ADL 64 Logistics and Supply Chain Management V2

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ADL 64 Logistics & Supply Chain Management V2

Assignment – A

Q1: (A) Define logistics. Discuss and elaborate various components of logistics
(B) Describe the concept of total cost analysis and logistics.

Q2: (A) What is supply chain management? What are the various flows in a supply
(B) What are the functions and contributions of supply chain management?

Q3: (A) What is meant by customer service? What are its futures?
(B) What are different elements of customer service costs? Explain its
fundamental trade-offs.

Q4: (A) Discuss the role of information in overall performance of logistics and
supply chain management.
(B) What are various components of logistics information system
architecture? How does LIS facilitate improvement in logistics decision making?

Q5: (A) What is inventory? Discuss various elements of inventory costs.
(B) Define the concept and objectives of MRP and DRP.

Assignment – B

Q1: (A) Discuss the nature and scope of storage, warehouse and distribution
(B) Discuss the various functions of a warehouse from the logistics and
supply chain perspective.

Q2: (A) Describe the role of transportation in the success of logistics and
supply chain.
(B) What are the issues that should be considered by a logistics manager
in selecting a mode of transport?

Q3: (A) Describe the functions of packaging in LSCM perspective.
(B) What are the objectives and principles of material handling?

Case Study

Maruti Udyog – Indian ethos and Japanese ways

Maruti Udyog Ltd (MUL) the leading manufacturer of cars in India is a leader in
supplier relationship management. Its turnover was Rs. 12481 Cr. And its profit
before tax, was 1750 Cr. In 2005 – 06. It sold 561822 vehicles in 2005 – 06 and
captured a market share of over 55%. It deals with about 7100 components for its
11 major models. 70% of its suppliers buy numbers are located within 100 km
radius of its Gurgaon plant. They meet more than 80% of Maruti’s requirement by

Maruti has 220 approved vendors who supply the major component. The top 80
vendors supply 86% by value of their purchases. The rest of the vendors supplie
only 14%. It has also signed joint ventures with a large number of its vendors.
Of the 86% components supplied by vendors, joint ventures supply only 34%; the
rest of the 52 % by value is supplied by other vendors. These 80 vendors are
considered strategic partners. Only 20 to 30 of them are Maruti joint ventures.

With strategic partners, Maruti has a number of programs. Their emphasis is on
vendor productivity and quality. Maruti take a major role in improving vendor
productivity. It organizes Junkai VA or cost workshops with its vendors on an
ongoing basis. Junkai is a Japanese word which basically means “visiting “. It
has three components called G-Genmab, Gembutsu, and Genjitsu.

Gemba means taking a look to see what is happening at the site. Gembutsu means
examine the affected piece to understand what exactly the defect is. Genjitsu
means discussing under what conditions this has happened – something like a
brainstorming session. Typically a team from Meerut along with the supplier team
visit the supplier’s shop floor has look around noting down points. They then
have brainstorming sessions at the Meerut office. At the end of the
brainstorming they come out with various points relating to improvements in
productivity, quality and cost.

Meerut also has constituted a group called Maruti center for excellence. This is
a team which continuously goes to suppliers to upgrade team. It audits the
workings of its suppliers and comes out with a spider chart. The spider chart
has 22 points. Each vendor is evaluated in these 22 points. Additional business
is promised on the next new model to vendor who scores over 605 on the spider
chart. Every vendor really tries to make sure that he goes above this mark.

Apart from this it has also started second tier improvement in a very big way.
This was the latest initiative it took up a year ago. The result has been that
the second tier vendors quality has also gone up. It has also started “green
initiatives” accordingly all packing has been converted into reusable packing.
It recently introduced a practice to check the pollution levels of all the
trucks getting into Maruti; if pollution levels were not right, then the trucks
were sent back. This made its vendors understand that Maruti cared about the

Further, it follows the Kaizen theme which means to make it smaller, fewer
lighter shorter and beautiful. It follows this theme in its plant and has been
continuously teaching this practice to its vendors. It conserves the usage of
material of yield improvement. Moreover along with CII and USAID it has started
a program to help its suppliers get ISO 14000 certification. It has also started
a program on ELV compliance. Though this is not required in India, the idea is
that by the time the requirement comes to india, Maruti’s vendors will all be
sufficiently equipped to take care of it. It also has a vendor finance cost
reduction program. It has lined up with banks to see that the loans of its
suppliers are transferred to lower interest rates. Through these initiatives
Maruti has become more agile and leaner.

In 2005 – 06, Maruti trained around 16 vendors and ultimately the savings of man
hours per day come to 1580 man hours which has resulted in a saving of over 1cr.
Rupees per annum. It was able to reduse component costs by 29% on the alto alone
from 2001 to 2005.


Q-1: What is supplier relationship management?

Q-2: What was Maruti’s objective on supplier relationship?

Q-3: Discuss the kind of relationship Maruti adopted with its vendors.

Q-4: What are the methods adopted by Maruti to achieve supplier relastionship?

Assignment – C

1. Which of the following is not a characteristic of logistics?
(a) It ensures a smooth flow of all types of goods.
(b) It has the ability to meet customer expectations and requirements
(c) It offers the best possible customer service at any cost
(d) It deals with movement and storage of goods in appropriate quantities

2. All of the following are the objectives of logistics except:
(a) To make available the right quantity of material at right quality at
right time at the right place in a right condition at right price
(b) To offer best possible customer service for competitive advantage
(c) To promote the product through the logistic channels
(d) To minimize total logistics costs

3. The logistic costs in India is _________ percentage of GDP
(a) 20%
(b) 13%
(c) 18%
(d) 7%

4. Which of the following does not provide a way to create competitive
(a) Low cost
(b) Low flexibility
(c) Superior customer service
(d) Value added services

5. All of the following are primary activities in a value chain except:
(a) Inbound logistics
(b) Operations
(c) Technology development
(d) Service

6. Which of the following is not a desired flow in a supply chain?
(a) Forward flow of value
(b) Flow of goods in both the direction
(c) Backward flow of cash
(d) Flow of information in both the directions

7. Which of the following is not a feature of customer service?
(a) It is reactive process
(b) Ensure a tradeoff between cost and service
(c) Creates a competitive advantage
(d) Brings about harmonious relationship with supply chain members

8. All of the following are post transactional customer service elements except:
(a) Installation, warranty, repairs, etc.
(b) Customer claim, complaints and returns
(c) Stock out level
(d) Temporary replacement of products

9. Freight charges depend on all of the following except:
(a) Nature of the product
(b) Value of the product
(c) Distance to be covered
(d) Volume/quantity to be shipped

10. A Carrier performance measure does not include:
(a) Speed
(b) Claim settlement ratio
(c) Area of warehouse owned
(d) Frequency

11. Physical distribution in terms of logistics is known as:
(a) Inbound logistics
(b) Outbound logistics
(c) In plant logistics
(d) Reverse logistics

12. which of the following is not a feature of supply chain?
(a) Supply chain is a network of entities
(b) The more the number of stages in a supply chain the more will be its
(c) Supply chain efficiency and effectiveness are the same
(d) Supply chain profit should be shared equitably by all the chain members

13. supply chain conflicts can be reduced by all of the following except;
(a) Use of power by the dominant partner
(b) Involvement by investment
(c) Information sharing
(d) Transfer of technology and skills

14. which of the following is not a key output of the logistic system?
(a) Creating competitive advantage
(b) Time and place utility
(c) Creating proprietary asset
(d) Increased cash flow

15. Logistics stand for
(a) Whatever is logical and reasonable
(b) Movement of material to destinations
(c) Putting together conclusions logically
(d) Moving supplying and warehousing material and information in an

16. Supply chain management covers:
(a) Management of suppliers and vendors
(b) Management of inventories, warehousing, transportation and documentation
relating to all suppliers
(c) Management of demand and supplies at minimum cost but grater customer
(d) Warehousing management

17. Transportation management is:
(a) A small and significant part of SCM
(b) Too specialized and should be managed separately
(c) Does not affect customer service
(d) Forms a major component of costs and should be synchronized to enhance
customer satisfaction

18. A fourth party logistics provider is:
(a) An organization that provides transportation
(b) An organization that provides warehousing facility
(c) An organization that manages inventory and information
(d) An organization that provides comprehensive supply chain solution

19. Which of the following does not fit into the feature of customer service?
(a) Providing customer service a tany cost
(b) Strategic processes that provides value added services
(c) Creates competitive advantage in the market place
(d) It reflects corporate vision

20. The internal web of an organization that allows only the internal users to
access and share data is called:
(a) Intranet
(b) EDI
(c) Extranet
(d) Internet

21. Which of the following is not an inventory related cost?
(a) Receivables
(b) Ordering cost
(c) Carrying cost
(d) Stock out cost

22. Which of the following is not an assumption of basic EOQ model?
(a) Annual demand, carrying cost and ordering cost can be estimated and is
(b) Half of order quantity is considered as safety stock
(c) Stock out has no effect
(d) Quantity discount does not exist

23. Inventory analysis based on the annual consumption value is called:
(a) ABC analysis
(b) VED analysis
(c) FSN analysis
(d) XYZ analysis

24. All are inputs to MRP system except:
(a) Bill of materials
(b) Inventory status file
(c) Master production schedule
(d) ABC analysis file

25. All are features of Distribution Resources Planning except:
(a) DRP deals with finished goods inventory
(b) DRP operates in an independent demand situation
(c) DRP is an explosion process
(d) Inputs to DRP is the distribution networks

26. Which of the following is not associated with JIT system?
(a) Waste elimination
(b) Mass production
(c) Single piece flow
(d) Pull system

27. All are economic function of warehouse except:
(a) Stock pilling
(b) Receiving
(c) Breaking bulk
(d) Consolidation

28. The changes levied by a municipal corporation
(a) Sales tax
(b) VAT
(c) Octroi
(d) Excise

29. Mode of economic surface transportation for bulk solid material over a long
distance is:
(a) Rail
(b) Road
(c) Ropeways
(d) Conveyors

30. Inter model transportation system arising out of the coordination between
roadways and railways are known as:
(a) Piggyback
(b) Fishy back
(c) Train – ship
(d) Express cargo

31. All are principles of material handling except:
(a) First principle
(b) Mechanization principle
(c) Flexibility principle
(d) Energy principle

32. Which of the following is not true for Air Way Bill?
(a) Receipt of goods
(b) Contract for affreightment
(c) Negotiable document
(d) Issued by carrier

33. Which of the following is not a carrier selection determinant?
(a) Transportation cost
(b) Transit time
(c) Reliability
(d) Vehicle cost

34. A bonded warehouse is:
(a) An open stockyard with high walls and other security measures for extra
protection of goods stored
(b) A war house in the premises of airport where goods imported by air are
(c) A warehouse where goods on which customs or excise duties have not been
paid are kept
(d) A govt. warehouse used for storing confiscated goods

35. LCL stands for:
(a) Less than normal cargo load
(b) Less than container load
(c) Low cargo load
(d) Less costlier load

36. Penalty charged by a carrier for not clearing a consignment from their
warehouse during the allowable time limit is known as:
(a) Damage
(b) Demurrage
(c) Liquidated damages
(d) Penal charges

37. certificate of origin is issued by;
(a) Bank in the exporting country
(b) Manufacturer
(c) Chamber of commerce
(d) The carrier

38. Which of the following is not an advantage of containerization?
(a) Reduces damages
(b) Increases investment on handling
(c) Reduces packaging
(d) Reduces loss

39. All are related to bullwhip effect except:
(a) It is the amplification of demand variation as one moves upstream in the
supply chain
(b) Forecast errors and lead time variability add to bullwhip effect
(c) The phenomena was first noted by Wal-Mart
(d) The effect can be reduced by information sharing, vendor managed
inventory, etc.

40. All are functions of order processing except:
(a) Order planning
(b) Order handling
(c) Order delivery
(d) Order pending

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