B.S. Sahay, Vasant Cavale and Ramneesh Mohan
With close to 22 percent of aggregate industry sales tied up in inventories in the entire supply chain network, what is it that ails Indian industry? Is it the way Indian supply…
Abstract
With close to 22 percent of aggregate industry sales tied up in inventories in the entire supply chain network, what is it that ails Indian industry? Is it the way Indian supply chains are configured – their orientation to processes to streamline business activities; their fusion of information technology to speed up business transactions; their approach to supply chain strategy to improve bottom line results – that has restricted them from achieving global standards? The article, based on a recently concluded nationwide study titled “Supply chain management practices in Indian Industry: 2000”, throws up glaring facts about the current architecture of supply chains in India. The article concludes that though some Indian organizations are moving fast towards improving supply chain efficiencies, most of them are still far from realising its effect on business performance.
Details
Keywords
To carry out a comprehensive survey on 3PL practices in India and to establish the impact of usage of third party logistics services on business results.
Abstract
Purpose
To carry out a comprehensive survey on 3PL practices in India and to establish the impact of usage of third party logistics services on business results.
Design/methodology/approach
Begins by analysing the studies carried out on 3PL practices and establishing a research framework. The input variables to the research framework depict the organization‐specific characteristics, such as the extent of usage of 3PL services, the reasons for outsourcing and the impact of the usage of 3PL services. The output function of future usage of 3PL services is influenced by the three input variables. Data collected through survey questionnaire on the input and output variables are used to establish impact of usage of 3PL services on business performance through statistical analysis.
Findings
The usage of 3PL services reveals positive and significant impact on business performance though 3PL practices are still at a nascent stage in India. Additionally, results clearly indicate that significant increase in outsourcing has been planned across all activities of the logistics function in the next 2‐5 years.
Research limitations/implications
Further research work should focus on managing 3PL relationships; selection and contract management of 3PL service providers for building collaborative supply chain partnerships; and identifying critical success factors for 3PL implementation and establishing performance measures for long‐term 3PL relationships.
Practical implications
Detailed study to motivate supply chain managers to outsource and use 3PL services to focus on the core business, drive logistics cost reduction, and improve supply chain efficiency. These indicators should also help the 3PL service providers plan the depth and scope of their service offerings to user organizations in India.
Originality/value
The paper contributes to the current 3PL and supply chain practices and the emerging trends in 3PL services for achieving improved business results and supply chain efficiencies.
Details
Keywords
B.S. Sahay, Jatinder N.D. Gupta and Ramneesh Mohan
The paper aims to analyse research conducted for assessing the current state of supply chain management practices followed by Indian organisations and identifying important areas…
Abstract
Purpose
The paper aims to analyse research conducted for assessing the current state of supply chain management practices followed by Indian organisations and identifying important areas that need to be addressed in order to increase their competitiveness.
Design/methodology/approach
The paper begins by proposing a framework for evaluating the supply chain strategy of an organisation along the three key dimensions – supply chain objectives, supply chain processes, and management focus on supply chain activities. Data collected through survey questionnaire for the three dimensions have been used to assess the alignment of supply chain strategy with the overall business strategy through statistical analysis.
Findings
The research findings reveal that most of the Indian organisations have aligned their supply chain objectives with their business objectives. They are now on course of aligning their processes and management focus. Enhanced level of competitiveness would require Indian organisations to manage the three‐dimensional alignment of achieving the agenda set by the business strategy.
Research limitations/implications
Further research work should focus on: assessing the current level of supply chain processes; identifying critical supply chain focus areas for the business; and establishing specific performance measures for continuous measurement of supply chain efficiency improvement.
Practical implications
This paper provides a detailed study to help supply chain managers improve supply chain efficiency through alignment of supply chain objectives with business objectives, supply chain processes with management tools and supply chain focus areas with management focus. Improved supply chain efficiency will help Indian organisations maintain competitiveness in a rapidly globalising economy.
Originality/value
The supply chain alignment model suggested in this paper provides a framework for realising true supply chain efficiency and competitiveness. Different organisations will align their objectives, processes and management focus as per the focal areas of their organisation depending on their capabilities and market situation. However, in every case Indian organisations need to act fast to capitalise on these opportunities to be competitive with the world market.
Details
Keywords
Increasing uncertainty of supply networks, globalization of businesses, proliferation of product variety and shortening of product life cycles have forced Indian organizations to…
Abstract
Increasing uncertainty of supply networks, globalization of businesses, proliferation of product variety and shortening of product life cycles have forced Indian organizations to look beyond their four walls for collaboration with supply chain partners. With a gross domestic product (GDP) of over US$474.3 biilion, the Indian industry spends 14 percent of its GDP on logistics. Considering this scenario, it is necessary to study the supply chain practices being followed by the Indian industry and to suggest areas for improving the same. This paper is based on a joint survey, covering 156 organizations, carried out by Management Development Institute, Gurgaon and KPMG India. The paper primarily focuses on the status of four major supply chain dimensions. The paper recommends that the Indian industry should align supply chain strategy with business strategy, streamline processes for supply chain integration, form partnerships for minimizing inventory and focus on infrastructure and technology deployment to build a India‐specific supply chain.