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Lecture 21 : Fundamentals of Supply Chain Management (SCM) — Transcript

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0:01[Music]
0:22[Music]
0:25so hello dear friends welcome back to
0:27nptl online course on Logistics and
0:29supply chain management so now uh we'll
0:32start our discussion on very basic uh
0:35Concepts about Supply Chain management
0:37so I'm Dr vikas taku assistant professor
0:40Department of humanities and social
0:42sciences IIT kakur so under this we'll
0:45try to address some of the key uh
0:49Concepts under Supply Chain management
0:51what are the major stakeholders in
0:52Supply Chain management what are the
0:54objectives when we are talking about
0:56Supply Chain management what are the key
0:58performance area where we are targeting
1:01right as uh supply chain manager and
1:03then we'll see what are the different
1:05decision uh area where we are making
1:08decision when we are designing our
1:09supply chains different types of models
1:12right so we'll talk about those models
1:15and then how this concept of supply
1:17chain evolved we'll talk about that also
1:19the process also and supply chain
1:21operation in the end we'll end this
1:23discussion with one small case
1:26again so uh in the very first session or
1:30second I think when I started explaining
1:32Logistics I defined what supply chain is
1:35where we talked about I think bread uh
1:38supply chain from where it is coming
1:40let's take the Sim similar example again
1:43and we'll see see if again another
1:46product you customer wants detergent or
1:49soap so you are going to Big Bazar right
1:52and big Bazar is getting delivery from
1:55maybe uh that outbound Logistics
1:58distribution network is there right so
2:00those are distribution centers are there
2:02or fulfillment centers are there or
2:05basically it is coming from one
2:06manufacturer and here we can see one
2:08manufacturer PNG G is providing those
2:10products right now from this this is the
2:15your outbound
2:16Logistics like we talked
2:19about now let us talk about the backward
2:22integration backward supply chain from
2:24where that product is coming the raw
2:25material is coming now for this maybe we
2:29are using plastic maybe we are using
2:31packaging maybe we are using for some
2:33chemical for manufacturing the soap or
2:35detergent right so different players
2:38will come into picture and different
2:40Supply chains will start here let's say
2:42one packaging we are using now this is
2:45again packaging is one supply chain from
2:47where we are using packaging paper
2:49manufacturer we are getting the
2:51packaging from the paper manufacturer
2:52right and then paper manufacturer is
2:55getting the raw material from the timber
2:58industry right now Timber industry again
3:01using so many different raw materials we
3:04talked about in that process Also let's
3:07say they are using some harvesting
3:09machine to cut the trees and you know to
3:12process those right now that harvesting
3:14machine is again using different
3:16components they are using engines they
3:19are using uh tires they are using other
3:23steel components so many steel
3:26components they are using right so then
3:28again we talked about the tire supply
3:30chain so then tire supply chain two
3:33major raw material we are using for
3:36manufacturing Tire one is your rubber
3:38another one is your steel wire right now
3:41this rubber is coming from another
3:43supply chain steel wire is coming from
3:45so this supply chain will keep on going
3:48right so we discussed the same concept
3:50so this is complete one system where we
3:53are talking about the system approach
3:55when we are talking about
3:57your supply chain
4:00management but in case of logistics we
4:03were focusing on the distribution part
4:05in between these players the
4:07transportation part in this between
4:09these players the warehousing part here
4:11what where we are storing right the
4:13packaging part we are talking about so
4:16this this is the key difference when we
4:18talk about the cons uh complete uh
4:20supply chain structure so before going
4:22further I'll show you one uh this small
4:26video uh how PNG is delivering different
4:29products so many different products are
4:30there under their umbrella term right so
4:33we'll see what are those different
4:34products and how they are managing their
4:36supply chains so here I have included
4:38some uh video links you guys can just
4:41quickly go through these videos so you
4:43can see how uh PNG beautifully they are
4:47you know they have designed those six
4:49different B baskets and providing so
4:52many different products under those
4:54baskets and how through communication
4:57through that culture of commitment and
4:59the creating the value for the customers
5:02how they are delivering those value
5:04overseas right it's not only one country
5:06they are serving with those products
5:08they are serving to all the players and
5:11the only key point is how we can add
5:14value uh to the uh end delivery right so
5:19just we'll Define the supply chain in
5:21more formal way as per Sunil Chopra and
5:23Peter mandal consists of all the parties
5:26involved directly or indirectly so
5:29obviously who who are those parties
5:31manufacturers suppliers Transporters
5:34warehouser retailers and even customers
5:37are also part of your Supply Chain
5:38management right so this Supply Chain
5:41man another key point when we talk about
5:43logistics and supply chain that customer
5:46we are considering one of the
5:47stakeholder in our supply chain so our
5:49supply chain will end with the End
5:51customer who is going to use that
5:53product right so uh again another
5:56definition is by they and chain that as
5:59as the group of interconnected
6:01participant companies those add value to
6:03stream of uh transform inputs from their
6:07source of origin to end product or
6:10services that are demanded by designated
6:12End customer right so how you are
6:14ensuring that through that integrated
6:17channel to the integrated uh set of
6:19stakeholders that you are transforming
6:22from one step to other step if you're
6:23moving you are adding some value right
6:25and then those values in multiple stages
6:28with multiple St stakeholders you keep
6:30on adding and in the end that value is
6:33provided to the End customer uh in terms
6:36of product and services right so that
6:38means this is a kind of network where we
6:41are trying to match the demand with the
6:44Supply right and then when saying this
6:47that means the large implication of this
6:50is you will from where the demand will
6:53come obviously from the one end of your
6:56supply chain the down down end right
6:58where your product is finally reaching
7:01so from there you are recording the not
7:03only the uh de quantity demanded but in
7:07terms of uh what are the extra features
7:10they are looking for how uh the
7:13different values set of values you can
7:15add in terms of how your competitors are
7:17adding and that's this information
7:20throughout that upward supply chain is
7:22being shared some information may be use
7:25very useful for your warehousing
7:27Partners who are taking care of your lab
7:29or packaging if any issue related to
7:32packaging let's say some information is
7:34required to uh we need to amend in the
7:37product design or some feature we need
7:40to add that is in information is
7:42valuable for manufacturer let's say some
7:45information where you need to change
7:47some part component raw material so then
7:50that information is required for your
7:52raw material supplier this is one kind
7:55of information where we are talking only
7:57about the product design specification
7:59features there are so many other form of
8:02information which are required pricing
8:04how how much customer is ready to pay
8:07how your competitors are you know
8:10charging so that is also one kind of
8:12information sourcing this is another
8:14kind of information from where the other
8:16players are sourcing how you can Source
8:19from those sources so that the overall
8:21uh the cost can be minimized right so we
8:25in that supply chain we'll try to
8:27minimize the cost and improve the LA
8:29long run performance right by
8:31implementing lean Logistics lean
8:34manufacturing lean Supply chains so
8:36those waste we can reduce right so major
8:39objective of the supply chain are to
8:41relate and monitor the distribution
8:44production transportation of goods and
8:46services so earlier we were not
8:48considering this as part of your
8:51Logistics but now when whenever we will
8:53talk about this production is very much
8:55part not only production routine
8:57production but R&D you are developing
8:59new product is also very much part of
9:01that right so inventory shipment
9:04internal sales and Productions are part
9:07of your supply chain Network so this is
9:09what how this uh concept evolved we were
9:13initially I talked about we were
9:15focusing only on Logistics part and we
9:17realize that this should be a separate
9:19department and then for 15 to 20 years
9:23we kept on you know optimizing those
9:25networks right and then we Logistics
9:28matured and and we realize that this is
9:31not enough we need to come up with the
9:33comprehensive uh view where we can
9:35handle all those activities in the
9:37supply chain we talked about one example
9:40where I'm just designing the product and
9:42then marketing the product so R&D part
9:46is done in my lab and rest marketing
9:48team is working on to generate the sales
9:50and all those things rest I don't want
9:52to go into manufacturing I don't want to
9:54go into sourcing raw material finding
9:56the stakeholders distribution Network I
9:58don't want to go into that right so then
10:01I need that complete supply chain
10:03solution we talked about Hitachi
10:06different kind of packages Services they
10:08are providing related to sourcing where
10:10they will ensure all the smooth
10:13availability of the raw material related
10:15to packaging they will ensure the smooth
10:17packaging of your whatever finished
10:20product is if you are talking about some
10:22other uh Outsourcing some other
10:25functional area warehousing
10:27manufacturing everything you can
10:29Outsource right so then came the concept
10:31of Supply Chain management in
10:32manufacturing right so earlier we were
10:35talking about only we can uh you know uh
10:39distribute the products right so major
10:42part we try to focus on on the Product
10:44Industry and then now this concept of
10:47Supply Chain management has come into
10:49your services industry as well but yes
10:51when we talk about Services industry no
10:53Services industry is complete without
10:56the support of your Product Industry if
10:58we are talking about Educational
11:00Services or now we are talking about
11:03mostly we are talking about Healthcare
11:06Services or we are talking about
11:08Emergency
11:10Services whatever uh disaster management
11:13related services so even if we are
11:16talking about Educational Services we
11:18need some equipment now this is Pure
11:20service I'm providing you nothing
11:22physically is Flowing from one this end
11:24to your end but then I need this pen I
11:27need this screen where I'm writing I
11:29need need that screen camera lighting
11:31everything these products are required
11:33you know only then this recording room
11:36has been developed and now we are
11:38delivering the services so this supply
11:41of these products are also required in
11:43healthcare also we are delivering the
11:45services maybe doctor is uh doing that
11:48checking you and all those things but
11:50that is only the diagnosis part how we
11:52treat the patient is again you need some
11:54products in terms of medicines vaccines
11:57injections or all those things right so
12:00uh this pure Services industry is very
12:03difficult to find out and whenever you
12:05are talking about those solution maybe
12:07consultancy is one kind of service
12:09industry where you are talking about
12:11that this is pure Services industry
12:13right but in then again if you are
12:16taking those advice and then you are
12:18implementing purchasing something and it
12:20is related to purchasing or it is
12:22related to purchasing property or maybe
12:24you are going for building house or
12:26something like that so again that come
12:28uh with The Product Industry right so uh
12:31this is how the concept of Supply Chain
12:33management evolved and as given by the
12:37and chain this is very basic supply
12:39chain model we can understand where the
12:42suppliers of suppliers are there in the
12:45backward supply chain
12:47so now we'll talk about whenever we'll
12:50talk about supply chain backward supply
12:52chain is one and forward supply chain
12:54forward supply chain means the supply
12:56chain which is Distributing the product
12:59from the manufacturing original
13:01equipment manufacturer to the customer
13:03is forward supply chain right outbound
13:06Logistics and supply chain we from uh
13:10when we are talking about supplying the
13:11raw material from the suppliers to other
13:14suppliers to the manufacturing unit then
13:16it is your backward supply chain right
13:19so this whole thing we are designing how
13:22depending upon the demand of the
13:24customer and then as per that we are
13:27creating the value and we are delivering
13:29bring that value and when this complete
13:31supply chain is ready this is very basic
13:34concept we try to explain in the very
13:36first session when we talk about supply
13:38chain that there are three things very
13:40important which are flowing through any
13:42supply chain first is your
13:45information right information is Flowing
13:48on all these are bidirectional these
13:51flows are bir directional earlier some
13:54of the flows were unidirectional only
13:56we'll talk about that but let's see this
13:58information
13:59now information from manufacturer to
14:01customer is flowing in terms of
14:04educating about the services about the
14:08products what is this product all about
14:11how it is going to solve your problem
14:13right so that is coming in either your
14:16advertisements or boarding holding
14:19whatever you are using Electronic media
14:21or uh you are using uh print media to
14:24advertise your product right and
14:26sometime you are providing the
14:28information to the customer in terms of
14:30how to use that product how to install
14:33that product or maybe sometime your
14:34engineer is visiting your the customer
14:37site and then they are installing this
14:39is form of information coming from the
14:41manufacturer to the customer in terms of
14:44sometimes the manual also how you can
14:46use that product then from customer this
14:49is a very obvious Link in terms of
14:52feedback very important how customer is
14:55rating your product or Services after
14:57taking dinner in your Hotel how customer
15:00is rating your services related to your
15:03ontime delivery of the food related to
15:06hygiene related to how you have prepared
15:08the related to raw material related to
15:11all those parameters are there right so
15:13this information is also very important
15:15to continuously you know improve your
15:19services level so you have designed some
15:22parameters matrices so where you are
15:26recording the data from the customer and
15:27then that information is helpful to
15:30redesign rethink your delivery system so
15:32that you can uh deliver in Better Way
15:35product obviously finished goods are
15:38flowing from manufacturer to the
15:40customer semi-finished goods are also
15:43there from some manufacturer to
15:45manufacturer from suppliers to
15:47manufacturer so that is that is forward
15:50flow very obvious reverse flow is now
15:53very important when we are talking about
15:56recycling of the product when we are
15:59talking about reuse of product when you
16:01are talking about refurbishment of the
16:04product after once it is done we are
16:07talking about products coming under
16:09warranty guarantee right so then the
16:12product will again flow back to the
16:14manufacturer right and if you are
16:16talking about the packaging is the
16:17responsibility of the manufacturer so
16:19you have to collect the packaging when
16:21uh the product is delivered so then
16:23again the reverse supply chain will be
16:25in use so product is flowing in both the
16:27direction right then then funds earlier
16:30fund was flowing in Reverse Direction
16:32only from the customer to the
16:33manufacturer but now with one click you
16:37can return the product so that that way
16:40fund has to be returned back refund uh
16:43you have to ensure from manufacturer to
16:46the customer so in that way now these uh
16:50three resources whatever flowing through
16:52that supply chain we'll use both by
16:55directional flow will be there right so
16:57we can code many many examples where you
16:59can see these things talking about this
17:03flow of these three things now this is
17:05the network so we talked about suppliers
17:08are there and then manufacturers are
17:10there then warehouses are there and then
17:13customers are there so let's talk about
17:15how the cost function is designed so
17:20when we are talking about supply of raw
17:22material to manufacture so first cost
17:25comp uh component will be your uh uh
17:28your material cost raw material
17:31cost this is the first thing that is
17:34going to add to your cost then you are
17:36talking about transportation of that so
17:38this is your inbound Logistics
17:44cost then you are talking about
17:46manufacturing that means converting your
17:48raw material into finished one again the
17:51manufacturing cost will be there then
17:53you are talking about the outbound
17:57Logistics you are shipping your your
17:59product from your manufacturer and to
18:01the distributor uh your fulfillment
18:05order fulfillment center or warehouses
18:07right and then in Warehouse you are
18:08managing the products this will carry
18:11some handling
18:13cost right again the very important part
18:16right and then in the end you are doing
18:18the distribution part so obviously
18:20distribution cost will be there in terms
18:23of you are maintaining raw material
18:25inventory finished goods inventory
18:27semi-finished good inventory that will
18:29also carry some cost so this is how you
18:31can design the cost function where
18:33material cost is there inbound logistic
18:36cost is there manufacturing cost is
18:37there outbound logistic cost is there
18:39handling cost is there distribution cost
18:41last mile delivery cost is there and
18:44inventory cost is there and then some
18:46few things you can add is maybe your
18:49packaging cost which is again considered
18:52sometime part of your final product only
18:55but then if you are talking about let's
18:57say the returns that is also adding cost
19:01returns in terms of end of end of life
19:03product or maybe under warranty period
19:06right so these are some of the extra
19:08cost which you you need to take care and
19:10if I'm saying that you need to be
19:13sustainable in your practices so
19:15sustainability measures will also add
19:17some cost initially maybe in the long
19:19term will help you to reduce the overall
19:21carbon footprint as well as well as your
19:24cost will be reduced so this hu this
19:27whole network these many elements are
19:30there we need to take care when we'll
19:32say we want to minimize the distribution
19:34cost you need to look at this function
19:37of cost what are those components which
19:39are adding to your distribution cost and
19:42how you can obviously if you'll say
19:44inventory I will not manage so that cost
19:46you can reduce but then what will happen
19:49customer is coming to you and you are
19:51maximum time out of stock you cannot
19:54compromise that on this uh promise that
19:57you are Min minimizing ing the inventory
19:59you are more efficient but what you will
20:01do when you are efficient but you are
20:03not having any product to offer to the
20:05customer right so that also you need to
20:07availability also you need to take care
20:09so somewhere you need to maintain
20:13the balance between
20:17efficiency and responsiveness if you
20:20want to keep the C product to the
20:23customer you have to maintain the
20:25inventory if you want to deliver quickly
20:29then you have to
20:30spend huge on outbound Logistics another
20:33one part which I missed here is
20:35information which is very very important
20:38part information cost so you are
20:40designing information platform how you
20:43can your customer can share the
20:44information your stakeholder can share
20:46the information how quickly you can
20:48spread that information throughout that
20:50supply chain that will also add some
20:52cost right so these are some of the
20:54elements you can just go through so when
20:57we are talking about how we can address
21:00those elements are you know adding to
21:02your cost function obviously we are
21:04dealing with those cost uh criteria so
21:09why we need to you know add into cost is
21:13these are some of the reasons timely
21:15delivery only will happen if you are
21:18maintaining inventory nearby to your
21:20customer how many times you are
21:22delivering the product on time if you
21:24said within one day delivery how many
21:26times you are keeping your promise if
21:28effective in Inventory management only
21:31two things you need to take care you
21:33should not be stock out you should not
21:35keep the excess inventory only then you
21:39are effectively managing your inventory
21:41flexibility and responsiveness if I'm
21:44coming to you asking for five units you
21:46are readily shipping the five units IM
21:49asking 500 units you have that capacity
21:51to scale up that you can provide 500 if
21:54I'm asking for 5,000 you can provide
21:565,000 items as well and responsiveness
21:59if I'm saying that I need these these
22:02these different models a b c d of those
22:05products how quickly you can find uh
22:07deliver those models efficient and cost
22:10effective that cost function you need to
22:12take care how you can lower down the
22:14inventory cost how you can lower down
22:16the inbound outbound Logistics cost how
22:18you can lower down the inventory uh
22:21warehousing cost handling cost
22:24distribution cost that you need to
22:26manage in effective way that is another
22:27objective of the supply chain when you
22:29are saying that your complete supply
22:31chain is one system you need to ensure
22:33that this is one family of all the
22:35stakeholders so that you know your
22:39stakeholders are very much part of your
22:41strategic decision making so this is not
22:45something that you you cannot share or
22:48you don't want to share with your
22:50stakeholders if your strategy is you you
22:53are going to be cost effective in that
22:55particular Market that should be shared
22:58among all the stakeholders in your
23:00supply chain if you are talking about
23:02responsiveness then you need to share
23:04with your retailer who is finally deling
23:07the product that you need to maintain
23:09that much inventory because you cannot
23:11say no to your customer we are all the
23:14time we are providing the inventory
23:15maybe inventory cost will rise up but
23:18then we are not caring about the cost we
23:20are more
23:21responsive improve Logistics management
23:24system in terms of minimizing the cost
23:26and Effectiveness you how you can be
23:28more effective optimized delivery time
23:30cost amount right so then if you're
23:34talking about same day delivery but are
23:36you able to you know ensure the enough
23:40ORD so that you can enjoy the economies
23:42of scale so that you can lower down the
23:43cost but if you are running you know
23:46every time your private fleet to fulfill
23:48one order two orders so then it may not
23:51be cost effective increase the overall
23:54customer value how you can reduce the
23:56value adding uh non value adding
23:59activities and add more value adding
24:01activities so that the customer
24:02experience can be enhanced you need to
24:06spread your network obviously one today
24:09if you are working in one reason maybe
24:11you are covering 10 pin codes how
24:13tomorrow you can go for 12 PIN codes 20
24:15PIN codes 30 pin codes that you need to
24:18cover right so increase demand
24:21fulfillment whenever order is recorded
24:23you should be able to fulfill that from
24:25your fulfillment center quality you are
24:28delivering the right product with right
24:30quality at right time that is the main
24:33objective and improved integrated
24:36technology that will you know help you
24:39to make that integrated system of all
24:42the stakeholders where all can
24:43contribute at one point so talking about
24:46supply chain decisions we are taking at
24:49three different stages and if I divide
24:52those three different stages first is
24:55top level management is involved here
24:57here is middle level man management here
24:59lower level management obviously when we
25:01are talking about top level management
25:03what strategic decisions will be there
25:06and when we are saying strategic
25:07decisions that means long-term
25:10commitment of your resources if today
25:12I'm taking some decision it may have
25:14effect for next 10 years 15 years 20
25:17years down the line so in that way your
25:19investment will be for that longer
25:21period if I'm talking about middle level
25:23management so maybe medium
25:26terms decision we are making maybe for 2
25:29years or one year that depends upon the
25:31nature of the industry as well if you
25:33are talking about automobile industry
25:35maybe Top This long-term decision maybe
25:39for 10 years to 20 years if I'm talking
25:41about entertainment
25:44industry so longterm may be for 5 to 6
25:48months and shortterm maybe how you are
25:51going to launch that within first five
25:54weeks then next five weeks so that is a
25:57kind of industry entertainment industry
26:00if today you are launching coming up
26:01with one web series or movie so tomorrow
26:04it is outdated whosoever has seen will
26:07never visit if that that much appealing
26:09it is not right so this these decisions
26:12will change as per the nature of the
26:15product and Industry lower level
26:16management usually deal with day routine
26:20decision how you will meet the day
26:22orders whatever is coming right so
26:25talking about your strategic decision so
26:28so I talked that long-term effect
26:30whether you will do in-house or
26:32Outsource it is very long-term decision
26:35so for next 20 years that supplier is
26:37going to be part of your supply chain
26:39and will supply you right or if you are
26:41doing it in-house so that you need to
26:43ensure that you have that expertise and
26:46Facilities to produce that
26:48in-house location where you will locate
26:51your suppliers just in time your
26:53supplier should be very near where you
26:55will locate your warehouses your
26:58distribution centers your manufacturing
27:00centers if you want to reduce the
27:02outbound Logistics cost your
27:05manufacturing uh Center or factor should
27:07be near to your markets then product to
27:10be manufactured what type of product you
27:12are manufacturing should be the very
27:14first question strategic decision today
27:16you are coming up new with new product
27:18tomorrow you can phase out easily right
27:21so that is again long-term mode of
27:22transportation what type of mode you
27:24will use again long-term decision and
27:26how you will set up your inform system
27:28will affect the performance of your
27:30organization for longer term and when
27:33you are talking about supply chain
27:34planning middle level planning quarter
27:37to one year so which Market we have so
27:40many different markets and maybe two
27:43factories so first three Market will be
27:46supplied by Factory 1 and next two
27:50markets will be supplied by Factory 2
27:52right so depending upon the capacity of
27:55this these facilities depending upon the
27:57demand coming from these markets
27:59depending upon the availability of the
28:01raw material at one point depending upon
28:03the supply chain cost how much distance
28:06they are covering all those things you
28:08will take in care planned inventory how
28:11much inventory you will uh maintain at
28:14the raw material Level at the
28:16semi-finished level or the finished
28:18level and then subcontracting if you are
28:20Outsourcing for some sometime maybe
28:23packaging right now you are not doing
28:25in-house you are Outsourcing it right
28:27and then timing and size of the market
28:29proportion as per that also you are
28:32making the decisions third stage is the
28:35lowest level where we are taking the
28:37lower level management is taking the
28:38routine decision how you can handle the
28:42uh date routine orders coming right how
28:44you can allocate the orders how you can
28:46set the order due date right and then
28:49pickup list you will generate means
28:51related to day routine activities today
28:53we'll manufacture these many units of
28:55model A these many units will shift of
28:58model B these many units of model C like
29:00this so that you know that this much
29:02demand is coming from that particular
29:04market right so that way you will set
29:06the delivery schedules you will place
29:08the replenishment orders day routine
29:10activities how you are ensuring the
29:12smooth supply chain of those activities
29:14right so quickly we'll go through what
29:16are the different types of supply chain
29:18models depending upon the requirement of
29:20the products continuous flow model this
29:22is a kind of supply chain where there is
29:25continuous flow of product and you have
29:28nothing much to do with the you know
29:30variation adding more features let's say
29:32talk about steel
29:34industry so what you'll do extra with
29:36the steel roads right if you are selling
29:39steel sheets what extra you can do that
29:42right so that as long as I'm taking that
29:45particular thickness sheet so it will be
29:48almost same throughout all the brands so
29:51then you need to be efficient in that
29:53kind of supply chain because only thing
29:56is you are operating your comp you are
29:58competing in the market based on cost
30:00only because there can be no other USP
30:02because variation is very less agile
30:05model when you will be having you know
30:09uh unpredictable demand of something so
30:12then you need to prioritize those things
30:15let's say you have one car one car
30:18Option is you can operate it as normal
30:20taxi you can operate it as ambulance so
30:23when you are operating as ambulance you
30:25have to be you know opt that model right
30:29where the demand can come any time and
30:31you have to quickly respond that so that
30:33is the kind of example but if you are
30:35talking about taxi so routine rides are
30:38coming to you so then that way you can
30:40handle fast model kind of products which
30:43are perishable today you are packaging
30:46only by today or maximum tomorrow you
30:48need to ensure the consumption of that
30:50milk products so if milk supply you are
30:53talking about so that is kind of uh uh
30:57this supply chain fast model supply
30:59chain is required flexible model if your
31:03supply product uh demand is affected by
31:07Seasons so then you need to uh opt for
31:10the flexible model where for the peak
31:12season you need to you know scale up
31:14your supply chain and for when the
31:16season is not there then low volume
31:19requirements will be there so you need
31:20to scale down your supply chain right so
31:23how you can do that so sometimes if you
31:25are keeping the inventory extra
31:27inventory and you are moving with the
31:29same kind of continuous flow of supply
31:32chain so you can see in the end you have
31:34to come up with some promotional offers
31:36that you are selling the same inventory
31:38at 50% or lesser price or 70% 75% so
31:42that is extra cost right efficient model
31:45again is required for those kind of
31:47products which are very uniform right
31:50like we talked about steel let's talk
31:51about the sugar industry let's talk
31:53about the salt industry where profit are
31:56very less what extra you will do with
31:58salt or sugar you can change packaging
32:00only maybe some quality difference very
32:03that will be there depending upon the
32:05size of the grain but yes then again
32:07what extra you will do but if you're
32:09talking about some you know automobile
32:12industry bike uh two wheelers you can do
32:16so many things with that product right
32:18you can add so many different features
32:20but these kind of the products uh which
32:23where we we can't do much so in that
32:25case efficiency is more requ Reed you
32:28can compete only based on the cost and
32:30then custom model when we have those
32:33luxury Brands and BM BMW or Mercedes or
32:36Rolex we are talking about so then you
32:39know specialized customized Services we
32:41need to provide if you're uh purchasing
32:44BMW so why don't they give us the option
32:47to design the interior to design the uh
32:50how you want to you know if you want to
32:53boost up the engine capacity if you want
32:56more boot space if you want those kind
32:58of things you can add right so that is
33:00customized model so talking about the
33:04concept of Supply Chain management we
33:06can Define under three concepts
33:07configuration relationship and
33:10coordination so configuration will
33:13Define the overall architecture of the
33:15supply chain how you are now we talked
33:18about the backward supply chain or
33:20reverse supp uh your forward supply
33:22chain so what type of model you are
33:24opting for are are you a kind of D
33:26Supply Chain who want want to interact
33:28directly with the customer direct supply
33:30chain no intermediary involved so that
33:33whatever customer wants they can give
33:35their configuration and directly will
33:37provide them the customized product so
33:40that will happen only when you have
33:41vertical integration that means you are
33:43producing your raw material of your own
33:46and then you are delivering the final
33:48product of your own so that way you are
33:51your supply chain completely you are
33:53having the control you can control the
33:55quality delivery schedules everything
33:58right but that expertise is required in
34:00that way but on the other way if you are
34:02including so many stakeholders different
34:04suppliers co- manufacturers manufacturer
34:06Distributors so then you cannot control
34:09the quality at every stage but yes then
34:12uh you it will be more efficient and
34:14maybe then you can use the expertise
34:16supply chain relationship like I talked
34:18about your stakeholders whether you are
34:21keeping at arms length or you are
34:23keeping very close relationship with
34:25them so you are sharing every
34:28you know secret recipe of your business
34:31how you are doing how you want to do as
34:33financially how you want to improve your
34:35services how you want to renovate
34:37quickly renovate your product if you
34:39want to quickly renovate your product
34:41your suppliers also have to quickly
34:43renovate the supply of the raw material
34:45components so that is only possible when
34:48you are keeping your suppliers intact
34:50with you and then talking about supply
34:53chain coordination again functional area
34:56where coordination with all the
34:58stakeholders if there only then you can
35:00go for continuous material flow
35:03throughout the supply chain right if
35:05there is any lag with the information or
35:07demand is not accurately predicted right
35:10by the sales team then that much
35:12inventory you will not store that much
35:15manufacturing will not happen and then
35:17order fulfillment centers will not be
35:19able to fulfill the order on time and
35:22your capacity everything will be
35:24hampered in that way right okay so uh
35:27here we can conclude that as if we'll
35:29talk about the basic fundamentals of
35:31Supply Chain management we are somewhere
35:35targeting the streamlined operations
35:37through your from the origin of that
35:40product to the end delivery right and
35:43how in between that how the procurement
35:45is happening how you are converting the
35:47raw material into finished one and how
35:49we are Distributing and we talked about
35:52the how this these all small activities
35:55are adding up into your cost function so
35:58you need to take care of that cost
36:00function but yes any activity you cannot
36:02phase out packaging you cannot phase out
36:05storage you cannot phase out inventory
36:07you cannot phase out yes but you can
36:09manage that level of inventory which
36:11will reduce our cost like Walmart is
36:14doing they are they are uh having this
36:17beautiful system of centralized store
36:20distribution centers from where they are
36:22supplying all the markets so in that way
36:25instead of in uh storing the inventory
36:28at 10 different locations they are
36:30storing inventory here only right so
36:32that means inventory cost you can reduce
36:36so we have different techniques in the
36:38same way during Transportation also you
36:40can reduce the inventory right so during
36:43packaging also if you'll design the
36:44packaging in that way the minimum uh
36:47packaging material you are using and
36:49ensuring the quality also of the
36:51packaging so then we can you know
36:55minimize the cost of the operation so
36:57this is the overall objective of the
36:59Supply Chain management any Supply Chain
37:01management whether you are talking about
37:03the complete vertical integration where
37:06Del is completely owning their supply
37:08chain or you are talking about kind of
37:10PNG supply chain where so many
37:12stakeholders are involv but this overall
37:15concept is one system concept where if
37:19we are making profit that that will be
37:21shared through all the stakeholders if
37:23we are making loss that will be shared
37:24through all the stakeholders so
37:27obviously the adoption of Technology
37:29collaboration with partners and focus on
37:31sustainability will be now these are
37:33some of the challenges also and
37:35opportunities as well coming as
37:36opportunity so obviously Regulators are
37:38putting more stress on you know
37:40sustainable practices and uh your
37:44customers are demanding those kind of
37:46services where you need to
37:48technologically you need to be very
37:49strong so that way you have to implement
37:52these are kind of drivers which are
37:54driving your Innovation uh platforms
37:56providing you those platforms but yes
37:59once these things are implemented
38:01streamlined standardized then the
38:03overall cost of uh supplying the
38:05products and services can be reduced so
38:09these are the references for further
38:11reading so thank you very much

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