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  • in reply to: Distribution in the Supply Chain #16226

    Distribution refers to taking the product from supplier stage to customer stage. It is a key driver as it affects both the supply chain costs and customer experience. The appropriate distribution network can be used to achieve a variety of supply chain objectives ranging from low cost to high responsiveness. Due to this, companies in a same industry often select different distribution network.

    Factors Influencing Distribution Network

    Customer Service Component

    1. Responsive Time- How much time it takes to reach customer?
    2. Production Variety- How many different types of products are being offered by the distribution network?
    3. Availability- What is the probability of having product when the customer arrives?
    4. Customer Experience- How is the experience of the customer with the ordering and shipment of the order?
    5. Returnability- How easy it is for the customers to return the item?

    Design option for Distribution Network

    • Manufacturer storage with direct shipment- In this method, the product is stored with the manufacturer only and is directly shipped to the customer. It is also known as drop shipping. It is best suited for a large variety of low demand, high-value items for which customers are willing to wait.
    • Manufacturer storage with direct shipment and in-transit merge- Not like pure dropping, in which the product is directly sold to the customer. In transit, merge refers to that method in which different orders from different locations are combined so that the customer gets a single delivery. It is best suited for low to medium demand, high-value items the retailers are sourcing from a limited number of manufacturers.
    • Distributor Storage with Carrier Option- In this method, inventory is held by the retailers, not the manufacturers. In this method, package carriers are used to transport products from the intermediate location to the final customer. It is suited for medium to fast moving items. It is also best suited when customers want delivery faster than is offered by manufacturer storage.
    • Manufacturer or Distributor Storage with Customer Pickup- In this method, inventory is stored at the manufacturer or distributor warehouse but customers place their order online or on the phone and then travel to designated pick up points to collect their merchandise. It is best suited for coffee shops, convenience shops or grocery shops.

    Supply chain management is crucial to the success of any small-scale manufacturing and can be the deciding factor between a successful project and a project full of delays and claims. An effective supply management system is essential for managing efficient material management to avoid material shortages, misplacements, loss, and theft which might result in increases in crew idle times, loss of productivity and delay of activities. The primary goal is to have the material needed, in the amounts needed, with the quality required, and the time that they are needed. Standardization of the material management system could be a step forward in improving the system and eliminating some of the bottlenecks.

    in reply to: Purchasing Cost Analysis #16224

    Purchasing is one of the major functions of the organization. As without purchasing, it would be very difficult to manufacture goods. Procurement analysis is the analysis of what goes on in your purchasing department, are they keeping to the purchasing strategy and are inventories being kept to the optimum levels. It is the actual cost that is spent to purchase the product. Not only this, there are costs related to delivery, storage and handling also. You may also have a supplier which requires advance payment. You might have ordered a large item which requires several people to move and you have to pay for them. So, purchasing cost doesn’t mean the cost to purchase the product but it also includes the cost which will eventually affect the cost of production of the product.

    Order Cycle

    It can be said as a process or a route through which the order line progresses and the cycle actions are completed. Each step has a result. Order cycles contain cycle actions, or processing steps, such as Enter, Pick Release, or Ship Confirm. It can be customized by redesigning the prerequisites of cycle actions and by rearranging it.

    Prerequisites for Order Cycles:

    • Set upcycle actions
    • Set upcycle action results
    • Assign results to cycle actions

    Order Processing

    A road which starts with picking goes with packing and ends with delivering the packed item to the shipping carrier is known as Order Processing.

    It involves different steps:

    a) Picking- It refers to the picking of the articles in a specified quantity to fulfill the order of the consumer. There are 3 types of picking-

    1. Piece Picking- When the orders are picked one piece at a time, it is known as piece picking. This is generally done in repair part distributors or mail order catalog companies.
    2. Case Picking- Case as a whole is picked.
    3. Pallet Picking- In this type of picking, the whole order is picked in one go and shipped to the customer.

    b) Sorting- It refers to keeping products on the basis of the destination; size etc. depending upon the orders.

    c) Packaging- In this step; price, labeling and weighting of the product is done.

    d) Consolidation- In this step, packaged items are filled in a box and are ready to be shipped to the customer.

    This is very much important for any organization as the timely order will lead to goodwill of the firm. If a firm fails to provide the product at a definite time, a rational consumer will switch to a different company and it will definitely affect the brand image of the product. Thus, a company must make sure that it has efficient Order Processing System.

    in reply to: ICT in Purchasing Operations #16222

    Information technology is simply the processing of data via computer: the use of technologies from computing, electronics, and telecommunications to process and distribute information in digital and other forms.

    Electronic Commerce- A term used to describe business which is done in a paperless environment, mostly online. It includes electronic mails, transfers, publishing, image processing etc. Due to this, companies are able to automate the process of moving documents electronically between suppliers and customers. It saves the time of ordering the inventory as well as cost is also saved.

    Electronic Data Interchange- It refers to the computer to computer data exchange in some standard format. It describes the ability of two organizations connecting with each other electronically via email rather than courier, post. Companies can place the order quickly and can also ask for a brochure which is really an important document. Due to this time-saving function, consistency in production will be maintained. Purchasing company will not have to worry about keeping invoices and other documents. And it is also the cost-efficient device.

    Barcoding and Scanner- Barcode scanners are mostly found in the checkout counter of super markets. This code refers to the name of the product and its manufacturer. Other applications are tracking the moving items such as components in PC assembly operations, automobiles in assembly plants.

    Data warehouse- It is a database maintained by the organization separately from production system database. There are many organizations which have many databases. A data warehouse is organized around informational subjects rather than specific business processes. Data held in data warehouses are time-dependent, historical data may also be aggregated.

    Enterprise Resource Planning (ERP)- ERP system have become enterprise-wide transaction processing tools which capture the data and reduce the manual activities and task associated with processing financial, inventory and customer order information. It saves the time which used to be incurred on making invoices and entering them into their books of accounts.

    in reply to: Supplier Selection Criteria #16220

    Criteria are attributes that a buying organization values in its arrangements with suppliers. They are:

    1. Time in business- Serving your requirement is the major thing a company looks into. The supplier must be established and ready to provide goods and services to the company’s requirement.
    2. Consistency- Company always wishes to buy goods and services from one supplier. They do not want to change their suppliers in short run. So, they look in their supplier that whether they are going to supply them the product consistently or not.
    3. Ability to supply all the products required or the complete solution- This is particularly necessary when you are looking for a one of a business solution such as a new computer system. You may also be attempting to rationalize the number of vendors you are dealing with or wish to purchase a product line from one vendor only. It would be particularly difficult to obtain good terms if you need to purchase just a small range from another supplier, because your chosen vendor was unable to supply the complete range.
    4. Flexibility- Supplier should be such that who will allow making deduction or increment in the orders. He should be flexible as the company may require number of items at the delivering time than ordering time.
    5. Sustainability- Company should always look for a supplier who is financially stable. The reason behind this is that they do not have to change the supplier again and again to purchase goods.
    6. Prices- It is the most important thing. It is because the cost of production is totally dependable on this thing. If the raw material price is higher than the price of the product will always be high and the consumer is price conscious. If they get a product at a lower price, they will choose them instead of going for the company who is providing the same product at a higher price.
    7. Terms of Payment- Company’s cash flow is also one factor which influences the decision. Terms of payment should be such that it doesn’t affect the cash flow of the company much.
    8. Services- Rude behavior, unprofessionalism is mostly ignored. The supplier should be such that who is cordial, easily available. No one likes hanging on the end of the phone being told by a machine, “your call is important to us”!
    in reply to: What is supply chain management? #16218

    Supply chain management refers to the process of flow of goods and services. This flow involves the movement of the goods from the point of production to the point of distribution where it reaches the customer. Thus, Supply Chain Management can be understood as the acquirement of the raw material, processing of the intermediate goods, storing them, processing the final goods and finally making them available to the consumer. The supply chain management is a comprehensive process of collection and distribution.

    Supply chain management is a cross-functional process as it involves the acquirement of raw material and processing it internally. It involves the functioning of the several departments. The major aim of the Supply Chain Management is to streamline the business’s supply side so that a smooth flow can be maintained to maximise the customer’s satisfaction and secure a safe a place in the competition.

    in reply to: Finance Questions #16037

    Solution

    1. Investors earn a higher annualized rate of return from long-term T-bonds than short-term – The statement is True
    2. Long-term T-bonds are better investments than short term T-bills. – The statement is True
    3. Investors are expecting higher inflation in the future than they are today. – The statement is False
    4. Investors who are willing to take the risk of investing in long-term bonds on average earn a higher rate of return because they are taking more risk (that in the interim bond prices fall / interest rates rise) – The statement is False

    in reply to: Finance Questions #16035

    Solution

    When an investor purchases a given corporate bond, he or she is actually purchasing a portion of a company’s debt. This debt is issued with specific details regarding periodic coupon payments, the principal amount of the debt and the time period until the bond’s maturity.

    Long-term securities typically offer more return than short-term securities because investors usually prefer to lend money for shorter terms. Hence money lent out for longer terms will have a higher yield.

    in reply to: Finance Questions #16033

    Solution
    The current inflation rate is 2.62%

    in reply to: Finance Questions #16031

    Solution
    These Treasuries is of 3 types-
    i. Treasury bills (upto one year)
    ii. Treasury notes (between one and ten years)
    iii. Treasury bonds (greater than ten years)

    in reply to: Finance Questions #16029

    Solution
    At my own personal bank Ac the prevailing savings accounts interest rate is 8.05%

Viewing 10 posts - 21 through 30 (of 44 total)