Supply Chain Management-

The new normal

General Instructions
 Report for Attendance and Poll
 Prior Information for change of division to attend class
 Host rights- Mute, Remove, Waiting Room, Lock Meeting
 Update profile name and Pic
 Cold call
 Video on
 Course plan and Guidelines
 Book
 Evaluation
 Class Reps
 Group list
 ZOOM
 Cases- Break out rooms
 Pre reads –Discussion board (Team/ Telegram/ whatsapp)
 Quiz and Polls
 Presentations
 Videos
 Exercises and Simulations
 Class Participation-Chats, etc.
 Project-
Risk and challenges to supply chain in this VUCA world and suggesting short, medium and long term
strategies.
 Submit Excel Gantt chart for proposal submission https://in.search.yahoo.com/search?
fr=mcafee&type=E211IN826G0&p=how+to+construct+gantt+chart+in+excel
 Adhere to Guidelines
Supply chain Type- Agile/ Flexible

 Push- Batch –Standard, 1st pick pack + Next(n-1)

 Pull- Unit- Express, 1st pick pack x n
The Objective of a Supply Chain

 Maximize overall value generated

Supply Chain Surplus

= Customer Value – Supply Chain Cost
Revision- (Some Decision points in
Supply Chain)
 Aggregation
 Shorter cycle time (5th V of supply chain Velocity)
 Arms length/Near shoring (Competitive Win-Lose) OR Partnerships (Collaborative Win-
Win)
 High inventory turnover ratio
 Make or buy
 Centralized/decentralized
 Customization
 IT intervention
 Economies of Scale/Economies of Distance
 Logistics
 Theory of Constraints (TOC)
Gartner Awards
 Top 25 companies success- 90% visibility and technology, 80% Big Data, 85%
Change Management
 Expanded CSR Measures (ESG)= 10% to 15% (Commitment, Transparency and
Performance)
 Leadership Trends-Purpose Driven Organizations, Business Model
Transformers, Digital Orchestrators

Note-Intent will drive technology & SCM Innovation & technology will never
drive the Intent at any cost.
Paradox- Expect the unexpected and
discover the path- Prescription
 Now- Survival
 Short Term-Fulfillment
 Medium Term-Operating Model (New Model Co-opetition vs Competition)
 Long Term-Resilience
Co-opetition is Cooperative Competition
An operating model is a representation of how an organization delivers value to
its customers as well as how an organization actually runs itself.
Supply chain resilience is the supply chain's ability to be prepared for
unexpected risk events, responding and recovering quickly to potential disruptions
to return to its original situation or grow by moving to a new, more desirable
state in order to increase customer service, market share and financial
performance.
30 day planning- Prescription
 Planning for demand and supply
 Vendor/ contract risk management
 Managing inventory/ working capital
 Business continuity planning
 Taxation impact
 IT infrastructure
 Output driven performance frameworks
Force majeure
 Force majeure refers to a clause that is included in contracts to remove
liability for natural and unavoidable catastrophes that interrupt the expected
course of events and restrict participants from fulfilling obligations.
 Act of God- Pandemic – Not covered
 Insurance companies don’t have provision
 Assessment of exposure to fail
 Communication and Documentation of key events with all business partners
Resiliency in Supply Chain
Technology Trends
A big challenge-Logistics Cost- Baltic Dry Index

 The Baltic Dry Index is reported daily by the Baltic Exchange in London. The
index provides a benchmark for the price of moving the major raw materials
by sea. The Baltic Dry Index is not restricted to Baltic Sea countries or to a
few commodities like crude oil. Instead, the Baltic Dry Index takes into
account 23 different shipping routes carrying coal, iron ore, grains and many
other commodities.
 https://tradingeconomics.com/commodity/baltic
 Increased by 25%
Break Index- How much country should ship out

Global Trade Barometer (GTB)- 1.9% decline in exports i.e. 7 of10

months exports have fallen in financial year
Sectors with a possible uptick
 Digital & Internet Economy: Online based products & services companies will
find new takers. Everything moving to E-platform
 Ed-tech and Online Education along with firms involved with online-skill development
 Online groceries
 There will be a sudden spike in the demand for Content, with digital content being in
demand more than ever.
 FMCG & Retail will benefit immensely. With continued fear, food-based retail
chains, and companies catering to low-ticket consumption demand will emerge
as winners. Especially customer preference more for packed big brands rather
than local
 Speciality Chemicals: Firms dealing in Chemicals will see a jump due to
increased demand for disinfectants, drugs and medicines.
 Pharma: Pharmaceutical firms are set to see growth in the near term.
 Telecom: High consumption
Adversely affected Sectors
 Apparel & Textile will get hit adversely due to disruption in labour supply, raw
material unavailability, working capital constraints and restricted demand due to
limited movement of people and purchasing ability.
 Auto sector (which includes automobiles and auto parts) will continue to face
challenges on account of lack of demand, global recession and falling income
levels. Alternate suppliers. In contrast-Preference for private vehicles can lead to
higher demand
 Aviation & Tourism is one sector which has the highest probability of going under
without direct government intervention. In the next 12 months, it’s highly unlikely
people will travel for leisure apart from very essential travel.
 Shipping and Non-Food Retail – Non food retail chains and global shipping
businesses will find this 12 month period very challenging. Frozen is the next
Fresh.
 Building & Construction businesses are generally leveraged and hence will face the
dual challenges of high-interest payments and lack of sales.
Why Make in India could not take off?
 Technology/Automation
 Diversification in Manufacturing (Flexible)
 Productivity with developing countries
 R&D
 From Low cost to Value driven/ Competency driven
 Collaborate/Technology partnership
 Government handholding MSMEs
 Issue of Cost of Capital
 Capital issue
 Support from Banker, NBFC, etc.
 Welfare of people-Government responsibility and Quality productivity- Business responsibility
 Service
 Knowledge sharing
 Marketing
 Reskill and Upskill workers
Learnings from Forio- Equilibrium Round
https://forio.com/simulate/mbean/near-beer-game/run/

 Bull whip
It's called the bull-whip effect, where the fluctuations start small and then start swinging wildly.
Do you think the unpredictable customer demand causes it?
 Customer Orders
If you haven't it noticed yet, the big revelation here is that the weekly order rate changes only once in the
game (i.e. in Week 2, from 10 units/week to 15 units/week). Each week the same quantity is ordered. What
does that tell us?
We can't blame the customers for the demand swings.
 Demand-Backlog Link
See how the Market Demand moves exactly in sync with the Backlog?
This is because the total demand is the sum of 2 variables (New customer orders + backlog) and one of them, as
you know now, remains constant
 Production-Inventory Link
This is the part that's completely in your control.
Now that you are more aware of how the Supply Chain behaves, give it another shot. See if you can better your
own record by trying to reach the Equilibrium state faster and with smaller inventory swings.
 Opportunities for
businesses lie at the
Bottom of Pyramid
SCM AT IT’S BEST : THE DABBAWALA TIFFINS

https://www.youtube.com/watch?v=N25inoCea24

Inspiring SCM BY OUR OWN DABBAWALA @ MUMBAI.

‘Customer Ahead of Everything Else’

NO TECHNOLOGY ... NO AUTOMATION... NO RFID.. NO BARCODE.

JUST
PURE UNDILUTED INTENT WITH COMMITTMENT.
Efficiency Responsiveness Frontier
Reality is Different
 Amazon.com Example
 – Founded in 1995
 – 1996: $16M Sales, $6M Loss
 – 1999: $1.6B Sales, $720M Loss
 – 2000: $2.7B Sales, $1.4B Loss
 – Last quarter of 2001: $50M Profit
 Total debt: $2.2B

To Pull Systems – Amazon.com, 1996-1999

• And, finally to Push-Pull Systems
Amazon.com, 1999-present
• 7 warehouses, 3M sq. ft.