Strategic supply chain management and logistics
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Videocon Industries focuses on strategic supply chain management through advanced corporate governance, utilizing technology such as B2B integration and ERP systems to enhance efficiency in logistics and operations. The integration has led to significant improvements in stock management, payment processes, and reduced operational times. However, challenges remain with some logistics service providers regarding integration costs and technology adoption.
![customers a discount on their loyalty. They have a history of an enterprise, as the Green
Shield stamps they use early, it certainly helps them in achieving membership card in the UK
first move. They collected data on the customer, such as name and address. They can collect
more, however, with the dietary requirements, birthdays, family (optional); and through
analysis, purchase frequency; basket customization; procurement, etc. All of this data is
archived in a database and processed in order to improve marketing , size of the sales and
procurement. While this represents significant percentage of the cost of the initial sale, which
makes Tesco win market share to break even quickly. 2001, Tesco club card has 8 million
users 200 million production, the store every day to buy!
IT now find themselves with any world-class enterprise in any field, technical or sector
indispensable activities. It is now used as a means of jurisdiction competitors. It has been
used by organizational restructuring and re-assign settings to achieve a higher standard of
service, accurate production planning and demand forecasting, in order to achieve
profitability, lower supply chain costs and high supply chain. Recently, advances in
information technology enables companies to have a supply chain, thereby eliminating any
chance of mismanagement of information and real-time tracking of the bullwhip effect each
level inventory management and inventory. IT infrastructure is now available by reducing
cycle time, execution and competitive position of the company free flow of information
across departments. [Smith, W B (2000)]
The company has now entered a maximum vertical and horizontal integration of the supply
chain stage by UPS to participate in the strategic cooperation between suppliers, wholesalers,
distributors and retailers. This inter-organizational supply chain development has been
enabled robust IT infrastructure, which provides three distinct advantages
Reduce costs](https://image.slidesharecdn.com/strategicsupplychainmanagementandlogistics-160124180310/85/Strategic-supply-chain-management-and-logistics-8-320.jpg)
![ Higher productivity
New product / market strategies
Under typical conditions in the supply chain Tesco can be divided into two sub-chain. The
first movement may be referred to the supply chain. This includes everything from raw
material suppliers to the company workshop exercise, the final movement of the work
progress and finished goods flow across departments, and from the warehouse to the retail
store. Another part of the supply chain are the forward and backward flow of information.
Behind the sub chain information flow is not the product of the forward movement of the
assembly line, because the final retail stage of the integration of the parties involved in the
entire supply chain is more complex. The key issue is that in the supply chain, resulting in the
event of failure at each stage of the supply chain is a cascade of error messages at every level
of the channel at the right time to provide the correct information. [King, J. (2000)]
While leveraging powerful IT infrastructure and advanced software services to end customers
have been identified using the model to help Tesco has funded the development of a strong
loyal customer base. This helps to accurately forecast demand, low inventory levels and high
efficiency production scheduling.
Some occur in the development of advanced technologies in different industries can be listed
in the following
E-commerce: With provides increased customer convenience, the Internet savvy
customers and continuous focus, organization resorted to business conducted in a paperless
environment. This includes electronically on the Internet, e-mail, electronic funds transfer
and the purchase and sale of goods and services. It also involves inter-departmental files
quickly and paperless flow.](https://image.slidesharecdn.com/strategicsupplychainmanagementandlogistics-160124180310/85/Strategic-supply-chain-management-and-logistics-9-320.jpg)
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Strategic supply chain management and logistics
- 1. Strategic Supply Chain Management and Logistics Organization: Videocon Objectives and goals: The company's corporate governance philosophy enshrined in various fields to achieve their business and goals at the highest level of transparency, accountability and equity for all of its dealings with all the shareholders and employees and the government including all the other parties. The company believes in the company philosophy of governance, which provides rights and different ingredients, such as responsibility, employees and shareholders are carved out of the board structure of the code. In carrying out this, ensure that the company's goal is clearly defined and adequately measure and monitor performance against these objectives. Corporate governance is considered to be an important tool for the protection of shareholders and maximize the value of its long-term -term. Cardinal owners, such as the accountability, responsibility and the transparency of the company as fair disclosure which acts as a means to achieve this goal. Videocon Industries Limited are basically engaged with the manufacture, sale and distribution of the consumer electronics and home appliances, as well as oil and gas exploration and production. Introduction: VIDEOCON Industries Limited manufacture is the subgroup of VIDEOCON producing Television, Washing Machine, mobile and other high end technology products. VIDEOCON was founded over 25 years ago in 1979. VIDEOCON adopted Business-to-Business Integration (B2Bi) protocol to interconnect with its direct suppliers, ASP/Hub, direct
- 2. customers, LSP and overseas sites and banks through the Internet (i.e. system-to-system connection), and the interconnection between VIDEOCON and its direct suppliers has already been established in 2002. The role of B2Bi platform here means the process of transforming legacy data into B2B protocol standard (in this case VIDEOCON uses Rosetta Net PIPs/Standard). The forwarders used Web based technology to interconnect with VIDEOCON through the Internet (i.e. system-to-Web connection). Basically, all the interconnections used in this company are based on the types of interconnection for e- purchasing . In doing so, standard information exchange mechanism and common platform is formed and the flow of information and goods for shipping is integrated. As a result, an intelligent commercial vehicle operation (CVO) environment is established and an intelligent enterprise-to-shipping-operator environment is developed. Hence, result in increased logistics efficiency. In addition, VIDEOCON also installed a FXML gateway to interconnect with its cooperated banks through the Internet for payment automation (i.e. e- payment). The main difference between the e-payment interconnection from others is the security issue. Therefore, encryption was used for payment transaction. By integrating the payment system with banks can save transaction times and reduce labour power. Hence, increase operation efficiency and achieve real-time payment. The e-financing model is shown in Figure 1. Fig. 1 Efinancing model of VIDEOCON
- 3. Task 3.1: assess how information technology could assist integration of different parts of the supply chain of an organization For the intra-organisational integration, VIDEOCON adopted Enterprise Resource Planning (ERP) integrated software solution and EAI technology. ERP is used here to manage the company’s resources and to integrate all business functions such as planning, inventory/materials management, and more. EAI technology is adopted here for data transformation, data integration, transport and messaging. EAI is achieved at three integration layers namely transportation layer, transformation layer and process automation layer. Source and target applications are integrated by exchanging their application elements, which include data, objects and processes when EAI is used. Videocon uses EAI to transfer the data elements from source application to the integration infrastructure and from the latter to the target application. So the flow is data elements are transferred from source application to the target through the integration infrastructure using the transportation layer. Meanwhile, data elements are translated from source application structure to target application format using the translation layer as translation is needed to transform data into compatible format for target application. Then, data elements that are used for the integration of processes or the integrity of information are transferred to process automation layer. The supply chain integration system architecture is shown in Figure 2
- 4. Fig. 2: VIDEOCON’s supply chain integration architecture. Recent developments in technology can help organizations to benefit from the information easily in their yard. These technologies will help to coordinate activities to manage the supply chain. The cost of information decreased because of the increasing rate of technology. Integrated supply chain model bi-directional arrow shows the accommodation of reverse materials and information feedback flowing. Manager must understand that information technology is more than computers. Aside from computer data to identify equipment, communication technologies, factory automation and other hardware and services included. Before 1980 the flow of information between different functional areas within an organization and among partners of supply chain was paper-based. The paper-based communication was slow.In the meantime, information is often overlooked important competitive resource, because the value of the supply chain members is unclear.IT
- 5. infrastructure capabilities provide the competitive positioning of the business plans like the reduction of cycle time, implementation, delivery and redesigned processes of cross- functional. Sharing of information among buisness partner is crucial and these integration attempts are accomplished by IT initiatives.Some of them are:- Use the barcode in the logistics system Use communication EDI, among different departments Use Material Requirements Planning Use of ERP business solutions Internet and web services to communication among partners Information Technology has given supply chain management a great opportunity to change the industry structure and competition from the creation of a strategic advantage. It is supported by centralized corporate strategic planning and daily operations of the day focused on creating a key strategic advantage. Infact supply chain to become more market-oriented, because the use of IT. There are number of companies those have integrated IT with there supply chain management.Here we will discuss some of the strategy regarding SCM in Sony. (a) Allocation network strategies: Issues like the warehouse location and their ability to relate to other aspects of the network policy assignments. Configure the network policy to maintain facilities, how will the information flow between management and supply chain members, namely warehouses and retailers. It helps to provide a total holding cost and logistics costs. Configure network policy relates specifically to reduce the cost of ownership as well as logistical and his organization.
- 6. (b) Manufacture source strategy: This strategy is an integrated logistics and production costs. It also has a fixed mass production to reduce the cost of production. But the production volume may increase, but the balance between the costs and impacts of transport and logistics costs associated with the production of small quantities of associated high fixed that they can be maintained by making the source strategy of the organization. (c) Revenue managing strategy: In the revenue management strategy, the price elasticity of demand is based on the market, in order to maximize sales revenue. (d) Technology& choice support system: Technologies take care of each and every fraction of the organization whether it is related to the production, income or inventory etc. So we can say that the technology is a choice support system of the organization. Task 3.2: Evaluate how information technology has contributed to the managementof the supply chain of an organization Organisationused: Tesco Introduction to company: The company was founded in 1919 in London, Tesco is a British international food and general merchandise retail chains. With income 60 one billion € (2009 years), it is composed of two global sales and domestic market share of the largest British retailer, realized profits of more than 3 £ one billion. There are nearly 500,000
- 7. employees (in 2009) and more than 4000 stores Tesco is currently the world's third largest retailer. Initially specializing in food and beverages, it has been extended to such as clothing, consumer electronics, financial services, telecommunications; home, health and car insurance, Internet services and software. Tesco stores in the UK is divided into six formats, differentiated scale and scope of product sales: Tesco stores are larger, mainly outside of town, almost all of the stock of hypermarkets Tesco product range; Tesco supermarket is a standard large supermarkets, stocking groceries and a smaller range of non-food goods than super stores; Tesco Tesco Metro stores the size of supermarkets and Tesco Express store. They are mainly distributed in the main streets of urban centers and small towns; Tesco Express store nearby convenience store, stocking mainly food;-stop shop is the only one class does not include the word Tesco in its name. These are the very smallest shops. In addition, Tesco has a banking arm called Tesco Personal Finance; used as an ISP, mobile phone, home phone and VoIP services; sale of petrol and diesel at their stations; and offer membership cards, programs to customers. Customers can store them in Tesco, Tesco petrol or Tesco.com for each £ 1 spent collecting a membership card points. Tesco is running on the Internet since 1994, is the world's first retailer in 1996 to provide a powerful Tesco.com home shopping service, officially launched in 2000. Tesco has IT valid user in its history. A few years ago, its chief information officer, was elected the year (2007) at the best CIO CNET Networks UK Business Technology Awards ceremony. One can not know the information provided in the success of Tesco's competitive advantage in the end what it is. For retailers at the global level, I would see it two advantages: helps to know what to sell; and help in providing products sold. Tesco first great work has been made, it seems to do very well the second as well. The first point is the creation and use of customer databases. Tesco did in the early 1990s a good move to introduce their membership card which gives
- 8. customers a discount on their loyalty. They have a history of an enterprise, as the Green Shield stamps they use early, it certainly helps them in achieving membership card in the UK first move. They collected data on the customer, such as name and address. They can collect more, however, with the dietary requirements, birthdays, family (optional); and through analysis, purchase frequency; basket customization; procurement, etc. All of this data is archived in a database and processed in order to improve marketing , size of the sales and procurement. While this represents significant percentage of the cost of the initial sale, which makes Tesco win market share to break even quickly. 2001, Tesco club card has 8 million users 200 million production, the store every day to buy! IT now find themselves with any world-class enterprise in any field, technical or sector indispensable activities. It is now used as a means of jurisdiction competitors. It has been used by organizational restructuring and re-assign settings to achieve a higher standard of service, accurate production planning and demand forecasting, in order to achieve profitability, lower supply chain costs and high supply chain. Recently, advances in information technology enables companies to have a supply chain, thereby eliminating any chance of mismanagement of information and real-time tracking of the bullwhip effect each level inventory management and inventory. IT infrastructure is now available by reducing cycle time, execution and competitive position of the company free flow of information across departments. [Smith, W B (2000)] The company has now entered a maximum vertical and horizontal integration of the supply chain stage by UPS to participate in the strategic cooperation between suppliers, wholesalers, distributors and retailers. This inter-organizational supply chain development has been enabled robust IT infrastructure, which provides three distinct advantages Reduce costs
- 9. Higher productivity New product / market strategies Under typical conditions in the supply chain Tesco can be divided into two sub-chain. The first movement may be referred to the supply chain. This includes everything from raw material suppliers to the company workshop exercise, the final movement of the work progress and finished goods flow across departments, and from the warehouse to the retail store. Another part of the supply chain are the forward and backward flow of information. Behind the sub chain information flow is not the product of the forward movement of the assembly line, because the final retail stage of the integration of the parties involved in the entire supply chain is more complex. The key issue is that in the supply chain, resulting in the event of failure at each stage of the supply chain is a cascade of error messages at every level of the channel at the right time to provide the correct information. [King, J. (2000)] While leveraging powerful IT infrastructure and advanced software services to end customers have been identified using the model to help Tesco has funded the development of a strong loyal customer base. This helps to accurately forecast demand, low inventory levels and high efficiency production scheduling. Some occur in the development of advanced technologies in different industries can be listed in the following E-commerce: With provides increased customer convenience, the Internet savvy customers and continuous focus, organization resorted to business conducted in a paperless environment. This includes electronically on the Internet, e-mail, electronic funds transfer and the purchase and sale of goods and services. It also involves inter-departmental files quickly and paperless flow.
- 10. Bar codes and scanners: This is one of the most common technical progress the retail industry, you can see the cashier in retail stores. For more information and a complete product information, suppliers of bar code carries detailed information on the entire product life cycle. Data Warehouse: Data Warehouse is a unified database management company's entire production system database. This is used in making the company's senior management similar demand forecasting, production planning and forecasting analysis and strategic decision making. Enterprise resource planning tool: The form SAP, almost all of the Fortune 500 companies IT infrastructure backbone of Oracle ERP system. These systems provide a complete end to end supply chain process highly optimized processes to reduce information throughout the supply chain to achieve process automation of manual activities and help. And well-equipped IT infrastructure, Tesco has developed a competitive advantage for competitors. And suppliers of information sharing in Tesco began in 1997, founded an Internet-based business secure data exchange system to facilitate the suppliers current inventory holdings information. This helps the suppliers have the necessary inventory in production facilities in real-time tracking and Tesco warehouses, such a low inventory holding costs, Tesco and better demand is estimated at Tesco and suppliers. With the application of information technology, Tesco has become the market leader in the UK, but with globalization and geographic expansion, surveillance and location management supply chain activities Tesco faced overseas, as well as a challenge. In order to effectively monitor and effectively control it is imperative for Tesco to develop for mobile local and international remote monitoring system to track and locate goods. These remote monitoring
- 11. applications must be with the existing policies and Tesco, the UK's supply chain activities are consistent. Real-time monitoring by satellite monitoring and implementation of RFID technology to track the flow of goods to complete, ERP systems to monitor procurement, order processing and foreign supplier management, warehouse management, fleet management systems. International Warehouse Management System will help to provide a buffer between supply and demand, taking into account Tesco source in the fact that international and global products and commodities. It can develop an international stock holding device, can be effectively and economically delivered to remotely located outlets through which the retail items. This will also help to maintain good Tesco scheduling facilities and warehouse business activities. Development of international fleet management systems, the need for long-term reliability of the vehicle. This will help to maintain scheduling, and tracking vehicle maintenance. This will help across borders efficiently and economically in the international movement of goods, Electronic Data Systems need to be deployed to capture the customer, such as customer data, usage patterns, order size and order details, such as product and quantity of basic data. This can be selected by using the customer database system delivery, past shopping details in different countries, customers patronize, resulting in reported figures are special requirements, if a customer to complete. For the case ofVideocon: Before the implementation of supply chain integration with IT, the delivery process was more complicated and time consuming as many of these processes were done manually. For example, when Videocon need to deliver goods to their customers by List Source Package
- 12. (LSP) that they need to fill in purchase orders first, then the LSP will come and pick up the goods. After receiving the goods from the ordering companies that usually LSP will put labels on the goods to facilitate the process as ordering companies will constantly check with LSP to see whether the goods have arrived on time. After this, LSP will key in the goods information into their database for suppliers’ enquiries. Meanwhile, if companies want to trace the goods that they need either to contact LSP by telephone or in person. Then LSP will check with the drivers to see where the goods are. As a result, the information obtained might not be 100% accurate all the times and information can not be obtained in real-time. This might affect the collaboration relationship between LSP and their customers. This situation has now improved ever since the Videocon start integrating its supply chain. Videocon has performed a preliminary efficiency analysis to examine the performance of integrating its supply chain. In doing so, some improvements are being specified by the Videocon as follows: • The period of stock stored in the warehouse has reduced approximately from 60 days to 45 days. • The management of distribution has shortened approximately from 24 hours to 3 minutes. • The ratio of finalising production on time has improved approximately from 75% to 90%. • The average time on payment operation has cut approximately from 2 hours to 10 minutes. Other benefits included: • Reduced errors occurrence and operation time. • The capital costs have significantly reduced by automating process.
- 13. • Since the period of stock stored in the warehouse has reduced, this has also lowered the risk. • The case company is able to obtain and exchange real-time information now. • Strengthen the ability of revolving the capital. • Increased collaboration among customers, LSP, banks and suppliers. Hence, building a closer relationship. • Increased competitive advantage. Apart from the improvements mentioned above, there are also problems and difficulties during the development of supply chain integration such as: • Some LSP claimed that since the pricing standard of ASP is unclear, this might increase their capital costs on integration. • The lack of IT application ability and the knowledge on RosettaNet standard of LSP, Videocon has spent a significant time on helping them in building B2B e- commerce platform. • Many LSP need to change their backend systems as well as to enhance the B2B system functionalities upon the implementation of integration. • There are also concerns over security on e-payment and the Internet. Videocon is addressing this issue by using the security measures like encryption to protect its data so that members of the supply chain can only see information that is relevant to them. Task 3.3: Assess the effectiveness of information technology in managing the supply chain of an organization From the above discussion, it shows that SMEs are moving to the adoption of integrated systems as a way to improve efficiency by interconnecting their systems with their suppliers,
- 14. LSP, customers and banks to fully automate the supply chain process. Hence, increase competitive advantages. In doing so, many types of interconnections have been established such as Web based interconnection, XML based interconnection and e-commerce turnkey based technology. These types of interconnections were then used to integrate/interconnect the cash flow and logistic flow of the supply chain, among these adopted interconnection methods that there were only approximately 10% of manufacturers supplier and LSP that were able to achieve system-to-system interconnection/integration. The majority of companies were only able to achieve system-to-Web connection. This is partly due to the differences in IT application ability between the manufacturers, the suppliers and LSP, and partly due to SMEs’ characteristics weaknesses e.g. lack of know-how and finance. SMEs in general have the characteristics of shortage in finance and weak financial structure. They can not raise capital in the same way as large companies do. In a situation where business slows down and inability to do financial planning, SMEs will face insufficient working capital and it is hard for SMEs to obtain loans from financial institutions As a result, these might have an influence on the overall supply chain integration performance. However, since VIDEOCON and its suppliers were supported by Indian government financially and technologically to integrate their supply chains. It is expected that the situation might be worse for SMEs without any financial or technical supports. Therefore, it was found that the government played an important role in assisting SMEs to achieve supply chain integration. Another point needs to be addressed is, since VIDEOCON and its suppliers are from IT sector, their IT application abilities are expected to be more advanced than SMEs from other sectors. The authors expect that the development of supply chain integration by SMEs from other sectors might face even more problems and difficulties. Therefore, IT sophistication is found to be one of the crucial factors affecting the adoption of supply chain integration in SMEs.
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- 16. 10. Kelly, P P. (2009) 'International Business and Management', Cengage Learning EMEA. 11. Morley, D. and Parker, C. (2004) 'Understanding Computers: Today and Tomorrow', Ed. 10. Thomson Course Technology.