Developing a supply chain for the service industry

Historically we have moved from physical distribution to logistics management to supply chain management. The major difference seems to be that supply chain management is the preferred name for the actualization of “integrated logistics”. With IT (Information Technology) acting as an enabler, it is now possible to have an integrated process view about the logistics & all the allied processes related to business. It is now possible to compress the lead-time by recognizing lead-time reduction as a strategic issue. Ideally, the supply chain should be a ‘seamless’ chain. In traditional supply chain systems, suppliers and manufacturers operate rather independently. Suppliers have very little information on what manufacturers need until they receive orders from manufacturers. Similarly, manufacturers do not know what materials are available with supplier until they place an order and get a corresponding response. The status of information with manufacturers as to what in a stock with a multitude of distributors, dealers and retailers is hardly available and if available is seldom reliable. As a matter of fact many manufacturers consider obtaining this information as unwarranted because sale transactions is considered to be completed once stock reach these channels and as undesirable as it amount to interference with distribution channels. Many stockists also consider disclosure of this type of information of stocks as uncalled for as this is confidential.

[...] Supply Chain configuration calls for determining numbers and location of each of the participant. It calls for specifying the role of each of the participants. The answer of these question will take into account factors such as the volume of supplies, number of customers and their geographic locations, cost transportation, distribution costs and the level of customer satisfaction. Distribution Planning: The supplies can be carried through a wide variety of transportation choices. A faster transportation not only helps to achieve a higher level of customer satisfaction in making the supplies available on time but also helps to increase the sales by seizing business opportunities, when there is a sudden rise in demand. [...]

[...] Decision Integration: If the various participants of the supply chain system operate as one congruent whole, demands of integration call for a joint decision-making exercise. The participants are expected to meet at frequent intervals to take a joint decision on issues such as inventories, distribution, trade- offs to strike a balance between contradictions and even pricing policies. The entire supply chain system would be behaving as if it were one single company. This task is however, not easy to achieve as human element is involved and consensus decisions only signify the path of least resistance and minimum risk involvement. [...]

[...] Activity Multi-store retailer One-store retailer Specialized buyer High-wage Economies Low-wage Economies High-wage Economies Low-wage Economies High-wage Economies Low-wage Economies After-sales service Retailing Distribution Marketing Design Purchasing International transport Production Buyers’ assessment of emerging trends in their supply chain Activity Multi-store retailer One-store retailer Specialized buyer New production Technology New production Capacity Suppliers outsourcing to lower tiers Suppliers designing products Suppliers marketing products Value Chain for Flue gas: Flue gas analysis Sophisticated techniques to accurately measure the concentration of a variety of pollutants. [...]