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Lecture 26 : Supply Chain Uncertainty and Processes — Transcript

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0:01[Music]
0:22[Music]
0:25so hello dear students welcome back to
0:27nptl online course on Logistics and
0:29Supply Chain management I'm Dr vikas
0:32takur assistant professor Department of
0:34humanities and social sciences IIT kakur
0:37so today in this journey we'll discuss
0:39today about the some of the challenges
0:42which maybe as supply chain manager will
0:44face right in terms of uncertainties
0:47right which may be posed from the
0:49customer end where we are consuming the
0:51final product or maybe it can come these
0:54uncertainties can be from the supply end
0:57so complete supply chain perspective
0:59we'll see what are the different
1:01challenges in terms of Uncertain
1:03situations which we are put into and
1:05then how we can deal with those some
1:08some of the mitigating strategies we'll
1:09discuss right and then we'll talk about
1:12uh again the supply chain macro
1:14processes uh keeping three stakeholders
1:18in mind first is your supplier then
1:20manufacturer and then the customer so uh
1:23among the interaction if we'll talk
1:25about among these uh three stakeholders
1:27we'll see what are those macro process
1:29processes we are handling when we are
1:31talking about the complete Supply Chain
1:33management as macro processes right so
1:37uh uh if I'll just randomly ask you
1:41about any if you are supply chain
1:44manager and we are asking about when we
1:46will replenish the inventory right maybe
1:49on the road you are having all the data
1:51stats with you that uh maybe five lots
1:54are coming from different suppliers
1:56right if I'll ask you the exact location
1:59maybe you can specify the exact location
2:01where are the goods right now but if
2:03I'll ask you the exact time when we'll
2:06receive those goods maybe that 100%
2:08accuracy may not be there because Still
2:11You can predict that maybe within that
2:13time we will receive the goods but we
2:15are never 100% sure right same is the
2:18case when I'm talking about the quality
2:20of those goods being transported from
2:23point A to location B right so then also
2:26because during that Transportation or
2:28handling in the warehouses maybe we we
2:31might have damaged some of the products
2:33if the initially we shifted 1,500 units
2:37all 1500 units with the you know
2:39promised quality are reaching to the End
2:42customer that again we are not sure and
2:44then some kind of maybe disruption in
2:46terms of uh recently we have seen
2:49covid-19 pandemic where the complete
2:52supply chain was disrupted because of
2:54the shutdown right so then again the
2:57availability of the raw material
2:59finished Goods factories were shut down
3:01worker moved from those location to
3:04their Villages so that is again kind of
3:06UNC uncertain situation right so how we
3:11can deal with these kind of Uncertain
3:13situation either happening from the
3:15customer side in terms of demand
3:17uncertainty or happening from the
3:19supplier side in terms of Supply
3:21uncertainty so whenever we are talking
3:24about uncertainty these two points we
3:26need to keep in mind because always in
3:28supply chain manage M the primary fight
3:31is to meet the demand with your supplies
3:34Whenever there is uncertainty with the
3:36demand or uncertainty with the supply so
3:39definitely challenges we are going to
3:41face so how the very first uh solution
3:45that comes to our mind is that let us
3:47keep some extra safe inventory in our
3:49retail outlet right so that any customer
3:52visits our showroom can get the
3:55inventory right can get the product so
3:57this is one way out but yes then how
4:00much inventory you will keep but then
4:03maybe for tomorrow you are predicting
4:05the cyclone and maybe for next 10 days
4:08or maybe 10 months there is no Cyclone
4:11so then what you will do with that extra
4:12inventory so that also you know uh the
4:16chances of getting that inventory
4:18obsolete is also very important point
4:21and then sometimes what is happening you
4:23are uh because of that end season sales
4:26are there and then you are selling the
4:27same inventory at the reduced price so
4:30these are some of the challenges when we
4:31are talking about the uncertain
4:33situations right and in supply chain
4:36these uncertain situations can arise
4:38either from the supply end or from the
4:41customer end in terms of demand let us
4:43first talk about the supply chain
4:46uncertainty obviously when we are not
4:49sure about the what see suppliers are
4:53when very prominent stakeholder of any
4:56supply chain from where the supply is
4:58coming right so so the very basic
5:00purpose of supply chain is to ensure the
5:04smooth supply of the uh raw materials to
5:07the production line right so that means
5:10when it is unpredictable situation or
5:12volatility is there so that means you
5:15cannot predict the situation 100% right
5:18so anything can go wrong with the
5:20supplier maybe for with the one supplier
5:23or maybe with the multiple suppliers
5:25right so then how you will respond
5:27during that situation like we quoted the
5:28example of 19 outbreak right so there
5:32can be natural disaster there can be
5:34man-made disaster so in nutshell we can
5:37say these factors demand fluctuations
5:41Logistics disruptions labor shortage
5:43geographical uh any event is occurring
5:47right so these are some of the factors
5:49which can interrupt your supply chain
5:51smooth supply chain right so in terms of
5:54supply chain manager our responsibility
5:57is how we can ensure the smooth Supply
5:59of the raw material right or whatever
6:02component we are using to produce that
6:04finished good finished product right so
6:08let us keep we'll discuss four scenarios
6:10Supply
6:11uncertainty uh on uh the row side and
6:14demand uncertainty on the column side
6:17see one very ideal situation is when we
6:21have low Supply uncertainty that means
6:25you are pretty sure about the supply
6:28that you can maintain the smooth supp
6:29Supply and then low demand uncertainty
6:33that means you are into a market kind
6:36where maybe you are dealing with those
6:38products where you have the continuous
6:40Supply continuous demand like we counted
6:43sugar industry salt industry seed uh
6:45steel industry cement industry those
6:48kind of goods where you know continuous
6:50Supply is there so in that case if this
6:53is the kind of industry what is the
6:55primary focus of any supply chain is to
6:58be efficient because there is nothing uh
7:02much you can do with the product in
7:03terms of innovation right cement
7:06industry will provide all same packet
7:08size right and same quality almost same
7:11quality and it is very difficult as a
7:13lemon maybe customer you cannot analyze
7:15the quality right so then what you will
7:18do with you know in terms of USP your
7:21USP lies majorly how efficient you are
7:24while you are pricing your product right
7:27so pricing is very very important in
7:29this this situation first scenario
7:31second scenario where we have still uh
7:34stable Supply but we are not sure about
7:37the demand high demand uncertainty right
7:40in terms of if you are coming with the
7:42new mobile phones right so only thing
7:44component are same sometimes you are
7:46adding some new features adding some new
7:48apps software so that way you are
7:50Innovative in that way right but in that
7:53case your supply chain should be very
7:54very responsive quickly you should
7:56respond to the customer demand that can
7:59come from anywhere right so high demand
8:02uncertainty from particular C uh uh
8:05Market maybe demand is coming and for
8:07next 10 days there is no demand from the
8:10same market and some other location we
8:12are getting high demand right so in that
8:14case how supply chain can respond very
8:17quickly the third scen this is the
8:19second scenario third scenario is where
8:22we have high Supply uncertainty but
8:26demand is still very stable right but
8:29Supply we are not sure so in that case
8:31what we can do like we talk about
8:34semiconductors in these days you might
8:36have seen the demand for the automobile
8:39industry is almost saturated with all
8:41the players right there are maybe some
8:44fluctuations are there but still they
8:45can figure out how much is the demand
8:47but if you talk about the uh recent news
8:50was there and now Indian government also
8:52started establishing semiconductor two
8:54or three location they have identified
8:56where they are planning to set up the
8:58semiconductor plant right so in that
9:00case because uh the news I was talking
9:04about more than 50 lakh units were uh
9:07with the manufacturers maruti Hyundai
9:09toota all those manufacturers but they
9:12were not able to sell because of the
9:14shortage in the chip right so then in
9:17that case what you can do risk hedging
9:20may be the best option for managing your
9:22supply chain where you can pull your
9:24resources if same Industries maybe many
9:26players are there they can pull their
9:29resources to meet that uh kind of
9:32saturated demand and last fourth case is
9:36where your supply is very uncertain your
9:38demand is very uncertain this is the
9:41biggest challenge when you are not sure
9:43about anything right then the AAL supply
9:46chain will help how flexible you are
9:49with your supply chain if demand is
9:51suddenly coming from one end how you can
9:54meet with the uh you know minimum
9:56consumption of the resources because
9:58meeting demand requires supplies right
10:01but we are not sure about the supplies
10:03as well so then those kind of you know
10:05Industries we have to be uh we have to
10:08come up with your agile supply chain
10:10let's talk about Healthcare supply
10:12chain maybe the Emergency Services you
10:15are providing with the ambulance maybe
10:17you are providing the different uh you
10:20know blood groups right and then Supply
10:23is also uncertain in that case whether
10:25you are maintaining those all the blood
10:27groups or not and then demand when you
10:29need how many bottle units you need
10:31right that also is very very uncertain
10:34so in that kind of situation in
10:36healthcare supply chain is Healthcare
10:38supply chain is usually we talk about
10:40emergency supply chain or you can talk
10:42about not only Healthcare supply chain
10:44disaster supply chain disaster relief
10:47operations from where how many first
10:50thing is we need to locate how many
10:51people are affected then we need to
10:53ensure the minimum supplies with the
10:55medicines next minimum Supply how they
10:57can survive for maybe eight or 10 10
10:59days then the rescue operation will
11:01happen so we need to supply them the
11:04medicines and the bread packets and all
11:07that that they can survive right so
11:09these are four different scenarios we'll
11:11discuss when we'll discuss about the
11:13uncertainty throughout your supply chain
11:16right talking about demand uncertainty
11:19refers to unpredictability and
11:21variability coming from the customer
11:23side so sometimes you are keeping that
11:26much stock you stocked in 2020 you
11:29forgot to use that and still that
11:31inventory is with is with you but it's
11:34it's not coming with the you know
11:35deadline or maybe uh expiry date so you
11:39are using somewhere in 2050 but that
11:42inventory is now you are counting that
11:44it is consumed but it is still with the
11:46customer that can also happen right if
11:48those kind of products are there so but
11:50demand variability usually coming from
11:52the customer side and why it is
11:54happening because of Market Trend
11:56suddenly if there is change in the
11:57market Trend obviously custom customer
11:59focus will shift to some other
12:01Alternatives consumer behavior is also
12:03very unpredictable sometime you are
12:05going maybe you are feeling that next 2
12:07three months you will be very busy let
12:09us stock all the grocery items in the
12:11house so that next 2 three months I'll
12:13not get the time to visit the uh retail
12:16shop right so that way you are
12:17maintaining extra stock but usually you
12:19are not buying for more than 8 or 10
12:22days or 15 days inventory so then your
12:24behavior in that way can be you know
12:26very complex to predict economic
12:29conditions so suddenly if there is a
12:31recession buying power purchasing power
12:34of the customer will reduce so that also
12:36we need to take care when during covid
12:39only that happened that most of the
12:41automobile industry they faced huge
12:44crisis in terms of managing the demand
12:46because of the very low Demand right and
12:49then external events are always there
12:52which can affect your Demand right
12:54implied demand uncertainty is uh
12:58different from the demand and cty where
13:00we are talking about the special thing
13:03the special promise we are meeting and
13:06we are promising to our customer right
13:08where you are providing the Emergency
13:09Services let us talk about uh say uh we
13:13need ambulance services right I'm I'm
13:16having one uh taxi right so maybe first
13:20scenario is I'm using it as maybe taxi
13:23right or second is I'm using it as
13:25ambulance right so then using Taxi still
13:29the uncertainty is there maybe for whole
13:31day you are not having even single ride
13:33and then maybe for the next uh 12 hours
13:36you are getting multiple rides right so
13:38how you will manage as long as you you
13:40are having only single taxi right how
13:43you cannot manage maybe you can hedge
13:45with the other uh hedging supply chain
13:48you can go for where you can pull the
13:50resources you can get the taxes from
13:52your other uh players in the market and
13:55then this is how you can meet the
13:57customer demand but let's talk about the
13:59second scenario where we are talking
14:01about the ambulance where any this
14:04uncertainty is at the highest level and
14:07because we are promising Services during
14:09emergency only when we will call uh
14:13ambulance when we don't want to wait
14:15even for 5 minutes but in case of Taxi
14:18you can wait for 1 hour right you can
14:20wait for half an hour if you're planning
14:22for long journey so you can wait you
14:24have fall taxi person and then he took
14:2630 minutes extra then you took maybe 15
14:2920 minutes extra to board on taxi and
14:31all those things right so that in that
14:33way it is not that kind of Emergency
14:35Services but implied demand uncertainty
14:38when you are promising you are actually
14:41uh referring to that portion of the
14:43demand which is you know very very
14:46uncertain and kind of emergency services
14:49so if talking about that order frequency
14:52is also not sure lead time is very less
14:55quickly you need to respond fire
14:57Services right so so that people will
15:00get the minimum time right to deliver uh
15:04to you know uh provide the fire services
15:07and then Services level also expected
15:09are you know in terms of services level
15:12different varied Services level are
15:14expected from the customer so this is
15:16very important in terms of implied
15:18demand uncertainty so uh talking about
15:22emergency orders and long lead time so
15:24this if long lead time is there we'll
15:26talk about demand uncertainty
15:32if your emergency orders are there we'll
15:35talk about your this implied demand
15:37uncertainty so this is the basic
15:39difference because we have very short
15:42time to respond to that query to respond
15:44to that you know the demand coming from
15:47the market right but in case of the
15:49other supply chain where we have long
15:51lead time still we can take some time to
15:53respond like uh if you are placing order
15:56with the zomato right even they are
15:58promising fast delivery but they have 30
16:0045 minutes 1 hour sometimes right they
16:02can delay those Services bad weather
16:05condition they can reflect and then they
16:07can ask the customer to wait for maybe
16:08little longer hardly matters but in case
16:11of emergency services disaster
16:13management supply chain you have to be
16:16very quick uh to provide those emergency
16:18services so impact of services level as
16:21the services level will increase implied
16:24demand uncertainty will replicate in the
16:26same way will increase like anything so
16:28so that also you need to see if you are
16:31providing the services through different
16:33channels right so again the implied
16:35demand certainty will increase because
16:38now it's not only you need to cater to
16:40the demand coming from one channel if
16:42you're selling tickets if you're airline
16:45industry selling ticket from your
16:46through your maybe your own website
16:48through make my trip through go through
16:50exigo through IRCTC all those different
16:54channels are there so in that way imply
16:56demand uncertainty will be higher so
16:59let's talk about the supply uncertainty
17:02already we introduced a little bit about
17:04how it can be
17:06unpredictable uh during your
17:09uh when we are interacting with the
17:12suppliers right so what can be the
17:14factors capability of uh the supply
17:17chain and life cycle position very
17:19important when we are talking in terms
17:21of Supply uncertainty let's talk about
17:23the capability of the supply chain
17:25capability in Layon terms capability how
17:28cap your supply chain is to you know
17:31meet all the demand coming from the
17:33customer end whether it is variability
17:36is there in the demand whether quality
17:38level expected is different from
17:40different customers some are looking for
17:43superior quality some are looking for
17:45maybe the superior pricing policy some
17:48are looking for maybe variety so how
17:50your supply chain is capable enough to
17:53meet all those you know
17:56uh different kind of Demands coming from
17:59the customer with the so how you can
18:02meet that first is your production
18:04process second is your eeld quality e so
18:08how quickly your production process will
18:11respond to change in the market demand
18:14and how quickly you are shifting from
18:15model one to model two let's say now
18:18there is high demand for model two you
18:20will stop model one model 3 Model four
18:22and you will suddenly change over to the
18:25model two because there is more demand
18:27coming for that particular model right
18:28right then quality is how efficiently
18:32effectively you are converting the raw
18:34material into the finished one right and
18:37ensuring the final quality so once you
18:39will stabilize in that market
18:42standardize your production process your
18:44quality will improve automatically but
18:46if you are coming initially with you
18:48know new product design new process
18:50design then in that case it will take
18:52little time to standardize that process
18:55so that's why we always talk about in
18:57production operation management it is
18:59very very important to reach that
19:01standardization of the production
19:02process as early as possible so that the
19:06rejection Pro processor rejection can be
19:08reduced raw material rejection can be
19:11reduced in that terms life cycle life
19:15cycle position of the product see so
19:17life cycle everyone knows that this is
19:19the life cycle right where we are
19:21talking about the introduction stage we
19:23are talking about here the growth stage
19:25here we are talking about the maturity
19:28and then finally our product declines so
19:31just quickly I'll relate this life cycle
19:34position and how it is putting uncertain
19:36situation through the supply chain see
19:38this introduction stage if I'll
19:40characterize that means you are very
19:42very
19:43uncertain not only with demand but as
19:46well as your Supply right so because
19:49just now you introduced the new product
19:51you are not sure about the demand from
19:53which market demand will come and then
19:56because you are still standardizing in
19:58the process of standardizing your raw
20:01material components your process design
20:03so your supply is also not sure and you
20:06are also not sure how many vendors you
20:08need to develop whether that particular
20:10product will be success or failure so
20:13then you cannot suddenly go for multiple
20:15vendors right so in that way it is very
20:18uncertain so obviously in that case you
20:21have to be very responsive in your
20:23supply chain why I'm saying responsive
20:26when you'll go somewhere here you should
20:27be efficient cost efficient but when you
20:30are at the introduction stage you need
20:33to be responsive that means if demand is
20:36coming from anywhere you need to respond
20:39quickly right so that means cost will be
20:42little higher in terms of we are not
20:44sure about the demand in terms of we are
20:46not sure about the supplies that maximum
20:49inventory we are maintaining
20:50standardization is not done of the
20:52process so that means cost of production
20:55productivity will be low when
20:57productivity will be low that that means
20:58cost of production will be higher so
21:01that means the pricing will be little
21:03higher okay so because you need to
21:05recover the R&D cost as well so that you
21:08need to consider because as soon as you
21:10will get go into the growth stage other
21:13players will come into picture
21:14competition will be there in that case
21:16you need to lower down the cost you need
21:19to lower down the price as well right so
21:22till this point you need to ensure that
21:24you have recovered all the R&D cost
21:27including the profit margin as well that
21:29also you need to ensure right and once
21:31you will go into maturity stage now your
21:34processes are standardized demand is in
21:36that way saturated Supply is saturated
21:39you can forecast You can predict how
21:41much customer share is there if you're
21:43maintaining somewhere around 15 to 177%
21:45customer share so you you see
21:47fluctuation maybe 1 to 2% right so that
21:50much you are sure about the supply so in
21:52that way you can be efficient so when
21:54you are going to maturity stage you need
21:56to be efficient you need to be more cost
21:59efficient and quality also you need to
22:01promise imply demand uncertainty already
22:03I discussed if there is imply demand
22:06uncertainty so that will that effect
22:09will be replicated in the supply as well
22:11how many ambulances are required maybe
22:13at the same time then three calls are
22:15coming all cases are equally important
22:18so to whom you will address the first so
22:20that will pose extra you know challenge
22:23for this so how we can counter supply
22:26chain uncertainty first thing is we need
22:28to diversify the suppliers that means
22:30multiple suppliers different
22:32geographical location already in one
22:34session I discussed about uh single
22:37supplier m versus multiple supplier if
22:40anything goes wrong in that geographical
22:42location any disaster like Cloud
22:45bursting or flood is coming earthquake
22:47is there so that means your supply chain
22:49in interrupted right so then you need to
22:52locate different locations right
22:55sometime what is happening you are
22:56locating your supply uh your partner
23:00overseas as well when you are going
23:01overseas maybe some overseas is required
23:05maybe you are getting cheaper product uh
23:08with a lesser cost and then maybe
23:10quality is another one maybe technology
23:14is another one quality level is high
23:16technology is another Factor you are
23:18buying from the overseas player right so
23:21but this is long supply chain so but you
23:24can't replace all the suppliers with the
23:27overseas player what if that overseas
23:29supply chain interrupted right so one
23:32maybe one or two local vendors I will
23:34maintain who can ensure the smooth
23:36Supply during that time but when I'm
23:38sure about the supply and demand and
23:41that much Big Lot is required obviously
23:43I'll go over seas from where I can
23:45negotiate the cost quality and
23:48technology and performance all those
23:49things enhance visibility if you are you
23:53know real time data is provided by
23:55tracking your inventory by whatever
23:58action you are activity you are
24:00performing at different stages of that
24:02supply chain right then you can in that
24:04way reduce the uncertainty why
24:06uncertainty is there in the supply chain
24:09because we don't have the full
24:10information either we are dealing with
24:12the partial information wague
24:15information uncertain information right
24:18if that can be let's say how we are
24:20tracking right now is that this much
24:23demand is coming from the customer okay
24:2450 units let us place the order for 55
24:27units right then let us manufacture
24:29maybe 60 units let us place the order
24:31with the supplier for 70 units so this
24:33is how your demand is still 50 but you
24:36are placing order for 70 units how we
24:38can electronically we can change that so
24:40can so that that visibility can be
24:43maintained build flexibility so that we
24:46need to ensure while storing the
24:48inventory and agile manufacturing
24:51practices fostering collaboration so
24:53this aile manufacturing can only happen
24:55if I'm asking my supplier quickly Supply
24:58five units he's ready to supply five
25:00units now I need 50 units he's ready to
25:02supply 50 units now change over to
25:04Second model he's ready to change over
25:06to the second model so that you know
25:08collaboration with the supplier is
25:10required and that is only when you can
25:12strengthen the relationship with the
25:14stakeholders communication trust and
25:17collaboration it's not only the problem
25:19with the manufacturer the seller it's
25:21problem if something uncertain situation
25:24is there you need to deal with that
25:26uncertain situation throughout the
25:28network suppliers distributor your
25:31manufacturer Warehouse all those agent
25:34need to work in line right and then
25:36Implement risk management practices to
25:39manage risk first is you need to assess
25:42the risk then scenario planning maybe
25:44multiple Alternatives you will see what
25:46are the different scenarios if you'll go
25:48with root a what what can happen if
25:50you'll go with root b c d then what are
25:53the different you know uh Alternatives
25:56and what will be the different outcomes
25:57and then we will we can find out the
25:59chances of happening something right
26:01probability Theory right we can find out
26:03that so that invest in resilience how we
26:06need to invest more and more in to
26:08develop that robust infrastructure so
26:10that we can back uh come up with the
26:13backup inventory backup location backup
26:15manufacturing so that can be supported
26:18Monitor and adapt we need to monitor the
26:20supply chain performance regularly with
26:22the changing Dynamic that market
26:24scenario right and we need to tap the
26:27external factors as well which can come
26:29and play important role right already we
26:32talked about we can conclude this that
26:33improve visibility and communication
26:35throughout the supply chain and this
26:37will only happen when you are sharing
26:39the data information with all the
26:41stakeholders right so improved supply
26:44chain visibility will lead to agility so
26:47quickly you can respond to proactively
26:49you can respond to whatever uh
26:52uncertainty is coming risk is coming
26:54from the market so that you can tap
26:56quickly so just before proceeding
26:59further I'll show you one video where
27:01you can see how these intelligent Supply
27:03chains what are the expectations in
27:04terms of when we are talking about the
27:06intelligent Supply chains so here I have
27:08included some uh video links you guys
27:11can just quickly go through these videos
27:13so you can see the only way to deal with
27:17this kind of supply chain uncertainty is
27:19transparency and visibility throughout
27:21the supply chain so that quickly you can
27:23share the information with all the
27:25stakeholders and accordingly that quick
27:27action can be taken so just uncertainty
27:30versus risk risk is something that can
27:33be estimated if you are going this way
27:35you can be sure that maybe there is 15%
27:39risk if you are going to this way maybe
27:4125% risk if you're going to this way
27:43maybe 10% risk but if this risk is 25%
27:47maybe the returns are maybe uh 35% if
27:51risk is 15% maybe returns are only 20%
27:55so that way you can find out right so
27:57risk of you know adopting a particular
28:00action and then you can find uncertainty
28:02is something that uh the probability you
28:05cannot find out right this is clearly
28:08unced situation which can happen which
28:11cannot happen right so and these are
28:13some of the events like we talk we are
28:15talking about the disaster events right
28:17so who can predict that this is going to
28:19be the you know depth of that particular
28:21disaster still we can predict in that
28:23way that Cyclone is coming low pressure
28:25Zone and that all we have environment
28:28you know tracking parameters where we
28:30are predicting up to some extent right
28:32so but how much it it is going to uh
28:36interrupt your supply chain is all
28:38together another story right so talking
28:40about supply chain uncertainty and risk
28:43either we are dealing with the
28:44information uncertainty Logistics
28:46related customer related or environment
28:49related uncertainty and risk so
28:52Logistics related
28:53uncertainty simply means when you are
28:56delivering the product from one end to
28:57other end so anything can go so that
29:00means that will if anything is
29:03interrupting your physical flow of the
29:06goods within the supply chain so that
29:08means that can delay your delivery time
29:11transport Network management will be
29:13into picture storage issues will be
29:15there you will not be having enough
29:17inventory carrier Str flight
29:19Transportation operation all will be
29:21affected right if you are not having the
29:24exact information related to your
29:26Logistics right or any uncertainty is
29:29there with the logistics right and then
29:32uh uncertainty May uh these
29:34uncertainties may impact your efficiency
29:36and effectiveness of the overall
29:38Logistics process you are not sure about
29:41how how much you need to Warehouse how
29:43much you need to uh transport how much
29:45you need to go for the final delivery so
29:48those kind of things you are not sure
29:50right so uncertainties are on that side
29:53information uncertainty this is a kind
29:55of uncertainty because this will lead
29:58lead to all other uncertainty if any
30:00lack is there in the information
30:02delivery that means your whole network
30:04is Disturbed right if you are not
30:06getting proper uh demand function right
30:10how it is going to behave for the next
30:1215 days how you will plan your
30:14manufacturing cycle how you'll plan your
30:16procurement cycle how much inventory you
30:18will store in the storage house right so
30:20that information accuracy availability
30:24and timely processing is very much
30:26required these are some of the features
30:28when we are talking about the
30:29information uncertainty customer related
30:32uncertainty is always there how many
30:35customers are visiting your retail
30:37outlet what is the footfall how many are
30:39converted maybe somewhere you can say
30:41maybe on an average maybe 50% or 60% you
30:45are converting but then this is
30:47something consumer behavior is very very
30:49typical to predict reputation risk if
30:53negative you know brand image is
30:55associated or some negative experiences
30:58are there so then also you need to tap
31:00that right or customers is having that
31:03uh reputation right so receivable risk
31:06if you are giving something on credit so
31:08whether you are going to receive that or
31:10not that is also a kind of risk then
31:12forecasting errors demand delays to
31:14customer those all can come from the
31:17customer end right because C sometimes
31:20customer are just roaming around the
31:21market and buying nothing sometime they
31:23are not coming with the mind that they
31:25will buy something and buy so many stuff
31:28in the end right so that those things
31:30are very unpredictable environment
31:33uncertainty in terms of all the
31:35dimension political economic social
31:38technological environmental Global
31:40factors whatever there right any Global
31:42event Russia Ukraine bar suddenly your
31:45crude oil prices are going up Suddenly
31:47Transportation industry is hit badly the
31:49cost of you know shipping the product
31:52will go like anything or any other
31:54product coming from that reason will
31:56affect adversely any any Global event
31:59happens so and then political if there
32:02is change over so you can see how the
32:04market will react right so those all
32:07Market sentiments are uh you know
32:09attached with the if there is change in
32:11the government right how we can mitigate
32:13these supply chain uncertainty some of
32:15the measures we can take right regular
32:19Plan Generation planning is something is
32:22not permanent right if you are looking
32:25for this this is permanent plan that
32:27cannot happen so you need to generate
32:30frequent plan maybe today whatever I'm
32:32planning tomorrow it may go obsolete
32:34right so maybe some other factors which
32:37we you know yesterday we did not uh
32:40considered and today are very very
32:42important right so in that way you need
32:45to go with very frequent plans you need
32:49to evaluate again the plans with the
32:51changing Market scenario and then when
32:54you are saying that that means that if
32:56you know uh you are still working with
32:59the manual kind of planning so it will
33:01not work right so automatically you need
33:04to you know automate your warehouses
33:06inventory your stock your manufacturing
33:08so that immediately information can be
33:10shared and if that is happening you can
33:12reduce the inventory cost by 37% because
33:16continuously you are coming up with the
33:19uh changing environment you are uh
33:21modeling in your uh equation right
33:25consistency in planning now see if today
33:28I'm saying I'm a responsive supply chain
33:31and something goes wrong in the
33:32environment and then I'm so now I'm
33:34saying that I want to compete on cost
33:36how it can happen if Rolex suddenly
33:39start advertising the cheaper product
33:41watches they are providing who will
33:42believe in that and then then then the
33:45first thing will come in our mind those
33:47who are bearing the Rolex and then
33:50whether they are compr obviously they
33:51will be compromising with the quality
33:53that's why they are reducing so that is
33:55something that consistency planning
33:58should go throughout the supply chain
34:00right so that standardization today you
34:02are responsive tomorrow you should be
34:04responsive that is the main thread you
34:07know uh connecting all the stakeholders
34:10so integration of additional data source
34:12it's not only one channel through your
34:14marketing channel or distribution or
34:15sale you are getting the data how you
34:17can track the pattern through different
34:19social media websites right that is
34:21another source how customers are uh you
34:25know rating those products on different
34:27websites those also can be a source of
34:29for your you know renovating the product
34:31supplying the product to the market so
34:33that you need to align your resources
34:36with the demand whatever it is coming
34:38and accordingly you need to change your
34:40production plans as well enhanced
34:43visibility across the supply chain is
34:46again now bull whip effect so this I was
34:49talking about like let's say this is how
34:52the information gets implified over the
34:55stages here the customer is placing
34:57order for 50 products with the
35:01retailer retailer is placing another
35:04maybe with keeping in mind maybe there
35:07may be uh you know increase in the uh
35:11demand so he is placing order 75 with
35:14the uh you know uh manufacturer
35:16manufacturer then again manufacturer is
35:20there and then your raw material
35:22supplier is there so raw material
35:25manufacturer is placing for safer side
35:27maybe 110 products components so this is
35:30see how this information gets implified
35:33over multiple stages how you can reduce
35:36that with maybe electronic data inter uh
35:38interchange is there so quickly you can
35:41share the exact information if 50 is
35:43there you need to acquire the material
35:45as per 50 why to keep that extra you
35:48know more than double inventory okay so
35:51that can only happen when you are having
35:54holistic View and performance tracking
35:56kpis where you have the not only kpis
36:00for one manufacturer or distributor or
36:02where you warehousing right you should
36:05have uh keep kpis aligned with all the
36:08stakeholders and one holistic approach
36:11system approach should be adopted for
36:13this so talking about the last concept
36:16related to this is supply chain macro
36:19processes we'll quickly
36:21see see whatever we are doing with the
36:24supplier known as supplier relationship
36:26management internal supply chain from
36:29raw material to finished goods here raw
36:32material is coming whatever we are doing
36:34within our manufacturing unit is
36:36internal supply chain management and how
36:38we are managing with the customer is
36:40customer relationship management right
36:43so what is happening with the supplier
36:45we are sourcing the supplier we are
36:47negotiating them on the quantity quality
36:49price right and then we are buying that
36:51buying also not only single lot we'll
36:54see in one month how many Lots we'll buy
36:56what will be the quantity in each load
36:58and then throughout the year how many
37:00Lots we are going to buy so in that way
37:02when you are saying that these are our
37:04suppliers you are sharing your recipe
37:06with the suppliers only then they will
37:08manufacture the components for you right
37:10so design collaboration is there and
37:13obviously Supply is there because you
37:14are getting the supply once you'll get
37:16the supply within uh your manufacturing
37:19unit how you'll convert that raw
37:21material into finished one you will
37:23store your raw material then strategic
37:25planning will be there maybe you have
37:27have three different production lines
37:29right one production line A and B model
37:32you are running second production line c
37:34d e and then maybe so many other
37:37different models you are running on the
37:38third production line so strategic
37:41planning demand planning will come into
37:43picture how many units of D today will
37:45manufacture how many units of B today
37:47will manufacture so when we'll shift
37:49from A to B how quickly will shift that
37:52so internal planning how we are going to
37:54fulfill the order so all Supply order
37:57you need to match with the internal
37:59supply chain management we discussed
38:02about the first three main streams of
38:04supply chain here you can say the first
38:06stream this is the second stream this is
38:09the third stream which is interacting
38:10with the final customer now you need to
38:13Market first you need to identify the
38:16demand the expectation from the customer
38:18only then you can you know go for
38:20Designing of the product designing of
38:22the process how you will convert raw
38:24material into finished one then pricing
38:26how much cust customer is willing to pay
38:28is there really that problem is really
38:31that important for the customer that he
38:33is ready to pay this much right then you
38:35will sell and once you will sell you
38:37will provide after salale Services right
38:39you will installation related Services
38:41any returns are happening or any damages
38:44are happening or maybe you are providing
38:46the you know spare parts to maintain the
38:49product maybe over 20 years right okay
38:52so these are some of the things which
38:53are related to customer relationship
38:55management right so these three macro
38:58processes within the supply chain we can
39:00see and whenever there is any
39:02uncertainty among any of this maybe we
39:06figured the market demand in a wrong way
39:09we'll plan strategic planning will be in
39:11wrong way and we'll Source the wrong
39:13component right so we need to align all
39:17these M macro processes so that we can
39:20maintain the smooth supply of all these
39:22materials already we discussed in detail
39:25right so uncertain
39:28basically coming from these four sources
39:32okay these four sources you need to tap
39:34and need to maintain the but still that
39:37cannot be 100% uh accurate information
39:40but still you can somewhere you can go
39:42for that and uh uh how you can mitigate
39:46that uh uncertainty you need to
39:48collaborate with the suppliers close
39:50relationship you need to enhance the
39:52visibility and relationship we have seen
39:54that video that throughout that Supply
39:57ch if visibility is there you can track
39:59the operations right and your supply
40:01chain should be flexible asile quickly
40:03you are responding and for you are
40:05responding for anything right you ask me
40:07any product I'll provide you any product
40:10right and then you need to continuously
40:12monitor your kis your risk and then you
40:15need to develop the resilient supply
40:17chain if anything goes wrong even then
40:19your supply chain is standing there
40:21right so that's all these are some of
40:23the
40:25references so thank you very very much

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