Services »Capabilities »Business & Supply Chain Strategy
Business & Supply Chain Strategy
Although supply chain management has grown in importance in recent years, many enterprises fail to link it with their overall business strategy. Strategic decisions are the ones that have a long lasting effect on the firm. Decisions governing various busniess units of the firm and how supply chain structures and industry structures overlap, and how these structures are affected by the speed of change in the industry.
Decisions relating to acquring market share and growth, entering new markets, deploying new processes for such change, are policy level decisions which affect decision drivers further down the line. Decisions relating to demand estimation, market segmentation, marketing strategy which includes selection of the right portfolio of products, their pricing and promotion, all form part of the business strategy. Operational strategy include reaching the target market, storage and logistics requirement, selection of right IT framework etc. All of these decision points have to be entwined with the supply chain strategy in order to achive the objective of the firm. Some of the strategic decisions within a few supply chain domains are:
Product Development
What to outsource and what to make internally?
Should there be a new channel of flow for information, goods etc. or should they be integrated into the already existing channels?
Should there be new roles and responsibilities in place dedicated to the new product introduction?
Selection of suppliers for the raw materials needed for new product based on cost effective and timely procur
Last Updated On:10/19/2008 7:29:30 AM
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Services »Impact »Revenue Growth
Revenue Growth
A tighter supply chain brings down logistical costs and increases efficiency. In the upstream, it leads to more predictable demand forecasts leading to an optimum level of inventory and lesser wastage. In the downstream, it helps to create accurate supply schedules for retailers and end consumers. Aqua MCG looks at ways to streamline your supply chain and boost revenue growth.
In the past, firms simply used their supply chains as a means to control costs by improving efficiencies but now, they are using their supply chains as a mechanism to boost revenue and improve customer satisfaction through reduced turnaround times and better management of highly customized products. Shorter life cycle products, global competition and rising commodity prices have posed challenges for the firms to grow their revenues and increase product’s market share but at the same time, product development, better management and more integrated services provide huge opportunities.
Some of the supply chain domains where revenue growth can be achieved are:
Domain
Capabilities
Decision Drivers
Product Development
New product introduction
Economies of scaleo Capital investment analysis
Planning of capacity with the new product introduction and existing infrastructure
Last Updated On:10/16/2008 2:48:48 PM
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Transportation Management Systems : An Indian Perspective
Thumbs-Down to the Global Meltdown
The global melt-down is here and the nay-sayers are all on a roll about the impending doom. Companies are looking at multiple options to manage the challenging situation that the occurrences in the global economy have put them into. Supply Chain costs therefore are of special significance in such market conditions as they hold the key to managing profitability and ensuring better health of the organization.
India is no exception!
Logistics costs in India are estimated to be nearly 13-14% of the GDP of around $1 trillion. This cost is significantly higher as compared to the developed economies where the logistics costs are around 7-8% of the GDP. What this means to companies is that there is a huge potential to optimize the costs of logistics.
Supply Chain costs are spread over multiple domains starting from Import-Export Logistics to Transportation to Warehousing and finally Distribution. In a country like India which has a large geographic dispersion and manufacturing clusters based at key locations, transportation becomes a key link to managing the costs. In fact, Transportation accounts for the largest single cost component of logistics, estimated to be nearly 35%-40% of the total logistics costs.
There are multiple reasons for this. India has traditionally been a country that thrives on the entrepreneurial spirit of the hinterland. Hence all transportation needs, especially ground transport, were being met by small transport operators (more than 80-85% of the market) who own less than 5 trucks of smaller tonnage. This leads to an extreme fragmentation of the industry and thereby the cost of managing the overall delivery is high.
In addition, the Indian transportation industry has multiple layers of demand and capacity agents who are essentially people who play the intermediary role of matching demand and capacity albeit a
Last Updated On:7/30/2010 1:39:54 PM
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4. Transportation Management Systems in India: What works here?
India as a large diverse nation has complex logistical needs which are further supplemented by the nature of the worker class in the industry and also the practices in the industry till now. The industry is starting to see a transformation in the way global practices are being introduced. These will have definitive impacts on the way technology is being leveraged.
AquaMCG believes there are still a few key trends that will be seen in the choice of Transportation Management Systems.
Niche Transportation Software and Custom-Built solutions will continue to be popular along with the mainstream vendors:
Until the mainstream vendors such as SAP and Oracle are able to
customize their solution and their pricing to suit Indian logistics
players, the trend towards building a custom solution in-house or using a
niche solution from an Indian vendor who has a solution that can cater
to the nuances of Indian business will continue to be prevalent. It is
expected that the transportation software will be point-solutions that
will be integrated to other enterprise solutions like Warehousing
Systems, ERP, Financial Accounting Systems.
Transportation Software will be a potential candidate for increasing number of Software-As-A-Service (SaaS) solutions:
Indian logistics players are at the crossroads looking at an
exponential growth situation in the next few years. However current size
of the companies may deter large capital investments in Transportation
Software. Though the number of software vendors who offer a full-scale
SaaS solution are very less in number, it is expected that an increasing
number of vendors will offer this as a cost-effective solution for the
Indian firms.
Customers will influence technology investments in
Transportation software especially in the visibility
Last Updated On:8/3/2010 4:29:55 PM
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