Logistics and Supply Chain Management
MS 55 Free Solved Assignment
Q 1. “The supply chain management (SCM) is viewed as a system that links an enterprise with its customers and suppliers.” Comment on the statement.
Ans. At the most fundamental level, supply chain management (SCM) is management of the flow of goods, data, and finances related to a product or service, from the procurement of raw materials to the delivery of the product at its final destination.
Although many people equate the supply chain with logistics, logistics is actually just one component of the supply chain.
Today’s digitally based SCM systems include material handling and software for all parties involved in product or service creation, order fulfillment, and information tracking-such as suppliers, manufacturers, wholesalers, transportation and logistics providers, and retailers.
Supply chain activities span procurement, product lifecycle management, supply chain planning (including inventory planning and the maintenance of enterprise assets and production lines), logistics (including transportation and fleet management), and order management. MS 55 Free Solved Assignment
SCM can also extend to the activities around global trade, such as the management of global suppliers and multinational production processes.
The history of SCM :
Supply chains have existed since ancient times, beginning with the very first product or service created and sold.
With the advent of industrialization, SCM became more sophisticated, allowing companies to do a more efficient job of producing and delivering goods and services.
For example, Henry Ford’s standardization of automobile parts was a game-changer that allowed for the mass production of goods to meet the demands of a growing customer base.
Over time, incremental changes (such as the invention of computers) have brought additional levels of sophistication to SCM systems.
However, for generations, SCM essentially remained a linear, siloed function that was managed by supply chain specialists.
The internet, technology innovation, and the explosion of the demand-driven global economy has changed all that.
Today’s supply chain is no longer a linear entity. Rather, it’s a complex collection of disparate networks that can be accessed 24 hours a day.
At the center of these networks are consumers expecting their orders to be fulfilled-when they want them, the way they want them.MS 55 Free Solved Assignment
We now live in a time of unprecedented global business and trade, not to mention continual technology innovation and rapidly changing customer expectations.
Today’s best supply chain strategies call for a demand-driven operating model that can successfully bring people, processes, and technology together around integrated capabilities to deliver goods and services with extraordinary speed and accuracy.
Though SCM has always been an enterprise fundamental, the supply chain today is more vital than ever as a marker for business success.
Companies that can effectively manage their supply chain to adapt to today’s volatile and ever-changing, technology-driven business environment are the ones that will survive and thrive.
Industry 4.0 and SCM :
Today’s application of radical new technologies to manufacturing has been dubbed Industry 4.0, or the “fourth industrial revolution.”
In this latest iteration of industrialization, technologies such as Al, machine learning, the Internet of Things, automation, and sensors are transforming the way companies manufacture, maintain, and distribute new products and services.
It can be said that Industry 4.0 is built on the supply chain.
In Industry 4.0, the way enterprises apply technology to the supply chain is fundamentally different from how they applied it in the past.MS 55 Free Solved Assignment
For example, within the maintenance function, enterprises would typically wait until a machine malfunctioned to fix it. Smart technology has changed that.
We can now predict failure before it happens, and then take steps to prevent it so that the supply chain can continue uninterrupted. Today’s SCM is about using technology to make the supply chain-and the enterprise-smarter.
Q 2. It is a fact; SCM and BPR have a common goal and are interrelated. Explain the sentence with examples.
Ans. Business process re-engineering (BPR) is a business management strategy, originally pioneered in the early 1990s, focusing on the analysis and design of workflows and business processes within an organization.
BPR aimed to help organizations fundamentally rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors.
BPR seeks to help companies radically restructure their organizations by focusing on the ground-up design of their business processes.
According to early BPR proponent Thomas H. Davenport (1990), a business process is a set of logically related tasks performed to achieve a defined business outcome.
Re-engineering emphasized a holistic focus on business objectives and how processes related to them, encouraging full-scale recreation of processes rather than iterative optimization of sub-processes. MS 55 Free Solved Assignment
BPR is influenced by technological innovations as industry players replace old methods of business operations with cost saving innovative technologies such as automation that can radically transform business operations.
Business process reengineering is also known as business process redesign, business transformation, or business process change management.
Business process reengineering (BPR) is the practice of rethinking and redesigning the way work is done to better support an organization’s mission and reduce costs. Organizations reengineer two key areas of their businesses.
First, they use modern technology to enhance data dissemination and decision-making processes. Then, they alter functional organizations to form functional teams.
Reengineering starts with a high-level assessment of the organization’s mission, strategic goals, and customer needs. Basic questions are asked, such as “Does our mission need to be redefined?MS 55 Free Solved Assignment
Are our strategic goals aligned with our mission? Who are our customers?” An organization may find that it is operating on questionable assumptions, particularly in terms of the wants and needs of its customers.
Only after the organization rethinks what it should be doing, does it go on to decide how best to do it.
Within the framework of this basic assessment of mission and goals, re-engineering focuses on the organization’s business processes the steps and procedures that govern how resources are used to create products and services that meet the needs of particular customers or markets.
As a structured ordering of work steps across time and place, a business process can be decomposed into specific activities, measured, modeled, and improved. It can also be completely redesigned or eliminated altogether.
Re-engineering identifies, analyzes, and re-designs an organization’s core business processes with the aim of achieving improvements in critical performance measures, such as cost, quality, service, and speed.
Re-engineering recognizes that an organization’s business processes are usually fragmented into subprocesses and tasks that are carried out by several specialized functional areas within the organization. MS 55 Free Solved Assignment
Often, no one is responsible for the overall performance of the entire process.
Reengineering maintains that optimizing the performance of sub-processes can result in some benefits but cannot yield improvements if the process itself is fundamentally inefficient and outmoded.
For that reason, reengineering focuses on re-designing the process as a whole in order to achieve the greatest possible benefits to the organization and their customers.
This drive for realizing improvements by fundamentally re-thinking how the organization’s work should be done distinguishes the re-engineering from process improvement efforts that focus on functional or incremental improvement.
Q 3 Information is the key to the decision making in Business.” Explain the concept of information and technology in the integrated supply chain. Also, explain the importance of information in integrated business.
Ans. Information, analyze this information, and execute on it to improve the performance of the supply chain. Information is essential to making good supply chain decisions because it provides the broad view needed to make optimal decisions.
It provides the tools to gather this information and analyze it to make the best supply chain decisions (Chopra & Meindl, 2013).
Information is a key supply chain driver because it serves as the glue that allows the other supply chain drivers to work together to create an integrated, coordinated supply chain.
Information is crucial to supply chain performance because it provides the foundation on which supply chain processes execute transactions and managers make decisions.
Without information, a manager cannot know what customers want, how much inventory is in stock, and when more products should be produced or shipped.
In short, information provides supply chain visibility, allowing managers to make decisions to improve the supply chain’s performance (Chopra & Meindl, 2013).
Using IT systems to capture and analyze information can have a significant impact on a firm’s performance. Availability and analysis of information to drive decision-making is key to the success of a supply chain. MS 55 Free Solved Assignment
To support effective supply chain decisions, information must have the following characteristics: Information must be accurate, must be accessible promptly, must be of the right kind, and must be shared (Chopra & Meindl, 2013).
In summary, information is crucial to making good supply chain decisions at all three levels of decision making (strategy, planning, and operations) and in each of the other supply chain drivers (facilities, inventory, transportation, sourcing, and pricing).
Information Technology enables not only the gathering of these data to create supply chain visibility but also the analysis of these data so that the supply chain decisions made will maximize profitability (Chopra & Meindl, 2013).
The inherent challenges to the successful development and implementation of effective information are the sharing of information along supply chains and the discipline to ensure the integrity of the data collected, (Coyle, Langley, Novack & Gibson, 2013).
The information and communication systems that are available to organizations today lead to the collection and storage of vast amounts of data, but some organizations may not be taking advantage of the abundance of data to develop information systems to improve decision-making. MS 55 Free Solved Assignment
The accumulation and storage of data are almost useless unless the data are shared horizontally and vertically in the supply chain and used to make better decisions about inventory, customer services, transportation, and so forth.
Information can be a powerful tool if it is timely, accurate, managed, and shared, (Coyle, Langley, Novack & Gibson, 2013).
Bring it all together :
Every day, organizations in all sizes have a large amount of data compiling into their systems, raw data will not make much sense without proper analysis.
I believe that the most challenging part is how to make use of those data? How to make raw data meaningful and understandable in a business sense to decisionmakers? How to derive the inherent insights from those data?
Although it is both art and science in doing So, I believe that it requires commonsense, analytical skills, carefully think of the background of your audiences, using the right tools and of course, maintain integrity. MS 55 Free Solved Assignment
Q 4. “Logistics Management impacts not only upon the profit and loss account of business but also upon the balance sheet?” Comment on the statement.
Ans. Most small businessmen do not prepare, read, understand or analyze their profit & loss account. They think this document is required mainly by big companies and it is not necessary for small businesses.
As a business grows year-on-year, the issue for most businessmen is, how can one determine their income-tax obligations?
How can one avail loans from bankers? And finally the most important concern is how to forecast their revenue and expenses while setting yearly targets?
The profit & loss account provides information about an enterprise’s income and expenses which result in net profit or net loss. MS 55 Free Solved Assignment
It helps a businessman to evaluate the performance of an enterprise and provides a basis for forecasting future performance.
It also provides valuable information required by a banker while sanctioning a loan.
The Profit & Loss account describes different business activities such as revenues and expenses, particularly useful in assessing the risk of not achieving certain level of income in the future. It also provides information required to determine tax obligations.
“A profit & loss account is not only the statement of income and expense, but it also enables you to increase your earnings by reducing unnecessary expenses and increasing incomes,” states Garg Sharma Tandon & Associates, partner Sanjeev Tandon, a practising chartered accountant since 1995.
Setting and achieving targets is the bedrock for the growth of SMEs and setting a target requires projection of revenues and expenses.
An established SME can make projections for its future revenue based on its past sales and expected income using their Profit & Loss account. MS 55 Free Solved Assignment
As a small business starts and grows, it may find that its expenses increase at a higher rate. The SMEs may make accurate expense projections to avoid unnecessary expenses.
Analysing a profit and loss account :
The profit & loss account of an enterprise can be analysed by understanding its basic components.
Gross profit: This is the profit from the sale of goods that will be utilized to pay operating expenses of the enterprises.
Higher gross profits mean that the enterprise will have more money to pay operating expenses like salaries, rent and administrative expenses.
Indirect expenses: All expenses other than direct expenses are assumed as indirect expenses. For example, rent and taxes, salaries and wages, interest, depreciation, agent commission, advertisement, etc. MS 55 Free Solved Assignment
These expenses describe selling and administration cost of a business.
Net profit/loss: A profit & loss account has two sides, that is, income part (credit side) or expenditure part (debit side). The difference in the two sides of this account will represent either net profit or net loss.
A higher net profits indicates that the enterprise is more effective in converting their revenues into actual profit.
Gross turnover/sales: The gross turnover describes the total sales or gross receipts made during the year. Basically, it provides information about the size and value of the business.
A comparison can be made between the previous year’s turnover and the current year’s turnover to analyze the growth of the business.
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