Bullwhip Effect in SCM

The bullwhip effect on the supply chain occurs when changes in consumer demand causes
the companies in a supply chain to order more goods to meet the new demand. The bullwhip
effect is a distribution channel phenomenon, rather problem, in which demand forecasts yield
supply chain inefficiencies. This mostly happens when retailers become highly reactive to
consumer demand, and in turn, intensify expectations around it. This results into inefficient
asset allocations and high inventory fluctuations, moving down in the supply chain.

 The bullwhip effect usually flows up the supply chain, starting with the
retailer, wholesaler, distributor, manufacturer and then the raw materials
supplier.
 This effect can be observed through most supply chains across several
industries; it occurs because the demand for goods is based on demand
forecasts from companies, rather than actual consumer demand.
 The bullwhip effect can be explained as an occurrence detected by the
supply chain where orders sent to the manufacturer and supplier create
larger variance then the sales to the end customer.
 These irregular orders in the lower part of the supply chain develop to be
more distinct higher up in the supply chain.

How Do we minimize the bullwhip effect?

Every industry has its own unique supply chain, inventory placements, and complexities.
However, after analyzing the bullwhip effect and implementing improvement steps,
inventories in the range of 10 to 30 percent can be reduced and 15 to 35 percent reduction in
instances of stock out situations and missed customer orders can be achieved. Below are
some of the methods to minimize the bullwhip effect.
 1. Accept and understand the bullwhip effect
The first and the most important step towards improvement is the recognition of the presence
of the bullwhip effect. Many companies fail to acknowledge that high buffer inventories exist
throughout their supply chain. A detailed stock analysis of the inventory points from stores to
raw material suppliers will help uncover idle excess inventories. Supply chain managers can
further analyze the reasons for excess inventories, take corrective action and set norms.

2. Improve the inventory planning process

Inventory planning is a careful mix of historical trends for seasonal demand, forward-looking
demand, new product launches and discontinuation of older products. Safety stock settings
and min-max stock range of each inventory point need to be reviewed and periodically
adjusted. Inventories lying in the entire network need to be balanced based on regional
demands. Regular reporting and early warning system need to be implemented for major
deviations from the set inventory norms.

3. Improve the raw material planning process

Purchase managers generally tend to order in advance and keep high buffers of raw material
to avoid disruption in production. Raw material planning needs to be directly linked to the
production plan. Production plan needs to be released sufficiently in advance to respect the
general purchasing lead times. Consolidation to a smaller vendor base from a larger vendor
base, for similar raw material, will improve the flexibility and reliability of the supplies. This,
in turn, will result in lower raw material inventories.

4. Collaboration and information sharing between managers

There might be some inter-conflicting targets between purchasing managers, production
managers, logistics managers and sales managers. Giving more weight to common company
objectives in performance evaluation will improve collaboration between different
departments. Also providing regular and structured inter-departmental meetings will improve
information sharing and decision-making process.

5. Optimize the minimum order quantity and offer stable pricing

Certain products have high minimum order quantity for end customers resulting in overall
high gaps between subsequent orders. Lowering the minimum order quantity to an optimal
level will help provide create smoother order patterns. Stable pricing throughout the year
instead of frequent promotional offers and discounts may also create stable and predictable
demand.

Performance Measurement: Dimension, Tools

of Performance Measurement
Supply chain performance measure can be defined as an approach to judge the performance
of supply chain system. Supply chain performance measures can broadly be classified into
two categories:

 Qualitative Measures: For example, customer satisfaction and product

quality.
 Quantitative Measures: For example, order-to-delivery lead time, supply
chain response time, flexibility, resource utilization, delivery performance.

Here, we will be considering the quantitative performance measures only. The performance
of a supply chain can be improvised by using a multi-dimensional strategy, which addresses
how the company needs to provide services to diverse customer demands.

Quantitative Measures
Mostly the measures taken for measuring the performance may be somewhat similar to each
other, but the objective behind each segment is very different from the other.

Quantitative measures is the assessments used to measure the performance, and compare or
track the performance or products. We can further divide the quantitative measures of supply
chain performance into two types. They are:

 Non-financial measures
 Financial measures

Non – Financials Measures

The metrics of non-financial measures comprise cycle time, customer service level,
inventory levels, resource utilization ability to perform, flexibility, and quality. In this
section, we will discuss the first four dimensions of the metrics:

Cycle Time
Cycle time is often called the lead time. It can be simply defined as the end-to-end delay in a
business process. For supply chains, cycle time can be defined as the business processes of
interest, supply chain process and the order-to-delivery process. In the cycle time, we should
learn about two types of lead times. They are as follows:

 Supply chain lead time

 Order-to-delivery lead time

The order-to-delivery lead time can be defined as the time of delay in the middle of the
placement of order by a customer and the delivery of products to the customer. In case the
item is in stock, it would be similar to the distribution lead time and order management time.
If the ordered item needs to be produced, it would be the summation of supplier lead time,
manufacturing lead time, distribution lead time and order management time.
The supply chain process lead time can be defined as the time taken by the supply chain to
transform the raw materials into final products along with the time required to reach the
products to the customer’s destination address.

Hence it comprises supplier lead time, manufacturing lead time, distribution lead time and the
logistics lead time for transport of raw materials from suppliers to plants and for shipment of
semi-finished/finished products in and out of intermediate storage points.

Lead time in supply chains is governed by the halts in the interface because of the interfaces
between suppliers and manufacturing plants, between plants and warehouses, between
distributors and retailers and many more.

Lead time compression is a crucial topic to discuss due to the time based competition and the
collaboration of lead time with inventory levels, costs, and customer service levels.

Customer Service Level

The customer service level in a supply chain is marked as an operation of multiple unique
performance indices. Here we have three measures to gauge performance. They are as
follows:

 Order fill Rate: The order fill rate is the portion of customer demands that
can be easily satisfied from the stock available. For this portion of customer
demands, there is no need to consider the supplier lead time and the
manufacturing lead time. The order fill rate could be with respect to a
central warehouse or a field warehouse or stock at any level in the system.
 Stockout Rate: It is the reverse of order fill rate and marks the portion of
orders lost because of a stockout.
 Backorder Level: This is yet another measure, which is the gauge of total
number of orders waiting to be filled.
 Probability of on-time delivery: It is the portion of customer orders that
are completed on-time, i.e., within the agreed-upon due date.

In order to maximize the customer service level, it is important to maximize order fill rate,
minimize stockout rate, and minimize backorder levels.

Inventory Levels
As the inventory-carrying costs increase the total costs significantly, it is essential to carry
sufficient inventory to meet the customer demands. In a supply chain system, inventories can
be further divided into four categories.

 Raw materials
 Work-in-process, i.e., unfinished and semi-finished sections
 Finished goods inventory
 Spare parts
Every inventory is held for a different reason. It’s a must to maintain optimal levels of each
type of inventory. Hence gauging the actual inventory levels will supply a better scenario of
system efficiency.

Resource Utilization
In a supply chain network, huge variety of resources is used. These different types of
resources available for different applications are mentioned below.

 Manufacturing Resources: Include the machines, material handlers, tools,

etc.
 Storage Resources: Comprise warehouses, automated storage and retrieval
systems.
 Logistics Resources: Engage trucks, rail transport, air-cargo carriers, etc.
 Human Resources: Consist of labor, scientific and technical personnel.
 Financial Resources: Include working capital, stocks, etc.

In the resource utilization paradigm, the main motto is to utilize all the assets or resources
efficiently in order to maximize customer service levels, reduce lead times and optimize
inventory levels.

Financial Measures
The measures taken for gauging different fixed and operational costs related to a supply chain
are considered the financial measures. Finally, the key objective to be achieved is to
maximize the revenue by maintaining low supply chain costs.

There is a hike in prices because of the inventories, transportation, facilities, operations,

technology, materials, and labor. Generally, the financial performance of a supply chain is
assessed by considering the following items:

 Cost of raw materials.

 Revenue from goods sold.
 Activity-based costs like the material handling, manufacturing, assembling
rates etc.
 Inventory holding costs.
 Transportation costs.
 Cost of expired perishable goods.
 Penalties for incorrectly filled or late orders delivered to customers.
 Credits for incorrectly filled or late deliveries from suppliers.
 Cost of goods returned by customers.
 Credits for goods returned to suppliers.

In short, we can say that the financial performance indices can be merged as one by using key
modules such as activity based costing, inventory costing, transportation costing, and inter-
company financial transactions.
Supply Chain Operations Reference Model
(SCOR Model)
One of the most promising models for strategic decision-making in supply chain management
is known as the SCOR model. 70 leading members of the manufacturing, distribution, and
solutions supplier industries (in collaboration with the Supply Chain Council) developed the
management tool, which is short for “Supply Chain Operations Reference Model.” The
program has been designed in a way that it can applicable to any size operation. The SCOR
model is a process meant to assess waste, establish standards, and continuously improve. It is
a repetitive framework of constant engagement and discovery, developed to describe all the
business activities associated with the phases of satisfying a customer.

SCOR MODEL: Management Process

The SCOR model is based on three major principles: process modeling/re-engineering,
measuring performance, and best practices. There are 5 distinct process-modeling building
blocks to the SCOR model:

1. Plan: These are processes that relate to demand and supply planning.
Standards must be established to improve and measure supply chain
efficiency. These rules can span compliance, inventory, transportation, and
assets, among other things.
2. Source: This step in the SCOR model involves any processes that procure
goods or services in order to meet a demand (real or planned). Material
acquisitions and sourcing infrastructure are examined to determine how to
manage the supplier network, inventory, supplier performance, and
agreements. This stage should help you plan on when to receive, verify, and
transfer a product in the supply chain.
3. Make: In order to meet planned or actual demand, this is the process in
which a product is transformed to its final state. This step is particularly
important in the manufacturing and distribution industries, and helps to
answer the questions of: make-to-order, make-to-stock, or engineer-to-
order? The “make” part of the process includes production activities,
packaging, staging, and releasing the product. It also involves production
networks and managing equipment and facilities.
4. Deliver: Any process that involves getting the product out, from order
management and warehousing, to distribution and transportation. This step
also involves customer service and overall management of product
lifecycles, finished inventories, assets, and importing/exporting
requirements.
5. Return: This final step focuses on all products that are returned or received,
for any reason. Organizations must be prepared to handle the return of
defective products, containers, and packaging. The return process involves
the application of business rules, return inventory, assets, and regulatory
 requirements. This final step directly extends to post-delivery customer
support and follow-up.

SCOR MODEL: Scope

The SCOR model does not attempt to explain every business process or activity. As in all
business models, there is a specific scope that the SCOR model addresses, including the
following segments:

 Customer Interactions: The entire process of the customer relationship,

from order entry through paid invoice.
 Product Transactions: All product, from the supplier’s supplier to the
customer’s customer, including equipment, supplies, bulk products, etc.
 Market Interactions: From the understanding of demand, to the fulfillment
of every order.

The focus of SCOR can also be defined and measured on 3 levels of process detail.

 Level 1: Defining Scope – geographies, segments, and context

 Level 2: Configuration of the supply chain
 Level 3: Process element details – identifies key business activities within
the chain.

A major supplier of light bulbs around the world, Philips Lighting has been using the SCOR
model since 1999. They recently reported to the Supply Chain Council that over the years,
incorporating the SCOR model into their business framework has directly resulted in
improved customer service and reduced inventories. The SCOR model is a tried and true
process for manufacturing and distribution industries that has seen decades of success. When
applied correctly, it can streamline processes and refine your organization’s supply chain.

Demand Chain Management

Demand-chain management (DCM) is the management of relationships between suppliers
and customers to deliver the best value to the customer at the least cost to the demand chain
as a whole. Demand-chain management is similar to supply-chain management but with
special regard to the customers.

Demand Chain Management software tools bridge the gap between the customer-
relationship management and the supply-chain management. The organization’s supply chain
processes are managed to deliver best value according to the demand of the customers. DCM
creates strategic assets for the firm in terms of the overall value creation as it enables the firm
to implement and integrate marketing and supply chain management (SCM) strategies that
improve its overall performance. A study of the university in Wageningen (the Netherlands)
sees DCM as an extension of supply chain management, due to its incorporation of the
market-orientation perspective on its concept.
A Demand-driven supply network (DDSN) is one method of supply-chain management
which involves building supply chains in response to demand signals. The main force
of DDSN is that it is driven by customers demand. In comparison with the traditional supply
chain, DDSN uses the pull technique. It gives DDSN market opportunities to share more
information and to collaborate with others in the supply chain.

DDSN uses a capability model that consist of four levels. The first level is Reacting, the
second level is Anticipating, the third level is Collaborating and the last level is
Orchestrating. The first two levels focus on the internal supply chain while the last two levels
concentrate on external relations throughout the Extended Enterprise.

In a demand-driven chain, a customer activates the flow by ordering from the retailer, who
reorders from the wholesaler, who reorders from the manufacturer, who reorders raw
materials from suppliers. Orders flow backward, up the chain, in this structure.

Many companies are trying to shift from a build-to-forecast to a build-to-order discipline. The
property of being demand-driven is one of degree: Being “0 percent” demand-driven means
all production/inventory decisions are based on forecasts, and so, all products available for
sale to the end user is there by virtue of a forecast. This could be the case of fashion goods,
where the designer may not know how buyers will react to a new design, or the beverage
industry, where products are produced based on a given forecast. A “100 percent” demand-
driven is one in which the order is received before production begins. The commercial
aircraft industry match to this description. In most cases, no production occurs until the order
is received.

Competitive Advantages
To create sustainable competitive advantages with DDSN, companies have to do deal with
three conditions:

 Alignment (create shared incentives)

 Agility (respond quickly to short-term change)
 Adaptability (adjust design of the supply chain)

Misconceptions

There are five commonly-made misconceptions of demand driven (DDSN):

Companies might think they are demand driven because they have a good forecast of their
company.

 They have implemented lean manufacturing.

 They have great data on all their customers.
 They think it is a technology project and the corporate forecast is a demand
visibility signal.
 They have a better view of customers demand.
An important component of DDSN is DDM (“real-time” demand driven manufacturing).
DDM gives customers the opportunity to say what they want, where and when.

Demand Driven execution

Demand-chain management is the same as supply chain management, but with emphasis on
consumer pull vs. supplier push. The demand chain begins with customers, then funnels
through any resellers, distributors, and other business partners who help sell the company’s
products and services. The demand chain includes both direct and indirect sales forces.
Customers demand is hard to detect because out of stock situations (OOS) falsify data
collected from POS-Terminals. According to studies of Corsten/Gruen (2002, 2008) the
OOS-rate is about 8%. For products under sales promotion OOS rates up to 30% exist.
Reliable information about demand is necessary for DCM therefore lowering OOS is a main
factor for successful DCM.

Corsten and Gruen describe key factors for lowering OOS-rates:

 Data accuracy
 Forecast and order accuracy
 Order quantity
 Replenishment
 Capacity (time supply)
 Capacity (Packout) and Planogram Compliance
 Shelf Replenishment

Global Supply Chain Management

Firms are creating truly global supply chains because it enables them to reduce their costs.
Companies can take advantage of lower production costs and they can outsource to free
capital from non-core activities and generate large-scale efficiencies. In addition, the costs of
shipping, communications and tariff-related charges have come down over the years.

Global supply chain management involves planning how the entire supply chain will function
as an integrated whole, with the aim of generating an optimum level of customer service
while being as cost efficient as possible.

Other aims include increasing the speed by which your product reaches your customers, as
well as flexibility in dealing with customer transactions.

It incorporates management processes that integrate the network of suppliers, manufacturers,

warehouses and retail outlets so that the right type of goods are sourced, supplied, produced
and shipped in the right quantities, to the right locations, at the right time and are received in
sound condition.
To achieve successful integration, flows of information (such as purchase orders, shipping
notices, waybills and invoices), materials (including raw and finished products) and finances
(payments and refunds) through the supply chain must be co-ordinated effectively.

What are the three things all successful supply chain management needs?
Supply chain management touches all of an organization’s functions. To be successful, it
requires focused effort across the entire company and collaboration with all outside suppliers
and service providers. This means that supply chain management must have a
multidimensional approach, involving people, processes and technology.

People
People are key to supply chain management because they are the core of organizations. For
successful supply chain management, the people involved must have the skills and
knowledge to manage sourcing, manufacturing, storage and transportation of products. They
must have a solid view of the company’s strategic business vision and know how their role
fits into the overall functioning of the supply chain.

Processes

The processes in supply chain management are the actions taken with the aim of satisfying
customers. They include all functions involved in the supply chain: sourcing, distribution,
transportation, warehousing, sales and customer service. They also include all actions
performed by external companies that are part of the supply chain.

Technology
Technology is used in the supply chain to connect people and processes. However, people
involved in the supply chain will not use technology unless they find it easy to adopt. Careful
selection and implementation of the supply chain technologies a company uses is essential for
supply chain success.

The Benefits of Global Supply Chain Management

In the modern global marketplace, advances in communications and transportation
technologies have led customers to expect a steady and regular supply of products in good
condition at the lowest possible price, despite the long distances most products, commodities
and foodstuffs are shipped.

Companies must always be looking for ways to improve the functioning of their supply
chains to ensure that their supply meets projected demands cost effectively. If they do not
produce sufficient product to meet demand, they will lose customers. If they produce too
much product, they must pay for expensive warehousing of the excess inventory, which they
might not be able to sell.
If supplies are not sourced carefully and production is not monitored, companies might be
faced with mass product recalls or returns. These can result in financial ruin for a company.

“By managing their supply chains carefully, companies can select the most cost-effective
solution at each stage in the chain and can avoid business costs. This provides a
company with a real competitive edge.”

The cost savings provided by supply chain management enhance additional cost-cutting
manufacturing methods and strategies that many international companies have already
instituted. These strategies include the following:

 Just-in-time (JIT) manufacturing (reducing inventory levels, overall costs,

product variability and production times, and also improving product
quality)
 Lean manufacturing (producing goods using less manpower, raw
materials, time and space)
 Total quality management (embedding awareness of quality in all
operational strategies)

Global supply chain management has many benefits for a company. It enables business
processes to be organized using international organizations that be reduced, companies can
react rapidly to unforeseen market conditions, transport strategies can be improved, costs can
be minimized and waste can be eliminated. You can get your product to market substantially
more quickly.

Small- and medium-sized businesses benefit as well. These smaller organizations, especially
with niche technologies or specializations, can now sell to multinational organizations or to
their suppliers. Many of these large firms have started outsourcing activities that were carried
out internally in the past.

Challenges in establishing Global Supply Chain

In every industry, networks of suppliers, manufacturers, trade intermediaries and customers
have spread around the globe as companies strive to lower their costs, increase their profits
and improve productivity in a highly competitive global marketplace. A paradigm shift has
occurred in which companies that once built domestically to sell internationally now look
globally for raw materials, services and finished goods to sell into a defined marketplace.
This shift is happening because of reduced barriers to trade and investment, lower
transportation costs, ease of information flows, new enabling technologies and the emergence
of economies such as China and India. Supply chain management aims to manage the flow of
goods, information and finances among these business networks in the most efficient manner.
Companies have discovered that effective supply chain management cuts costs, reduces
waste, prevents over-production and helps ensure that customers are more satisfied with
product, price and service. This means it is an essential tool for competitiveness in a global
marketplace.
Challenges that companies face with global supply chains include the following: Currency
fluctuations: When dealing with suppliers or customers overseas, companies must plan for
fluctuating charges and income from foreign exchange rate variations.

Maintaining intellectual property protection: A company might be able to have a product

assembled overseas more cost effectively than assembling it domestically. However, some
countries have less stringent laws regulating protection of intellectual property.

Identifying and assuring the reliability of international business partners: With

suppliers, distributors, customers and business partners located in many regional areas of the
world, it can be difficult for companies to monitor the business practices and financial
stability of all organizations in the supply chain.

Accessing finance and insurance: Financial transactions conducted internationally are

always more complicated than domestic transactions. Companies must establish lines of
credit with banks and work with other members of the supply chain to identify preferred
methods of payment. Obtaining the correct insurance to protect foreign property and
shipments is also essential.

Compliance with international regulations and standards: Quality standards, import and
export restrictions, safety and packing regulations and labelling regulations vary around the
globe. For companies new to international trade, ensuring that materials provided by a
foreign supplier will meet all domestic entry regulations can be a daunting undertaking.

If you ignore or mishandle these risks, they can result in cost penalties and distracting
inefficiencies. Identifying the risks up front, so you know what to look for, can be the key to
success. The following six risks can easily have a negative impact on your business:

1. Quality levels and defects. Manufacturing processes aren’t perfect, so the

industry typically accepts a certain quality level for products. Complexity
and variability are part of any production process, and unfamiliar sources
might not adhere to accepted U.S. defect levels. Choosing a non-U.S.-based
sourcing firm can open up questions and disputes about which party is liable
for defect percentages that rise above normal.
2. Time zones. Some U.S. firms experience issues when dealing with
companies on the other side of the country—and never mind the 13-hour
time difference between the United States and Asia. Waking and working
hours do not coincide, which can be a challenge when a pressing issue
arises. Waiting one day to clarify a product question or process change can
often simply be too long for companies that are trying to run nimble
operations.
3. Long-range logistics. Purchasing items at a delivered price is easy, but the
shipment can be delayed. Whether it is a factory hold-up or transit problem,
ignoring the complexity of long-range logistics can be a risk.
4. Accountability and compliance. Companies should consider social
compliance every time they look at global sourcing. They need to conduct
 due diligence about child labor practices, acceptable working conditions,
forced labor, and fair compensation practices. Barring the hiring of local
staff members, however, there isn’t a surefire way to ensure social
compliance from across the globe. Risk comes in the form of severe brand
damage due to unfair or illegal practices that come to light.
5. To receive on-time product delivery, it is vital to have firm completion
dates and shipping timeframes. An item that is globally sourced, however, is
often just a piece of a bill of materials that must be on hand for product
completion. Delays from a non-U.S. source can derail production and drive
up related costs.
6. Language barriers. Global partners offer competitive pricing and
efficiencies, but still often conduct day-to-day business in a different
language. Managers will likely speak English, but their directions must be
relayed to line staff, and your own words might be lost in translation. Errors
are bound to happen when communications aren’t translated and interpreted
perfectly.

These six factors present mighty risks, but they are not insurmountable. Companies looking
to take advantage of global sourcing opportunities can build their own teams located in the
United States or abroad, or work with experienced partners to mitigate and remove these
risks. The benefits of sourcing from outside the country can be great when handled properly.

Factor that influences designing Global Supply

Chain Network
Designing Supply Chain Network for each industry or business involves arriving at a
satisfactory design framework taking into all elements like product, market, process,
technology, costs, external environment and factors and their impact besides evaluating
alternate scenarios suiting your specific business requirements. No two supply chain designs
can be the same. The network design will vary depending upon many factors including
location and whether you are looking at national, regional or global business models.

1. Supply Chain Network in Simple and basic Terms Involves determining

following process design:

Procurement

 Where are your suppliers

 How will you procure raw materials and components

Manufacturing

 Where will you locate the factories for manufacturing/assembly

 Manufacturing Methodology
Finished Good

 Where will you hold inventories, Number of Warehouses, Location of

warehouses etc.
 How will you distribute to markets – Transportation and Distribution
logistics

All above decisions are influenced and driven by Key Driver which is the Customer
Fulfillment.

2. Designing Supply Chain Network involves determining and defining

following Elements:
 Market Structure
 Demand Plotting or Estimation
3. Market Segment
 Procurement Cost
 Product /Conversion Costs
 Logistics Costs including Inventory holding costs
 Over heads
 Cost of Sales
4. Network Design aims to define:
 Best fit Procurement model – Buying decision and processes-
VMI, JIT, Kanban, procurement cost models etc.
 Production processes – One or more number of plants, plant
capacity design, Building to order, build to stock etc, in-house
manufacturing or outsource manufacturing and related decisions
including technology for production.
 Manufacturing Facility design – Location, Number of factories,
size of unit, time frames for the plant setup project etc.
 Finished Goods Supply Chain network – Number of warehouses,
location & size of warehouses, inventory flow and volume
decisions, transportation.
 Sales and Marketing Decisions – Sales Channel and network
strategy, Sales pricing and promotions, order management and
fulfillment process, service delivery process definitions.
5. Network Design also examines:
 Derives cost estimates for every network element
 Examines ways to optimize costs and reduce costs
 Extrapolates cost impact over various product lines and all
possible permutations and combinations to project profitability
6. Some of the key factors that affect the supply chain network modeling
are:
 Government Policies of the Country where plants are to be
located.
 Political climate
  Local culture, availability of skilled / unskilled human resources,
industrial relations environment, infrastructural support, energy
availability etc.
 Taxation policies, Incentives, Subsidies etc across proposed plant
location as well as tax structures in different market locations.
 Technology infrastructure status.
 Foreign investment policy, Foreign Exchange and repatriation
Policy and regulations.

Supply Chain Network designs not only provide an operating framework of the entire
business to guide the managements, they also examine the structure from strategic view point
taking into account external influences, interdependencies of all processes and critically
evaluate opportunities to maximize profitability.

Supply Chain Design consultants use various design softwares and optimization techniques
coupled with inputs from industry consultants and experts.