By

Nivedita - 09020241076
Mansi - 09020241087
Dylan - 09020241072
Vivek S - 09020241094
Vivek K - 09020241102
Terry R - 09020241101
 Whole Sale distributor of bicycles and
bicycle parts.
 Its primary retail outlets are located within

an area of 1000 sq km. i.e. a radius of

approx 18 km.
 Receives all its bicycles of different models

from a single manufacturer in China.

 The major selling model of bicycle at

Miracle Mind is the “ Road King”.

 Manufactur
er in China
 n
Shipment received in 4 to 4.5 weeks

Miracle Mind Step 1: Order placed Retail

Company outlets
(distributor) Order dispatched in 2 days
Retailer
informed,
& he places
YES
Is stock the order
availabl with an
e? alternate
distributor
Alternate
NO distributor
of bicycles
 Shipment of orders from China to MC takes
4 to 4.5 weeks
 Order Cost: Rs. 1000 per order
 Purchase price per order by MC:

75% of MRP for all models ~ Rs 900

 Inventory Carrying Cost: 20% of the

purchase price per year.

 Average Retail Price for Road King:

Rs. 1200
Months Actual Sales Actual sales Predicted
for 2003 for 2004 demand for
2005
January 1216 1217 1218
February 1222 1224 1225
March 1234 1238 1241
April 1240 1245 1255
May 1260 1270 1278
June 1239 1234 1250
July 1235 1244 1251
August 1236 1235 1239
September 1228 1231 1230
October 1218 1231 1254
November 1225 1230 1235
December 1230 1235 1245
 The predicted Annual Demand for 2005:
14921
 Order Cost: 1000 per order
 Purchase Price : Rs. 900
 Avg. retail Price: Rs. 1200
 Inventory Carrying Cost: 20% of

(14921*1200)
 To maintain a 99% service level with its
customers to minimize losses on lost orders.
1) Issues from SCM point of view?

2) How to resolve these issues?

3) To develop a comprehensive supply chain

strategy for MC.
 The inventory management is not efficient as
orders are lost due to unavailability of stock.

 No back up order.

 A Probable lack of required storage capacity.

 Insufficient information exchange with the

retailers.
 Lack of consistent fulfillment of Retailer demand
might result in diminished retailer loyalty.

 Lack of proper understanding of Retailer

requirements.

 High delivery time from manufacturer (china) to

MC.
 To increase the inventory in proportion to
the order loss by determining order
fulfillment ratio.
 To increase the Storage capacity &order

frequency with the manufacturer.

 To have a daily exchange of information

with retailer through online communication.

 To determine the Segregated demand of
bicycles model-wise, area-wise and creation
of forecast database.

 To
plan the inventory of fast and slow
moving models.
 Information:To improve the information
exchange between the retailer and
distributor in terms of bi-weekly demand
requirements.

 Touse demand forecasting tools which may

calculate demand on quarterly, half yearly,
yearly averages etc.
 Transportation:To reduce the delivery time
from MC to retailer by bucketing the orders
and using milk-van run.

 The retailer should keep a buffer stock to

satisfy any excess demands immediately(as
99% service level is to be achieved i.e. 6
sigma).
 In order to avoid loses due to lack of stock, the order
frequency needs to be improved with the help of the
information received in the monthly sales report of
the retailers.

 Contingency plan should be incorporated in case of

transport strikes, dock strikes etc.