news /

Supply chain management (SCM) is the management of a network of interconnected
businesses involved in the ultimate provision of product and service packages required
by end customers. Supply Chain Management spans all movement and storage of raw
materials, work-in-process inventory, and finished goods from point-of-origin to pointof-consumption.
To compete successfully in today’s market, the companies must have effective and
efficient supply chain network.
Due to globalization and expanding of multinational companies the supply chain network
has become crucial for the success of the Organizations. Technological changes had
brought the cost factor for information flow quite low thus increasing the flow of
information and coordination among the members of the supply chain network.
Supply chain management is the backbone of business in global and competitive world
market. Supply chains are increasingly becoming more complex and dynamic. The success
of the business often depends on the success of your supply chain. A leaner supply chains
enabling through process and IT related interventions in planning, execution and
collaboration are indeed the need of modern retail companies.
Designing of Supply Chain
The following activities are considered for designing of Supply chain network:
Strategic
1) Strategic network optimization. It includes the number, location and size of
warehousing, distribution centers and facilities.
2) Creating reliable partnership with suppliers and distributors. Right and useful
exchange of information and feedback system.
3) Product life cycle management.
4) Modern Technology for designing and executing supply chain operations.
5) Decision regarding outsourcing or manufacture, and selection of source of supply.
6) Ensuring supply strategy in align with organizational business strategy.
Tactical
1) Purchasing and source of supply selection.
2) Production planning and scheduling, decision to outsource or in house
manufacturing.
3) Decision in regard to Inventory and warehousing facilities.
4) Transportation strategy.
5) Meeting the quality standard and services of competitors by implementation of
best practices.
6) Scheduling of Payments.
7) Keeping customer demand in mind.
8) Innovative marketing techniques and new launches.
Operational
1) Production and distribution schedules.
2) Forecasting of demand and coordination with suppliers and distributors.
3) Sourcing and planning of material.
4) Inbound operations, including transportation from suppliers and receiving
inventory.
5) Production operations, inventory consumed and finished product.
6) Transportation and warehousing management.
7) Ordering at right time and proper accounting.
8) Inventory control.
9) Quality control system.
Supply chain management is getting the right things to the right places at the right
times, for profit. New information and communications technologies have
revolutionized today’s supply chains making them extraordinary better, faster and
cheaper. For example, the Cigarette supply chain involves a process from buying
tobacco leaf to turning into smoke by customers. Procurement through farmers or
government cooperatives or auction, proper storing, processing and transportation
activities form the critical process of the system

The prime objective of Supply chain risk management (SCRM) is to reduce the chances of any
uncertain situation and feat an appropriate set of solution to manage the situation efficiently and
effectively. We at Logismart Understand this very well. SCRM is full of challenges that can result
in higher cost, wasted materials and production error. It has become even more complex and
vulnerable than in past. Due to absence of commonly recognized definition of SCRM and very
scared literature, it is very difficult to clearly understand it. This article will elaborate a general
literature review on evaluation of definitions of supply chain, risk management and supply chain
risk management. This article applies content analysis approach, bibliographic analysis and
analyzing top cited journal and researches in SCRM that is a unique and novel methodology. The
finding of this study reveals that, majority of the researchers are agreed, risk is variation in
outcome or performances that are not predictable, whereas supply chain is a network of
organizations that add value in every stage of product or services till its destination toward users.
Supply chain risk is probabilistic and unwanted situation whereas supply chain risk management
is to manage probabilistic and undesirable situation by evaluating risk sources, analyzing
likelihood and present a strategy to avoid, mitigate or minimize the effect of risk sources.
Risk is part of life. Someone may be late from his work or one may need to cancel his meeting,
internet can stop working when you really need it or there may be strike in Sunday when
someone has the only day for shopping. Risk or disruption of risk can be anytime, anywhere and
to anyone but it does not mean to halt, life has to move on. Meanwhile if someone has
noteworthy planning or contingencies the loss can be avoided, mitigated or minimized. Risk is
reality; it is almost impossible to absolutely escape from this. Every single field has to face it either
in daily life or in business. Any disruption either natural or nonnatural have become highest risk
for business. In an interview about 67% managers agree that risk management is more important
than before. Huge literature is available on the definition of SCRM and its development but still
a common understanding is missing. Global, economic, social and political advances in supply
chain have increased the risks and by involving more partners it has become more complex. Risk
or risk management is diverse, complex and scattered area, it can be found in many subjects like
engineering, medical, electrical, mechanical etc. because of its diversity and complexity it has
numerous definitions. In the justification section it can be observed. Subsequently, supply chain
has become as essential part of global business and economies. Due to globalization and rapid
change in innovation increase the value of supply chain. Now it has been said that supply chain
is a complex network it includes procurement, internal operations, inventory, marketing etc. But
due to its simplicity and commonness the world supply chain will prevail. Supply chain risk
management is a new area but has gained histrionic importance. This study will present a detail
discussion on definition in literature section. Several views describe various definition of risk but
some words or ideas are common by taking these mutual ideas a universal definition can be
developed.

Logistics Management is a function of Supply Chain Management that focus on
the planning, implementation and control of the storage and flow of goods and
services in anticipation of or response to recurrent customer demand. Logistics
Management is therefore an integral component of any successful organization
because a company grows its customer base, it requires advanced freight and
transport handling techniques to sustain its operational efficiency. A fully
functional logistics department within an organization satisfies customer demand
by ensuring that the suppliers, transporters, loaders, the accountants and other
important stakeholders along the supply chain are efficiently coordinated to
provide the customer with the demanded goods promptly and in the best quality.
Logistics Management is therefore an extensive managerial function that
encompasses effective transportation networks, proper handling of productive
materials, efficient freight management, up-to-date inventory management and
customer order fulfillment.
The concept of logistics management has its origins in the military, where military
commanders rely in on efficient logistics plans to execute successful military
operations by deployment the right personnel and material to secure with minimal
loss of personnel or other resources. Similarly, product managers or marketers
rely on their knowledge of logistics management to fulfil their core mandate of
supplying goods and services demanded by customers in the most profitable and
cost-effective manner. To meet these objectives, a logistics manager needs to
coordinate the core supply chain activities of demand forecasting, order
processing, packaging, distribution communication, material traffic and
transportation, plant and warehouse site selection as well as warehousing and
storage with a view of delivering prompt and excellent customer service.
A well-functioning logistics function provides a comprehensive outlook of a
company’s supply chain, enabling the management to address potential
bottlenecks that hinder efficient delivery of goods and services. Logistics
managers use advanced transport management systems (TMS) to analyze
inbound and outbound movement of goods and services with a view to identifying
and mitigating potential causes for disruptions in the processing of customer
orders. This results in operational efficiency and enables managements to save
costs associated with pilferage along the supply chain or delays in delivery of
customers’ orders. Prompt delivery of customer orders equally creates a ripple
effect within the supply chain by improving the company’s reliability rating
amongst its clients, which in turn drives up revenues through increased orders.
The concept of logistics management has gained increased prominence in today’s
business environment due to a number of factors within the internal and external
business environments that require organizations to pursue greater efficiency in
the upstream and downstream movement of their products. To begin with, a rapid
rise in transportation costs due to adverse fluctuation in oil prices requires
companies to stringently trace the movement of products during transportation to
ensure greater cost savings. Secondly, rising competition in the era of
globalization has compelled businesses to scale up their production efficiency,
which can only be realized through efficient logistics management systems that
enable prompt and quality delivery of goods and services. Lastly, increased
customer awareness coupled with a rising concern about the product has
prompted the growth of large retail chains that require sophisticated logistics
services, raising a need for advanced logistics management knowledge to solve
the challenges of the traditional channels of product and service distribution.
Logistics managers are often charged with ensuring rapid response to customer
demands by putting in place appropriate channels to satisfy customer inquiries in
time. With the increased integration of computers and information technology in
business operations, logistics managers are expected to eliminate excessive
inventories that were traditionally stocked in anticipation of customer inquiries
and instead accomplish a rapid response to such inquiries once they are placed.
This enables response to customer needs on a shipment-to-shipment basis,
eliminating the operational deficiencies by ensuring performance commitment
from the clients before ordering for the stocking of inventories. Logistics
management also ensures minimum variance due to the occurrence of events that
disrupt the supply chain such as delays in receipt of customer orders, disruptions
in the manufacturing process or delivery of goods at a wrong customer location.
These disruptive events may lead to loss of business or additionally delivery costs
which impact negatively on revenues and profits. Logistics management
integrates information technology and positive logistics control to minimize these
variances and improve productivity.
Logistics management also enables business organizations to realize minimum
inventory by enabling managers to trace the financial value of inventories deployed
throughout the supply chain. In so doing, managers are able avoid excessive
deployment of inventories and achieve the optimum inventory costs required to
meet customer service demands. To realize the aim of minimum inventories,
logistics management aligns customer commitments with the productive velocity
for an entire firm to ensure that all productive segments are operating at the most
efficient and profitable level. In addition to achieving minimum inventories,
logistics managers also aim to reduce the cost of transportation of materials and
products along the supply chain by consolidating the inbound and outbound
movement of products and materials. The consolidation of products and materials
movements requires the logistics management function to formulate programs
that would group together small cargo shipments for consolidated movement.
Conclusively, logistics management is an integral component of supply chain
management that is aimed at ensuring productive and operational efficiency as
well as improving customer service through better management of production,
packaging, order processing and transportation of goods. The ultimate aim of
logistics management is to reduce transportation costs, improve operating cost
structure and increase revenues through increased customer commitment.

Logistics is regarded as the backbone of the economy as it ensures efficient and
cost-effective flow of goods and other commercial sectors depend on it. Logistics
industry in India is evolving rapidly. It is the interplay of infrastructure, technology
and new types of service providers, which defines whether the logistics industry
will be able to help its customers reduce their costs and provide effective services.
Despite weak response, the logistics industry continues to witness growth owing to
the progress in retail, e-commerce and manufacturing sectors. The Global Logistics
sector was expected to grow 10 to 15 per cent in 2013-14. Logistics industry is
expected to reach over $ 2 billion by 2019. Rise of e-commerce logistics and
increased domestic consumption will pave the way for the industry to grow further
in future. With the promise of steady growth and improvement, the serviceoriented logistics industry is ready to expand beyond the horizons in the latter half
of this decade.
Recent Scenario
The recent Indian logistics sector comprises inbound and outbound segments of
the manufacturing and services supply chains. Of late, the logistics infrastructure
has gained the much-needed boost from business houses as well as policy makers.
Managing the infrastructure to effectively compete with other industries has not
been given its due emphasis. Inadequate logistics infrastructure can create
bottlenecks in the growth of an economy. The logistics management regimen has
the capability to overcome the disadvantages while providing cutting-edge
competitiveness in the long run. There exist several challenges and opportunities
for the sector in the Indian economy.
Challenges Faced By The Recent Logistic Industry In India
The biggest challenge faced by the industry today is poor integration of transport
networks, information technology and warehouse & distribution facilities.
Regulations existing at different tiers are imposed by national, regional and local
authorities. However, the regulations differ from city to city, hindering the creation
of national networks. Trained manpower is essential for the third-party logistics
sector and the manufacturing and retailing sectors. It is lacking at the IT, driving
and warehouse as well as at the higher strategic level. The sector is in a
disorganized state in India. The general perception of logistics being a manpowerdriven industry and lack of adequate training institutions have created crisis of
skilled management and client service personnel. Poor facilities and management
are reasons behind high levels of loss, damage of stock, mainly in the perishable
sector. The problem arises mainly because of the absence of specialist equipment,
like proper refrigerators. Lack of quality training is another reason. Though
practitioners and academicians are slowly becoming aware of the importance of
logistics and supply chain, however, the field is still not adequately explored as far
as research is concerned. It is essential to prioritize research and development so
that the weaknesses in the industry can be taken care of and improved.
Solutions To Some Of The Challenges
Infrastructure is the backbone of every country’s growth and prosperity. The same
is true for the logistics industry. Emphasis should be laid on building world-class
road networks, integrated rail corridors, modern cargo facilities at airports.
Logistics parks should be set up and accorded a status equivalent to Special
Economic Zones. It is necessary to realize that the logistics industry can best be
benefitted if companies establish training institutions to improve the service
quality of the sector. Good storage and warehouse facilities are important for the
growth of the industry. With increase in the transportation of perishable products,
the logistics agencies need to give a lot of importance to enhancing the warehouse
facilities. Emphasis on research and development is potent because it encourages
the use of indigenous technology, which can make the industry cost-effective and
can also bring about improvement in services.
Future Prospects
The logistics firms are moving from a traditional set-up to the integration of IT and
technology to their operations to reduce the costs incurred and to meet the service
demands. The growth of the Indian logistics sector depends much upon its soft
infrastructure like education, training and policy framework as much as the hard
infrastructure. To support India’s fast-paced economy growth logistics industry is
very essential. It is estimated that the industry will continue to grow at a robust
rate of 10-15 per cent annually.
The global economic outlook and that of India is expected to significantly improve
as India Inc begins to tackle the economic downturn. With a new government many
policies are expected to be implemented, which will give a fresh impetus to India’s
growth engine, particularly in the corporate and small and medium enterprises
(SME) sector, which in turn will expand demand for the logistics sector.
With the implementation of GST, companies, which currently have small
warehouses in several cities, can just set up a few in specific regions, following the
hub-and-spoke model for freight movement from the warehouses to the different
manufacturing plants, wholesale outlets, retail outlets and various POS. The growth
is backed by the boom in the e-commerce sector and expansionary policies of the
FMCG firms.