1 xcellence Emerging Market Supply Chains Emerging Market Supply Chains SW upply Chain Ex Challenges and Opportunities Challenges and Opportunities N. Viswanadham INAE Distinguished Professor Computer Science and Automation Indian Institute of Science INTEGRATED S Global S Indian Institute of Science Bangalore- 560012 [email protected]lence Contents Contents The Three Supply Chain Networks Wh E i M k ply Chain Excel What are Emerging Markets Supply Chain Automation Integrated Supply Chain Networks The Basic Ecosystem Disruptive Changes in the Three Processes Global Supp The Orchestration model Conclusions N.Viswanadham
Supply Chain AutomationIntegrated Supply Chain NetworksThe Basic EcosystemDisruptive Changes in the Three Processes
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el The Three Supply Chain The Three Supply Chain NetworksNetworks
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WebsiteOrder
ProcessingSystem
CustomerConfiguredOrder
Industry Supply Chain
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Time ofDelivery
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SuppliersWarehouse
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Assembler
Logistics Service ProvidersGlobal Transportation & Logistics
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Global Supply Chain Global Supply Chain NetworkNetwork
Inventory hub
ChinaManufacturing
hub
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USA
USA
Europe
Demand
India
InBoundLogistics
China
Korea
OutboundLogistics
EasternEurope
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Distribution
Europe
Retail
Suppliers
Assembly
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Integrated Manufacturing & Service Network
B2B Logistics Chain B2C Logistics Chain
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Supplier OEM DistributorCustomer
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iService Center Logistics
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Cradle to Cradle Protocol : A sustainable supply chain uses environmentally friendly inputs & Its outputs can be reclaimed and re-used at the end of their life-cycle.
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What are Emerging Markets?What are Emerging Markets?
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What are Emerging Markets?
Emerging markets are countries having– People with increasing disposable incomes, – Large young populations
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– High-growth, High-potential, And High-risk, Markets– Have poor industrial infrastructure. – liberalized to attract FDI in Manufacturing, Services & Infrastructure
with initiatives such as PPP & SEZs.
Liberalization has increased the vertical trade .Politics & Social issues are very important for Businesses.
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upp o t cs & Soc a ssues a e ve y po ta t o us esses.Most populations live in rural areas with poorer logistical connectivity than their urban counter parts. Rural development is largely in the hands of the government.
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Can India be the Food supplier for the world? December 2005. (A very frequently cited report and was reprinted several times by the magazines)
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Supply Chain AutomationSupply Chain Automation
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Global Manufacturing & Service NetworksGlobal Manufacturing & Service Networks
Institutions
ControlledExport markets
Resource &
Coordinaer
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GMSN
Local LogisticsPaper Communications
Local Enterprises using local resources
DistributedNetworksUsing Global Resources
Modular GlobalProduction
Internet enabled3 PLs ServingGlobal markets
Free TradeEnabled Global markets
Supply Chain
ation
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serving Local markets
Vertically Integrated Localized Enterprises
ProductionNetworks
Global markets
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New Sensing and Tracking TechnologiesNew Sensing and Tracking Technologies
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eRFID tags (5) placed on the inventory periodically signal their locations to access points/readers (4). They in turn, send information, via LAN (1), to the RF controller (3) and locating software (2)
The Three Supply Chain Business The Three Supply Chain Business Processes Processes
Procurement
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Manufacturing: In a single location or spatially distributed Distribution & Retail:In Apparel, Food , etc all the three processes are i t t d d O h t t d F T F k O
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Supply hubs: Inventory at the manufacturer site
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Cross docks: Transshipment facilities where goods are sorted, consolidated and loaded onto outbound trucks Postponement: Final assembly based on the customer orderMerge-in-transit: Components assembled during transitCollaborative Planning, Forecasting & Replenishment
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combines the collaborative intelligence of multiple trading partners in planning and fulfillment of customer demand
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Last Two Decades Companies were Last Two Decades Companies were Proud of Their Supply ChainsProud of Their Supply Chains
g y pp y ptransmitted market collapse across the globe.
• Governments turned protectionist . Resources became expensive.• High concentration Clusters became vulnerable. • Shortage of Talent to deal with new realties.
The Great Trade Collapse: Causes, Consequences and Prospects A VoxEU.org Publication Edited by Richard Baldwin page 3
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The Ecosystem Model
A framework to visualize all
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Management & Execution Issues
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N. Viswanadham and S. Kameshwaran, Ecosystem Aware Global Supply Chain Management, World Scientific Publishing, 2013
Retail Chains Distribution Manufacturing SuppliersJuly16,2010 24N.Viswanadham
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Disruptive Changes in the Three ProcessesDriven by Innovations in Technology
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B2B Procurement: Disruptive Changes
Strong ties with Trusted suppliers to Order Configured SCNs– In Order-based supply chains, (apparel, agri), OEM selects all
l i h h i b k f i l h i h
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(vegetables) needed for the shirt (nutritious food). Procurement by Suppliers to Buying through Multi -Tier Purchasing Platform– Supplier Factory Gate Pricing than Payment on Delivery
Focus on supplier ecosystem not just product price & qualityFocus on Product Sales & Marketing to Industry Knowledge
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Do not own all assets – Orchestrate : New Mantra in manufacturing
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– Li & Fung , orchestrates a network of 15,000 suppliers and 29,000 employees in 40 countries
– Boeing’s 777 jet is assemblage of three million parts from more than 900 suppliers in 17 countries
– Southwest, JetBlue and Ryan Air lease engines & aircraft, contract out baggage handling and maintenance
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several customers by orchestrating 3PLs, 2PLs,etc.
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Retailing: Disruptive ChangesRetailing: Disruptive ChangesRetailers gain an understanding of how shoppers move around the stores – where they go, in what order, how long they stay, when they come to the store, and how all of these questions map to actual sales. Retailers are developing predictive models for price discounting
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advertising, and couponing. – Forecasting based on past data, batch size calculation using square root
formula are being replaced by real time visibility and delivery on demandWal-Mart’s technology platform, tracks connections between people, products, brands and uses this to make product recommendations to customers.
– Wal-Mart aggregates and mines POS data to predict customer buying
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behavior and links inventory and purchasing data with the suppliers to speed inventory turns and lower holding costs.
Netflix has a 5-star recommendation system for each subscriber from their viewing habits using sophisticated algorithmsTarget predicted pregnancy in a Teen based on her buying patterns.
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eBig Data ExplosionBig Data Explosion
What once was the stuff of science fiction has become an everyday occurrence.
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Exabytes. Zettabytes. Yottabytes. Sensors, asset intelligence, mobile devices and constant streams of unstructured communications have created digital exhaust that can capture who we are and how we live, work and playDriven by computer algorithms recommenders help
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consumers by selecting products they will probably like and might buy based on their browsing, searches, purchases, and preferences
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The Orchestration ModelThe Orchestration Model
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eOrchestratorOrchestrator Business ModelBusiness Model
End Customer
Planning, Coordination and Overall Responsibility
OrdersOrchestrator
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Material FlowOperationalStatus
Plans
Payment
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Supplier Contract Mfg 3PL
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Supplier Contract Mfg 3PL
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OrchestrationOrchestration
Orchestrators are “learning organizations” with privileged relationships
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– Mobilizes assets and capabilities of other companies for value delivery to its customers.
– Builds infrastructure for planning , monitoring and execution – Have a deep knowledge of the network’s operations– Have connections with all strategic partners in industry,
governments and other stake holders
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– Recruits the right Talent.
A Popular model in construction, airlines, newspapers, Apparel, Electronics etc. and spreading fast to other areas
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Dispersed Small Player Service/ Supply networks require mentoring by big retailers for creating efficiencies
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y g gIdentifying and managing relations with government, trade, social groups, labour, resources and B2B and B2C delivery mechanisms are required capabilities.Implementations need sensor networks, big data management, cloud computing Can be used with advantage for SMEs, Hospitals, Cities, Villages, etc.Theory development needs Integration of Social networks Inter
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organizational theory, Machine learning, Optimization, Game theory with SCNs.
