CLARAS COLLEGE OF COMMERCE

2015-2016
NAME: INSHA GHASWALA
ROLL NO: 13
TYBMS
SEMESTER 5
BUSINESS MANAGEMENT STUDIES
SUBJECT: LOGISTICS AND SUPPLY CHAIN
MANAGEMENT
PROFESSOR: FAISAL TANWAR

CERTIFICATE
THIS IS TO CERTIFY THAT THE PROJECT REPORT
TITLED
SUPPLY CHAIN MANAGEMENT
IS PREPARED BY MS.INSHA GHASWALA, STUDENT
OF BACHELOR OF MANANGEMENT STUDIES (BMS)
DEGREE, UNIVERSITY OF MUMBAI CONDUCTED
BY OUR COLLEGE

IMPORTANT SOURCES USED IN THIS HAVE BEEN

DULY ACKNOWLEDGE IN THIS REPORT.THE
PROJECT REPORT IS SUBMITTED IN PARTIAL
FULFILLMENT OF THE BACHELOR MANANGEMNET
STUDIES (BMS) DEGREE CIRCULATION AS PER
THE RULES OF THE UNIVERSITY OF MUMBAI

(DR .MAMATA RAJANI)

(DR.ZAHIDA SHAIKH)

BMS CO-ORDINATOR
PRINCIPAL

3 | Page

INDEX
SR NO

TOPIC

DFINATION

WHAT IS SUPPLY CHAIN MANAGEMENT

OBJECTIVE SUPPLY CHAIN MANAGEMENT

PARTICIPANTS OF SUPPLY CHAIN MANAGEMENT

IMPORTANCE OF SUPPLY CHAIN MANAGEMENT

LOGISTICS V/S SUPPLY CHAIN MANAGEMENT

GLOBAL SUPPLY CHAIN MANAGEMENT

BULLWHIP EFFECT

EXTENDED ENTERPRISE

4 | Page

5 | Page

6 | Page

Defination
Definition of Supply Chain Management by The Council of Supply Chain
Management Professionals:
Supply Chain Management may also be defined as the integrated
management of all linkages and value added activities from the suppliers
supplier to the customers customer in such a way that enhanced customer
value is achieved at lower costs.
What is Supply Chain Management ?
It is networking activities which directly or indirectly meets customer
needs.
Supply chain consists of all stages that are required to meet the customer
requirement.
It starts with the supplier and passes through manufacturing, distribution,
customer and final consumer.

Supply Chain Management flows

There are mainly 3 flows in SCM:
Product flow: It is physical movement of product from the factory to the
final consumer.
Information flow:
Forecasting
Order Management
Financial flow: It consists of credit terms, payment schedule, discount
information and consignment

7 | Page

Objectives of supply chain management

To maximise the over all profitability
The most important objective of supply chain management is to
maximise the over all supply chain profitability is a difference between amount
paid by customer to purchase the product and the cost incurred by organisation
to produce and supply the product to consumer at right time . Higher the supply
chain profitability ,more successful is the supply chain .
Enhancing customer service
One of the major objective of supply chain management is to provide
superior customer service . it aims at avoiding any kind of service failure and
provides efficient service to customer there by leading to customer satisfaction.
Reduce inventory cost
One of the objective of supply chain management is to reduce inventory
cost . Due to efficient supply chain management , there is greater co-ordination
and co-opration among the member which help to reduce inventory there by
reducing inventory cost .
Reduce the ware housing cost
Due to reduction in the level of inventory there will be a reduction in
ware housing cost as there will be less held up of inventory .
Reduce transportation cost
Another objective of supply chain management is to reduce transportation
cost through proper planning and network by using transportation principles like
economics of scale and economics of distance
Reduce lead time
Efficient supply chain management should reduce the time required
to convert order in to cash proper communication , co-ordination .

Minimising variance

8 | Page

Supply chain management through standardization of activities and

process helps to reduce variance between actual results and perceived results .
Ensuring on time delivery to customers
All the member of supply chain should work efficiently and there by
ensure on time delivery to customers
Reducing working capital
Effective supply chain management will help to reduce various cost
such as inventory cost , ware housing cost , and transportation cost there by
reducing working capital .

Participents of supply chain management

Suppliers
9 | Page

These are the organization that provide goods and services to purchasing
organization . suppliers provide raw material to manufacturers who need the
Manufacturers
These are the organization that are engaged in the production of goods and
services. Manufacturers sell there goods to other like distributor / wholesalers/
retailers in the supply chain for re sale .
Distributors
Distributors are typically middlemen that purchases goods from
manufacturers with the intention of reselling them to others in the supply chain .
Customers
Customers are the end receiver or user of the product or service. They are
essential part of supply chain as they are the ultimate consumers of the product
and services .

Important of supply chain management

Reduced inventories along with chain
Efficient supply chain management helps to reduce the inventory level to
be maintained by each member in the chain . This is possible due to good cooperations among the members in the chain
.
Better flow of information
Supply chain leads to a better flow of information among the members of the
chain right from the supplies of raw materials up to the final consumers
In supply chain management the information flow from top to bottom as
well as from bottom to top . Hence , the firm is able to adapt to changes and
provide response when ever needed
Competition edge
Scm provides a competitive edge to the company in the market by making the
goods available at the right time , at right place , and in right quality. Scm
facilities the availability of goods in all the convenient location easily accessible
to customers.
Customers satisfaction
When a particular product is introduced and advertised in the market , then
that product has to be made available in all the market of the country so as to
make product accessible to the customer.
10 | P a g e

Thus supply chain management helps in customer satisfaction by creating place

utility and providing the customer with demanded products at convenient
location .
Build trust
Scm builds trust and cooperation among members of supply chain by
sharing true information. Better trust among member leads to a win win
situation.
Avoid wastage
Due to adaptation of supply chain management techniques, the level of
wastage get reduce which reduces the manufacturing cost , inventory cost ,
labour cost , etc
Quick response
The scm helps the company in giving quick response to their customers due
to better flow of information. Quick response system can positively influence
the inventory management.
Difference Between Logistics and Supply Chain Management

11 | P a g e

Logistics Management is a small portion of Supply Chain Management that

deals with management of goods in an efficient way. Although, if we talk about
Supply Chain Management, it is a broader term which refers to the connection,
right from the suppliers to the ultimate consumer. People are quite puzzled
between these two concepts.
It has been noticed that, there has been a drastic change in the manner in which
business is conducted many years ago and now. Due to the improvement in the
technology, you can see all the areas of business has been developed. Supply
Chain Management also evolved as an improvement over Logistics
12 | P a g e

Management, from past years. Now coming to the point, lets start
understanding the difference between Logistics and Supply Chain Management.

Logistics Vs Supply Chain Management

Comparison Chart
BASIS OF
COMPARISON

LOGISTICS
MANAGEMENT

SUPPLY CHAIN
MANAGEMENT

Meaning

The process of
integrating the
movement and
maintenance of goods
in and out the
organization is
Logistics.

The coordination and

management of the
supply chain activities
are known as Supply
Chain Management.

Objective

Customer Satisfaction

Competitive
Advantage

Evolution

The concept of
Logistics has been
evolved earlier.

Supply Chain
Management is a
modern concept.

How many
organizations are
involved?

Single

Multiple

One in another

Logistics Management
is a fraction of Supply
Chain Management.

Supply Chain
Management is the
new version of
Logistics Management.

13 | P a g e

Definition of Logistics Management

The management process which integrates the movement of goods, services,
information and capital, right from the sourcing of raw material, till it reaches
its end consumer is known as Logistics Management. The objective behind this
process is to provide the right product with the right quality at the right time in
the right place at the right price to the ultimate customer. The logistic activities
are divided into two broad categories they are:
Inbound Logistics: The activities which are concerned with procurement
of material, handling, storage and transportation
Outbound Logistics: The activities which are concerned with the
collection, maintenance and distribution or delivery to the final consumer.
Apart from these, other activities are warehousing, protective packing, order
fulfillment, stock control, maintaining equilibrium between demand and supply,
stock management. This will result in savings in cost and time, high quality
products etc.

Definition of Supply Chain Management

Supply Chain Management (SCM) is a series of interconnected activities related
to the movement and transformation from raw material to the finished goods till
it reaches to the end user. It is the outcome of the efforts of multiple
organizations that helped in making this chain of activities successful. These
organizations may include the firms with whom the organization is currently
working like partners or suppliers, manufacturers, wholesalers, retailers and
14 | P a g e

consumers. The activities may include integration, sourcing, procurement,

production, testing, logistics, customer services, performance measurement, etc.
Supply Chain Management has a multi-dimensional approach which manages
the flow of raw materials and work in progress (semi finished goods) within the
organization and the end product outside the organization till it reaches the
hands of the final consumer with a complete emphasis on the customer
requirement.

Key Differences Between Logistics and Supply Chain Management

The following are the major differences between logistics and supply chain
management:
1. The flow and storage of goods inside and outside the firm is known as
Logistics. The movement and integration of supply chain activities is
known as Supply Chain Management.
2. The main aim of Logistics is full customer satisfaction. Conversely, the
main aim behind Supply chain Management is to gain
substantial competitive advantage.
3. There is only one organization involved in Logistics while a number of
organizations are involved in Supply Chain Management.
4. Supply Chain Management is a new concept as compared to Logistics.
5. Logistics is only an activity of Supply Chain Management.

15 | P a g e

Conclusion
Logistics is a very old term, firstly used in the military, for the maintenance,
storage and transportation of army persons and goods. Nowadays, this term is
used in many spheres, not specifically in military after the evolution of the
concept of Supply Chain Management. It has also been said that SCM is an
addition over Logistics Management as well as SCM comprises of logistics.
Both are inseparable, hence they do not contradict but supplement each other.
SCM helps Logistics to be in touch with the transportation, storage and
distribution team.

Global Supply Chain Management Major

Every successful organization owes some of its success to effective supply
chain management and logistics.
These processes focus on the flow of goods and information from the source of
raw materials through the distribution channels to the final consumer, and
beyond, to recycling and disposal.
In today's competitive environment, managing transportation, inventory, product
plans and schedules, and information flows are critical to satisfying customers
and creating competitive advantages.
Organizations compete globally by working with international suppliers,
outsourcing, and marketing to consumers worldwide. This global reality places
even more importance on successful supply chain management.
The global supply chain management major focuses on global business and
prepares students for success. And with the flexibility of multiple campuses and
online courses, you can personally tailor your educational experience.
Courses provide insight into many subjects, including:
Managing raw materials and finished products

16 | P a g e

 Developing transportation and logistics strategies

Merging transportation policies with production and marketing plans
Global supply chain analysis and planning

Problems in Global SCM

Different currency and valuation.
Different tax law.
Different trading protocols.
Lack of transparency of cost and profit.

A supply chain has various stakeholders i.e. retailer, dealers, distributor,

suppliers, etc.
Each of the chains outlooks, functions and judgments are different.
17 | P a g e

 It is important as actions of one stage has its impact on the other stage of
supply chain.
Further on, if a retailer has different objectives then the dealer will have
confusion.

Causes of Bullwhip Effect

No communication up and down the supply chain.
Lack of co-ordination between value chain members.

Demand forecast will be incorrect.

Impact of Bullwhip Effect

Increase in manufacturing cost.
Increase in inventory cost.
Increase in lead time.
Increase in transportation cost.
Increase in labour cost.
18 | P a g e

Solution for Bullwhip Effect

Know your Consumers.
Proper forecasting.
Better information.
Better supplier.
Proper inventory flow.
Perfect logistics.
Better technology.

19 | P a g e

Bibliography
Refer logistics text book
http://keydifferences.com/difference-between-logistics-and-supply-chainmanagement.html#ComparisonChart

20 | P a g e