You are on page 1of 169

5/30/2009

ERP SYSTEMS PROJECT

SUPPLY CHAIN MANAGEMENT SYSTEMS FOR PEPSI HAIDRI BEVERAGES(PVT.) LTD.

Kiran Afshan, Huma Naz | MBA ITM 13

7DEOHRI&RQWHQWV
Chapter Title Number Page #

1 2 3 4 5 6 7 8

Organization Portfolio Literature Survey An Introduction to Supply Chain and Supply Chain Management Supply Chain of Pepsi Haidri Beverages Ideal Features of a Supply Chain Management Software Supply Chain Management Systems and the Current Marketplace Proposed System for Pepsi Haidri Beverages Limitations and Future Recommendations

3 13 26 80 100 129 167 186

[Type the company address]

Page 2

Chapter 1

Organization Portfolio

[Type the company address]

Page 3

&KDSWHU 2UJDQL]DWLRQ3RUWIROLR +DLGLUL%HYHUDJHV3ULYDWH/LPLWHG3DNLVWDQ




7KH+DLGLUL%HYHUDJHV*URXSZDVVHWXSLQDQGLV3HSVL
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

+LVWRU\RI3HSVL&R
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
V EUDQG QDPHV DUH PRUH WKDQ \HDUV ROG EXW WKH FRUSRUDWLRQ LV UHODWLYHO\ \RXQJ 3HSVL&R ZDV IRXQGHG LQ  WKURXJK WKH PHUJHURI3HSVL&RODDQG)ULWR/D\7URSLFDQDZDVDFTXLUHGLQDQG3HSVL&RPHUJHG ZLWK7KH4XDNHU2DWV&RPSDQ\LQFOXGLQJ*DWRUDGHLQ 3HSVL&RRIIHUVSURGXFWFKRLFHVWRPHHWDEURDGYDULHW\RIQHHGVDQGSUHIHUHQFHIURPIXQ IRU\RXLWHPVWRSURGXFWFKRLFHVWKDWFRQWULEXWHWRKHDOWKLHUOLIHVW\OHV3HSVL&R VPLVVLRQLV 7REHWKHZRUOG
VSUHPLHUFRQVXPHU 3URGXFWV&RPSDQ\ IRFXVHGRQFRQYHQLHQWIRRGVDQG EHYHUDJHV :H VHHN WR SURGXFH KHDOWK\ ILQDQFLDO UHZDUGV WR LQYHVWRUV DV ZH SURYLGH RSSRUWXQLWLHV IRU JURZWK DQG HQULFKPHQW WR RXU HPSOR\HHV RXU EXVLQHVV SDUWQHUV DQG WKH

FRPPXQLWLHVLQZKLFKZHRSHUDWH$QGLQHYHU\WKLQJZHGRZHVWULYHIRUKRQHVW\IDLUQHVV DQGLQWHJULW\  ZZZSHSVLFRFRP 

3HSVL&R+HDGTXDUWHUV
3HSVL&R :RUOG +HDGTXDUWHUV LV ORFDWHG LQ 3XUFKDVH 1HZ <RUN 7KH VHYHQEXLOGLQJ KHDGTXDUWHUV FRPSOH[ ZDV GHVLJQHG E\ (GZDUG 'XUUHOO 6WRQH RQH RI $PHULFD
V IRUHPRVW DUFKLWHFWV

$UHDVRI2SHUDWLRQ
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

[Type the company address]

Page 5

%XVLQHVV&\FOHRI3HSVL+DLGUL%HYHUDJHV 

Figure 1 Business Cycle of Haidri Beverages [Source: Haidri Beverages Management]

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

[Type the company address]

Page 6

 &DQV  %RWWOHFDSV  DQGPDQ\RWKHUV

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

2UJDQL]DWLRQDO:RUNIORZ
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
[Type the company address] Page 7

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

[Type the company address]

Page 8

Start Process 2

Start Process 2

Liquidation of Sugar

PEPSI Concentrate

Carbonated Filtering

Syrup Tank

Put Into the Filling Machine

Filing Process

Capping and Coding Process

Put Bottles in Crates through Machine

Filling of crates with 24 bottles

Figure 2 Production process of beverages [Source: Pepsi Haidri Beverages Production Department]

&XUUHQW,7,QIUDVWUXFWXUH
7KHFRPSDQ\KDVSDUWLDOO\DXWRPDWHGLWVIRXU  PDMRUEXVLQHVVSURFHVVHV  6DOHV3URFHVV  $FFRXQWLQJDQG)LQDQFH  +XPDQ5HVRXUFH  6WRUHDQGZDUHKRXVHPDQDJHPHQW
[Type the company address] Page 9

 7KH GHWDLOV RI WKHVH PRGXOHV DQG KRZ WKH\ KHOS LQ WKH EXVLQHVV SURFHVVHV LV SURYLGHG DV XQGHU  6DOHVRU6KLSPHQW0RGXOH 7KH VDOHV PRGXOH HQFDSVXODWHV DOO LQIRUPDWLRQ UHJDUGLQJ GLVWULEXWRU GDWD PDQDJHPHQW NH\ DFFRXQWV PDQDJHPHQW VDOH FDVK LQIORZ  DQG VKLSPHQW HWF 7KH GLVWULEXWRULQIRUPDWLRQLVFDSWXUHGZLWKUHJDUGVWRWKHDUHDLWLVFRYHULQJLQWKHORFDO PDUNHWWKHORFDWLRQRIWKHGLVWULEXWRU QDPHFRQWDFWQXPEHUVFRQWDFWSHUVRQVHWF .H\ DFFRXQWV DUH WKRVH UHWDLOHUV WR ZKLFK WKH FRPSDQ\ GLVWULEXWHV WKH SURGXFW GLUHFWO\ 7KLV KDSSHQV LQ WKH FDVH RI IRXQWDLQ IUHVK 3HSVL SURGXFWV ZKLFK DUH GHOLYHUHGWRWKHFXVWRPHUXVLQJWKHSRVWPL[F\OLQGHUVGHOLYHUHGE\FRPSDQ\RZQHG YHKLFOHV6XFK FXVWRPHUV LQFOXGH .)& 3L]]D+XW 6DYRXU )RRGV DQG RWKHUV 6DOHV DUHGRQH RQFDVKSD\PHQWVZKLFKDUHGHSRVLWHGLQDGYDQFHE\WKHGLVWULEXWRU7KH SURGXFWV DUH WKHQ VKLSSHG WKH GLVWULEXWRU 8VXDOO\ WKH GLVWULEXWRUV EULQJ DORQJ WKHLU RZQYHKLFOHVWRORDGWKHVKLSPHQW$WWKHWLPHRIVDOHWKHGDWDLVVDYHGLQ(53VDOHV PRGXOHWKHILQDQFHGDWD FDVKLQIORZ LVXSGDWHGDQGDUHFHLSWLVJHQHUDWHGE\WKH V\VWHPFDOOHGVDOHVLQYRLFH 7KH V\VWHP NHHSV WUDFN RI ZKLFK GLVWULEXWRU SXUFKDVHG ZKDW TXDQWLW\ DQG WKH IUHTXHQF\ RI VDOHV FDQ DOVR EH FDSWXUHG $ GDLO\ VDOHV UHSRUW LV JHQHUDWHG E\ WKH V\VWHPZKLFKVKRZVWKHGLVWULEXWRUXQLWVRISURGXFWSXUFKDVHGGDWHRISXUFKDVHWKH WRWDODPRXQWDQGRWKHUNH\LQIRUPDWLRQ7KHFRPSDQ\GHILQHVDWDUJHWVDOHIRUHDFK GLVWULEXWRUDWWKHEHJLQQLQJRIPRQWK7KLVWDUJHWLVGHILQHGRQWKHEDVLVRISUHYLRXV VDOHV KLVWRU\ RI WKH GLVWULEXWRU ZKLFK LV PDQDJHG E\ WKH VRIWZDUH 7KH UHSRUWV JHQHUDWHG E\ WKH V\VWHP DOVR SURYLGH WKH XVHU ZLWK WKH LQIRUPDWLRQ RI ZKDW SHUFHQWDJHRIWKHWDUJHWKDVEHHQDFKLHYHGE\WKHGLVWULEXWRUDV\HW7KHGLVWULEXWRU FDQEHMXGJHGRQWKLVEDVLVLIKHZLOOEHDEOHRDFKLHYHWKHVHWWDUJHWRUQRW 7KH(53V\VWHPQRWRQO\NHHSVWUDFNRIWKHSULPDU\VDOHVGRQHWRWKHGLVWULEXWRULW DOVRFDSWXUHVWKHVHFRQGDU\VDOHGDWDSURYLGHGE\7HUULWRU\'HYHORSPHQW0DQDJHUV 7'0V WKHSHUVRQQHOGHVLJQDWHGE\WKHFRPSDQ\WRPRQLWRUWKHGLVWULEXWRUVDOHV DW GLVWULEXWRUHQG DQGWRNHHSDFKHFNWKDWDGLVWULEXWRUGRHVQRWHQWHUWKHGRPDLQRI DQRWKHU GLVWULEXWRU 7KH VHFRQGDU\ VDOHV GDWD FRQWDLQV LQIRUPDWLRQ UHJDUGLQJ GLVWULEXWRU VVDOHWRUHWDLOHUVZKLFKLVUHFRUGHGLQXQLWVSHUGD\DQGGRHVQRWDFWXDOO\ FRQWDLQLQIRUPDWLRQDVWRZKLFKUHWDLOHUWKHSURGXFWZDVVROG  )LQDQFLDO$FFRXQWLQJPRGXOH )LQDQFLDODFFRXQWLQJPRGXOHKDVDEDVLFDQGOLPLWHGIXQFWLRQDOLW\,WKDVWZRWRWKUHH PDLQ HQWU\ IRUPV UHJDUGLQJ LQVHUWLRQGHOHWLRQ RI DFFRXQWV FKDUW RI DFFRXQWV  DQG WUDQVDFWLRQHQWU\$Q\WUDQVDFWLRQWDNLQJSODFHLQWKHFRPSDQ\ZLOOEHUHFRUGHGKHUH 7KH LQYRLFHV SD\PHQW RU UHFHLSW  LV DOVR FUHDWHG LQ WKH VDPH IRUP 7KH IRUP

[Type the company address]

Page 10

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

[Type the company address]

Page 11

,Q RUGHU WR VXSSRUW WKH (53 V\VWHP DQG QHWZRUN DV D ZKROH WKH IROORZLQJ KDUGZDUH FRQILJXUDWLRQKDVEHHQDGRSWHGE\WKH0,6GHSDUWPHQW y )XOO /$1 VXSSRUW XVLQJ GRPDLQ VHUYHU VZLWFKHV ERRVWHUV DQG RWKHU QHWZRUN HTXLSPHQW ,QWHUQHWIDFLOLW\LVSURYLGHGWRDOOXVHUV  RUDFOH GDWDEDVH VHUYHU  DSSOLFDWLRQ VHUYHU /LQX[ VHUYHU IRU QHWZRUN PDQDJHPHQW DQGDSULQWVHUYHU 5HTXLVLWLRQIRUDEDFNXSGDWDEDVHVHUYHUKDVDOUHDG\EHHQSODFHG 7KHQHWZRUNIDFLOLWDWHVDOPRVWXVHUVDURXQGWKHRUJDQL]DWLRQ

y y

y y

7KHV\VWHPFROOHFWLYHO\KDVSURYHGWREHYHU\EHQHILFLDOIRUWKHHPSOR\HHVDQGPDQDJHUV DW+DLGUL%HYHUDJHVDQGWKHHPSOR\HHVVHHPWREHVDWLVILHGRYHUWKHV\VWHP VSHUIRUPDQFH )XUWKHU HQKDQFHPHQWV DUH GRQH DW IUHTXHQW EDVLV LQ RUGHU WR IDFLOLWDWH WKH FRPSDQ\ V PDQDJHPHQWDQGKXPDQUHVRXUFHWRSHUIRUPWKHLUWDVNVLQDPXFKEHWWHUZD\ 

[Type the company address]

Page 12

Chapter 2

Literature Survey

[Type the company address]

Page 13

 &KDSWHU /LWHUDWXUH6XUYH\
$UWLFOH+RZVKRXOGZHGHILQH6&0"
$XWKRU6UHH+DPHHG &UHDWHGRQ$SULO ,QWKHHDUO\\HDUVRI60LWLVFRQVLGHUHGWREUHDNLQJGRZQWKHZDOOVEXWQRZWKHFRQFHSWLV FKDQJHLWQRWEUHDNLQJGRZQWKHZDOOVEXWUHDUUDQJLQJWKHZDOOV6&0KHOSVWRDFKLHYH&(2 DJHQGD3URIHVVLRQDORUJDQL]DWLRQVWU\WRSURYLGHNQRZOHGJHRI6&0 7KLVILJXUHKHOSVWRXQGHUVWDQGWKHSURFHVVRIEXVLQHVV

Figure 3 Business processes in a supply chain [Source: Sree Hameed, 2007]

 7KURXJK WKLV ILJXUH ZH JHW RYHUYLHZ RI EXVLQHVV DQG XQGHUVWDQG KRZ DFWXDOO\ LW PDNHV PRQH\ 7KH SXUSRVH LV WR VHH WKH ELJJHU SLFWXUH DQG FUHDWLQJ YDOXH WR HQWHUSULVH DQG QRW VWXFNLQWRFRQIOLFWVDQGGHEDWHV &XVWRPHU WKHZK\  &XVWRPHUVDUHWKRVHZKRWDNHWKHLQLWLDOVWHSLQRUGHUWRJHWWKHSURGXFW&RPSDQ\FXUUHQW DQGIXWXUHVWUDWHJLHVDURXQGZKLFKSURGXFWWREXLOGDVVHWVWRRZQZKLFKPDUNHWWRHQWHURU VHUYHWKHVHDOOWKLQJVGHSHQGRQFXVWRPHUQHHGVDQGUHTXLUHPHQW  3URGXFW WKHZKDW 
[Type the company address] Page 14

$VWKHSURGXFWEHFRPHREVROHWHPRUHLQQRYDWLRQDQGFUHDWLYLW\LVUHTXLUHGLQRUGHUWRVDWLVI\ FXVWRPHU QHHG %XW WR PHHW LQQRYDWLRQ SURILWDELOLW\ UHTXLUHV HQJLQHHULQJ 7KHUH LV D JDS EHWZHHQDFWXDODQGGHVLUHGDQGWKLVJDSZLOOOHDGWRWKHSURILWOHDNV

Figure 4 Product leaks [Source: Sree Hameed, 2007]

 3URILWOHDNVDOVRSURYLGHWKHRSSRUWXQLW\IRUSURGXFWDQGSURFHVVLQQRYDWLRQ 3URFHVV WKHKRZ  6HYHQFRUHSURFHVVHVDUHGHVLJQVRXUFHPDNHPRYHVWRUHVHOODQGVHUYLFH0DQDJHPHQW WDNHV GHFLVLRQ UHJDUGLQJ WR SURFHVV 7KH GHFLVLRQ EDVHG RQ WKUHH JURXSV LH VWUDWHJLF WDFWLFDOH[HFXWLRQ 3HRSOH3DUWQHU WKHZKR  &XVWRPHUGHPDQGLQJEHWWHUIDVWHUDQGFKHDSHUZKLFKLQFUHDVHWKHSURGXFWFRPSOH[LW\DQG WKLV OHDGV WR FRPSOH[LW\ LQ VXSSO\ FKDLQ &RPSDQLHV WU\ WR DFKLHYH IOH[LELOLW\ DQG UHVSRQVLYHQHVV 2XWVRXUFH VRPH SURFHVV RU IXQFWLRQ WR WKH SDUWQHUV ZKR KDYH PRUH FRPSHWHQFLHV LQ VSHFLILF DUHD 3URFHVVHV DUH VKDUHG DQG FROODERUDWH DQG FRRUGLQDWH ZLWK SDUWQHUV :KHQ HQYLURQPHQW LV YHU\ G\QDPLF LW LV YHU\ GLIILFXOW WR JR DORQH /LIH F\FOHV RI SURGXFWV DUH VKULQNLQJ IDVWHU DV FRPSDUH WR OLIHF\FOH RI WKH DVVHWV XVHG WR SURGXFH WKH SURGXFWWKLVZLOOOHDGWKHRUJDQL]DWLRQZKHUHWKH\KDYHYHU\OLWWOHFKRLFHDQGWKH\DUHOHVV DGDSWLYHWRDVVHWV

[Type the company address]

Page 15

$UWLFOH6XSSO\&KDLQ0DQDJHPHQW
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

[Type the company address]

Page 16

Figure 5 Supply Chain Process [Source: M. Eric. Johnson (1999), Supply Chain Management]

 .H\FRPSRQHQWVRIVXSSO\FKDLQPDQDJHPHQW $FFRUGLQJ WR WKH DXWKRU WKHUH DUH WZHOYH NH\FRPSRQHQWV RI D VXSSO\ FKDLQ PDQDJHPHQW V\VWHP  /RFDWLRQ  7UDQVSRUWDWLRQDQG/RJLVWLFV  ,QYHQWRU\DQGIRUHFDVWLQJ  0DUNHWLQJDQGFKDQQHOUHVWUXFWXULQJ  6RXUFLQJDQGVXSSOLHUPDQDJHPHQW  ,QIRUPDWLRQDQGHOHFWURQLFPHGLDWHGHQYLURQPHQWV  3URGXFWGHVLJQDQGQHZSURGXFWLQWURGXFWLRQ  6HUYLFHDQGDIWHUVDOHVVXSSRUW  5HYHUVHORJLVWLFVDQGJUHHQLVVXHV

[Type the company address]

Page 17

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

Figure 6 Typical VMI impplmentation [Source: M. Eric Jonhson (1999), Supply Chain Management]

 0DUNHWLQJ IRFXVHV GRZQVWUHDP LQ WKH VXSSO\ FKDLQ ZKHUHDV VRXUFLQJ DQG VXSSO\ PDQDJHPHQW IRFXVHV RQ XSVWUHDP WR VXSSOLHUV ,QIRUPDWLRQ DQG HOHFWURQLF PHGLDWHG
[Type the company address] Page 18

HQYLURQPHQWV IRFXVHV RQ DSSOLFDWLRQ RI ,7 WR UHGXFH LQYHQWRU\ :RROOH\   DQG WKH H[SDQGLQJDUHDRIHFRPPHUFH %HQMDPLQ :LJDQG  DQG6FKRQIHOG   7KH VDOH DQG DIWHU VDOH VXSSRUW DGGUHVVHV WKH FULWLFDO SUREOHP RI SURYLGLQJ VHUYLFH DQG VHUYLFH SDUWV &RKHQ DQG /HH   5HYHUVH ORJLVWLFV DQG JUHHQ LVVXHV DUH HPHUJLQJ GLPHQVLRQVRIVXSSO\FKDLQPDQDJHPHQW 0DULHQ  

Figure 7 Product recovery options [Source: M. Eric Johnson (1999), Supply Chain Management]

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

[Type the company address]

Page 19

  $UWLFOH $UWLILFLDO ,QWHOOLJHQFH LQ 6XSSO\ &KDLQ 0DQDJHPHQW  7KHRU\ DQG $SSOLFDWLRQV
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
[Type the company address] Page 20

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

$UWLFOH$&ROODERUDWLYH6XSSO\&KDLQ0DQDJHPHQW
3DUW WKHK\EULG.%JDSDQDO\VLVV\VWHPIRUSODQQLQJVWDJH
7KH$XWKRUV =XONLIOL 0RKDPHG 8GLQ )DFXOW\ RI 7HFKQRORJ\ 0DQDJHPHQW 8QLYHUVLWL\ 8WDUD 0DOD\VLD .HGDK 'DUXO$PDQ0DOD\VLD 0RKDPPDG . .KDQ 6FKRRO RI (QJLQHHULQJ 'HVLJQ DQG 7HFKQRORJ\ 8QLYHUVLW\ RI %UDGIRUG %UDGIRUG8. 0RKDPHG=DLUL6FKRRORI0DQDJHPHQW8QLYHUVLW\RI%UDGIRUG%UDGIRUG8.

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
[Type the company address] Page 21

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

$UWLFOH7KH,QWHUQHW(QDEOHG6XSSO\&KDLQ)URPWKH )LUVW&OLFN WRWKH /DVW0LOH 


$XWKRU'U'DYLG/$QGHUVRQ$QGHUVRQ&RQVXOWLQJ 'U+DX//HH6WDQIRUG8QLYHUVLW\
[Type the company address] Page 22

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y 6KRUWHUWLPHWRPDUNHWHQDEOHGE\FROODERUDWLYHGHVLJQ y ,QWHUQHWHQDEOHG WHFKQRORJ\ SURYLGHV UHDOWLPH OLQNDJHV EHWZHHQ NH\ VXSSOLHUV PDQXIDFWXUHUVHQJLQHHUVDQGPDUNHWHUV y 7KH DELOLW\ WRFRQGXFW FROODERUDWLYH GHVLJQ PHDQV WKDW FRPSDQLHV FDQ LWHUDWH PDQ\ PRUHGHVLJQDOWHUQDWLYHVZLWKVXSSOLHUV y 3URGXFW XSJUDGHV FDQ DOVR EH DFKLHYHG PRUH HIIRUWOHVVO\ DQG LQ D WLPHO\ PDQQHU HQDEOLQJFRPSDQLHVWRVWD\DKHDGRIWKHLUFRPSHWLWLRQ y 7KHUHYHQXHDQGSURILWLPSDFWVDUHHQRUPRXV y (QKDQFHG FRPPXQLFDWLRQ DQG FROODERUDWLYH SURFHVVHV RYHUFRPH PDQ\ RI WKH RUJDQL]DWLRQVLORLVVXHVIDFHGLQWUDGLWLRQDOVHTXHQWLDOO\RULHQWHGGHVLJQDFWLYLW\ y 3URGXFWVFDQEHUROOHGRXWIDVWHU y 7KHULVNVRIFXVWRPHUQHHGVVKLIWLQJGXULQJGHYHORSPHQWDUHPLWLJDWHG y ,QFUHDVHG FROODERUDWLRQ WKURXJKRXW WKH GHVLJQ SURFHVV FDQ PLQLPL]H SURGXFW FRPSOH[LWLHV WKDW ODWHU GULYH VXSSO\ FKDLQ LQHIILFLHQFLHV DQG FRVWV LQ SURGXFWLRQ ORJLVWLFVDQGVHUYLFHSDUWV 
[Type the company address] Page 23

Figure 8 E-Design of SCM [Source: D.L. Anderson, 2000]

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

[Type the company address]

Page 24

Chapter 3

An Introduction to Supply Chain & Supply Chain Management

[Type the company address]

Page 25

 &KDSWHU $Q,QWURGXFWLRQWR6XSSO\&KDLQ  6XSSO\&KDLQ0DQDJHPHQW


8SWLOOUHFHQWO\FRPSDQLHVGLGQRWWKLQNLQWHUPVRIVXSSO\FKDLQVEXWYLHZHGWKHPVHOYHV DQGWKHLUWUDGLQJSDUWQHUVDVLQGHSHQGHQWLVODQGV6HOOHUVDWWLPHVVWUXJJOHGWRNHHSXSZLWK GHPDQG ZKLOH EX\HUV SXUFKDVHG JRRGV IRU ZKLFK WKH\ FRXOG SD\ EDUWHU RU REWDLQ FUHGLW (FRQRPLF DQG FRPSHWLWLYH SUHVVXUHV HYHQWXDOO\ IRUFHG FRPSDQLHV WR WKLQN LQ WHUPV RI VXSSO\ FKDLQV IRU WKH SURGXFWLRQ DQG GHOLYHU\ RI JRRGV )RU WKLV UHDVRQ WKH PDWHULDO RU SK\VLFDOVXSSO\FKDLQZDVERUQ :LWK WKH DGYDQFHPHQW RI EXVLQHVV SURFHVVHV VXSSO\ FKDLQ JDLQHG PRUH DQG PRUH LPSRUWDQFH IRU HDFK PHPEHU RI EXVLQHVV FRPPXQLW\ LQFOXGLQJ PDQXIDFWXUHUV UHWDLOHUV VXSSOLHUV VXSSOLHUV  VXSSOLHUV DQG HYHQ FRQVXPHU 6WUDWHJLHV ZHUH GHYHORSHG LQ RUGHU WR DFFHOHUDWH SURGXFW VDOHV DQG GLVWULEXWLRQ :LWK WKH H[SDQVLRQ RI VDOHV IURP DUHDV WR FLWLHV DQGFLWLHVWRFRXQWULHVWKHQHHGDURVHIRUSURSHUWUDFNLQJRIGHPDQGDQGVXSSO\DVZHOODV IRUHFDVWLQJ RI PDWHULDOV VXSSOLHV VDOHV DQG GLVWULEXWLRQ VFKHPDV $IWHU WKH HPHUJHQFH RI ,QIRUPDWLRQ7HFKQRORJ\DQGEXVLQHVVJOREDOL]DWLRQWKHFRQFHSWRILQWHJUDWHGVXSSO\FKDLQ PDQDJHPHQWZDVUHYROXWLRQL]HG,QIRUPDWLRQWHFKQRORJ\FRQVLVWV RIWKHWRROVXVHGWRJDLQ DZDUHQHVV RI LQIRUPDWLRQ DQDO\]H WKLV LQIRUPDWLRQ DQG H[HFXWH RQ LW WR LQFUHDVH WKH SHUIRUPDQFHRIWKHVXSSO\FKDLQ

:KDW,VD6XSSO\&KDLQ"
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
[Type the company address] Page 26

VHYHUDO OD\HUV RI VWRUDJH IDFLOLWLHV RI HYHU GHFUHDVLQJ VL]H DQG HYHU PRUH UHPRWH JHRJUDSKLFDOORFDWLRQVDQGILQDOO\UHDFKLQJWKHFRQVXPHU

Figure 9 Information, Funds, and Product flow in SCM [Source: http://dspace.mit.edu/bitstream/handle/1721.1/39816/ESD-260JFall2003/OcwWeb/Engineering-SystemsDivision/ESD-260JFall2003/CourseHome/index.htm]

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


[Type the company address]

Page 27

Figure 10 Wal-Mart SCM Process [Source: Supply Chain Management System by Sunil Chopra &Pete Meindl]

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

(DFK VWDJH LQ D VXSSO\ FKDLQ LV FRQQHFWHG WKURXJK WKH IORZ RI SURGXFWV LQIRUPDWLRQ DQG IXQGV7KHVHIORZVRIWHQRFFXULQERWKGLUHFWLRQVDQGPD\EHPDQDJHGE\RQHRIWKHVWDJHV RU DQ LQWHUPHGLDU\ (DFK VWDJH QHHG QRW EH SUHVHQW LQ D VXSSO\ FKDLQ 7KH DSSURSULDWH

[Type the company address]

Page 28

GHVLJQ RI VXSSO\ FKDLQ GHSHQGV RQ WKH FXVWRPHU V QHHGV DQG WKH UROHV SOD\HG E\ VWDJHV LQYROYHG

7KH2EMHFWLYHRID6XSSO\&KDLQ
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

6XSSO\&KDLQ0DQDJHPHQW 6&0 
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

[Type the company address]

Page 29

Figure 11 An example of SCM Process

*RDORI6XSSO\&KDLQ0DQDJHPHQW
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


7KH%XOOZKLS(IIHFW
,Q WKH ,WDOLDQ SDVWD LQGXVWU\ FRQVXPHU GHPDQG LV TXLWH VWHDG\ WKURXJKRXW WKH \HDU +RZHYHU EHFDXVH RI WUDGH SURPRWLRQV YROXPH GLVFRXQWV ORQJ OHDG WLPHV IXOO\WUXFNORDG GLVFRXQWV DQG HQGRITXDUWHU VDOHV LQFHQWLYHV WKH RUGHUV VHHQ DW WKH PDQXIDFWXUHUV DUH KLJKO\ YDULDEOH ,Q IDFW WKH YDULDELOLW\ LQFUHDVHV LQ PRYLQJ XS WKH VXSSO\ FKDLQ IURP

[Type the company address]

Page 30

FRQVXPHU WR JURFHU\ VWRUH WR GLVWULEXWLRQ FHQWHU WR FHQWUDO ZDUHKRXVH WR IDFWRU\ D SKHQRPHQRQWKDWLVRIWHQFDOOHGEXOOZKLSHIIHFW

Figure 12Bullwhip Effect in Supply Chain [Source: http://knowscm.blogspot.com/2008/02/bullwhip-effect-insupply-chain.html]

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

Order Quantity
Manufacturer s Orders to Supplier Wholesaler s Orders to Manufacturer

Retailer s Orders to Wholesaler

Figure 13 Bullwhip Effect in supply chain [Source: http://knowscm.blogspot.com/2008/02/bullwhip-effect-insupply-chain.html]

[Type the company address]

Page 31

6XSSO\&KDLQ,QIUDVWUXFWXUH
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

Figure 14 Supply Chain Process [Source: http://en.wikipedia.org/wiki/File:A_company%27s_supply_chain_(en).png]

 ([WHQGHG6XSSO\&KDLQ
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

[Type the company address]

Page 32

VXSSO\FKDLQFRQWLQXHVWKURXJKWKHZDUHKRXVLQJDQGGLVWULEXWLRQFKDQQHOVDQGWKHQWKURXJK WKHUHWDLOFKDQQHOVHQGLQJZLWKWKHFRQVXPHU


Figure 15 A Systematic diagram of extended supply chain

7KHVXSSO\FKDLQHQFRPSDVVHVDOODFWLYLWLHVDVVRFLDWHGZLWKWKHIORZDQGWUDQVIRUPDWLRQRI JRRGVDQGVHUYLFHVIURPWKHUDZPDWHULDOVWDJH DWRQHHQGRIWKHVXSSO\FKDLQ WKURXJKWR WKHFRQVXPHU DWWKHRWKHUHQGRIWKHFKDLQ LQFOXGLQJDOODVVRFLDWHGLQIRUPDWLRQIORZV

%DVLF&RPSRQHQWVRI6XSSO\&KDLQ0DQDJHPHQW
7KHIROORZLQJDUHILYHEDVLFFRPSRQHQWVRI6&0

[Type the company address]

Page 33



3ODQ 7KLVLVWKHVWUDWHJLFSRUWLRQRI6&0<RXQHHGDVWUDWHJ\IRUPDQDJLQJDOOWKH UHVRXUFHVWKDWJRWRZDUGPHHWLQJFXVWRPHUGHPDQGIRU\RXUSURGXFWRUVHUYLFH$ELJ SLHFHRISODQQLQJLVGHYHORSLQJDVHWRIPHWULFVWRPRQLWRUWKHVXSSO\FKDLQVRWKDWLWLV HIILFLHQWFRVWVOHVVDQGGHOLYHUVKLJKTXDOLW\DQGYDOXHWRFXVWRPHUV 6RXUFH  &KRRVH WKH VXSSOLHUV WKDW ZLOO GHOLYHU WKH JRRGV DQG VHUYLFHV \RX QHHG WR FUHDWH \RXU SURGXFW 'HYHORS D VHW RI SULFLQJ GHOLYHU\ DQG SD\PHQW SURFHVVHV ZLWK VXSSOLHUV DQG FUHDWH PHWULFV IRU PRQLWRULQJ DQG LPSURYLQJ WKH UHODWLRQVKLSV $QG SXW WRJHWKHUSURFHVVHVIRUPDQDJLQJWKHLQYHQWRU\RIJRRGVDQGVHUYLFHV\RXUHFHLYHIURP VXSSOLHUV LQFOXGLQJ UHFHLYLQJ VKLSPHQWV YHULI\LQJ WKHP WUDQVIHUULQJ WKHP WR \RXU PDQXIDFWXULQJIDFLOLWLHVDQGDXWKRUL]LQJVXSSOLHUSD\PHQWV



Figure 16 The Five Components of Supply Chain Process



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





[Type the company address]

Page 34

6&0)ORZV
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

Figure 17 A view of different flows in a supply chain [Source: http://www.careersinsupplychain.org/what-isscm/flows.asp]

2EYLRXVO\ \RX QHHG HIIHFWLYH IORZV RI SURGXFWV IURP WKH SRLQW RI RULJLQ WR WKH SRLQW RI FRQVXPSWLRQ%XWWKHUH VPRUHWRLW&RQVLGHUWKHGLDJUDPRIWKHIUHVKIRRGVXSSO\FKDLQ$ WZRZD\IORZRILQIRUPDWLRQDQGGDWDEHWZHHQWKHVXSSO\FKDLQSDUWLFLSDQWVFUHDWHVYLVLELOLW\

[Type the company address]

Page 35

RI GHPDQG DQG IDVW GHWHFWLRQ RI SUREOHPV %RWK DUH QHHGHG E\ VXSSO\ FKDLQ PDQDJHUV WR PDNHJRRGGHFLVLRQVUHJDUGLQJZKDWWREX\PDNHDQGPRYH 2WKHUIORZVDUHDOVRLPSRUWDQW,QWKHLUUROHVDVVXSSOLHUVFRPSDQLHVKDYHDYHVWHGLQWHUHVW LQILQDQFLDOIORZV$V\RXFDQXQGHUVWDQGVXSSOLHUVZDQWWRJHWSDLGIRUWKHLUSURGXFWVDQG VHUYLFHV DV VRRQ DV SRVVLEOH DQG ZLWK PLQLPDO KDVVOH 6RPHWLPHV LW LV DOVR QHFHVVDU\ WR PRYHSURGXFWVEDFNWKURXJKWKHVXSSO\FKDLQIRUUHWXUQVUHSDLUVUHF\FOLQJRUGLVSRVDO

7KH,PSRUWDQFHRI6XSSO\&KDLQ'HFLVLRQV
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

 'HFLVLRQ3KDVHVLQD6XSSO\&KDLQ
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

[Type the company address]

Page 36

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

[Type the company address]

Page 37


Figure 18 Hierarchy of Supply Chain Decisions [Source: http://www.eil.utoronto.ca/profiles/rune/node5.html]

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
[Type the company address] Page 38

,QYHQWRU\GHFLVLRQVLQFOXGLQJTXDQWLW\ORFDWLRQDQGTXDOLW\RILQYHQWRU\ 7UDQVSRUWDWLRQVWUDWHJ\LQFOXGLQJIUHTXHQF\URXWHVDQGFRQWUDFWLQJ %HQFKPDUNLQJ RI DOO RSHUDWLRQV DJDLQVW FRPSHWLWRUV DQG LPSOHPHQWDWLRQ RI EHVW SUDFWLFHVWKURXJKRXWWKHHQWHUSULVH 0LOHVWRQHSD\PHQWV )RFXVRQFXVWRPHUGHPDQG

 6XSSO\&KDLQ2SHUDWLRQV 7KH WLPH KRUL]RQ KHUH LV ZHHNO\ RU GDLO\ DQG GXULQJ WKLV SKDVH FRPSDQLHV PDNH GHFLVLRQV UHJDUGLQJ FXVWRPHU RUGHUV $W WKH RSHUDWLRQDO OHYHO VXSSO\ FKDLQ FRQILJXUDWLRQLVFRQVLGHUHGIL[HGDQGSODQQLQJSROLFLHVDUHDOUHDG\GHILQHG7KHJRDO RIVXSSO\FKDLQRSHUDWLRQVLVWRKDQGOHLQFRPLQJFXVWRPHURUGHUVLQWKHEHVWSRVVLEOH PDQQHU 'XULQJ WKLV SKDVH ILUPV DOORFDWH LQYHQWRU\ RU SURGXFWLRQ WR LQGLYLGXDO FXVWRPHU RUGHUV VHW D GDWH WKDW DQ RUGHU LV WR EH ILOOHG JHQHUDWH SLFN OLVWV DW D ZDUHKRXVH DOORFDWH DQ RUGHU WR D SDUWLFXODU VKLSSLQJ PRGH DQG VKLSPHQW VHW GHOLYHU\ VFKHGXOHV RI WUXFNV DQG SODFH UHSOHQLVKPHQW RUGHUV %HFDXVH RSHUDWLRQDO GHFLVLRQVDUHEHLQJPDGHLQWKHVKRUWWHUP PLQXWHVKRXUVRUGD\V WKHUHLVDOHVV XQFHUWDLQW\ DERXW GHPDQG LQIRUPDWLRQ JLYHQ WKH FRQVWUDLQWV HVWDEOLVKHG E\ WKH FRQILJXUDWLRQ DQG SODQQLQJ SROLFLHV WKH JRDO GXULQJ WKH RSHUDWLRQDO SKDVH LV WR H[SORLWWKHUHGXFWLRQRIXQFHUWDLQW\DQGRSWLPL]HSHUIRUPDQFH 'HFLVLRQVPDGHGXULQJWKLVSKDVHLQFOXGH 'DLO\SURGXFWLRQDQGGLVWULEXWLRQSODQQLQJLQFOXGLQJDOOQRGHVLQWKHVXSSO\FKDLQ 3URGXFWLRQVFKHGXOLQJIRUHDFKPDQXIDFWXULQJIDFLOLW\LQWKHVXSSO\FKDLQ PLQXWH E\PLQXWH  'HPDQG SODQQLQJ DQG IRUHFDVWLQJ FRRUGLQDWLQJ WKH GHPDQG IRUHFDVW RI DOO FXVWRPHUVDQGVKDULQJWKHIRUHFDVWZLWKDOOVXSSOLHUV 6RXUFLQJ SODQQLQJ LQFOXGLQJ FXUUHQW LQYHQWRU\ DQG IRUHFDVW GHPDQG LQ FROODERUDWLRQZLWKDOOVXSSOLHUV ,QERXQG RSHUDWLRQV LQFOXGLQJ WUDQVSRUWDWLRQ IURP VXSSOLHUV DQG UHFHLYLQJ LQYHQWRU\ 3URGXFWLRQ RSHUDWLRQV LQFOXGLQJ WKH FRQVXPSWLRQ RI PDWHULDOV DQG IORZ RI ILQLVKHGJRRGV 2XWERXQG RSHUDWLRQV LQFOXGLQJ DOO IXOILOOPHQW DFWLYLWLHV DQG WUDQVSRUWDWLRQ WR FXVWRPHUV 2UGHUSURPLVLQJDFFRXQWLQJIRUDOOFRQVWUDLQWVLQWKHVXSSO\FKDLQLQFOXGLQJDOO VXSSOLHUVPDQXIDFWXULQJIDFLOLWLHVGLVWULEXWLRQFHQWHUVDQGRWKHUFXVWRPHUV

7KH GHVLJQ SODQQLQJ DQG RSHUDWLRQ RI D VXSSO\ FKDLQ KDYH D VWURQJ LPSDFW RQ RYHUDOO SURILWDELOLW\DQGVXFFHVV,WLVIDLUWKDWDODUJHSDUWRIWKHVXFFHVVRIDILUPFDQEHDWWULEXWHG WRWKHLUHIIHFWLYHVXSSO\FKDLQGHVLJQSODQQLQJDQGRSHUDWLRQ
[Type the company address] Page 39

3URFHVV9LHZVRID6XSSO\&KDLQ
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
Customer Customer Order Cycle Retailer Replenishment Cycle Distributor Manufacturing Cycle Manufacturer Procurement Cycle Supplier


(DFK F\FOH RFFXUV DW WKH LQWHUIDFH EHWZHHQ WZR VXFFHVVLYH VWDJHV RI WKH VXSSO\ FKDLQ7KHILYHVWDJHVWKXVUHVXOWLQIRXUVXSSO\FKDLQSURFHVVF\FOHV)RUH[DPSOH ZKHQFXVWRPHUVVKRSRQOLQHDW$PD]RQWKH\DUHSDUWRIWKHFXVWRPHURUGHUF\FOH  ZLWK WKH FXVWRPHU DV WKH EX\HU DQG $PD]RQ DV WKH VXSSOLHU ,Q FRQWUDVW ZKHQ $PD]RQ RUGHUV ERRNV IURP D GLVWULEXWRU WR UHSOHQLVK LWV LQYHQWRU\ LW LV SDUW RI WKH UHSOHQLVKPHQWF\FOH ZLWK$PD]RQDVWKHEX\HUDQGWKHGLVWULEXWRUDVWKHVXSSOLHU

[Type the company address]

Page 40

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

6XSSO\&KDLQ0DFUR3URFHVVHVLQD)LUP
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

[Type the company address]

Page 41

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

6XSSOLHU

&RPSDQ\

&XVWRPHU

Figure 19 SCM Macro Processes [Source: Copra S., Meindl P., Supply Chain Management]

 )RU D VXSSO\ FKDLQ WR EH VXFFHVVIXO LW LV FUXFLDO WKDW WKH WKUHH PDFUR SURFHVVHV DUH ZHOO LQWHJUDWHG7KHRUJDQL]DWLRQDOVWUXFWXUHRIWKHILUPKDVDVWURQJLQIOXHQFHRQWKHVXFFHVVRU IDLOXUH RI WKH LQWHJUDWLRQ HIIRUW ,Q PDQ\ ILUPV PDUNHWLQJ LV LQ FKDUJH RI WKH &50 PDFUR SURFHVV PDQXIDFWXULQJ KDQGOHV WKH ,6&0 PDFUR SURFHVV DQG SXUFKDVLQJ RYHUVHHV WKH 650 PDFUR SURFHVV  ZLWK YHU\ OLWWOH FRPPXQLFDWLRQ DPRQJ WKHP ,W LV QRW XQXVXDO IRU
[Type the company address] Page 42

PDUNHWLQJDQGPDQXIDFWXULQJWRKDYHWZRGLIIHUHQWIRUHFDVWVZKHQPDNLQJWKHLUSODQV7KLV ODFNRILQWHJUDWLRQKXUWVWKHVXSSO\FKDLQ VDELOLW\WRPDWFKVXSSO\DQGGHPDQGHIIHFWLYHO\ OHDGLQJ WR GLVVDWLVILHG FXVWRPHUV DQG KLJK FRVWV )LUPV VKRXOG VWUXFWXUH D VXSSO\ FKDLQ RUJDQL]DWLRQ WKDW PLUURUV WKH PDFUR SURFHVVHV DQG HQVXUHV JRRG FRPPXQLFDWLRQ DQG FRRUGLQDWLRQDPRQJWKHRZQHUVRISURFHVVHVWKDWLQWHUDFWZLWKHDFKRWKHU

'ULYHUVRI6XSSO\&KDLQSHUIRUPDQFH
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

[Type the company address]

Page 43

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

[Type the company address]

Page 44

)UDPHZRUNIRU6WUXFWXULQJ'ULYHUV
7KHYLVXDOIUDPHZRUNIRUVXSSO\FKDLQGHFLVLRQPDNLQJLVVKRZQLQILJXUHEHORZ 0RVWFRPSDQLHVEHJLQZLWKDFRPSHWLWLYHVWUDWHJ\DQGWKHQGHFLGHZKDWWKHLUVXSSO\FKDLQ VWUDWHJ\ RXJKW WR EH 7KH VXSSO\ FKDLQ VWUDWHJ\ GHWHUPLQHV KRZ WKH VXSSO\ FKDLQ VKRXOG SHUIRUPZLWKUHVSHFWWRHIILFLHQF\DQGUHVSRQVLYHQHVV7KHVXSSO\FKDLQPXVWWKHQXVHWKH WKUHHORJLVWLFDODQGWKUHHFURVVIXQFWLRQDOGULYHUVWRUHDFKWKHSHUIRUPDQFHOHYHOWKLVVXSSO\ FKDLQ VWUDWHJ\ GLFWDWHV DQG PD[LPL]H WKH VXSSO\ FKDLQ SURILWV $OWKRXJK WKLV IUDPHZRUN LV JHQHUDOO\YLHZHGIURPWKHWRSGRZQLQPDQ\LQVWDQFHVDVWXG\RIVL[GULYHUVPD\LQGLFDWH WKHQHHGWRFKDQJHWKHVXSSO\FKDLQDQGSRWHQWLDOO\HYHQWKHFRPSHWLWLYHVWUDWHJ\

&RPSRQHQWVRI'HFLVLRQLQ6XSSO\&KDLQ'ULYHUV
)DFLOLWLHV
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

[Type the company address]

Page 45

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y y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

[Type the company address]

Page 46

&RPSRQHQWVRI,QYHQWRU\'HFLVLRQV
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

[Type the company address]

Page 47

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y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

&RPSRQHQWVRI7UDQVSRUWDWLRQ'HFLVLRQV
7KH NH\ FRPSRQHQWV RI WUDQVSRUWDWLRQ WKDW FRPSDQLHV PXVW DQDO\]H ZKHQ GHVLJQLQJ DQG RSHUDWLQJDVXSSO\FKDLQDUH 'HVLJQRI7UDQVSRUWDWLRQ1HWZRUN
[Type the company address] Page 48

7KH WUDQVSRUWDWLRQ QHWZRUN LV WKH FROOHFWLRQ RI WUDQVSRUWDWLRQ PRGHV ORFDWLRQV DQG URXWHV DORQJZKLFKSURGXFWFDQEHVKLSSHG$FRPSDQ\PXVWGHFLGHZKHWKHUWUDQVSRUWDWLRQIURPD VXSSO\ FKDLQ VRXUFH ZLOO EH GLUHFW WR WKH GHPDQG SRLQW RU ZLOO JR WKURXJK LQWHUPHGLDWH FRQVROLGDWLRQ SRLQWV 'HVLJQ GHFLVLRQV DOVR LQFOXGH ZKHWKHU PXOWLSOH VXSSO\ RU GHPDQG SRLQWVZLOOEHLQFOXGHGLQDVLQJOHUXQRUQRW)LQDOO\FRPSDQLHVPXVWDOVRGHFLGHWKHVWRI WUDQVSRUWDWLRQPRGHVWKDWZLOOEHXVHG &KRLFHRI7UDQVSRUWDWLRQ0RGH 7KHPRGHRIWUDQVSRUWDWLRQLVWKHPDQQHULQZKLFKDSURGXFWLVPRYHGIURPRQHORFDWLRQLQ WKH VXSSO\ FKDLQ QHWZRUN WR DQRWKHU &RPSDQLHV FDQ FKRRVH EHWZHHQ DLU WUXFN UDLO VHD DQGSLSHOLQHDVPRGHVRIWUDQVSRUWIRUSURGXFWV7RGD\LQIRUPDWLRQJRRGVFDQDOVREHVHQW YLD LQWHUQHW (DFK PRGH KDV GLIIHUHQW FKDUDFWHULVWLFV ZLWK UHVSHFW WR WKH VSHHG VL]H RI VKLSPHQWV LQGLYLGXDOSDUFHOVWRSDOOHWVWRIXOOWUXFNVWRHQWLUHVKLSV FRVWRIVKLSSLQJDQG IOH[LELOLW\WKDWOHDGFRPSDQLHVWRFKRRVHRQHSDUWLFXODUPRGHRYHUWKHRWKHUV 7UDQVSRUWDWLRQUHODWHG0HWULFV $ PDQDJHU VKRXOG WUDFN WKH IROORZLQJ WUDQVSRUWDWLRQUHODWHG PHWULFV WKDW LQIOXHQFH VXSSO\ FKDLQSHUIRUPDQFH y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

[Type the company address]

Page 49

WKLV PHWULF LGHQWLILHV RSSRUWXQLWLHV IRU JUHDWHU HFRQRPLHV RI VFDOH LQ RXWERXQG WUDQVSRUWDWLRQ y )UDFWLRQ WUDQVSRUWHG E\ PRGH PHDVXUHV WKH IUDFWLRQ RI WUDQVSRUWDWLRQ LQ XQLWV RU GROODUV  XVLQJ HDFK PRGH RI WUDQVSRUWDWLRQ 7KLV PHWULF FDQ EH XVHG WR HVWLPDWH LI FHUWDLQPRGHVDUHRYHUXVHGRUXQGHUXWLOL]HG

&RPSRQHQWVRI,QIRUPDWLRQ'HFLVLRQV
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
[Type the company address] Page 50

LQIRUPDWLRQWREHVKDUHGDFURVVWKHVXSSO\FKDLQEHFDXVHLWDIIHFWV ERWKWKH GHPDQG RQ D ILUP VVXSSOLHUVDQGWKHVXSSO\WRLWVFXVWRPHUV ,QIRUPDWLRQUHODWHG0HWULFV $ PDQDJHU VKRXOG WUDFN WKH IROORZLQJ LQIRUPDWLRQUHODWHG PHWULFV WKDW LQIOXHQFH VXSSO\ FKDLQSHUIRUPDQFH y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

&RPSRQHQWVRI6RXUFLQJ'HFLVLRQV
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

[Type the company address]

Page 51

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y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

y y

&RPSRQHQWVRI3ULFLQJ'HFLVLRQV
7KH IROORZLQJ NH\ FRPSRQHQWV RI SULFLQJ GHFLVLRQV DUH LGHQWLILHG WKDW DIIHFW VXSSO\ FKDLQ SHUIRUPDQFH
[Type the company address] Page 52

3ULFLQJDQG(FRQRPLHVRI6FDOH 0RVW VXSSO\ FKDLQ DFWLYLWLHV GLVSOD\ HFRQRPLHV RI VFDOH &KDQJHRYHUV PDNH VPDOO SURGXFWLRQUXQVPRUHH[SHQVLYHSHUXQLWWKDQODUJHSURGXFWLRQUXQV/RDGLQJDQGXQORDGLQJ FRVWV PDNH LW FKHDSHU WR GHOLYHU D WUXFNORDG WR RQH ORFDWLRQ WKDQ IRXU ,Q HDFK FDVH WKH SURYLGHURIWKHVXSSO\FKDLQDFWLYLW\PXVWGHFLGHKRZWRSULFHLWDSSURSULDWHO\WRUHIOHFWWKHVH HFRQRPLHVRIVFDOH$FRPPRQO\XVHGDSSURDFKLVWRRIIHUTXDQWLW\GLVFRXQWV&DUHPXVWEH WDNHQWRHQVXUHWKDWTXDQWLW\GLVFRXQWVRIIHUHGDUHFRQVLVWHQWZLWKWKHHFRQRPLHVRIVFDOHLQ WKH XQGHUO\LQJ SURFHVV 2WKHUZLVH WKHUH LV D GDQJHU RI FXVWRPHU RUGHUV EHLQJ GULYHQ SULPDULO\ E\ WKH TXDQWLW\ GLVFRXQWV HYHQ WKRXJK WKH XQGHUO\LQJ SURFHVV GRHV QRW KDYH VLJQLILFDQWHFRQRPLHVRIVFDOH (YHU\GD\/RZ3ULFLQJ9HUVXV+LJK/RZ3ULFLQJ $ILUPVXFKDV&RVWFRSUDFWLFHVHYHU\GD\ORZSULFLQJDWLWVZDUHKRXVHVWRUHVNHHSLQJSULFHV VWHDG\ RYHU WLPH &RVWFR ZLOO JR WR WKH H[WHQW RI QRW RIIHULQJ DQ\ GLVFRXQW RQ GDPDJHG ERRNV WR HQVXUH LWV HYHU\GD\ORZ SULFLQJ VWUDWHJ\ ,Q FRQWUDVW PRVW VXSHUPDUNHWV SUDFWLFH KLJKORZ SULFLQJ DQG RIIHU VWHHS GLVFRXQWV RQ D VXEVHW RI WKHLU SURGXFW HYHU\ ZHHN 7KH &RVWFR SULFLQJ VWUDWHJ\ UHVXOWV LQ UHODWLYHO\ VWDEOH GHPDQG 7KH KLJKORZ SULFLQJ VWUDWHJ\ UHVXOWVLQDSHDNGXULQJWKHGLVFRXQWZHHN2IWHQIROORZHGE\DVWHHSGURSLQGHPDQGGXULQJ WKHIROORZLQJZHHNV7KHWZRSULFLQJVWUDWHJLHVOHDGWRYHU\GLIIHUHQWGHPDQG SURILOHVWKDW WKHVXSSO\FKDLQPXVWVHUYH )L[HG3ULFH9HUVXV0HQX3ULFLQJ $ILUPPXVWGHFLGHZKHWKHULWZLOOFKDUJHDIL[HGSULFHIRULWVVXSSO\FKDLQDFWLYLWLHVRUKDYH DPHQXZLWKSULFHVWKDWYDU\ZLWKVRPHRWKHUDWWULEXWHVXFKDVWKHUHVSRQVHWLPHRUORFDWLRQ RI GHOLYHU\ ,I PDUJLQDO VXSSO\ FKDLQ FRVWV RU WKH YDOXH WR WKH FXVWRPHU YDU\ VLJQLILFDQWO\ DORQJVRPHDWWULEXWHLWLVRIWHQHIIHFWLYHWRKDYHDSULFLQJPHQX 3ULFLQJ5HODWHG0HWULFV $ PDQDJHU VKRXOG WUDFN WKH IROORZLQJ SULFLQJUHODWHG PHWULFV :LWK PHQX SULFLQJ HDFK PHWULFVKRXOGEHWUDFNHGVHSDUDWHO\IRUHDFKVHJPHQWLQWKHPHQX y 3URILWPDUJLQPHDVXUHVSURILWDVDSHUFHQWDJHRIUHYHQXH$ILUPQHHGVWRH[DPLQHD ZLGH YDULHW\ RI SURILW PDUJLQ PHWULFV WR RSWLPL]H LWV SULFLQJ LQFOXGLQJ GLPHQVLRQV VXFK DV W\SH RI PDUJLQ JURVV QHW HWF  VFRSH 6.8 SURGXFW OLQH GLYLVLRQ ILUP  FXVWRPHUW\SHDQGRWKHUV 'D\VVDOHVRXWVWDQGLQJPHDVXUHVWKHDYHUDJHWLPHEHWZHHQZKHQDVDOHLVPDGHDQG ZKHQWKHFDVKLVFROOHFWHG ,QFUHPHQWDOIL[HGFRVWSHURUGHUPHDVXUHVWKHLQFUHPHQWDOFRVWVWKDWDUHLQGHSHQGHQW RIWKHVL]HRIWKHRUGHU7KHVHLQFOXGHFKDQJHRYHUFRVWVDWDPDQXIDFWXULQJSODQWRU

[Type the company address]

Page 53

RUGHU SURFHVVLQJ RU WUDQVSRUWDWLRQ FRVWV WKDW DUH LQFXUUHG LQGHSHQGHQW RI VKLSPHQW VL]HDWDPDLORUGHUILUP y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

'HPDQG)RUHFDVWLQJLQD6XSSO\&KDLQ
'HPDQG)RUHFDVWLQJLVWKHDFWLYLW\RIHVWLPDWLQJWKHTXDQWLW\RIDSURGXFWRUVHUYLFHWKDWFRQVXPHUV ZLOO SXUFKDVH 'HPDQG IRUHFDVWLQJ LQYROYHV WHFKQLTXHV LQFOXGLQJ ERWK LQIRUPDO PHWKRGV VXFK DV HGXFDWHGJXHVVHVDQGTXDQWLWDWLYHPHWKRGVVXFKDVWKHXVHRIKLVWRULFDOVDOHVGDWDRUFXUUHQWGDWD IURPWHVWPDUNHWV'HPDQGIRUHFDVWLQJPD\EHXVHGLQPDNLQJSULFLQJGHFLVLRQVLQDVVHVVLQJIXWXUH FDSDFLW\UHTXLUHPHQWVRULQPDNLQJGHFLVLRQVRQZKHWKHUWRHQWHUDQHZPDUNHW

1HFHVVLW\IRU)RUHFDVWLQJ'HPDQG
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

[Type the company address]

Page 54

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
[Type the company address] Page 55

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

$JJUHJDWHSODQQLQJLVDQRSHUDWLRQDODFWLYLW\ZKLFKGRHVDQDJJUHJDWHSODQIRUWKH SURGXFWLRQSURFHVVLQDGYDQFHRIWRPRQWKVWRJLYHDQLGHDWRPDQDJHPHQWDV WRZKDWTXDQWLW\RIPDWHULDOVDQGRWKHUUHVRXUFHVDUHWREHSURFXUHGDQGZKHQVR WKDWWKHWRWDOFRVWRIRSHUDWLRQVRIWKHRUJDQL]DWLRQLVNHSWWRWKHPLQLPXPRYHUWKDW SHULRG 7KHTXDQWLW\RIRXWVRXUFLQJVXEFRQWUDFWLQJRILWHPVRYHUWLPHRIODERUQXPEHUVWR EHKLUHGDQGILUHGLQHDFKSHULRGDQGWKHDPRXQWRILQYHQWRU\WREHKHOGLQVWRFNDQG WREHEDFNORJJHGIRUHDFKSHULRGDUHGHFLGHG$OORIWKHVHDFWLYLWLHVDUHGRQHZLWKLQ

[Type the company address]

Page 56

WKH IUDPHZRUN RI WKH FRPSDQ\ HWKLFV SROLFLHV DQG ORQJ WHUP FRPPLWPHQW WR WKH VRFLHW\FRPPXQLW\DQGWKHFRXQWU\RIRSHUDWLRQ
$JJUHJDWHSODQQLQJKDVFHUWDLQSUHUHTXLUHGLQSXWVZKLFKDUHLQHYLWDEOH7KH\LQFOXGH
y y y

,QIRUPDWLRQDERXWWKHUHVRXUFHVDQGWKHIDFLOLWLHVDYDLODEOH 'HPDQGIRUHFDVWIRUWKHSHULRGIRUZKLFKWKHSODQQLQJKDVWREHGRQH &RVW RI YDULRXV DOWHUQDWLYHV DQG UHVRXUFHV 7KLV LQFOXGHV FRVW RI KROGLQJ LQYHQWRU\ RUGHULQJ FRVW FRVW RI SURGXFWLRQ WKURXJK YDULRXV SURGXFWLRQ DOWHUQDWLYHV OLNH VXEFRQWUDFWLQJEDFNRUGHULQJDQGRYHUWLPH 2UJDQL]DWLRQDOSROLFLHVUHJDUGLQJWKHXVDJHRIDERYHDOWHUQDWLYHV

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y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

y y y

y y

'HVLJQ2SWLRQVIRUD7UDQVSRUWDWLRQ1HWZRUN
'LVWULEXWRU6WRUDJHZLWK&DUULHU'HOLYHU\

[Type the company address]

Page 57

8QGHU WKLV RSWLRQ LQYHQWRU\ LV QRW KHOG E\ PDQXIDFWXUHUV DW WKH IDFWRULHV EXW LV KHOG E\ GLVWULEXWRUVUHWDLOHUVLQLQWHUPHGLDWHZDUHKRXVHVDQGSDFNDJHFDUULHUVDUHXVHGWRWUDQVSRUW SURGXFWV IURP WKH LQWHUPHGLDWH ORFDWLRQ WR WKH ILQDO FXVWRPHU $PD]RQFRP DV ZHOO DV LQGXVWULDO GLVWULEXWRUV OLNH :: *UDLQJHU XVH WKLV DSSURDFK FRPELQHG ZLWK GURS VKLSSLQJ IURP D PDQXIDFWXUHU ,QIRUPDWLRQ DQG SURGXFW IORZV ZKHQ XVLQJ GLVWULEXWRU VWRUDJH ZLWK GHOLYHU\E\DSDFNDJHFDUULHUDUHVKRZQLQ)LJXUH

Figure 20 Distributor Storage with Carrier Delivery [Source: Sunil Chopra and Pete Meindl, Supply Chain Management]

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

[Type the company address]

Page 58

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


[Type the company address]

Page 59

'LVWULEXWRU VWRUDJH ZLWK FDUULHU GHOLYHU\ LV ZHOO VXLWHG IRU PHGLXP WR IDVW PRYLQJ LWHPV 'LVWULEXWRUVWRUDJHDOVRPDNHVVHQVHZKHQFXVWRPHUVZDQWGHOLYHU\IDVWHUWKDQRIIHUHGE\ PDQXIDFWXUHU VWRUDJH EXW GR QRW QHHG LW LPPHGLDWHO\ 'LVWULEXWRU VWRUDJH FDQ KDQGOH VRPHZKDW ORZHU YDULHW\ WKDQ PDQXIDFWXUHU VWRUDJH EXW FDQ KDQGOH D PXFK KLJKHU OHYHO RI YDULHW\WKDQDFKDLQRIUHWDLOVWRUHV 'LVWULEXWRU6WRUDJHZLWK/DVW0LOH'HOLYHU\ /DVWPLOHGHOLYHU\UHIHUVWRWKHGLVWULEXWRUUHWDLOHUGHOLYHULQJWKHSURGXFWWRWKHFXVWRPHU
V KRPHLQVWHDGRIXVLQJDSDFNDJHFDUULHU:HEYDQ3HDSRGDQG$OEHUWVRQ VKDYHXVHGODVW PLOH GHOLYHU\ LQ WKH JURFHU\ LQGXVWU\ 8QOLNH SDFNDJH FDUULHU GHOLYHU\ ODVW PLOH GHOLYHU\ UHTXLUHVWKHGLVWULEXWRUZDUHKRXVHWREHPXFKFORVHUWRWKHFXVWRPHULQFUHDVLQJWKHQXPEHU

[Type the company address]

Page 60

RIZDUHKRXVHVUHTXLUHG7KHZDUHKRXVHVWRUDJHZLWKODVWPLOHGHOLYHU\QHWZRUNLVDVVKRZQ LQ)LJXUH

Figure 21 Distributor Storage With Last Mile Delivery [Source: Sunil Chopra and Pete Meindl, Supply Chain Management]

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
V KRPH XQOLNH D VXSHUPDUNHW ZKHUHWKHUHLVPXFKPRUHFXVWRPHUSDUWLFLSDWLRQ

[Type the company address]

Page 61

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


[Type the company address]

Page 62

,Q DUHDV ZLWK KLJK ODERU FRVW LW LV YHU\ KDUG WR MXVWLI\ GLVWULEXWRU VWRUDJH ZLWK ODVW PLOH GHOLYHU\RQWKHEDVLVRIHIILFLHQF\RULPSURYHGPDUJLQ,WFDQRQO\EHMXVWLILHGLIWKHUHLVD ODUJHHQRXJKFXVWRPHUVHJPHQWZLOOLQJWRSD\ IRUWKLVFRQYHQLHQFH,QWKDWFDVHDQHIIRUW VKRXOGEHPDGHWRFRXSOHODVWPLOHGHOLYHU\ZLWKDQH[LVWLQJQHWZRUNWRH[SORLWHFRQRPLHVRI VFDOH DQG LPSURYH XWLOL]DWLRQ $Q H[DPSOH LV $OEHUWVRQ
V XVH RI H[LVWLQJ JURFHU\ VWRUH IDFLOLWLHV DQG ODERU WR SURYLGH KRPH GHOLYHU\ $ SRUWLRQ RI WKH JURFHU\ VWRUH VHUYHV DV D IXOILOOPHQW FHQWHU IRU RQOLQH RUGHUV DV ZHOO DV D UHSOHQLVKPHQW FHQWHU IRU WKH JURFHU\ VWRUH LWVHOI7KLVKHOSVLPSURYHXWLOL]DWLRQDQGORZHUWKHFRVWRISURYLGLQJWKLVVHUYLFH/DVWPLOH GHOLYHU\PD\EHMXVWLILDEOHLIFXVWRPHURUGHUVDUHODUJHHQRXJKDQGFXVWRPHUVDUHZLOOLQJWR SD\IRUWKLVVHUYLFH$OOKRPHGHOLYHU\FRPSDQLHVOLNH3HDSRGQRZFKDUJHIRUWKLVVHUYLFH HYHQIRUYHU\ODUJHRUGHUVL]HV

[Type the company address]

Page 63

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


Figure 22 Manufacturer or Distributor Warehouse Storage with Customer Pickup [Source: Sunil Chopra and Pete Meindl, Supply Chain Management]

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
[Type the company address] Page 64

7UDQVSRUWDWLRQ FRVW LV ORZHU WKDQ DQ\ VROXWLRQ XVLQJ SDFNDJH FDUULHUV EHFDXVH VLJQLILFDQW DJJUHJDWLRQ LV SRVVLEOH ZKHQ GHOLYHULQJ RUGHUV WR D SLFNXS VLWH 7KLV DOORZV WKH XVH RI WUXFNORDGRUOHVVWKDQWUXFNORDGFDUULHUVWRWUDQVSRUWRUGHUVWRWKHSLFNXSVLWH,QDFDVHOLNH  (OHYHQ -DSDQ WKH PDUJLQDO LQFUHDVH LQ WUDQVSRUWDWLRQ FRVW LV VPDOO EHFDXVH WUXFNV DUH DOUHDG\ PDNLQJ GHOLYHULHV WR WKH VWRUHV DQG WKHLU XWLOL]DWLRQ FDQ EH LPSURYHG E\ LQFOXGLQJ RQOLQHRUGHUV )DFLOLW\FRVWVDUHKLJKLIQHZSLFNXSVLWHVKDYHWREHEXLOW$VROXWLRQXVLQJH[LVWLQJVLWHVZLOO ORZHUWKHDGGLWLRQDOIDFLOLW\FRVWV7KLVIRUH[DPSOHLVWKHFDVHZLWKGUHDPFRPDQG:: *UDLQJHU ZKHUH WKH VWRUHV DOUHDG\ H[LVW 3URFHVVLQJ FRVWV DW WKH PDQXIDFWXUHU RU WKH ZDUHKRXVHDUHFRPSDUDEOHWRRWKHUVROXWLRQV3URFHVVLQJFRVWVDWWKHSLFNXSVLWHDUHKLJK EHFDXVH HDFK RUGHU PXVW EH PDWFKHG ZLWK D VSHFLILF FXVWRPHU ZKHQ WKH\ DUULYH&UHDWLQJ WKLV FDSDELOLW\ FDQ LQFUHDVH SURFHVVLQJ FRVWV VLJQLILFDQWO\ LI DSSURSULDWH VWRUDJH DQG LQIRUPDWLRQ V\VWHPV DUH QRW SURYLGHG ,QFUHDVHG SURFHVVLQJ FRVW DW WKH SLFNXS VLWH LV WKH ELJJHVWKXUGOHWRWKHVXFFHVVRIWKLVDSSURDFK $VLJQLILFDQWLQIRUPDWLRQLQIUDVWUXFWXUHLVQHHGHGWR SURYLGHYLVLELOLW\RIWKH RUGHUXQWLOWKH FXVWRPHU SLFNV LW XS 9HU\ JRRG FRRUGLQDWLRQ LV QHHGHG EHWZHHQ WKH UHWDLOHU WKH VWRUDJH ORFDWLRQDQGWKHSLFNXSORFDWLRQ $ UHVSRQVH WLPH FRPSDUDEOH WR WKH XVH RI SDFNDJH FDUULHUV FDQ EH DFKLHYHG LQ WKLV FDVH 9DULHW\DQGDYDLODELOLW\FRPSDUDEOHWRDQ\PDQXIDFWXUHURUGLVWULEXWRUVWRUDJHRSWLRQFDQEH SURYLGHG 7KHUH LV VRPH ORVV RI FXVWRPHU H[SHULHQFH EHFDXVH XQOLNH WKH RWKHU RSWLRQV GLVFXVVHG FXVWRPHUV PXVW FRPH DQG SLFN XS WKHLU RUGHUV 2Q WKH RWKHU KDQG FXVWRPHUV ZKR GR QRW ZDQW WR SD\ RQOLQH FDQ SD\ E\ FDVK XVLQJ WKLV RSWLRQ ,Q FRXQWULHV OLNH -DSDQ ZKHUH  HOHYHQ KDV RYHU  RXWOHWV LW FDQ EH DUJXHG WKDW WKH ORVV RI FXVWRPHU FRQYHQLHQFHLVVPDOOEHFDXVHPRVWFXVWRPHUVDUHFORVHWRDSLFNXSVLWHDQGFDQFROOHFWWKHLU RUGHU DW WKHLU RZQ FRQYHQLHQFH ,Q VRPH FDVHV WKLV RSWLRQ FDQ EH FRQVLGHUHG PRUH FRQYHQLHQWEHFDXVHLWGRHVQRWUHTXLUHWKHFXVWRPHUWREHDWKRPHDWWKHWLPHRIGHOLYHU\ 2UGHUYLVLELOLW\LVH[WUHPHO\LPSRUWDQWIRUFXVWRPHUSLFNXSV7KHFXVWRPHUPXVWEHLQIRUPHG ZKHQ WKH RUGHU KDV DUULYHG DQG WKH RUGHU VKRXOG EH HDVLO\ LGHQWLILHG RQFH WKH FXVWRPHU DUULYHVWRSLFNLWXS6XFKDV\VWHPZLOOEHKDUGWRLPSOHPHQWEHFDXVHLWUHTXLUHVLQWHJUDWLRQ RIVHYHUDOVWDJHVLQWKHVXSSO\FKDLQ5HWXUQVFDQSRWHQWLDOO\EHKDQGOHGDWWKHSLFNXSVLWH 7KHSUREOHPZLWKVRPHH[LVWLQJVLWHVVXFKDV(OHYHQVWRUHVLVWKDWWKH\DUHQRWHTXLSSHG WR DFFHSW DQG SURFHVV UHWXUQV IRU SURGXFWV QRW VROG DW WKH VWRUHV )URP D WUDQVSRUWDWLRQ SHUVSHFWLYHKRZHYHUUHWXUQIORZVFDQEHKDQGOHGXVLQJWKHGHOLYHU\WUXFNV)RUFXVWRPHUV UHWXUQLQJDSURGXFWZLOOEHHDV\EHFDXVHWKH\KDYHDSK\VLFDOORFDWLRQWREULQJLWWR2YHUDOO UHWXUQDELOLW\LVIDLUO\JRRGXVLQJWKLVRSWLRQ 7KH SHUIRUPDQFH FKDUDFWHULVWLFV RI PDQXIDFWXUHU RU GLVWULEXWRU VWRUDJH ZLWK FRQVXPHU SLFNXSVLWHVDUHVXPPDUL]HGLQ7DEOH


[Type the company address]

Page 65

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
[Type the company address] Page 66

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


[Type the company address]

Page 67

7KHPDLQDGYDQWDJHRIDQHWZRUNZLWKORFDOVWRUDJHLVWKDWLWFDQORZHUWKHGHOLYHU\FRVWDQG SURYLGH D IDVWHU UHVSRQVH WKDQ RWKHU QHWZRUNV 7KH PDMRU GLVDGYDQWDJH LV WKH LQFUHDVHG LQYHQWRU\ DQG IDFLOLW\ FRVWV 6XFK D QHWZRUN LV EHVW VXLWHG IRU IDVW PRYLQJ LWHPV RU LWHPV ZKHUHFXVWRPHUVYDOXHWKHUDSLGUHVSRQVH 'LUHFW6KLSSLQJZLWK0LON5XQV $ PLON UXQ LV D URXWH RQ ZKLFK D WUXFN HLWKHU GHOLYHUV SURGXFW IURP D VLQJOH VXSSOLHU WR PXOWLSOHUHWDLOHUVRUJRHVIURPPXOWLSOHVXSSOLHUVWRDVLQJOHEX\HUORFDWLRQDVVKRZQLQWKH ILJXUHEHORZ

[Type the company address]

Page 68

Figure 23 Direct Shipping with Milk Runs, Single supplier to multiple retailers

Figure 24 Direct shipping with milk runs, multiple suppliers to single retailer [Source: Sunil Chopra and Pete Meindl, Supply Chain Management]

,QGLUHFWVKLSSLQJZLWKPLONUXQVDVXSSOLHUGHOLYHUVGLUHFWO\WRPXOWLSOHEX\HUORFDWLRQVRQD WUXFN RU D WUXFN SLFNV XS GHOLYHULHV GHVWLQHV IRU WKH VDPH EX\HU ORFDWLRQ IURP PDQ\ VXSSOLHUV:KHQXVLQJWKLVRSWLRQDVXSSO\FKDLQPDQDJHUKDVWRGHFLGHRQWKHURXWLQJRI HDFKPLONUXQ

/HDQ6XSSO\&KDLQ0DQDJHPHQW
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
[Type the company address] Page 69

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
[Type the company address] Page 70

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

[Type the company address]

Page 71

:KHQ FRPSDQLHV DUH FRQVLGHULQJ ZDVWH PLQLPL]DWLRQ SURJUDPV WKH\ ZLOO ILQG WKDW VRPH FRVWVZLOOEHUHTXLUHGLQWKHLPSOHPHQWDWLRQ+RZHYHUDVWKRVHSURJUDPVFRPHRQOLQHWKH UHGXFWLRQ LQ ZDVWH ZLOO SURGXFH FRVW VDYLQJV JUHDWHU WKDQ WKH LQLWLDO LQYHVWPHQW 7KH LPSOHPHQWDWLRQ RI ZDVWH PLQLPL]DWLRQ SURJUDPV KDV EHHQ VXFFHVVIXO LQ LPSURYLQJ FRPSDQ\ VSURGXFWVDVZHOODVUHGXFLQJRYHUDOOFRVWV

[Type the company address]

Page 72

Chapter 4

Supply Chain of Pepsi Haidri Beverages

[Type the company address]

Page 73

 &KDSWHU 6XSSO\&KDLQRI3HSVL+DLGUL%HYHUDJHV
8QGHUVWDQGLQJ6XSSO\&KDLQRI+DLGUL%HYHUDJHV
$VZHKDYHDOUHDG\GLVFXVVHGWKHFRQFHSWRIVXSSO\FKDLQLQGHWDLOLWZRXOGQRZEHPXFK HDVLHUWRXQGHUVWDQGWKHFXUUHQWVXSSO\FKDLQRSHUDWHGPDQXDOO\E\+DLGULEHYHUDJHV

6XSSO\&KDLQ6WUDWHJ\RU'HVLJQ
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

6XSSO\&KDLQ3ODQQLQJ
$VWKHDERYHFRQILJXUDWLRQVKDYHEHHQVHWSODQQLQJPXVWEHGRQHZLWKLQWKHDERYHVWDWHG FRQVWUDLQWV 7KH JRDO RI SODQQLQJ LV WR PD[LPL]H WKH VXSSO\ FKDLQ VXUSOXV 3ODQQLQJ HVWDEOLVKHV SDUDPHWHUV ZLWKLQ ZKLFK D VXSSO\ FKDLQ ZLOO IXQFWLRQ RYHU D SHULRG RI WLPH &RPSDQLHVVWDUWWKHSODQQLQJ SKDVHZLWKD IRUHFDVWIRUWKHFRPLQJ\HDURIGHPDQG3HSVL FDUULHV RXW VDOHV IRUHFDVWLQJ IRU ORFDO GHPDQG DV ZHOO DV IRU H[SRUW SXUSRVHV WR FRXQWULHV
[Type the company address] Page 74

VXFKDV$IJKDQLVWDQ7KHDQQXDOVDOHVWDUJHWLVFRQYH\HGWRWKHVXSSO\FKDLQGHSDUWPHQWRI +DLGUL%HYHUDJHV3ODQQLQJLVFDUULHGRXWRQDPRQWKO\ZHHNO\DQGGDLO\EDVLVDW+DLGUL

6XSSO\&KDLQ2SHUDWLRQ
&RPSDQ\ PDNHV GHFLVLRQ UHJDUGLQJ LQGLYLGXDO FXVWRPHU RUGHUV 7KH JRDO RI VXSSO\ FKDLQ RSHUDWLRQVLVWRKDQGOHLQFRPLQJFXVWRPHURUGHUVLQWKHEHVWSRVVLEOHPDQQHU'XULQJWKLV SKDVHILUPVDOORFDWHLQYHQWRU\RUSURGXFWLRQWRLQGLYLGXDORUGHUVVHWDGDWHWKDWDQRUGHULV WREHILOOHGJHQHUDWHSLFNOLVWVDWDZDUHKRXVHDOORFDWHWRVKLSSLQJVHWGHOLYHU\DQGVRRQ 7KHUH LVOHVV XQFHUWDLQW\ DERXW GHPDQG $W +DLGUL WKH SURGXFWLRQ VDOHV DQG VXSSO\ FKDLQ GHSDUWPHQWVJHWWRJHWKHUWRGHFLGHWKHLQYHQWRU\XVXDOO\RQDZHHNO\EDVLV

3URFHVV9LHZVRID6XSSO\&KDLQ
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

&RPSHWLWLYH(GJHDQG6XSSO\&KDLQ6WUDWHJLHV

Figure 25 Supply Chain Strategy for Pepsi

7KHUHDUHWKUHHPDMRUVXVWDLQDEOHDGYDQWDJHVWKDWJLYH3HSVL&RDFRPSHWLWLYHHGJHDVWKH\ RSHUDWHLQWKHJOREDOPDUNHWSODFH  %LJPXVFXODUEUDQGV  3URYHQDELOLW\WRLQQRYDWHDQGFUHDWHGLIIHUHQWLDWHGSURGXFWVDQG  3RZHUIXOJRWRPDUNHWV\VWHPV

[Type the company address]

Page 75

3HSVL&R
VRYHUDOOPLVVLRQLVWRLQFUHDVHWKHYDOXHRIVKDUHKROGHU
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

6XSSO\&KDLQ6WUDWHJ\
6WHS7KH&XVWRPHUDQG6XSSO\&KDLQ8QFHUWDLQW\
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

6WHS8QGHUVWDQGLQJWKH6XSSO\&KDLQ&DSDELOLWLHV


[Type the company address]

Page 76

Highly Efficient

Somewhat Efficient

SomewhatResponsive

Highly Responsive

In towns

PEPSI in cities


)LJXUH

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

6WHS$FKLHYLQJWKH6WUDWHJLF)LW
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

'LVWULEXWLRQ&KDQQHOV
 'LUHFWGLVWULEXWLRQ o 'HOLYHU\ RI SRVW PL[ F\OLQGHUV  KDQGOLQJ RI NH\ DFFRXQWV 7KH NH\ DFFRXQWV DUH GLIIHUHQW ZKROHVDOHUV UHVWDXUDQWV DQG KRWHOV OLNH 3L]]D +XW .)& 0HWUR ZKLFKVHUYHDVDSODFHIRUNH\VDOH7KHVHDUHNQRZQDVQDWLRQDONH\DFFRXQWV DQGDUHYHU\LPSRUWDQWLQWHUPVRIFRPSHWLWLRQ o ([SRUW3DUWLHV  ,QGLUHFWGLVWULEXWLRQ
[Type the company address] Page 77

o 7KURXJK%DVHPDUNHWGLVWULEXWRUV o 7KURXJK2XWVWDWLRQGLVWULEXWRUV  +DLGULXVHVOLJKWDQGKHDY\YHKLFOHVIRUVDIHGHOLYHU\RIJRRGVWRWKHGLVWULEXWRUVIRUWLPHO\ GHOLYHU\,WIROORZVWKHMXVWLQWLPHFRQFHSWZKLFKLVDSSOLFDEOHLQ1RQVHDVRQDOSHULRGDQG QRWDSSOLFDEOHLQWKHVHDVRQDOSHULRG

5HYLHZDQG5HYLVH'LVWULEXWLRQ
7KLV LV XVXDOO\ GRQH WKURXJK WDNLQJ RYHU NH\ UHYHQXH DUHDV ,I WKH GLVWULEXWRU GRHV QRW DFKLHYHLWVVDOHVWDUJHWWKHGLVWULEXWLRQLVWDNHQEDFNDQGDQDGGLWLRQRIQHZ GLVWULEXWRULV GRQH 7KHUHIRUH 3HSVL V VXSSO\ LV ORZ VXSSO\ XQFHUWDLQW\ 6RPH RI LWV VXSSO\ VRXUFH FDSDELOLWLHVDUH  /HVVEUHDNGRZQV  +LJKTXDOLW\  )OH[LEOHVXSSO\FDSDFLW\  0DWXUHSURGXFWLRQSURFHVV

)DFWRUV,QIOXHQFLQJ'LVWULEXWLRQ1HWZRUN'HVLJQ
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

[Type the company address]

Page 78

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

 'HVLJQ2SWLRQVIRU'LVWULEXWLRQ1HWZRUN
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
[Type the company address] Page 79

Figure 27 Distributor Storage with Carrier Delivery method is used by Pepsi Haidri Beverages [Source: Pepsi Shipment Department]

 9DOXHRI'LVWULEXWLRQ6\VWHP 7KHUHDUHEDVLFDOO\WZRFRPSRQHQWVRIGLVWULEXWLRQ y y 6WRUDJH 'LVWULEXWLRQ

7KH VWRUDJH IDFLOLWLHV RI +DLGLUL %HYHUDJHV DUH GHVLJQHG LQ RUGHU WR ERRVW WKH WLPHO\ DYDLODELOLW\RIWKHSURGXFW)RUWKLVSXUSRVHWKHGLVWULEXWRUVDUHIXOO\HTXLSSHGZLWKIDFLOLWLHV WKDWDUHQHHGHGWRHQVXUHLQWHQVLYHVXSSO\RIWKHSURGXFW7KHVWRUDJHIDFLOLWLHVDUHGHVLJQHG WRFRQWDLQWKHPD[LPXPSRVVLEOHLQYHQWRU\LWHPVWKDWDUHQHHGHGDWDQ\JLYHQWLPH +DLGLUL %HYHUDJHV KDV HVWDEOLVKHG VHYHUDO VWRUDJH XQLWV QHDUHU WR WKH PDUNHW LQ RUGHU WR ERRVWDYDLODELOLW\7UDQVSRUWDWLRQFRQGXFWVLQYHQWRU\PRYHPHQWIURPSRLQWWRSRLQWLQVXSSO\ FKDLQRI+DLGHUL%HYHUDJHV,WLQFRUSRUDWHVDFRPELQDWLRQRIPRGHVDQGURXWHVDWGLIIHUHQW VWDJHV 7UDQVSRUWDWLRQ FKRLFHV KDYH D ODUJH LPSDFW RQ WKH UHVSRQVLYHQHVV VWUDWHJ\ RI WKH EXVLQHVV +DLGLUL KDV VHYHUDO FRQWUDFWV ZLWK VHYHUDO GLVWULEXWRUV ZLWK PXOWLSOH WUDQVSRUW IDFLOLW\ WKDW HQVXUH WKH PD[LPXP SRVVLEOH WUDQVSRUW RI LQYHQWRU\ ZLWKLQ D VKRUW SHULRG RI WLPH 7KH GLVWULEXWLRQ GRHV QRW ZRUN EHWZHHQ VSHFLILF VXSSO\ FKDLQ FRPSRQHQWV EXW LW SHUIRUPV D EDVLF IXQFWLRQ RI LQWHJUDWLRQ DPRQJVW DOO VXSSO\ FKDLQ FRPSRQHQWV ,Q FDVH RI )0&*OLNH3HSVLWKHYDOXHRIV\VWHPDWLFGLVWULEXWLRQSURFHVVFDQQRWEHXQGHUPLQHG7KH 3HSVL GLVWULEXWLRQ V\VWHP OLQNHG WKH HQWLUH VXSSO\ FKDLQ IRU DOO SURGXFW FDWHJRULHV 7KH GLVWULEXWLRQ FHQWHUV DQG LWV LQIRUPDWLRQ QHWZRUN SOD\ D NH\ UROH LQ WKDW UHJDUG 7KH PDMRU REMHFW LV WR FDUHIXOO\ WUDFN VDOHV RI LWHPV DQG RIIHU VKRUW UHSOHQLVKPHQW F\FOH WLPHV 7KH GLVWULEXWRUV RIIHU VWRUHG GHOLYHULHV WRR PDQ\ UHWDLO RXWOHWV LQ WKH WZLQ FLWLHV 'LIIHUHQW SURGXFWVDUHEHLQJGHOLYHUHGFRQYHQLHQWO\RQSUHRUGHUV7KHGLVWULEXWLRQV\VWHPLVIOH[LEOH HQRXJKWRDOWHUGHOLYHU\VFKHGXOHGHSHQGLQJRQFXVWRPHUGHPDQG7KH7HUULWRU\'LVWULEXWRU 0DQDJHUV PDLQWDLQ D FRQWDFW ZLWK WKH UHWDLOHUV LQ RUGHU WR ERRN DQG SODFH WKH RUGHUV
[Type the company address] Page 80

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

'HPDQG)RUHFDVWLQJ
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

[Type the company address]

Page 81

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

 $JJUHJDWH3ODQQLQJ
[Type the company address] Page 82

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y y y 3URGXFWLRQ OLWUHVFRQYHUWHGWR0/FUDWHVSHUGD\  6WRUDJH5DZDQGSDFNLQJ 6T)W  6WRUDJH)LQLVKHGJRRGV 6T)W 

7KH FRPSDQ\ QHHGV WR FRPSO\ WR WKH FDSLWDO DYDLODEOH DQG KDV WR PDLQWDLQ D PLQLPXP VDIHW\LQYHQWRU\OHYHODWDOOWLPHVWRDYRLGVWRFNRXWV

[Type the company address]

Page 83

7UDQVSRUWDWLRQ1HWZRUN
+DLGLUL %HYHUDJH V VXSSO\ FKDLQ VWUDWHJ\ LV FORVHO\ OLQNHG WR WKH DSSURSULDWH XVH RI WUDQVSRUWDWLRQ ,Q D W\SLFDO PDUNHW TXLFN UHVSRQVH HQDEOHV VXSSO\ FKDLQV WR PHHW WKH FXVWRPHU GHPDQGV IRU HYHUVKRUWHU OHDG WLPHV DQG WR V\QFKURQL]H WKH VXSSO\ WR PHHW WKH SHDNVDQGWURXJKVRIGHPDQG7KHPDMRUIRFXVLVWRGHWHUPLQHWKHSURFHVVHVWKDWDUHWREH LQWHJUDWHG LQ WKH VXSSO\ FKDLQ QHWZRUN ZLWK WKHLU FRUUHVSRQGLQJ VXSSOLHUV GLVWULEXWLRQ FHQWHUVDQGWKHDVVRFLDWHGWUDQVSRUWOLQNVEHWZHHQWKHP

0RGHVRI7UDQVSRUWDWLRQ
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


'HVLJQ2SWLRQVIRUD7UDQVSRUWDWLRQ1HWZRUN
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

[Type the company address]

Page 84

 

Retailer Retailer Retailer

 +DLGLUL%HYHUDJHV 

Retailer

D.C
Figure 7 (Shipping via Central DC)

Retailer Retailer

   'LUHFW 6KLSSLQJ 7KLV PHWKRG LV XVHG IRU WUDQVSRUWLQJ SURGXFWV WR NH\ DFFRXQW KROGHUV VXFK DV .)& DQG 3L]]D +XW +DLGUL WUDQVSRUWV WR WKHP GLUHFWO\ 'LDJUDP LQ $SSHQGL[   'LUHFW 6KLSSLQJ ZLWK 0LON5XQV 7KLV PHWKRG LV XVHG IRU WUDQVSRUWLQJ SRVW PL[ F\OLQGHUV WR UHWDLOHUV ZLWKLQ WKH ,VODPDEDG5DZDOSLQGL UHJLRQ IRU IRXQWDLQ IUHVK 3HSVL 7KH VKLSPHQWLVPDGHLQPLONUXQV

 6RXUFLQJ'HFLVLRQVLQ6XSSO\&KDLQ
)RU+DLGLUL%HYHUDJHVRXWVRXUFLQJUHVXOWVLQWKHVXSSO\FKDLQIXQFWLRQEHLQJSHUIRUPHGE\D WKLUGSDUW\,WLVLQIDFWRQHRIWKHPRVWLPSRUWDQWIDFWRUVIDFLQJWKHILUP5DZPDWHULDOIRU SURGXFWLRQ DQG SDFNDJLQJ LV EHLQJ RXWVRXUFHG WKURXJK FRQWUDFWV ,QERXQG DQG RXWERXQG WUDQVSRUWDWLRQRISURGXFWVIURPWKHPDQXIDFWXULQJSODFHWRWKHGLVWULEXWLRQFHQWHUDQGWKHQWR WKH ILQDO FXVWRPHU LV DOVR EHLQJ RXWVRXUFHG WR D WKLUG SDUW\ 7KH EDVLF FRQVLGHUDWLRQV RI +DLGLULLQWKLVUHJDUGDUH y 3RLQWLQJRXWVRXUFHVRIVXSSO\DQGQHJRWLDWHZLWKVXSSOLHUV y 6RXUFLQJRIUDZPDWHULDOIURPORFDODQGIRUHLJQVXSSOLHUV y 'HFLGLQJWHUPVDQGFRQGLWLRQVZLWKVXSSOLHU y &RRUGLQDWLQJDFWLYLWLHVDQGGRFXPHQWDWLRQZLWKVXSSOLHUV y &RVWFRPSDULVRQVDQGTXDOLW\DVVXUDQFH +DLGLULPDNHVWKHGHFLVLRQIURPZKHUHWRRXWVRXUFHE\LQYLWLQJELGVIRUWHQGHUVLQWKHORFDO QHZVSDSHUV7KHWHQGHUZRUNVDVD JHQHUDORIIHUWRDOOWKHLQWHUHVWHGSDUWLHVZKHWKHUWKH\ DUHUHODWHGWRWKHSURYLVLRQRIUDZPDWHULDORUGLVWULEXWLRQYHKLFOHV6RXUFLQJSURFHVVRIWKH FRPSDQ\ LQFOXGHV WKH VHOHFWLRQ RI VXSSOLHU GHVLJQ RI VXSSOLHU FRQWUDFWV SURGXFW GHVLJQ FROODERUDWLRQSURFXUHPHQWRIPDWHULDODQGVHUYLFHVDQGHYDOXDWLRQRIVXSSOLHUSHUIRUPDQFH LQFDVHRIUDZPDWHULDOSURFXUHPHQW

[Type the company address]

Page 85

6XSSOLHU6FRULQJDQG$VVHVVPHQW

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

5DZPDWHULDO3URFXUHPHQW
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

1HJRWLDWLRQVZLWK6XSSOLHUV
3URFXUHPHQW0DQDJHUVDW+DLGLULSHUIRUPWHFKQLFDOHYDOXDWLRQRIWKHVXSSOLHUVLQFOXGLQJWKH DQDO\VLVRIWKHLUKLVWRULFDOILQDQFLDOUHFRUGOHDGWLPHDQGLQIUDVWUXFWXUHEHIRUHVHOHFWLRQ,Q VRPHFDVHVDIWHUVHOHFWLRQRIWKHVXSSOLHU+DLGLULHQWHUVLQWRQHJRWLDWLRQVWRVHWWKHWHUPVRI

[Type the company address]

Page 86

WKHFRQWUDFWV+DLGLUL VVXSSO\FRQWUDFWZLWKWKHVXSSOLHUVSHFLILHVSDUDPHWHUVJRYHUQLQJWKH EX\HUVXSSOLHU UHODWLRQVKLS %XW LQ DGGLWLRQ WR WKLV FRQWUDFW IXUWKHU QHJRWLDWLRQV ZLWK WKH VXSSOLHUDUHRSWHGIRUHVWDEOLVKLQJDVLJQLILFDQWLPSDFWRQWKHEHKDYLRUDQGSHUIRUPDQFHRI DOO VWDJHV LQ WKH VXSSO\ FKDLQ +DLGLUL HQMR\V D EDUJDLQLQJ HGJH LQ WKH QHJRWLDWLRQ SURFHVV DQGGLFWDWHVWKHWHUPVUDWKHUWKDQWRIROORZWKHP 

6HOHFWLRQ&ULWHULDRI'LVWULEXWRUV
6HOHFWLRQRIGLVWULEXWRUVLVDFULWLFDOVWHSEHFDXVHWKH PDMRULW\RIVXSSO\WRWKHUHWDLOHUVLV KDQGOHGE\WKHGLVWULEXWRUV(IILFLHQWDQGZHOOSODFHGGLVWULEXWRUVDUHHVVHQWLDOIRUHQVXULQJ SURGXFW DYDLODELOLW\ ZKLFK LV WKH PDLQ WDUJHW RI WKH FRPSDQ\ )RU WKLV SXUSRVH DSSOLFDQW GLVWULEXWRUVPXVWKDYHYHKLFOHV GHSHQGVXSRQDUHDVXSSOLHG KDYHFDVHVRI HPSW\ERWWOHVDQGGHSRVLW5VDVVHFXULW\'LVWULEXWRUVZKRPHHWWKHVHFULWHULDDUH WKHQFRQVLGHUHGDVSRWHQWLDOVDQGWKHQVHOHFWHGDIWHUQHJRWLDWLRQVRQFRVWDQGRWKHUIDFWRUV ,Q FDVH RI +DLGLUL V GLVWULEXWRUV WKH FRPSDQ\ DOORFDWHV D IL[HG TXRWD WR LWV GLVWULEXWRUV DQG GRHV QRW VKRZ IOH[LELOLW\ RI EX\LQJ EDFN 5HYHQXH VKDULQJ FRQWUDFW H[LVWV EHWZHHQ WKH GLVWULEXWRUDQG+DLGLUL

3URGXFW&DWHJRUL]DWLRQE\9DOXHDQG&ULWLFDOLW\
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

[Type the company address]

Page 87

 
H ig h S tr a te g ic I tem s Figure 29 E n s u r e lon g te rm Product r e la tio n s h ip D r in k F o r m u la B u lk P u r c ha se I tem s E n s u r e lo w c o s t Sug a r H ig h

C r i ti c a li ty

L ow

G e ne ra l I tem s E n s u r e lo w c o s t C a n s a n d b o ttle s L ow

V a l u e / Co st
utdallas .e du/ ~ m e tin

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

5HYHQXH0DQDJHPHQWIRU6HDVRQDO'HPDQG
6HDVRQDOSHDNVRIGHPDQGDUHFRPPRQHYHU\\HDU,Q3HSVLWKHVHDVRQDOGHPDQGYDULHVDV LWLQFUHDVHVFRQVLGHUDEO\LQVXPPHUWKDQLQZLQWHUV2IISHDNGLVFRXQWLQJFDQVKLIWGHPDQG IURPSHDNWRQRQSHDNSHULRGV7KLVLVH[DFWO\ZKDW3HSVLGRHVDVLWUHGXFHVLWVSULFHVRQ OLWUHERWWOHVDQGFRPHVXSZLWKQHZVDYLQJVFKHPHVMXVWWRDWWUDFWFXVWRPHUV3HSVLFKDUJHV KLJKHUSULFHGXULQJSHDNSHULRGVDQGDORZHUSULFHGXULQJRIISHDNSHULRGV 

3ULFLQJDQG5HYHQXH0DQDJHPHQWIRU0XOWLSOH&XVWRPHU6HJPHQWV
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
[Type the company address] Page 88

C r itic a l I tem s E n s u r e a v a ila b ility G as CO 2

tegorization by value & riticality

26

 3ULFLQJ DQG 5HYHQX H 0DQDJH PHQW

3HSVL XVHV GLIIHUHQW SULFHV IRU HDFK VHJPHQW 7R JDLQ WKH HGJH 3HSVL IRUHFDVWV DW WKH VHJPHQW OHYHO DV ZHOO WR KHOS NHHS 3HSVL FRPSHWLWLYH LQ WKHLU SULFLQJ DQG UHYHQXH PDQDJHPHQW

3ULFLQJDQG5HYHQXHPDQDJHPHQWIRU%XONDQG6SRW&XVWRPHUV
+DLGLUL VKDVNH\DFFRXQWVOLNH6DYRUIRRGV.)&3L]]D+XWHWFDQGSULFLQJLVDGMXVWHGLQ RUGHU WR IDFLOLWDWH WKHVH FXVWRPHUV 7KH\ DUH RIIHUHG GLVFRXQWHG SULFHV EHFDXVH WKH\ DUH SRWHQWLDOORQJWHUPFXVWRPHUVDQGWKH\DOZD\VSXUFKDVHLQEXON1RWRQO\WKDWWKH\VHUYHDV DQ LPSRUWDQW PHDQV RI SURPRWLRQ %\ RIIHULQJ ORZHU SULFHV WR VXFKODUJH VFDOHFXVWRPHUV WKH FRPSDQ\ XOWLPDWHO\ EHQHILWV $W WKH VDPH WLPH WKH GLVWULEXWRUV DOVR UHDFK RXW WR WKH UHWDLOHUVZKRXVXDOO\EX\DWWKHVSRWLQVPDOOTXDQWLWLHV

8VLQJ,Q3UDFWLFH
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

[Type the company address]

Page 89

Chapter 5

Ideal Features of a Supply Chain Management System

[Type the company address]

Page 90

 &KDSWHU ,GHDO)HDWXUHVRID6XSSO\&KDLQ0DQDJHPHQW6\VWHP
7KHUHDOLW\RIWRGD\ VJOREDOHFRQRP\LVVXFKWKDWPDQXIDFWXULQJILUPVHYHU\ZKHUHIDFHVWLII FRPSHWLWLRQDVDUHVXOWRIRXWVRXUFLQJWRFRXQWULHVZKHUHFKHDSHUODERULVUHDGLO\DYDLODEOH %HFDXVHRIWKLVQHZPHWKRGVRIPDQXIDFWXULQJDQGGHOLYHU\KDYHEHHQFUHDWHGDQGRXWRI WKLVKDYHFRPH6XSSO\&KDLQ0DQDJHPHQW 6&0  7R EHWWHU DSSUHFLDWH WKLV UHODWLYHO\ QHZ DUHD RI WHFKQRORJ\ RQH QHHGV WR XQGHUVWDQG WKH JHQHUDOVXSSO\FKDLQPRGHOWKHHFRQRPLFIDFWRUVLQYROYHGLQWKHVXSSO\FKDLQSURFHVVDQG KRZWKHVRIWZDUHPDUNHWKDV GHYHORSHG VROXWLRQVWRPHHWWKHFKDOOHQJHVIDFHGE\WRGD\ V PDQXIDFWXUHUVDQGGLVWULEXWRUV )LHUFHFRPSHWLWLRQLVQRWWRGD\ VPDQXIDFWXUHUVRQO\FRQFHUQ5LVLQJIXHOFRVWVDQLQFUHDVH LQ WKH QXPEHU RI JRYHUQPHQW UHJXODWLRQV D JUHDWHU QHHG IRU YLVLELOLW\ DV SURGXFWV RU FRPSRQHQWVPRYHFURVVFRXQWU\DQGDFURVVQDWLRQV PDLQWDLQLQJFXVWRPHUVDWLVIDFWLRQ DOO WKHVH LVVXHV DUH IRUFLQJ RUJDQL]DWLRQV WR ORRN IRU IDVWHU PRUH HIILFLHQW ZD\V RI SURGXFLQJ DQG PRYLQJ JRRGV 6&0 VRIWZDUH LV QRZ DYDLODEOH WR DFFRPPRGDWH WKH QHHGV RI PDQXIDFWXUHUVWRGD\

7KH1HHGIRU6XSSO\&KDLQ0DQDJHPHQW6\VWHPV
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
[Type the company address] Page 91

6RIWZDUH6ROXWLRQVIRU7RGD\ V0DQXIDFWXUHUVDQG'LVWULEXWRUV
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

&RUH&RPSRQHQWVRI6&06RIWZDUH
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

[Type the company address]

Page 92

y y y

y y

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

 7UDQVSRUWDWLRQ0DQDJHPHQW6\VWHP 706  7KH 706 VRIWZDUH LV RQH RI WKH NH\ FRPSRQHQWV WR WKH VXSSO\ FKDLQ 7KLV VRIWZDUH PDQDJHVWKHVFKHGXOLQJRIDOOWUDQVSRUWPRGHVXVHGWRPRYHSURGXFWVIURPRQHORFDWLRQ WRDQRWKHULQDGGLWLRQWRILQGLQJWKHEHVWURXWHVWRWDNHDQGGHWHUPLQLQJZKLFKSURGXFWV DUH EHVW WUDQVSRUWHG E\ ZKDW W\SH RI WUDQVSRUWDWLRQ WKDW LV WUXFN UDLO VHD RU SODQH  706VRIWZDUHDOVRDOORZVLQGLYLGXDOVZLWKLQWKHWUDQVSRUWDWLRQQHWZRUNVXFKDVGULYHUV RU PDQDJHUV WR ORJ LQ WR D WUDQVSRUWDWLRQ SRUWDO WR FRPPXQLFDWH GLUHFWO\ DQG PDNH XSGDWHVLQUHDOWLPH 6&0FDQPDQDJHNH\WUDQVSRUWDWLRQSURFHVVHVLQFOXGLQJ
y

7UDQVSRUWDWLRQ 3ODQQLQJ  2SWLPL]H VKLSPHQWV DVVLJQ FDUULHUV WR VKLSPHQWV DQG WHQGHUVKLSPHQWVWRDVVLJQHGFDUULHUV 7UDQVSRUWDWLRQ ([HFXWLRQ  6HOHFW FDUULHUV FDOFXODWH IUHLJKW FRVWV VHWWOH VKLSPHQW FRVWV DQG SULQW GRFXPHQWV 8VH GHQLHGSDUW\ DQG HPEDUJR OLVWV ZKHQ VKLSSLQJ LQWHUQDWLRQDOO\ )UHLJKW &RVWLQJ  &DOFXODWH DQG VHWWOH IUHLJKW FRVWV EDVHG RQ DFWXDO VKLSPHQWV DQG FXUUHQWUDWHVDQGXVHWKLVLQIRUPDWLRQWRYHULI\LQYRLFHV

 ,QWHUQDWLRQDO7UDGH/RJLVWLFV 7KH ,7/ PRGXOH ZLWKLQ WKH 6&0 VXLWH KDQGOHV WKH GHWDLOV IRU LQWHUQDWLRQDO WUDGH &ROODERUDWLRQ EHWZHHQ FRXQWULHV FRPSOLDQFH LVVXHV WDULIIV DQG WD[HV HYHQW PDQDJHPHQW VKLSPHQW WUDFNLQJ DQG LPSRUW DQG H[SRUW PDQDJHPHQW DUH DOO GHDOW ZLWK E\JLYLQJPDQ\SHRSOHDFURVVWKHVXSSO\FKDLQDFFHVVDQGYLVLELOLW\LQWRWKHLVVXHVWKDW FDQRFFXUDWDQ\QRGHZLWKLQWKHVXSSO\FKDLQDQGQRWRQO\LQWRWKHSURGXFWVWKHPVHOYHV LQWKHLQWHUQDWLRQDOFRQWH[W  6XSSOLHU5HODWLRQVKLS0DQDJHPHQW 650 

[Type the company address]

Page 93

650VRIWZDUHHQDEOHVVXSSOLHUVDQGGHOLYHU\VLWHLQGLYLGXDOVWRDFFHVVVXSSOLHUSRUWDOV IRUWKHIROORZLQJWZRUHDVRQV L LL 7R IDFLOLWDWH FRPPXQLFDWLRQ DPRQJ WKHVH SDUWLHV DQG WR XSGDWH WKHP RQ DQ\ SUREOHPVWKHVXSSOLHUPD\EHH[SHULHQFLQJDWLWVHQGDQG 7RDOORZPDQDJHUVWRXVHVFRUHFDUGVWRUDWHVXSSOLHUVDVJRRGDYHUDJHRUSRRU

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
y

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

 'HPDQG0DQDJHPHQW '0 VRIWZDUH JLYHV ERWK PDQXIDFWXUHUV DQG GLVWULEXWRUV WKH DELOLW\ WR IRUHFDVW DQG PDQDJH WKH GHPDQG IRU SDUWLFXODU SURGXFWV VROG ZLWKLQ WKHLU UHVSHFWLYH PDUNHWV '0 VRIWZDUH WDNHV KLVWRULFDO VDOHV DQG ZDUHKRXVH GDWD DQG SURYLGHV D JXLGHOLQH WR ZKDW VKRXOGEHSURFXUHGDQGDWZKDWWLPHWDNLQJLQWRDFFRXQWVHDVRQDOYDULDELOLW\7KLVKHOSV LQWKHSODQQLQJRIZKDWLVQHHGHGWREHSURGXFHGDQGKRZPXFKRIHDFKPDWHULDOLVWREH
Key Performance Indicators (KPI) are financial and non-financial measures or metrics used to help an organization define and evaluate how successful it is, typically in terms of making progress towards its long-term organizational goals. KPIs can be specified by answering the question, "What is really important to different stakeholders?"
1

[Type the company address]

Page 94

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
y y

6DOHV2UGHU3URFHVVLQJ )XOILOODFRQWUDFWRUSXUFKDVHRUGHUZLWKDVSHFLILFSURGXFW FRQILJXUDWLRQDQGTXDQWLW\ RUDJLYHQVHUYLFHDWDVSHFLILFWLPH %LOOLQJ  +DQGOH WKH HQWLUH ELOOLQJ SURFHVV IURP WKH FUHDWLRQ DQG FDQFHOODWLRQ RI LQYRLFHVWKURXJKWKHWUDQVIHURIELOOLQJLQIRUPDWLRQWRWKHDFFRXQWLQJGHSDUWPHQW

 3URFXUHPHQW 6&0VXSSRUWVHQGWRHQGSURFXUHPHQWLQFOXGLQJSURFHVVHVIRU
y

6WUDWHJLF6RXUFLQJ ,GHQWLI\DQGHYDOXDWHYHQGRUVEDVHG RQKLVWRULFDOSHUIRUPDQFH DQG RWKHU GDWD &UHDWH ORQJWHUP VRXUFLQJ SODQV WKDW DOLJQ ZLWK ILQDQFLDO DQG PDUNHWLQJVWUDWHJLHV 3XUFKDVH2UGHU3URFHVVLQJ &RQYHUWGHPDQGVXFKDVSXUFKDVHUHTXLVLWLRQVDQGH VKRSSLQJ FDUWV LQWR SXUFKDVH RUGHUV RU GHOLYHU\ VFKHGXOHV IRU D VFKHGXOLQJ DJUHHPHQW ,QYRLFLQJ  5HFHLYH HQWHU DQG FKHFN YHQGRU LQYRLFHV IRU FRUUHFWQHVV LQ WHUPV RI FRQWHQWSULFHDQGFRPSXWDWLRQ

 0DQXIDFWXULQJ 6&0VXSSRUWVDOOSURGXFWLRQSURFHVVHVLQFOXGLQJHQJLQHHUWRRUGHUFRQILJXUHWRRUGHU PDNHWRRUGHUDQGPDNHWRVWRFNPDQXIDFWXULQJ7KHVROXWLRQHQDEOHVERWK

[Type the company address]

Page 95

3URGXFWLRQ 3ODQQLQJ DQG 'HWDLOHG 6FKHGXOLQJ  2SWLPL]H VFKHGXOHV IRU PDFKLQH ODERUDQG RYHUDOOFDSDFLW\XWLOL]DWLRQIDFWRULQJLQFXVWRPHUGHOLYHU\GDWHVPDWHULDO DYDLODELOLW\DQGUHDOWLPHPDQXIDFWXULQJFRQGLWLRQV 0DQXIDFWXULQJ 2SHUDWLRQV  &DSWXUH SURGXFWLRQ LQIRUPDWLRQ IURP WKH VKRS IORRU WR VXSSRUWSURGXFWLRQFRQWURODQGFRVWLQJSURFHVVHV

 6HUYLFH3DUWV3ODQQLQJ 6&0FDQDOVRKDQGOHVHUYLFHSDUWVSODQQLQJDFWLYLWLHVLQFOXGLQJ


y

y y

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

2WKHU6XSSRUWHG)HDWXUHVRI6XSSO\&KDLQ0DQDJHPHQW6\VWHPV
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

[Type the company address]

Page 96

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
V DFFRXQWV UHFHLYDEOH SURFHVVHVDQGHQVXUHFDVKIORZVWKURXJKRQOLQHELOOLQJPRUHVWUHDPOLQHGKDQGOLQJRIELOOLQJ GLVSXWHVDQGFROOHFWLRQV &RPSOHWH LQWHJUDWLRQ ZLWK FRUH (53 DSSOLFDWLRQV HQVXUHV WKDW FRPSDQ\ UHFHLYDEOHV DQG FROOHFWLRQVSURIHVVLRQDOVKDYHWKHPRVWXSWRGDWHGDWD6RWKH\FDQUHVROYHLVVXHVTXLFNO\  UHVXOWLQJLQDFFHOHUDWHGFDVKIORZDQGORZHURSHUDWLQJH[SHQVHV )6&0LQFOXGHVWKHIROORZLQJDSSOLFDWLRQV
y

&UHGLW0DQDJHPHQW (PSOR\V VRSKLVWLFDWHG WRROV WR DQDO\]H FXVWRPHU FUHGLW ZRUWKLQHVV DQG HVWDEOLVKSROLF\ o +HOSVWRDYRLGEDGGHEWORVVHVE\SURDFWLYHO\PDQDJLQJFXVWRPHUFUHGLWULVN H[SRVXUH
o


y

(OHFWURQLF,QYRLFLQJDQG3D\PHQWV (QDEOHV FXVWRPHU DFFHVV WR LQYRLFHV DFFRXQW VWDWXV DQG SD\PHQW LQIRUPDWLRQRYHUWKH,QWHUQHW o ,QWHJUDWHVVHDPOHVVO\ZLWK\RXUH[LVWLQJFXVWRPHURUVXSSOLHUIDFLQJSRUWDOV
o

'LVSXWH0DQDJHPHQW 5HVROYHVDFFRXQWVUHFHLYDEOHGLVSXWHVIDVWHUDQGPRUHV\VWHPDWLFDOO\ o 5HGXFHVGD\VVDOHVRXWVWDQGLQJ '62 DQGLPSURYHFDVKIORZV


o

&ROOHFWLRQV0DQDJHPHQW
o o

(QDEOHVWKHPRUHHIIHFWLYHPDQDJHPHQWRISDVWGXHDFFRXQWV (QVXUHVIDVWHUFROOHFWLRQRIGHOLQTXHQWSD\PHQWVWKRXJKSULRULWL]HGFROOHFWLRQV HIIRUWV

[Type the company address]

Page 97

6XSSO\&KDLQ3ODQQLQJDQG&ROODERUDWLRQ
6&0 LQFOXGHV IHDWXUHV DQG IXQFWLRQV WR VXSSRUW FROODERUDWLYH VXSSO\ FKDLQ SODQQLQJ SURFHVVHVLQFOXGLQJVWUDWHJLFWDFWLFDODQGRSHUDWLRQDOSODQQLQJ 6WUDWHJLF7DFWLFDODQG2SHUDWLRQDO3ODQQLQJ 6&0FDQRSWLPL]HDIXOOUDQJHRISODQQLQJDFWLYLWLHVLQFOXGLQJ
y

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

%XVLQHVV%HQHILWV
6&0FDQKHOSWRWUDQVIRUPDWUDGLWLRQDOOLQHDUVXSSO\FKDLQLQWRDQDGDSWLYHQHWZRUNZLWK WKHIROORZLQJEHQHILWV
y

)DVWHU5HVSRQVHWR&KDQJHVLQ6XSSO\DQG'HPDQG :LWKLQFUHDVHGYLVLELOLW\LQWR WKHVXSSO\FKDLQDQGDGDSWLYHVXSSO\FKDLQQHWZRUNV\RXFDQEHPRUHUHVSRQVLYH &RPSDQLHVFDQVHQVHDQGUHVSRQGTXLFNO\WRFKDQJHVDQGTXLFNO\FDSLWDOL]HRQQHZ RSSRUWXQLWLHV ,QFUHDVHG&XVWRPHU6DWLVIDFWLRQ %\RIIHULQJDFRPPRQLQIRUPDWLRQIUDPHZRUNWKDW VXSSRUWVFRPPXQLFDWLRQDQGFROODERUDWLRQ6&0HQDEOHVWREHWWHUDGDSWWRDQGPHHW FXVWRPHUGHPDQGV &RPSOLDQFH ZLWK 5HJXODWRU\ 5HTXLUHPHQWV  FRPSDQLHV FDQ WUDFN DQG PRQLWRU FRPSOLDQFHLQDUHDVVXFKDVHQYLURQPHQWKHDOWKDQGVDIHW\
[Type the company address] Page 98

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
VRYHUDOOSHUIRUPDQFHDQGDFKLHYHPHQWRIJRDOV

(QDEOLQJ7HFKQRORJLHV
0DQ\ WHFKQRORJLHV H[LVW WR VKDUH DQG DQDO\]H LQIRUPDWLRQ LQ D VXSSO\ FKDLQ V\VWHP 0DQDJHUV PXVW GHFLGH ZKLFK WHFKQRORJLHV WR XVH DQG KRZ WR LQWHJUDWH WKHVH WHFKQRORJLHV LQWR WKHLU FRPSDQLHV DQG WKHLU SDUWQHUV  FRPSDQLHV 7KH FRQVHTXHQFHV RI WKHVH GHFLVLRQV DUH EHFRPLQJ PRUH DQG PRUH LPSRUWDQW DV WKH FDSDELOLWLHV RI WKHVH WHFKQRORJLHV JURZ 6RPHRIWKHVHWHFKQRORJLHVLQFOXGHWKHIROORZLQJ  (OHFWURQLF 'DWD ,QWHUFKDQJH (',  DOORZV FRPSDQLHV WR SODFH LQVWDQWDQHRXV SDSHUOHVVSXUFKDVHRUGHUVZLWKVXSSOLHUV(',LVQRWRQO\HIILFLHQWLWDOVRGHFUHDVHV WKH WLPH QHHGHG WR JHW SURGXFWV WR FXVWRPHUV EHFDXVH WUDQVDFWLRQV DUH IDVWHU DQG PRUHDFFXUDWHWKHQZKHQWKH\DUHSDSHUEDVHG$OWKRXJK(',LVDELWRXWGDWHGDQG KDV OLPLWHG FDSDELOLWLHV LW VWLOO RIIHUV HIILFLHQF\ DQG UHVSRQVLYHQHVV JDLQV IRU VRPH ILUPV  7KH ,QWHUQHW KDV FULWLFDO DGYDQWDJHV RYHU (', ZLWK UHVSHFW WR LQIRUPDWLRQ VKDULQJ 7KH LQWHUQHW FRQYH\V PXFK PRUH LQIRUPDWLRQ DQG WKHUHIRUH RIIHUV PXFK PRUH YLVLELOLW\ WKDQ (', %HWWHU YLVLELOLW\ LPSURYHV GHFLVLRQV DFURVV WKH VXSSO\ FKDLQ ,QWHUQHW FRPPXQLFDWLRQ DPRQJ VWDJHV LQ WKH VXSSO\ FKDLQ LV DOVR HDVLHU EHFDXVH D VWDQGDUGLQIUDVWUXFWXUH :RUOG:LGH:HE DOUHDG\H[LVWV7KDQNVWRWKHLQWHUQHWH FRPPHUFHKDVEHFRPHDPDMRUIRUFHLQWKHVXSSO\FKDLQ  (QWHUSULVH5HVRXUFH3ODQQLQJ (53 V\VWHPVSURYLGHWKHWUDQVDFWLRQDOWUDFNLQJDQG JOREDO YLVLELOLW\ RI LQIRUPDWLRQ IURP ZLWKLQ D FRPSDQ\ DQG DFURVV LWV VXSSO\ FKDLQ 7KLV UHDOWLPH LQIRUPDWLRQ KHOSV D VXSSO\ FKDLQ WR LPSURYH WKH TXDOLW\ RI LWV RSHUDWLRQDO GHFLVLRQV (53 V\VWHPV NHHS WUDFN RI WKH LQIRUPDWLRQ ZKHUHDV WKH LQWHUQHWSURYLGHVRQHPHWKRGZLWKZKLFKWRYLHZWKLVLQIRUPDWLRQ  5DGLR )UHTXHQF\ ,GHQWLILFDWLRQ 5),'  FRQVLVWV RU DQ DFWLYH RU SDVVLYH UDGLR IUHTXHQF\ 5)  WDJ DSSOLHG WR WKH LWHP EHLQJ WUDFNHG DQG DQ 5) UHDGHUHPLWWHU $ SDVVLYHWDJGUDZVHQHUJ\IURPWKHUHDGHUZKHUHDVDQDFWLYHWDJKDVLWVRZQEDWWHU\ DQGGUDZVSRZHUIURPWKHUH:DO0DUWKDVPDQGDWHGWKHXVHRI5),'WHFKQRORJ\E\ LWVWRSVXSSOLHUVDWWKHFDVHOHYHO5),'KDVPDQ\SRWHQWLDOXVHV,WFDQEHXVHG

[Type the company address]

Page 99

LQPDQXIDFWXULQJWRFKHFNDYDLODELOLW\RIWKHHQWLUHELOORIPDWHULDOV7KHWHFKQRORJ\ FDQPDNHWKHUHFHLYLQJRIDWUXFNPXFKIDVWHUDQGFKHDSHU )XOOLPSOHPHQWDWLRQRI 5),' FRXOG HOLPLQDWH WKH QHHG IRU PDQXDO FRXQWLQJ DQG EDUFRGH VFDQQLQJ DW WKH UHFHLYLQJGRFN,WFDQDOVREHXVHGWRJHWDQH[DFWFRXQWRILQFRPLQJLWHPVDQGLWHPV LQVWRUDJH5),'WHFKQRORJ\KRZHYHUKDV\HWWRUHDFKSHUFHQWDFFXUDF\DQGLWV FRVWSHUXQLWLVVWLOOKLJKHQRXJKWRPDNHJOREDODFFHSWDQFHGLIILFXOWHYHQDWWKHFDVH OHYHO

(%XVLQHVVDQG&RQWULEXWLRQ1HWZRUN
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

[Type the company address]

Page 100

%\ LQFUHDVLQJ WKH HDVH RI LQWHUDFWLYLW\ ZLWK FXVWRPHU EXVLQHVVHV LQFUHDVH WKH OLNHOLKRRGRIDQH[FKDQJHRILQIRUPDWLRQ7KLVFDQEHDFKLHYHGWKURXJKIRUPVXUYH\V DQGLQFHQWLYHV   &XVWRPHU([SHULHQFHV $Q HEXVLQHVV FDQ JUHDWO\ LQFUHDVH FXVWRPHU H[SHULHQFH LQ WHUP RI DFFHVV FXVWRPL]DWLRQDQGFRQYLQFHV  3URGXFW9DULHW\ (EXVLQHVVRIIHUVDODUJHYDULHW\RISURGXFWVWRFXVWRPHUV  (IILFLHQW)XQG7UDQVIHU $QHEXVLQHVVFDQHQKDQFHUHYHQXHVE\VSHHGLQJXSFROOHFWLRQ


,PSDFWRI(%XVLQHVVRQ&RVW
(EXVLQHVVDIIHFWVLQYHQWRU\IDFLOLWLHVDQGWUDQVSRUWDWLRQDQGLQIRUPDWLRQFRVWV Competitive Strategy

S.C. Strategy Efficiency Responsiveness

Inventory   ,QYHQWRU\

Transportation

Facilities

Information 

$Q HEXVLQHVV FDQ ORZHU LQYHQWRU\ OHYHO DQG LQYHQWRU\ FRVW E\ LPSURYLQJ VXSSO\ FKDLQFRRUGLQDWLRQDQGFUHDWLQJEHWWHUPDWFKEHWZHHQVXSSO\DQGGHPDQG%HQHILWV DUH6PRRWKLQJ6XSSO\'HPDQGXQFHUWDLQWLHVDQG(FRQRPLHVRIVFDOH 6WDUWXSFRVWV 7UDQVSRUWIL[HGFRVWV &RVWLQFOXGHV&DSLWDOFRVW5LVNDQG2SHUDWLRQDOFRVWV 7\SHVRILQYHQWRU\ 

[Type the company address]

Page 101

%\XQFHUWDLQW \W\SH
y y

&\FOH,QYHQWRU\GHVLJQHGWRPHHWHFRQRPLHVRIVFDOH (26  6DIHW\,QYHQWRU\GHVLJQHGWRPHHWXQFHUWDLQWLHV PDUJLQDODQDO\VLV 

%\VXSSO\FKDLQVWDJH y y 5DZPDWHULDOV3URFHVVLQYHQWRU\ 5HDG\SURGXFWLQYHQWRU\

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

[Type the company address]

Page 102

7KH5ROHRI,7LQ)RUHFDVWLQJ
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

5LVN0DQDJHPHQWLQ)RUHFDVWLQJ
7KH ULVN DVVRFLDWHG ZLWK IRUHFDVW HUURU PXVW EH FRQVLGHUHG ZKHQ SODQQLQJ IRU WKH IXWXUH (UURUVLQIRUHFDVWLQJFDQFDXVHVLJQLILFDQWPLVDOORFDWLRQRIUHVRXUFHVLQLQYHQWRU\IDFLOLWLHV WUDQVSRUWDWLRQ VRXUFLQJ SULFLQJ DQG HYHQ LQ LQIRUPDWLRQ PDQDJHPHQW )RUHFDVW HUURUV GXULQJ QHWZRUN GHVLJQ PD\ FDXVH WRR PDQ\ WRR IHZ RU WKH ZURQJ W\SH RI IDFLOLWLHV WR EH

[Type the company address]

Page 103

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

)RUHFDVWLQJLQ3UDFWLFH
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
[Type the company address] Page 104

7KH5ROHRI,7LQ$JJUHJDWH3ODQLQJ
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
o o o o o o o

3URGXFWLRQUDWH :RUNIRUFH 2YHUWLPH 0DFKLQHFDSDFLW\OHYHO 6XEFRQWUDFWLQJ %DFNORJ ,QYHQWRU\RQKDQG

$OO VXSSO\ FKDLQ VWDJHV VKRXOG ZRUN WRJHWKHU RQ D SODQ WKDW ZLOO RSWLPL]H VXSSO\ FKDLQ SHUIRUPDQFH ,QIRUPDWLRQ 1HHGHG IRU DQ $JJUHJDWH 3ODQ DUH 'HPDQG IRUHFDVW LQ HDFK SHULRG3URGXFWLRQFRVWVODERUFRVWVUHJXODUWLPHDQGRYHUWLPH6XEFRQWUDFWLQJFRVWVFRVW RI FKDQJLQJ FDSDFLW\ KLULQJ RU OD\RII DQG FRVW RI DGGLQJ RU UHGXFLQJ PDFKLQH FDSDFLW\ /DERUPDFKLQHKRXUVUHTXLUHGSHUXQLW,QYHQWRU\KROGLQJFRVW6WRFNRXWRUEDFNORJFRVW $JJUHJDWH3ODQQLQJLQ3ODQQLQJLQ3UDFWLFH
y y y y

7KLQNEH\RQGWKHHQWHUSULVHWRWKHHQWLUHVXSSO\FKDLQ 0DNHSODQVIOH[LEOHEHFDXVHIRUHFDVWVDUHDOZD\VZURQJ 5HUXQWKHDJJUHJDWHSODQDVQHZLQIRUPDWLRQHPHUJHV 8VHDJJUHJDWHSODQQLQJDVFDSDFLW\XWLOL]DWLRQLQFUHDVHV


[Type the company address] Page 105

7KH5ROHRI,7LQ,QYHQWRU\0DQDJHPHQW
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

5ROHRI,7LQ7UDQVSRUWDWLRQ
7UDQVSRUWDWLRQLVRQHRIWKHPDMRULWHPVRIFRVWLQDVXSSO\FKDLQ$VDILUP
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

5LVNPDQDJHPHQWLQWUDQVSRUWDWLRQ
[Type the company address] Page 106

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

0DNLQJ7UDQVSRUWDWLRQ'HFLVLRQVLQ3UDFWLFH
 $OLJQWUDQVSRUWDWLRQVWUDWHJ\ZLWKFRPSHWLWLYHVWUDWHJ\  &RQVLGHUERWKLQKRXVHDQGRXWVRXUFHGWUDQVSRUWDWLRQ  'HVLJQDWUDQVSRUWDWLRQQHWZRUNWKDWFDQKDQGOH  HFRPPHUFH  8VHWHFKQRORJ\WRLPSURYHWUDQVSRUWDWLRQSHUIRUPDQFH  'HVLJQIOH[LELOLW\LQWRWKHWUDQVSRUWDWLRQQHWZRUN 

7KH)XWXUHRI,7LQ6XSSO\&KDLQ
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

[Type the company address]

Page 107

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

5LVN0DQDJHPHQWLQ,7
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

:KHQ,PSOHPHQWLQJ,76\VWHPV
y ,QVWDOO,7V\VWHPLQDQLQFUHPHQWDOIDVKLRQUDWKHUWKDQLQDELJEDQJDSSURDFK7KLV DOORZ WKH ILUP WR OLPLW WKH GDPDJH DQG HDV\ WR SLQSRLQW SUREOHP DUHDV GXULQJ LQVWDOODWLRQ

[Type the company address]

Page 108

)LUPFDQLPSOHPHQWGXSOLFDWHV\VWHPWRHQVXUHQHZV\VWHPZRUNZHOO7KHILUPFDQ NHHSLWVROGV\VWHPUXQQLQJDWWKHVDPHWLPHUWKHQHZRQHLVUXQQLQJ,IQHZV\VWHP FUHDWHVSUREOHPVWKDQROGV\VWHPFDQEHXWLOL]HGDVLWVWLOOH[LVWV ,PSOHPHQWRQO\WKHOHYHORIFRPSOH[LW\WKDWRQHQHHGVEHDFXUHFRPSOH[LWLHVLQFUHDVH WKHULVNV

2QHWKHRSHUDWLRQDOVLGHPLWLJDWLRQVWUDWHJLHVLQFOXGHGDWDEDFNXSV\VWHPVV\VWHPVUXQQLQJ LQ SDUDOOHO  LQ FDVH ZKHQ RQH VKRXOG VXIIHU D SUREOHP DQG UDQJH RI VHFXULW\ VRIWZDUH SURGXFWV3LFNLQJV\VWHPVWKDWFDQIOH[LELOLW\RIFKDQJHLIQHHGEFDQEHLPSRUWDQW

7KHUROHRI,7LQ6RXUFLQJ
6RXUFLQJ UHODWHG ,7 KDV KDG WKH PRVW XSV DQG GRZQ RI DQ\ VXSSO\ FKDLQ VRIWZDUH VHFWRU 7KH VRXUFLQJ VRIWZDUH ZRUOG FUHDWHG PDQ\ HOHFWURQLF PDUNHWSODFHV LQ WKH ODWH V WKDW ZHUHH[SHFWHGWRWUDQVIRUPWKHSXUFKDVHRIJRRGVDQGVHUYLFHV7KHUHDUHDZLGHYDULHW\RI DUHDVLQZKLFK,7FDQDQGLVXVHGLQVRXUFLQJWRGD\,QIDFWWKHUHLVDJUHDWHUGLYHUVLW\LI,7 VRXUFLQJSURGXFWVWKDQLQPRVWVXSSO\FKDLQDUHDV 

6RPHRIWKH0DMRU,73URGXFW$UHDV:LWKLQ6RXUFLQJ
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
[Type the company address] Page 109

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

5LVN0DQDJHPHQWLQ6RXUFLQJ
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

[Type the company address]

Page 110

,QWHOOHFWXDOSURSHUW\ULVNFDQEHPLWLJDWHGE\NHHSLQJSURGXFWVLQKRXVH(YHQZKHQSURGXFW LVRXWVRXUFHGILUPFDQPDLQWDLQRZQHUVKLSRISDUWRIWKHHTXLSPHQWLILWLVYLHZHGDVKDYLQJ VLJQLILFDQWLQWHOOHFWXDOSURSHUW\YDOXH  

0DNLQJ6RXUFLQJGHFLVLRQLQSUDFWLFH
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

%XLOG/RQJ7HUP5HODWLRQVKLSVZLWK.H\6XSSOLHUV
$EDVLFWKLQJRIJRRGVRXUFLQJLVWKDWDEX\HUDQGDVXSSOLHUZRUNLQJWRJHWKHUFDQJHQHUDWH PRUHRSSRUWXQLWLHVIRUVDYLQJWKDQWKHWZRSDUWLHVZRUNLQJVHSDUDWHO\6ROLGUHODWLRQVKLSLV OLNHO\WRUHVXOWRQO\ZKHQWZRSDUWLHVKDYHORQJWHUPUHODWLRQVKLSDQGGHJUHHRIWUXVW$ORQJ WHUPUHODWLRQHQFRXUDJHVXSSOLHUVWRH[SDQGJUHDWHUHIIRUWRQLVVXHVWKDWDUHLPSRUWDQWWRD SDUWLFXODU EX\HUV WKLV LQFOXGH LQYHVWPHQW LQ EX\HU VSHFLILF WHFKQRORJ\ DQG GHVLJQ FROODERUDWLRQ7KHVHFDSDELOLWLHVDUHYHU\LPSRUWDQWZKHQVRXUFLQJGLUHFWPDWHULDOV
[Type the company address] Page 111

7KH5ROHRI,7LQ3ULFLQJDQG5HYHQXH0DQDJHPHQW
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

8VLQJ3ULFLQJDQG5HYHQXH0DQDJHPHQWLQ3UDFWLFH
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

[Type the company address]

Page 112

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

7KH)LQDO:RUG
6&0 VRIWZDUH KDV EHHQ GHVLJQHG WR PHHW WKH QHHGV RI ILUPV ZLWK JOREDO GLVWULEXWLRQ ORJLVWLFVDQGPDQXIDFWXULQJQHHGV/HDQPDQXIDFWXULQJDQGYLVLELOLW\LQWKHVXSSO\FKDLQDUH
[Type the company address] Page 113

FUXFLDO HOHPHQWV IRU ERWK GLVWULEXWRUV DQG PDQXIDFWXULQJ H[HFXWLYHV 0RYLQJ SURGXFWV DPRQJPXOWLSOHORFDWLRQVDQGFRXQWULHVFDQEHDGDXQWLQJWDVNDQG6&0VRIWZDUHRIIHUVWKH IOH[LELOLW\WRWUDFNDOOLQYHQWRU\DWDQ\SRLQWLQWKHVXSSO\FKDLQ $GGLWLRQDOO\WKHLVVXHVRIFRPSOLDQFHVFKHGXOLQJIOH[LELOLW\FRRUGLQDWLRQDQGYLVLELOLW\FDQ EHJUHDWO\LPSURYHGEHFDXVHRIWKHFRPELQDWLRQRIEXVLQHVVSURFHVVHVLQWHJUDWHGLQWR6&0 VRIWZDUHQRPDWWHUKRZFRPSOH[WKHVXSSO\FKDLQLV

[Type the company address]

Page 114

Chapter 6

Supply Chain Management Systems and the Marketplace

[Type the company address]

Page 115

 &KDSWHU 6XSSO\&KDLQ0DQDJHPHQW6\VWHPVDQGWKH0DUNHWSODFH
,IDFRPSDQ\H[SHFWVWRDFKLHYHEHQHILWVIURPWKHLUVXSSO\FKDLQPDQDJHPHQWSURFHVVWKH\ ZLOO UHTXLUH VRPH OHYHO RI LQYHVWPHQW LQ WHFKQRORJ\ 7KH EDFNERQH IRU PDQ\ ODUJH FRPSDQLHVKDVEHHQWKHYDVWO\H[SHQVLYH(QWHUSULVH5HVRXUFH3ODQQLQJ (53 VXLWHVVXFK DV6$3DQG2UDFOH 6LQFHWKHZLGHDGRSWLRQRI,QWHUQHWWHFKQRORJLHVDOOEXVLQHVVHVFDQWDNHDGYDQWDJHRI:HE EDVHGVRIWZDUHDQG,QWHUQHWFRPPXQLFDWLRQV,QVWDQWFRPPXQLFDWLRQEHWZHHQYHQGRUVDQG FXVWRPHUV DOORZV IRU WLPHO\ XSGDWHV RI LQIRUPDWLRQ ZKLFK LV NH\ LQ PDQDJHPHQW RI WKH VXSSO\FKDLQ 7KLVFKDSWHUSUHVHQWVDOLVWRIPDUNHWJLDQWVZLWKUHVSHFWWR6&0VROXWLRQVVRUWHGE\WKH WRWDOPDUNHWVKDUHRIWKHLUVROXWLRQVZRUOGZLGH

/HDGLQJ6&06RIWZDUH3URYLGHUV )LQDQFLDO6FRUHFDUG
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

7RS6XSSO\&KDLQ0DQDJHPHQW6RIWZDUH9HQGRUV

[Type the company address]

Page 116

7KHOLVWRIWRS6&0YHQGRUVZDVSXEOLVKHGLQE\$055HVHDUFK   DQG $5& $GYLVRU\ *URXS ZKR HYDOXDWHG WKH IROORZLQJ YHQGRUV ZLWK UHVSHFW WR UHYHQXH HDUQHGLQSUHYLRXV\HDUVDQGTXDOLW\RIEHQHILWVVHUYLFHVRIIHUHGWRWKHLUFXVWRPHUV 
 6XSSOLHU  UHYHQXH :HEVLWH LQPLOOLRQ      ZZZVDSFRP ZZZRUDFOHFRP 6&3 :06 0(6053 706

 6$3  2UDFOH  ,QIRU  0DQKDWWDQ $VVRFLDWHV

[ [ [ [ [ [  [ [ [ [ 

[ [ [ [   [ [ [ [ [ [

[ [ [    [ [    [

[ [ [ [ [ [ [ [ [ [ [ [

  ZZZLQIRUFRP        ZZZPDQKFRP ZZZLFRP ZZZMGDFRP ZZZUHGSUDLULHFRP ZZZLEVXVFRP ZZZHSLFRUFRP ZZZDOGDWDVROXWLRQFRP

 L7HFKQRORJLHV  -'$6RIWZDUH  5HG3UDLULH  ,%6  (SLFRU  $OGDWD  6ZLVVORJ  +LJK-XPS %URRNV6RIWZDUH  $SSOLHG 0DWHULDOV   &OLFN&RPPHUFH  0LFURVRIW  4$'

  ZZZVZLVVORJFRP  ZZZKLJKMXPSVRIWZDUHFRP



ZZZEURRNVVRIWZDUHFRP

[

  

ZZZFOLFNFRPPHUFHFRP ZZZPLFURVRIWFRP ZZZTDGFRP

 [ [

[  [

 [ [

[  [

[Type the company address]

Page 117

6XSSOLHU

 UHYHQXH :HEVLWH LQPLOOLRQ      ZZZLIVZRUOGFRPXV ZZZGHVFDUWHVFRP ZZZFDWDO\VWZPVFRP ZZZORJLOLW\FRP

6&3 :06 0(6053 706

 ,)6  'HVFDUWHV 6\VWHPV*URXS

[ [ [ [

  [ [

[   

 [ [ [

 &DWDO\VW  /RJLOLW\

,QGXVWU\HVWLPDWH &RPELQHG,QIRU66$*OREDO 3URYLD6RIWZDUH 6ZLVVORJ,QGXVWU\ HVWLPDWHIRU:06:&6DQGVXSSO\FKDLQSODQQLQJ 6&36XSSO\FKDLQSODQQLQJ:06:DUHKRXVHPDQDJHPHQWV\VWHP0(60530DQXIDFWXULQJ H[HFXWLRQV\VWHP7067UDQVSRUWDWLRQPDQDJHPHQWV\VWHP

 *LYHQEHORZLVDOLVWRIVRPHRIWKHWRS6&0VRIWZDUHYHQGRUVDORQJZLWKWKHLUSURILOHDQGD EULHIKLVWRU\WRKHOSGHYHORSDEHWWHUXQGHUVWDQGLQJRIWKHYHQGRUVWKHPVHOYHVDVZHOODVWKH V\VWHPRIIHUHGE\WKHP 

6$36&0


6$3$PHULFDVLVDVXEVLGLDU\RI6$3$*WKHZRUOG VODUJHVWEXVLQHVV VRIWZDUHFRPSDQ\ DQG WKH WKLUGODUJHVW VRIWZDUH VXSSOLHU RYHUDOO 6$3 $PHULFDV  FRUSRUDWH KHDGTXDUWHUV LV ORFDWHG LQ 1HZWRZQ 6TXDUH 3$ D VXEXUE RI 3KLODGHOSKLD 7KH FRPSDQ\ V RIILFHUV DQG H[HFXWLYHVOHDGDWHDPRISURIHVVLRQDOVGHGLFDWHGWRGHOLYHULQJKLJKOHYHOFXVWRPHUVXSSRUW DQGVHUYLFHV )RXQGHGLQDV6\VWHPV$SSOLFDWLRQVDQG3URGXFWVLQ'DWD3URFHVVLQJ6$3KDVDULFK KLVWRU\ RI LQQRYDWLRQ DQG JURZWK WKDW KDV PDGH LW WKH UHFRJQL]HG OHDGHU LQ SURYLGLQJ FROODERUDWLYH EXVLQHVV VROXWLRQV IRU DOO W\SHV RI LQGXVWULHV  LQ HYHU\ PDMRU PDUNHW 7KH FRPSDQ\KHDGTXDUWHUHGLQ:DOOGRUI*HUPDQ\HPSOR\VPRUHWKDQSHRSOHLQPRUH WKDQFRXQWULHVDQGVHUYHVPRUHWKDQFXVWRPHUVZRUOGZLGH 

[Type the company address]

Page 118

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

6$3.H\6WUHQJWKV
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

6$37HFKQRORJ\
7KH6$3VROXWLRQVVXLWHFRPSULVHVOLFHQVHGDQGRQGHPDQGDSSOLFDWLRQVDQGVHUYLFHV7KH FRPSDQ\ V(QWHUSULVH6HUYLFH2ULHQWHG$UFKLWHFWXUH (QWHUSULVH62$ LVDEOXHSULQWIRUDQ DGDSWDEOHIOH[LEOHDQGRSHQ,7DUFKLWHFWXUHIRUGHYHORSLQJVHUYLFHVEDVHGHQWHUSULVHVFDOH EXVLQHVVVROXWLRQV:LWK6$31HW:HDYHUDVDWHFKQLFDOIRXQGDWLRQHQWHUSULVH62$PRYHV ,7DUFKLWHFWXUHVWRKLJKHUOHYHOVRIDGDSWDELOLW\ DQGPRYHVFRPSDQLHVFORVHUWRWKHYLVLRQ RIUHDOWLPHHQWHUSULVHVE\HOHYDWLQJ:HEVHUYLFHVWRDQHQWHUSULVHOHYHO
[Type the company address] Page 119

6$36XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV
6$3%XVLQHVV2QH $IIRUGDEOH HDV\WRXVH EXVLQHVV PDQDJHPHQW VRIWZDUH GHVLJQHG VSHFLILFDOO\ IRU VPDOODQGPLGVL]HEXVLQHVVHV (QDEOHV FXVWRPHUV WR PDQDJH WKHLU FULWLFDO EXVLQHVV IXQFWLRQV DFURVV VDOHV GLVWULEXWLRQDQGILQDQFLDOVDOOLQDVLQJOHLQWHJUDWHGV\VWHP :LWK6$3%XVLQHVV2QHFRPSDQLHVFDQLQVWDQWDQHRXVO\DFFHVVDFRPSOHWHDQGXS WRWKHPLQXWHYLHZRIWKHEXVLQHVVVRWKH\FDQUHVSRQGWRFXVWRPHUVIDVWHUDQGJURZ WKHEXVLQHVVPRUHSURILWDEO\

6$3%XVLQHVV%\'HVLJQ -

6WUHDPOLQHVSURFHVVHVDQGHOLPLQDWHVGHSDUWPHQWDOVLORV ,PSURYHVWKHHIILFLHQF\DQGHIIHFWLYHQHVVRIHPSOR\HHV +HOSVFXVWRPHUVPDNHEHWWHUPRUHSURDFWLYHGHFLVLRQV $GDSWVWRFKDQJLQJPDUNHWUHTXLUHPHQWVTXLFNHUWKDQFRPSHWLWRUV /HWVFXVWRPHUVJDLQFRQWURODQGYLVLELOLW\RYHUWKHLUHQWLUHEXVLQHVV 6LPSOLILHV,7E\DOORZLQJ6$3WRPDQDJHVRIWZDUHDVDVHUYLFH

6$3%XVLQHVV$OOLQ2QH &RQILJXUDEOHDQGH[WHQVLEOHEXVLQHVVVROXWLRQIRUPLGVL]HFRPSDQLHV )DVW6WDUW 3URJUDP SURYLGHV LQQRYDWLRQV WKDW OHW FXVWRPHUV FRQILJXUH WKHLU 6&0 VROXWLRQ RQOLQH DQG UHFHLYH DQ LPPHGLDWH FRVW HVWLPDWH IRU D FRVWHIIHFWLYH GHSOR\PHQW 'HOLYHUV UDSLG WLPH WR YDOXH DQG WKH IOH[LELOLW\ WR DGDSW DV DQ RUJDQL]DWLRQ V QHHGV FKDQJH %HVW RI DOO 6$3 %XVLQHVV $OOLQ2QH LV DQ DIIRUGDEOH DQG VDIH ORQJWHUP LQYHVWPHQW

6$36XSSOLHU5HODWLRQVKLS0DQDJHPHQW 6$3650  3URYLGHVVWUDWHJLFYDOXHWKURXJKVXVWDLQDEOHFRVWVDYLQJVFRQWUDFWFRPSOLDQFHDQG TXLFNWLPHWRYDOXH (TXLSVFXVWRPHUVZLWKWRROVWRRSWLPL]HSURFXUHPHQWRSHUDWLRQVDQG GULYHVXSHULRU UHVXOWVWKURXJKDQHQGWRHQGVRXUFHWRSD\SURFHVV $FWLYLWLHV VXFK DV VSHQG DQDO\VLV FDWHJRU\ PDQDJHPHQW UHTXLVLWLRQLQJ VRXUFLQJ RSHUDWLRQDOFRQWUDFWVLQYRLFLQJDQGVXSSOLHUPDQDJHPHQWDUH SDUWRIDQLQWHJUDWHG SODWIRUP

6$36XSSO\&KDLQ0RGXOHV
[Type the company address] Page 120

6$36XSSO\&KDLQ0DQDJHPHQW 6$3%XVLQHVV2QH 6$36PDOO%XVLQHVV6ROXWLRQ  

6DOHVRSSRUWXQLW\PDQDJHPHQW %XVLQHVVSDUWQHUPDQDJHPHQW ,QYHQWRU\ 3URGXFWLRQ 0DWHULDOUHTXLUHPHQWVSODQQLQJ 053  6HUYLFHPDQDJHPHQW 5HSRUWLQJ

6$3%XVLQHVV%\'HVLJQ 6$30LGVL]H%XVLQHVVVROXWLRQ  6XSSO\&KDLQ0DQDJHPHQW 6XSSO\&KDLQ6HWXS0DQDJHPHQW o 6XSSO\&KDLQ'HVLJQ o 3URGXFWLRQ0RGHOLQJ o 5HVRXUFH3ODQQLQJDQG$OORFDWLRQ 6XSSO\&KDLQ3ODQQLQJDQG&RQWURO o 'HPDQG3ODQQLQJ o 'HPDQG0DQDJHPHQWDQG2UGHU&RQILUPDWLRQ o ([FHSWLRQ0RQLWRULQJDQG&RQWURO o 6XSSO\3ODQQLQJ o 6XSSO\DQG/RJLVWLFV&RQWURO 0DQXIDFWXULQJ:DUHKRXVLQJDQG/RJLVWLFV o ,QERXQGDQG2XWERXQG/RJLVWLFV o ,QWHUQDO/RJLVWLFV o ,QYHQWRU\0DQDJHPHQW o 3URGXFWLRQ o 4XDOLW\$VVXUDQFH o 7UDFNLQJ7UDFLQJDQG,GHQWLILFDWLRQ o 7DVN0DQDJHPHQWDQG$XWRPDWLRQ

6XSSOLHU5HODWLRQVKLS0DQDJHPHQW 6$3(6RXUFLQJDSSOLFDWLRQ 6$3(6RXUFLQJRQGHPDQGVROXWLRQ 6$36SHQG$QDO\WLFV 6$3&RQWUDFW/LIHF\FOH0DQDJHPHQW 6$3&RVWDQG4XRWDWLRQ0DQDJHPHQW

2UDFOH 

[Type the company address]

Page 121


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

2UDFOH.H\6WUHQJWKV
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

[Type the company address]

Page 122

 5HDGHUV  &KRLFH $ZDUG 7KH 6XSSO\ &KDLQ 6RIWZDUH $ZDUG  :LQQHU RI 6XSSO\ &KDLQ $VLD /RJLVWLFV $ZDUGV  %HVW 6XSSO\ &KDLQ 6RIWZDUH 6ROXWLRQ 3URYLGHU  DQG ZLQQHU RI WKH 6XSSO\ &KDLQ ([FHOOHQFH $ZDUGV RUJDQL]HG E\ 6&0 /RJLVWLFV:RUOG

2UDFOH7HFKQRORJ\
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

 -

2UDFOH6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV
2UDFOH(%XVLQHVV6XLWH6XSSO\&KDLQ0DQDJHPHQW o ,QWHJUDWHV DQG DXWRPDWHV DOO NH\ VXSSO\ FKDLQSURFHVVHV IURP GHVLJQ SODQQLQJ DQGSURFXUHPHQWWRPDQXIDFWXULQJDQGIXOILOOPHQWSURYLGLQJDFRPSOHWHVROXWLRQ VHWWRHQDEOHFRPSDQLHVWRSRZHULQIRUPDWLRQGULYHQYDOXHFKDLQV o &RPSDQLHVFDQDQWLFLSDWHPDUNHWUHTXLUHPHQWVDQGULVNVDGDSWDQGLQQRYDWHWR UHVSRQG WR YRODWLOH PDUNHW FRQGLWLRQV DQG DOLJQ RSHUDWLRQV DFURVV JOREDO QHWZRUNV o $ XQLILHG GDWD PRGHO SURYLGHV D VLQJOH DFFXUDWH YLHZ RI D FXVWRPHU V HQWLUH VXSSO\ FKDLQ &RPSDQLHV FDQ LPSOHPHQW OHDQ GHPDQG GULYHQ SULQFLSOHV DQG PDQDJHWKHLULQFUHDVLQJO\FRPSOH[JOREDOVXSSO\FKDLQV 2UDFOH6HUYLFH2SWLPL]DWLRQ6XLWH o 7KH2UDFOH6HUYLFH2SWLPL]DWLRQ6XLWH 262 IHDWXUHVDEHVWRIEUHHGPRGXODU FRQILJXUDEOH GHVLJQ WKDW DOORZV FXVWRPHUV WR FKRRVH WKH ULJKW FRPSRQHQWV WKDW PHHWWKHLUXQLTXHEXVLQHVVUHTXLUHPHQWV o 7KHKLJKO\FRQILJXUDEOHQDWXUHRI262HQDEOHVLWWREHGHSOR\HGLQDEURDGUDQJH RI VXSSO\ FKDLQ VHFWRUV VXFK DV +RPH 'HOLYHU\ )LHOG 6HUYLFH DQG )DFLOLWLHV 0DQDJHPHQW o )URPFDSDFLW\SODQQLQJWKURXJKYHKLFOHWHFKQLFLDQDQGFXVWRPHUVFKHGXOLQJWR GLVSDWFKPDQDJHPHQWDQGPRELOHRSHUDWLRQV 2UDFOH6HUYLFH2SWLPL]DWLRQ6XLWH FDQ KHOS FXVWRPHUV WDNH WKHLU VHUYLFH GHOLYHU\ EXVLQHVV WR WKH QH[W OHYHO RI RSHUDWLRQDOHIILFLHQF\DQGFXVWRPHUVDWLVIDFWLRQ 3HRSOH6RIW(QWHUSULVH6XSSO\&KDLQ0DQDJHPHQW
[Type the company address] Page 123

o 3URYLGHV D FRKHVLYH \HW IOH[LEOH VROXWLRQ IRU WKH V\QFKURQL]HG VXSSO\ FKDLQ GULYLQJHIILFLHQFLHVLQFRVWVDYLQJVRYHUWKHHQWLUHVXSSO\FKDLQ LQFOXGLQJSODQ WRSURGXFHDQGRUGHUWRFDVKEXVLQHVVSURFHVVHV o 3HRSOH6RIW (QWHUSULVH 6XSSO\ &KDLQ 0DQDJHPHQW LV D IDPLO\ RI DSSOLFDWLRQV LQ 2UDFOH V3HRSOH6RIW(QWHUSULVHSURGXFWVXLWH o ([WHQGV D FRPSDQ\ V VXSSO\ FKDLQ LQ UHDO WLPH E\ FRQQHFWLQJ VXSSOLHUV DQG FXVWRPHUVZLWKFRPSDQ\EXVLQHVVSURFHVVHV o 3URYLGHVLQWHJUDWHGVSHQGPDQDJHPHQWIRUDOOFDWHJRULHVRIJRRGVDQGVHUYLFHV  o 'HOLYHUVHPEHGGHGDQDO\WLFVWRPRQLWRUVXSSO\FKDLQSHUIRUPDQFHDQGDGMXVWDV FRQGLWLRQVDQGEXVLQHVVJRDOVVKLIW -'(GZDUGV(QWHUSULVH2QH6XSSO\&KDLQ0DQDJHPHQW o 7KHVH VRIWZDUH PRGXOHV SURPRWH UHYHQXH JURZWK DQG FRVW UHGXFWLRQ E\ LPSURYLQJ IXOILOOPHQW UDWHV DOORZLQJ EHWWHU DVVHW DQG FDSDFLW\ XWLOL]DWLRQ DQG H[SDQGLQJPDUNHWGRPLQDQFHZKLOHUHGXFLQJLQYHQWRU\VKULQNLQJOHDGWLPHVDQG DFKLHYLQJRYHUDOOFRVWRIJRRGVLPSURYHPHQWV o -' (GZDUGV 6XSSO\ &KDLQ 0DQDJHPHQW LV SDUW RI 2UDFOH V -' (GZDUGV (QWHUSULVH2QHIDPLO\RIDSSOLFDWLRQV 2UDFOH7UDQVSRUWDWLRQ0DQDJHPHQW o 'HOLYHUVUREXVWWUDQVSRUWDWLRQSODQQLQJDQGH[HFXWLRQFDSDELOLWLHVWRVKLSSHUVDQG WKLUGSDUW\ORJLVWLFVSURYLGHUV o ,QWHJUDWHVDQGVWUHDPOLQHVWUDQVSRUWDWLRQSODQQLQJH[HFXWLRQIUHLJKWSD\PHQW DQGEXVLQHVVSURFHVVDXWRPDWLRQRQDVLQJOHDSSOLFDWLRQDFURVVDOOPRGHVRI WUDQVSRUWDWLRQIURPIXOOWUXFNORDGWRFRPSOH[PXOWLOHJDLURFHDQDQGUDLO VKLSPHQWV o /RZHUVWUDQVSRUWDWLRQFRVWVLPSURYHVFXVWRPHUVHUYLFHDQGDVVHWXWLOL]DWLRQDQG SURYLGHVIOH[LEOHJOREDOIXOILOOPHQWRSWLRQV

2UDFOH6XSSO\&KDLQ0RGXOHV
2UDFOH6XSSO\&KDLQ0DQDJHPHQW6XLWH o $GYDQFHG3URFXUHPHQW o /RJLVWLFV 7UDQVSRUWDWLRQ o 3URGXFW/LIHF\FOH0DQDJHPHQW o $VVHW/LIHF\FOH0DQDJHPHQW o 0DQXIDFWXULQJ o 6XSSO\&KDLQ3ODQQLQJ o 2UGHU)XOILOOPHQW o 2UGHU0DQDJHPHQW 2UDFOH6HUYLFH2SWLPL]DWLRQ6XLWH o 2UDFOH5HDO7LPH$SSRLQWPHQW6FKHGXOHU o 2UDFOH5HDO7LPH'LVSDWFK0DQDJHU

[Type the company address]

Page 124

o 2UDFOH5HDO7LPH5HVRXUFH0DQDJHU o 2UDFOH5HDO7LPH5HVRXUFH6FKHGXOHU 3HRSOH6RIW(QWHUSULVH6XSSO\&KDLQ0DQDJHPHQW o &XVWRPHU2UGHU0DQDJHPHQW o 6XSSO\&KDLQ3ODQQLQJ o ,QYHQWRU\DQG)XOILOOPHQW0DQDJHPHQW o 0DQXIDFWXULQJ6ROXWLRQ -'(GZDUGV(QWHUSULVH2QH6XSSO\&KDLQ0DQDJHPHQW o )RRGDQG%HYHUDJH3URGXFHUV o 0DQXIDFWXULQJ o 6XSSO\&KDLQ([HFXWLRQ /RJLVWLFV  o 6XSSO\&KDLQ3ODQQLQJ 6&3  o 6XSSO\0DQDJHPHQW 3URFXUHPHQW  25$&/(7UDQVSRUWDWLRQ0DQDJHPHQW o )RUZDUGLQJDQG%URNHUDJH2SHUDWLRQV o )UHLJKW3D\PHQW%LOOLQJDQG&ODLPV o )XVLRQ7UDQVSRUWDWLRQ,QWHOOLJHQFH o /RJLVWLFV,QYHQWRU\9LVLELOLW\ o 7UDQVSRUWDWLRQ2SHUDWLRQDO3ODQQLQJ o 7UDQVSRUWDWLRQ6RXUFLQJ 

 0DQKDWWDQ$VVRFLDWHV


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
[Type the company address] Page 125

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

0DQKDWWDQ$VVRFLDWHV.H\6WUHQJWKV
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

 -

[Type the company address]

Page 126

0DQKDWWDQ $VVRFLDWHV LV FRPPLWWHG WR RIIHULQJ WKH EHVW DQG GHHSHVW VXSSO\ FKDLQ VROXWLRQVWRLWVFXVWRPHUV

0DQKDWWDQ$VVRFLDWHV7HFKQRORJ\
0DQKDWWDQ$VVRFLDWHV 6XSSO\&KDLQ3URFHVV3ODWIRUPSURYLGHVDXQLI\LQJDUFKLWHFWXUHWKDW IRVWHUV DJLOLW\ DQG VFDODELOLW\ ZKLOH PLQLPL]LQJ VROXWLRQ LPSOHPHQWDWLRQ HYROXWLRQ DQG VXSSRUWFRVWV0RUHWKDQFXVWRPHUVZRUOGZLGHXVH0DQKDWWDQ$VVRFLDWHV JOREDORQ GHPDQG DQG OLFHQVHG VXSSO\ FKDLQ VROXWLRQV WR HQKDQFH SURILWDELOLW\ DQG EXLOG VXVWDLQDEOH FRPSHWLWLYHDGYDQWDJH

0DQKDWWDQ$VVRFLDWHV6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV
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

0DQKDWWDQ$VVRFLDWHV6XSSO\&KDLQ0RGXOHV
0DQKDWWDQ V6&23(6XSSO\&KDLQ2SWLPL]DWLRQ 3ODQQLQJDQG)RUHFDVWLQJ o 'HPDQG)RUHFDVWLQJ o 0XOWL&KDQQHO3ODQQLQJ
[Type the company address] Page 127

o $VVRUWPHQW3ODQQLQJ o ,WHP3ODQQLQJ o 3URPRWLRQ3ODQQLQJ o 6WRUH&OXVWHULQJ ,QYHQWRU\2SWLPL]DWLRQ o 5HSOHQLVKPHQW o 0XOWL(FKHORQ o 9HQGRU0DQDJHG,QYHQWRU\ o &ROODERUDWLRQ*DWHZD\ 2UGHU/LIHF\FOH0DQDJHPHQW o 'LVWULEXWLRQ2UGHU0DQDJHPHQW o 5HYHUVH/RJLVWLFV0DQDJHPHQW o &ROODERUDWLRQ*DWHZD\ 7UDQVSRUWDWLRQ/LIHF\FOH0DQDJHPHQW o 7UDQVSRUWDWLRQ3URFXUHPHQW o 7UDQVSRUWDWLRQ3ODQQLQJ ([HFXWLRQ o /RJLVWLFV*DWHZD\ o )OHHW0DQDJHPHQW o $SSRLQWPHQW6FKHGXOLQJ o <DUG0DQDJHPHQW 'LVWULEXWLRQ0DQDJHPHQW o :DUHKRXVH0DQDJHPHQW o 6ORWWLQJ2SWLPL]DWLRQ o /DERU0DQDJHPHQW o %LOOLQJ0DQDJHPHQW o 6XSSOLHU(QDEOHPHQW o +XE0DQDJHPHQW

 

 ,QIRU

 ,QIRULV RQH RIWKHZRUOG VODUJHVWSURYLGHUVRI EXVLQHVVVRIWZDUHZLWKDSSUR[LPDWHO\ ELOOLRQ LQ UHYHQXH DQG WKH WK ODUJHVW VRIWZDUH FRPSDQ\ LQ WKH ZRUOG $ FRPSDQ\ XQSDUDOOHOHG LQ DSSOLFDWLRQ EUHDGWK PDUNHW H[SHULHQFH RSHQ WHFKQRORJ\ DQG JOREDO UHDFK ,QIRU KDV  HPSOR\HHV GLUHFW RIILFHV DQG LPSOHPHQWDWLRQ DQG VXSSRUW FDSDELOLWLHV LQ  FRXQWULHV DQG RYHU  FXVWRPHUV ZRUOGZLGH 7KH WKRXJKW OHDGHUV DW ,QIRU
[Type the company address] Page 128

XQGHUVWDQGWKDWWKHLUFXVWRPHUVZDQWWRUHGXFHWKHQXPEHURIYHQGRUVWKH\ZRUNZLWKDQG ,QIRU VWULYHV WR FRQWLQXH DV WKHLU WUXVWHG YHQGRU RI FKRLFH  ,QIRU KDV D FRQVLVWHQW  FXVWRPHUUHWHQWLRQUDWH RQHRIWKHKLJKHVWLQWKHLQGXVWU\DQGRILWVOLFHQVHUHYHQXHV DUHJHQHUDWHGE\LWVFXUUHQWFXVWRPHUV$GGLWLRQDOO\RYHUQHZFXVWRPHUVFKRVH,QIRU ODVW \HDU IRU LWV XQSDUDOOHOHG DSSOLFDWLRQ EUHDGWK RSHQ WHFKQRORJ\ DQG JOREDO UHDFK 7KH FRPSDQ\LVFRPPLWWHGWRFRQWLQXLQJLWVJURZWKE\EURDGHQLQJLWVEHVWLQFODVVIRFXVDQGE\ SURYLGLQJWKHPRVWLQQRYDWLYHVROXWLRQVDQGVHUYLFHVJOREDOO\ &XVWRPHUV FDQ H[SHFW ,QIRU WR FRQWLQXH DGGLQJ VROXWLRQV EDVHG RQ PDUNHW QHHG DQG FXVWRPHU GHPDQG ,QIRU LV D XQLTXH VRIWZDUH FRPSDQ\  IRXU \HDUV ROG ZLWK PRUH WKDQ WKLUW\ \HDUV H[SHULHQFH ,W KDV WKH VWDELOLW\ WKH DJLOLW\ DQG WKH UHVRXUFHV WR PHHW WKH EXVLQHVVGHPDQGVRIDUDSLGO\FKDQJLQJZRUOG

,QIRU.H\6WUHQJWKV
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

,QIRU6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV
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

[Type the company address]

Page 129

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

,QIRU6XSSO\&KDLQ0DQDJHPHQW0RGXOHV
,QIRU6&0 6XSSO\&KDLQ0DQDJHPHQW  6WUDWHJLF1HWZRUN'HVLJQ 'HPDQG3ODQQLQJ 'LVWULEXWLRQ3ODQQLQJ
[Type the company address] Page 130

0DQXIDFWXULQJ3ODQQLQJ 3URGXFWLRQ6FKHGXOLQJ 7UDQVSRUWDWLRQDQG/RJLVWLFV3ODQQLQJ :DUHKRXVH0DQDJHPHQW6\VWHP 5),' (YHQW0DQDJHPHQW ,QIRU650 6XSSOLHU5HODWLRQVKLS0DQDJHPHQW  'HPDQG)XOILOOPHQWDQG3HUIRUPDQFH(YDOXDWLRQ (OHFWURQLF.DQEDQDQG6XSSOLHU0DQDJHG,QYHQWRU\&DSDELOLWLHV $GYDQFHG(OHFWURQLF'DWD,QWHUFKDQJH (', DQG:HE(QDEOHG6ROXWLRQ ,QIRU6506XSSO\:HE 3URGXFWLRQ,QYRLFLQJ 3XUFKDVH2UGHU&ROODERUDWLRQ 6XSSOLHU&XPXODWLYH4XDOLW\0DQDJHPHQW )OH[)LHOGV 5HFHLSW5HFRQFLOLDWLRQ   

[Type the company address]

Page 131

-'$

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

-'$.H\6WUHQJWKV
-'$ KDV EHHQ VHUYLQJ WKH VXSSO\ DQG GHPDQG FKDLQ IRU QHDUO\  \HDUV 7KH FRPSDQ\ V 6XSSO\  'HPDQG 2SWLPL]DWLRQ VROXWLRQ VHW LV SRZHUHG E\ D FROOHFWLRQ RI EHVWLQFODVV SURGXFWV GHVLJQHG WR HQDEOH UHWDLOHUV PDQXIDFWXUHUV DQG ZKROH VDOH GLVWULEXWRUV WR PRUH SURILWDEO\DQWLFLSDWHFUHDWHDQGVDWLVI\FXVWRPHUGHPDQG 7KLV FRPSUHKHQVLYH VROXWLRQ LQWHJUDWHV -'$ V SURYHQ SODQQLQJ DQDO\VLV RSWLPL]DWLRQ DQG H[HFXWLRQ FDSDELOLWLHV ZLWK FROODERUDWLYH ZRUNIORZ IRU VHDPOHVV LQWHJUDWLRQ DQG LQWHURSHUDWLRQ VSDQQLQJ D ZLGH UDQJH RI SURFHVVHV DFURVV WKH &XVWRPHU'ULYHQ 9DOXH &KDLQ :LWK 6XSSO\  'HPDQG 2SWLPL]DWLRQ GHFLVLRQ PDNHUV FDQ ZRUN WRJHWKHU WR UHGXFH RSHUDWLRQDOFRVWVDQGLQFUHDVHWRSOLQHUHYHQXHVDFURVVWKHHQWHUSULVHDQGGRZQWRWKHVWRUH OHYHO -'$ FXVWRPHUV UHSUHVHQW PRUH WKDQ  RI VRIWZDUH OLFHQVH VDOHV HDFK TXDUWHU D WHVWDPHQW WR WKH UHDO GHPDQG FKDLQ UHVXOWV WKDW -'$ UHSHDWHGO\ GHOLYHUV -'$ DFTXLUHG 0DQXJLVWLFVLQ-XO\7KLVSURYLGHURIGHPDQGDQGVXSSO\FKDLQVROXWLRQVHQDEOHG-'$ WR JURZ LWV SURGXFW OLQH ZLWK VXSSO\ PDQDJHPHQW GHPDQG PDQDJHPHQW DQG SULFLQJ DQG WUDQVSRUWDWLRQDQGORJLVWLFVDSSOLFDWLRQV

[Type the company address]

Page 132

-'$LVXQLTXHO\SRVLWLRQHGWRVXSSRUWDQRSWLPL]HG&XVWRPHU'ULYHQ9DOXH&KDLQ,WFDQ KHOSLWVFXVWRPHUVWRRSWLPDOO\SODQYDULRXVDVSHFWVRIWKHLUEXVLQHVV IURPUDZPDWHULDOV DFTXLVLWLRQWKURXJKPDQXIDFWXULQJDQGUHSOHQLVKPHQWWRWKHVKHOI

-'$7HFKQRORJ\
-'$ RIIHUV VHYHUDO KRVWLQJ DQG RQGHPDQG PDQDJHG VHUYLFHV WR HQVXUH D ILW WDLORUHG VSHFLILFDOO\WRWKHQHHGVRILWVFXVWRPHUV:KHWKHUDQRUJDQL]DWLRQ VQHHGVDUHDVVLPSOHDV KDUGZDUH KRVWLQJ RU DV VXEVWDQWLDO DV FRPSOHWH DSSOLFDWLRQ PDQDJHPHQW -'$ SURYLGHV D IXOOVSHFWUXPWHFKQRORJ\SODWIRUPDQGVXSSRUW

-'$6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV
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

[Type the company address]

Page 133

GROODUV DW DOO OHYHOV RI WKH RUJDQL]DWLRQ VR WKDW FXVWRPHUV FDQ PD[LPL]H WKHLU UHWXUQ RQ SURPRWLRQDOVSHQG*HQHUDWHVPD[LPXPYDOXHIURPHQGRIOLIHHQGRIVHDVRQDQGH[FHVV LQYHQWRU\VRWKDWFXVWRPHUVFDQGULYHXSRYHUDOOPDUJLQV  -'$6XSSO\&KDLQ0RGXOHV -'$6XSSO\ 'HPDQG2SWLPL]DWLRQ (QWHUSULVH3ODQQLQJ 6SDFH &DWHJRU\0DQDJHPHQW 3ULFH 3URPRWLRQ0DQDJHPHQW 'HPDQG3ODQQLQJ $OORFDWLRQ 5HSOHQLVKPHQW 6XSSO\ 0DQXIDFWXULQJ0DQDJHPHQW 1HWZRUN ,QYHQWRU\2SWLPL]DWLRQ &ROODERUDWLRQ  

[Type the company address]

Page 134

 (SLFRU

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

 (SLFRU.H\6WUHQJWKV
(SLFRU LV D JOREDO OHDGHU GHGLFDWHG WR SURYLGLQJ EXVLQHVV VRIWZDUH VROXWLRQV WR FRPSDQLHV DURXQG WKH JOREH :LWK FRPSUHKHQVLYH VROXWLRQV VHUYLFH DQG VXSSRUW WKH FRPSDQ\ KHOSV PRUH WKDQ  RI WKH ZRUOG V EHVW FRPSDQLHV UXQ WKHLU EXVLQHVV PRUH HIILFLHQWO\ DQG HIIHFWLYHO\ (SLFRU V (53 VROXWLRQV DXWRPDWH DQG RSWLPL]H EXVLQHVV RSHUDWLRQV E\ LQWHJUDWLQJGDWDDQGSURFHVVHVLQWRDVLQJOHXQLILHGVROXWLRQWRPD[LPL]HSURILWDEOHJURZWK (SLFRUGHOLYHUVDVLQJOHHQGWRHQGVRIWZDUHVROXWLRQIRUEXVLQHVV
[Type the company address] Page 135

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

(SLFRU6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV+LJKOLJKWV
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

0LFURVRIW'\QDPLFV

[Type the company address]

Page 136

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

 0LFURVRIW%XVLQHVV6ROXWLRQV
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

0LFURVRIW'\QDPLFV.H\6WUHQJWKV
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
[Type the company address] Page 137

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

0LFURVRIW'\QDPLFV7HFKQRORJ\
7KH0LFURVRIW'\QDPLFVOLFHQVHGVXLWHRIVRIWZDUHSURGXFWVDQGDSSOLFDWLRQVEXLOWRQ IDPLOLDUDQGZLGHO\XVHG0LFURVRIWWHFKQRORJLHVRIIHUVDZLGHDUUD\RIIXOOVSHFWUXP(53 VROXWLRQVIRU6XSSO\&KDLQ0DQDJHPHQW

0LFURVRIW'\QDPLFV6XSSO\&KDLQ0DQDJHPHQW6ROXWLRQV
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
[Type the company address] Page 138

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

0LFURVRIW'\QDPLFV6XSSO\&KDLQ0RGXOHV
0LFURVRIW'\QDPLFV$; &RPPHUFH*DWHZD\ (QWHUSULVH3RUWDO /RJLVWLFV 0DVWHU3ODQQLQJ 3URGXFW%XLOGHU 3URGXFWLRQ 6XSSO\&KDLQ9LVLELOLW\ 7UDGH :DUHKRXVH0DQDJHPHQW :06  0LFURVRIW'\QDPLFV1$9 ,QYHQWRU\0DQDJHPHQW :DUHKRXVH0DQDJHPHQW 6XSSO\3ODQQLQJ %XVLQHVV1RWLILFDWLRQV 6DOHVDQG3XUFKDVH'RFXPHQW:RUNIORZ$SSURYDOV 0LFURVRIW'\QDPLFV*3 'LVWULEXWLRQ,, 0LFURVRIW'\QDPLFV6/ $GYDQFHG6KLSSLQJ0DQDJHU %LOORI0DWHULDOV ,QYHQWRU\0DQDJHPHQW 5HSOHQLVKPHQW
[Type the company address] Page 139

/DQGHG&RVW 2UGHU0DQDJHPHQW 2UGHUWR3XUFKDVH 3XUFKDVLQJ :RUN2UGHU

'RPHVWLF9HQGRUVRI6&06\VWHPV
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


&RPSDQLHV OLNH 7HUD'DWD 1&5  8OWLPXV '36 HWF KDYH GHYHORSHG WKHLU RZQ (53 V\VWHPV JLYLQJ LW GLIIHUHQW WHUPLQRORJLHV OLNH %XVLQHVV 3URFHVV 0DQDJHPHQW %30  %% V\VWHPV %XVLQHVVWR%XVLQHVV  (QWHUSULVH &ODVV HWF 6RPH RI WKHVH V\VWHPV SURYLGH IXOO VXSSO\FKDLQVXSSRUWZKLOHRWKHUVRQO\VXSSRUWKDOIRIWKHIXQFWLRQDOLW\HOLPLQDWLQJWKHNH\ EXVLQHVVSODQQLQJVRIWZDUHIHDWXUHV 6RPHRIWKHVXSSO\FKDLQPDQDJHPHQWV\VWHPVYHQGRUVLQ3DNLVWDQDUHOLVWHGEHORZDORQJ ZLWKWKHIHDWXUHVRIIHUHGE\WKHV\VWHPV

 7HUDGDWD1&5

 7HUDGDWDLVWKHZRUOG VODUJHVWFRPSDQ\VROHO\IRFXVHGRQUDLVLQJLQWHOOLJHQFHWKURXJKGDWD ZDUHKRXVLQJDQGEXVLQHVVDQDO\WLFV7HUDGDWDGHOLYHUVDZDUGZLQQLQJLQWHJUDWHGSXUSRVH EXLOWSODWIRUPVEDVHGRQWKHPRVWSRZHUIXOVFDODEOHDQGUHOLDEOHWHFKQRORJ\SODWIRUPLQWKH LQGXVWU\7KHLUDVVHWVLQFOXGH

[Type the company address]

Page 140

y y y

$SSUR[LPDWHO\DVVRFLDWHVLQPRUHWKDQFRXQWULHV 6WURQJGLYHUVLILHGFOLHQWEDVHRIRYHUFXVWRPHUVZRUOGZLGHDQGFRPSDQLHVRIDOO VL]HV LPSOHPHQWDWLRQVZRUOGZLGH

7ULOOLRQV RI E\WHV RI GDWD GRQ


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
y y y y y y y y

&XVWRPHU5HODWLRQVKLS0DQDJHPHQW7HUDGDWD5HODWLRQVKLS0DQDJHU 'DWD:DUHKRXVLQJ 'HPDQG&KDLQ0DQDJHPHQW )LQDQFLDO0DQDJHPHQW ,QGXVWU\6ROXWLRQV 3URILWDELOLW\$QDO\WLFV 6XSSO\&KDLQ,QWHOOLJHQFH 0DVWHU'DWD0DQDJHPHQW

$FWLYH(QWHUSULVH,QWHOOLJHQFH 
6WD\LQJDKHDGRI\RXUFRPSHWLWLRQPHDQVWKDW\RXFUHDWHDQGGHSOR\FRQVLVWHQWDQGXSWR GDWHLQWHOOLJHQFHWKURXJKRXW\RXUHQWHUSULVHHQDEOLQJ\RXWRDFKLHYH SHUYDVLYHEXVLQHVV LQWHOOLJHQFH 0DVWHULQJWKLVUHTXLUHVDV\QHUJLVWLFFRPELQDWLRQRIWZRSRZHUIXOIRUPVRI EXVLQHVVLQWHOOLJHQFH %,  
y

6WUDWHJLF ,QWHOOLJHQFH  IRU EDFN RIILFH NQRZOHGJH ZRUNHUV 3ODQQHUV ILQDQFLDO DQDO\VWVPDUNHWLQJPDQDJHUVDQGRWKHUVXVHKLVWRULFDOWUHQGVDQGLQVLJKWVWRPDNH LQIRUPHG GHFLVLRQV FRQFHUQLQJ FXVWRPHUV LQYHQWRU\ VXSSOLHUV SURGXFWV DQG SDUWQHUV 2SHUDWLRQDO,QWHOOLJHQFHIRUIURQWOLQHZRUNHUVDQGV\VWHPV7KLVH[WHQGVWKHYDOXH RI\RXUHQWHUSULVHGDWDZDUHKRXVHWRFXVWRPHUVHUYLFHUHSUHVHQWDWLYHVUHWDLOFDVKLHUV DQGFDOOFHQWHUDJHQWVDQ\RQHZKRPDNHVGD\WRGD\GHFLVLRQV

7HUDGDWD V VWUDWHJ\ IRU SHUYDVLYH %, NQRZQ DV $FWLYH (QWHUSULVH ,QWHOOLJHQFH  SURYLGHV WKH IRXQGDWLRQ IRU QHDU UHDOWLPH VPDUWHU GHFLVLRQV WKURXJKRXW \RXU RUJDQL]DWLRQ :H
[Type the company address] Page 141

GHOLYHU $FWLYH (QWHUSULVH ,QWHOOLJHQFH  VROXWLRQV WKURXJK RXU $FWLYH 'DWD :DUHKRXVLQJ  WHFKQRORJ\SURIHVVLRQDOVHUYLFHVH[SHUWLVHDQGSDUWQHUSURGXFWV

(QWHUSULVH'DWD:DUHKRXVLQJ
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
OOUHFHLYHH[SHUWGDWD ZDUHKRXVH DGYLFH IURP WKH LQGXVWU\
V PRVW H[SHULHQFHG GDWD ZDUHKRXVH FRQVXOWLQJ SURIHVVLRQDOV 7KHVH DUH MXVW D IHZ RI WKH UHDVRQVZK\ LQGXVWU\ OHDGHUV ZRUOGZLGH FKRRVH 7HUDGDWDVROXWLRQVDQGVHUYLFHV 7HUDGDWDSDUWQHUVDQGLQWHJUDWHVZLWKOHDGLQJEXVLQHVVLQWHOOLJHQFHFRPSDQLHVVXFKDV6$6 6$32UDFOH0LFURVRIWDQG0LFURVWUDWHJ\7HUDGDWDDOVRUHOLHVRQLWVZRUOGFODVVSDUWQHUV WRGHOLYHUNH\VROXWLRQVEXLOWRQWKH7HUDGDWD(':LQFOXGLQJGDWDDFTXLVLWLRQDQGLQWHJUDWLRQ VHUYLFHV IURP FRPSDQLHV VXFK DV $E,QLWLR $WWXQLW\ *ROGHQ*DWH +XPPLQJELUG ,%0 DQG ,QIRUPDWLFD

8OWLPXV

 8OWLPXVLVWKHILUVW%30&RPSDQ\ZLWKFRPSOHWHJOREDOFDSDELOLWLHVLQFOXGLQJRIILFHVLQ FRXQWULHVDQGFXVWRPHUVLQFRXQWULHV7KH8OWLPXVSURGXFWLVDYDLODEOHLQODQJXDJHV DQG LV VXSSRUWHG E\ D ZRUOGZLGH SURIHVVLRQDO VHUYLFHV WHDP DQG D  VXSSRUW FHQWHU :LWK RYHU  FXVWRPHUV ZRUOGZLGH 8OWLPXV KDV GHSOR\HG %30 SURFHVVHV IRU PRUH FXVWRPHUVWKDQDQ\RWKHU%30FRPSDQ\2YHU/DUJH(QWHUSULVHFXVWRPHUVZLWKDQQXDO

[Type the company address]

Page 142

UHYHQXHV DERYH  %LOOLRQ KDYH GHSOR\HG 8OWLPXV %30 :LWK RYHU  \HDUV H[SHULHQFH DQG PRUH WKDQ  FXVWRPHUV PDQ\ ZLWK H[WHQVLYH SURFHVV GHSOR\PHQWV 8OWLPXV KDV GHSOR\HG PRUH %30 SURFHVVHV WKDQ DQ\ RWKHU %30 FRPSDQ\ 8OWLPXV LV UHFRJQL]HG IRU LQQRYDWLRQ DQG KDV D KLVWRU\ RI %30 LQGXVWU\ ILUVWV &XVWRPHUV DQG DQDO\VWV DJUHH WKDW 8OWLPXV KDV WKH PRVW FRPSOHWH DQG PDWXUH VHW RI FDSDELOLWLHVWRVXSSRUWERWKWKHKXPDQQHHGVDQGV\VWHPQHHGVRIEXVLQHVVSURFHVVHV

%XVLQHVV3URFHVV0DQDJHPHQW
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

8OWLPXV%306ROXWLRQVIRU6XSSO\&KDLQ0DQDJHPHQW
3UHFLVLRQDQG(IILFLHQF\DUH<RXU&RPSHWLWLYH$GYDQWDJH :KLOH PDQ\ FRPSDQLHV KDYH FOHDU SURFHVVHV WR PDQDJH WKHLU VXSSO\ FKDLQ PRVW RI WKHVH SURFHVVHVFRQWLQXHWREHPDQXDOSDSHUEDVHGSURFHVVHVWKDWDUHVORZDQGFXPEHUVRPHWR PDQDJH7KHUHVXOWRI%XVLQHVV2SWLPL]DWLRQIRU6XSSO\&KDLQ0DQDJHPHQWFDQPHDQ
y y y y

)DVWHUWLPHWRPDUNHWZLWKQHZSURGXFWV 5DSLGFKDQJHUHVSRQVH ,QFUHDVHGLQYHQWRU\WXUQV /HVVFDVKWLHGXSLQZRUNLQSURFHVV

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
y

5HGXFH7XUQDURXQG7LPHIRU%XLOGWR2UGHU3URFHVVHV
[Type the company address] Page 143

y y y y y

3URGXFH0RUH$FFXUDWH4XRWHV $FFHOHUDWH&RQWLQXRXV3URFHVV,PSURYHPHQW,QLWLDWLYHVVXFKDV6L[6LJPD *DLQ(QGWRHQG9LVLELOLW\,QWR0LVVLRQ&ULWLFDO3URFHVVHV


5HGXFH/DWHQFLHVLQ3URGXFWLRQ3URFHVVHV 6WUHQJWKHQ5HODWLRQVKLSVZLWK&XVWRPHUVDQG3DUWQHUV

'36

 $PRQJ ,7 FRQVXOWLQJ ILUPV '36 LV XQLTXH LQ LWV HPSKDVLV RQ GHYHORSLQJ FRPSDWLEOH VROXWLRQVIRULWVFOLHQWV QRWRQO\LQWHUPVRIWHFKQRORJ\EXWLQWHUPVRIFRUSRUDWHFXOWXUHDV ZHOO ,QIRUPDWLRQ VROXWLRQV FRQVLVW QRW PHUHO\ RI VRIWZDUH RU KDUGZDUH EXW RI D ZD\ RI WKLQNLQJDQGPDNLQJGHFLVLRQVDVDJURXS$FOHYHUWHFKQLFDOVROXWLRQLVQRWHQRXJKLWZLOO VXFFHHGRQO\LILWPDWFKHVWKHFOLHQW
VORQJWHUPEXVLQHVVJRDOVDQGYDOXHV:HWDNH\RXDV RXU SDUWQHU ILUVW DQG RXU FOLHQW DIWHUZDUGV :H SDUWQHU ZLWK RXU FOLHQWV ,7 GHSDUWPHQW DQG SURYLGHWKHPVXSSRUWDWDOOWKHWKUHHOHYHOVVWUDWHJLFWDFWLFDODQGRSHUDWLRQDO :H EHOLHYH LQ SHRSOH EHIRUH VRIWZDUH DQG VWUDWHJ\ EHIRUH V\VWHPV :H
YH ZRUNHG DW WKH KLJKHVWOHYHOVRIWKHFRUSRUDWHHQYLURQPHQW IURPWKHLQVLGH:H
UHVHQVLWLYHWRWKHFXOWXUDO DVSHFWV RI FKDQJH MXVW DV VXUHO\ DV ZH
UH DOHUW WR WKH ODWHVW WUHQGV LQ ,7 GHYHORSPHQW :H FUHDWHHIIHFWLYHVSRQVRUVKLSDVZHOODVHIIHFWLYHFRGH

%XVLQHVVWR%XVLQHVV%%
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

'36%%3DFNDJHV

[Type the company address]

Page 144

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

%%3URGXFW)HDWXUHV
,Q WHFKQLFDO WHUPV '36 %WR% LV D PRGXODU SDFNDJH FRQVLVWLQJ RI -DYD VHUYOHWEDVHG EXVLQHVV ORJLF DQG D FXVWRPL]DEOH +70/ FOLHQW 7KH SDFNDJH FDQ EH LQWHJUDWHG ZLWK DQ\ HQWHUSULVHVWUHQJWK EDFN HQG LQFOXGLQJ 2UDFOH '% RU 64/ 6HUYHU '36 %WR% LV GHVLJQHGIRUUREXVWSHUIRUPDQFHLQDKLJKYROXPHHQYLURQPHQW\HWLVHDVLO\VFDODEOHWRVXLW PHGLXPVL]HGHQWHUSULVHVDVZHOO 

[Type the company address]

Page 145



;DYRU

&RUSRUDWLRQ

  ;DYRULVDQ,UYLQH&DOLIRUQLDEDVHG0DQDJHPHQW 7HFKQRORJ\6ROXWLRQVILUPZLWK*OREDO  FOLHQWV FRPSOHWH ZLWK DQ RXWVRXUFLQJ VHWXS ;DYRU XVHV D SURSULHWDU\ ZRUNVKRS GULYHQFRQVXOWDWLYHDSSURDFKWRKHOSFOLHQWVZLWK
y y y y y y y y y

(VWDEOLVKLQJWHDPGULYHQ/HDGHUVKLSDQG2ZQHUVKLS 'HILQHDQ2UJDQL]DWLRQ0RGHO 'HILQH3ROLFLHV 'HILQH3URFHVVHV %XLOG7HFKQRORJ\6\VWHPV 'HILQHDQGEXLOG0HWULFV 'HILQH5ROHV 5HVSRQVLELOLWLHV 'HVLJQ0DQDJHPHQW6\VWHPV %XLOGDVXVWDLQDEOH,QIUDVWUXFWXUH

9HQGRU0DQDJHG,QYHQWRU\6ROXWLRQ
  ;DYRU
V 90, 9HQGRU 0DQDJHG ,QYHQWRU\  6XSSO\ &KDLQ ,QWHJUDWLRQ 6ROXWLRQ D SURFHVV PDQDJHPHQW HQDEOHPHQW DFFRPSOLVKHG E\ D VFDODEOH LQIRUPDWLRQ WHFKQRORJ\ VROXWLRQWKDWDOORZVPDQXIDFWXUHUVVXSSOLHUVRIJRRGVWRPRQLWRUWKHLUVDOHVFRQVXPSWLRQE\ OLQNLQJGLUHFWO\ZLWKUHWDLOHUUHVHOOHU
VVWRUHOHYHOSRLQWRIVDOHGDWDXVLQJLQGXVWU\VWDQGDUG ;0/ GDWD LQWHUFKDQJH %% VWDQGDUGV VXFK DV (', RU 5RVHWWD1HW 5HSOHQLVKPHQW RUGHU GHFLVLRQVDUHPDGHXVLQJVWRUHDQGSURGXFWFRPERLQIRUPDWLRQE\DQDO\]LQJLQYHQWRU\GDWD VWDWLVWLFDOO\LQRUGHUWRPD[LPL]HWKHFXVWRPHUVHUYLFHOHYHOZKLOHPLQLPL]LQJLQYHQWRU\DQG ORJLVWLFDOFRVWV 90,6XSSO\&KDLQ,QWHJUDWLRQ3ODWIRUPSURYLGHV %XVLQHVV7REXVLQHVV,QWHJUDWLRQ (IILFLHQF\E\LQYHQWRU\LQWHJUDWLRQZLWKSDUWQHUV ,QGXVWU\VWDQGDUGSURWRFROVDQGFXVWRPL]HGSURWRFROVIRURXUFOLHQWV +RZLVLWGRQH"

[Type the company address]

Page 146

6XSSO\ FKDLQ DQDO\VWV ZRUN FORVHO\ ZLWK WKH FXVWRPHU LQ RUGHU WR XQGHUVWDQG WKH UHOHYDQW YHQGRU DQG VXSSOLHU LQYHQWRU\ UHODWHG SURFHVVHV 7KH DQDO\VW EXLOGV D 90, LQWHJUDWLRQ SURFHVVPRGHOZLWKUHSOHQLVKPHQWUXOHV;DYRU
V6\VWHPV,QWHJUDWLRQ$QDO\VWVZRUNFORVHO\ ZRUNLQJZLWKWKHFXVWRPHU
VWHFKQRORJ\WHDPWRLPSOHPHQWWKHWHFKQRORJ\RIWKHFXVWRPHU
V FKRRVLQJVXFKDV6WHUOLQJ%L]7DONRU7LEFR;DYRU
VWHDPRIDQDO\VWVFXVWRPL]HVDVROXWLRQ WKDWVXIILFHVFXVWRPHU
VEXVLQHVVSURFHVVUHHQJLQHHULQJDQGDXWRPDWLRQQHHGV %HQHILWV y y y ,QWHJUDWHGGHOLYHU\VROXWLRQ &RPELQHGIRUHFDVWDQGEHWWHUEXVLQHVVVROXWLRQV *DSUHGXFWLRQEHWZHHQFOLHQWDQGYHQGRUPDWHULDOPDQDJHPHQW

[Type the company address]

Page 147

Chapter 7

Proposed System for Pepsi Haidri Beverages

[Type the company address]

Page 148

 &KDSWHU 3URSRVHG6\VWHPIRU3HSVL+DLGUL%HYHUDJHV
7KLVFKDSWHUSUHVHQWVDGHWDLOHGKLJKOHYHO6&0V\VWHPGHVLJQIRU3HSVL+DLGUL%HYHUDJHV ,W DOVR LGHQWLILHV ZKLFK SDUW RI WKH V\VWHPV QHHG FXVWRPL]DWLRQ DQG ZKLFK RI WKHP QHHG UHHQJLQHHULQJ 7KH FKDSWHU VWDUWV E\ SURYLGLQJ D FRPSOHWH MXVWLILFDWLRQ DV WR ZK\ VXSSO\ FKDLQ PDQDJHPHQW V\VWHP LV QHHGHG DQG ZKDW EHQHILWV WKH FRPSDQ\ H[SHFWV WR JDLQ E\ DGRSWLQJVXFKV\VWHPV 

:K\6&0"
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

*HWWLQJ6WDUWHG

[Type the company address]

Page 149

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

7HFKQRORJ\8VHG
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
2

Collaborative Commerce, also referred to as c-commerce, involves the collaborative, electronically enabled business interactions among enterprise s internal personnel, business partners and customers throughout a trading community. The trading community can be an industry, industry segment, supply chain or supply chain segment.

[Type the company address]

Page 150

6XSSO\ &KDLQ 0DQDJHPHQW 6&0  &XVWRPHU 5HODWLRQVKLS 0DQDJHPHQW &50  .QRZOHGJH0DQDJHPHQW .0 EXVLQHVVLQWHOOLJHQFH %, DQGLQYHQWRU\RSWLPL]DWLRQ ,2  7KHIHDWXUHVLQ(53,,LVYHU\PXFKLQOLQHZLWKWKH*DUWQHUUHVHDUFKSDSHUZKLFKSUHGLFWHG WKDW(53,,ZRXOGWDNH(53IRXQGDWLRQDQGH[WHQGLWRXWZDUGWRSRVLWLRQWKHHQWHUSULVHLQ WKHVXSSO\FKDLQ

'HSOR\PHQWRI(53,,LQD&XVWRPL]HG:D\
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

$FKLHYLQJ7DUJHW'HSOR\PHQW
7KH(53,,GHSOR\PHQWLVSODQQHGLQWKHIROORZLQJZD\V y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
[Type the company address] Page 151

FXVWRPHU DQG VXSSOLHU WUDQVDFWLRQV LQYHQWRU\ LQIRUPDWLRQ VKLSPHQW DQG VDOHV LQIRUPDWLRQ HWF )RU WKLV SXUSRVH WKH LQIRUPDWLRQ FRPLQJ IURP HLWKHU RI WKH WKUHH VXSSO\ FKDLQ SDUWLFLSDQWV ZLOO EH ILUVW HQFU\SWHG XVLQJ KDVK IXQFWLRQV ZKLFK DUH HPEHGGHGWRVXSSRUWGLJLWDOVLJQDWXUHVIRUWKHYHULILFDWLRQRIVHQGHU7KHLQIRUPDWLRQ ZLOO WKHQ IXUWKHU EH HQFU\SWHG XVLQJ GLIIHUHQW WHFKQLTXHV DQG GHFU\SWHG DW WKH UHFHLYHU VHQG7KHHQFU\SWLRQDQGGHFU\SWLRQ SURFHVVZLOOEHNHSWKLGGHQIURPWKH XVHUVWRHQVXUHHDVHRIXVH

%HQHILWVRI8VLQJ:HE6&0V\VWHPV
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y 5HGXFHGWUDQVDFWLRQFKDUJHV y ,PSURYHGPDUNHWHIILFLHQFLHV y (QKDQFHGVXSSO\FKDLQEHQHILWV  3ULRU WR PDNLQJ DQ\ LQYHVWPHQW LQ %% HFRPPHUFH D FRPSDQ\ KDV WR LGHQWLI\ WKH YDOXH FUHDWHG DQG WKH HIIRUW UHTXLUHG IRU LPSOHPHQWDWLRQ XQGHU HDFK RI WKHVH FDWHJRULHV 7KH

[Type the company address]

Page 152

UHODWLYHSRVLWLRQRIWKHVHFDWHJRULHVZLOOQRWEHWKHVDPHIRUDOOILUPVEXWZLOOYDU\EDVHGRQ WKHVXSSO\FKDLQVWUDWHJ\DQGFRPSHWLWLYHHQYLURQPHQW$FRPSDQ\PXVWWDLORUHFRPPHUFH LPSOHPHQWDWLRQWRVXSSRUWFDWHJRULHVZKHUHWKHYDOXHFUHDWHGLVKLJKUHODWLYHWRWKHFRVWRI LPSOHPHQWDWLRQ 

1HWZRUN'LDJUDPRI3URSRVHG6\VWHP

Figure 30 Network Diagram of the Proposed System

$VLPSOHGLDJUDPRIWKHQHWZRUNVHWXSKDVEHHQGHYHORSHGZKLFKGHSLFWVKRZWKHVXSSOLHUV DQGGLVWULEXWRUVDUHFRQQHFWHGWRWKHLQWHUQHW7KHZHEDSSOLFDWLRQLVKRVWHGE\WKHFRPSDQ\ LWVHOIZKLFKLVFRQQHFWHGWRWKHLQWHUQHWZLWKDILUHZDOOLQVWDOOHG7KHZHEEDVHGDSSOLFDWLRQ LVDFFHVVLEOHE\WKHVXSSOLHUVDQGGLVWULEXWRUVYLDLQWHUQHW)XUWKHUPRUHLOOXVWUDWLYHGLDJUDP LVJLYHQDVIROORZV

[Type the company address]

Page 153

Distributor/ Wholesaler

Su

Distributor

Figure 31 Detailed Network Diagram of Proposed System Distributor/ Wholesaler

&RUH0RGXOHVRI3URSRVHG6\VWHP
7KHIROORZLQJPRGXOHVKDYHEHHQLGHQWLILHGDVWKHFRUHVXSSO\FKDLQPDQDJHPHQWV\VWHP PRGXOHVWR EHLPSOHPHQWHGSKDVHE\SKDVH LPSOHPHQWDWLRQ RI RSHUDWLRQVVXSSRUWHG736 PRGXOHVLQWKHILUVWSKDVH 

Suppliers
 'HPDQG0DQDJHPHQW  6XSSO\&KDLQ$QDO\WLFV  9HQGRU0DQDJHG,QYHQWRU\  ,QYHQWRU\0DQDJHPHQW  7UDQVSRUWDWLRQ0DQDJHPHQW  6XSSOLHU5HODWLRQVKLS0DQDJHPHQW  0DQXIDFWXULQJ([HFXWLRQ  )DFLOLW\0DQDJHPHQW  6RXUFLQJ  6DOHVDQG&XVWRPHU6XSSRUW  )LQDQFLDO0DQDJHPHQW

Pepsi Manufacturing L

'HPDQG0DQDJHPHQW
'HPDQGPDQDJHPHQWPRGXOHFRQWDLQVWZRPDMRULWHPV

[Type the company address]

Page 154

D 'HPDQGDQGVXSSO\IRUHFDVWLQJDQG E $JJUHJDWHSODQQLQJ 'HPDQGDQG6XSSO\)RUHFDVWLQJ,QGHPDQGDQGVXSSO\IRUHFDVWLQJWKHIRUHFDVWVZLOO EH EDVHG RQ WLPH VHULHV TXDOLWDWLYH DQG FDXVDO PHWKRGV 'DWD IRU WLPH VHULHV ZLOO EH DFTXLUHGIURPSUHYLRXV\HDU VVDOHVUHFRUGV2WKHUIHDWXUHVLQFOXGH L LL LLL LY Y YL YLL )RUHFDVWKRUL]RQ )UHTXHQF\RIXSGDWH )RUHFDVWHUURU 6HDVRQDOIDFWRUV 3URFXUHPHQWIRUHFDVWEDVHGRQSUHYLRXVSURGXFWLRQDQGVWRUHGDWD 9DULDQFHIURPSODQ 5DWLRRIGHPDQGYDULDELOLW\WRRUGHUYDULDELOLW\

6HH,QIRUPDWLRQUHODWHGPHWULFVIRUVWXG\RIGHWDLOVRIWKHLQFOXGHGIHDWXUHV $JJUHJDWH3ODQQLQJ,QWKLVVHFWLRQWKHIRUHFDVWZLOOEHGLYLGHGLQWRELDQQXDOO\ TXDUWHUO\PRQWKO\ZHHNO\DQGGDLO\IRUHFDVWWRPDNHLWHDVLHUIRUWKHVWDIIWRSODQWKH GHPDQGDQGVXSSO\7KHDJJUHJDWHSODQZLOOEHPDGHLQDFFRUGDQFHZLWKWKHXVHU VSHFLILFDWLRQWKDWLVWRZKDWH[WHQWKHZDQWVWRGLYLGHWKHIRUHFDVW7KHDJJUHJDWHSODQQLQJ PRGXOHZLOOWKHQEHDEOHWRJHQHUDWHWKHIROORZLQJSODQV L LL LLL 6DOHV)RUHFDVWLQJ 3URFXUHPHQW)RUHFDVWLQJ 3URGXFWLRQ)RUHFDVWLQJ

Figure 32 Data Input and Output Diagarm - Data generated from demand forecast will be used as input for Aggregate Planning subsystem

 7KHGDWDJHQHUDWHGIURPGHPDQGIRUHFDVWWKDWLVWKHIRUHFDVWGDWDZLOOEHXVHGDVLQSXWE\ WKHDJJUHJDWHSODQQLQJPRGXOHWRJHQHUDWHWLPHVSHFLILFSODQV
[Type the company address] Page 155

6XSSO\&KDLQ$QDO\WLFV
7KLVPRGXOHGHDOVZLWKWKHDQDO\VLVRI3HSVL+DLGUL%HYHUDJHV VXSSO\FKDLQ7KLVPRGXOH SHUIRUPVWKHIROORZLQJWDVNV L LL LLL LY 'HILQHDQGVHOHFW.H\3HUIRUPDQFH,QGLFDWRUV .3,V  0RQLWRULQJDQGDQDO\VLVRI.3,V 6DIHW\VWRFNSODQQLQJ 6XSSOLHUGHOLYHU\SHUIRUPDQFHUDWLQJVLQFOXGLQJOHDGWLPHVTXDOLW\RISURGXFW GHOLYHUHGLWHPVUHWXUQHGLWHPVIRXQGGDPDJHGQRQXVDEOHDQGGXUDELOLW\RI GHOLYHUHGSURGXFW

9HQGRU0DQDJHG,QYHQWRU\
9HQGRU 0DQDJHG ,QYHQWRU\ 90,  LV D IDPLO\ RI EXVLQHVV PRGHOV LQ ZKLFK WKH EX\HU RI D SURGXFWSURYLGHVFHUWDLQLQIRUPDWLRQWRDVXSSOLHURIWKDWSURGXFWDQGWKHVXSSOLHUWDNHVIXOO UHVSRQVLELOLW\ IRU PDLQWDLQLQJ DQ DJUHHG LQYHQWRU\ RI WKH PDWHULDO XVXDOO\ DW WKH EX\HU
V FRQVXPSWLRQORFDWLRQ XVXDOO\DGLVWULEXWRUZDUHKRXVH $WKLUGSDUW\ORJLVWLFVSURYLGHUFDQ DOVR EH LQYROYHG WR PDNH VXUH WKDW WKH EX\HU KDYH WKH UHTXLUHG OHYHO RI LQYHQWRU\ E\ DGMXVWLQJWKHGHPDQGDQGVXSSO\JDSV 7KH90,PRGXOHZLOOSURYLGHWKHIROORZLQJIHDWXUHV L LL LLL LY Y YL ,QYHQWRU\PDQDJHPHQWDWGLVWULEXWRUHQG 6WRFNLQDQGVWRFNRXW 6HFRQGDU\VDOHV 'DLO\RSHQLQJDQGHQGLQJUHSRUW 5HRUGHUOHYHOV 2WKHUNH\IHDWXUHVLQFOXGHWUDFNLQJRI D 4XDQWLW\GDPDJHG E 0D[LPXPLQYHQWRU\TXDQWLW\ F 5HWXUQVIURPFXVWRPHU G 0D[LPXPTXDQWLW\GDLO\TXDQWLW\DJUHHGXSRQ

,QYHQWRU\0DQDJHPHQW6\VWHP
7KRXJK LWHPV DUH WKH VDPH WKH LQYHQWRU\ PDQDJHPHQW V\VWHP ZLOO EH LQ XVH E\ WKH FRPSDQ\RQO\7KLVPRGXOHSURYLGHVIXOOVXSSRUWIRUWKHPDQDJHPHQWRIUDZVHPLILQLVKHG DQGILQLVKHGPDWHULDO7KHUDZDQGVHPLILQLVKHGPDWHULDOUHFRUGVZLOOEHNHSWVHSDUDWHIURP ZDUHKRXVH RU ILQLVKHG JRRGV LQYHQWRU\ UHFRUGV WR VXSSRUW FXVWRPL]DWLRQ 7KH IHDWXUHV LQFOXGHGIRULQYHQWRU\PDQDJHPHQWV\VWHPDUH L &RXQWLQJDQGPDLQWHQDQFHRIVWRFNDQGLQYHQWRU\LWHPV
[Type the company address] Page 156

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

[Type the company address]

Page 157

7UDQVSRUWDWLRQ0DQDJHPHQW
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

LLL

5HSRUWLQJDQG&DOFXODWLRQV D $YHUDJHLQERXQGWUDQVSRUWDWLRQFRVW E $YHUDJHLQFRPLQJVKLSPHQWVL]H F $YHUDJHLQERXQGWUDQVSRUWDWLRQFRVWSHUVKLSPHQW G $YHUDJHRXWERXQGWUDQVSRUWDWLRQFRVW H $YHUDJHRXWERXQGVKLSPHQWVL]H I $YHUDJHRXWERXQGWUDQVSRUWDWLRQFRVWSHUVKLSPHQW J )UDFWLRQWUDQVSRUWHGE\PRGH LQERXQG RXWERXQG 

6XSSOLHU5HODWLRQVKLS0DQDJHPHQW
7KLV PRGXOH LV UHVSRQVLEOH IRU PDLQWHQDQFH RI VXSSOLHU UHFRUGV LQFOXGLQJ PDVWHU GDWD DV ZHOO DV VXSSOLHU KLVWRU\ 7KLV ZLOO DOVR DOORZ FROODERUDWLRQ DPRQJ VXSSOLHU DQG +DLGUL EHYHUDJHV E\ VHWWLQJ XS ZKLFK PRGXOHV DQG VFUHHQV WKH VXSSOLHU FDQ DFFHVV E\ GHILQLQJ

[Type the company address]

Page 158

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

0DQXIDFWXULQJ([HFXWLRQ6\VWHP
7KLV PRGXOH DOORZV IXOO PRQLWRULQJ DQG SODQQLQJ RI SURGXFWLRQ SURFHVV 7KH IROORZLQJ IHDWXUHVDUHSURSRVHGIRUWKLVPRGXOH L LL 3URGXFWLRQVFKHGXOLQJ /DERUVKLIWVPDQDJHPHQW
[Type the company address] Page 159

LLL LY Y YL YLL YLLL L[ [

:DVWHPDQDJHPHQW 3URGXFWLRQVXPPDU\ &RVWRIJRRGVPDQXIDFWXUHG %LOOVRIPDWHULDO 0DSSLQJSURGXFWLRQWRIDFLOLWLHV 0DQXIDFWXULQJRSHUDWLRQVPDQDJHPHQW 3URFHVV&RVWLQJ 5HSRUWV D 3URGXFWLRQ3ODQ E 3URGXFW&RVWLQJ F 3URFHVV&RVWLQJ5HSRUW G 3URGXFWLRQ'D\(QG5HSRUW H )DFLOLWLHV(QJDJHPHQW5HSRUW I 1XPEHURIKRXUVFRQVXPHGE\HDFKIDFLOLW\DWGD\HQG J $YHUDJHPDQXIDFWXULQJWLPHIRUHDFKLWHP K $YHUDJHFRVWRIJRRGVPDQXIDFWXUHG L &RVWRIJRRGVDYDLODEOHIRUVDOH

)DFLOLW\0DQDJHPHQW
7KLV PRGXOH RIIHUV IXOO VXSSRUW IRU PDQDJHPHQW RI DOO IDFLOLWLHV LQVWDOOHG DW 3HSVL +DLGUL %HYHUDJHVDVZHOODVWKRVHZKLFKDUHXVHGIRURSHUDWLQJSXUSRVHVOLNHYHKLFOHVFRPSXWHU V\VWHPVSKRWRFRS\PDFKLQHVSULQWHUVID[PDFKLQHVVHFXULW\JDWHORDGHUVIRUNOLIWHUVHWF 7KHIROORZLQJIHDWXUHVDUHVXSSRUWHGE\WKLVPRGXOH L )DFLOLWLHV0DVWHU'DWD D 7\SH E &DSDFLW\ F 0D[LPXPQXPEHURIZRUNDEOHKRXUV
[Type the company address] Page 160

G /RFDWLRQ LL LLL LY Y YL YLL 2SHUDWLRQDOFRVWV 0DSSLQJHPSOR\HHVWRIDFLOLW\ 8WLOL]DWLRQ 3URGXFWYDULHW\ 0DSSLQJSURGXFWLRQVFKHGXOHVWRIDFLOLWLHV 5HSRUWVDQG&RPSXWDWLRQV D &DSDFLW\ E 8WLOL]DWLRQ F &\FOHWLPHRISURGXFWLRQ G $FWXDO$YHUDJHIORZF\FOHWLPH H )ORZWLPHHIILFLHQF\ I 3URGXFWYDULHW\ J 3URFHVVLQJVHWXSGRZQLGOHWLPH K $YHUDJHSURGXFWLRQEDWFKVL]H L 3URGXFWLRQVHUYLFHOHYHO

6RXUFLQJ
6RXUFLQJUHIHUVWRDOODFWLYLWLHVLQYROYHGLQSXUFKDVLQJUDZDQGVHPLILQLVKHGPDWHULDOVIURP VXSSOLHUVRUWKLUGSDUWLHV7KHNH\IHDWXUHVRIWKLVPRGXOHDUH L LL LLL LY Y YL YLL 6XSSOLHU7HQGHUVPDQDJHPHQW 5HTXHVWIRU4XRWDWLRQV 6XSSOLHUTXRWDWLRQV 6XSSOLHUVHOHFWLRQ 3XUFKDVHRUGHUPDQDJHPHQW *RRGVUHFHLSW1RWH0DQDJHPHQW ,QYRLFLQJ
[Type the company address] Page 161

YLLL L[

0DWHULDOUHWXUQVPDQDJHPHQW 5HSRUWVDQG&DOFXODWLRQV D 'D\VSD\DEOHRXWVWDQGLQJ E $YHUDJHSXUFKDVHSULFH F 5DQJHRISXUFKDVHSULFH G $YHUDJHSXUFKDVHTXDQWLW\ H )UDFWLRQRQWLPHGHOLYHU\ I 6XSSO\TXDOLW\ J 6XSSO\OHDGWLPH K 3XUFKDVHV+LVWRU\

6DOHVDQG6XSSRUW
7KHPRGXOHVXSSRUWVWKHIROORZLQJIHDWXUHV L 'LVWULEXWRU,QIRUPDWLRQPDQDJHPHQW D 6WRUDJH&DSDFLW\ E /RFDWLRQ F 'LVWULEXWRU VUHWDLOFKDQQHO LL LLL LY Y YL YLL YLLL L[ .H\DFFRXQWVPDQDJHPHQW 6DOHVRUGHUSURFHVVLQJ 6DOH2UGHUWUDFNLQJ 6DOHVLQYRLFLQJ 6HFRQGDU\6DOHV0DQDJHPHQW 7'03HUVRQQHO0DQDJHPHQW 7DUJHWGHILQLWLRQDQGWUDFNLQJ 5HSRUWV D 'LVWULEXWRU'DWD

[Type the company address]

Page 162

E 6HFRQGDU\6DOHV7UDFNLQJ F 7DUJHWWUDFNLQJ G 'LVWULEXWRUUDQNLQJ H $YHUDJHOHDGWLPH I 3URGXFWVDOHVDQDO\VLV J )RUHFDVWYDULDELOLW\ 

)LQDQFLDO0DQDJHPHQW
7KLV PRGXOH FRQWUROV D ZLGH UDQJH RI DFWLYLWLHV $OO PDWWHUV UHODWLQJ WR PRQH\  DUH GHDOW KHUH7KHNH\IHDWXUHVRIWKLVPRGXOHLQFOXGH L LL LLL LY Y &DSLWDO%XGJHWLQJ 3RVWLQJRI7UDQVDFWLRQV &DVKSD\PHQWVDQGUHFHLSWV 7UDQVDFWLRQ$XGLW6\VWHP 5HSRUW*HQHUDWLRQ D &RVWRI*RRGV6ROG E &DVK)ORZ6WDWHPHQW F 3D\PHQW6FKHGXOHV G $QDO\VLVRI)LQDQFLDO6WDWHPHQWV    

[Type the company address]

Page 163

Chapter 8

Limitations and Future Recommendations

[Type the company address]

Page 164

 &KDSWHU /LPLWDWLRQVDQG)XWXUH5HFRPPHQGDWLRQV 
/LPLWDWLRQVRI6WXG\
7KHIROORZLQJOLPLWDWLRQVZHUHLGHQWLILHGGXULQJVWXG\  5RXJKFXW0HWKRG7KHVXSSO\FKDLQPDQDJHPHQWV\VWHPSURSRVHGIRU3HSVL+DLGUL %HYHUDJHV ZDV LQ WKH ILUVW VWDJH KDV EHHQ GHVLJQHG XVLQJ WKH 5RXJKFXW PRGHO RQO\7KHVHPRGHOVW\SLFDOO\DVVXPHDVLQJOHVLWH LHLJQRUHWKHQHWZRUN DQGDGG VXSSO\FKDLQFKDUDFWHULVWLFVWRLWVXFKDVH[SOLFLWO\FRQVLGHULQJWKHVLWH
VUHODWLRQWR WKH RWKHUV LQ WKH QHWZRUN 7KHUHIRUH WKH VXSSO\ FKDLQ V\VWHP SURSRVHG IRU WKH FRPSDQ\ ZRXOG RQO\ FRQWDLQ VXSSOLHUV DQG GLVWULEXWRUV RI 3HSVL +DLGUL %HYHUDJHV ,VODPDEDGRQO\7KHRWKHUIUDQFKLVHRZQHUVRI3HSVLZLOOEHFRQQHFWHGWRWKHVXSSO\ FKDLQLQIXWXUHDVPHQWLRQHGLQDUWLFOH  5),'7HFKQRORJ\5),'WHFKQRORJ\KDVQRWEHHQSURSRVHGGXHWRWKHKXJHEXGJHW UHTXLUHG WR LPSOHPHQW WKLV WHFKQRORJ\ 0RUHRYHU WKH FRPSDQ\ GRHV QRW QHHG WKLV WHFKQRORJ\VLQFHILUVWO\WUDFNLQJRIWKHLWHPVEHLQJVROGLVDOUHDG\VXSSRUWHGE\WKH 6&0IHDWXUHVDQGVHFRQGO\WKHGLVWULEXWLRQDUHDLVOLPLWHGWRXUEDQDQGUXUDODUHDV RI5DZDOSLQGLDQG,VODPDEDGGLVWULFWRQO\  6XSSOLHU&RQQHFWLYLW\WKHQXPEHURIVXSSOLHUVFRQQHFWLQJWRWKHSURSRVHGV\VWHPLV H[SHFWHGWREHPRUHRUOHVV)RUWKLVSXUSRVHWKHFRPSDQ\LVH[SHFWLQJWR FRQQHFW RQO\ WKRVH VXSSOLHUV ZKR VXSSO\ PDMRU LWHPV OLNH FRQFHQWUDWH FDQV VXJDU DQGSODVWLFVVXSSOLHUV

&XVWRPL]DWLRQYV5HHQJLQHHULQJ
0RVW RI WKH PRGXOHV SURSRVHG LQ WKH VXSSO\ FKDLQ V\VWHP DUH UHHQJLQHHUHG WKDW LV WKH\ QHHG PDMRU FKDQJHV LQ WKH FRUH EXVLQHVV SURFHVVHV 7KH PRGXOHV ZKLFK QHHGHG VRPH FXVWRPL]DWLRQLQFOXGHWKHIROORZLQJ y y y y )RUHFDVWLQJ 6DOHV 'LVWULEXWRUDQGPDQXIDFWXUHULQYHQWRU\ 3URGXFWLRQVFKHGXOLQJDQGFRQWURO

[Type the company address]

Page 165

)URPWKHDERYHPRGXOHVVDOHVPRGXOHLVWKHPRGXOHWKDWQHHGVPD[LPXPFXVWRPL]DWLRQ 7KH SD\PHQW PRGHV DUH SURSRVHG WR EH FKDQJHG DOWKRXJK WKH SD\PHQW PHWKRG ZRXOG UHPDLQ WKH VDPH WKDW LV DGYDQFHG SD\PHQW 7KH UHTXLUHPHQWV IRU GLVWULEXWRU DQG PDQXIDFWXUHULQYHQWRU\PDQDJHPHQWV\VWHPUHPDLQWKDWVDPHZLWKVRPHDGGLWLRQLQILHOGV WRVXSSRUWGHFLVLRQPDNLQJSURFHVV

)XWXUH5HFRPPHQGDWLRQV
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

&RQFOXVLRQ
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

[Type the company address]

Page 166

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

[Type the company address]

Page 167

5HIHUHQFHV
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

 $%DQNRI$PHULFD:KLWH3DSHU  )RFXVRQ(IIHFWLYH,QWHUQDWLRQDO6XSSO\&KDLQ 0DQDJHPHQW  -RKQVRQ0(3\NH')  6XSSO\&KDLQ0DQDJHPHQW+DQRYHU  6LHPV7)  6XSSO\&KDLQ0DQDJHPHQW 7KH6FLHQFHRI%HWWHU)DVWHU &KHDSHU>RQOLQH@$YDLODEOHDW KWWSZZZGDOODVIHGRUJUHVHDUFKSDSHUVZSSGI  &KRRPULW1/RFDWLRQ'HFLVLRQLQ'LVWULEXWLRQ&HQWHUV  +DUULVRQ73$Q,QWURGXFWLRQWR6XSSO\&KDLQ0DQDJHPHQW  KWWSZZZHQWHJUHDWFRPHJBLQGXVWU\VROXWLRQVBEHYHUDJHB6&0KWP  http://www.i2.com/solutions/tmm/features_and_benefits.cfm  'HPDQG)RUHFDVWLQJ http://www.cio.com/article/30381/Supply_ hain_Management_ uru_Hau_Lee_on_Dema nd_Forecasting
[Type the company address] Page 168

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

[Type the company address]

Page 169

You might also like