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supplier relationship management (SRM)

• Definition:- Supplier relationship management (SRM) is the systematic

approach to evaluating vendors that supply goods, materials and services
to an organization, determining each supplier's contribution to success and
Unit – V developing strategies to improve their performance
TRENDS IN SUPPLY CHAIN • Goals of supplier relationship management :-
1. To streamline and improve the processes that take place between the
organization as buyer of products and services and the businesses that
supply them.
2. SRM aims to develop a mutually beneficial relationship between the
Dr. Ramesh K T organization and its suppliers.
Dept. of IEM 3. To promote quality, efficiency and innovation.
BMS College of Engineering 4. To maximize the value of suppliers to gain a competitive advantage in
the marketplace.

supplier relationship management (SRM) supplier relationship management (SRM)

• Tasks of supplier relationship management :- • Supplier relationship management process :-

1. Enterprise leaders who take a strategic approach. 1. Segment suppliers.
Example, might determine that long-term engagements with specific 2. Develop a supplier strategy.
suppliers are preferable to ensure continuity of supplies, while short 3. Execute the supplier strategy.
term relationships with other suppliers can best ensure business agility . SRM use cases :-
and flexible pricing.
1. Take better advantage of supplier capabilities.
2. An effective SRM strategy also requires cultivating personal
relationships with suppliers and working to build trust and mutually 2. Reduce costs.
beneficial partnerships when appropriate. 3. Ensure supply chain continuity.
3. Leaders involved in SRM must also work to align everyone in their 4. Limit supply chain risks.
organization with the goals of the SRM program and ensure
compliance with its objectives. 5. Increase responsiveness of suppliers.
6. Gain visibility into future prices and hedge against price volatility.
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Logistic resource management(LRM)

supplier relationship management (SRM)
• Definition :-Logistics resource management (LRM) is a new IT tool providing
browser-based software for automating, planning, managing and optimizing the
• SRM challenges :- e-commerce logistics activities. It is a platform for the command and control of
logistics execution, which can also operate as a central clearing house of
1. overemphasis on using it to reduce cost rather than cultivate value and logistics data to meet a variety of other decision-making needs of the e-
strategic ties.
commerce firm.
2. lack of visibility into suppliers, their importance to the organization and
the value they can deliver. • LRM OPERATIONS :-
3. insufficient commitment to developing clear objectives for the 1. Order Processing
program, assigning and training staff to run it, and aligning business
units to the objectives. 2. Inventory Management
• SRM software :- 3. Order Execution
1. contact and communication management. 4. Shipping
2. invoices and requisitions. 5. Tracking and Tracing
3. order histories. 6. Payments
4. Scheduling. 7. Transaction Security
5. performance analytics. 8. Order Postponement, Cancellation and Substitutions
6. procurement intelligence 9. Reverse Material Flow

Logistic resource management(LRM) E-Supply Chain Management (E-SCM)

• Factors influencing the e-logistics systems :- • Definition :-Electronic supply chain management (e-SCM)
is collaborative use of technology to improve the operations of supply
1. Reliability, maintainability. chain activities as well as the management of supply chains.
2. software and facility. • Goals of E-SCM :-
3. transportation and handing serve as key factors for LRM . 1. fulfill demand.
4. Economic factors and supply support factors. 2. drive customer value.
• Empirical Analysis :- 3. improve responsiveness.
1. Data Collection . 4. facilitate financial success and build a good network.
2. Descriptive Analysis of Data. Most primary goals of efficient supply chain management should be.
3. Reliability and Validity. 5. faster delivery.
6. Higher efficiency.
4. Empirical Data Analysis.
7. accelerated cash flow.
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E-Supply Chain Management (E-SCM) Block chain in SCM

• Activities of e-supply chain management :- • How does blockchain work?

1. Supply Chain Replenishment.
2. E-Procurement.
3. Supply Chain Monitoring and Control Using RFID.
4. Inventory Management Using Wireless Devices.
5. Collaborative Planning.
6. Collaborative Design and Product Development.
7. E-Logistics.

Block chain in SCM Block chain in SCM

• How does blockchain provide supply chain solutions? • Blockchain and supply chain: The perfect union of efficiency and
1. Blockchain technology allows companies to track all types of transparency
transactions more securely and transparently. The potential impact on 1. Efficiency
the supply chain function is immense. o Blockchain makes global supply chains more efficient by allowing
2. Using blockchain, companies can trace the history of a product right companies to complete transactions directly and without third parties.
from its point of origin to where it currently sits o Integrated payment solutions reduce the time between ordering and
3. With the help of this powerful technology, parties collaborating on payment processing, ensuring the proper, timely movement of products.
one shared platform could dramatically reduce the time delays, added o Organizations can integrate blockchain with radio-frequency
costs, and human error frequently associated with transactions. identification (RFID) tags.
4. A shared blockchain ledger provides a trusted and tamperproof audit 2. Transparency
trail of the flow of information, inventory, and finance within a supply
chain o As records on the blockchain can’t be erased, it makes for a transparent
supply chain.
o logistics issues can be easily tracked to their source.
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Introduction to supply chain analytics Supply Chain Analytics

• Types of supply chain analytics :- Supply chain analytics refers to the processes organizations
1. Descriptive use to gain insight and extract value from the large amounts
2. Diagnostic of data associated with the procurement, processing and
3. Predictive distribution of goods. Supply chain analytics is an essential
4. Prescriptive element of supply chain management (SCM).
Features of supply chain analytics:-
1. Data visualization: The ability to slice and dice data from different Achieving end-to-end supply chain analytics requires bringing
angles to improve insight and understanding. information together across the procurement of raw materials
2. Stream processing: Deriving insight from multiple data streams and extends through production, distribution and aftermarket
generated by, for example, the IoT, applications, weather reports and third-
party data. services.
3. Social media integration: Using sentiment data from social feeds to
improve demand planning.

How supply chain analytics works Features of supply chain analytics

Supply chain analytics brings together data from across different ● Data visualization. The ability to slice and dice data from different angles
to improve insight and understanding.
applications, infrastructure, third-party sources and emerging ● Stream processing. Deriving insight from multiple data streams generated
technologies such as IoT to improve decision-making across the by, for example, the IoT, applications, weather reports and third-party
strategic, tactical and operational processes that make up supply data.
● Social media integration. Using sentiment data from social feeds to
chain management. improve demand planning.
● Natural language processing. Extracting and organizing unstructured data
The process of creating supply chain analytics typically starts with buried in documents, news sources and data feeds.
data scientists who understand a particular aspect of the business, ● Location intelligence. Deriving insight from location data to understand
such as the factors that relate to cash flow, inventory, waste and and optimize distribution.
● Digital twin of the supply chain. Organizing data into a comprehensive
service levels. These experts look for potential correlations model of the supply chain that is shared across different types of users to
between different data elements to build a predictive model that improve predictive and prescriptive analytics.
optimizes the output of the supply chain. They test out variations ● Graph databases. Organizing information into linked elements that make it
easier to find connections, identify patterns and improve traceability of
until they have a robust model. products, suppliers and facilities.
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Supply chain analytics uses Descriptive analytics

● Improve risk management by identifying known risks and
predicting future risks based on patterns and trends • Descriptive analytics :- What has happened
throughout the supply chain.  the use of data to figure out what is happening now or what happened in
● Increase planning accuracy by analyzing customer data to the past.
identify factors that increase or decrease demand.
● Improve order management by consolidating data sources to  Descriptive analytics prepare and analyze historical data and identify
assess inventory levels, predict demand and identify fulfillment patterns
issues.  This type of intelligence looks for trends at the micro-, the macro-, or
● Streamline procurement by organizing and analyzing spending the aggregated-levels of the business and then drills up, down, or across
across departments to improve contract negotiations and the data to identify areas of under- and over-performance.
identify opportunities for discounts or alternative sources.  Areas may include: geography, time, products, shipments, logistic and
● Increase working capital by improving models for determining transport lanes or channels, customers, stores, partners, campaigns, and
the inventory levels required to ensure service goals with other business dimensions such as rates and costs
minimal capital investment.
 Techniques such as data modeling, visualization, and regression analysis
largely reside in this space.

Predictive analytics Prescriptive analytics

• Predictive analytics:- What could happen • Prescriptive analytics:- What should happen
 The use of data to find out what could happen in the future.  The use of data to prescribe the best course of action to increase
 Predictive analytics predict future probabilities and trends, and the chances of realizing the optimal outcome.
find relationships in data that are not readily apparent with  This is a forward-looking future state or alternate path analysis,
traditional or descriptive analysis. providing future-looking insights on the business; predicting what
 Techniques such as data mining, forecasting, and predictive is likely to happen and why it’s likely to happen.
modeling reside in this space.  Prescriptive analytics evaluate and determine new ways to
 It helps managers anticipate likely scenarios, so that they can plan operate, target business objectives, and balance all constraints, to
ahead and address contingencies, rather than reacting to what has better optimize the outcome in terms of cost and service.
already happened.
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Analytics Progression Moving to descriptive/

Predictive/Prescriptive Plans & Execution Future trends of supply chain analytics
● Blockchain: Blockchain infrastructure and technologies
promise to improve visibility and traceability across more
layers of the supply chain. These same building blocks could
drive companies to use smart contracts to automate, control
and execute transactions.
● Graph analytics: Predicted to power more than half of all
enterprise applications within a decade, graph analytics will
help supply chain managers better analyze the links of various
entities in the supply chain.
● Hyper Automation: The technologies underpinning hyper
automation will accelerate supply chain automation by using
process mining analytics to identify automation candidates,
generate the automations and manage these automated
processes.

Supply Chain Sustainability Supply Chain Sustainability Statistics

Supply chain sustainability refers to companies’ efforts to ● Demand: Nearly half of U.S. consumers say they would
consider the environmental and human impact of their change purchasing habits to reduce their impact on the
products’ journey through the supply chain, from raw environment, according to Nielsen.
materials sourcing to production, storage, delivery and every ● Environmental impact: The supply chain accounts for
transportation are in addition to traditional corporate supply more than 90% of most consumer goods companies’
chain concerns around revenue and profit. environmental impact.
● Societal risk: The U.S. Department of Labor listed 148
types of goods from 76 countries produced by child labor
or forced labor in 2018, when it released the Comply
Chain app to help American businesses eliminate child
labor from their supply chains.
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Benefits of Supply Chain Sustainability Four Steps to a More Sustainable Supply

● Supply chain operations: Recent examples show that energy costs
Chain
● Procurement: Most companies start sustainability programs by
decrease, for example, as companies set emission targets with looking at energy and water procurement, and by procuring
suppliers and help them identify potential areas for improvement.
● Branding: Consumers are more concerned than ever about where sustainable materials to use in their products.
products come from and how they’re produced. Researchers at ● Operations: Look for operational processes or steps across the
MIT’s Sloan School of Management found that consumers may pay supply chain that could be more efficient and reduce resource
2-10% more for products that provide supply chain transparency. usage.
● Corporate culture: Millennials, in particular, seek greater purpose in ● Retirement: Avoid excess waste and obsolete items by
their work, according to demographers. Successfully hiring and
retaining employees often depends on a company’s corporate designing products for upcycling and reuse
culture and values, and sustainability plays a key role in that. ● Data and communication: Measure the effectiveness of
● Compliance: Governments around the world are mandating greater initiatives in the first three areas, and strengthen any related
supply chain sustainability, in part to meet the United Nations’ 2030 efforts, by communicating them to customers, supply chain
deadline for achieving Sustainable Development Goals.
partners and other stakeholders.

Closed-Loop Supply Chain Steps of Closed-Loop Supply Chain

A closed-loop supply chain essentially combines the 1) Production: A new service, or product, comes to life via the design
and manufacturing process. While the specifics vary dramatically from
traditional supply chain (forward logistics) with reverse industry to industry, this process incorporates the usual steps of a
logistics, considering the item after it’s served its original traditional supply chain.
purpose. Once the item has been manufactured, shipped, and 2) Distribution: The product makes its way to retail shelves, distributors,
and the broader market.
distributed through a reseller, the manufacturer works to
encourage the item’s return once it’s no longer functional or 3) Sales: The product finds its way to the end customer. While this is the
final step in a traditional supply chain, it’s merely the end of the first
needed. Reverse logistics then kick in, and the items can phase of a CLSC.
either be repaired and resold, or they can be broken down for 4) Repair: The first aspect of the reverse logistics flow considers
reuse in future products. defective products. Instead of being written off as waste, defects are
processed by a returns division. This team collects, repairs, and returns
products to the user once they’ve been brought to working order.
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5) Reuse: Perhaps a defective product cannot be readily repaired

and returned. In this case, a processor sends the item directly back
Business and Environmental Benefits
to the distributor for reuse or recycling. The product is
remanufactured, and retailers replace the item and ship it to the ● Landfills around the world are bursting with plastic, heavy
user without missing a beat — or generating waste. metals, and other non-biodegradable materials.
6) Recycle: Recycling is a key part of the closed-loop model. ● Aside from being a threat to public health and safety, especially
Defective products, returned products, or even products that have in developing countries where it is often dumped, this “e-
reached the end of their life cycle go through the returns processor waste” and other waste from consumer products can be a
for recycling. The parts and materials then go right back through
the production process to create new items. valuable source of materials for creating new products.
7) Dispose: As a company adapts to a closed-loop model, more and ● In our culture of planned obsolescence, more and more silver,
more material is absorbed throughout the process, and less finds gold, and plastic is being mined for new products. By recycling
its way to landfills. Product performance is tracked, analyzed, and some of those materials, we reduce the impact on our planet
improved, and the company saves on costs in addition to in two ways: by reducing the items heading to the landfill, and
minimizing impact. by reducing the impact of mining new natural resources for
manufacturing.

Reverse Logistics The Return of Goods Sold

Reverse logistics refer to monitoring the life-cycle of your ● The physical shipping of the returned product
products after they arrive at the end consumer. This could ● Quality testing the returned product to replicate the error
include how your product could potentially be reused, how it or identify the flaw.
should be properly disposed of after use, and any other way ● Documenting any problems with the returned item.
where your expired product can create value. ● The disassembling, repairing, recycling of your returned
The reverse logistics that directly impact supply chains the items and the process and time involved to restock
most are the return of products from the end consumer back products.
to the manufacturer. For the rest of the article, we’ll explain
more about this process, and ways you can use it to your
advantage.
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Lean Supply Chain

The lean supply chain is dedicated to decreasing prices and
waste. This system is oriented to fruitful and rational
operations. As a rule, cooperation is going between the
supplier and the company.
In the lean supply chain, all are accessible, which has values
for the customer. The other unnecessity elements are
eliminated. Working with the lean supply chain suppliers take
into consideration only those steps, which make the values of
the products and services a lot higher.

How To Choose The Better Supply Chain For

Agile Supply Chain The Company?
An agile supply chain is not only the type of strategies to keep on supply and -What do you produce? Which kind of products do you want
demand. It is a new way to solve a lot of problems and confirm success. The
agile supply chain is the way to increase operative deliveries in the changing to sell?
environment. This strategy is behind the competition, as companies can use
this kind of supply chain without the help of others. Effective agile supply chain -Designate the audience of consumers and their conduct.
brings the company possibility to:
-Streamline inventory -How is the demand for the product change? What are the
reasons for changing? Build the forecasts for it.
-Decrease expenses
-Create the anticipatable supply chain -How fast do your market audience change?
-Complete new demand of the customers in a short period of time -Which impact has the economy on your product, it’s the cost
-Fast producing on the market and consumers?
-Increase profit -Which supply chain do your partners use?
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Thank you