Implementation of Backward Integration of Supply Chain Management in Papad Industry: A Case Study

  • Deepak Sharma, Alok Khatri, Y. B. Mathur

Abstract

Supply chain management is the integration of activities takes place among a network of facilities that procure raw materials, transform them into intermediate goods and then final products and deliver it to customers through a distribution system. Within each organization, such as a manufacturer, the supply chain includes all functions involved in receiving and filling a customer request. Purchasing, Operation, Distribution and Integration are constituents of supply chain management. Purchasing is related to relationship between buyer and supplier. Operation is related to type of manufacturing process adopted by industry in order to transform raw material into finished goods. Distribution is related with transportation of products from one place to other place. Integration is related to various forms of supply chain integration such as Vertical Integration, Horizontal Integration, Forward Integration and Backward Integration etc. Hence Purchasing, Operation, Distribution and Integration can be treated as functions of supply chain management. The idea of contract farming can be regarded as backward integration of supply chain management which improves the supply chain approach of raw material of agribusiness firm. Contract farming is correlated to agricultural production being carried out on the basis of an agreement between the agribusiness firms and farm producers. Thus Contract farming is a concept of Purchasing used in supply chain management for agribusiness firm. In Present Paper the concept of contract farming is carried out in Papad manufacturing industry in order to enhance the supply chain strategy of raw material which reduces the cost of uncovered moong pulses used in Papad. Finally the cost of uncovered moong pulses is reduced from Rs. 4680000 to Rs. 4373423 and profit of the industry will be 6.5% for uncovered moong pulses.

Published
2019-12-21
Section
Articles