Enhancing your Existing Storage Capacity

The traditional warehouse combines a mixture of bulk storage and pallet racks. The former is ideal for facilities that have to deal with large quantities of goods both arriving and departing on a regular basis, as these can be stored in the original containers on the warehouse floor. For items that don’t sell as quickly, these can be moved onto to the pallet racks where they can be stored out of the way of employees until they’re needed. Eventually, though, many businesses find themselves in a situation where sales slow down and they start to become space constrained. Continue reading Enhancing your Existing Storage Capacity

The Benefits of Portable Storage Units

If you are about to move home or renovate it, or if you want to have more storage space but there simply isn’t any room in your house, then portable storage units may just be exactly what you have been looking for. You can use these units to simply store any item you like when you need some additional space, you can use them for long distance moves, or you can use them if you simply need to store a few items for a short period of time.

Continue reading The Benefits of Portable Storage Units

Tips for Shipping Bulk Cargo

Your company may have a need to ship bulk cargo—a large quantity of an item that is unpackaged, typically in liquid or granular form. It may be a one-time thing, or it may be something you do on a daily or weekly basis. No matter the frequency of your shipping needs, it’s important to know the best way to ship your bulk cargo so that you can ensure timely delivery while keeping your cargo intact. Continue reading Tips for Shipping Bulk Cargo

China Sourcing Agent: Ways To Hire The Best One

If you are looking for a reliable and trustworthy company who can help you import products from China, then you can get to choose from a huge list of companies. Look for a reliable and trustworthy agent who has huge years of experience, excellent professionalism to ensure you with safe and smooth shipping process. One of the best ways to run a business smoothly is with the help of a china sourcing agent. To put it simply, most of the business entrepreneurs rely on this kind of agent to get the work done. It’s mainly because hiring a sourcing agent can offer you with a lot of benefits. Now, keep reading this post to learn a lot more. Continue reading China Sourcing Agent: Ways To Hire The Best One

Why your Business Needs High Quality Fleet Management

For many businesses their biggest investment will be a fleet of vehicles, and the upkeep on this can be both expensive and complex. When you own and regularly use a fleet of vehicles for business you will have to consider vehicle financing, tracking and diagnostics, driver management, fuel management, health and safety and vehicle maintenance amongst other functions. As you can see this can cause a real headache if there is not a proper system in place to manage every aspect of your fleet. Seeing as this is such a large part of your operation and key to your success, it means that it is essential that you look for ways to ensure the smooth running of your entire fleet of vehicles. Continue reading Why your Business Needs High Quality Fleet Management

Supplier selection criteria and models

Purchasing is among the most important activities in supply chain management, since it is the primary point of contact with most supply-chain partners. A major area in purchasing management is that of Supplier Selection Problem (sometimes called the Vendor Selection Problem). Research in this domain started in the early 1960s and over 175 studies have attempted to address this highly critical issue of procurement management. “Vendor selection criteria and methods” have reportedly been the highest area of interest in operations management research.

A wide variety of selection criteria have been used in different studies for the evaluation of suppliers which have varied due to the differences in requirements in different industries and also often had been purely firm specific. Typically the variety of supplier selection criteria that has been used has exceeded 50 criteria in over 65 research papers working on finding new criteria for evaluation of suppliers. These criteria have been enlisted in the matrix shown below.

Some of the most popular criteria in supplier selection which has been used in over 10 research papers and have also been widely cited are relative price, compliance with the delivery schedule, quality of the delivered goods to specifications, production capabilities of the supplier, geographic distance (of the warehouse), technical capability of the supplier, management capability of the supplier  and financial position of the supplier. All these supplier evaluation criteria have found massive application in the studies in this domain and are marked by subtle differences in terms of relative importance, as perceived by senior procurement practitioners.

Similarly another area of keen interest is the models which has been used to provide decision support to the supplier selection problem. Over 35 different mathematical models have been used for providing decision support to this extremely critical issue of procurement management. A study by Ho, Xu and Dey (2010) reveals that the Analytic Hierarchy Process, Mathematical Programming and Data Envelopment Analysis are the top 3 modeling paradigms used to provide decision support in supplier selection problems. Many other novel techniques like multi-attribute-deterministic models; mixed mathematical programming, outranking techniques; weighted sum of products; interpretive structural modeling; fuzzy set theory, neural networks; intelligent agent based techniques; TOPSIS, fuzzy multi-attribute frameworks; rule based reasoning models and multi-objective programming models have also been used. Typically the evolution of supplier selection models have been as described pictorially below, due to the evolution of the nature of selection criteria, from quantitative to a mix of quantitative and qualitative criteria.

As the trend highlights, there is a paradigm shift in the nature of the mathematical models used for supplier selection with a change in the requirements in the nature of business, mostly in the manufacturing industries and the maturity of the discipline. No wonder the area has attracted so much of attention to the consulting practitioners and theory developers in academia alike.

Do mail me if you have any queries regarding this post.

The content in this article is an original piece of research made to further the purpose of education only. You may NOT copy, distribute and transmit the work for any purpose without the express written permission of the author. Neither you may alter, transform, or build upon this work without express written permission from the author (arpan.kumar.kar@gmail.com).

Supply Chain Management Basics

In this article, we take you on a tour on the very basic focus of supply chain management. While there are many articles, which talk about the intricacies, the sole focus of this article is to cover all the various aspect an opening class for a grad program is likely to address.

There are few issues which are of prime importance while studying the subject. Before, one can call oneself conversant with the discipline, one needs to ask himself,  can he answer the questions in details regarding these aspects? This article is off course written more on lines of a strategic view point rather than an implementer ‘ s viewpoint.

  • Distribution Network Configuration: This is related to the number and location of suppliers, production facilities, distribution centers, warehouses and customers.
  • Distribution Strategy: This is related to the centralized versus decentralized issue, direct shipment, cross docking, pull or push strategies, and third party logistics.
  • Information: This is related to integration of  systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation etc.
  • Inventory Management: How should one manage stored quantity and decide the location of inventory including raw materials, work-in-process and finished goods.
  • Cash-Flow: Arranging the payment terms and the methodologies for exchanging funds across entities within the supply chain.

Focus: Customer, cost saving, value adding, time from cash to cash, percentage of fill rate against customer specifications and total response times

The extension of the supply chain definition is to provide a context for measurement or to operationalize theoretical concepts. Existing definitions may not always explicitly provide a basis for measurement. The development of new measures and the development of new benchmarks, based on these measures; in developing the new measurement format, various aspects of the supply chain definition can be expected to affect the specific mix of measures used.

It is important to understand that the position of players in the chain (supplier, manufacturer, wholesaler, service supplier) affects their contribution and relevant measures, the level of integration and the strategic approach may affect the relevance of measures needs to be scrutinized. Creating benchmarks based on the new measurement systems may contribute to directing management effort in optimizing the supply chain. Thus this is of prime importance to a supply chain manager.

Also, the development of tools that can help support the implementation of the new measurement approach may be a crucial final step leading to the actual application of new measurement approaches. The tools cannot be limited to the measurement system itself; they also need to include strategic trade-off and planning frameworks in order to assure executive “buy-in” and commitment and initiate actual improvement processes in the supply chain.

Finally some finer aspects to ponder for supply chain managers while attempting to operationalize theoretical models.

  • Whether the models are qualitative or quantitative will affect the plans.
  • What they measure is of paramount importance: cost and non-cost; quality, cost, delivery, resource utilization, flexibility, visibility, trust and innovativeness
  • Collaboration efficiency and coordination efficiency and configuration and input, output and composite measures.
  • Their strategic, operational or tactical focus.
  • The process in the supply chain they relate to.

These are some of the basics that a supply chain manager is expected to plan about while going about his job. By the way, did you read our article on Supply Chain Value Management

Supply Chain Value Management

No doubt that the efficient management of the Supply Chain is crucial for any business, but the grasping question always comes is how does it create value for the firm? More still, how can that value be better managed so as to create competitive advantage for the firm?

While the Value Chain analysis as developed by Michael Porter in 1985 argues as being efficient for creating a sustainable platform for value generation for firms so that they may achieve competitive advantage in the industry, the proposition is not without major limitations, like all other popular frameworks in strategic management literature.

Theory of Economics is one of many possible ways to define and measure value. 

While operationalizing the definition of value, it is crucial to note whether the exchange that creates this economic value is between business entities i.e.  Business to Business (B2B) – or between a firm and a consumer – i.e., Business to Consumer (B2C).

Since Supply Chain is intrinsic to creation of economic value between business entities only, we focus on B2B value creation. There are 3 forms of value that is created in B2B type economic transactions that is widely accepted in strategic management literature focusing on Supply Chains.

  1. Technical value, which is intrinsic to the resource being provided and occurs in almost every economic exchanges.
  2. Organizational value, which is built upon the context of the exchange, and may derive from a range of factors such as ethical standards, prestige, reliability, and association.  This may help the organization get more than the normal economic value from the transactional point of view, in terms of helping the same to achieve some degree of competitive advantage.
  3. Personal value, which is derived from the personal experiences and relationships involved in the exchange of resources and the benefits provided to the entities associated with the firms bounded by the economic exchange.

Value in supply chain gets created through the following processes:

  1. Supply chain modeling must be done quantitatively and objectively. Understanding of the goals objectively is crucial for its success.
  2. The major challenge in an excellent supply chain network is not to build a model but to model the sensitivity of one variable against others optimally. A simple model can work fine in many cases. However, supply chain experts (OR & Analytics Professionals) should be involved immediately when doing multi-layered inventory strategies, industrial engineers and operations.
  3. The fundamental building blocks of work are the methods and standards for the tasks. Value creation occurs when the changing business dynamics can be effectively modeled regularly to drive maximum benefits. (remember the Theories of Constraints?)

So creating value from supply chain should be a major focus for all manufacturing companies.

This is crucial to improve the effectiveness and efficiency of not only the supply chain in particular, but for the overall firm productivity.

By the way, did you read the following articles?

These are few of our highly popular articles

 

Supply Chain Management

Supply Chain Management is often defined in Operations Management literature as the integrative planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities (Handfield & Nichols, 1999; Mentzer et al., 2001). Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, third-party service providers, In fact, the coordination is one of the major challenges in effective supply chain management (Thomas & Griffin, 1996). Stakeholders could be intermediaries, and even customers. At its core. Supply Chain Management integrates supply and demand management within and across companies.

Supply-Chain-Structure

Supply Chain Management can also be defined as the integrative planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Securing one of the few respected logistics companies can be a great way to have a more efficient supply chain management.

However, selection of any supply chain partner is a multi-criteria decision making process and is extremely complex. Therefore a lot of advanced decision support systems are used for partner selection for effective supply chain management. There has been lots of studies which has focussed on the challenges and approaches for supply chain partner selection (Kar, 2009; Pani & Kar, 2011, Kar, 2014; Kar & Pani, 2014a; Kar & Pani, 2014b)

 

Supply Chain StructureThe structure and activities of a typical Supply Chain for a large manufacturing firm is displayed above.

So what does integrative supply chain management?

Integrative supply chain management consists of all the activities involved in logistics, supplier identification and management, reverse logistics, cash to cash management, service level distribution, management to demand and responding to fluctuations, manufacturing, management of e-SCM issues, management of technology, auctions, negotiations, reverse auctions, customer relationship management (to an extent), ware house management, inventory management and so on.

However the most crucial activities in proper management of the supply chain focuses on activities involving logistics management, supplier / vendor selection, procurement strategizing (make vs buy decisions), vendor management, value co-creation with partners and collaborators, and daily operational aspects. Essentially, the crux of excellence in Supply Chain Management lies in managing the Supply Chain Network, which extends from the many tiered suppliers (vendors) to the end customer through distributors or retailers.

Supply-Chain-Structure

Research on supply chain management started as early as in the late 1950s, and research issues were centered around few key themes as described by the diagram below.

Supply-Chain-Key-Activities

Thus Effective Supply Chain Management encompasses the planning and management of all the ploys and strategies, including the implementation of the same, for improving the sourcing and procurement of a firm, conversion, demand creation and fulfillment, and all Logistics Management activities. Thus, it also includes coordination and collaboration with channel partners, who can be suppliers for the firm, third-party service providers, intermediaries, and as mentioned earlier, collaborating customers on the network.

Those who feel as though they have a strong understanding of the many relationships involved with supply chain management may be able to own a franchise like Quiznos or other restaurant franchises with their expertise. The act of owning and establishing a franchise or chain restaurant in one’s area is fairly complicated, but certainly not impossible. It is also an excellent way to gain an understanding of what goes into owning and managing a business. Those who are relatively new to some of the aforementioned concepts may also find that they would have an easier time managing a franchise that is already established versus managing a business from the ground up.

By the way, did you hear about Interlink Parcel Delivery? They are a part of the UK based Interlink Express. They offer an excellent courier service, based on effective management of the logistics value chain.

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P.S. Article inspired by the presentation of my friend and colleague, Dr. Priyal Singh

References:

  • Handfield, R. B., & Nichols, E. L. (1999). Introduction to supply chain management (Vol. 183). Upper Saddle River, NJ: prentice Hall.
  • Kar, A. K. (2009). Using Fuzzy Neural Networks and Analytic Hierarchy Process for Supplier Classification in e-Procurement.
  • Kar, A. K. (2014). Revisiting the supplier selection problem: An integrated approach for group decision support. Expert systems with applications, 41(6), 2762-2771.
  • Kar, A. K., & Pani, A. K. (2014a). How can a group of procurement experts select suppliers? An approach for group decision support. Journal of Enterprise Information Management, 27(4), 337-357.
  • Kar, A. K., & Pani, A. K. (2014b). Exploring the importance of different supplier selection criteria. Management Research Review, 37(1), 89-105.
  • Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). Defining supply chain management. Journal of Business logistics, 22(2), 1-25.
  • Pani, A. K., & Kar, A. K. (2011, January). A study to compare relative importance of criteria for supplier evaluation in e-procurement. In System Sciences (HICSS), 2011 44th Hawaii International Conference on (pp. 1-8). IEEE.
  • Thomas, D. J., & Griffin, P. M. (1996). Coordinated supply chain management. European journal of operational research, 94(1), 1-15.