A STUDY ON SUPPLY CHAIN MANAGEMENT IN
TVSLOGISTICS PVT LTD, CHENNAI
ABSTRACT
For any business to compete successfully in the modern, globalized business environment, it
needs to mobilize its suppliers and customers to co-operate in order to reduce unnecessary costs
and inefficiencies between them and to ensure the best value for the final customer. The focus is on
management of the supply chain as a whole (or a system) and maximum value for the final
customer of the supply chain, instead of on management for the maximum benefit of one of the
parties in the supply chain. If the supply chain is seen as a system of organizations with one aim
(value for the final customer), it is logical that a problem in one part of the supply chain must
affect the workings and efficiency of the system or supply chain as a whole. This article reports on
an exploratory empirical study to illustrate the effect of problems at one party in the supply chain
on the whole supply chain. The study was done at automotive component manufacturers. To
determine how problems at one place permeate through the whole supply chain, correlation testing
was done between supply side, internal operations, and distribution or customer-side problems.
The study found that problems experienced at one place in the supply chain had a negative impact
throughout the supply chain. Automotive supply chains should therefore be managed more as a
system, taking into consideration the effect of decision making and actions at one part of the
supply chain on other parts of the supply chain. There should be a supply chain wide co-operative
effort to find solutions to inefficiencies at all places in the supply chain.
INTRODUCTION
Supply Chain Management (SCM) is the active management of supply chain
activities to maximize customer value and achieve a sustainable competitive advantage. It
represents a conscious effort by the supply chain firms to develop and run supply chains in
the most effective & efficient ways possible. Supply chain activities cover everything from
product development, sourcing, production, and logistics, as well as the information systems
needed to coordinate these activities.
The concept of Supply Chain Management (SCM) is based on two core ideas:
1. The first is that practically every product that reaches an end user represents the
cumulative effort of multiple organizations. These organizations are referred to
collectively as the supply chain.
2. The second idea is that while supply chains have existed for a long time, most
organizations have only paid attention to what was happening within their “four walls.”
Few businesses understood, much less managed, the entire chain of activities that
ultimately delivered products to the final customer. The result was disjointed and often
ineffective supply chains.
The organizations that make up the supply chain are “linked” together through physical
flows and information flows.
PERFORMANCE MEASUREMENT
Experts found a strong relationship from the largest arcs of supplier and customer
integration to market share and profitability. Taking advantage of supplier capabilities and
emphasizing a long-term supply chain perspective in customer relationships can both be
correlated with a firm's performance. As logistics competency becomes a critical factor in
creating and maintaining competitive advantage, measuring logistics performance
becomes increasingly important, because the difference between profitable and
unprofitable operations becomes narrower. A.T. Kearney Consultants (1985) noted that
firms engaging in comprehensive performance measurement realized improvements in
overall productivity. According to experts[according to whom?]
, internal measures are generally
collected and analyzed by the firm, including cost, customer service, productivity, asset
measurement, and quality. External performance is measured through customer
perception measures and "best practice" benchmarking.
WAREHOUSING MANAGEMENT
To reduce a company's cost and expenses, warehousing management is concerned with
storage, reducing manpower cost, dispatching authority with on time delivery, loading &
unloading facilities with proper area,inventory management system etc.
WORKFLOW MANAGEMENT
Integrating suppliers and customers tightly into a workflow (or business process) and
there by achieving an efficient and effective supply chain is a key goal of workflow
management.
STATEMENT OF PROBLEM
Safety and Quality Products
More than ever it is important to have a quality product. As quality standards rise, it is
crucial to produce safe and high-quality products. Companies are working harder than ever to
avoid damaging recalls that can hurt the bottom line.
Global Manufacturing
When faced with the challenge and opportunity that is manufacturing on a global scale,
it is critical to have a procurement network that can support those global supply chain
management needs.
Shorter Product Life Cycles and Changing Market Demands
In line with changing market demands and shorter product life cycles, industries must
work to find a lean concept and an adjacent workable lean solution.
New Technology
Having access to the latest technology has proven to be a challenge. Those who are
able to effectively utilize the latest technology to their advantage have been able to see the
direct results to support new product development.
Consolidation of Supplier Base
Consolidating supplier base can offer many perks. From cutting overhead costs to
lowering the margin of error, the challenge lies in finding a supplier that meets each
companies needs in regards to experience
SCM's can't do it all
Unfortunately supply chain management systems cannot do all that companies may
hope for. Be realistic about what can be achieved and research into how an SCM could
help your business.
SCOPE OF STUDY
Demands
Customers want their products immediately and at a good price, yet this is not
always possible and puts companies under a great deal of pressure to provide customers
with what they want. It is not always possible for companies to create both quick and
remunerative methods due to the demands of the chain.
Globalization
Due to these demands, companies are often forced to collaborate with countries in
which products can be produced at a lower cost. Despite this, delivery times take even
longer, therefore may not be beneficial at all.
Market growth
Increasing the customer base can be a hard challenge to tackle in order to expand
distribution both at home and abroad. There are a number of factors to take into
consideration when doing so, including trading policies, fees, and government policies,
therefore is not always easy to get to grips with.
Inventory
Most of the time, companies are unsure about what stock they own and confusion can arise
surrounding whether products have been lost due to their SCM system being not as reliable as
expected. Money can be lost easily though these false expectations as there is often too much
stock to keep track of which as a result is not being sold.
OBJECTIVE OF STUDY
To study the supply chain management process in TVS logistics Pvt ltd
To study the distribution network of TVS logistics Pvt ltd
To analysis the transport management system of TVS logistics Pvt ltd
To study the warehouse and operational problems faced by TVS logistics Pvt ltd
SIGNIFICANCE OF THE STUDY
To reduce a company's cost and expenses, warehousing management is concerned with storage,
reducing manpower cost, dispatching authority with on time delivery, loading & unloading facilities
with proper area, inventory management system etc.
Integrating suppliers and customers tightly into a workflow (or business process) and there by
achieving an efficient and effective supply chain is a key goal of workflow management.
INDUSTRIAL PROFILE
LOGISTICS – GLOBAL VIEW
Global Logistics Industry includes all activities of the supply chain such as transportation, customer
service, inventory management, flow of information and order processing. Other activities of the
supply chain are warehousing, material handling, purchasing, packaging, information dissemination
and maintenance among others. The Logistics market in terms of revenue was valued at US$
8185.46 billion in 2015 and is expected to reach US$15522.02 billion by 2023, growing at a CAGR
of 7.5% from 2015 to 2024.The market in terms of volume was valued at 54.69 billion tons in 2015
and is expected to reach 92.10 billion tons by 2024 growing at a CAGR of 6% from 2016 to 2024.1
1Transparency Market Research "Logistics Market - Global Industry Analysis, Size, Share, Growth,
Trends and Forecast, 2016 – 2024’
The Global Logistics Industry in 2017 is equally subject to global geo political machinations but that
apart countless disruptions threaten to tip the balance of global trade as we knew it. These could be
stated as follows: -
Robotics, automation, 3 D /4 D printing will offset low cost manufacturing advantages.
Rampant protectionism favours localisation and also sustainability.
Digitisation and demand driven logistics are pushing supply chains closer to demand.
Middle class growth in developing markets is altering supply demand dynamics.
Global E Commerce will challenge traditional borders and boundaries.
Thus there are countless locations with compelling value propositions. Whether it is pureplay
distribution facility, manufacturing center of excellence, transhipment port, regional E Commerce
hub or new market to sell in/ source from, retailers and manufacturers have no shortage of options.
On top of that if we consider global volatility and hypersensitivity to supply chain exceptions then
what emerges is that supply chain modelling, simulation and optimisation are fast becoming core
competencies.
LOGISTICS – INDIAN PERSPECTIVE
The Indian logistics sector is valued at USD$ 150 billion, contributing 14.4 % of country’s GDP.
With the easing of FDI norms, proposed implementation of GST, increasing globalization, growth of
ecommerce, positive changes in the regulatory policies, and government initiatives such as
“Sagarmala”, “Make in India”, the sector is expected to touch $200 billion by 2020. In the World
Bank’s Logistics performance ranking 2016, India’s ranks has improved from 54 in 2014 to 35 in
2016, jumping 19 places.
Out of this USD 150 billion logistics cost, almost 99% is accounted for by the unorganized sector
(such as owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse
operators, customs brokers, freight forwarders, etc.), and slightly more than 1%, i.e. approximately
USD 1.5 billion, is contributed by the organized sector. However, the industry is growing at a fast
pace and if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US),
savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods
more competitive in the global market. Moreover, growth in the logistics sector would imply
improved service delivery and customer satisfaction leading to growth of export of Indian goods and
potential for creation of job opportunities.
PROCESS FLOW OF LOGISTICS / SUPPLYCHAIN
DEMAND-SUPPLY GAP OF SKILLED MANPOWER IN LOGISTICS SECTOR
Current Concentration Growth Corridors Potential Geographies
Tamil Nadu, Telangana, Andhra Pradesh, Uttar Pradesh, Gujarat, Bihar, Orissa, West Himachal Pradesh,
Karnataka, Maharashtra, Delhi NCR Bengal, North-Eastern States, Punjab, Goa, Rajasthan
Haryana
Logistics Sector employs about 21.24 million as of 2016. Of 21.24 million 54% are
employed in passenger roadways segment, 35% in road fright while remaining are in
passenger railways, freight forwarding, warehousing, packaging and other services.
As per the National Sample Survey the distribution of employees is mainly in Mumbai,
Kolkata, Hyderabad and Ahmedabad Districts whereas emerging clusters includes
Bangalore, Surat and Indore.
There has been no formal training in the country to address the skill gap in the logistics
sector.
Thrust on infrastructure projects such as the dedicated Freight & Industrial Corridors like
DMIC, expansion of Port Terminals and construction of greenfield Port projects under
Sagarmala project and Bharatmala project will create fresh employment opportunities.
Increasing income levels and rapid growth in organised retail, e-commerce, QSR etc. will
create new opportunities for the youth.
With 100 percent FDI through automatic route permitted, and the implementation of GST
FMCG is expected to grow at over 12 percent CAGR during 2010- 2020
COMPANY PROFILE
TVS Logistics Services is a third party logistics services company that offers supply chain
management, logistics services and more and has headquarters in Chennai, Tamil Nadu.
Tvs Logistics Pvt Limited was founded in 2004 and has more than 5000 employees. The company is
founded by R. Shankar. He is also the CEO of the company. The Company offers supply chain
management, warehousing, material handling, freight management, transportation, and
communication services.
REVIEW OF LITERATURE
Supply chain management is the systematic, strategic coordination of the traditional
business functions and the tactics across these business functions within a particular company
and across businesses within the supply chain, for the purposes of improving the long-term
performance of the individual companies and the supply chain as a whole (Mentzeret al.,
2001).
A customer focused definition is given by Hines (2004) "Supply chain strategies require a
total systems view of the linkages in the chain that work together efficiently to create customer
satisfaction at the end point of delivery to the consumer. As a consequence costs must be
lowered throughout the chain by driving out unnecessary costs and focusing attention on
adding value. Throughout efficiency must be increased, bottlenecks removed and performance
measurement must focus on total systems efficiency and equitable reward distribution to those
in the supply chain adding value.
The supply chain system must be responsive to customer requirements." Global supply
chain forum - supply chain management is the integration of key business processes across the
supply chain for the purpose of creating value for customers and stakeholders (Lambert,
2008).
A supply chain, as opposed to supply chain management, is a set of organizations
directly linked by one or more of the upstream and downstream flows of products, services,
finances, and information from a source to a customer. Managing a supply chain is 'supply
chain management' (Mentzeret al., 2001).
In the 21st century, changes in the business environment have contributed to the
development of supply chain networks. First, as an outcome of globalization and the proliferation
of multinational companies, joint ventures, strategic alliances and business partnerships,
significant success factors were identified, complementing the earlier "Just-In-Time", "Lean
Manufacturing" and "Agile Manufacturing" practices. Second, technological changes,
particularly the dramatic fall in information communication costs, which are a significant
component of transaction costs, have led to changes in coordination among the members of the
supply chain network (Coase, 1998)
Many researchers have recognized these
kinds of supply network structures as a new organization form, using terms such as
"Keiretsu", "Extended Enterprise", "Virtual Corporation", "Global Production Network", and
"Next Generation Manufacturing System". In general, such a structure can be defined as "a
group of semi-independent organizations, each with their capabilities, which collaborate in ever-
changing constellations to serve one or more markets in order to achieve some business goal
specific to that collaboration" (Ackerman’s, 2001)
Three major movements can be observed in the evolution of supply chain management
studies: Creation, Integration, and Globalization (Movahedi et al., 2009)
Arntzen, Brown, Harrison, and Trafton (1995) provide the most comprehensive
deterministic model for supply chain management. The objective function minimizes a
combination of cost and time elements. Examples of cost elements include purchasing,
manufacturing, pipeline inventory, transportation costs between various sites, duties, and taxes.
Time elements include manufacturing lead times and transit times. Unique to this model was
the explicit consideration of duty and their recovery as the product flowed through different
countries.
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
Research methodology is the systematic, theoretical analysis of the procedures applied to a
field of study (Kothari, 2004). Methodology involves procedures of describing, explaining
and predicting phenomena so as to solve a problem; it is the 'how'; the process, or techniques
of conducting research.
RESEARCH DESIGN
Research design adopted for this research is “Descriptive Research “. It includes surveys
and fact-finding enquiries of different kinds. The major purpose of descriptive research is
description of the state of affairs as it exists at presen
SAMPLING FRAMEWORK
The population is finite and “Simple random sampling method” will be
adopted for selecting samples from the finite one.
PROFILE OF RESPONDENTS
The survey was conducted among employees in TVS LOGISTICS PVT LTD
CHENNAI. The total population is 1476 employee the sample population of my study is 100
employees. Based on the population I took 7% of the total population as sample size
DATA ANALYSIS AND INTERPRETATION
DESCRIPTIVE STATISTICS
Descriptive statistics is the term given to the analysis of data that helps describe, show or
summarize data in a meaningful way such that, for example, patterns might emerge from the
data. Descriptive statistics are simply a way to describe our data. “Descriptive analysis is
largely the study of distribution of one variable. This study provides us with profiles of
companies, work groups, persons and other subjects on any of a multiple characteristics such as
size, compositions, efficiency, preferences etc.”
Descriptive analysis is more specific in that they direct attention to particular aspects or
dimensions of research target. Such studies reveal potential relationship between variables,
thus setting the stage for more elaborate investigation later. It is a search for broader
meaning and research findings. It is the device through which the factors that seem to explain
what has been observed by researcher in the course can be better understood and provides
theoretical conception which serve as a guide for further researches. It is essential because it
will lead towards findings of the study and proper effective conclusions of the study.
Descriptive approach is one of the most popular approaches in these days. In this
approach, a problem is described by the researcher using questionnaire or schedule. This
approach enables a researcher to expose new ideas or areas of investigation. Direct contact
between respondents and researcher is brought through this descriptive approach.
DESCRIPTIVE ANALYSIS OF PRIMARY DATA
This part of study is mainly focused on verifying main objectives of study.
Researcher used Chi square, simple percentage and graphs as statistical tool for analysis
of data PROFILE OF RESPONDENTS
The survey was conducted among employees in TVS LOGISTICS PVT LTD
CHENNAI.
The total population is 1476 employee the sample population of my study is 100
employees. Based on the population I took 7% of the total population as sample size.
Our organization strive to establish long term relationship with its suppliers
Cumulative
Frequency Percent Valid Percent Percent
Valid strongly agree 19 19.0 19.0 19.0
agree 41 41.0 41.0 60.0
neutral 19 19.0 19.0 79.0
disagree 21 21.0 21.0 100.0
Total 100 100.0 100.0
INTERPRETATION
In the above specified table, 19% of the respondents specified strongly agree, 41% of the
respondents specified agree, 19% of the respondents specified neutral, 21% respondents
specified disagree. According to this analysis most of the employees specified agree
Our supply chain members share risks and rewards
Valid Percent CumulativePercent
Frequency Percent
Valid strongly agree 41 41.0 41.0 41.0
agree 38 38.0 38.0 79.0
neutral 21 21.0 21.0 100.0
Total 100 100.0 100.0
INTERPRETATION
In the above specified table, 41% of the respondents specified strongly agree, 38% of the
respondents specified agree, 21% of the respondents specified neutral. According to this
analysis most of the employees specified strongly agree
FINDINGS
Out of 50 Respondents Majority of the respondents belong to the Gender
of Females
Out of 50 Respondents Majority of the respondents belong to the age
group of 26-35
Out of 50 Respondents Majority of the respondents belong to the status of
married.
Out of 50 Respondents Majority of the respondents belong to the education
of secondary to graduation.
Out of 50 Respondents Majority of the respondents belong to the monthly
family income 25,001-50,000.
33% of the respondents are have 5 -10 years of experience of the
employees.
41% of the respondents agree the long term relationship with its suppliers.
39% of the respondents strongly agree that the supply chain members
share risks and rewards.
58% of the respondents strongly agree that the procedure available in TVS
is satisfied.
46% of the respondents agree that there is poor communication level in
TVS.
RECOMMENDATIONS
1. Training programmes can be organized to improve the communication
level.
2. Opportunity for overall development must be provided in different areas
such as technology, team work, personality etc.
3. Counselling programmes can be arranged to make the employees emotional
independent.
4. A good environment is necessary for the workers around their working
place.
CONCLUSION
Efficient material & supply chain management is crucial for the success of any small
scale manufacturing & fabrication project and can be the deciding factor between a successful
project and a project full of delays and claims. Better material management methods and
decision models are needed to improve the electrical industry current practices, thus
increasing efficiency and minimizing costs. An effective supply management system is essential
for managing efficient material management to avoid material shortages, misplacements, loss,
and theft which might result in increases in crew idle times, loss of productivity and delay of
activities. Organization should implement an efficient material management system due to the
fact that in most of the cases they are asked to squeeze their bids in order to keep the costs of
project under budget. In such a case, failures to effectively manage materials could result in
decreases in profit or even a loss. The primary goal is to have the material needed, in the
amounts needed, with the quality required, and the time that they are needed. Most electrical
companies have a material management system that serves their 205 needs, although it could
be improved. Standardization of the material management system could be a step forward in
improving the system and eliminating some of the bottlenecks. The research presented in this
document aimed at designing an integrated system of decision- support tools for material
procurement for the small scale industry particularly an electrical industry. An integrated
approach for material procurement provides better decisions on what to order, how much to
order and where to deliver. Future research will be needed to develop a more complete
framework integrating other decisions needed in areas such as supplier selection and preliminary
material scheduling during the prefabrication phase. A fully integrated approach will better
improve communication and minimize gaps in information flow among all the parties and
departments involved.
APPENDIX Ⅰ
Questionnaire
1. Gender
a) Male b) Female c) Others
2. Age group
a) 18 -25 b) 26 – 35 c) 36 – 40 d) 40 and anove
3. Marital Status
a) Married b) Unmarried
4. Educational level
a) below SSLC b) SSLC c) Graduate d) Post Graduate
5. Monthly family income
a) below 25000 b) 25001 – 50000 c) above 50000
6. Work Experience
a) below 5 years b) 6 -10 years c) 11 – 15 years
d) above 15 years
7. The organization strive to establish long term relationship with its suppliers
a) strongly agree b) agree c) neutral d) disagree
8. The supply chain members share risks and rewards.
a) strongly agree b) agree c) neutral d) disagree
9. Employee satisfaction level is high
a) strongly agree b) agree c) neutral d) disagree
10. Communication level is good
a) strongly agree b) agree c) neutral d) disagree
BIBLIOGRAPHY
Sridhar Tayur, Ram Ganeshan, Michael Magazine (editors). Quantitative Models for Supply
Chain Management. Kluwer Academic Publishers, 1999. R.B. Handfield and E.L. Nochols, Jr.
Introduction to Supply Chain Management. Prentice Hall, 1999.
N. Viswanadham and Y. Narahari. Performance Modeling of Automated manufacturing Systems.
Prentice Hall of India, 1998.
Sunil Chopra and Peter Meindel. Supply Chain Management: Strategy, Planning, and
Operation, Prentice Hall of India, 2002.
Jeremy F. Shapiro. Modeling the SupplyChain. Duxbury Thomson Learning, 2001.
Y. Narahari and S. Biswas. Supply Chain Management: Models and Decision Making
Ram Ganeshan and Terry P. Harrison. An Introduction to Supply Chain Management
Anthony Chavez, Daniel Dreilinger, Robert Guttman, Pattie Maes, A Real- Life
Experiment in Creating an Agent Market place.
