Programme: B.

Com (Advertising & Marketing)

Semester-6 Core-Paper – 13
Subject: Logistics & Supply Chain Management
Chapter- 9 (Organising and Planning for LSCM Functions)
Organising and Planning for LSCM Functions: ---
Supply chain planning is the process of planning a product from raw material to the
consumer. It includes supply planning, production planning, demand planning, and sales
and operations planning. Supply planning determines how best to fulfill the requirements
created from the demand. Several goals and objectives of supply chain management help
you gain a competitive advantage in your marketplace: collaborative efficiency, optimized
logistics, quality improvement and long-term stability with an overall outcome of creating a
supply chain that is as productive and profitable as possible.
Strategic planning is important to supply chains, first of all, because it improves efficiency.
... Strategic planning must improve efficiency; it must make the supply chain Speedier.
Strategic Planning improves Economy. The need for speed is just part of the supply chain.

SUPPLY CHAIN MANAGEMENT :----

Supply chain management (SCM) is a broadened management focus that considers the
combined impact of all the companies involved in the production of goods and services, from
suppliers to manufacturers to wholesalers to retailers to final consumers and beyond to
disposal and recycling. This approach to managing production and logistics networks
assumes all companies involved in the process of delivering goods to consumers are part of a
network, pipeline, or supply chain. It encompasses everything required to satisfy customers
and includes determining which products they will buy, how to produce them, and how to
deliver them. The supply chain philosophy ensures that customers receive the right products
at the right time at an acceptable price and at the desired location.

Increasing competition, complexity, and geographical scope in the business world have led to
this broadened scope and continuing improvements in the capabilities of the personal
computer have made the optimization of supply chain performance possible. Electronic mail
and the Internet have revolutionized communication and data exchange, facilitating the
necessary flow of information between the companies in the supply chain.

Companies that practice supply chain management report significant cost and cycle time
reductions. For example, Wal-Mart Stores Inc. announced increases in inventory turns,
decreases in out-of-stock occurrences, and a replenishment cycle that has moved from weeks
to days to hours.

A fundamental premise of supply chain management is to view the network of facilities,

processes, and people that procure raw materials, transform them into products, and
ultimately distribute them to the customer as an integrated chain, rather than a group of
separate, but somewhat interrelated, tasks. The importance of this integration cannot be
overstated because the links of the chain are the key to achieving the goal. Every company
has a supply chain, but not every company manages their supply chain for strategic
advantage.

While easy to understand in theory, the chain management becomes more complex the larger
the company and its range of products, and the more international the locations of its
suppliers, customers, and distribution facilities. Supply chain management is also complex
because companies may be part of several pipelines at the same time. A manufacturer of
synthetic rubber, for example, can at the same time be part of the supply chains for tires,
mechanical goods, industrial products, shoe materials and footwear, aircraft parts etc.

Supply Chain Planning - Process, Methods, and

Strategies:---
Within any given supply chain, it is important to be able to have the correct amount of materials, equipment and labor required to
complete any given production, process or manufacturing order with optimal efficiency. Timely arrival and departure of these
production assets is also vital in order to make certain that all inventory and labor are in the right place at the right time. This all
comes down to what is the most vital aspect of the supply chain - "supply chain planning."

Supply chain planning within a production facility or operation is the groundwork for the
activity both inside and outside of the facility - and then there are multi-plant operations that
require planning for synchronization of disparate production plans. This is supply chain
planning.

Without a comprehensive operations plan for production, the operation does not have proper
foresight and coverage established for all of the potential "what-ifs" that are capable of
occurring. A proper operations plan can provide contingency sub-plans for common points of
failure. Equipment malfunctions, weather, personnel absenteeism can all upset the apple cart
for the days or week's output. Finding ways to further enhance supply chain planning
methods can benefit a facility enormously.

Supply chain planning :----

Supply chain management has undergone large-scale transformation in the past few years. In
the past, companies primarily used enterprise resource planning (ERP) systems for
collaboration and data tracking across the entire business. Today, some companies do their
planning with a mix of spreadsheets and ERP systems, and others use cloud-based planning
platforms.

These planning and scheduling decisions occur across a complex playing field organized by
decision tier (strategic, tactical, operational, and relevant time response) and organization
(corporate planning, factory, marketing, purchasing, etc.). The core of supply chain planning
as we investigate the role of artificial intelligence (AI) on this area

Soon, this approach raises more questions than it answers…..

  Are forecast numbers updated and shared across the business with relevant
stakeholders, including sales, finance, and operations?
 Are inventory numbers from previous versions of a spreadsheet accurately entered
into a new one?
 What do you do when disruptions like natural disasters and labor issues strike the
supply chain?

Without connection, these questions go unanswered. And with the waves of change sweeping
across the supply chain management world, you can’t afford to move forward with slow,
siloed planning. First, let’s define supply chain management, then we’ll talk about a few key
areas of supply chain transformation, and finally, five tips for building connected supply
chain planning.

What is the supply chain planning process?

Supply chain planning is the process of planning a product from raw material to the
consumer. It includes supply planning, production planning, demand planning, and sales and
operations planning.

1. Supply planning determines how best to fulfill the requirements created from the
demand plan. The objective is to balance supply and demand in a manner that
achieves the financial and service objectives of the enterprise.
2. Production planning addresses the production and manufacturing modules within a
company. It considers the resource allocation of employees, materials, and of
production capacity.
3. Demand planning is the process of forecasting demand to make sure products can be
reliably delivered. Effective demand planning can improve the accuracy of revenue
forecasts, align inventory levels with peaks and troughs in demand, and enhance
profitability for a particular channel or product.
4. Sales and operations planning (S&OP) is a monthly integrated business management
process that empowers leadership to focus on key supply chain drivers, including
sales, marketing, demand management, production, inventory management, and new
product introduction.

How to conduct supply chain planning ( Step-wise) ?

To succeed in a growing global market, you must adapt effectively to the digital revolution
and seek out practical ways to connect your supply chain planning from start to finish. Here
are five steps we recommend to achieve connected supply chain planning.:---
 1. Make the move to real-time supply chain planning
When using ERP systems and spreadsheets for planning, companies typically rely
only on historical data, resulting in little wiggle room for changes should any
disruptions occur in demand or supply. For example, based on the previous year’s
numbers, a company can estimate the number of products it will sell in the next
quarter.
2. Unify supply chain planning with enterprise planning
A vital second step is connecting traditionally siloed supply chain planning to sales
and operations planning and financial planning. Companies can benefit from
synchronizing their short-term operational planning with their wider business
planning processes to make real-time updates to inventory forecasts and supply.
Deploying real-time S&OP solutions that enable enterprise-wide collaboration means
key stakeholders across the business can create new scenarios and quickly assess how
to use their resources wisely to optimize profitability when an unforeseen event
happens.
3. Anticipate the demand of the end customer
For consumer-packaged goods companies, anticipating what customers want and
when they want it is an ongoing challenge. A solution like Anaplan allows end-to-end
visibility across the supply chain, and beyond their existing network of wholesalers
and retailers to sense demand signals from customers. When you can rapidly identify
changing consumer sentiments and assess how that changes demand for your product,
it benefits your company, partners, and customers by improving profitability, margins,
and lead time.
4. Leverage real-time data across all points of the supply chain
Because supply chain planning typically involves a myriad of suppliers, channels,
customers, and pricing schemes, models soon become large and potentially
unwieldy—especially when spreadsheets are your primary planning tools.
Incorporating a solution that uses real-time data allows you to plan with more
accuracy and reduces the risk of stock-outs or having too much inventory.
5. Ensure you have the flexibility to cope with change
When you have technology that lets you plan efficiently and react quickly, disruptions
aren’t disruptive because re-planning and re-forecasting is easy—resulting in time and
money saved and increased profitability.

Activities of Supply Chain Management: ---

The purpose of Supply Chain Management (SCM) is to keep chaos at bay – synchronizing
the activities of the network. All SCM or central planning processes created to manage an
organization’s demand/supply network consists of three primary activities, as well as two
secondary activities.

Primary Activities of Supply Chain Management: ---

The three primary activities of supply chain management include:

1. Demand Management – Understanding the exit demand, quantity, due date,

certainty and priority of an organization’s products. To achieve successful demand
management, it is key to have current data, collaboration and a wide range of
visibility. Best-in-class demand software solutions help organizations achieve these
 requirements by providing seamless access as needed to key data like ship history,
order history, forecast history, and current forecast. As well as, the ability to
dynamically aggregate and disaggregate the data, implement various forecasting
methods, and create a collaborative environment. Through effective demand
management, an organization can automate the routine aspects of their process,
quickly analyze emerging opportunities, and focus on understanding their market to
improve responsiveness as opposed to the mechanics of creating the demand estimate.
2. Supply Planning or Matching Assets with Demand – Balances or matches assets
such as inventory, resource capacity, and production routes with demand to determine
what can be met and how different asset levels impact the projected supply plan
linked to demand. The methods deployed differ based on the level of granularity, the
inherent nature of the industry, and the algorithm(s) used to match or balance assets
with demand. It is important to determine which method is best for each specific
situation. Other names associated with this process are master planning, central
planning, rough cut capacity planning, and replenishment planning. However, in all
cases, there are two main goals: insight for responsiveness and synchronization.
3. Analytics Workbench – Using analytics to create insights that can help determine the
exchange between those involved in the SCP or S&OP process. Generating the
demand statement and executing the matching process are just the start of the supply
chain planning process. The real work is the analysis of the source data and model
results to ensure the organization is not overcommitted, and more importantly, those
opportunities are not missed. This is sometimes referred to as the ―repair‖ process.
Key elements of support are basic business analytics and dynamic, or pro-active,
analytics.

Secondary Activities of Supply Chain Management:---

The two secondary activities of SCM are:

1. Available to Promise (ATP) – ATP Focuses on specific commitments to make to

customers when an actual order is placed. ―Complexity‖ can range from simply
looking at available inventory to complex trade-offs with projected inventory to
altering the relative importance of tasks for execution.
2. Inventory Modeling and Policy – This activity is based on understanding what
inventory levels occur simply as a result of the nature of your network, as well as,
locating safety stock to buffer against the inevitable variability in demand and supply.
The purpose of setting inventory policies is to manage risk. Inventory models help
management understand the risk.

ATP and inventory modeling and policy setting are considered secondary activities of supply
chain management because the primary activities of demand, supply and analytics
management must exist first.

A new supply chain planner for a new supply chain System :---
Along with new technologies and practices comes the need for a supply chain leader with a
new set of skills. To lead the way into a transformative future, they need to combine technical
and business knowledge with collaboration and communication skills. The ability to
influence department leaders that partner with supply chain is key, as well as the skills to
interact intelligently with leaders across the organization is essential, because supply chain
initiatives often reach across business units.
The effective supply chain leader of tomorrow is tech-savvy and comfortable working
alongside the world of ―machines.‖ Some have said that artificial intelligence won’t replace
managers, but managers who work with AI will replace managers who don’t. This highlights
the transformation taking place in supply chain: humanity is essential, but so is technology.
And this leader is a storyteller—digging into the countless layers of the supply chain to find
the issues and weaving the right story together to help solve them.

Are you ready to take your supply chain beyond its limitations driven by outdated ERP
systems and spreadsheets? By effectively adapting to the supply chain digital revolution and
following the steps to connected supply chain planning above, you’ll be ready to collaborate
across the enterprise, quickly adjust to market changes, and reap benefits, including lower
costs and increased efficiency.

Product Portfolio Management:---

Product portfolio management oversees the overall product lifecycle, beginning with the
introduction of a new product through to its end-of-life planning. In many cases, product lines
are interdependent, and understanding how new products may influence demand for other
products is important to understanding the overall product mix required to maximize market
share.

Starting or Improving Planning with Supply Chain Management Software

Organizations that are just starting the journey of using software to support more intelligent
SCP will often, but not always start with demand management followed by either an
aggregate level supply planning application or an inventory model. After these are in place,
typically an assessment is made to determine the next steps that best benefit the organization.
It has been proven that following an incremental process for enhancing existing or
implementing new functions is the best practice. An organization already into the journey
should begin with the assessment. However, the critical concept to remember overall
integrated areas is this is a ―plan,‖ not the execution.

Benefits of having an SCM improvement plan are:----

 You create expectations for an organization that are feasible but do not leave
opportunities on the table.
 You ensure the ―assets‖ needed are in place.
 You synchronize the overall activities of the organization.

Last, having this process in place with depth, breadth, and flexibility enhances the value of
business knowledge and intuition, not replace it and creates the necessary base to bring AI
methods to bear on key challenges.

Supply Chain Planning (SCP) :---

Supply chain planning (SCP) is the forward-looking process of coordinating assets to
optimize the delivery of goods, services and information from supplier to customer, balancing
supply and demand. An SCP suite sits on top of a transactional system to provide planning,
 what-if scenario analysis capabilities and real-time demand commitments, considering
constraints. Typical modules include:

 Available/capable to promise
 Sales and operations planning/integrated business planning
 Collaborative planning (including forecasting and replenishment)
 Vendor-managed inventory/direct point of sale
 Event planning (promotion, life cycle)
 Demand planning
 Inventory planning
 Production/factory planning and scheduling
 Distribution planning (unconstrained, distribution requirements planning [DRP] and
deployment)
 Strategic network design
 Inventory strategy optimization (simultaneous, multitiered)
 Supply planning (optimized, DRP and deployment)
 Production/multiplant capacity planning (master production scheduling, rough-cut
capacity planning)

Supply Chain Planning strategies and methods include:----

 Data Gathering - Precise figures and data allow for an insight into the supply chain.
With up-to-minute and real-time data, critical resolutions can be made sooner.
 Lean Principles - Just-in-time supply management enables a decrease in inventory
cost. Fulfillment of orders and overhead cost will be eradicated, allowing for inventory to
have a much more steady flow.
 Increased Visibility - Supply chains often contain inevitable mishaps such as waste
and miscalculation. An increase in operational visibility can reduce the amount of missing
inventory or out of spec waste. It adds-up and efficient handling of these losses to efficiency
can require a male-up plan in order to meet production.
 Standardization - Obtaining an ERP system that enables efficiency growth will help
the supply chain in the short and long run by increasing revenue. Along with a planning
system, locating software that is comprehensible within a team promotes overall coalition and
will curtail mistakes in the future.

There is a fair amount to account for in the planning process of supply chain. A multitude of
facilities, if not all, are looking for ways to become better prepared for unforeseen obstacles
and circumstances in their supply chains and similar challenges within their own respective
location in the supply chain of their clients. Without some sort of a comprehensive plan, a
facility might completely fail at order fulfillment; production suffers when the first
unforeseen hurdle presents itself. This is exactly why obtaining an ERP system or system
add-on that has suitable planning and production scheduling that can achieve the amount of
comprehensive planning required is vital to profitability and timely order fulfillment. ERPs,
typically, only go so far.
Facility wants and needs may not entirely match-up with any given in-house ERP system;
therefore locating appropriate add-ons, such as advanced planning and scheduling systems
(APS) can tend to fill gaps in those operational wants and needs that may be lacking. With an
advanced planning and scheduling system, it can extend a given ERP system into a full-on
supply chain planning and scheduling system for supply chain management (SCM).

Supply chain demand planning:---

The supply chain planning process almost always begins with demand planning, in which a
team consisting of people from sales, marketing and production creates a sales forecast based
on historical data and other information, such as data arriving from point-of-sale (POS)
terminals. It then analyzes the data in spreadsheets or specialized demand planning software
or data repositories to identify patterns that provide clues to future demand.

Demand planning often includes an attempt not just to forecast demand, but to influence it to
some degree, through such mechanisms as price cuts, product substitutions and special
promotions. This demand shaping is another tool that companies have available to more
closely match demand with the actual supply.

Once the demand plan is approved, it is translated into a corresponding production plan and,
eventually, carried out in the various steps of supply chain execution, such as distribution and
order fulfillment.

Why is Demand Planning Important?

If product isn’t available for customers to purchase because it’s out of stock, businesses lose
out on revenue, and over time, they could lose the customer to a competitor. On the other
hand, sitting on a slew of unused inventory incurs both space and production costs
unnecessarily. With demand planning, business leaders can stay in front of market shifts and
make more proactive decisions, while being responsive to their customers’ needs.

Best Practices for Demand Planning---Demand planning is a multi-step process, dependent

on the right tools, information and processes. Often, there can be unique nuances in the
process, based on product positioning, inventory needs and organizational goals.

Key supply chain planning elements:---

At most companies, supply chain planning is accomplished with a collection of planning and
forecasting processes and software. There is usually no single supply chain planning software
system, though many applications and SCM suites are designed to facilitate end-to-end
supply chain planning by helping trading partners to collaborate.

Integration between different vendors' SCM systems and online procurement networks also
facilitates supply chain planning across geographic and corporate boundaries.

The main supply chain planning processes include the following:---

 Sales and operations planning (S&OP) is an effort to match a manufacturer's supply
with customer demand by having the sales department work with operations departments,
such as manufacturing, marketing and procurement, to develop a single production plan.
The S&OP team starts by gathering information, such as recent forecasts and sales and
inventory data, develops a demand plan and builds a production plan based on available
manufacturing and distribution capacity. The team then reconciles the demand and
production plans with resource constraints, such as finances, before meeting with
executives to adjust the plan and obtain their final approval.

Some companies employ S&OP in a broader integrated business planning (IBP) process
that rolls up the plans of other departments, such as finance and HR, into a single plan. In
fact, IBP evolved from S&OP.

 Material requirements planning (MRP) is a method for calculating and planning the
raw materials and components needed to manufacture the products called for in the
demand or production plan. It involves taking inventory of materials and components,
identifying others that are needed and making plans to produce or buy them. MRP's
critical role in the supply chain is obvious, since it affects the supply coming into a
manufacturer and leaving it in the form of products continuing along the chain to
distributors, retailers and ultimately to consumers.

Manufacturers have used MRP since it was developed in the '60s, and few manufacturers
of any size do without it. Some also use a successor called manufacturing resource
planning (MRP II) that includes MRP, but broadens the concept to other operations of a
manufacturer, such as shop-floor scheduling, purchasing and financial management. MRP
II was broadened in the late '80s to work in industries outside manufacturing, and the
Gartner research firm came up with a new name -- enterprise resource planning (ERP) --
in 1990 to capture its appeal to any type of enterprise.

S&OP, IBP, MRP and MRP II all were processes before software vendors developed
specialized modules for them. Today, most vendors of ERP suites, especially those
expressly serving the manufacturing sector, have MRP modules, and a handful have
S&OP software, and fewer still sell IBP tools. There are dozens of niche MRP vendors.

 Production planning addresses the details of manufacturing products, including the

number and types of products, their components, who will make them and which plants
and machinery will be involved. Production scheduling is a key part of production
planning and the term is sometimes used as a synonym for the entire process.
 Advanced planning and scheduling (APS) goes beyond simple production planning in
an attempt to optimize more of the factors that can affect supply, especially materials,
labor and plant capacity. It can also incorporate demand management and, in theory,
provides a much finer-tuned mechanism for matching supply with demand. Major ERP
vendors, including Oracle and SAP, sell dedicated APS modules.
Importance of supply chain planning :---
Supply chain planning is a tactical approach that, when done well, helps optimize the
manufacture and delivery of products. It can lower production costs, increase sales and help
manage relationships with suppliers.

Supply chain planning provides other advantages, including the following:

 Data collection. Having access to precise, real-time data can improve decision-
making and facilitate time-sensitive processes, such as just-in-time manufacturing.
 Inventory management. Up-to-date inventory data can enable lean production and
lower overhead.
 Efficiency. Accurate demand and production plans can help companies identify
inefficiencies, including raw materials waste and excess inventory.
 Improved customer satisfaction. Tracking customer sentiment and product demand
can improve profit margins.
 Product lifecycle management (PLM). Demand planning can help align product
development with consumer demand.

 Statistical Forecasting

Using historical data, statistical forecasting creates supply chain forecasts with advanced
statistical algorithms. In this area, it is important to determine the accuracy of each model,
identify outliers and exclusions and understand assumptions. Seasonal shifts (think the spurt
of holiday shopping that occurs between October and December for retailers, or the boost in
yard equipment sales in spring months) can also be assessed with statistical forecasting.

 Trade Promotion Management

Trade promotion or marketing events can influence demand, especially in the retail industry.
The goal of a trade promotion is to help a brand connect with a customer, often through an in-
store giveaway, discount, or promotion, and these events can impact the demand for a
product.

 Implement the Right Software

There is a plethora of options when it comes to enterprise resource planning (ERP) systems,
so choosing the right one can be tricky. When considering ERP software, it’s important to
examine the ability of the tool to handle forecasting nuances as well as the provider’s
reputation, reporting capabilities, and the transparency and reliability of the forecasts it
produces.
  Gather and Prepare Data

Data drives demand planning, now more than ever. Real-time visibility into inventory
movements coupled with metrics reports that paint a clear picture and data mining and
aggregation that can identify areas for improvement or reaction can help to create more agile
process modeling.

 Define Process Models

Lacking a defined process for a demand planning cycle leads to chaos. Confusing process
with information that is simply a set of widely known facts around an organization is all too
common, making it difficult to hold anyone accountable, and thus hurting overall
performance. For most companies, the steps in the demand planning process go something
like this:

 Preparation of data
 Initial forecasting
 Incorporation of market intelligence
 Consideration of sales goals and financial reports to reconcile bottom-up forecasts
with top-down financial and sales forecasts
 Refine a final forecast
 Performance monitoring based on real-time analytics

 Implement and Monitor

Successful demand planners usually design a pilot version of the plan using historical data, or
descriptive analytics, as a basis. They also make regular adjustments and have a team of
people dedicated solely to devising the plan, implementing it, reducing error and bias, and
designing processes for execution.

Organising LSCM- Functions :---

For supply chain professionals, understanding how to use digital enterprise architectures and
implementing artificial intelligence and machine learning programs that can help optimize a
lean, agile and data-driven approach will reveal new ways to cut costs in operations, boost
revenue and offer a greater competitive edge. When implemented well, demand planning can
be a pivotal process in boosting a supply chain’s profitability.

In addition to helping to create an efficient, integrated company, supply chain management

also plays a large part in reducing costs. A study by the A.T. Kearney management consulting
company estimates that supply chain costs can represent more that eighty percent of the cost
structure in a typical manufacturing company. These costs include lost sales due to poor
customer service or out of stock retail products. For every rupees of inventory in a system,
there are a hidden supply chain costs: working capital costs, asset costs, delivery costs, and so
on.
  Customer Focus:---

All sources agree the fundamental focus of supply chain management begins by
understanding the customer, their values, and requirements. This includes internal customers
of the organization and the final customer as well. Companies must seek to know exactly
what the customer expects from the product or service and must then focus their efforts on
meeting these expectations. The process of suppliers must be aligned with the buying process
of the customer. Even performance measurements must be customer driven, because the
behavior of the final customer ultimately controls the behavior of the entire supply chain.

 Information Flows :----

Another requirement is increased information flow. Companies must invest in the technology
that will provide access to greater amounts of timely information. Information makes it
possible to move to more instantaneous merchandise replenishment and allow all parties in
the chain to respond quickly to all changes. Information facilitates the decisions of the supply
chain such as evaluation and exploration of alternatives. Information flow is key to the
visibility of the product as it flows through the supply chain and is needed at every stage of
he customer order. Improving the intelligence of where products are in the chain also
improves inventory management and customer service capabilities. Issues of trust and
security are fundamental to information integration. Many organizations are successfully
dealing with these issues through the development of partnering relationships.

 Employees and Management Support :---

As partners in the supply chain must also be highly flexible, supply chain strategies often
require changes in processes and traditional roles. All members of the supply chain must
be open to new methods and ideas. The flexibility and change required is often difficult
for organizations and their employees. It is however, the ability to embrace necessary
changes that will position a company to take advantage of the benefits of supply chain
management. Because the supply chain is a dynamic entity, businesses are advised to
organize for change. They must anticipate resistance and be prepared to deal with it.
Training in the concepts of supply chain management will aid in this effort. Also, as with
any organization change, the new ideas must be supported and embraced by all levels of
management.

 Improvement Measurement :---

Often companies undertake ways to improve themselves without also thinking about how to
measure whether or not they have been successful. Performance measurement must consider
the entire supply chain and be related to the effect on the ultimate goal of customer
satisfaction. Therefore the final concept of supply chain management is ensuring
measurement techniques are adequately considered during the implementation of supply
chain management techniques.
  Achieving the Goals of SCM:---

Methods being used to achieve the goals of supply chain management can be divided into
two categories. Some methods seek to achieve the goals through improving the processes
within the links of the chain. There are also methods that seek to achieve the goals by
changing the roles or functions of the chain.

The methods used to improve the process include modeling various alternatives, effective
measurement, improved forecasting, designing for the supply chain, cross-docking
inventories, direct store delivery, and electronic data interchange (EDI) technology. Direct
store delivery methods bypass the distribution center. Products using direct store delivery
include bakeries, cosmetics, snack foods, and other items where product freshness or quick
replenishment is required. Cross-docking is a process that keeps products from coming to rest
as inventory in a distribution center. Products arrive at the center and are immediately off
loaded, moved, and immediately reloaded on waiting delivery trucks.

Conclusion:---
EDI technology is the electronic exchange of information between the computer systems of
two or more companies. It is used to process transactions like order entry, order confirmation,
order changes, invoicing, and pre-shipment notices. The EDI movement was started by big
retailers like Wal-Mart, Kmart, and Target. To do business with some of these large
customers, EDI processing is a requirement. EDI delivers results by facilitating the constant
and rapid exchange of information between companies. Customer order, invoice, and other
information that would previously require hours of data entry can be done in minutes. Point
of sale data can be transmitted in a matter of minutes or hours instead of weeks.

Methods that use changing roles include postponement strategies, vendor managed inventory,
and supplier integration. Postponement strategies delay the differentiation of products in
order to gain flexibility to respond to changing customer needs. Product inventory is held in a
generic form so that as specific demand becomes known, the product can be finished and
shipped in a timely manner.

Vendor managed inventory and continuous replenishment programs are ways in which
organizations are reaching beyond their boundaries and integrating their efforts with suppliers
and customers. Point of sale data is transferred from customer to supplier in real time so that
automatic replenishments can occur. Companies can even surrender the responsibility for
managing inventory to some of their suppliers. Supplier integration moves beyond partnering
with suppliers and focuses on aligning with all critical suppliers the supply chain.

==================================================================