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DRIVE
WINTER 2014
PROGRAM/SEMESTER
MBADS (SEM 4/SEM 6)
MBAFLEX/
MBAN2 (SEM 4)
PGDSCMN
(SEM 2)
SUBJECT
CODE & NAME SC0009–SUPPLY CHAIN COST MANAGEMENT
BK ID
-B1664
CREDITS
AND MARKS -4 CREDITS AND 60 MARKS
Q1.
Write short notes on: 10
Ø Joint
process design
Ø Skills
required in a supply chain leader
Ø Total
Cost of Ownership(TCO)
Ø Job
costing
Answer:
Joint Process Design: Organisations need to design the process for product
development at the same time as the product design. Various activities
take place between the buyer and the seller in the product development
process. These include joint testing, data exchange and operational
design. Caterpillar Inc, a manufacturer of construction and mining equipment,
started to involve its suppliers in the product design process. Hence, all
three of its suppliers, now have a total product perspective. They also
have the same objective of designing a system that will function well.
An excellent source
Q2. What
are the different approaches developed to assess the sustainability performance
of the supply chain? (Listing of the approaches, Brief discussion on the
approaches) 10
Answer:
Assessing the Sustainability of Supply Chains: Sustainability
is one of the main issues in supply chain. Businesses are forced to
create a sustainable development, particularly in its social dimension.
Sustainable development is considered as an attempt to gain a balance
between the environmental, social and economic priorities. Thus, if there
is balance between the economic needs and environmental limitations, then
supply chains become sustainable. Sustainability of supply chain
Q3. “New
developments in B2C e-commerce
E-marketplaces
and CPFR are typical examples of business-to-business (B2B) integrators. New
developments of business-to-consumer (B2C) e-commerce are also impacting the
supply chain for both retailers and manufacturers.
The
Webvan case is particularly interesting, because it used to be an example of
logistics excellence and customer service for many Internet gurus. The downfall
of the market capitalization of Webvan by 98 % of its top is a clear indication
that there is actually something wrong with this business model. The problem is
that the business model of almost any pure online food retailer is a disaster
area for investors and entrepreneurs.
The
use of Activity Based Costing has shown, that supply chain costs of pure online
food retailing are twice (double!) the supply chain costs of traditional food
retailers. Added value for average consumers is only one-third of the added
costs for online food retailers. Most online food retailers are then caught in
the same trap: reducing the extremely high order fulfilment costs means high
turnover; high turnover means low prices and high service; low prices and high
service means a very negative bottom line. Distribution costs of online food
retailing are twice the distribution costs of traditional supermarkets.
Traditional channels are extremely efficient, because consumers do most of
labour-intensive work for the retailer: order-picking in the store and transportation
of goods to the home. Costs of these activities are approximately 10 % of the
consumer price. Online retailers have to pay well-trained and professional
employees to do this work without errors. An additional 5 % of costs are spent
on information technology, order management and after sales service. Additional
costs are much higher in case of low market penetration or substandard
execution.There are roughly three
scenarios for online food distribution:
·
Distribution
from an existing store
·
Direct home
delivery from a dedicated central warehouse
·
Home delivery
from a central warehouse via satellite stations
Each
scenario has its own specific benefits and value chain characteristics.
Distribution from an existing store is appropriate for a small online business.
Direct home delivery from a dedicated warehouse is appropriate for an online
business with a high market share in a medium size densely populated area. Home
delivery from a central warehouse via satellite stations is appropriate when the
area is larger and the market share is lower.
The next
table is an overview of supply chain activities and cost structure of each
scenario, including traditional retailing. Figures are costs per activity as a
percentage of consumer value.
This
cost structure is an indication only. In each country and in every situation
the costs per activity will differ. Outsourcing the delivery process to
logistics service providers may add efficiency but also increase complexity
costs].
Solution
is to integrate traditional retailing with online retailing: using online
retailing as an alternative channel for existing customers or to reach new
customers. There are several strategies to integrate traditional and online
retailing:
·
Niche Marketing
·
Focus on margin
rich products
·
Focus on
information distribution and communication
Niche marketing is focusing the marketing mix on a special target
group. This strategy is particularly effective for traditional retailers with a
high market share and an affluent customer base. These retailers can develop an
online channel as service offering, as market development strategy and as
barrier against new entrants. In the USA this would be the recommended approach
for successful local chains, in the UK for Tesco and in The Netherlands for
Albert Heijn.
A focus on margin rich products is the
most debated solution for online food retailing.
Many
e-commerce analysts assume, that consumers will prefer to order their heavy
bulk products online, and visit the store for the rest of their grocery needs.
This
assumption about consumer behavior is not supported by practical findings. In
practice consumers will try to order enough products to avoid the delivery fee,
in most cases set at an order amount of above 50 US$ or the equivalent in
Europe. For online retailers the sale of mainly bulk products is the quickest
road to bankruptcy, since these products are the loss leaders of the grocery
business.
There
are already many examples of a clear product focus in online food retailing.
The best example is wine. This product group is often the only food group of
general merchandise online retailers. Another important online food group is
vitamins and supplements. In the USA there were some very attractive examples:
Wholefoods.com and Vitamins.com.
The
Belgian food retailer Colruyt used non-food not only as an important margin
rich extension of the food assortment, but also as a traffic builder for the
supermarkets. Consumers can order the non-food articles online, but have to
collect the merchandise from the store.
Information distribution and
communication is the name of
the Internet game. Internet is the perfect channel for targeting different
consumers and other stakeholders of the company.
In
traditional advertising every commercial message is targeting a specific
consumer profile with a specific message. Alternatively an Internet site has a
menu structure, which makes it possible to communicate a whole range of
messages to a wide range of interested target groups.
The
other major advantage of Internet is the ability to really communicate in two
directions. This important feature of Internet will have a great impact on the
internal and external organization of any company.
The
company “Rituals” combines these three opportunities into one new brand.
Rituals is developing margin rich niche products with a message. The company is
selling these products in its own single brand stores and by the Internet.”
Analyse activity based costing of
various channels of food distribution. Evaluate the strategies recommended for
integrating online and traditional retailing. (Compare
the activity based cost of various channels of food distribution, State the
reasons for high costs in online distribution channels, Describe the strategies
recommended for integrating online and traditional retailing, Assess if the
strategies will work) 10
Answer:
Q4.
Why is a “buy-in” in strategy required? Explain the guidelines to prepare to
“buy-in” strategy. (List the reasons why buy-in is required, Explanation of
guidelines to prepare to “buy-in” strategy) 10
Answer:
Why is a “buy-in” in strategy required: In organisations, teams work hard to develop
innovative cost management strategies, but their ideas may not be accepted and
used. The reason for their ideas not being used could be any of the following:
·
The team could have failed to ‘sell’ their strategy to
the right stakeholders and obtain their collective buy-in.
Q5.
Write short notes on: 10
Ø
Project
coordinators responsibilities
Ø
Web 2.0 to
communicate ideas throughout the supply chain
Ø
Reduction of
supply chain costs through packaging redesign
Ø
Cost management
strategies for the critical level of the risk return model
Answer:
Project Co-Ordinator Responsibilities: It is
always important to make sure that the team stays on track and continues
to execute the strategy on which the team spent so much time in developing.
This initiative can be taken by a team member, or by an interested third
party. More often, customers invite one of the members of the supplier team to
lead the project execution. Any person agreeing to lead the project execution
needs to commit sufficient time for this. Project teams often require
coordination of activities, resources, equipment and information, and
monitoring the
Q.6.
Healthcare supply chains face many challenges
By
NCT11. October 2013
Medical
supplies and equipment are a significant cost center for hospitals.Medical
supplies and equipment are a significant cost center for hospitals. An aging
population continues to place pressure on the healthcare industry. Hospitals
are expected to deliver immediate care to anyone who walks through the door,
but the number of people needing treatment is likely to continue to grow. This
dynamic is creating new jobs within the industry - more than 5.6 million
positions are expected to be created by 2020, according to a study from
Georgetown University's Center on Education and Workforce, as reported by The
Huffington Post. However, the growth is also placing new demands on supply
chains. The Supply Chain Council noted that healthcare organizations may have
to absorb 10 to 20 percent more capacity to account for the increase in
equipment and medications needed to treat an aging population. There is already
considerable pressure to reform hospital distribution networks, as the supply
chain can represent nearly half of healthcare companies' operating costs,
making it the second largest expense behind labor. A blog post on the medical
site KevinMD stated that changes in supply chain management could contribute to
significant saving for hospitals.
Overcoming obstacles with effective shipping
Hospitals
face several challenges when it comes to streamlining their supply chains. The
first is the need to cover emergency care. On any given day, a facility may
have the need for a wide range of equipment and medications. Regular, timely
deliveries ensure they have the supplies they need. The second issue facing
healthcare supply chain reform is the range of products required. Everything
from cardiac stents to artificial joints may be needed at anytime. To
complicate the situation, physicians may have preferences for select brands of
medications. More products create complex distribution networks, but hospitals
could benefit from LTL freight management. This shipping strategy lets
organizations move various quantities of goods from a variety of locations at
minimal costs. The carriers are able to use product to increase capacity,
reducing their overall operating expenses, and the savings are passed along to
customers. Switching to LTL services could help hospitals gain control of
supply chain costs. Product quality is essential to controlling expenses in the
healthcare industry. Pharmaceuticals that are stored wrongly could deteriorate
and become ineffective. Keeping merchandise at the ideal temperature is
essential for reducing waste within supply chains, and hospitals can use
refrigerated trucking services to maintain the optimal climate for medications
during delivery. This provides the guarantee that shipments will arrive as
scheduled and in good condition chains-face-many-challenges
What are
the challenges faced by hospitals in streamline their supply chain? How can
these be overcome? (Listing and brief explanation of the challenges, Solution
to overcome the challenges) 5, 5
ANS:
The challenges faced by hospitals in streamline their supply chain: Streamlining the Healthcare Supply Chain are the second biggest cost
drivers after labour in the healthcare
industry. Millions of products move through the healthcare supply chain daily through manufacturers,
distributors, Group Purchase
Organisations (GPOs), healthcare providers to patients. Healthcare
supply chains are very fragmented. Here, the manufacturers, wholesalers, distributors, group purchasing organisations and providers work
independently throughout the chain,
but still will interact
Get fully solved assignment. Buy online from website
online store
or
plz drop a mail with your sub code
we will revert you within 2-3 hour or immediate
Charges rs 125/subject and rs 700/semester only.
if urgent
then call us on 08791490301, 08273413412
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