a market is any structure that allows buyers and sellers to exchange any t ype of goods, services and information . The exchange of goods or services for money is a transaction. Market participants consist of all the buyers and sellers of a good who influence its price. This influence is a major study of economics and has given rise to seve ral theories and models concerning the basic market forces of suppl y and demand . There are two roles in markets, buyers and sellers. The market facilitates trade and enables the distribution and allocation of resources in a societ y. Markets allow any tradable item to be evaluated and priced. A market emerges more or less spontaneousl y or is constructed deliberatel y by human interaction in order to enable the exchange of rights (cf. ownership) of services and goods.

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What is industrial market?

Industrial market segmentation is a scheme for categorizing industrial and business customers to guide strategic and tactical decision -making, especiall y in sales and marketing. While government agencies and industry associations use standardized segmentation schemes for statistical surveys, most businesses create their own segmentation scheme to meet their particular needs. While similar to consumer market segmentation, segmenting indus trial markets is different and more challenging because of greater complexit y in buying processes, buying criteria, and the complexit y of industrial products and services themselves. Further complications include role of financing, contracting, and complem entary products/services. The goal for every industrial market segmentation scheme is to identify the most significant differences among current and potential customers that will influence their purchase decisions or buying behavior, while keeping the sche me as simple as possible (Occam's Razor ). This will allow the industrial marketer to differentiate their prices, programs, or solutions for maximum competitive advantage. An industrial market involves one business dealing goods or services to another business instead of a consumer base. Also known as the business -to-business market, this market encompasses three distinct variations, including businesses selling goods, businesses selling raw materials and businesses selling services. Each of these three happen in a variet y of individual business . There are many advantages of this t ype of market over the traditional consumer market. The industrial market focuses solel y on the goods and services provided for producing a separate end product. This is an organizational market with its own advertising, distribution and sales. From automobiles to food, clothes and more, consumer industrial products would not be available without the industrial market first being utilized. Many companies within an industrial market specialize in selling goods to other industries in order to help them produce an end product. These c ompanies normall y do not offer these products to the general public, because there would be little use for them to an individual consumer. A company producing an industrial loom for creating garmen ts would be one example of a company utilizing this market. Computer programs are another example, especiall y networks or specialized programs that aid in the production of goods and services.

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The industrial market equall y benefits from groups that sell raw materials to other companies that use them to create end products. The selling companies tend to have some products that would be useful to individual consumers, but they generall y sell go ods in bulk numbers that are not practical for consumers. Some of these companies focus a small portion of the business on consumer goods but generall y do onl y business -to-business deals. An excellent example would be selling raw wool to the same company that bought industrial looms, with that company using the wool and looms to produce sweaters, socks and scarf. The third t ype of in dustrial market deals solel y with selling services to other businesses. These groups do not provide any physical goods but suppl y manpower and expertise in particular areas. This can be a physical act, such as cleaning up hazardous materials that are produ ced by industrial machinery. It also can be more data-based, such as providing business accounting for companies.

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What is consumer market?

The consumer market is composed of individuals who buy a specific good or service. Rarel y does one product interest the entire population. This statement applies even to staples, such as sugar, flour, and salt. A small percentage of households do not eat these products, so even if a company did target the entire population, not everyone would be a potential con sumer. The same statistical truth applies to cultural products. However, because of the extremel y fragmented nature of the cultural sector, some distinctions are in order. For example, looking at this sector as a whole, it can be said that nearl y 100% of the population consumes one type of cultural product or another. Indeed, in its broadest sense, the cultural sector encompasses everything from the performing arts (high and popular), to heritage, compact disks, movies, book and magazine publishing, and ra dio and television, with each of these disciplines appropriating a more or less important share of global demand. In Canada, for example, statistics1 show that 37.0% of families attend a performing arts event at least once a year: movies 62.2%, museums a nd art galleries 32.9%. In the United States the figures for cultural consumption are: classical music 15.6%, opera 4.7%, musicals 24.5%, plays 15.8%, ballet 5.8%, art museums 34.5%, and historical parks 46.9%.2 In Australia3 the figures are: musical theat re 19.3%, classical music 7.7%, festivals 21.9%, concerts 23%, and museums 27.8%. Of course, within each of these sectors, consumers cluster according to specific poles of interest. This leads to sharper market segmentation. The consumer makes a discrimina ting choice among various cultural products to acquire or consume the t ype of product desired. The distribution of consumers according to various market segments differs in both time and space. Markets undergo and reflect the influence of opinion leaders, trends, tastes, and societal characteristics. Markets also vary from country to country according to different social structures. Over the past 40 years, various surveys focusing on the sociodemographic profile of consumers of cultural products have been carried out in nearl y every European country (both East and West), as well as in Canada, the United States, Australia, and Japan.4 It is fascinating to note that, regardless of whether the surveys were conducted in the 1970s, 1980s, or 1990s, they all obt ained the same attendance rates and the same sociodemographic profiles. Differences in the measuring tools used can sometimes make it difficult to compare countries (different nomenclature for sectors, questions formulated differentl y, etc.); nonetheless, these studies have consistentl y and systematically revealed strong polarization of audiences between high art and popular culture across all
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countries over the past four decades. They show, for example, that cultural products catering to high art attract e ducated consumers, whereas those catering to popular culture draw on all segments of the population, in accordance with the relative weight of each. The proportion of universit y graduates making up Canadian audiences, for example, ranges between 50% and 70 % for high art (s ymphony orchestras, arts festivals, fine arts museums, etc.), compared with 10% to 25% for popular culture (pop music, historical parks, etc.). By way of comparison, the overall percentage of universit y graduates in Canada is 25%. Similar results have been found in other countries, most notabl y in France5 but also in Russia, where universit y graduates make up 50% of performing arts audiences but onl y 7% of the general population. Other sociodemographic variables are also linked to attendan ce, including average income (higher among consumers of high art than consumers of popular culture) and t ype of occupation (white -collar workers account for a larger proportion of high art consumers while blue -collar workers are drawn to popular culture in greater numbers). It should be pointed out once again that this profile is based on averages. Less -educated individuals with lower income may be great consumers of culture, as is the case for students and those specialized or working in the cultural milie u. Indeed, it is well known that, as a rule many people active in the arts are highl y educated yet so ill paid that they struggle to stay above the poverty line. On the other hand, there are people with both very high salaries and very high educational lev els who are not interested in the arts and gladl y keep their distance. Four factors are known to influence an individuals penchant for complex cultural products: famil y values that encourage or discourage high art; the educational milieu and the value it places on high art; the fact of having attended performances or visited museums as a child; and amateur art practice. A more detailed analysis of the t ypical cultural consumers traits reveals other nuances based on the different disciplines (see Capsule 3.1 for a discussion of the development of tastes among arts consumers). For example, dance audiences are relativel y younger and even more female in composition than those of the other performing arts; similarl y, more women than men read novels, although a larger proportion of men read dail y newspapers. In the film sector, there are two very different segments of avid cinema -goers; one of these segments is dominated by a young clientele (15 -25 years), while the other is made up of educated people. The majo rit y of consumers in the film sector belong to one or the other of these two segments.

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What is supply chain management?

A suppl y chain, as opposed to supply chain management, is a set of organizations directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to a customer. Managing a suppl y chain is 's uppl y chain management' (Mentzer et al., 2001). [ 5 ] Suppl y chain management software includes tools or modules used to execute suppl y chain transactions, manage supplier relationships and control associated business processes. Suppl y chain event management (abbreviated as SCEM) is a consideration of all possible events and factors that can disrupt a suppl y chain. With SCEM possible scenarios can be created and solutions devised.

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Problems addressed by Supply Chain Management

Suppl y chain management must address the following problems:

Distribution Network Configuration: number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers. Distribution Strategy : questions of operating control (centralized, decentralized or shared); delivery sc heme, e.g., direct shipment, pool point shipping, cross docking, DSD (direct store delivery), closed loop shipping; mode of transportation, e.g., motor carrier, including truckload, LTL, parcel; railroad; intermodal transport, including TOFC (trailer on flatcar) and COFC (co ntainer on flatcar); ocean freight; airfreight; replenishment strategy (e.g., pull, push or hybrid); and transportation control (e.g., owner -operated, private carrier , common carrier , contract carrier, or 3PL). Trade-Offs in Logistical Activities : The above activities must be well coordinated in order to achieve the lowest total logistics cost. Trade -offs may increase the total cost if onl y one of the activities is optimized. For example, full truckload (FTL) rates are more economical on a cost per pallet basis than less than truckload (LTL) shipments. If, however, a full truckload of a product is ordered to reduce transportation costs, there will be an increase in inventory holding costs which may increase total logistics costs. It is therefore imperative to take a systems approach when planning logistical activities. This trade-offs are key to developing the most efficient and effective Logistics and SCM strategy. Information: Integration of processes through the suppl y chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc. Inventory Management: Quantit y and location of inventory, including raw materials, work -in-progress (WIP) and finished goods. Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across entities within the suppl y chain.

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Supply chain execution means managing and coordinating the movement of materials, information and funds across the suppl y chain. The flow is bi directional.

Activities/functions
Suppl y chain management is a cross-function approach including managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end -consumer. As organizations strive to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingl y being outsourced to other entities that can perform the activities better or more cost effectivel y. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing management control of dail y logistics operations. Less control and more suppl y chain partners led to the creation of suppl y chain management concepts. The purpose of suppl y chain management is to improve trust and collaboration among suppl y chain partners, thus improving inventory visibilit y and the velocit y of inventory movement. Several models have been pr oposed for understanding the activities required to manage material movements across organizational and functional boundaries. SCOR is a suppl y chain management model promoted by the Suppl y Chain Council. Another model is the SCM Model proposed by the Global Suppl y Chain Forum (GSCF). Suppl y chain activities can be grouped into strategic, tactical, and operational levels. The CSCMP has adopted The American Productivit y & Qualit y Center (APQC) Proce ss Classification Framework a high-level, industryneutral enterprise process model that allows organizations to see their business processes from a cross -industry viewpoint.

Strategic Level

Strategic network optimization, including the number, location, a nd size of warehousing, distribution centers , and facilities. Strategic partnerships with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-part y logistics. Product life cycle management, so that new and existing products can be optimall y integrated into the suppl y chain and capacit y management activities. Information technology chain operations. Where-to-make and make-buy decisions. Aligning overall organizational strategy with suppl y strategy.
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It is for long term and needs resource commitment.

Tactical Level

Sourcing contracts and other purchasing decisions. Production decisions, including contracting, scheduling, and planning process definition. Inventory decisions, including quantity, locatio n, and qualit y of inventory. Transportation strategy, including frequency, routes, and contracting. Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise. Milestone payments. Focus on customer demand.

Operational Level

Dail y production and distribution planning, including all nodes in the suppl y chain. Production scheduling for each manufacturing facilit y in the suppl y chain (minute by minute). Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers. Sourcing planning, includin g current inventory and forecast demand, in collaboration with all suppliers. Inbound operations, including transportation from suppliers and receiving inventory. Production operations, including the consumption of materials and flow of finished goods. Outbound operations, including all fulfillment activities, warehousing and transportation to customers. Order promising, accounting for all constraints in the suppl y chain, including all suppliers, manufacturing facilities, distribution centers, and other customers. From production level to suppl y level accounting all transit damage cases & arrange to settlement at customer level by maintaining company loss through insurance company.

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Importance of Supply Chain Management

Organizations increasingl y find that they must rel y on effective suppl y chains, or networks, to compete in the global market and networked econom y. In Peter Drucker's (1998) new management paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies. During the past decades, globalization, outsourcing and information technology have enabled many organizations, such as Dell and Hewlett Packard, to successfull y operate solid collab orative suppl y networks in which each specialized business partner focuses on onl y a few key strategic activities (Scott, 1993). This inter -organizational suppl y network can be acknowledged as a new form of organization. However, with the complicated inter actions among the players, the network structure fits neither "market" nor "hierarchy" categories (Powell, 1990). It is not clear what kind of performance impacts different suppl y network structures could have on firms, and little is known about the coordination conditions and trade -offs that may exist among the players. From a systems perspective, a complex network structure can be decomposed into individual component firms (Zhang and Dilts, 2004). Traditionall y, companies in a suppl y network concentrate o n the inputs and outputs of the processes, with little concern for the internal management working of other individual players. Therefore, the choice of an internal management control structure is known to impact local firm performance (Mintzberg, 1979). In the 21st century, changes in the business environment have contributed to the development of supply chain networks. First, as an outcome of globalization and the proliferation of multinational companies, joint ventures, strategic alliances and business p artnerships, significant success factors were identified, complementing the earlier " Just-In-Time", "Lean Manufacturing" and "Agile Manufacturing" practices. Second, technological changes, particularl y the dramatic fall in information communication costs, which are a significant component of transaction costs, have led to changes in coordination among the members of the supply chain network (Coase, 1998). Many researchers have recognized these kinds of suppl y network structures as a new organization form, using terms such as " Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global P roduction Network", and "Next Generation Manufacturing S ystem". [ 9 ] In general, such a structure can be defined as "a group of semi -independent organizations, each with their capabilities, which collaborate in ever -changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration" (Akkermans, 2001).
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The securit y management system for suppl y chains is described in ISO/IEC 28000 and ISO/ IEC 28001 and related standards published jointl y by ISO and IEC.

Historical developments in Supply Chain Management

Six major movements can be observed in the evolution of suppl y chain management studies: Creation, Integration, and Globalization (Lavassani et al., 2008 a ), Specialization Phases One and Two, and SCM 2.0. 1. Creation Era The term suppl y chain management was first coined by a U.S. industry consultant in the earl y 1980s. However, the con cept of a suppl y chain in management was of great importance long before, in the earl y 20th century, especiall y with the creation of the assembl y line. The characteristics of this era of suppl y chain management include the need for large -scale changes, re engineering, downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management. 2. Integration Era This era of supply chain management studies was highlighted with the development of Electronic Data Interchange ( EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of internet -based collaborative systems. This era of sup pl y chain evolution is characterized by both increasing value -adding and cost reductions through integration. 3. Globalization Era The third movement of suppl y chain management development, the globalization era, can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents. Although the use of global sources in the suppl y chain of organizations can be traced back several decades (e.g., in the oil industry), it was not until the late 1980s that a considerable number of organizations started to integrate global sources into their core business. This era is characterized by the globalization of suppl y chain management in organizations with the goal o f increasing their competitive advantage, value -adding, and reducing costs through global sourcing. 4. Specialization Distribution Era Phase One: Outsourced Manufacturing and

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In the 1990s industries began to focus on core competencies and adopted a specialization model. Companies abandoned vertical integration, sold off non core operations, and outsourced those functions to other companies. This changed management requirements by extending the suppl y chain well beyond company walls and distributing manage ment across specialized suppl y chain partnerships. This transition also re -focused the fundamental perspectives of each respective organization. OEMs became brand owners that needed deep visibilit y into their suppl y base. They had to control the entire sup pl y chain from above instead of from within. Contract manufacturers had to manage bills of material with different part numbering schemes from multiple OEMs and support customer requests for work -in-process visibilit y and vendor -managed inventory (VMI). The specialization model creates manufacturing and distribution networks composed of multiple, individual suppl y chains specific to products, suppliers, and customers, who work together to design, manufacture, distribute, market, sell, and service a product . The set of partners may change according to a given market, region, or channel, resulting in a proliferation of trading partner environments, each with its own unique characteristics and demands. 5. Specialization Era Phase Two: Supply Chain Management a s a Service Specialization within the suppl y chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non -asset-based carriers and has matured beyond transportation and logistics into aspects of suppl y planning, collaboration, execution and performance management. At any given moment, market forces could demand changes from suppliers, logistics providers, locations and customers, and from any number of these specialized participants as components of suppl y chain ne tworks. This variabilit y has significant effects on the suppl y chain infrastructure, from the foundation layers of establishing and managing the electronic communication between the trading partners to more complex requirements including the configuration of the processes and work flows that are essential to the management of the network itself. Suppl y chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allo ws them to focus on their core competencies and assemble networks of specific, best -in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency. The abilit y to quickl y obtain and deploy this doma in-specific suppl y chain expertise without developing and maintaining an entirel y unique and complex competency in
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house is the leading reason why suppl y chain specialization is gaining popularit y. Outsourced technology hosting for supply chain solutions d ebuted in the late 1990s and has taken root primaril y in transportation and collaboration categories. This has progressed from the Application Service Provider (ASP) model from approximatel y 1998 through 2003 to the On -Demand model from approximatel y 2003-2006 to the Software as a Service (SaaS) model currentl y in focus today. 6. Supply Chain Management 2.0 (SCM 2.0) Building on globalization and specialization, the term SCM 2.0 has been coined to describe both the changes within the suppl y chain itself as well as the evolution of the processes, methods and tools that manage it in this new "era". Web 2.0 is defined as a trend in the use of the World Wide Web that is meant to increase creativit y, information sharing, and collaboration among users. At its core, the common attribute that Web 2.0 brings is to help navigate the vast amount of information available on the Web in order to find what is being sought. It is the notion of a usable pathway. SCM 2.0 follows this notion into suppl y chain operations. It is the pathway to SCM results, a combination of the processes, methodologies, tools and delivery options to guide companies to their results quickl y as the complexit y and speed of the suppl y chain increase due to the effects of global competition, rapid price fluctuations, surging oil prices, short product life cycles, expanded specialization, near -/far- and off-shoring, and talent scarcit y. SCM 2.0 leverages proven solutions designed to rapidl y deliver results with the abilit y to quickl y manage future change for continuous flexibilit y, value and success. This is delivered through competency networks composed of best -ofbreed suppl y chain domain expertise to understand which elements, both operationall y and organizationall y, are the critical few that deliver th e results as well as through intimate understanding of how to manage these elements to achieve desired results. Finall y, the solutions are delivered in a variet y of options, such as no -touch via business process outsourcing, mid -touch via managed services and software as a service (SaaS), or high touch in the traditional software deployment model. Supply chain business process integration Successful integrating purchasing marketing SCM requires a change from managing individual functions to activities into key suppl y chain processes. An example scenario: the department places orders as requirements become known. The department, responding t o customer demand, communicates with
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several distributors and retailers as it attempts to determine ways to satisfy this demand. Information shared between suppl y chains partners can onl y be full y leveraged through process integration . Suppl y chain business process integration involves collaborative work between buyers and suppliers, joint product development, common systems and shared information. According to Lambert and Cooper (2000), operating an integrated suppl y chain requires a continuous information flow. However, in many companies, management has reached the conclusion that optimizing the product flows cannot be accomplished without implementing a process appro ach to the business. The key suppl y chain processes stated by Lambert (2004) are:

Customer relationship management Customer service manageme nt Demand management Order fulfillment Manufacturing flow management Supplier relationship management Product development and commercialization Returns management

Much has been written about demand management. Best -in-Class companies have similar characteristics, which include the following: a) Internal and external collaboration b) Lead time reduction initiatives c) Tighter feedback from customer and market demand d) Customer level forecasting One could suggest other key critical suppl y business p rocesses which combine these processes stated by Lambert such as: a. b. c. d. e. f. g. Customer service management Procurement Product development and commercialization Manufacturing flow m anagement/support Physical distribution Outsourcing/partnerships Performance measurement

a) Customer service management process Customer Relationship Management concerns the relationship between the organization and its customers. Customer service is the source of customer information. It also provides the customer with real -time information on scheduling and product availabilit y through interfaces with the compan y's production and distribution operations. Successful organizations use the following steps to build customer relationships:
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determine mutuall y satisfying goals for organization and customers establish and maintain customer rapport produce positive feelin gs in the organization and the customers

b) Procurement process Strategic plans are drawn up with suppliers to support the manufacturing flow management process and the development of new products. In firms where operations extend globall y, sourcing should be managed on a global basis. The desired outcome is a win -win relationship where both parties benefit, and a reduction in time required for the design cycle and product development. Also, the purchasing function develops rapid communication systems, such as electronic data interchange (EDI) and Internet linkage to convey possible requirements more rapidl y. Activities related to obtaining products and materials from outside suppliers involve resource planning, suppl y sourcing, negotiation, order placement, inbound transportation, storage, handling and qualit y assurance, many of which include the responsibilit y to coordinate with suppliers on matters of scheduling, supply continuit y, hedging, and research into new sources or programs. c) Product development and commercialization Here, customers and suppliers must be inte grated into the product development process in order to reduce time to market. As product life cycles shorten, the appropriate products must be developed and successfull y launched with ever shorter time-schedules to remain competitive. According to Lambert and Cooper (2000), managers of the product development and commercialization process must: 1. coordinate with customer relationship management to identify customer articulated needs; 2. select materials and suppliers in conjunction with procurement, and 3. develop production technology in manufacturing flow to manufacture and integrate into the best suppl y chain flow for the product/market combination. d) Manufacturing flow management process The manufacturing process produces and supplies products to the distribut ion channels based on past forecasts. Manufacturing processes must be flexible to respond to market changes and must accommodate mass customization. Orders are processes operating on a just -in-time (JIT) basis in minimum lot sizes. Also, changes in the manufacturing flow process lead to shorter cycle times, meaning improved responsiveness and efficiency in meeting customer demand. Activities related to planning, scheduling and supporting manufacturing operations, such
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as work-in-process storage, handling, t ransportation, and time phasing of components, inventory at manufacturing sites and maximum flexibilit y in the coordination of geographic and final assemblies postponement of physical distribution operations. e) Physical distribution This concerns movement of a finished product/service to customers. In physical distribution, the customer is the final destination of a marketing channel, and the availabilit y of the product/service is a vital part of each channel participant's marketing effort. It is also thro ugh the physical distribution process that the time and space of customer service become an integral part of marketing, thus it links a marketing channel with its customers (e.g., links manufacturers, wholesalers, retailers). f) Outsourcing/partnerships This is not just outsourcing the procurement of materials and components, but also outsourcing of services that traditionall y have been provided in -house. The logic of this trend is that the company will increasingl y focus on those activities in the value chain where it has a distinctive advantage, and outsource everything else. This movement has been particularl y evident in logistics where the provision of transport, warehousing and invent ory control is increasingl y subcontracted to specialists or logistics partners. Also, managing and controlling this network of partners and suppliers requires a blend of both central and local involvement. Hence, strategic decisions need to be taken centrall y, with the monitoring and control of supplier performance and day -today liaison with logistics partners being best managed at a local level.

g) Performance measurement Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitabilit y. Taking advantage of supplier capabilities and emphasizing a long -term suppl y chain perspective in customer relationships can b oth be correlated with firm performance. As logistics competency becomes a more critical factor in creating and maintaining competitive advantage, logistics measurement becomes increasingl y important because the difference between profitable and unprofitab le operations becomes narrower. A.T. Kearney Consultants (1985) noted that firms engaging in comprehensive performance measurement realized improvements in overall productivit y. According to experts, internal measures are generall y collected and anal yzed b y the firm including
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1. 2. 3. 4. 5.

Cost Customer Service Productivit y measures Asset measurement, and Qualit y.

External performance measurement is examined through customer perception measures and "best practice " benchmarking, and includes 1) customer perception measurement, and 2) best practice benchmarking. h) Warehousing Management : As a case of reducing company cost & expenses, warehousing management is carrying the valuable role against o perations. In case of perfect storing & office with all convenient facilities in company level, reducing manpower cost, dispatching authority with on time delivery, loading & unloading facilities with proper area, area for service station, stock management system etc. Components of Suppl y Chain Management are as follows: 1. Standardization 2. Postponement 3. Customization Theories of supply chain management Currentl y there is a gap in the literature available on suppl y chain management studies: there is no theoretical support for explaining the existence and the boundaries of suppl y chain management. A few authors such as Halldorsson, et al. (2003), Ketchen and Hult (2006) and Lavassani, et al. (2008 b ) have tried to provide theoretical foundations for different areas related to suppl y chain b y employing organizational theories. These theories include:

Resource-Based View (RBV) Transaction Cost Anal ysis (TCA) Knowledge-Based View (KBV) Strategic Choice Theory (SCT) Agency Theory (AT) Institutional theory (InT) Systems Theory (ST) Network Perspective (NP)

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Supply Chain Centroids

In the study of supply chain management, the concept of centroids has become an important economic consideration. A centroid is place that has a high proportion of a countrys popul ation and a high proportion of its manufacturing, generall y within 500 mi (805 km). In the U.S., two major supply chain centroids have been defined, one near Dayton, Ohio and a second near Riverside, California. The centroid near Dayton is particularl y imp ortant because it is closest to the population center of the US and Canada. Dayton is within 500 miles of 60% of the population and manufacturing capacit y of the U.S., as well as 60 percent of Canadas population. The region includes the Interstate 70/75 i nterchange, which is one of the busiest in the nation with 154,000 vehicles passing through in a day. Of those, anywhere between 30 percent and 35 percent are trucks hauling goods. In addition, the I -75 corridor is home to the busiest north -south rail route east of the Mississippi. [ 1 2 ]

Tax efficient supply chain management

Tax Efficient Supply Chain Management is a business model which considers the effect of Tax in design and implementation of suppl y chain management. As the consequence of Globalization, business which is cross -nation should pay different tax rates in different countries. Due to the differences, global players have the opportunity to calculate and optimize suppl y chain based on tax efficiency legall y. It is used as a method of gaining more profit for company which owns global suppl y chain.

Supply chain sustainability

Suppl y chain sustainabilit y is a business issue affecting an organizations suppl y chain or logistics ne twork and is frequentl y quantified by comparison with SECH ratings. SECH ratings are defined as social, ethical, cultural and health footprints. Consumers have become more aware of the environmental impact of their purchases and companies SECH ratings and, along with non governmental organizations ([NGO]s), are setting the agenda for transitions to organicall y-grown foods, anti -sweatshop labor codes and locall y-produced goods that support independent and small businesses. Because suppl y chains frequentl y account for over 75% of a companys carbon footprint many organizations are exploring how they can reduce this and thus improve their SECH rating. For example, in Jul y, 2009 the U.S. based Wal-Mart corporation announced its intentions to create a global sustainabilit y index that would rate products
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according to the environmental and social impact made while the products were manufactured and distributed. The s ustainabilit y rating index is intended to create environmental accountabilit y in Wal -Mart's suppl y chain, and provide the motivation and infrastructure for other retail industr y companies to do the same.

Components of supply chain management integration

The management components of SCM The SCM components are the third element of the four -square circulation framework. The level of integration and management of a business proce ss link is a function of the number and level, ranging from low to high, of components added to the link (Ellram and Cooper, 1990; Houlihan, 1985). Consequentl y, adding more management components or increasing the level of each component can increase the level of integration of the business process link. The literature on business process re -engineering, [ 1 6 ] buyer-supplier relationships, and SCM suggests various possible components that must receive managerial attention when managing supply relationships. Lambert and Cooper (2000) identified the following components:

Planning and control Work structure Organization structure Product flow facilit y structure Information flow facilit y structure Management methods Power and leadership structure Risk and reward structure Culture and attitude

However, a more careful examination of the existing literature [ 1 9 ] leads to a more comprehensive understanding of what should be the key critical suppl y chain components, the "branches" of the previous identified suppl y chain business processes, that is, what kind of relationship the components may have that are related to suppliers and customers. Bowersox and Closs states that the emphasis on cooperation represents the synergism leading to the highest level of joint achievement (Bowersox and Closs, 1996) . A primary level channel participant is a business that is willing to participate in the inventory ownership responsibilit y or assume other aspects of financial risk, thus including primary level components (Bowersox and Closs, 1996). A secondary level participant (specialized) is a business that participates in channel relationships b y
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performing essential services for primary components, which support primary participants and components that support and are the fundamental branches of the be included.

participants, including secondary level participants. Third level channel the primary level channel participants secondary level components may also

More common and accepted definitions of Suppl y Chain Management are:

Suppl y Chain Managemen t is the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the suppl y chain, for the purposes of improving the long -term performan ce of the individual companies and the suppl y chain as a whole (Mentzer et al., 2001). A customer focused definition is given by Hines (2004:p76) "Suppl y chain strategies require a total systems view of the linkages in the chain that work together efficientl y to create customer satisfaction at the end point of delivery to the consumer. As a consequence costs must be lowered throughout the chain by driving out unnecessary costs and focusing attention on adding value. Throughput efficiency must be increased, bottlenecks removed and performance measurement must focus on total s ystems efficiency and equitable reward distribution to those in the suppl y chain adding value. The suppl y chain system must be responsive to customer requirements." Global Suppl y Chain Forum - Suppl y Chain Management is the integration of key business processes across the suppl y chain for the purpose of creating value for customers and stakeholders (Lambert, 2008). According to the Council of Suppl y Chain Management Professionals (CSCMP), Suppl y chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management . It also includes the crucial components of coordination and collaboration with channel partners , which can be suppliers, intermediaries, third-part y service providers, and customers. In essence, suppl y chain management integrates suppl y and demand management within an d across companies. More recentl y, the loosel y coupled, self-organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise.

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OBJECTIVE OF STUDY

The global objective of a Suppl y Chain is customers satisfaction. At the same time, individual components of the Supply Chain aim at maximizing their shareholder value by maximizing the Return on Investment (ROI) of their investors. ROI is the ratio of p rofit to capital employed over one year. The main objective of studying is : a) To understand the driving forces of industrial market and consumer market . b) To anal yze the role of effective suppl y chain management in industrial market and consumer market.

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RESARCH METHODOLOGY

c) What is primary data?

Primary data is important for all areas of research because it is unvarnished information about the results of an experiment or observation. It is like the eyewitness testimony at a trial. No one has tarnished it or spun it by adding their own opinion or bias so it can form the basis of objective conclusions. 1. Primary data is the specific information collected by the person who is doing the research. It can be obtained through clinical trials, case studies, true experiments and randomized controlled studies. This information can be anal yzed by other experts who may decide to test the validit y of the data by repeating the same experiments.

2. Suppose that you are researching the effects of a certain new substance on the nervous system of mice. Because yours will be the first such experiment, the data that you collect will be considered prospective in nature. It can be used to establish a baseline from which other follow -up experiments can be devised. In the education context, prospective primary data about the kindergartners in a school district might be to collect the actual test results from the first day of school showing how many could write their names, count to 20, and retell a simple story in a logical way. The information forms the base -line from which the district must move their students so that they can meet the state standards for entering first graders within the nex t 180 days.

3. Primary data can also be retrospective, interventional and observational in nature. Retrospective primary data gathers information about past conditions or behaviors. The researcher may be investigating a cause of a preventable disease, for instant as in t he connection between smoking and lung cancer. Interventional primary data may be gathered to see the effect of a new drug or therapy. A recent study reported in the Journal of Ophthalmology, for example, described an interventional study about treatments for convergence insufficiency. Patients with this diagnosis received one of three treatments over a 12 -week period to determine which intervention would be the most effective. Observational studies
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gather primary data by means of case studies such as the work done b y naturalists like Jane Goodall on chimpanzees in the wild.

4. Two strategies are commonl y employed when researchers gather primary data: randomizing and blinding. Both of these strategies serve to keep the results objective. Both involve limiting the information given either to the researcher or the subject about whi ch test group to which a subject has been assigned. The researcher is prevented from imposing her bias on the data so she may be a more careful observer. The subject is prevented from becoming either encouraged or discouraged by any previous opinions about the treatment, in a drug trial for example, that he may have started with.

5. Once the primary data has been gathered, anal ysts study it using other research methods. They look for relationships between factors that may suggest the designs for new studies. When they combine the primary data from more than one study, they are using integrative methods. Their findings present secondary data, a synthesis of several streams of primar y data.

d) What is secondary data?

Secondary data is data collected by someone other than the user. Common sources of secondary data for social science include censuses, surveys, organizational records and data collected through qualitative methodologies or qualitative research . Primary data, by contrast, are collected by the investigator conducting the research. Secondary data analysis saves time that would otherwise be spent collecti ng data and, particularly in the case of quantitative data, provides larger and higher-qualit y databases than would be unfeasible for any individual researcher to collect on their own. In addition to that, anal ysts of social and economic change consider se condary data essential, since it is impossible to conduct a new survey that can adequatel y capture past change and/or developments. Sources of secondary data As is the case in primary research, secondary data can be obtained from two different research strands:
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Quantitative: Census, housing, social securit y as well as electoral statistics and other related databases. Qualitative: Semi-structured and structured interviews , focus groups transcripts, field notes, observation records and other personal, research related documents.

A clear benefit of using secondary data is that much of the backgr ound work needed has been already been carried out, for example: literature reviews, case studies might have been carried out, published texts and statistic could have been already used elsewhere, media promotion and personal contacts have also been utiliz ed. This wealth of background work means that secondary data generall y have a pre established degree of validit y and reliabilit y which need not be re -examined by the researcher who is re -using such data. Furthermore, secondary data can also be helpful in the research design of subsequent primary research and can provide a baseline with which the collected primary data results can be compared to. Therefore, it is always wise to begin any research activit y with a review of the secondary data. Secondary analysis or re -use of qualitative data Qualitative data re-use provides a unique opportunit y to study the raw materials of the recent or more distant past to gain insights for both methodological and theoretical purposes. In the secondary anal ysis of qualitative data, good documentation cannot be underestimated as it provides necessary background and much needed context both of which make re -use a more worthwhile and systematic endeavor. Actuall y one could go as far as claim that qualitative secondary data anal ysis can be understood, not so much as the anal ysis of pre -existing data; rather as involving a process of re-contextualizing, and re -constructing, data. Overall challenges of secondary dat a analysis There are several things to take into consideration when using pre -existing data. Secondary data does not permit the progression from formulating a research question to designing methods to answer that question. It is also not feasible for a secondary data anal yst to engage in the habitual process of making observations and developing concepts. These limitations hinder the abilit y of the researcher to focus on the original research question.

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Data qualit y is always a concern because its source may not be trusted. Even data from official records may be unreliable because the data is onl y as good as the records themselves, in terms of methodological validit y and reliabilit y. Furthermore, in the case of qualitative material, primary researchers are of ten reluctant to share their less -than-polished earl y and intermediary materials, not wanting to expose false starts, mistakes, etc.

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ANALYSIS OF THE STUDY

The analysis of the study is done by gathering information from 20 sellers through a questionnaire. The results are as follows:1. How many industrial buyers do you have in a month?

a) Less than 50

b) more than 50

No. of industrial buyers

14 12 10 8 6 4 2 0 Less than 50 More than 50

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2. How many individual buyers do you have in a month?

a) Less than 50

b) More than 50

No. of individual buyers

18 16 14 12 10 8 6 4 2 0 Less than 50 More than 50

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3. The retention rate of which of the following is more?

a) Industrial

b) Individual

Retention Rate
12 10 8 6 4 2 0 Industrial Individual

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4. Which factor is the key to satisfaction of industrial buyers?

a) Timely Delivery c) Competent Pricing

b) Quality Product d) Add on Benefits

Series 1
9 8 7 6 5 4 3 2 1 0 Timely Delivery Quality Product Competent Pricing Add on Benefits

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5. Which factor is the key to satisfaction of individual buyers?

a) Timely Delivery c) Competent Pricing

b) Quality Product d) Add on Benefits

Series 1
8 7 6 5 4 3 2 1 0 Timely Delivery Quality Product Competent Pricing Add on Benefits

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6. Do you think that length of channel affects the price of the product?

a) Yes

b) No

20 18 16 14 12 10 8 6 4 2 0 YES NO YES NO

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7. When you purchase any commodit y then would you like to know its channel of distribution?

a) Yes

b) No

20 18 16 14 12 10 8 6 4 2 0 YES NO YES NO

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8. Does channel of distribution effects after sale services?

a) Yes

b) No

20 18 16 14 12 10 8 6 4 2 0 YES NO YES NO

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9. Which t ype of goods you generall y purchase more?

a) Consumer Goods

b) Production Goods

Type of Goods Purchase

14 12 10 8 6 4 2 0 Consumer Goods Production Goods

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10. You generall y prefer to purchase goods from whom?

a) Producer c) Wholesaler

b) Agent d) Retailer

Series 1
9 8 7 6 5 4 3 2 1 0 Producer Agent Wholesaler Retailer

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CONCLUSION

The study shows that both the industrial market and the consumer market if based on the preferences of the customer. The anecdote customer is the king applies well to both these two markets. The marketer must des ign all the suppl y chain variables to provide the necessary benefits to the customer. The study has also shown that the after sales services are not affected by the t ype of channel of distribution used for the s ale of the product. It is also seen that all the tools of suppl y chain management much complement each other to ultimatel y get the product reach the consumer in the right time.

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BIBLIOGRAPHY
Malhotra, Naresh K. and Birks, David F. (2007). Marketing Research, An applied Approach, 3rd ed. Prentice Hall, Inc. Naichiamas, D. and FrankfortNachiamas, C. (1996). Research Methods in the Social Sciences 5thed., Arnold, Santa Crux. Robson (2002). Real World Research: A Resource for Social Scientists and Practitioners, 2nd Edition. Paperback, pp113:59. Salant and Dilman (1994). How to conduct your own survey,John Wiley and Sons Inc.

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ANNEXURES

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QUESTIONNAIRE

Dear Sir/Madam, I am the student of Institute of Innovation in Technology and Management , BBA (CAM)- III Semester, Janak puri , Delhi and presently doing a project on A COMPARATIVE STUDY BETWEEN SUPPLY CHAIN MANAGEMENT IN INDUSTRIAL MARKET AND CONSUMER MARKET . I request you to kindly fill the questionnaire below and assure you that the data generated shall be kept confidential.
GENDER : MALE FEMALE NAME :

1. How many industrial buyers do you have in a month? a) Less than 50 b) more than 50

2. How many individual buyers do youu have in a month? b) Less than 50 b) More than 50

3. The retention rate of which of the following is more? a) Industrial b) Individual

4. Which factor is the key to satisfaction of industrial buyers? a) Timely Delivery c) Competent Pricing b) Quality Product d) Add on Benefits
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5. Which factor is the key to satisfaction of individual buyers? a) Timely Delivery c) Competent Pricing b) Quality Product d) Add on Benefits

6. Do you think that length of channel affects the price of the product? a) Yes b) No

7. When you purchase any commodit y then would you like to know its channel of distribution? a) Yes b) No

8. Does channel of distribution effects after sale services? a) Yes b) No

9. Which t ype of goods you generall y purchase more? a) Consumer Goods b) Production Goods

10. You generall y prefer to purchase goods from whom? a) Producer c) Wholesaler b) Agent d) Retailer

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