8.30        ndian    onom
              likely when suppliers serve many                   (iv) In the case of agricultural products, the
              manufacturers.                                           situation is even worse. Agrimarkets
        (iii) Manufacturers in a supply chain make                     of regulations by the APMCs did not
              ‘make-or-buy’ decisions that affect the                  allowed India to establish a common and
              chain. They do this based on cost and                    single market. This has hampered not
              scheduling       improvements     available.             only the growth and business prospects,
              Manufacturers may also begin using                       but it has also crippled the agricultural
              distributors to capture additional                       sector in a very serious way. It has taken
              markets or decide to concentrate on                      the heaviest toll on the agriculture sector
              larger customers whom they can serve                     which still remains a non-remunerative
              directly. All of these types of potential                profession.
              improvements depend on understanding                (v) As India is to compete in the global
              the motivations and incentives of the                    market, it immediately needs to
              companies in a supply chain.                             strengthen it upstream and downstream
          Industries, to have a smooth and uninterrupted               process. For this, India is advised to pick
     functioning, depend heavily on the upstream and                   the best practices from around the world
     downstream requirements. In the case of India,                    and integrate itself with the developed
     we find several bottlenecks in both the processes:                world with the better ways and the state-
          (i) In the case of the private sector, the                   of-the-art tools and means.
              downstream process seems better. But it
              is not so. Upto the level of ‘wholesale’ it is    suPPly cHAIn mAnAGement
              somewhat organised, but the retail trading     A supply chain is a network of facilities and
              is quite fragmented. India’s retail business   distribution options that performs the functions
              remains least organised. Organised retail      of procurement of materials, transformation of
              is yet to evolve in the country, thus,         these materials into intermediate and finished
              the levels of uncertainities, potential of     products, and the distribution of these finished
              market access, monitoring and regulation       products to customers. Supply chains exist in
              of retail market are too weak.                 both services, and manufacturing organisations,
         (ii) Upstream processes are also not up-to-         although the complexity of the chain may vary
              the-mark. From the stage where the             greatly from industry to industry and firm to firm.
              wholesale comes into picture, things look            Traditionally,     marketing,     distribution,
              better. But outsourcing the raw from           planning, manufacturing, and the purchasing
              the local producers is an uphill task in       organisations along the supply chain operated
              the country. Due to this the upstream          independently. These organisations have their
              segment of the economy has remained            own objectives and these are often conflicting.
              too weak and fragmented.                       Marketing’s objective of high customer service
        (iii) The industrial and manufactured sectors        and maximum sales conflict with manufacturing
              have been managing their upstream and          and distribution goals. Many manufacturing
              downstream requirements, but their             operations are designed to maximise output and
              heavy dependence on the unorganised            lower costs with little consideration for the impact
              sector is a challenging issue in front of      on inventory levels and distribution capabilities.
              India.                                         Purchasing contracts are often negotiated with