Distribution and Supply Chain

Supply Chain Management =Integration of all activities involving:

Sourcing of Raw material
Integration of goods
Production of final product
Delivering products in the market
Making products available to the consumer
Objectives of Supply Chain Management:
Superior value for customer in product and service delivery
Profitability
Reliability
Flexibility
Responsiveness
Turnover rate
Communication and co-ordination

Suvrashis Sarkar / Aug 2014

Channels of Distribution
Different type of distribution channels for different industries:
(1) Consumer:
FMCG
Consumer durables Electricals, Electronics
Automobile

Urban
&
Rural

Service Travel, Online trade, finance

(2) Industrial:
Raw materials Tank / Container / Bulk
Machinery / spares, equipment, etc.

Suvrashis Sarkar / Aug 2014

Channels of Distribution
Supply Chain

Consumer Business

Urban

Tangible

Intangible

Industrial Business

Rural

Tangible

Intangible

Suvrashis Sarkar / Aug 2014

Channels of Distribution (eg: FMCG)

Manufacturer

Company Warehouse

Distributor

Retail

C & F Warehouse

Wholesale

MFR
Consumer

Retail

MFR

Distributor

Retail MFR
Consumer

Suvrashis Sarkar / Aug 2014

Channels of Distribution
(eg: Institutional business of FMCG)
Manufacturer
(factory)
Company Warehouse

Distributor

Retail

Institutional
Customer
and /or
Government
contract

Suvrashis Sarkar / Aug 2014

Channels of Distribution (eg: Consumer durables)

Manufacturer

Company Warehouse

Dealer

C & F Warehouse

Wholesale

(Distributor / Retailer)

(Distributor / Retailer)

MFR

Up-country
Retail
Consumer

Dealer

Up-country
Retail

Wholesale

Consumer

Suvrashis Sarkar / Aug 2014

Channels of Distribution
(eg: Institutional orders of consumer durables)
Manufacturer
(factory)

Company Warehouse

Dealer
(Distributor / Retailer)

Institutional
customer

Government
contract

Suvrashis Sarkar / Aug 2014

Supply chain and Logistics management

Raw material supplier

Equipment / machinery supplier

Factory
Material requirement planning
Production scheduling

Warehouse

Government
contract

Distributor

Institutional
customer

Capacity planning &

Distribution scheduling
Product stacking &
dispatch planning

Retail / MFR
Suvrashis Sarkar / Aug 2014

e-tailing and ThirdThird-party Logistics

Brand owner &
Manufacturer

Company Warehouse

Courier
company

Third party
supplier

e-retailer
or
portal
Courier
company

Customer
Suvrashis Sarkar / Aug 2014

What is Supply Chain all about ?

Supply Chain Management comprise of a co-ordination of processes like:
Planning
Organising
Directing
Staffing
Controlling

Point of Origin
to
Point of Consumption

Reporting
Budgeting

Suvrashis Sarkar / Aug 2014

Supply Chain Management enablers

Physical Network and facilities (material planning, procurement,
processing, warehousing, distribution and order fulfillment services)

Inventory management (planning, forecasting and replenishment)

Transportation and logistics (mode, route and network selection,
providing in-transit services, tracking services)

Information technology (use of ERP, EDI, RFID)

Sourcing and strategic alliances
Pricing and revenue management
Organization structure and human resource management (skill
set mapping, directing, delegating, flexibility, innovation cycles, processcentered management)

Suvrashis Sarkar / Aug 2014

Benefits of Supply Chain Management

Ensures work-in-process of material flow and finished goods
Optimization of work force at different levels and different processes
Reduction in working capital deployment
Ensures accurate inventory planning and forecasting
Ensures simplification of order tracking and fulfilment status
SCM reduces cycle time, resulting in faster turnover of inventory and capital
resources.
It results in reduction in wastage and faster replenishments
This results in better profitability and ROI
SCM results in better customer reach, higher product availability, better
responsiveness to customers.
It ensures improved satisfaction for both internal and external customers

Suvrashis Sarkar / Aug 2014

Supply Chain Process Cycles

Material Supplier
Procurement
cycle

Manufacturer
Warehouse
Distributor

Manufacturing
cycle

Replenishment
cycle

Retail
Consumer

Order generating
cycle

Suvrashis Sarkar / Sept 2014

ORDER Management
Need for Order Management process:
Demand visibility across channels, divisions, partners
Enables multi-channel order capture
Enables multi-source and multi-division order execution and fulfillment
Enables monitoring of order execution
Enables order modification at various stages of fulfillment
Enables customization and customer satisfaction

Suvrashis Sarkar / Sept 2014

ORDER Management
Components of Order Management process:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Order preparation = manual / electronic

Order entry = order completeness , accuracy, back-order/cancellation check
Credit history of customer
Checking of product availability = existing / made-to-order / promotional
Order approval and confirmation from customer
Order transmission = manual / electronic
Order processing for enabling delivery
Order filling = assembling & dispatching
Tracking order fulfillment
Communicating with customer about order fulfillment status

Suvrashis Sarkar / Sept 2014

ORDER Management
Measures of order fulfilment:
Line fill rate: Line fill rate = Total no: of units received
Total no: of units ordered
Order fill rate: Order fill rate = Total no: of SKU categories received
Total no: of SKU categories ordered

Suvrashis Sarkar / Sept 2014

ORDER Management
Benefits of good Order Management process:
Reduces inventory
Better collaboration with suppliers
Reduces operational cost
Reduces cost of purchase and order management
Compresses order pipeline
Improves customer service

Suvrashis Sarkar / Sept 2014

ORDER Management
Customer orientation objectives in Order Management process:
Increase customer and channel satisfaction
Execute flawless fill and delivery of each customer order
Build seamless customer experience across multiple channels
Provide global visibility to order status

Suvrashis Sarkar / Sept 2014