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This week I bring to readers two topics of interest to logistics.

A first draft of a successful


transition from model "Supply Push" to "Demand Pull Supply Chain Management" in
India and the second on the best indicator of the real economy, which should be given
attention in this time of crisis.

Project Mi-Net - Distribution Management

This month I bring you a case that illustrates the level at which the world begins to come
in terms of managing the supply chain and related information, with implications that will
result in greater integration of information systems in the medium term throughout the
supply chain and transport, including ports. Moreover, the project PORTMAR pointed in
that direction.

This is a real case month in India, Pankaj Bagri, LS Murty, TR Madanmohan and
Rajendra K Bandi, Indian Institute of Management Bangalore, Project Mi-Net, "An Inter-
organizational E-Business Adoption Study."
The Miracle Industries Limited is a company producing and selling fast moving
consumer goods throughout India, based on natural products for food and health, which
has 10 factories, 5 regional offices and 30 warehouses, 32 freight forwarders, 970
distributors and 2,500 stockholders.

Until 1999, the company had a competitiveness problem that was related to the difficulty
of having adequate stocks of products it sells from its 1.6 million retail stores and the
retail, which meant that often do not perform sales of products for lack of stocks in
thousands of retail outlets and the preference of people for competing products.

This difficulty has several sources all related to supply chain management: delay of
weeks in the arrival of orders for each of its distributors, delays in delivery, difficulty in
billing, trouble knowing who to pay, difficulty in negotiating payment terms special
difficulty in the segmentation of customers and distributors to develop appropriate
marketing policies.

In 1999, the company felt it needed to get on-line data from secondary sales of their
products, that is needed to know at any given time how many products were ordered by
retailers to distributors, what kind and why or retail store. Only thus can be considered
properly manage its production and its supply chain of both raw materials and
components, or distribution, gaining competitiveness.

Basically wanted to change the paradigm of managing their supply chain, Supply Push to
Demand Pull Supply Chain Management (SCM), or wanted his chain were to become
totally driven by the final consumer and the final sales online, using for this the internet.

So I developed an ERP from SAP, to organize the internal management, linked to an


external integration software, MIDAS, which endorsed the integration of its relationship
with the outside world and the distribution network through software on the Internet easy
installation and use that allowed customers to send orders, stock management (including
other products), the management of billing and payments, among others.

Indicator of the Real Economy


I recently heard Professor Augusto Felicio say that the crisis is not financial, but
economic. The economics of recent years is unsustainable and financial sphere has tried
to give you a flask of serum to survive, but eventually succumb first to the superhuman
effort that was taken.
The economic crisis came later, but seems to be very serious and not easily get through
more bags of serum, whether from banks or states, but lacks permanent structural
changes.
On the other hand, it was expected that the big break occurred now, since it was time that
the Kondratiev cycles, 50 years of global economic growth point to be a big break,
expected since the beginning of the century, which have been delayed by the balloon
serum of the financial and creative management of the bankers.

http://www.thelongwaveanalyst.ca/flash_cycle.html

http://www.cge.uevora.pt/aspo2005/abscom/ASPO2005_Matias.pdf
The recent fall in prices of raw materials and the decline in maritime transport costs will
indicate how deep the consequences of the global crisis on the real economy.
Since the early summer of 2008, the price of steel has decreased 20-70% and freight
shipping and transportation of raw materials declined even more. The drop is also due to
the slowdown in global demand and the arrival of new ships on order.
The cuts in steel production and accumulation in Chinese stocks of iron ore in China, led
ore prices to fall by half. Prices of copper, nickel and zinc also fell sharply.
The most spectacular reflection of the loss of activity has been the evolution of the Baltic
Dry Index (BDI), which indexes the price of shipping bulk cargoes.
It is a leading indicator of international trade and, by extension, of economic activity. In
2006 and 2007, the index was driven by the boom in China, which accumulated materials
transported by sea.
But after the index plunged 90% after having a record high of 11.793 points at the end of
May 2008 and there is no way to recover, which is a bad sign. We will monitor their
progress in the coming months.

http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm # bdi
Victor Caldeirinha
vitorcaldeirinha@netvisao.pt