Class 10

Class 10 – SCM (Prof. Suhas Rane)

Strategies -

Competitive strategy – How customer sees my performance vis a vis my competitor.

Product development Strategy (For New product)

Marketing and Sales strategy – Sales strategy on own product as well as on competitors product (Competitive advantage)

Supply Chain Strategy – 3 kinds of attributes – Basic, Performance, Exciter. In due course of time, excitement attribute becomes performer and then basic.

Level of demand uncertainty –

Salt (Very certain)……………Existing Automobiles …………. Communication device (very uncertain)

Supply chain responsiveness – Ability to

· Respond to wide range of quantities demanded

· Meet short lead time (Use postponement to handle it – Assemble to order)

· More SKUs to handle a variety of products

But there is a cost to achieve responsiveness. Supply chain efficiency is in managing cost and not responsiveness.

Michael Porter strategy –

1) Generic Strategy

a. Cost Leadership

b. Differentiation

c. Focus

2) Value Chain

3) 5 force model (for industry)

Value chain is a template for testing –

1. Support

a. Infrastructure – Organization structure

b. Technology

c. HR

d. Procurement services, equipment and raw materials

2. Primary process –

a. Inbound logistics

b. Conversion – outsource if cost is low

c. Outbound logistics

d. Sales and Marketing

e. Services – after sales service

3. Decrease cost or increase selling price to improve upon margin – decrease cost by decreasing above costs, increase selling price by changing customer’s perception about the product.

HP – Cartridges are high priced, not printers.

DFL – Design for logistics (IKEA….flat furniture, easy to ship – do it yourself – DIY….. customer takes pride in doing it itself, customer can’t comeback with complaints as they themselves have assembled it……. Other example is ATM)

Standardization –

· For parts / components

· For products – Fevicol, which are moving very fast towards consumption.

· Process standardization

· Procurement standardization – Have few vendors

Supplier’s involvement in new product development –

1. None

2. White box – consult the supplier

3. Grey Box – Invite the supplier

4. Black Box – Give interface to supplier

· Vendor must have capability to manufacture

· Make vendors to have tie-ups like in case of Maruti and Suzuki’s Japanese counterparts (Have holdings in vendor’s company)

Mass customization (limited customization @ low prices)– Times of India….only the front page is printed last, rest all are printed upfront (supplements are printed well in advance). Here, the hawker does the assembling part in the morning.

National bicycle case – Use of sophisticated custom order system (Person sits on a machine to decide the structure of the cycle) ….. Use CAD to produce product design in factory in 3 minutes.