Supply Chain Networks: Trends - Game Theory Lab, CSAlcm.csa.iisc.ernet.in/scm/nv-2.pdf · Global S u p p l y C h a i n s Best Practices and Emerging Supply Chain Networks: Trends

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Supply Chain Networks: Best Practices and Emerging

TrendsN. Viswanadham

Deputy Executive Director, The Logistics Institute – Asia Pacific

National University of [email protected]

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s Outline

• What is a Supply Chain?• Some Best Practices• Web Enabled Supply Chain

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What is a Supply Chain?


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DesignCenter

Shippers

Information Network

DistributionCenters

Company B

Company AMaterialsSupplier

Subassemblies

IntelligentA

gents

Customers

Raw PartsInventory Status

ProductsCosts

ServicesTransport mode

AvailabilitySchedules

Product andProcess Design

Logistics Chain

FinishedGoods

Inventory

INTEGRATED MANUFACTURINGSUPPLY CHAIN

Assemblies

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Exploration

Legalities

Drilling ProductionField Processing

Storage

Transportation

Refining

Information Network

Distribution

PetrochemicalPlants

Petrol Pumps

Products

Storage

Storage

The OilChain

Supplier Assembler

Supplier Distributor

Logistics Provider Customer

Retailer Bank

Integrated Supply Chain NetworkInternet

Information NetworkIT Network (Extranet)

Logistics Hub

Logistics Network

Material Flow Integration

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ii ii ii

Supplier OEM DistributorCustomer

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Design Manufacturing Sales

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Machine 1 Machine 2 Machine 3

B2B Logistics Value Chains


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ii ii ii

Supplier OEM DistributorCustomer

• Movement of materials between businesses and from business to the consumer

• In-bound Logistics: Suppliers to Manufacturers• Out-bound Logistics: Manufacturer to Resellers

Logistics

• Freight transportation, warehousing, material handling, protective packaging, inventory control, order processing• Third parties

B2B Logistics Value Chains B2C Logistics Value Chain

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Some Best Practices in Supply Chain Networks

• End to End Value Delivery Process Perspective• Outsourcing• Customer Centricity• Information Sharing• Vendor Managed Inventory• Cross docking


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Supplier DistributorCustomerManufacturer

• Channel master or a process owner.• Interface management.• Process based Performance measurement

Logistics

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1 4 EndProducts

Inputs

2 4ToCompetitors?

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FromCompetitors?

Business Process Outsourcing• Logistics• ASPs


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POSTPONEMENT & CONFIGURATION

RETURN MATERIALSAUTHORIZATION

CALL CENTRE SUPPORT

GLOBAL SOUTIONS TEAMDATA HUB OPERATIONS

TRADE FINANCING

MATERIALS / VENDOR HUB

Supply ChainSolutions

Outsourcing

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The CustomerChannelsProduct/Service Offering

Inputs &Raw

Materials

Assets&Core

Competencies

Assets&Core

Competencies

Inputs &Raw

Materials

Product/Service Offering

ChannelsThe Customer

The Traditional Supply Chain Starts with Assets, Core Competencies

The Customer-Centric Supply Chain Starts with the Customer


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Collaborative Opportunities in Supply Chains

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Assembly Line

Wait-Room(operated by ABC)

Inventory owned by supplier

Kits for 20 units4 hourly

delivery

Supp

liers EDI

Consumptionreport (daily)

Inventoryreport (wkly)

Procurement Office

EDI up to 18 mth forecast (weekly)

EDI PO

ABC

(Kitt

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Hub

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FTZ

Min-max control

Supplier Hub

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Emergence of the Internet and the www has impacted the Logistics Industry in fundamental ways

Web Enabled Supply Chains


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Internet Enabled Supply ChainWhat does the Internet enable?– Non-intrusive communication (e-mail)– Information transfer– Global reach– Rich content

In the Business context this means – Direct selling ( Dis-intermediation)– Customer self-service (Product: search, comparison,

configuration; order, pay, and track, self-repair)– Collaboration

Product developmentPlanning and forecastingScheduling

– Monitoring outsourced activities

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N. Viswanadham

BTO, CTO Five Day Car

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Selling something directly to consumers. Positive effects: lower costs of distribution and happier customers who get exactly what they want for less money and in less time. Negative effects: serious dislocation as intermediaries disappear. With the arrival of a truly ubiquitous, universally accessible WWW, the theory goes, companies can provide consumers with precisely what they want at the lowest possible cost with the shortest time between manufacture and delivery.


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Traditional Cut-Flower Industry Chain

Calyx & Corolla’s New Cut-Flower Industry Chain

Participant

Grower Jobber Wholesaler Florist CustomerPrice Charge $8.00 $12.00 $24.00 $60.00*

Markup 50% 100% 150%

Price Charged

* Survey of Boston florist, price included delivery charge and tax, July 1995.

Participant

Grower Customer

$54.00**

Calyx & Corolla

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In case of Vortals there will be Industry specific content and Services.

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Trading Exchanges

Steel ExchangeElectronic

Components Exchange

OtherVertical

Exchanges

BUYERS

SELLERS

LogisticsExchange

Logistics Exchange

•Suppliers•OEMs•Agents

•Sea Cargo•3PLs•Agent•Freight •Air Cargo•Forwarder

• Public, Private and consortia Exchanges


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Products and services were designed and built far in advance of customer needs.– Today customers want to configure the products and services to

their own requirements

Customers cannot compare prices quickly and easily. Producers made billions of dollars in profits– Harnessing the word of Mouse, called Viral marketing, messages

both good and bad spread like a contagion

Supply chain that runs backward is optimized.– The delivery chain that runs forward toward customers has hardly

changed in the past 100 years.

Retailers tell customers “You come to us”. – Online consumers are saying:My place, my time is the new

mantra.They say it is not e-buz but Me-buz

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Regardless of technology innovations & The promise of the internet, we are still dealing with people and relationships


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e-Channel Solutions Facilitate Responsive and Efficient Links Between Shippers, Carriers and others

Tangible goods still have to move (and be stocked) through space and time. . . new strategies and methods must create new value

Fulfillment Perspective

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Four Types of Automation: Investment View Point

Material Flow AutomationInformation flow and Decision making AutomationSupervision and Control AutomationRelationshipsBalanced Investments


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The Four Types of AutomationRelationship Automation

Information Automation

Control &

Supervision A

utomation

Mat

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Aut

omat

ion Automated

Supply ChainAssembly

Automation

Paper based, word of mouth

Face to Face Interface

Open loop (human) Controllers

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$$

E-Supply Chains Should not Underestimate Fulfillment Requirements

$0 Process

Attract Sell Fulfill Retain

InternetRetailer

TechnologyInvestment

Browse Select ReceivePayOrder Come Back

100%

0%

CustomerSatisfactionPotential


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Documents

Supply Chain Networks: Trends - Game Theory Lab, CSAlcm.csa.iisc.ernet.in/scm/nv-2.pdf · Global S u p p l y C h a i n s Best Practices and Emerging Supply Chain Networks: Trends