SUP-2013 Intro to Supply Chain
Assignment 1
Complete the assignment and submit it on Moodle.
Marks Weightage – 20%
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SUP-2013 Intro to Supply Chain
Assignment 1 – 20 Marks Building India
SUP 2013 – Intro to Supply Chain
© 2014 LAMBTON COLLEGE IN TORONTO
In class discussion – Building India
Logistics infrastructure is a critical enabler of India’s economic development. Recognizing
this pivotal role, logistics infrastructure spending has been tripled from around USD 10
billion in 2003 to a planned amount of around USD 30 billion in 2010. Despite this increase,
the country’s network of roads, rail and waterways will be insufficient as freight movement
increases about three-fold in the coming decade. This shortfall in logistics infrastructure will
put India’s growth at risk.
Since a large part of India’s future logistics network is still to be built, the country has a
chance to build infrastructure optimally, to meet the growing demand. Doing so requires an
integrated and coordinated approach in which the development of each mode— railways,
waterways and roads—is matched to the needs and existing assets are better utilized.
In particular, India needs to increase its use of rail, and realize the potential of its
waterways. For example, in the normal course, India’s rail share in freight would decline to
25 percent from the current 36 percent. This is relative to almost 50 percent rail share in
China and the US, similar continental-sized nations. The concerted approach suggested in
this report can increase India’s rail share to 46 percent.
If India fails to achieve this, waste caused by poor logistics infrastructure will increase from
the current USD 45 billion equivalents to 4.3 percent of today’s GDP, to USD 140 billion or
more than 5 percent of the GDP in 2020. If tackled in an integrated and coordinated
manner, this can be reduced by half and India’s transport fuel requirement reduced by 15 to
20 percent.
Achieving this will require four major shifts:
• Building the right network and ensuring flows on the right mode.
• Creating logistics facilities to maximize the efficient use of the network.
• Extracting more from existing assets.
• Allocating more investment to rail and reallocating within roads and rail.
© 2014 LAMBTON COLLEGE IN TORONTO
SUP-2013 Intro to Supply Chain
Source: Rajat Gupta, Hemarig Mehta, and Thomas Netzer, McKinsey Quarterly
(www.mckinseyquarterly.com), September 2010.
ASSIGNMENT QUESTIONS (1,200 words)
1. Explain in detail, ten (10) steps India should take to develop its Supply Chain /
Logistics network
i. Provide clear references for your work
ii. Provide analysis as to how your suggestions benefit the following logistics
utilities
1. Form Utility
2. Time Utility
3. Place Utility
4. Quantity Utility
5. Possession Utility
iii. Also provide discussion on how the following factors influenced your
choices
1. Technology
2. Consumer Influence
3. Globalisation
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© 2014 LAMBTON COLLEGE IN TORONTO
SUP-2013 Intro to Supply Chain
Since liberalization of the Indian Economy in the early 90s, India has been pegged to
become a global power. Since then, significant developments in technology, talent
development and infrastructure have meant that India has grown into a world leader in
multiple fields. Supply Chain was not one of them so far. The most recent Global Logistics
Performance Index, ranked India at 35. A poor showing for one of the world's largest
economies.
In order to develop the supply chain network in India the following steps should be
followed-
1. The first and foremost thing must improve is the complex tax structure.
The traditional supply chains in India were designed keeping in mind the tax regulations and
restraints of different states. This lead to segregated supply chains, domination of
unorganized local players and heavily person dependent operations. Over the last decade or
so, there has been significant development and automation, but considering where we
were coming from, there's still a long way to go.
With the advent of the upcoming GST reform - scheduled for 1st July 2017 - will force the
hands of multiple industries to move away from tax-based supply chain and chase greater
scale and efficiency. As there will be a uniform tax code across India:
local unorganized players will no longer hold the same value benefits.
consolidation of warehouses would be necessary, leading to greater scale and
making person dependency impossible.
operational efficiency would be the decisive factor
the efficiency of transportation systems would improve due to lesser
stoppages while crossing tax circles[ CITATION Ste17 \l 1033 ]
Time utility will be benefited because barriers regarding tax will be
removed due to that customer can easily get their products with in less
© 2014 LAMBTON COLLEGE IN TORONTO
SUP-2013 Intro to Supply Chain
time. And consumer also influenced positively towards company owing
to fast service.
2. Transportation- One issue is within the trucking industry. In India, the trucking
business is highly unorganized and does not have any standards regarding industry
practices. Only 10% of Indian truck operators own a fleet exceeding 25 trucks, and
most drivers own single trucks and rely on third parties to handle their orders. This
poses a problem to businesses entering the Indian market, "there are a ton of small
trucking companies in India and there are no big players who control most of the
market. India should take some steps towards the improvement of transportation
field, Form and time utility will be benefited as shipment will be delivered in time
and there will be no delays in production process.[ CITATION Qua18 \l 1033 ]
Form utility will be benefited because raw material will reach in time
due to best service of transportation and production become efficiently,
along with time utility and consumer influence also benefited by just
providing of good customer services to consumers by corporation like
everything be in time.
3. Automatic Purchasing- Continually monitoring inventory levels takes up too much
time. Newer ERP systems with Supply Chain Management (SCM) functionality feature
automated purchasing. This means that the ERP software can be programmed to
automatically place orders with vendors when inventory levels drop below a certain
level. A critical part of any supply chain strategy is being able to preemptively maintain
inventory levels. Automatic purchasing will free up employees to concentrate on other
important duties. So, India should install this kind of feature in their logistic systems and
due to this Quantity utility will be better because they keep their stock up to date
according to the demand and supply of the goods in market. And company also grow in
the terms of technological. [ CITATION inc15 \l 1033 ]
© 2014 LAMBTON COLLEGE IN TORONTO
SUP-2013 Intro to Supply Chain
4.Improve Returns Management - Every solid supply chain strategy needs an efficient
returns management system. Manufacturers must be able to effectively handle returns,
so they can quickly re-process or re-manufacture returned products or units. Many
manufactures understandably focus on continually moving new products out the door
and therefore, returns often fail to get the attention they deserve. Being able to better
manage returns will reduce waste and identify consistent product problem factors.
[ CITATION inc15 \l 1033 ] Indian companies ought to focus in this point if they want
to be in the market as like a successful corporation because it reflects the consumer
satisfaction which always remain prime motto of every company that is why it benefits
to both consumer influence as well as time utility.
5. Technological issues- In India most of the people who work in supply chain field, are
unable to operate new kind of machines and technologies, so if company want to
improve its performance, training should be provide to their workers. Globalization and
technology factor will have affected by this step in India because after getting training
related to new techniques of logistic system they can rubbing their shoulders globally
and entertain their customers very efficiently.
6.Fragmented warehouses- The biggest issue in logistic system of India is poor
construction and less number of warehouses. Indian companies should take major step
towards improvement of infrastructure regarding warehouses. hence place and time
utility will be benefited because large chain of warehouses will be provided accessible
way to consumer to buy product from stores rather than online and it is less time-
consuming processes than purchasing online. Globalization and consumer factors will
also have influenced by this point because from stores customer can get anything
around the world at one place.
© 2014 LAMBTON COLLEGE IN TORONTO
SUP-2013 Intro to Supply Chain
7. Packaging issues- Packaging is very crucial step for any industry to preserve or
maintain the standard of product and goods. Unfortunately, in India very less people
take care of it, but India should do more work on packaging to maintain the standard of
their logistic system. Every customer wants best things for their use if company provide
reliable product with attractive and safe packaging along with fulfil the globalized
product standards, so consumer influence and globalization factor will have affected
positively because products will also export worldwide.
8.Market demand and information issues-Prime step of supply chain management is
market demand and information, India should work first on market demand and collect
data what kind of consumer needs have nowadays in the market. company can easily
arrange inventory according to market demand and Quality utility will be benefited with
it and when customer get product according to their taste, so consumer influenced
factor will also meet with this choice.
9.Knowledge and Awareness- In India people have lack of knowledge regarding supply
chain system that is why Indian’s logistic system do not run adequately. For the
flourishment of logistic networks, education will play an important role. Proper
education regarding this system should implement by government to citizens.
Afterwards, people will become more curious to purchase products from near stores or
by online shopping and they will able to think rationally what’s good for them, so it may
be benefited for possession, place or quantity utility and technical factor will absolutely
affected
10. Robotics for Picking & Warehousing- Indian companies should introduce robots for
working in warehouse and stores because they are more accurate and very fast to find
anything with in the fraction of seconds. It will also helpful for those workers who do
not have knowledge regarding latest technology. They can easily learn how these robots
© 2014 LAMBTON COLLEGE IN TORONTO
SUP-2013 Intro to Supply Chain
work after programming. It will make work very fast, so time utility will be benefited
and technical as well as consumer influence factor will have affected with this choice.
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............[ CITATION inc15 \l
1033 ]..............................................................................................................................................
© 2014 LAMBTON COLLEGE IN TORONTO
SUP-2013 Intro to Supply Chain
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SUP-2013 Intro to Supply Chain
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