Classification of BPS Industry in Supply Chain ManagementM Unit I 2024.pptx

Classification of BPS Industry

1. SUPPLY CHAIN MANAGEMNT Dr.j.Deepak kumar Assistant professor – department of b.com-bps Sri Ramakrishna colleg of arts &science UNIT I

2. Dr.J.Deepak kumar What is an Organization? Organization is a set or a group of persons who join for a cause or with a motto to achieve collective goals, with controlled performance, which has a boundary separating it from its environment. An organization can be Classified into “Profit Oriented” or “Non-Profit Oriented” which include activities like Product Selling, Rendering Service or social activities etc., given below are few examples: Profit Oriented • FMCG (Fast moving consumer goods) company producing Soaps and Detergents (E.g., Hindustan Unilever Limited) • An International Accounting Firm (PWC - Price Waterhouse Coopers LLP) • Ramesh & Suresh (A Partnership Firm) Non-Profit Oriented • Trade Union • Local Authority (Panchayat Union or Municipality) • University Even though the above entities are classified as non-profit organization, they are expected to ensure to look after their revenues to fulfill their expected commitments.

3. Dr.J.Deepak kumar There are three main types of business organization: • Sole traders • Partnerships • Limited companies Public and Private Companies: There are two classes of limited company: Private company: These have the word ‘limited’ at the end of their name. being private, they cannot invite members of the public to invest in their capital (ownership) Public companies: These are much fewer in number than private companies, but are generally much larger in size. They have the words ‘public limited company’- shortened to PLC or plc. at the end of their name. Public limited companies can invite members of the general public to invest in their equity, and the ‘shares’ of these companies may be traded in The Stock Exchange.

4. Dr.J.Deepak kumar Why Outsourcing? The main reason is to save costs . Typically, huge organizations operating in advanced countries outsource some of their non-critical processes to third party service providers in developing countries like India to take advantage of the lower manpower costs. However, there are many other advantages too. Some of these are: Knowledge and expertise which a specialized BPS company has acquired over a period becomes available. Availability of efficient and professional services. • Ready availability of a large pool of talented workforce • Outsourcing proves to be economically more sensible as it reduces the client accounting cost by at-least 50 to 80% • The organization will be able to utilize expertise and value-add services of third party in undertaking work • The outsourcing business organization will not be concerned for people leaving key accounting position The management becomes free from daily routine work and hassles and can concentrate on core business activities. Freedom from inevitable business issues like handling a large workforce, administration, employee attrition, etc. as these become the problem of the service provider.

5. Dr.J.Deepak kumar What is BPO (Business Process Outsourcing)? Organizations reinvent their Business Process Outsourcing model into Business Process Services model in the recent years to build customized intelligent workflows and transform employees, improve the customer satisfaction. Business Process Services shortly called as BPS, will provide services to an entity who operates from the same or a different Country. BPS Team will own the responsibility of providing services for various business functions of the entity with agreed conditions for the deliverables. Business Process Services are broadly classified as: ✓ Offshore Outsourcing – Services are awarded to a BPS entity operating in another country ✓ Near shore Outsourcing – Services are awarded to a BPS entity operating in neighbouring countries ✓ ITES (Information Technology Enabled Services), ✓ KPO (Knowledge Process Outsourcing) ✓ LPO (Legal Process Outsourcing)

6. Dr.J.Deepak kumar Why BPS? Most of the organizations look out for changing the operational cycle by implementing various process improvements. If a company want to concentrate on its core business and free up resources to focus on Relationship-based activities rather than processing regular transactions, Then they can think of alternative is Business Process Services either directly (Captive) or in-directly (Non-Captive) Transactions such as servicing of all Business units, including new business services both for variable and fixed business lines. Business Process Service Unit can be structured to the designated operations to a remote location with minimal disruption . This changeover will result in considerable operational cost savings for the company as a whole as well as a significant increase in Service and consequently better customer satisfaction.

7. Dr.J.Deepak kumar Major Areas of BPS Sector: • Information Technology Enabled Services (ITES) • E-logistics • Management of facility & operations • Legal Services • Horizontal Services. Finance & Accounting Human Resources Collections Customer Interaction Management Supply Chain Management Market Research

8. Dr.J.Deepak kumar ITES: will include services like Customer Service, Web content development, Back office Management, Network Consultancy, Application Development and Maintenance, Testing Services & System Integration, Consulting including KPO (Knowledge Process Services. According to NASSCOM ( N ational A ssociation of S oftware and S ervice COM panies ) “The coming of a new decade heralds a strategic shift for IT services organizations, from a ‘one factory, one customer’ model to a ‘one factory, all customers’ model. Central to this strategy is the growing customer acceptance of Cloud-based solutions which offer best in class services at reduced capital expenditure levels.” Facility Management: According to IFMA (The International Facilities Management), Facility Management is defined as “Management of a vital Asset, the organization’s facilities.” Barret and Baldry define it as “An integrated approach to operating, maintaining, improving and adapting the buildings and infrastructure of an organization in order to create an environment that strongly supports the primary objectives of the organization.”

9. Dr.J.Deepak kumar E-Logistics: Logistics a service industry which provides support to movement of stocks at both Input and Output stages and plays major role in bringing in inventory at the right, thus supports maintaining inventory at desired level. It also plays an important role in converting the last-minute sale. In short, the customer’s Supply chain competitiveness will be structurally strengthened in the areas of costs, visibility, reliability, flexibility and sustainability through technological support. This will include EDI (Electronic Data Interchange), RFID (Radio Frequency Identification), GPS (Global Positioning Systems), Shipping and Package Tracking Systems etc., These IT dependents support is provided 24 X 7. E-Logistics provides various types of services including : Designing of Supply Chain, Finalizing Transportation (RFQ - Request for Quotation and Rate Management), Transport Planning, Placement and Optimization, Loading (Including Barcoding and scanning), Freight Payment Services etc.,

10. Dr.J.Deepak kumar Legal Services: Legal services include many a services and to name a few: Providing Legal advice, Provide various judgment, Legal Opinion, filing, pleading, and defending lawsuits and back office services. Vertical or Industry Domain means “What they (Clients) do as Business”. Given below are the domains handled by BPS: • Banking and Financial Services • Insurance • Pharmaceutical • Manufacturing • Media and Information Services • Retail and Consumer Packaged Goods • Telecom • Travel& Hospitality • Environment Resource Utilities (ERU) Horizontal Services means “BPS services which cut across all Verticals (Businesses). Some of the horizontal services handled by BPS are: • Finance & Accounting • Human Resources • Collections • Customer Interaction Management • Supply Chain Management • Market Research

11. Dr.J.Deepak kumar Classification of BPS: BPS is of two types. i.e., Captive and Third-Party BPS. Captive: In a captive BPS, the selected processes (F&A, HR, etc.) are handled by a division of the company or the company establishes its own operation, which has been set-up in same or another country to take advantage of low manpower, Infrastructure costs etc., For Example, Dell computers has opened its own call centers in India to support its Customers and Vendors. Third Party: On the other hand, in the case of a third-party BPS, the processes are outsourced to a specialized BPS service provider. Again, this can be onshore or offshore. In fact, this is the real outsourcing and is more common. For Example, Insurance Company in US may outsource some of its activities like preparation of their policies, collecting the premiums etc., to a BPS company operating from India. Based on the services provided, BPS can be further classified into: • Voiced Based Services • Non-Voice based or Data Services • Blended Services

12. Dr.J.Deepak kumar Types of BPS • Transaction Processing • Data Services • Voice Services • Blend Services • Comprehensive

13. Dr.J.Deepak kumar Types of BPS This newest form of BPS needs more changes operationally and functionally at Client/Customer side which might be a challenge to start these types of service. Blend Services means a combination of both Data Services and Voice Services. Transaction Processing means a single process (e.g. Invoice Processing) at off-sites/Remote site processing as per The Contract/agreement for a certain period by appointing third-party service provides or even with their own Employee. Fees will be paid for the transactions processed only. Data Services means receiving the Input data from a client and converting into output data by performing a process which may simple or complex at off-sites/Remote site processing as per the Contract. Voice Services means a process of solving the queries over the phone from the requestor or contacting the potential customers for receiving the Input data from a client and converting into output data by performing a process which may simple or complex at off-sites/Remote site processing as per the Contract. Comprehensive providers handle all type of transactional and administrative processes of an any function like Finance & Accounts, HR, SCM, CRM etc. For any Geography or Global Clients with an aim to increase process efficiency and cost optimization.

14. Dr.J.Deepak kumar Future and Challenges • With increased globalization and business climatic, the focus on BPS will keep increasing. • Focus on high end processes in the value chain • Innovative business models like outcome-based commercials • Transformational improvement from early stage of Business Services • Sourcing and retaining of right skilled resources • Developing Business culture mind set against service mind set With organizations setting up global operation, their purchasing departments explore innovative and cost-effective Ways of managing expenditure, optimizing processes and leveraging supplier relationships. The key activities of a supply chain are: • Customer Relationship Management. • Customer Service Management. • Demand Management. • Order Fulfilment. • Manufacturing Flow Management. • Procurement. • Product Development and Commercialization. • Returns Management (if product is defective).

15. Dr.J.Deepak kumar Supply chain management involves 5 main functions: line up flows of task Incorporating functions, synchronizing processes, designing complex systems, handling resources. Supply Chain Management is how we co-ordinate and combine the flow of material and information to ensure customer satisfaction at a minimal cost. This flow involves key stakeholders in the Supply Chain process – namely, the Supplier, Manufacturer, Wholesaler, Retailer and the End Customer.

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17. Dr.J.Deepak kumar The characteristics of a supply chain include : Balance : a supply chain is a succession of coordinated activities which together acquire certain complexity. Efficiency : reducing costs and executing the phases appropriately at the same time is a characteristic of a well-functioning supply chain. Coordination : suppliers, transport, manufacturers, customers, technology… make up the supply chain. Components : producers, vendors, warehouses, transportation companies, distribution centers, and retailers. Functions : product development, marketing, operations, distribution, finance, and customer service

18. Dr.J.Deepak kumar Mainly Supply chain functions are categorized into three portions. Supply Chain Management : Sourcing and procurement, coordination, supply & demand management are all done as part of Supply chain management Logistics Management : Inventory management, inbound transportation, Supply and demand planning, Outsourcing and Fleet management etc. are done in logistics management Distribution : Warehousing, Order administration, outbound transportation, data processing and allcommunications happens during distribution phase.

19. Dr.J.Deepak kumar Strategic Sourcing and Category Management Operational Procurement and Procurement Helpdesk Master Data Management Vendor Management Contract Lifecycle Management is (CLM) Supply Chain Planning & Scheduling Inventory Management Logistics Fleet Management & Warehouse Management Sales Order Management Warranty Management, Spares Management & Return Material Authorization Process View of SCM

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27. Dr.J.Deepak kumar Inventory Management- the management of inventory and stock. Includes aspects such as controlling and overseeing ordering inventory, storage of inventory, and controlling the amount of product for sale. JIT (Just in Time) Finish Goods Inventory, Raw Material Inventory, MRO (Maintenance Repairs and Operations) Inventory and Capital Goods Inventory. Logistics Fleet Management an administrative approach that allows companies to organize and coordinate work vehicles to improve efficiency, reduce costs, and provide compliance with government regulations. Types of Fleet in Goods Transportation: road transportation are vans, trucks, road rails, liquid tankers, dry bulk carriers, shipping container trailers etc. Air transportation aircrafts of various sizes and types are used. Certain heavy-duty aircrafts are used for military goods transportation. water transportation , ships of various sizes and types are used to transport containers, including liquid cargo (e.g. oil & petroleum products), dry cargo (e.g. coal, iron ore) and dry chemicals (e.g. crude Sulphur).

28. Dr.J.Deepak kumar Warehouse Management a performance of administrative and physical functions associated with storage of goodsand materials. These functions include receipt, identification, inspection, verification, putting away, retrieval for issue, etc. Types of warehouse: Privately Owned, Publicly Owned and Customs Bonded warehouses for storage of goods without payment of duty. Functions & Benefits of a Warehouse: Storage of goods to ensure price stabilization when their supply is more than demand. It also controls risk of priceincrease and risk bearing by storing of goods in a warehouse which is designed to protect the goods from various types of risk like, water, storm, fire etc. For e.g. Grading and packing for industries like FMCG, Pharms etc.

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30. Dr.J.Deepak kumar Key SOM Workflow/Activities ✓ Inquiry to Order (ITO): generating leads and the quotation process to get a customer PO. ✓ Order Entry : booking of all types of orders like a standard order, professional services, service renewals & adjustment entries. ✓ Plog Handling : working with customers on orders with incomplete/missing information coordinating for booking. ✓ Back Ordering : placing an order to approved vendors/internal manufacturing units, based on the PO. ✓ Order Fulfilment Specialist (OFS): Order fulfillment activities based on the order placed to the CRD (Customer Required Date). ✓ Account Level Management : managing issues/queries raised by customers & ensuring appropriate responses are provided. ✓ Electronic Data Interchange (EDI): Working on EDI failures/errors that show up in the report & taking necessary steps to fix system errors. ✓ Return Material Authorization (RMA): involves an adjustment entry in the system for credit returns from customers. ✓ Serial Number/ Pricing / Holds Reports ✓ Return to Vendor (RTV) Activities: retriggering & resending of undelivered licenses.

31. Dr.J.Deepak kumar Warranty Management, Spares Management & Return Material Authorization Warranty Management - traditionally viewed by companies as the cost of doing business. The costs amounted to 4% to 5% of the total sales revenue of the company per annum. Warranty is a bond (assurance document) issued by the manufacturer of a product It can be called as a performance guarantee of the goods or services provided by the manufacturer. In case of any technical issues due to the non performance of any spare or defect in any part of the product, will be agreed to be considered by the supplier/manufacturer with a replacement of the particular part or repair of the product. Warranty Management and Claims Processing System This is run by e-commerce enabled system application which consists of: 1. Service Warranty Database and Tracker - database information uploaded from the Sales module 2. Service request registration and authorization, 3. Service job ticket issue, closure & Reporting. 3. Parts procurement request and parts issue authorization 4. Management of Parts Inventory, Purchase Orders, Repairs and Vendors

32. Dr.J.Deepak kumar Warranty Management, Spares Management & Return Material Authorization Warranty Management - traditionally viewed by companies as the cost of doing business. The costs amounted to 4% to 5% of the total sales revenue of the company per annum. Warranty is a bond (assurance document) issued by the manufacturer of a product It can be called as a performance guarantee of the goods or services provided by the manufacturer. In case of any technical issues due to the non performance of any spare or defect in any part of the product, will be agreed to be considered by the supplier/manufacturer with a replacement of the particular part or repair of the product. Warranty Management and Claims Processing System This is run by e-commerce enabled system application which consists of: 1. Service Warranty Database and Tracker - database information uploaded from the Sales module 2. Service request registration and authorization, 3. Service job ticket issue, closure & Reporting. 3. Parts procurement request and parts issue authorization 4. Management of Parts Inventory, Purchase Orders, Repairs and Vendors

33. Dr.J.Deepak kumar Robotic Process Automation Robotic process automation is a form of business process automation technology that helps to reimagine the business supply chain process thereby reducing errors and anomalies and minimizing inefficiency. Cognitive Intelligence Cognitive intelligence refers to software programmed to enhance human intellectual purposes. These technologies are being educated and are progressing day by day through machine learning. Continued human feedback is also captured and modified throughout all interactions. Analytics Analytics are mostly used in areas which record a lot of data or information. Supply Chain Analytics aims to improve the value chain through operational efficiency and effectiveness by enabling data-driven decisions at strategic, operational and tactical levels. Mobility Mobility is an approach to work with mobile devices, such as smartphones and tablets in which employees can do their jobs from anywhere. Few biggest benefits to incorporating Mobility in supply chain are Transportability, dealing with problems in real time, Accuracy monitoring and ensuring Health & Safety. Technology and its Intervention in SCM Offerings

34. Dr.J.Deepak kumar Technology and its Intervention in SCM Offerings Chat BOT A Chabot is a computer program that simulates human conversation through voice commands or text chat or both integrated through any major messaging applications. In Supply chain, these bots can take up all high-volume tasks right from placing orders to processing payments including tracking orders, These Chat bots are instrumental in transforming the user experience through data retrieval which can be used for analysis. Deep Machine Learning Based on Patterns, ML typically uses data or observations to train a computer model on the data and are used to improve how the technology functions, this can be predicted or actual data. Supply chain managers can develop inventory and find most appropriate suppliers to keep their business running competently. Artificial Intelligence Replication of human intelligence in machines that are automated to consider like humans and replicate their activities. The term may also be applied to any machine that exhibits behaviors related with a human mind such as knowledge and resolving problems. AI also helps to analyze its performance and come up with new aspects which impacts the same part of supply chain IOT The Internet of things is a system of interconnected computing devices, mechanical and digital machines provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction As an enabler for supply chain visibility, it allows the exchange of critical realtime information with the stakeholders, mitigating disruption