We have tried covering an holistic list of questions with some possible explanations for you to understand. The below content should be good enough to give you an idea about an interview based on SCM and from a fresher's point of view.
There are two aspects to an interview : Firstly what do you make out of Supply Chain Management (SCM) and secondly deep diving into SCM.
First we tried to cover how you can justify choosing SCM as a career option and then we have tried explaining the SCM in some details. Any particular topic that you would like to understand OR want to part of mock interviews, please contact us.
Question: What is SCM?
Explanation: Supply Chain Management (SCM) refers to the entire process of managing the flow of goods, services, and information from the starting point (where raw materials are sourced)
to the endpoint (where the final product reaches the customer). It ensures that the right product is delivered to the right place at the right time in the most efficient way possible.
Basic daily life examples to understand SCM in a simple way:
Ordering a Product Online: Ordering a smartphone from an e-commerce website and getting it delivered to our address would have involved an entire SCM operation - sourcing of phones from different brands sellers, stocking them at warehouse, transportation and logistics playing a part to deliver the phone
Going to a Restaurant and Ordering Food: Having a pizza at a restaurant would involve the pizza shop to plan the raw materials sufficiently and have the staff ready to freshly bake the pizza based on custom orders
Question: Why is SCM so important for any business?
Explanation: Supply Chain Management (SCM) is crucial for businesses so that they can perform their work efficiently and smoothly and thus satisfy the customers.
Example: A famous burger outlet would need to stock the burgers sufficiently so as to not run out of them, now you need a proper planning as how many burgers for a weekday and how many for a weekend or for a holiday and retail outlet will have to plan for the latest trends and the right quantity and sizes and also see to no over stock and thus incur lot of costs.
Question: Can any business do without SCM being involved?
Explanation: At first glance, it may seem that small businesses like a roadside food stall or a neighborhood grocery store operate without a formal Supply Chain Management (SCM) system.
They don't have large warehouses, sophisticated ERP tools, or complex logistics networks, yet they successfully meet their customers' needs.
However, if we look closer, we’ll see that SCM exists in some form even in these small businesses.
A small roadside food stall selling tea and snacks doesn't seem to rely on SCM. But think about it - every morning, the owner ensures they have the right amount of tea leaves, milk, sugar, and snacks. They estimate how much will be needed for the day and restock accordingly. They are unknowingly managing inventory, planning demand, and ensuring a smooth flow of operations, which are all components of SCM.
Your neighborhood grocery store might not use any fancy tools, but the owner keeps track of which items sell faster, like rice, flour, or biscuits, and makes sure they’re restocked regularly.
This is basic SCM in action—managing inventory, procurement, and replenishment.
SCM is a fundamental concept that applies to any process involving the movement of goods or services from one point to another. The difference is that advanced SCM tools, such as ERP systems, make the process more efficient, scalable, and predictable.
SCM is definitely the backbone to any thriving business.
Question: Why you want to start your career with SCM? Why not AI/ML, Data Analyst? What makes you think that SCM can be a great option for your career launch?
Explanation: Yes, I am definitely exploring opportunities in Data Analytics as well, but as a fresher, I believe it’s important to keep all options open.
I’m also attracted to SCM as a career option because it offers ample opportunities to learn and grow. I think combining knowledge of SCM with skills in Data Analytics could be a strong combination. SCM is evolving rapidly with technologies like automation and AI, and having a foundation in both areas can help me contribute more effectively to solving real-world business challenges.
I’m open to exploring any opportunities that can help me build a strong career foundation and allow me to contribute meaningfully to whichever field I choose.
Question: As a fresher how did you come to know about SCM and how you got intrigued by this as a career option?
Explanation: (If you are a graduate and likely no SCM was there as a subject) Post my graduation, while looking out for jobs in portals and in LinkedIn as well, came across a lot about SCM as well. That is where I started exploring about it more and gradually started getting more interested.
(If you are a MBA, most likely would have had SCM as a subject/course) During my MBA, I had the opportunity to take courses on Supply Chain Management, and that’s when I truly understood its significance. Learning about concepts like demand planning, logistics, and procurement made me realize how critical SCM is in ensuring a business operates efficiently.
Question: What are the different aspects/areas/applications/pillars/modules of SCM? Can you relate with some examples to explain them?
Explanation:
Procurement - This involves sourcing raw materials, goods, or services needed for production.
Inventory Management - Managing the stock levels of raw materials, work-in-progress, and finished goods.
Order Management - Handling customer orders and ensuring accurate and timely fulfillment.
Demand Planning - Predicting customer demand to ensure the right quantity of products is available.
Production Planning (Supply Planning) - Scheduling and controlling the production process to meet demand efficiently.
Manufacturing - ensuring the production as per the capacity and the planned schedule
Warehousing - Storing goods safely before they are distributed to the next stage.
Transportation and Logistics - Ensuring the movement of goods from one location to another.
Scenario#1 - Automobile Industry – Manufacturing and Delivering a Car
Procurement: Sourcing materials like steel, tires, and electronic chips for car production.
Inventory Management: Keeping stock of critical parts like engines and transmissions to avoid production delays.
Order Management: Processing dealership orders for specific car models and custom features.
Demand Planning: Forecasting demand for electric SUVs based on market trends and customer preferences.
Production Planning (Supply Planning): Scheduling assembly lines to optimize the production of hybrid and conventional cars.
Manufacturing: Assembling vehicles as per planned schedules, ensuring quality checks at each stage.
Warehousing: Storing finished cars and spare parts in regional distribution centers before delivery.
Transportation and Logistics: Shipping cars from factories to dealerships using car carriers and rail freight.
Scenario#2 - Healthcare Industry – Producing and Distributing Medicines
Procurement: Buying raw materials like active pharmaceutical ingredients (APIs) and packaging supplies.
Inventory Management: Managing stocks of medicines and ensuring expiry dates are tracked to minimize waste.
Order Management: Processing orders from hospitals for emergency stock replenishments.
Demand Planning: Forecasting demand for seasonal medicines like flu vaccines.
Production Planning (Supply Planning): Planning production batches to align with market demand for specific medicines.
Manufacturing: Producing medicines in compliance with regulatory standards and ensuring high-quality output.
Warehousing: Storing temperature-sensitive drugs in cold storage facilities before distribution.
Transportation and Logistics: Using refrigerated vehicles to transport medicines to hospitals and pharmacies.
Question: What do you know about new trends in SCM?
Explanation: Some of them listed below:
# Sustainability or Green Supply Chain: Incorporating eco-friendly practices to minimize environmental impact.
Example: A cosmetics brand uses recyclable packaging and optimizes transportation routes to reduce its carbon footprint.
# Resilient Supply Chain: Building supply chains that can quickly adapt to disruptions like pandemics or natural disasters.
Example: A global electronics company diversifies its supplier base across regions to avoid dependency on a single source.
# Robust Supply Chain: Focusing on consistent and stable operations, ensuring reliability and durability.
Example: An auto manufacturer invests in predictive maintenance technologies to ensure machinery uptime during critical production cycles.
# AI and Machine Learning in SCM: Leveraging advanced analytics and AI to improve demand forecasting, inventory management, and operational efficiency.
Example: A retail chain uses AI algorithms to predict seasonal product demand and adjust stock levels accordingly.
# Blockchain in SCM: Ensuring transparency and traceability across the supply chain, enhancing trust and reducing fraud.
Example: A food retailer uses blockchain to track the origin of organic produce from farm to table.
# IoT and Connected Devices: Using Internet of Things (IoT) devices to monitor and optimize real-time operations.
Example: A cold storage logistics company uses IoT sensors to track and maintain the temperature of perishable goods during transit.
# Omnichannel Supply Chain: Integrating multiple sales and distribution channels to provide a seamless customer experience.
Example: An apparel brand aligns its physical stores, online platform, and third-party marketplaces for smooth order fulfillment.
Question: Some of the basic SCM terminologies that are good to know?
Explanation:
Lead Time: The time taken between placing an order and receiving it.
Example: Ordering a part for a machine and waiting five days for delivery. So, the lead time is five days here.
Safety Stock: Extra inventory kept to prevent stockouts in case of unexpected demand.
Example: A pharmaceutical company storing an additional supply of medicines during flu season.
3PL (Third-Party Logistics): Outsourcing logistics services like transportation and warehousing to external providers.
Example: A company using FedEx for shipping its products.
4PL (Fourth-Party Logistics): Managing and integrating the entire supply chain process, often through a single logistics partner.
Example: A consulting firm overseeing procurement, warehousing, and distribution for a client.
Kanban: A scheduling system for lean manufacturing and just-in-time (JIT) production.
Example: Using visual cards to signal when more components are needed on a production line.
Routing: Determining the best path or sequence for transportation or production processes.
Example: Optimizing delivery routes for a fleet of trucks to reduce fuel costs.
Economic Order Quantity (EOQ): The ideal order quantity that minimizes total inventory costs.
Example: A bakery calculating the optimal amount of flour to order each month.
Unit of Measure (UoM): The standard measurement used for tracking inventory quantities.
Example: Bottles, kilograms, or liters for various products.
Yield: The amount of usable product obtained from a production process.
Example: A factory producing 95% defect-free widgets out of 100 units manufactured.
Bill of Materials (BOM): A detailed list of raw materials, components, and instructions required to produce a product.
Example: The BOM for a car includes steel, glass, tires, and the assembly instructions.
SKU (Stock Keeping Unit): A unique identifier for a product to track inventory.
Example: A clothing retailer assigns an SKU to each shirt style, size, and color.
Lot Size: The quantity of an item ordered or produced in a single batch.
Example: A bakery producing 500 loaves of bread in one batch.
Stockout: When inventory is unavailable to meet customer demand.
Example: A retail store running out of a trending shoe model during a sale.
Total Cost of Ownership (TCO): The overall cost of acquiring and using a product or service over its lifespan.
Example: Buying a machine and factoring in maintenance, repair, and operational costs.
Vendor-Managed Inventory (VMI): Allowing suppliers to manage inventory levels on behalf of the buyer.
Example: A beverage company allowing its vendor to restock drinks at retail outlets as needed.
Cycle Counting: Regularly counting a portion of inventory to ensure accuracy.
Example: A store counting one section of its stock every week to avoid full inventory checks.
Distribution Center (DC): A facility used to store and distribute goods to various locations.
Example: A large e-commerce company using a DC to store and ship products to customers in nearby regions.
Kaizen: A Japanese term meaning "continuous improvement" in processes.
Example: A factory implementing small changes daily to reduce waste and improve productivity.
Material Requirements Planning (MRP): A system for planning production and raw material needs.
Example: A bakery using MRP to determine how much flour and sugar it needs based on upcoming orders.
Order Cycle Time: The time it takes to complete an order from placement to delivery.
Example: A customer placing an order online and receiving it within three days.
Collaborative Planning, Forecasting, and Replenishment (CPFR): A strategy where suppliers and retailers share information to improve supply chain efficiency.
Example: A supermarket sharing sales data with suppliers to avoid overstock or stockouts.
Rough-Cut Capacity Planning (RCCP): A process to verify if available capacity can meet production plans without diving into granular details.
Example: A furniture manufacturer checks if its production lines can handle an increase in sofa orders next month based on current resources.
Inventory Turns: A metric that shows how often inventory is sold and replaced over a specific period.
Example: A clothing store selling its entire inventory four times a year has an inventory turnover of 4.
Drop Shipping: A fulfillment model where a retailer passes customer orders directly to a supplier, who ships the product.
Example: An online store taking orders for electronics that are shipped directly from the manufacturer.
Bullwhip Effect: Small changes in demand at the customer level causing larger fluctuations upstream in the supply chain.
Example: A slight increase in demand for hand sanitizers leading to excessive raw material orders by manufacturers.
Fill Rate: The percentage of customer orders fulfilled from available stock.
Example: A retailer fulfilling 95 out of 100 orders immediately has a fill rate of 95%.
Capacity Utilization: The percentage of production capacity being used effectively.
Example: A factory operating at 80% capacity during peak seasons.
Dual Sourcing: Using two suppliers for the same material to reduce risk.
Example: A car manufacturer sourcing tires from two different companies.
Reorder Point (ROP): The inventory level at which new stock should be ordered.
Example: A retailer ordering new stock when the quantity of an item drops to 10 units.
Decoupling Point: The stage in the supply chain where push (forecast-driven) meets pull (demand-driven).
Example: A bakery pre-baking bread (push) but customizing sandwiches per order (pull).
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