SUPPLY CHAIN OF DRAWING BOARDS

Assignment No 1
Date: 15th March 2010

SUPPLY CHAIN & LOGISTICS

BINOY KM 431
Describe the various Supply Chain
KAILAS SREE CHANDRAN 432
Stages, Drivers and Flows involved
when a customer orders a KRISHNA KUMAR R 433
Drawing Board at the retail shop.
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INTRODUCTION

Supply Chain consists of all parties involved directly or indirectly in fulfilling a

customer requests. Supply Chain includes manufactures, suppliers, transports, warehouses,
retailers and customers. It involves constant flow of information, product and funds
between different stages. The pricing purpose of supply chain is to a) Satisfy customers b)
Generate profits. Supply Chain activities starts with customer order and ends when a
satisfied customer has paid for his or her purchase. In this article, the Supply Chain of
“Drawing Board” is described. Its various Stages, Drivers and Flows involved when a
customer orders the product at a retail shop.

STAGES OF SUPPLY CHAIN

The stages of Supply Chain for “Drawing Board” involves Customers, Retailers,
Wholesalers/ Distributors, Manufacturers, Raw material suppliers etc.

1. Customer:

The customers of drawing boards are mostly students and design/ drawing
professionals. Students will go for small costless drawing boards and the professionals will

SUPPLY CHAIN AND LOGISTICS MANAGEMENT

go for big ones with stands. To fulfill the need, they will go to near by shop (retailer).

2. Retailer:

The Retailer here is actually a shop where different models of drawing boards are
available. They stocks different models of different manufactures according to the demand
based on forecast and other policies. They will get the drawing boards from the distributors.
When the inventories come below the minimum level, they give orders to the distributors
for refilling.

3. Distributor:

Its actually a wholesaler which can be of a specified manufacturer or for different

manufacturers. The distributor stocks the products, here its drawing board, from the
manufacturer. And gives to the retailers according to the orders. The distributor also act as a
warehouse. The products can be saved for sometime till they receives orders.

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4. Manufacturer:

This is the main stage in supply chain. The product is actually made during this stage. The
manufacturer of drawing boards analyses the customer population and demands and
manufactures the drawing boards according to the requirements of the customer. The
manufacturer receives raw materials (Wood and other things) for manufacturing drawing
boards from different suppliers.

5. Supplier:

The supplier for the manufacturer who manufactures drawing boards will be an industry
which collects and finishes woods. The supplier has contacts with different manufacturers
which not only producing Drawing boards but different products using woods. Supplier’s
product is the input to the manufacturer.

SUPPLY CHAIN AND LOGISTICS MANAGEMENT

SUPPLY CHAIN FLOWS

A Supply Chain is dynamic and involves the constant flow of information, Products
and funds between different stages, i.e. the Supply Chain flow includes

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a) Product
b) Information
c) Cash

There is a close connection between the design and management of supply chain flows and
the success of a supply chain.

1. Information

The success of supply chain is facilitated by sophisticated information exchange. The

information flow is a two way direction flow which comes between all the stages. When the
customer gives orders for the drawing board in the shop, i.e. the retailer, information is
transferred in the form of customer order. From there it flows to the distributor as the
orders for the Retailer. This information flows to the coming stages also. The same thing
happens in the opposite direction. The information may be about the pricing, availability,
needs, orders, etc.

2. Product

In the supply chain of drawing board, the flow off product is all physical. And it will

SUPPLY CHAIN AND LOGISTICS MANAGEMENT

depend on the information. Usually the flow of product will be unidirectional. I.e. in this
case, it is supplier to customer direction. The supplier sends their product, ie wood to the
manufacturer. From then, the drawing boards are transported to the distributor, retailer
and finally to the customer. The flow may be of semi-finished product in the initial stages
but at the end stages, it will be fully finished product.

3. Funds:

This flow means flow of money. There is only one source of revenue in supply chain. I.e.
the flow of money from customer to retailer, which flows till end of the supply chain, i.e.
supplier. All other flow of funds are expenses. So that means all other cost should be less
than the inflow of cash from the customer. All flow of information, product or funds
generates costs within the supply chain. Thus the appropriate management of these flows is
a key to supply chain success. Supply chain management involves the management of flows
between and among stages in a supply chain to maximize total supply chain profitability.

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SUPPLY CHAIN DRIVERS

Supply Chain drivers are used to determine the performance of supply chain. Drivers
can be categorized into two. Logical drivers and Cross functional drivers. Logical drivers
include Facilities, Inventory, and Transportation. Cross functional drivers includes
Information, Sourcing, Pricing etc.

1. Facilities:

SUPPLY CHAIN AND LOGISTICS MANAGEMENT

Facilities are the actual physical locations in the supply chain network where product is
stored, assembled or fabricated. In the case of drawing boards, the products are
manufactured in industries and stored in warehouses. The supply chain of drawing boards
don’t have to be big responsive. So it needs only a central warehouse or can use zonal
warehouse for large area. The capacity of the warehouse depends on the demand and
production.

2. Inventory:

It encompasses all raw materials, work in process and finished goods within a supply
chain. Changing inventory policies can dramatically alter the supply chain’s efficiency and
responsive. Drawing boards don’t need big inventory and also the demand pattern can be
analyzed easily. So always keep required amount of inventories, no big safety inventory
needed.

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3. Transportation

Drawing boards can be transported from manufacturer to distributor and there to

Retailers using trucks. No need to use air or water transport. But the route of road transport
can be analyzed to make efficient. No deteriotion is happened in this product so
transportation can be slowly, just try to keep the schedule.

4. Information

This consists of data and analyze concerning facilities, inventory, transportation, costs,
price and customer throughout the supply chain. Information presents management with
the opportunity to make supply chain more responsive and more efficient. As mentioned
earlier, the information about the demand of drawing boards and other things are
transferred between different stages of supply chain.

5. Sourcing

Sourcing is the choice of who will perform a particular supply chain activity such as
production, storage, transportation, or the management of information. In this case, the
need of sourcing is not required, the manufacturer can produce the drawing boards

SUPPLY CHAIN AND LOGISTICS MANAGEMENT

themselves but if the demand during some period exceeds, they can opt for sourcing.

6. Pricing

This has the biggest input in the supply chain. The price of drawing board should include
the cost of production and profit. The cost of supply chain comes in the production cost. So
to reduce the production cost, the supply chain should be analyzed and expenses should be
minimized. In the supply chain of drawing boards, cost comes in all stages, during all flows.
To increase the demand, price of drawing boards should be minimum. We can reduce the
percentage of profit required from the product. So an efficient way is to optimize the cost of
supply chain. Supply chain of drawing boards need not be efficient so some expenses can be
saved. Also it doesn’t require faster transportation methods. So expense can be controlled
in that also. We can also reduce cost by optimizing warehouse facility, inventory policy etc.

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SUPPLY CHAIN AND LOGISTICS MANAGEMENT

Assignment No.1