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Operations WorkshopSupply chain risks in ecommerce

SUBMITTED BY: GROUP 8

ANUJ GARG 15P1

RAA!R"S#NA ! 15P$%

O#"& S#ARA 15P$1

N"&"S# S#R"(AS&A(A 15P$1

SAR"!A *"!!AN" 15P$

("*#OR +#O&, 15P$

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+esi-nin- supply chain

net.orks•

When /esi-nin- a supply chain net.ork0 one nee/s to lookinto the uncertainties oer the lon- term

• A company can make a tremen/ous opportunity or can 2eprone to hu-e risk 2ase/ on the /esi-n o3 its supply chain

  For a supply chain to b !cti":• "/enti3y sources o3 risk

• +e4ne uncertainties that are releant

• +iscuss risk miti-ation strate-ies

• ,aluation o3 net.ork /esi-ns

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!ey risks inole/

• o-istics capacity6 compleity

• orecastin-6 Plannin- accuracy

• Supplier plannin-6 9ommunication "ssues

• Per3ormance o3 supply chain partners

• 9ustomer6 9onsumer pre3erence shi3ts

•

"n:ei2le supply chain technolo-y

• Shorta-e o3 skille/ resources

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!ey risks inole/

#at$ory Ris% Dri"rs

+isruptions Natural /isaster0 .ar0a2our /isputes0 terrorism

+elays Poor ;uality or yiel/ at supply source"n:ei2ility o3 supply source

Systems Risk "n3ormation in3rastructure 2reak/o.nSystem inte-ration or etent o3 systems2ein- net.orke/

orecast Risk "naccurate 3orecasts /ue to lon- lea/ times0seasonality0 short li3e cycles

"ntellectualproperty risk

(ertical inte-ration o3 supply chainGlo2al outsourcin- an/ markets

Procurement risk ,chan-e rate risk0 price o3 inputs0in/ustry<.i/e capacity utili=ation

"nentory risk "nentory hol/in- cost

Pro/uct alue

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•

Uncertainties taken into account>• Warehousin- capacity6compleity

• orecastin-6 plannin- accuracy

• Possibl scnario: Shoul/ a 4rm si-n a lon- term contract3or .arehousin- space or -et space 3rom a spot market asnee/e/??@@

• Possibl options:

•

Get all .arehousin- 3rom the spot market as nee/e/• ie/ lease option0 a//itional re;uirements 3rom the spot

market

• lei2le lease .ith a minimum char-e that allo.s aria2leusa-e o3 .arehouse space

"nentory 2ase/ mo/el

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+ecision &ree

 

+18%1?15

+$'BC%?D8

+1$)C1?'$

+1$)C%?D8

+ $'BC1?'$

+'%B?$C1?5$

+'%B?$<1?1$

+1)'?8C1?5$

+'%B?$C%?8'

+1)'?8C1?1$

+1)'?8C%?8'

+88?$C1?5$

+88?$C1?1$

+88?$C%?8'

Considering the demand and price fuctuations

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,aluation o3 Options

• ,pecte/ NP(>

• Option 1> %?7 million

• Option $> '?'$ million

• Option '> B?8) million

• (alue o3 :ei2ility>

• Option ' is 1?5B million more alua2le thanoption$ an/ B?1) million more alua2le thanoption 1

• Option $ is $?)$ million more alua2le than option1

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Scenario $> 9hoosin- a customer

$ people> similar pro/uct in their carts

1st> ne. customer0 Pro2a2ility o3 Purchase> %?$

$n/> returnin- customer0 PoP> %?)

9ost o3 -eneratin- noti4cation>

9ost o3 pro/uctE shippin-> y

Pro4t 3rom 1st> %?$FSP H yI H %?8F

Pro4t 3rom $n/> %?)FSP H yI H %?BF

SP &''

1?'

y )%

1st '?')

$n/ 1$?)8

SP 1%%

1?)

y )%

1st <%?B8

$n/ 1?7)

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Scenario $> 9hoosin- acustomer +ecision &reeI

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Scenario '> 9hoosin- the supplier

  S1 S$ S'

9ost o3 pro/uct0 9P 1%% 1%% 1%%

Sellin- price0 SP 1$% 1$% 1$%

+eliery char-e0 / 1% 1% 1%

Pro2a2ility o3 timely success3ul /eliery0

;%?B %?B1 %?B$

Pro2a2ility o3 /elaye/ success3ul /eliery0

r%?B %?B1 %?B1

9ost o3 /elay0 t 1% ) 8Pro4t0 p 11?$ 1$?%' 11?5$

Prot = q*[SP- (CP + d)] + (1-q)*r*[SP (CP + d + t)] + (1-q)*(1-

r)*!*d

' Suppliers> S10 S$ an/ S'

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Scenario '> 9hoosin- the supplier  +ecision treeI

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Scenario B> Shipment +ecision

  D to # M to #  

9ost &ime 9ost &im

e

+ama-e6

Perish

 &otal

9ost

 &otal

 &ime

Roa) $% )% NA NA ?$% $% )%

Rail 1% B5 NA NA ?1% 1% B5

*ir 1%% 5 NA NA ?%5 1%% 5

Roa) + *ir 8% ' 5 8 ?1$ 85 11

Rail + *ir 8% ' $ 7 ?7 8$ 1%

Dli"ry Typ Mo) #ost Ti,-. hour )li"ry/ no

prishabl0

 Air E Rail 8$ 1%

-. hours/prishabl0 Air 1%% 5&12 )ays/prishabl0 Air E Rail 8$ 1%&12 )ays/non1

prishabl0

Air E Rail 8$ 1%

Bt3n . an) &'

)ays

Rail 8$ B5

•

Shipment o3 a consi-nment 3orm +elhi Warehouse+I to 9oim2atore 9I0 either /irectly or ia 9hennaiI

• +ecision at this leel re;uires to oKset 2et.een+eliery cost0 time an/ risk o3 /ama-e inole/ ineach mo/e

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imitations•

Not all risk 3actors taken into consi/eration

• Only $ possi2le alues at the en/ o3 each perio/

• ,;ual assumption o3 pro2a2ilities

•  &he 3orecaste/ alues mi-ht not 2e accurate

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 &hank you