. Understand Supply Chain Dynamics: Gain a comprehensive understanding of the entire supply chain, including procurement, production, logistics, and distribution. Recognize how different stages of the supply chain may influence demand. 2. Collaborate with Stakeholders: Involve key stakeholders from different departments such as sales, marketing, production, and logistics. Their insights and expertise will provide valuable information for accurate forecasting. 3. Data Integration: Integrate data from various sources within the supply chain, including historical sales data, inventory levels, supplier performance, and external factors such as market trends or economic indicators. 4. Demand Segmentation: Segment your products or services based on characteristics that affect demand, such as seasonality, product life cycle, or customer demographics. Differentiated forecasting methods may be applied to each segment. 5. Technology Selection: Choose forecasting technologies that integrate seamlessly with other SCM systems. This might include Enterprise Resource Planning (ERP) systems, Warehouse Management Systems (WMS), and Transportation Management Systems (TMS). 6. Consider Lead Times and Variability: Account for lead times in the supply chain when forecasting. Understand the variability in lead times and demand patterns to optimize inventory levels and reduce the risk of stockouts or overstocking. 7. Dynamic Models for Supply Chain Events: Design dynamic forecasting models that can adapt to sudden events in the supply chain, such as disruptions in the supply network, changes in supplier capabilities, or unexpected demand fluctuations. 8. Demand Shaping Strategies: Implement demand shaping strategies to influence customer demand positively. This may involve promotions, discounts, or other marketing initiatives to align with forecasted demand. 9. Risk Assessment: Incorporate risk assessments into the forecasting process. Identify potential risks and uncertainties in the supply chain, such as geopolitical issues, natural disasters, or supplier reliability, and develop contingency plans. 10. Real-time Visibility: Aim for real-time visibility into supply chain activities. Use technologies like IoT devices, RFID, and advanced analytics to monitor the movement of goods, track inventory levels, and gather real-time data for more accurate forecasting. 11. Performance Metrics: Establish key performance indicators (KPIs) to measure the accuracy and effectiveness of the forecasting system. Regularly assess forecast accuracy, bias, and other relevant metrics to identify areas for improvement. 12. Continuous Improvement: Emphasize a culture of continuous improvement. Regularly review and update forecasting models based on changing market conditions, technology advancements, and feedback from actual performance. 13. Sustainability Considerations: Consider sustainability factors in forecasting, such as the environmental impact of production and transportation.

1. Unit 3: Forecasting Systems Design

2. Objectives:
 Explain how consumers are
decision makers and why
this is important in
understanding customer
relationships.
 Identify certain
psychological influences on
consumer behavior.
 Recognize certain
sociological influences on
consumer behavior.
 Define customer relationship
management (CRM), and
explain its importance to a small
business.
 Discuss the significance of
providing extraordinary
customer service.
 Understand how technology can
be used to improve customer
relationships and the techniques
used to create a customer
database.
2

3. Customer Service
Management
Meaning: Customer service management is a term that refers to
practices, strategies, and technologies that companies use to
manage and analyze customer interactions and data throughout the
customer lifecycle, with the goal of improving business
relationships with customers, assisting in customer retention, and
driving sales growth.

4. 4
Supply Chain Relationships:
Types of Relationships
1. Vertical
2. Horizontal
3. Full Collaboration

5. “
Regardless of form, relationships may differ in numerous ways:
1.Duration
2.Obligations
3.Expectations
4.Interaction/Communication
5.Cooperation
6.Planning
7.Goals
8.Performance analysis
9.Benefits and burdens
5

6. “ Definition of 3PL (Third-Party Logistics) :
A third-party-logistics firm is an external supplier
that performs all or part of a company’s
logistics functions. Multiple logistics
activities are managed together to provide
logistics/supply chain solutions.
6

7. “
7

8. ▫ 3PL - Third-Party Logistics
▫ In a 3PL model, an enterprise outsources operations of
transportation and logistics to a provider who may subcontract
out some or all of the execution. Additional services may be
performed such as crating, boxing and packaging to add value to
the supply chain.
▫ In our farm-to-grocery store example, a 3PL may be responsible
for packing the eggs in cartons in addition to moving the eggs
from the farm to the grocery store.

9. Third Party Logistics
▫ Third Party Logistics is the activity of outsourcing activities related to logistics and
distribution
▫ A 3PL can be defined as an external supplier which performs all or a parts of the
company’s logistics functions.
▫ Transportation
▫ Warehousing
▫ Cross-docking
▫ Inventory management
▫ Packaging
▫ Freight forwarding - A freight forwarder, forwarding agent, also known as a non-
vessel operating common carrier, is a person or company that organizes shipments for
individuals or corporations to get goods from the manufacturer or producer to a
market, customer or final point of distribution.

10. How third-
party
logistics
work
▫ Here is an example of how 3PL arrangements operate:
▫ A book publisher hires writers, editors and graphic designers
to produce publications, but it may not want to handle the
consumer ordering process or transportation of book
shipments. Instead, the book publisher uses a fulfillment center
to process its online orders and hires a trucking carrier to haul
its freight. The fulfillment center and carrier both act as 3PL
providers. It's possible for a single 3PL provider to fulfill and
ship book orders, too.
▫ By contracting with a 3PL provider, the book company can
use supply and distribution services only when needed, thus
controlling costs more effectively while focusing on its core
competency of producing books.

11. 11

13. Reasons to
Out source to
3PL
1. It saves time and money :
▫ eliminating the need to invest in warehousing space,
transportation, and the staff required.
▫ do not need to worry and spend time on paperwork, billing, audits,
training, staffing and optimization
▫ able to focus more directly on your business’ core competency.
2. It offers flexibility
▫ scale space, labor, and transportation according to inventory
needs.
▫ There is no need to stress about high and low seasons
▫ Example : If a business is in need of more space, a 3PL provider is
just one phone call away.

14. 3. It makes valuable expertise
▫ They are knowledgeable about the best practices in the industry
▫ They stay up to date with the latest developments in technology.
▫ your company is able to focus more on your core competencies
▫ Logistical needs are being handled by reliable, seasoned professionals.
4. It has a diverse resource network
▫ constantly develop resource networks i.e. (network with other
companies that are suitable for your business)
▫ Due to which your company can receive volume discounts
▫ which result in lower overhead and the fastest possible service.
▫ access to resources that otherwise would have been unavailable, or
costly, in-house.

15. 5. It encourages continuous optimization
▫ They cope with change.
▫ They have the resources at hand to make the proper adjustments needed in
each circumstance.
▫ your needs are met in the fastest, most efficient and cost effective way.
▫ help maximize profits, reduce wait times, and improve customer service.
6. It prioritizes advanced technology
▫ However, the latest software and technology can be accessed by partnering
with a 3PL provider.
▫ So there the need to purchase the most up to date developments in technology
is eliminated.

16. 7. It maximizes growth rate
▫ you are able to save time and money
▫ 3PL providers have warehouses in strategic locations all across the state,
country, and even the world.
▫ With this benefit, businesses now have the ability to expand their market
with minimal costs.
8. It ensures security
▫ They are up to date with the latest security regulations, which includes the
ISO, and Customs
▫ 3PLs also manage safety ratings and insurance better than most shippers.
▫ assured that your products will be handled in the most secure way possible.

17. 9. It improves quality
▫ Outsourcing to a 3PL provider ensures that you now have more capital.
▫ The advanced technology, multiple assets and expertise that come with
3PL providers
10. It improves customer service
▫ your business can now focus more on customer service

18. Reasons to
Outsource
to 4PL 1. Solution Oriented Approach
▫ aim at designing the solution first
▫ solution encompasses the entire supply chain
▫ an expertise of end-to-end operations like
warehousing, distribution, IT

19. 2. Vendor Management
▫ management of multiple vendors
▫ managing the complete eco-system of vendors
▫ enables the companies to focus on their core business
competency.

21. 3. IT Enabled supply chain
▫ Companies receives some extent of IT reports from their customers to
create visibility
▫ Challenge lies in integrating the various reports into one single seamless
▫ Now 4PL settings adds significant value end-to-end IT platform which
integrates all information relating to the clients supply chain
▫ 4PL can provide the client with comprehensive reports
▫ helps the client to take decisions faster and more efficiently

22. 3Pl and 4PL

23. 23
Pros & Cons of 4PL
4PL services just like every other business model come
with their own advantages and disadvantages.
4PL offers the following:

24. Pros of 4PL
▫ Unique and professional operational support
▫ Effective outsourcing of all logistics needs of a given business
▫ Offers a single point of contact for all the parties involved in the supply
chain
▫ Gives more sense of ownership and control over your business
▫ Creates a lean and cost-effective supply chain for improved profit margin
▫ Outsources all logistics to third-party professionals, letting manufacturers
focus on their product
24

25. 25
Cons of 4PL
•Minimal control over order fulfillment and logistics processes
•Maybe cost-prohibitive for some small businesses and startups
With 4PLs, companies can minimize inefficiencies in their supply
chain and ensure they focus more on their product as opposed to
dealing with the complexities of their supply chain.

26. 26
Supply Chain Network Design (SNDC) also known as 'STRATEGIC SUPPLY CHAIN
PLANNING' is the process for building and modelling the supply chain to
understand the costs and time to bring goods and services to market within an
organisations available resources.

27. ROLE OF NETWORK DESIGN IN
SUPPLY CHAIN MANAGEMENT
Network design decisions have a significant impact on performance because they
determine the supply chain configuration and set constraints within which
the other supply chain drivers can be used either to decrease supply chain cost
or to increase responsiveness.

28. Factors/Steps That Influence Supply
Chain Network Design Decisions:
1. Define the SC network design process
2. Perform a SC audit
3. Examine the SC network alternatives
4. Conduct a facility location analysis
5. Make decisions regarding network and facility
location
6. Develop an implementation plan
Reference: Book- SCM (Logistics
perspective) Pg.No: 96

29. Networks Models
1. Producer storage with direct shipping
2. Producer storage with direct shipping and in-transit merge (cross docking)
3. Distributor storage with package carrier delivery
4. Distributor storage with last mile delivery
5. Producer or distributor storage with costumer pickup
6. Retail storage with customer pickup

30. SCM Planning and
Development Strategies
• Supply chain planning is the forward-looking process of
coordinating assets to optimize the delivery of goods,
services and information from supplier to customer,
balancing supply and demand.
• Process of anticipating demand and planning materials
and components to meet that demand, along with
production, marketing, distribution and sales.
• Maintain optimum inventory and avoid costs associated
with maintaining surplus inventory.

31. “ Key elements of supply chain
planning:
1. Demand planning
2. Supply planning
3. Production planning
4. Sales and operations planning

32. Developing a Supply Chain
Management Strategy
32
1. Understand How Your Supply Chain Strategies and Business Plans Connect
2. Analyze your Current Supply Chain and Supply Chain Management Strategy:
a)Assist in an In-depth Discovery Process (b) They Tell You Your Processes Are
Out of Date © Recommend Solutions
3. Work Closely With Your Team and Third-Party Vendors
4. Choose the Right Solution
5. Implement the Plan

33. Supply chain
uncertainty refers to
the decision-making
process in the supply
chain in which the
decision maker does not
know exactly what to
decide due to lack of
transparency of the
supply chain and the
impact of possible
actions.

34. • CAUSES UNCERTAINTY IN SUPPLY CHAIN
Some of these factors may significantly increase the uncertainty in a supply
chain network, but other frequent parameters of uncertainty are product
demand, raw material prices, costs (energy, labor, production and
transportation costs) and lead times.
• HOW DO SUPPLY CHAINS DEAL WITH UNCERTAINTY?
Specific solutions or innovations respondents cited to reduce uncertainty across the supply
chain include expanded use of ERP data and capabilities as well as updating and
implementing software tools and techniques such as warehouse management systems,
transportation management systems, supplier relationship management.

35. “
35
WHAT ARE THE THREE MAJOR TYPES OF
SUPPLY CHAIN UNCERTAINITY
Uncertainty has been considered as a major factor
behind the need for supply chain flexibility.
We classify uncertainty in the supply chain context
as:
1. Upstream (supply) uncertainty
2. Internal (process) uncertainty
3. Downstream (demand) uncertainty

36. 36
SUPPLY CHAIN VULNERABILITY
Supply chain vulnerability can be defined
as ‘an exposure to serious disturbance,
arising from risks within the supply chain
as well as risks external to the supply
chain’.

37. Risk within the supply chain arises from interaction between
constituent organizations across the supply chain. It is caused
by sub-optimal interaction and cooperation between the entities
along the chain. Such supply chain risks result from a lack of
visibility, lack of ‘ownership’, self-imposed ‘chaos’, just-in-
time practices and inaccurate forecasts.
External risks arise from interactions between the supply chain
and its environment. Such interactions include disruptions
caused by strikes, terrorism and natural catastrophes. Any
disruption at any stage in a supply chain that can be linked to
environmental causes is ascribable to external risks
37