Supply Chain Management – There are many possible structures for supply chain


Q1. “There are many possible structures for supply chain, but the simplest view has materials converging on an organization through tiers of suppliers and products diverging through tiers of customers.” Elaborate.

Q2. Explain clearly the meaning of “World-Class” in World-Class Supply Chain Management (WCSCM). What are the features of World-Class Companies? Give your answer highlighting different characteristics pertaining to management level, quality control, operations/production and technological advances.

Q3. Define Enterprise Resource Planning (ERP). Give its tangible and intangible benefits. Why does a company pursue a new ERP solution?

Q4. When Christopher says that “Supply chains compete, not companies” what exactly does he mean? Evaluate this statement from the cost point of view.

Q5. Given the information below, which alternative would you recommend?

Factor Weight Location
Raw materials 0-40 50 70 60
Market 0-20 40 40 80
Transportation 0-10 90 70 50
Labour cost 0-20 40 40 30
Construction cost 0-10 10 60 30

The score of each location pertaining to each factor is out of 100.

Q6. “In the era of outsourcing, third party logistics can add value to existing supply chains.” Explain this statement with examples.



Q7. Read the following case and answer the questions given at the end.


Passenger Interchange

In most major cities the amount of congestion on the roads is increasing. Some of this is due to commercial vehicles, but by far the majority is due to private cars. There are several ways of controlling the number of vehicles using certain areas. These include prohibition of cars in pedestrian areas, restricted entry, limits on parking, traffic calming schemes, and so on. A relatively new approach has road-user charging, where cars pay a fee to use a particular length of road, with the fee possibly changing with prevailing traffic conditions.

Generally, the most effective approach to reducing traffic congestion is to improve public transport. These services must be attractive to people who judge them by a range of factors, such as the comfort of seating, amount of crowding, handling of luggage, availability off good toilets, safety, and facilities in waiting areas. Availability of escalators and lifts, and so on. However, the dominant considerations are cost, time and reliability.

Buses are often the most flexible form of public transport, with the time for a journey consisting of four parts:

  • joining time, which is the time needed to get to a bus stop
  • waiting time, until the bus arrives
  • journey time, to actually do the travelling
  • Leaving time, to get from the bus to the final destination.

Transport policies can reduce these times by a combination of frequent services, well-planned routes, and bus priority schemes. Then convenient journeys and subsidized travel make buses an attractive alternative.

One problem, however, is that people have to change buses, or transfer between buses and other types of transport, including cars, planes, trains, ferries and trams. Then there are additional times for moving between one type of transport and the next, and waiting for the next part of the service. These can be minimized by an integrated transport system with frequent, connecting services at ‘passenger interchanges’.

Passenger interchanges seem a good idea, but they are not universally popular. Most people prefer a straight-through journey between two points, even if this is less frequent than an integrated service with interchanges. The reason is probably because there are more opportunities for things to go wrong, and experiences suggests that even starting a journey does not guarantee that it will successfully finish.

In practice, most major cities such as London and Paris have successful interchanges, and they are spreading into smaller towns, such as Montpellier in France. For the ten years up to 2001, the population of Montpellier grew by more than 8.4 per cent, and it moved from being the 22nd largest town in France to the eighth largest. It has good transport links with the porti of Sete, an airport, inland waterways, main road networks and a fast rail link to Paris. In 2001, public transport was enhanced with a 15 kilometer tramline connecting major sites in the town centre with other transport links. At the same time, buses were rerouted to connect to the tram, cycling was encouraged for short distances, park-and-ride services were improved, and journeys were generally made easier, As a result, there has been an increase in use of public transport, a reduction in the number of cars in the town centre, and improved air quality. When the tram opened in 2000, a third of the population tried it in the first weekend, and it carried a million people within seven weeks of opening. In 2005, a second tramline will add 19 kilometers to the routes.


(a) Are the problems of moving people significantly different from the problems of moving goods or Services?

(b) What are the benefits of public transport over private transport? Should public transport be encouraged and, if so, how?

(c) What are the benefits of integrated public transport systems ?