SIKKIM MANIPAL UNIVERSITY, DEStudent Name:Course: MBA

Registration No:LC Code: 00918

Subject Name: SDSCMSubject Code: MK0010

Question 1. Define Aggregate Planning and its strategies to meet demand and supply.Ans: Definition of aggregate planning:One important strategy used in planning demand and supply is called Aggregate Planning. The aggregate plan is a demand management tool that allocates resources optimally relating both direct and derived demand such that there is both, a better utilization of the production system and an improvement of customer service.

Strategies:Once the demand has been determined, there are basically three strategies in meeting demand and supply that are used in aggregate planning:(a) Chase Strategy(b) Level Strategy(c) Mixed Strategy(a)Chase StrategyA cyclical nature of business often employs a chase strategy. When the demand fluctuates a firm should adjust the capacity to match the demand as close as possible. A Chase Strategy is a strategy aimed at adjusting capacity in anticipation of demand. You are chasing demand by regulating capacity to the demand doing it as dynamically and quickly as you can.

Use part-time employees: Having part-time employees when required is one way to pursue demand.

Varying production rates through overtime or idle time: Managers may be able to adjust for changes in demand by varying working hours. When demand is on a large upswing, though, there is a limit on how much overtime is realistic. Overtime pay requires more money.Increase contribution of consumer in delivery of service: You can increase your capacity if the contribution of the consumer in the delivery of the service is possible.

Keeping bottleneck resources busy: The key is to carefully extending capacity to monitor short-term schedules. You have to keep bottleneck resources as busy as practical.

Share capacity with other divisions/firms: Companies often share capacity. Gradually, many companies are entering into strategic agreements to gradually share maintenance facilities.

Outsourcing: A firm can handle peak demand periods by subcontracting some work. Subcontracting, however, has several pitfalls.

Varying work-force size by hiring or layoffs: One way to meet demand is to hire or layoff production workers to match production rates.

Counter seasonal products: One of the most common managerial strategies for obtaining good utilization of facilities and workforce and stabilizing employment is to acquire counter seasonal products and integrate them into the system.

(b)Level StrategyThe level-production strategy is an operations manager's vision. In a level strategy, an organization maintains a continuous capacity over a period of time, regardless of variations in demand. This strategy is utilized when the skills of manpower, the requirement of training, and the cost of recruiting and terminating employees is high.

Changing product mix: An organizations product mix is the percentage of total output devoted to each product. For instance a law firm may be involved in different areas of litigation.

Increasing machine production rate: In a machine constrained operation, adding people will not increase capacity.

Improving quality: Improving quality can often increase the capacity of operations. Simply stated, if an operation produces fewer defects, there is less waste and rework. Poor quality not only gives the organizations customers a bad impression of its product, but also lowers needed capacity.

Increasing product yield: Yield is the percentage of output of a certain product in relation to its input. In many operations, the quantity of output is less than the quantity of input.

Increase motivation: Another way to increase the production rate for an operation with labor constraints is to increase motivation. Increased cooperation has created more motivated employees, thus providing the following benefits to organizations.

Employee involvement: Many managements agree to profit sharing with workers, which the workforce to work towards higher productivity. New techniques of worker participation are being introduced, the talents of its labor force are being used more effectively, and there is greater employee involvement in decision-making.

Prepare for future growth in early creation of facilities: It is vital to think about the business prospects and then integrating and building them into the present organization plans.

(c) Mixed StrategyIndividual firms create endless combinations of these three pure strategies, i.e., chase and level strategies to match with their own conditions and situations. Each of these pure strategies has its strong points and weaknesses. The chase strategy reduces the costs of holding inventory, including the hazard of investing meager resources to gather the wrong products. Though the firm may gain from this, it also takes the risk of possibly alienating employees, especially if demand fluctuations are persistent. Firms can also try another option of adjusting orders to meet the availability of manpower with the current demand. This will only shift the problem to suppliers. However, there is the hope that suppliers may handle the inconsistency better by filling gaps with orders from other customers.

Question 2. Explain the SCOR model with a diagrammatic representation.Ans: SCOR Model:The SCOR model is used to understand simple or complex supply chains through a common set of terms. Consequently, different industries can be related to each other to interpret any supply chain. SCOR is based on five unique management methods. These are: Plan, Source, Make, Deliver and Return.

(i) Plan: It includes methods required to balance collective demand and supply to devise a strategy which meet sourcing, production and delivery requirements in an optimum manner.

(ii) Source: It includes methods to procure goods/services to meet the actual or anticipated demand.

(iii) Make: It includes methods that convert a raw product to a finished product to meet the actual or anticipated demand.

(iv) Deliver: It includes methods that are involved in the transfer of final products to the end consumer. This includes concepts such as distribution management, transportation, etc.

(v) Return: It includes methods which are involved in receiving the returned products no matter what the reason for return is.

Diagram with focusing aspects:The SCOR model focuses on the following aspects:1. All communication with the customer right from the purchase of a product to its payment.

2. All product transactions that come in the process right from the supplier to the end customer which includes equipment, bulk commodities, spare parts, etc.

3. All market communication right from understanding the collective demand to the fulfillment of each order.

Question 3. Explain the recent trends in sales management.Ans: Definition of sales management:The sales management function involves planning, organizing, directing and controlling of the organizations sales effort. Distribution management encompasses all the means used to transfer products from the manufacturer to the end-user through intermediaries, such as, wholesalers and retailers.

Distribution function serves the primary function of ensuring that the product or service is made available to the consumer either close to his living area or place of work. Sales management information system (SMIS) is the study of the sales people, sales technology and the sales organizations. SMIS provides information that is needed to manage sales firms efficiently and effectively. Sales management information systems are the methods of using technology to help organizations better manage people and make decisions. Sales managers use this system to collect and analyse information about various aspects of the organization such as sales, sales personnel, production, or other related aspects.

Trends in sales management:Following are the recent trends in the area of sales management:

(i) Intense Competition: Due to liberalization, privatization and globalization (LPG), the sales environment of todays organizations has changed a great deal. The selling firms are not competing with new domestic players but with foreign competitors too. Manufacturing hubs based in Asia, notably in China, South Korea, Hong Kong, Japan, etc. have captured huge market shares of most of the industries like automobiles, home appliances, machine tools, entertainment goods and industrial chemicals. The battlebetween national and international players is expected to continue. The economic heart will largely depend on how sales managers manage their sales forces to meet foreign competition in their country and to improve their company image and market share in the global market place.

Role of a sales professionalBesides, due to borderless economies and cultural shift in their respective client bases, selling professionals must begin the study of international cultures, requirements and languages. The acquired knowledge will assist sales professionals to communicate articulately with global clients and build smooth relationships. Simply put, it is vital for all selling professionals to think globally and act locally.

(ii) Rising Customer Expectations: Internet age, increased computer awareness and shrinking usage charges have made people enabled buy things on line resulting in growth of non-store selling (on line retail), customers today can get information on product prices, features, cross comparison details and place orders on the internet in a matter of seconds. They can access public feedback and the products performance reports from Indus try experts on line. Marketing firms can also collect detailed information about markets, customers, competitors, international trends, and prospects by using the internet. Consequently, it has made customers demanding than never before. Today customers want value for their money. Value is the relationship between customers expectations and his paying ability.

Role of a sales professionalSales people will have to acquaint themselves with latest technology. They should know and use technological innovations for sales management, such as, laptops, personal computers, cell phones, tele-conferencing, power point and video presentations.

(iii) Customer Relationship Marketing (CRM): Customer relationship marketing (CRM) is a business strategy built around the concept of being customer centric. Information and communication technology (ICT) plays a vital role in carrying out CRM. Through the use of CRM software packages, companies can offer excellent real time customer service by focusing on meeting the individual needs of each valued customer. The practice of relationship marketing has been facilitated by several generations of customer relationship management software that allow tracking and analyzing of each customers preferences, activities, tastes, likes, dislikes and complaints.

Role of a sales professionalTo fully comprehend and develop a competitive advantage plan, sales people must build a customer data base and data mining applications to detect trends, segments, and individual customer needs. CRM skills require a better understanding of the environment in which they are operating and allow the company to gain competitive advantage over competitors.

(iv) Revolution in computer Technology: Internet revolution and communication technology has enabled the customers to go on line and get information on product assortment, compare suppliers prices and product fractures, customers feedback and market experts reports in few seconds on the mouse click. They can access on line a great amount of information about almost every aspect of the products and companysofferings. Similarly, sales managers cannot afford to miss out on this revolution because it offers great opportunities to win competitive advantages with customers. Role of a sales professionalAmong the important technological innovations for sales management professionals are laptops and palmtops besides desktop personal computers, tele-conferencing, cellular phones, electronic sales offices and power point presentations. Undoubtedly, technology can do wonder and make most of the sales activities cost and time savvy. However, in case of selling technical products and B2B selling, face to face discussionswith customers are still required.(v) Cost cutting approach: Today throughout the globe, sales managers are emphasizing on cost control policies and adapting to the new selling environment. Buying power is more in fewer hands. Sellers can use this power and drastically cut their own administrative and operational costs by shifting more of their in-store activities including labour and display to manufacturer.

Role of a sales professionalThe results can be overwhelming if sales force is restructured and retrained in controlling costs and improving effectiveness considering business complexities and frequently changing sales environment.

(vi) Influx of women, minorities and rural into sales careers: The composition of sales force is changing shape with increasing involvement of women, minorities and rural communities that we had never heard of fifteen years ago. The future of selling requires changes to keep pace with generational and cultural shifts. Statistics even clearly depict that women and minorities are performing successfully in the new role. While change is good, it requires adjustment.

Role of a sales professionalSales managers will have to manage a sales force consisting of women, minorities, more educated and less educated sales persons, as well as experienced and senior sales people. The expectations and working style of the varied sales force will be different and therefore, the training, development and motivational tools will not be the same.

(vii) Ethical social issues: The present economy is morphing faster than in the days of both immigration and the industrial revolution. We now do business with nations and communities that we had never known ten years ago. Today sales managers face a number of moral and righteous issues. At times, the sale manager conveys incorrect information about a product to the customer, gives false commitments to the customer, etc., just to increase his sales revenue. There are instances, when the sales manager offers expensive gifts to the senior management of an organization in order to ensure that he receives the bulk order for a particular product. These unethical practices are being adopted today by the sales managers just to ensure speedy success in the current scenario.

Role of a sales professionalTherefore, it is always better to ensure ethical standards from the sales force otherwise they may be out of competition or land up in legal problems. Further, consultative sales people who are trying to build long run relationships of mutual trust and confidence with customers should avoid any statements or actions that may result in a loss of personal integrity in the eye of customers.

(viii) Managing multi-channels: Multi-channel marketing system takes place when an organization adopts two or more distribution (or marketing) channels to reach one or more customer segments. Most of consumer durables and FMCG companies use a different set of channels to service the retail trade and institutional customers. This system undoubtedly has benefits of cost and time savings, increased market coverage and customized selling.

Role of a Sales professionalThe acute sales manager will have to effectively manage the conflicts between channel members by using techniques such as co-optation, diplomacy, arbitration, mediation, adopting super-ordinate goals and exchanging sales force.

Question 4. Explain Green supply chain management in details.Ans: Environmental regulations are widely being extended due to a shrinking of theresource basket as well as fears of global warming.An organization that focuses on this concept ensures that less polluting materials are purchased, the manufacturing process consumes comparatively less amount of energyand produces less waste. The finished goods are delivered to the customers using combined modes of transport. Thereafter, using reverse logistics, used products are brought back to the recycling unit and processed further to produce new products.

Organizations have come up with innovative measures to reduce their ecological footprint. There are two components to become green:(a) eco-efficiency(b) eco-effectivenessCreating a Green Supply ChainA green supply chain consists of efforts involved to conserve and protect the environment. This is done by making certain changes in the supply chain management activities and plan, procurement and distribution processes. How does the green concept work?

It is no wonder that green innovations are revolutionizing businesses by changing everything from the way products are designed to how inventory is managed and controlled. This includes the design of products derived from recycled materials; reducing the waste of products from natural resources; ensuring "zero waste" from a product at end-of-life. Activities such as production, packaging, transportation, repackaging and delivery of products to the final consumer can create considerable hazard to the environment in terms of disposed packaging materials, carbon monoxide emissions, noise, traffic congestion, and other forms of industrial pollution. Companies have begun to realize the fact that by reducing waste and controlling pollution activities can help in reducing their costs.

As natural resources become scarcer, input costs in many industries is also increasing. Green initiatives can be very effective here. By increasing the amount of recycled leadused in the production of the batteries it supplies to the automobile industry, Johnson Controls has reported that it saved approximately $500 per ton of lead used.

Question 5. Explain the various stage invoved in the personal selling process.Ans: Definition of selling process: The key to the development of the sales force is the finalization of the appropriate sales processes by each organization. Sales processes differ across products as well as approaches and strategies followed by an organization.

Stages:It is important to understand the various steps involved in the personal selling process.

Step 1 Prospecting: This is the first step in the personal selling process and involves potential clients who might require the product and who also have the means to purchase the product offered being shortlisted. The process, in a large number of industries, involves cold calling, i.e., the practice of physically or telephonically calling apotential customer and ascertaining if a need exists for the product.Step 2 Pre-Approach: Pre-approach is, in fact, a preparatory step for the meeting with the prospect. Information such as preferences and expectations of the prospect is gathered and the presentation is crafted accordingly. Ideally, if the needs, tastes, requirements, outlook of the prospect can be ascertained, then a thorough preparationcould be organized by estimating possible questions the prospectmay ask and appropriate answers for the same.

Step 3 Gain Interview/Approach: Gain Interview/Approach is the phase where the first contact with the prospect is made in accordance with the appointment fixed in the pre-approach stage.

Step 4 Presentation: The core of the selling process, this stage is all about generating a desire for the product in the prospect's mind. Once again, various approaches are prevalent. The activity could start by exhibiting the product or helping the prospect visualize the product through pictures, charts, etc.

Step 5 Handling Objections: The objection handling phase that follows the presentation phase is amongst the most critical phases in personal selling.

Step 6 Closing the Sale: The importance of this step cannot be overstated as this is where the real results of the entire sales effort can be visible. In this stage, after all the negotiations and discussions, the salesperson finally asks for the order. There are different ways in which the sales person is able to clinch the deal.

Step 7 Post-Sales Service: Post-sales service is the final step in personal selling and has been utilized by many experienced salesmen as a key for obtaining new prospects, repeat sales, etc.

Question 6. Discuss three components of supply chain management.Ans: Explaination:When we talk of demand management, we should be clear about some of the basic elements that are involved. There are three basic elements that we need to understand. The first two are supply and demand. These two elements are intrinsically linked and are critical to sourcing raw materials and parts for manufacturing and assembly in a planned manner. The third component is warehousing. This includes inventory tracking, order entry and order management, distribution across all channels, and delivery to the customer.

Components:(a)DemandLet us first look at demand. Many different types of demands are considered in economic literature. There are some types that are important from the Operations Management perspective. Basically Supply chain management is interested in market demand.

Market demand is the total quantity of a product or service demanded by all the consumers in the market during a given period of time.

Direct demand: When the product or service yields direct satisfaction to a customer and is independent of the demand for other products, it can be termed as the direct demand. Direct demand refers to demand for goods meant for final consumption. Demand for consumers goods like cars, readymade garments, and vegetables, etc.

Derived demand: It is the demand for a product or service which arises from the demand for another product or service. In contrast to direct demand, derived demand refers to demand for goods which are needed for further production. Its demand depends on the demand for some output where it is used as an input.(b)SupplyDemand and supply are related. Supply is one side of the coin where demand is the other side. Ideally you would like demand and supply to be balanced. But this does not happen in a dynamic environment.

Cooperation between supply chain partners is necessary but it is highly complex phenomenon. It starts with joint planning and ends with joint control activities to evaluate performance of the supply chain members. It is not limited to a specific level but happens at several management levels. It also involves cross-functional coordination across the channel members. Supply chain partners need this type of relationship of cooperation to optimize their performances.

(c)LogisticsLogistics is involved in planning, implementing and controlling the flow and storage of goods, services and related information from the point of origin to the point of consumption (meeting the customer's requirements) in a manner that is efficient and effective.

There are two aspects of logistics; the receipt of stores (for transformation of inputs) and dispatch of stores (for supply of finished goods). These are the interfaces between incoming and finished goods flows. These physical flows are often called in-bound and out-bound logistics, respectively. In other words, logistics is the backend of both manufacturing and marketing.

Logistics is involved in specific activities which include:

Managing the inbound movements of parts and materials Outbound completed products Warehousing Inventory control Vehicle scheduling

10