2Nd Sem Preliminary Reviewer - Catering Management PDF

**CATERING MANAGEMENT** What is **CATERING?** Is a business of providing various food and beverage service based on pre-agreed arrangements at a specified site or site such as hotel, public house, or other location preferred by the customer or clients. **TYPES OF CATERING:** **ON-PREMISE**- A ca...

**CATERING MANAGEMENT** What is **CATERING?** Is a business of providing various food and beverage service based on pre-agreed arrangements at a specified site or site such as hotel, public house, or other location preferred by the customer or clients. **TYPES OF CATERING:** **ON-PREMISE**- A catering for any function -- banquet, reception, or event -- that is held on the physical premises of the establishment or facility that is organizing/sponsoring function. **OFF-PREMISE**---Catering takes place in a remote area or location, such as the client's home, park, gallery, or even parking, where staff, food, and décor are transported to the location. **COMMERCIAL-** Based on the concept of "pursuing profits" To gain profit by selling food and beverages as its primary or secondary activity. **NON-COMMERCIAL-** Aim not to earn profit, but instead provide welfare services at reasonable prices, such as hospitals, canteen, and industrial cafeterias. **CORPORATE CATERING-** Refers to the provision of food and drinks to business and corporate functions. The functions may range from onsite, small office gatherings to offsite, upscale dinners. The cost of a corporate catering event will also depend on the size and level of the function being hosted. **SOCIAL CATERING-** More intimate affairs and require greater attention to detail by the caterer. Due to their small nature, social event catering menus differ from party to party. That's because the clients' dietary needs, allergens, preferences and cultural beliefs have to be considered to make the event successful. HISTORY OF CATERING - Earliest account of major services being catered in the United States is a **1778** ball in **PHILADELPHIA** catered by **CAESAR CRANSHELL.** - Catering business began to form around **1820,** centering in **Philadelphia.** - The industry began to **professionalize** under the reigns of **ROBERT BOGLE** who is recognized as the '**ORIGINATOR OF CATERING.'** - By **1840,** a **second generation** of **Philadelphia black caterers formed**, who began to combine their **catering businesses with restaurants.** **COMMON CATERING SERVICES** 1. **MOBILE CATERING SERVICES-** Refers to catering that uses a mobile van in order to render services to specific locations. 2. **TAKE HOME ORDERS-** This type of catering service involves delivery of the food to the customer. 3. **DOOR TO DOOR CATERING SERVICES-** This type of catering service is that the caterer supplies outstanding combination of food according to the menu choice along with personal service delivered at your door for you and your guest to enjoy. 4. **SPECIAL EVENTS CATERING-** This type of catering includes all the services required for events. 5. **BUSINESS CATERING SERVICE-** Deals with offering of food menus for business meetings, training session etc. 6. **INDUSTRIAL CATERING SERVICES-** Generally, involves serving food to larger group of people such as airlines, schools, hospitals etc. **TYPES OF CATERING ESTABLISHMENT** 1. **RESTAURANT-** A restaurant is an establishment that serves the customers with prepared food and beverages to order, to be consumed in the premises. 2. **TRANSPORT CATERING-** The provision of food and beverage to passengers, before, during and after a journey. 3. **AIRLINE CATERING-** Catering to airline passengers on board the aircraft, as well as at restaurants situated at airport terminals is termed as airline catering. 4. **RAILWAY CATERING-** Catering to railway passengers both during the journey as well as during halts at different railway stations is called railway catering. 5. **SHIP CATERING-** Ship catering is catering to cargo crew and passenger. Ships have kitchens and restaurants on board. 6. **SURFACE CATERING-** Catering to passengers traveling by surface transport is called surface transport. 7. **OUTDOOR CATERING-** It includes the provision of food and drink away from home base and suppliers. The type of food and set up depends entirely on the price agreed upon. 8. **CLUB CATERING-** Refers to the provision of food and beverages to a restricted member clientele. **THE PRINCIPLES OF CATERING MANAGEMENT** **MANAGEMENT-** Is a process involving activities through which action is initiated and resources used for achievement of a present goal. **CATERING MANAGEMENT-** is a process or act of involving activities in business of providing foods and drinks to people through utilization of manpower in which there is profit in return. **PRINCIPLE OF MANAGEMENT** - Principles are formulated on the basis of past experiences of managers in related situations, through a process of recording mentally or in writing, the effects of decisions taken in the past. - Principles are not rigid fool proof rules to be applied for finding solutions to problems, but flexible, practical, consistent, and relevant guidelines for use in similar sets of situations. - Principles, therefore, provide a hypothesis for predicting future happening where they are used with the manager's own judgment of how and when to apply them. - According to Koontz, O'Donnel and Wiehrich, principles in management are descriptive or predictive, and not prescriptive. **PRINCIPLES FORM OF BASIC GUIDELINES TO MANAGING CATERING OPERATIONS:** 1. **DIVISION OF WORK -** The principle of division of work is based on the concept of specialization and since food production activities are each quiet distinct in the skills they require, jobs are generally divided according to the abilities of the staff. 2. **HIERARCHY-** The principle of hierarchy refers to the chain formed by staff placed at different levels in an organization and correspond to the various levels of management-line, middle and top management. 3. **AUTHORITY AND RESPONSIBILITY-** The principle of authority works in 2 ways; which One is exercised because of position in the organization and one which attributed to a person's intelligence and experience. 4. **ORDERLINESS-** This principle is most applicable to catering establishments which are constantly handling materials, heavy equipment and working with steam and other fuels. Oderliness helps to avoid cross-contamination, saves time looking for materials and equipment when required and ensure safety for all concerned. 5. **DISCIPLINE-** The principle of discipline covers factors such as punctuality, courtesy, adherence to rules and regulations, obedience that are essential for smooth functioning of establishments where group activities are involved and directed towards common goals. 6. **PUNCTUALITY-** This simply means being on time. Whether this refers to reaching for work, completing a task etc. It is the principle that encourages people at all levels to be more productive, alert and creative. 7. **COURTESY-** This is the quality of showing respect to others as well as you're living and work environment. 8. **ADHERENCE TO RULES AND REGULATIONS**- Obeying the rules laid down for work to produce harmony, safety and a stress-free work environment, by following instructions. Rules and regulations guide attitudes and enable success for individuals as well as the organization. 9. **LOYALTY AND DEVOTION-** This principle ensures an atmosphere at work which is bound to generate a unified attachment to the organization and to its interest and goals, through development of harmonious relations at work. 10. **UNITARY COMMAND-** Application of the principles of unitary command goes a long way. There should always be a single commander in each area. 11. **WORK STABILITY-** The principle of minimized labor turnover creates a sense of security and confidence in people, leading to better orientation at work. 12. **UNITARY DIRECTION-** This related to coordination of activities to achieve a single goal. There can be no command without direction. 13. **INITIATIVE**- If staff are allowed to suggest plans which can be followed even partly, it is highly motivating fir them. 14. **INDIVIDUAL GOALS SUBORDINATE-** This principle is important for the success of any establishment, because if every individual start working to achieve his own goals first and then those of the establishment, there is no doubt that the organization will have to close down. 15. **UNITY TO ESTABLISHMENT GOALS-** This principle emphasizes the spirit of group work, and helps to establish smooth communications between people. This can be achieved by fair and just management practices offering both reward and punishment. 16. **PAYMENT OF RENUMERATION-** All work must be paid for in order to motivate people to their best. 17. **CONTROL-** This principle suggest that limiting the area of control of a leader or supervisor to cover the work of only five or six people having related jobs, bring about greater efficiency. **6 FUNCTIONS OF MANAGEMENT** 1. **PLANNING** 2. **ORGANIZING** 3. **DIRECTING** 4. **COORDINATING** 5. **CONTROLLING AND EVALUATING** **PLANNING** is the process of setting objectives and determining the actions, resources, and timelines needed to achieve them. - It involves envisioning a desired future, identifying the steps required to reach that future, and organizing efforts efficiently to make it a reality - The planning process is generally initiated by an awareness of an opportunity or problem, which can be foreseen in the future. - Goal setting is fundamental to any achievement. **ALL PLANNING INVOLVES THREE MAIN STEPS:** 1. **Gathering information** for chalking out broad policies relating to building, standards, finances, staff needs, food service methods, type and number of customers that can be expected. In short, any information for making a workable scheme. 2. **Developing a blueprint of the structure,** arrangement of spaces and activity details that can be conveniently translated into action from the information collected. 3. **Setting goals or targets** to be achieved in a predetermined period of time. The goals must be related to a fairly accurate forecast of future events, since they cannot be based on absolute certainty. **PLANNING CATERING OPERATIONS THUS INVOLVES STATING OBJECTIVES CLEARLY BY:** - **Forecasting** the number of customers accurately. - **Judging customer expectations** through familiarity with their food habits, religious and cultural background and economic status - **Determining profit margin required** to cover all cost taking into account inflationary trends menu composition, taste of customers and so on. - **Establishing profit policy** (once cost are calculated) in the light of financial constraints like tax requirements, subsidies in the form of free meals to employees or subsidized overheads. - **Knowing staff skills** for production and service. **EVERY ESTABLISHMENT IRRESPECTIVE OF ITS SIZE REQUIRE FORMULATING PLANS OF ACTION FOR ITS PRESENT AND FUTURE SUCCESS. THOUGH SOME MANAGERS, MAY CONSIDER PLANNING BE A COSTLY EXERCISE REQUIRING LOT OF TIME, EFFORT AND MONEY, IT HAS CERTAIN DISTINCT ADVANTAGES. IT HELPS TO:** - **Minimize time-wasting activities** that may involve waiting for instructions or ingredients because of last minute purchasing, leading to an indefinite cycle of uncertainties of what is to be done next and so on. - **See future possibilities** making managers alert to changes intrends that may affect the activities of the department. - **Organize and integrate activities** in proper sequences, match jobs to skills and increase overall efficiency by seeing the inter-relationship of the various activities in the light of total objectives of the organization, and of individuals. - **Eliminate confusion** if the plan is communicated well to those involved in its implementation. Provide an important basis for control through budgeting of time, energy, space and money, while forming targets for achievement. - **Enable managers to direct** their subordinates at all levels effectively towards the goal. With every step forward in the right direction, job satisfaction & confidence develop. **ORGANIZING** The ability to established such a work flow by proper coordination of activities allotted to staff, according to their abilities is termed as organizing. **STEPS IN ORGANIZING:** - A number of steps are involved in organizing any activity. - Each activity is broken down into specific action units. - Each action unit is then allotted to a manageable group of people, and authority delegated to a group leader for task performance. - Staff are allocated each action unit and placed in positions according to their skills with levels of authortiy clearly defined. - Adequate resources are then allocated for each activity. - Work load is equally distributed to avoid stress areas and fatigue. **DIRECTING** - Is said to be a process in which the managers instruct, guide and oversee the performance if the workers to achieve predetermined goals. - Directing is said to be the heart of management process. - Directing initiates actions. Directing is providing guidance to workers. **The following are the important principles of directing:** 1. **Principle of Maximum Individual Contribution--**management should adapt that directing policy through which the employees get motivated and give their maximum individual contribution for the achievement of organization objective. 2. **Principle of Harmony of Objectives --** there must be full coordination between organization and individual objectives. 3. **Principle of Unity of Command --** a subordinate should get directions from one officer at a time. If the subordinate gets direction from more than one officer, the subordinate will be unable to prioritize work. 4. **Principle of Appropriateness of Direction Technique --** appropriate direction techniques should be used. 5. **Principle of Managerial Communication --** it should be monitored by the management that the subordinates get the same meaning for what has been said. 6. **Principles of Use of Informal Organization --** there must be a free flow of information between the senior and the subordinates. The success of direction depends upon effective exchange of information to a great extent. 7. **Principle of Leadership --** while giving direction to the subordinates a good leadership must be provided by the managers. 8. **Principle of Follow Through --** it must be monited by management as to what extent the policies frames and issued directions have been enforced. COORDINATING - Is the unification, integration, synchronization of the efforts of group members so as to provide unity of action in the pursuit of common goals. - According to Mooney and Reelay, "Coordination is orderly arrangement of group efforts to provide unity of action in the pursuit of common goals." - According to Charles Worth, "Coordination is the integration of several parts into an orderly hole to achieve the purpose of understanding." **COORDINATING** 1. **Coordination through planning** -- planning facilitates coordination by integrating the various plans through mutual discussion, exchange of ideas. 2. **Coordination through organizing** -- it considers coordination as the very essence of organizing. 3. **Coordination through staffing** -- a manager should bear in mind that the right number of personnel in various positions with right type of educations and skills are taken which will ensure right men on the right job. 4. **Coordination through directing --** the purpose of giving order, instructions & guidance to the subordinates is served only when there is a harmony between superiors and subordinates. 5. **Coordination through controlling --** managers ensures that there should be coordination between actual performance and standard performance to achieve organization goals. **CONTROLLING** Controlling is the process of **regulating organizational activities** so that actual performance conforms to expected organizational goals and standards. While interrelated with all of the other management functions, a special relationship exists between the planning function of management and controlling. Planning, essentially, is the deciding of goals and objectives and the means of reaching them. Controlling lets manager tell it the organization is on track for goal achievement, and it not, why not. A well-developed plan should provide benchmarks that can be used in the control process. Controls serve other important roles including helping managers cope with uncertainty, detecting irregularities, identifying opportunities, handling complex situations, and decentralizing authority. Like planning, controlling responsibilities differ by managerial level with control responsibilities paralleling planning responsibilities at the strategic, tactical, and operational level. **THE FOLLOWING ARE THE PRINCIPLE OF THE CONTROLLING:** **GOALS** A. The establishment of the measurable goals acts as prerequisites to the controlling. B. For the implementation of the program, it is very necessary to have a conceptual document and this document is referred to as the planning. C. From here, the process of the planning goes through the conceptual to the measurable objectives. D. At times these can also be qualitative in the nature and in such cases, it becomes very necessary to convert these into measurable term. **ESTABLISHMENT OF THE STANDARDS** A. The measurable goals that are created have to be converted into the standards. B. In case of the measurable goals, the measure of weighing the results is fixed. C. But in case of the standard, one expects for a minimum performance depending on the given efforts and the time. D. During this step, the measures of the efforts, the time, and the cost are fixed in the nature. E. The performance can be judged by setting the minimum standards. **NATURE OF THE CONTROLS** A. The controls must be economical in the nature not only in the implementation but also in correcting the deviation by getting a signal on time. B. The control costs in terms of the implementation. C. The evaluation of the control in a tangible as well as the intangible form depends greatly on the judgment of the management. **SELECTION CRITERIA OF THE CRITICAL POINTS** A. It is very necessary to keep the costs of the control down, so hence it is not at all possible to have a control over each stage in the process. For this purpose, it is very important to select certain control points. B. The selection largely depends on the individual testing skills, group output, its criticality to the operation in the total activity etc. C. The raw materials that cannot be reworked and returned must be selected as the critical point for the control. D. The selected critical points can be changed on a rotational basis and also by changing after the feedback that is obtained from the results of the process. **FEEDBACK SYSTEM** A. The feedback should be very efficient and meaningful in the nature. B. It is very essential that the control points are very well supported by the control systems as these points at any stage can be forward as well as backward. C. With the help of the feedback system, one can make a decision over the fat that whether the cost of the continuity in the operations in the similar manner would be good in the customer's interest or not. D. This system helps in the determination of the fact that whether any type of the rework or correction is required or not. **DISCIPLINE AND FLEXIBILITY** A. Both the Discipline and the Flexibility are very much required in the process of the controlling and for this, the presence of the control system is very essential. B. Discipline can be achieved, if it is assured that the same process will be carried on during the existence. C. In case of any type of the changes or the deviations in the design of the product etc, then it is not at all possible to continue with the same set of the control points. D. Discipline can be maintained only if the various activities involved remain totally unchanged. E. But sometimes such circumstances, like the results that are obtained at a particular point do not meet the requirements expected of such a control, arise and then it F. becomes very necessary for the control system to possess the flexibility. G. One very important point to be kept in mind here is that the changes that are brought in the control systems should be brought in, depending on the demands of the business. H. As the environment present around the organization and that present within the organization keep on changing continuously, so it is very important that the control systems possess the flexibility. **DEVELOPMENT OF CONTROLS** A. The controls should be tailored in such a way that the whole organization should be able to read the feedback reports. B. The results of the control should be communicable and also actionable in the nature. C. Any type of the difference in the output should be brought out by the various controls as with this, the deviations can be easily pointed out without doing much work. **CORRECTIONS** A. With the help of the controls, one can find out the deviations in the planned performance. B. If the control is ideally placed, its organization and the management can act in the self-interest of the business. C. It is very necessary to direct the controls towards the corrections and then suitable corrective actions should be taken. **EVALUATING** Evaluating is a systematic determination of a subject\'s merit, worth and significance, using criteria governed by a set of standards. It can assist an organization, program, project or any other intervention or initiative to assess any aim, realizable concept/proposal, or any alternative, to help in decision-making; or to ascertain the degree of EXCELLENT achievement or value in regard to the aim and objectives and results of any such action that has been completed. The primary purpose of evaluation, in addition to gaining insight into prior or existing initiatives, is to enable reflection and assist in the identification of future change. Evaluation is often used to characterize and appraise subjects of interest in a wide range of human enterprises, including the arts, criminal justice, foundations, non-profit organizations, government, health care, and other human services. **ORGANIZATIONAL STRUCTURE FOR A CATERING BUSINESS** **ORGANIZATIONAL OBJECTIVES**- The organizational objectives of your catering company help determine the business's overall structure. **CENTRALIZED ORGANIZATIONAL STRUCTURE-** A centralized organizational structure installs you, the business, as the sole decison-maker in your company. **DECENTRALIZED ORGANIZATIONAL STRUCTURE-** A decentralized structure separates your catering company into several departments, all with manager, operating in a semi-autonomous state. **FOOD & BEVERAGE DIRECTOR/MANAGER** Position Summary: The director of Food and Beverage is responsible for coordinating all phases of group meeting/banquet functions held in the hotel; coordinates these activities on a daily basis; assists clients in program planning and menu selection **DIRECTOR OF CATERING** Position Summary: The Director of Catering promotes plans and executes member-related activities, social and business meetings, and private banquets. The director coordinates and organizes events by choosing the appropriate club facility based on the event's size and need; stays within budgetary constraints, directs the administrative and operational aspect. **CATERING COORDINATOR** Position Summary: To work as a liaison between all in house groups, conventions, meetings, and all departments of the hotel. The main purpose is to provide efficient operation of the Catering Department. **CATERING SERVICE MANAGER** Position Summary: Catering service manager's responsibility is to plan, organize and develop the food and beverage services of organizations and businesses, while meeting customer expectations, food and hygiene standard and financial targets. **SUPPLY CHAIN MANAGEMENT** **SUPPLY CHAIN-** Can be defined as the management of flow of products and services, which begins from the origin of products and ends at the product's consumption. It also comprises movement and storage of raw materials that are involved in work in progress, inventory and fully furnished goods. **OBJECTIVE OF SCM** Is to monitor and relate production, distribution, and shipment of products and services. **IMPORTANCE OF SCM** Supply chain management is important since it help meet company goals. For example: It can increase product quality by regulating production processes Avoiding expensive shortages or cycles of product oversupply, restriction over shipping procedures will enhance customer support. Overall, the SCM offers business with several ways to increase their profit margins, which is particularly relevant for large and multinational businesses. **AS COLLABORATION HAS INCREASED, ADDITIONAL DATA FROM SUPPLY CHAINPARTNERS HAS ALLOWED COMPANIES TO USE ADVANCE ANALYTICAL TOOL TO IMPROVE RESULTS:** - Identifying potential problems before they occur - Optimizing price dynamically - Improving the allocation available to promise inventory **SCM TOOLS** 1. SHIPPING STATUS 2. ORDER PROCESSING 3. LEAN INVENTORY 4. WAREHOUSE MANAGEMENT 5. SPECIALIZED FREIGHT HANDLING 6. BID AND SPEND 7. SUPPLIER MANAGEMENT 8. DEMAND FORECASTING 9. ANALYTICS AND REPORTS 10. COLLABORATION PORTALS **MEANING INVENTORY:** - In a **General Sense,** it means stock of goods available or held for sale in the ordinary course of business. - In a **Business Sense,** it includes raw-materials stored in warehouse, work-in-progress in production, and finished goods available for sale. - In an **Academic Sense,** it means the stock of goods which have demand and supply in the market and can be easily realized in cash. **INVENTORY CONSIST OF:** - Raw-materials required for production process - Work in progress (WIP). E.g., semi-finished goods - Captive consumable goods, goods used by manufacturer - Finished goods which are available for sale **EXAMPLES OF INVENTORY** 1. AUTOMOBILE INDUSTRY 2. CONSUMABLE GOODS 3. ELECTRONICS GOODS 4. CONSTRUCTION INDUSTRY **SUPPLY CHAIN MANAGEMENT - ADVANTAGES** **THE KEY BENEFITS OF SCM ARE AS FOLLOWS:** - Assist companies in adapting to the challenges of globalization, economic upheaval, expanding consumer expectations, & related differences. - Assist companies in minimizing waste, driving out cost, and achieving efficiencies throughout the supply chain process - Assist in achieving shipping of right products to the right place at the right time Creates better delivery mechanisms for products and services in demand with minimum delay - Develops better customer relationship and service Enhances inventory management, supporting the successful execution of just-in-time stock models. - Minimizes warehouse and transportation costs. **THE OVERALL GOAL SUPPLY CHAIN MANAGEMENT** **Improving Efficiency** -- refers to the minimization of waste. Example: Materials, Money, Man hours, and delivery time **HOW DOES SCM CHAIN REDUCE WASTE?** 1. By managing production 2. Inventory 3. Transportation and logistics SCM aims to look for opportunities to change procedures in order to cut down waste. - Improving Quality -- Making sure that the product and customer experience are as positive and as effective as they can be is another goal. - Improving Stability -- Companies can aim to forge and maintain strong relationships with their suppliers and distributors to make sure that business continues to run smoothly. - Risk Management is one of the other aspects Of stability. By keeping an eye on possible risks associated with parts of the supply chain, a business can take steps to alleviate the risk. **SIX (6) COMPONENTS OF SCM** 1. **PLANNING** -- Enterprises need to plan and manage all resources required to meet customer demand for their products and services. 2. **SOURCING**- Companies must choose suppliers to provide the goods and services needed to create product. - After supplier are under contract, SM Managers use variety of processes to monitor and manage supplier relationships. Key processes includes ordering, receiving, managing inventory, and authorizing supplier relationships. 3. **MAKING-** SC managers coordinate the activities required to accept raw materials, manufacture the product, test for quality, package shipping, and schedule for delivery. - The firm perform all activities related to the transformation of raw material to the final. Activities such as assembling, testing and packaging 4. **DELIVERING-** Often called logistics, this involves coordinating customers orders, scheduling delivery, dispatching loads, invoicing customers, and receiving payments. 5. **RETURNING-** It is a post- delivery customer support process that is associated with all kinds of returned products. It is also known as "reverse logistics" 6. **ENABLING-** To operate efficiently, the supply chain requires a number of support processes to monitor information throughout the supply chain and assure compliance all regulations. It includes finance, HR, IT, facilities, portfolio management, product design, sales, and quality assurance. **COMPETITIVE & SUPPLY CHAIN STRATEGIES** - competitive strategy defines the set of customer needs a firm seeks to satisfy thru its products and services. - Product development strategies specifies the portfolio of new products that the company will try to develop - Marketing and sales strategy specifies how the market will be segmented and product positioned, priced and promoted. **THE HOTEL CHAIN SUPPLY CHAIN** 1. **UPSTREAM (SUPPLIERS)** 2. **CENTER (HOTELS/RESTAURANT)** 3. **DOWNSTREAM (CUSTOMER)** **WHY IS SUPPLY CHAIN MANAGEMENT IMPORTANT IN HOSPITALITY?** - **Smooth Operations** - **Cost Control** - **Quality and Consistency** - **Guest Satisfaction** - **Sustainability** **6 CHARACTERISTICS OF A HOTEL SUPPLY CHAIN** 1. Perishability of the products and services rendered 2. Presentation and interpretation of products offered 3. Inherent complexity of products and services 4. Uncertainty of demand 5. Inseparability between service production and to the end customer 6. Tradition sale of tourism services packages **FACTORS AFFECTING SUPPLY CHAIN MGT. IN HOTEL INDUSTRY** **Customer centricity-** Customer centricity means placing the guest at the heart of all decisions in the supply chain. It's about tailoring services and products to meet and exceed customer expectations **Various styles of management--** The management style adopted by a hotel directly impacts how effectively its supply chain is organized and operated. **BENEFITS of SCM** - The supplier and the hotel profit from a well-established SCM framework. - It leads to significant reduction in costs and also helps continuous evaluation and improvement in the buying process. - Improve management information to future requirements. **THE NEED FOR SCM** - The need to further reduce operational costs - Increased outsourcing requirements - Increasing Transportation costs **IMPORTANCE/OBJECTIVES OF SCM** 1. **Achieve Strategic Advantage**-- SCM gives competitive edge to the firm by ensuring smooth and systematic flow of goods, info and funds. 2. **Achieve Cost control/reduction-** Reduce all company costs by optimizing the cost of freight and logistics 3. **Enhances outsourcing capability-** outsourcing generally reduces the costs of operation of a company. 4. **Achieve Globalization-** Helps to operate across world market 5. **Better Inventory Management-** eliminates the necessity to stock the items in large quantities 6. **Effective Use of Supply Chain and Logistic Resources-** Few dedicated suppliers and dedicated transportation and logistics 7. **Reduced lead time by design collaboration-** lead time for product improvement is less. 8. **Achieve on time delivery-** Ensure prompt delivery of product and services to customers on time. 9. **Facilitate Commerce-** introduction or e-commerce and e-business gives entirely new dimension to buying and selling using internet which enhances operational efficiency and customer satisfaction. 10. **Boost Customer Service-** Customers expect the correct product assortment and quantity to be delivered.