Supply Chain Management

Assignment 1

Name of the student: A.Sameer Khan

Roll Number: 20M028

Section: A

Semester: III

Batch : 2020-22

Course: Supply chain management

Date of submission: 06/09/2021

Faculty in-charge: M.S.Siranjeevi

1.Write on any 5 key issues in supply chain management

1. Limited Granularity of Data

When China shut down, many who thought they understood their supply chains
discovered that knowing Tier 1 suppliers wasn't enough. Few appreciated the
extent supply would be affected by the shutdown of Tier 2 and Tier 3 suppliers
located in the Wuhan region and later, as the virus spread, in other parts of the
world. Much of this was due to faulty assumptions regarding Tier 1 suppliers and
possibly a degree of wishful thinking. As New York Governor Cuomo said in his
daily COVID-19 briefings, "Let’s start with facts. While we all have opinions, let’s
start by reviewing the facts."

It's absolutely crucial organizations map out their supply chains, in detail, to
identify vulnerabilities and weaknesses. This information will allow fast and
decisive action when lower level supplies are threatened.

It might be time to stop focusing so much on supply chain visibility and invest
more resources in understanding supply chain complexity. Granted, this isn't an
easy task, particularly in large organizations, but the events of 2020 have shown
what happens if companies don't appreciate supply chain weaknesses.
Naturally, it's not just the impact of COVID-19 that's important, but companies
also need to guard against the potential impact of other events that could
exacerbate supply chain challenges, such as:

• Trade wars
• Natural disasters
• Sanctions
• Civil unrest
• Strikes

2. Single-source Amplifies Supply Chain Risk

For numerous reasons, many companies have focused on single-sourcing
strategies, possibly because this was perceived to be the lowest cost scenario.
Unfortunately, this also means companies are vulnerable if suppliers face
shortages or production interruptions. As Warren Buffet said, "Only when the
tide is out do you discover who has been swimming naked."

In a complex world facing the sorts of supply chain challenges referred to above,
single sourcing is risky and a guaranteed way to lose sales when disruption
occurs. Instead, companies should focus on risk mitigation strategies to
anticipate and minimize supply chain challenges and risks.

3. Slowed Digital Transformation

Access to data is crucial for effective decision-making. Unfortunately, many
organizations have a mishmash of manual and digital systems that effectively
trap information within functional silos, meaning that decision-making is
hampered by an incomplete picture.

As Colin Parris, the CTO of GE Digital says, "COVID-19 has emphasized the need
to look at financials to understand base cost versus variable cost. Digital
(transformation) could enable leaders to make much more intelligent decisions.
This is becoming more vital than ever."

It's crucial companies devise ways to access supply chain data through the
introduction of technologies that allow data to flow freely through the system.
Additionally, organizations need technologies such as a supply chain digital twin
that allow them to monitor, manage and observe the impacts of decisions.

4. Maintaining Traditional Inventory Strategies

Traditional inventory control strategies focus on past performance to determine
current inventory strategies. Precise algorithms are used to determine exact
requirements. The problem with this approach is that it doesn't take into
consideration unexpected events, nor is it agile and is often completely divorced
from current realities.

Conversely, Jonathan Whitaker from Chainalytics believes that "Continuous

supply chain alignment will be the new norm." This view is supported by Lora
Cecere of Supply Chain Insights, who believes we need to "navigate a world of
gray, there will be no new normal." She recommends an outside-in approach to
supply chain challenges that looks at using streaming data to drive insights,
determine market shifts and establish demand. This, together with the next
generation of advanced inventory optimization techniques, can help handle
unpredictability better than standard inventory optimization solutions. Another
way of looking at this is to switch from traditional demand planning to what can
be termed demand shaping based on what-if analyses to determine expected
demand and deal with supply chain challenges.

5. Lack of Actionable Data and Insights

A common theme facing business leadership, and supply chain management in
particular, is they often don't have sufficient information at hand to make
informed decisions. Added to that, supply chain complexity makes it difficult to
evaluate multiple alternatives, trade-offs and scenarios to arrive at the best or
right decision.

While traditional transactional-based ERP excels in handling huge volumes of

data, the way information is captured, handled and stored means it's hard to
use it for identifying forward-looking trends. The same applies to most business
analytics that are great for reporting what happened in the past, but provide
limited insight into future supply chain challenges.

What's needed when dealing with supply chain challenges is an ability to

interrogate data to determine an optimal solution. This can be likened to what
Shigeo Shingo meant when he said, "A relentless barrage of why's is the best
way to prepare your mind to pierce the clouded veil of thinking caused by the
status quo. Use it often."

The answer to this dilemma lies in the use of optimization techniques that form
the basis for modern prescriptive analytics. Based on advanced modeling
techniques, prescriptive analytics allows you to create a model of your supply
chain that accurately reflects how it works, taking into account all inputs,
outputs, and constraints, together with an ability to measure trade-offs.
Additionally, this form of supply chain modeling allows you to use the large
volumes of structured and unstructured data available to the organization to
evaluate different scenarios and determine the best way to overcome supply
chain challenges and achieve supply chain goals.