SUPPLY CHAIN MANAGEMENT OF COTTON: FROM FARM TO FACTORY
*Rajendra Bafna, Jyoti Singh Tanwar, Sanjay Kadam
Introduction:
The concept of Supply Chain Management is based on two core ideas. 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. Supply chain management, then, 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.
This article throws light on the existing supply chain management of cotton in India. India is the second largest producer of cotton in the world and also the second largest exporter of after the USA. As Cotton is one of the most important cash crops in India supply chain of cotton has major economic significance.
…show more content…
The main reasons are: fragmentation of the industry, labour restrictions that restricted loom capacity, poorly developed textile machine industry and production restrictions like the hank-yarn obligation. The use of outdated technology adversely affects the competitiveness the textile industry in the global markets. Below table shows the low level of technology adoption across segments.
The large scale integrated mills have been the only segment that have been able to access capital intensive technology helping them upgrade and scale-up production according the needs of the changing markets.
3. Information
The supply chain management is considered as a management concept from past two decades as the customers are concerned about timely and safe delivery. The competitiveness has been increasing among the companies to deliver the products as quickly as possible to the customers all around the world. This has made the supply chain management as a vital tool for the management. This is also measured as a competitive parameter for the companies.
Supply-chain management consists of developing a strategy to organize, control, and motivate the resources involved in the flow of services and materials within the supply chain. A supply chain strategy, an essential aspect of supply chain management, seeks to design a firm’s supply chain to meet the competitive priorities of the firm’s operations strategy.
Mellat-Parast and Spillan (2014) defines supply chain management as the method of handling material and information moves from the beginning, through the organization, and to the end-user. This is a very important factor of organizational strategy.
Supply Chain Management (SCM) has been defined by Supply Chain Management Institute to be “the management of relationships in the network of organizations, from end customers through original suppliers, using key cross-functional business processes to create value for customers and other stakeholders”(SCM-Institute, 2016).
Manufacturers source the best fabrics available at low cost to make into garments. U.S. textile and apparel imports increased from $10 billion in 1982 to $96 billion in 2006. This corresponds to the enormous growth of the textile industries of China, Korea, Taiwan, and India. One reason for this is that U.S. manufacturers contracting production overseas tend to use fabrics from
Supply chain management lets an organization get their products of raw goods to the place they are needed at the right time, the right place, and what exactly they have ordered, and at a reasonable cost. It moves from parts supplier to manufacturers to wholesale to retailer then consumer. Supply chain management plays an important role supplying the manufacturers all the way down to the consumer, so they can satisfy their customers, and to have good benefits for their company, if the supply chain management is managed good, they will have a good outcome for their company. Supply chain management does involve some factors; location of facilities of where the goods will be flowing from, production is another
Supply chain management (SCM) is the maximization of customer value and effective management of supply chain activities to ensure a sustainable competitive advantage. Supply chain firms strive to develop and manage their supply chains as efficiently as possible. Supply chain activities include everything from product development, procurement, production and logistics to all the information systems necessary to coordinate these activities.
“The term Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities.” as quoted by the council of Supply Chain Management Professionals.[1]
Supply chain management is the business of overseeing the flow of materials to manufacturers, wholesalers, retailers and consumers. It is an external process that involves supply chain managers communicating with other vendors to ensure a product flows through the supply chain smoothly. Once a product reaches the consumer, it has already flowed through multiple organizations – these organizations collectively are referred to as the supply chain. Effective supply chain management should result in a relatively seamless production process while also minimizing costs on a continuing basis. Operations management, by definition, is the development, execution and
Supply Chain Management according to Tom Mc Guffog is "Maximising added value and reducing total cost across the entire trading process through focusing on speed and certainty of response to the market." Supply chain management is one of the important area which requiring strategic planning in a business enterprise. Planning and decision making are required right from the production of goods till the goods reach the ultimate consumers in the most cost effective and timely manner. If a firm is able to manage its supply chain efficiently, it can increase its customer satisfaction because SCM ensure the deliverance of fast and quality products to customers. Supply chain includes all the activities from the conversion of raw materials, one end
Supply Chain Management seeks to guarantee that “merchandise is produced and distributed at the right quantities, to the right locations, and at the right time. . .” (Stock, Boyer, & Harmon, 2010). It is the management of a company’s supply chain by coordination and integration of the multitude of supply chain partners that a company interacts with. Initially, the concept focused on how to make a relationship between supplier and purchaser more efficient but has now been broadened to include the management of many activities, functions, and organizations. In some industries it may include a company’s entire supply chain, including all of its customers, suppliers, and strategic partners (du Toit & Vlok, 2014; Walker & Jones, 2012). The concept has expanded so far today that many argue that there is no longer any competition among individual companies but instead competition among separate supply chains (Brun & Moretto, 2012).
Growth of any country depends upon its manufacturing capabilities. Today is world of competitiveness. Every industry must need to increase their performance and reliability as well as quality.Besides this one need to consider cost. Because at last cost will decide whether the thing is of superior quality in that range. So every industry must reduce the cost of process.
India is witnessing rapid changes in retailing with urbanization, increase in disposable income, changing lifestyle, preferences and eating habits of its population. India with diverse agro-climatic conditions offers both opportunities and challenges in retailing of fruits and vegetables. Concentration of production with small and medium farmers in remote areas without proper infrastructure facilities and market linkages has led to large scale inefficiencies in supply chain. Namdhari’s Fresh has successfully overcome the challenges by producing fruits and vegetables on their own farms under different agro-climatic conditions apart from contract
A supply chain management may be defined as the process involving all the activities like planning, organising, implementing and controlling the cost effective flow of goods from the point of origin to the point of consumption. This involves various other activities which is required to add value to the product along the supply chain like procurement, sourcing and conversion of the products. There are a lot of players involved like the suppliers, manufacturers distributors etc. They have to have a lot of coordination and collaboration among them to in order to be really efficient and deliver good quality products and services. The whole process is integrated to meet the supply and demand. The supply chain networks have drastically changed over the years in the era of globalization. They are very global in nature involving various complex interactions and flow of goods, data and funds between companies which are situated in different countries and continents. Even though the companies are spread across the world the manufacturing plants generally follow a similar structure which normally comprises of the suppliers, assembly plants, distributors, retailers, inbound and outbound logistics providers. There were a lot of challenges which arose because of the competition
Supply Chain Management is the process of planning, implementing, and controlling the operations of supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. It is a cross functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end consumer.