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Lecture 32 : Strategic Supply Chain Management — Transcript

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0:01[Music]
0:22[Music]
0:25hello dear friends welcome back to nptl
0:27online course on Logistics and Supply
0:30Chain management so in the last session
0:32we started discussion on identifying
0:35what are the various impellers of Supply
0:37Chain management and then we we saw that
0:40how these impellers are very important
0:42to understand the market dynamics and
0:44then react accordingly right so that all
0:47those customer requirement can be met
0:50with the whatever available resources we
0:52have with our supply chain right so in
0:55this uh session uh we'll now we'll spend
0:59couple of sessions on uh uh identifying
1:02those all the factors in the internal as
1:04well as external environment we'll talk
1:06about the Strategic development process
1:09how we can formulate the strategy how we
1:11can implement the strategy and then in
1:13the end how we need to you know
1:15implement the control phase where we we
1:17can go for if any deviations or any
1:20checks are required so as per that we
1:22can go for that right so in this first
1:26session of uh strategic management
1:28process so again here here the special
1:31uh content has been taken from the
1:34Strategic Management uh book which is uh
1:37you know written by your H Ireland uh
1:40Robert so these two three books are
1:43there uh competitive strategy or
1:45strategic management process so you can
1:47just go through because many of the
1:49diagrams have been taken from there and
1:51then those diagrams have been modified
1:53uh as for the supply chain management
1:55perspective right so this is the content
1:58we'll go through quickly we introduce
2:01what is supply chain strategy so
2:03obviously planning design execution
2:06control and monitoring of supply chain
2:09activities so whatever activities
2:11starting from the production of the raw
2:13material to the end consumption all
2:16those activities will try to integrate
2:19synchronize using a particular supply
2:21chain strategy right so the very basic
2:24purpose here is to align the business
2:26goals or then we have seen in the last
2:29session that we have one overall
2:31competitive strategy business strategy
2:33right how we are competing with our
2:35rivales right and then how we are making
2:38our market segments right so then in
2:43align with that strategy we need to
2:45develop our supply chain strategy right
2:48so that supply chain strategy obviously
2:50we are looking for some unique
2:52parameters where maybe we are targeting
2:55on cost efficient delivery where maybe
2:57we are targeting on how we can enhance
2:59the experience of the customer where
3:02maybe we are targeting on minimizing the
3:05inventory where maybe we are targeting
3:07on minimizing the transportation cost
3:10minimizing the warehousing cost
3:11minimizing the raw material acquisition
3:13cost any of these strategies will be
3:16part of your overall supply chain
3:18strategy and then then if we we talked
3:22about Push Pull supply chain strategy
3:24and then we have seen either you can go
3:26for make to stock that means
3:28continuously you are optim kind of pull
3:32uh uh supply chain strategy where you
3:34are continuously manufacturing the
3:36product storing those product as
3:38inventory near the market in your
3:40fulfillment center or then you can go
3:43for make to order whenever you are uh
3:46getting the order then you are
3:48manufacturing the product or engineer to
3:50order very customized kind of product
3:53where you are completely starting from
3:56the you know uh development of that
3:59product you are implementing pool kind
4:01of strategy right so once you will get
4:04the customized order then only you will
4:06develop the product and then after
4:09testing that product you will finally
4:10deliver that that is where uh when we
4:13are dealing with very highend you know
4:15those customized or special equipments
4:18we are dealing with right that kind of
4:20strategy is implemented there so this
4:23strategic management process again taken
4:26from that book so I referred initially
4:29so these are the generic steps we'll go
4:31for Supply Chain management but just
4:33we'll understand what is there first is
4:35your review your current situation
4:38current situation in terms of your
4:41Mission Vision whatever statements you
4:44have set up right if you want to be cost
4:46leader for next maybe in 20 years how
4:49you are aligning all those activities in
4:52your supply chain towards to be cost
4:55efficient if you want to be highly
4:57responsible supply chain how you are
5:00aligning all those activities towards a
5:02highly responsive supply chain and then
5:04how you are setting up your objectives
5:05for meeting those responsiveness or cost
5:08efficiency uh supply chain right and
5:11then you will finally you will pick
5:13maybe uh work with some strategies how
5:16you can go there to your mission and
5:19vision statement how you can hit that
5:21mission and vision statement so to after
5:24developing your mission and vision
5:26statement you need to analyze the
5:29environment we'll see some models here
5:31in this session how we can analyze the
5:34environment uh when talking about
5:36analysis of environment both internal as
5:39well as well your external environment
5:42are important right internal environment
5:45is important because we need to do the
5:47internal analysis what are our strengths
5:50what are our capabilities and where we
5:52are lagging right so that we can you
5:54know capitalize on our strengths and we
5:57can avoid or maybe improve our
5:59weaknesses right and then external
6:01environment we need to go like may we we
6:04we we are having like a kind of tool
6:06like pestal tool is
6:13there pestal tool where we can go for
6:17analysis of the external environment
6:19like political environment ethical
6:20environment social technical uh
6:23environmental analysis legal uh analysis
6:26right so how these factors are changing
6:29right we need to keep the track of those
6:31all those uh environmental factors so
6:34when we are talking about analyzing the
6:36external environment the very basic
6:39point is to identify the opportunities
6:41if any opportunities are coming on our
6:44way or any threat it is equally
6:46important to identify the threat also so
6:49that we can you know change our uh
6:52supply chain strategy as per the threat
6:54coming like the threat was there during
6:56the pandemic we may uh face some
6:59shortage of raw material because of the
7:00shutdown or uh interruption in your
7:03supply chain activities so how we can
7:06build that inventory so that we can meet
7:08the demand during that shutdown time or
7:11any other disaster if happens how we can
7:14come up with the aile kind of supply
7:16chain strategy right then develop new
7:19strategy when we are talking about
7:21developing a strategy we are having
7:23different units for developing strategy
7:25first is your corporate level strategy
7:28so corporate level strategy you need to
7:30find out how you are targeting whether
7:33you are thinking about growth
7:38strategy or you are thinking of
7:40stability
7:42strategy or retrenchment
7:46strategy what type of strategy you are
7:48thinking of growth strategy it say we
7:51are looking Market as one of maybe the
7:54coming opportunity and maybe Market is
7:57expending 5% at 5% rate how we can tap
8:01out of that 5% 2% we can tap with our
8:04brand right so that is kind of growth
8:06strategy we are looking for stability
8:08strategy where maybe Market is saturated
8:11maybe this is the time whatever customer
8:14group we are having right now customer
8:16potential we are having we need to
8:18stabilize that customer potential we
8:19need to maintain those customer with us
8:21only they should not switch to some
8:23other brand retrenchment strategy where
8:25you are thinking that maybe uh a kind of
8:29like in communication industry how your
8:32zo came with the new concept of data
8:35free calling free messaging free
8:36everything is free right so then many uh
8:40companies like where are those hia H
8:43cellular network so bone so those all
8:47started collaborating with each other
8:49right so that is kind of retrenchment
8:51strategies where you are you know going
8:53for divestment strategies where you are
8:55going for
8:59your cash and then you are leaving that
9:01market or you are diversifying into some
9:03other area so these are some of the
9:05strategies you are deciding right so
9:08then you are coming up with the business
9:10level strategy this is a kind of
9:12strategy where you are coming you are
9:14talking about your competitive strategy
9:16in the market how you will compete with
9:19your uh different players like Geo
9:22competed initially they uh made
9:25everything free right and then they came
9:27up with the device geoi device where you
9:30can you know connect free up to 30
9:32devices I think right and then calling
9:35free data free so that means they
9:38created that space where every customer
9:40is now looking for maybe shifting their
9:43Network towards go so then initially
9:45they came up with the this free kind of
9:47policy for six months then they uh
9:50sensitized that maybe the again the mark
9:52there is untapped Market maybe we need
9:55to expand this for another one year then
9:57another 6 months so that Max maximum
9:59share we can we can uh invite that those
10:04customers into our customer group right
10:06and then once there will be a kind of
10:09Monopoly very few players will be there
10:11then they can charge now you can see
10:13they are coming up with all those plans
10:15where you can see they are charging
10:17fairly now uh as per that time now their
10:21prices are little higher on that side
10:23right so this is a kind of strategy
10:25where you are going towards that kind of
10:27Monopoly Market where you are only
10:29uh the player left in that market or
10:32only two three players are there so then
10:34you can you know then uh in your way you
10:37can guide the market right functional
10:40level strategy now if I'm saying that
10:42cost efficient strategy what will be
10:44your inventory management strategy what
10:47will be your distribution management
10:49strategy your manufacturing strategy
10:51Outsourcing strategy right so these all
10:53strategies will Target towards to be
10:57cost efficient so that means in
10:59Inventory management strategy will be to
11:01keep the minimum inventory maybe
11:03centralized Warehouse will set up from
11:06where the inventory will be channelized
11:08to all the market maybe it will take
11:11more lead time but in that way we will
11:15consolidate inventory at one point where
11:18maybe we are not keeping at different
11:20locations and only keeping at one point
11:22right so that inventory cost can be
11:24minimized but that way it will increase
11:27the lead time so responsiveness will be
11:29reduced so that is already we have
11:31discussed how one strategy will maybe if
11:34you are targeting cost efficiency so
11:36some of the your you know responsiveness
11:39parameters will be compromised then in
11:41the end we will come up with all the
11:44Supply Chain management plans right how
11:46you can Implement that implementation
11:49strategies at every level at every
11:52stakeholder not only in manufacturing
11:54unit we talked about this supply chain
11:56is complete system how we can implement
11:59this with the supplier manufacturer
12:01distributor warehousing transport
12:04Transportation agency with all the
12:06players right and in the end we have the
12:08control process uh where we will you
12:11know measure our output with the set of
12:14Standards if there is any deviation we
12:16are lacking with the objective uh
12:19whatever we have set up initially we'll
12:22come up with the uh corrective actions
12:25right how we can correct that how we can
12:27take the preventive actions and how we
12:29can Implement that in such a way those
12:32objectives can be established so this is
12:34the complete strategic management
12:36process right so I Tred to explain in
12:39Supply Chain management perspective so
12:41here is one video I have included so
12:43maybe this link you can just visit and
12:45you can see if you are not coming with
12:47the you know uh some supply chain
12:50strategy and you are just hitting
12:52randomly here and there will not work
12:54for you for longer period of time right
12:56so you have to come with some uh uh that
12:59Common Thread which will bind all these
13:01components of supply chain strategy so
13:04obviously sourcing also we need to
13:06implement the supply chain strategy if
13:09cost efficient then we need to hit this
13:12point first is the priority right and
13:14then we'll talk about the delivery in
13:16minimum time right and then we'll talk
13:19about the quality these are some of the
13:21parameters we'll try to uh either you
13:24can say manipulate in that way if you'll
13:27increase the cost what will happen maybe
13:29maybe quality of the raw material will
13:30increase if will decrease the cost what
13:32will happen we maybe will uh compromise
13:35with the delivery schedule maybe will
13:37compromise with the quality right then
13:39Logistics strategy obviously talking
13:42about logistics means talking about
13:45Transportation different types of mode
13:47how much you are transporting through
13:50Road through ship through air right
13:52those things you need to decide
13:55warehousing Again part of logistics
13:57automated warehousing how you are
13:59utilizing the capacity of the
14:00warehousing Inventory management Again
14:03part of your Logistics management how
14:05how you are handling your inventory
14:07throughout the network either you are a
14:10kind of Walmart kind of player where you
14:12are not keeping any inventory in your
14:14distribution centers and your
14:16distribution centers are kind of your
14:18cross doing centers where only vehicles
14:20are moving uh stopping for for for some
14:24time and then they are just reshuffling
14:26the inventory coming from different
14:28location and then consolidating those
14:30inventory as maybe area wise pin code
14:33wise or whatever right so as per that
14:36they are sending in another uh truck to
14:38the another dist uh distribution center
14:41right and then talking about production
14:44production means uh how much we need to
14:48produce where we need to produce when we
14:50need to produce so production facilities
14:52where you are going to locate and then
14:54scheduling and sequencing how much you
14:56need to produce in what sequence you
14:58need to produce how many units of a
15:00model how many units of B model C model
15:02likewise you will take care of your
15:04production strategy right and then
15:06distribution strategy here we'll talk
15:08about whether you are uh Outsourcing
15:11this distribution part to third party
15:13where delivery is maybe a kind of career
15:16partner for you and delivering your
15:18services swii z may be a career partner
15:21for your restaurant where they are
15:22taking care of your distribution Network
15:24right and sometime you are we have seen
15:27that these kind of third party log IC
15:29Provider Services are means a complete
15:32basket from development of product to
15:34the final your delivery of the product
15:36and even they are taking care of the
15:39returns as well we have talked about
15:42complete session on third party
15:43Logistics right so customer services
15:46what is the strategy how you will handle
15:48the after sales Services how you'll
15:50handle the returns how you'll credit the
15:52customers if they are processing the
15:54returns how you will handle their
15:57maintenance requirements right right how
15:59easily you will replace their spare
16:01parts whatever requirements they are
16:03having so this is another kind of very
16:06important element of strategy we'll see
16:08now in this era what are you know the
16:12the existing compet uh competition level
16:15and how we can get there to get that
16:17competitive Advantage talking about 21st
16:20century these are some of the forces
16:22which are you know guiding our market
16:25right today Market global economy like I
16:27talked about it's not not local market
16:30complete economy so we have seen that
16:34maybe positives are there negatives are
16:36there global economy you have access to
16:39global economy and then if you are
16:41having access to global economy right
16:45then in that way you are also volatile
16:47to global economic disruptions like 2008
16:51recession uh recently was the probably
16:54uh covid-19 recession also was big in
16:57that way but 2009
16:59uh eight recession which started with
17:01the lemon Brothers bankruptcy how it
17:04disturb overall Market all the markets
17:07throughout the world so this is the
17:09negative of your global economy
17:11globalization again positive and
17:13negatives we have access to global raw
17:16material we have access to global raw
17:18material quality technology production
17:20technology Manpower skills distribution
17:23networks Global customers and in other
17:26way Global customers are also having
17:29access to global market they can you
17:31know buy product from anywhere any part
17:34of the world so that is globalization
17:37rapid technological change is another
17:39Force see technological change when we
17:42are talking about maybe the improved
17:44technology in the product maybe the
17:47improved technology in the process we
17:49are implementing to you know produce
17:51that product right but the basic Point
17:55here I want to highlight is as soon as
17:57you are changing the technology your
18:00product life cycle will also get shorter
18:03right so that means quickly they are
18:05renovating the product so again you you
18:08are replacing the product it's a kind of
18:10very big threat for sustainability but
18:13another threat is If today you are
18:15purchasing iPhone 14 then 15 will be
18:17there 16 will be there 17 so that iPhone
18:21company Apple is always engaging
18:22customers to you know for the repetitive
18:25buying behavior and then how much e-w we
18:28are generating in that way but in
18:31nutshell these repetive uh you know
18:34technological changes in the product are
18:36replacing the making the older product
18:39Obsolete and then increasing importance
18:42of the uh knowledge of your the
18:46customers right we have talked about in
18:48the last session as customer empowered
18:51customer is one of very big empal of
18:53your supply chain where he is forcing
18:56you to change all those things if you
18:58are giving me limited features I have
19:01access to all the players in the market
19:04where I can find out who is the best
19:06player who is giving me access to all
19:08those features which you are not giving
19:10me so then we need to formulate and
19:12implementation of the superior value
19:15creating strategy Superior value
19:17creating strategy mean with respect to
19:19your competitors so when you will pick
19:21that what you'll do you will commit you
19:23will commit to that particular kind of
19:26strategy commit means now you'll start
19:29investing your resources all the
19:31resources and you will Define what your
19:33firm will do what you will not do and
19:36then that will lead to competitive
19:38Advantage like I'll quote some example
19:41like Phillips is always coming with the
19:43advertisement Innovation and you so that
19:46means their competitive Advantage they
19:48are highlighting that they are very kind
19:49of innovative products every day they
19:52are revising the features the longivity
19:55the technology they are using right so
19:58trimming products they are offering you
20:00so that is they they are highlighting
20:02their competitive Advantage Walmart is a
20:05kind of player where they are saying
20:07that that you'll get the minimum cost
20:09product in our retail shop right or
20:12through our online distribution Network
20:14Zara on the other hand they are
20:16promising because our strength is what
20:20we will do is replenish the latest
20:23trends in our showrooms so if you want
20:26the updated inventory patterns Trends
20:29you come to our showroom right every
20:32week they are changing their patterns
20:34they are changing their styles on the
20:36other hand if you'll talk about any
20:38other traditional fashion store they are
20:40taking minimum one one two months to you
20:43know come up with the new designs so
20:46this is uh their unique strategy they
20:48know what they need to do what they need
20:51know to do when we are talking about
20:53competitive strategy usually we talk
20:55about either you go for cost leadership
20:58or you go for differentiation right
21:01either you provide minimum cost product
21:04lowest cost or maybe then you are
21:07talking we are talking about broad
21:08market right broad Market all the low
21:13status products or low uh customer group
21:16or middle customer group will Target
21:19using cost lead leadership because zo
21:22was very well aware that if now this is
21:25the era where you know everyone is going
21:27for the smartphone phone so means many
21:30now the population is the the people who
21:33are using the internet is the way this
21:36internet technology has penetrated the
21:39market is tremendous right the rate I'm
21:42talking about the rate of adoption of
21:44this new technology technology diffusion
21:47that is happening right but earlier if
21:49you talk about that time where radio
21:52first came in the market it took couple
21:54of decades to you know to mature and to
21:58go to the last level then TV then again
22:00little faster than that smartphone more
22:03faster than that now internet then you
22:05can see how fast uh this uh technology
22:09is penetrating the End Market so either
22:12you can go for cost leadership or you
22:14will go for differentiation Rolex BMW
22:17Mercedes so these are kind of players
22:19they are hardly bothering about their uh
22:22what the cost features they are
22:24bothering about what Extra Value they
22:26can add to their product right then if
22:29we are talking about very narrow Market
22:31focused cost leadership maybe some of
22:34the products which are required in
22:35Industries only not so frequently bought
22:38as maybe not used at raw material some
22:40of the machines they are using let's say
22:43uh many organization are using you know
22:45carton boxes to pack their products
22:48primary packaging secondary packaging
22:50carton boxes are required right so some
22:54of many companies are uh checking the
22:56strength of that carton box whether that
22:58can handle the beer and teer during the
23:00transportation warehouse and handl so
23:02only one machine is required right and
23:05very specific parameters must be there
23:08they may be setting for those uh
23:10equipment right so these kind of focused
23:14equipments and then required for
23:16industry so maybe then if cost
23:18efficiency is there obviously I'll go
23:20for that and then in case of this narrow
23:22Market again focused differentiation
23:24those kind of high-end products maybe we
23:27are very limited use but very high-end
23:29products right so those are there so you
23:31can see based on these parameters either
23:35you are cost efficient or you are
23:37providing unique value which others are
23:39not providing then you can go for your
23:41business level strategy how you can
23:43compete with your competitors so you can
23:46see quickly here determine and control
23:50what is driving your cost right so in
23:53that case either you need to Al maybe
23:56your production you are taking
23:58uh carrying more of the cost you need to
24:01go for automation why don't you remove
24:03some of the Manpower and go for
24:05automation where more productivity will
24:07be there and then the effect defects
24:10will be minimized new distribution
24:12Channel which can ensure maybe minimum
24:15lead time and maximum coverage of the
24:18area with minimum cost advertising media
24:21maybe what advertising media you are
24:23picking is
24:24not suitable for the targeted audience
24:27and Target audience is never visiting
24:30that maybe particular media so how you
24:32can go for the best one so let's say if
24:35you are uh promoting some sports related
24:39uh uh products right so then if you are
24:43uh maybe advertising those products
24:45during World Cup or IPL or any other uh
24:48sports event so that it will get more
24:51visibility because only those people who
24:52are interested in that will be watching
24:55those events right so that you need to
24:57find out and then direct sale in place
24:59of maybe indirect sale is taking more
25:02cost sometimes you need to reconfigure
25:04your value chain as well you need to
25:06talk about or think about the raw
25:08material is raw material carrying extra
25:10cost how we can minimize that cost can
25:12be change the technology of producing
25:15that raw material can be change the
25:17grading of the raw material we are using
25:19can we go for forward integration let us
25:21remove all the distribution Network and
25:24as a d directly communicate with the
25:26customer and Supply whatever they they
25:28want or we can go backward integration
25:30where let us acquire all our supplies
25:33we'll start producing our supplies and
25:35in that way your suppliers will be
25:37removed right and then maybe change
25:40location if you are at very costly
25:43location like we talked about how Jara
25:46is man handling they are managing cost
25:48efficiency with Asian locations but
25:50there they want to be responsive there
25:53they are setting up their uh
25:54manufacturing unit in Europe itself
25:57talking about some of the cost creating
26:00value activities you can directly see
26:02I'll just pick all those activities
26:03which are related to supply chain right
26:06so you can
26:07see uh cost effective Mis management
26:12information system how you can integrate
26:15all the players and minimize the cost
26:17and then uh this obviously related to
26:20management parameters we can have S
26:22simplified structure of management not
26:24so many layers right so that effectively
26:26we can control and Implement whatever is
26:29the common uh our policy is is to use
26:33manufacturing technology our technology
26:36is so complex it's very difficult to
26:38train first people to standardize that
26:40technology right then lot of investment
26:43is required to implement that how we can
26:45find out the lowc cost raw material
26:47right monitor suppliers performance as
26:50well because if they are performing well
26:53only then they can reduce the cost and
26:55will provide you more you know
26:57concessional rate on that way and you
27:00need to link suppliers with the
27:01production process can you uh enjoy the
27:05economies of scale feed large order and
27:07you also yourself produce large orders
27:10maybe in that process you will produce a
27:13high inventory but then you can minimize
27:15the cost so then you need to ensure how
27:17quickly you can uh uh utilize that
27:20inventory in the End Market efficient
27:23scale facilities effective delivery
27:25schedules low cost Transportation Maybe
27:28mild delivery using electrical bikes or
27:30maybe Cycles in that way you will be
27:32sustainable as well as you will be cost
27:35efficient the second Point how we can go
27:37to the differentiation strategy we need
27:39to talk about some of the maybe we can
27:42change some unique features we can add
27:44in the product maybe some performance
27:47parameters which like if you talk about
27:50the best performance in the uh maybe
27:53middle class family or lower class
27:55family or maybe a little upper class as
27:57well if Sony is known for their sound
28:00systems right so Hitachi is known for
28:03means kind of leader uh in the AC
28:06industry right and then so many other
28:09players where you want to get the Dell
28:11is another very good example right so
28:13Walmart is another very good example
28:15where he delmart h sorry Walmart is
28:17always targeting cost efficient right
28:20how you can add sustainability like
28:21menra did they started adding the paper
28:24packaging where we discussed about the
28:26complete case right in one one of the
28:28session how they are using the paper
28:30packaging which is 100% recyclable so in
28:33that way your customer will feel unique
28:36in that way and they will feel that okay
28:38this is good source to you know get our
28:41products right and these are some of the
28:44strategies you can Implement to get you
28:46know uh differentiation where you can
28:48either go for technological
28:50differentiation or you can Implement
28:52high quality raw material or you can use
28:55some of maybe fast delivery method now
28:58the best uh maybe the next best
29:01opportunity for e-commerce players to
29:03promote maybe or promise 90% of the
29:06delivery or maybe 90% of the products
29:09will be delivered within one day so that
29:12is going to be the future how you can
29:14Implement that if you are promising that
29:15obviously you just imagine how much
29:18crowd will be shifting to your platform
29:21if you are promising delivery within one
29:23day and then if that much crowd is
29:26coming obviously economy is of scale
29:28will be there right so you can
29:31consolidate those Prime orders with the
29:34normal orders as well and then in
29:37routine you are doing those activities
29:38maybe you will set up more fulfillment
29:40centers near to Big markets from there
29:43you can easily go for those so this is
29:46kind of you know USP which you can where
29:49you can deliver your product maybe
29:52customer credit for how longer period
29:54you are giving your customer this
29:56flexibility today you buy the product
29:58tomorrow you can pay how long period you
30:00are giving how quickly you are
30:02responding to customer things right so
30:04if this these are kind means there can
30:06be so many uh USPS related to all
30:10activities you are specialist in
30:11Warehouse like United Parcel Services
30:14they have automated their warehouses
30:16like Amazon is also doing they have set
30:18up one of the biggest Distribution Hub
30:21in uh Delhi near Delhi goodg where they
30:24have automated that you know Warehouse
30:27so automation means is how they are
30:28saving the cost right so that also you
30:31can do so effective supply chain
30:34strategy we are talking about obviously
30:36that should be synchronized and how it
30:39can handle the disruption and how we can
30:41mitigate the risk right talking about
30:44that we should have collaborative
30:47approach as well as we should have the
30:49aile supply chain structure if the
30:51demand is coming for five products we
30:53should be able to scale down and we
30:56should be deliver five products demand
30:58is coming for 500 products we should
31:00scale up and we should deliver that
31:03right resilient how resilient our supply
31:05chain is anything is happening in the
31:07market any disaster is happening any
31:10shutdown is there any strike is there
31:12even then our supply chain is
31:13maintaining that minimum inventory
31:16Safety stock that we can meet the demand
31:18and then digital platform is another
31:20thing where you can connect all the
31:23players stakeholders quickly share the
31:25information right in that way you will
31:27be more more productive if today any
31:29spike in the demand quickly you will
31:31share with the raw material suppliers we
31:32need extra raw material and then it will
31:34be shared immediately with the raw
31:36material suppliers and as well as your
31:38production facility as well as your
31:40distribution warehouse distribution
31:41management system so that this Erp kind
31:44of system iot where you know Ai and ml
31:48is taking all the decision making no
31:50Manpower is involved in taking the
31:52decision as soon as AI is or ml is just
31:56detecting a spike in the demand quickly
31:58responding to it and sharing the plans
32:01with all the stakeholders right and when
32:03talking about digal structure you need
32:05to create those firewalls where you know
32:09any Intruder cannot interrupt any time
32:11and can distribute uh disturb your whole
32:14supply chain so cyber security you need
32:16to invest heavily into that right so
32:19optimizing your supply chain strategy
32:22first is how you can optimize that sales
32:24and planning operation planning we sales
32:28department is directly linked with the
32:30production Department how much you need
32:32to produce where you need to produce
32:34what are the customer requirement that
32:36sales on uh sales and operational
32:38planning workforce
32:40management maybe you need to train your
32:43Workforce with better processes
32:44technology you need to equip with uh
32:47your Workforce your with the latest
32:49equipment so that that efficiency can be
32:51delivered and then supply chain Network
32:54when we are designing we need to take
32:56care of the minimum cost and minimum
32:58time we need to deliver demand planning
33:01how with the help of AI machine learning
33:03we are predicting the demand accurately
33:05and then delivering the right product at
33:07the right place at the right time and
33:09then optimizing inventory balance you
33:12need to maintain between Services level
33:15of services you cannot promise the
33:17highest level of services and keeping
33:18the high inventory all the time so maybe
33:21you can reduce that inventory somewhere
33:23without compromising the services means
33:25being stock out in the market and then
33:28you are also ensuring the minimum cost
33:30so if you talk about Overlord firm
33:32strategic choices we are having these
33:35choices right you go for economies of
33:38scale produce in bulk and reduce the
33:40cost barriers to Market entry if those
33:43barriers are there for the new players
33:45how you can leverage on those barriers
33:47and can enjoy the market share right
33:50diversification if you want to create
33:53little higher barriers to the entry you
33:55keep on diversifying into different
33:57product features with the latest
33:59technology or maybe with the latest
34:00industry as well you are coming with the
34:02products right product differentiation
34:05we talked about industry concentration
34:07is something if it is very high that
34:10means few players are capturing the most
34:13of the industry like I talked about zo
34:15right where most of the share is with
34:18the only Geo AEL only and BSL only two
34:21three players now are left out in the
34:23market right so Market frictions this is
34:26related to your finan Financial Market
34:28transactions how uh what is the direct
34:31indirect cost is in involved when we are
34:34talking we are making these Financial
34:36transactions let us talk about quickly
34:38strategy for all the value chain
34:40different components we discussed in the
34:42last session so quickly we'll talk about
34:44what can be the strategy when we are
34:46talking about all the value adding
34:47activities product development
34:50strategy so portfolio selection how you
34:53will Define the range of the products
34:55obviously based on the market analysis
34:57you prepare your offerings right and
34:59then you will decide whether you are
35:01producing inhouse or you are Outsourcing
35:04if we have the competencies to produce
35:07that those product and services
35:09obviously we should go for in-house and
35:11when we are talking about maybe we are
35:14less competent maybe there are players
35:16who are doing it better than us they
35:18have the latest technology the best
35:20skills required so then we can think of
35:22Outsourcing because in that way we can
35:24cut down the production cost as well
35:26marketing and Sal strategy how you will
35:29segment the market based on the
35:30different features demographic geography
35:33psychographic Behavior patterns of the
35:35customers pricing all those you can find
35:38out right different markets uh segments
35:40and then you will pick your segment and
35:43will try to position your product right
35:45as per the maybe if you are picking
35:47pricing so if low price Market you are
35:50picking so you'll Target with the low
35:51pricing strategies right promotional
35:54activities how you'll go with the
35:56promotional activity different Medias
35:58are there and then you can go for this
36:00is related to marketing but let's come
36:02to the supply chain strategy obviously
36:05procurement how you'll do the supplier
36:07selection and then if Outsourcing is
36:10done how you do the repetitive
36:12procurement what quantity right so that
36:15if the quantity is Big you can make up
36:17to that so you can have the better
36:19negotiation power and Contracting with
36:22that Manufacturing Services operations
36:25where you will set up your location what
36:27technology you are going to use how
36:29you'll convert your raw material into uh
36:31finished one and then how you'll plan
36:33Your Capacity distribution also
36:36important part of supply chain strategy
36:38different modes of distribution
36:40different way of how you can go for uh
36:43you know uh different distribution
36:45channels where you are talking about
36:47either Doorstep Delivery or customer
36:49pickup locations or retail shops or
36:51maybe uh the organized stores right
36:54those kind of strategies you can go for
36:56and then Outsourcing
36:58decisions how what are the activities
37:01you are Outsourcing in your supply chain
37:03strategy either you are Outsourcing your
37:04warehousing part Transportation part or
37:07any other part so broad supply chain
37:09structure supplier strategy operation
37:12strategy logistic strategy supplier
37:14strategy means backward integration how
37:16you'll handle your suppliers then your
37:19mainstream where you are converting raw
37:21material into finished one and then your
37:23front integration forward in forward
37:25supply chain where you are talking about
37:27about your distribution Network
37:28fulfillment centers final and mile
37:31delivery right so that is a kind of uh
37:34you can go for your all managing all
37:37three
37:38streams so uh design strategy uh
37:41Inventory management what type of
37:44inventory levels you are maintaining
37:46okay this is again uh you need to make
37:49the tradeoff between service level and
37:51cost of carrying that inventory
37:53Transportation modes Roots carriers
37:56right will Define your whether you are
37:58sustainable if you are using ship or
38:00minimum cost uh carrier if you are using
38:03using ship maybe or trains and then Road
38:06will increase the you know carbon
38:08footprint and air will increase your
38:10cost right so all those parameters
38:13operating facilities very important
38:15where you are setting up your uh
38:17fulfillment centers your inventory
38:19locations your manufacturing hubs right
38:22how you are designing the capacity
38:24depending upon the market requirement
38:26information flow how information will
38:28flow throughout your supply chain so
38:30that if you are if you are promising
38:32your digital platform so then quickly
38:34information will be shared throughout
38:36the supply chain right talking about
38:39Services strategy service design how
38:41you'll design your services depending of
38:43Market requirements you will develop
38:45your offerings service quality how
38:47you'll maintain the consistent quality
38:50and you will tie up with your suppliers
38:52to maintain that to ensure that customer
38:54experience management through you know
38:58uh engaging customers in your supply
39:00chain and then delivering the products
39:02and services what they want Meeting
39:04those expectations then you can enhance
39:07the customer experience service
39:09differentiation how you can create
39:11unique value proposition service
39:13recovery if something goes wrong with
39:16your product and services how quickly
39:18you are bouncing back technology
39:20integration how you can integrate the
39:22technology for delivering the products
39:25right and then employee training how Al
39:27you are equipping your employees with
39:29the latest skills required so that you
39:31can ensure the continuous Improvement
39:34right so this is one case study of uni
39:37which is based on your collaborative
39:39planning forecasting and replenishment
39:41cpfr strategy so you know that unil
39:44liver is dealing with the packed food uh
39:47items drinks Personal Care items and
39:49cleaning products so FMC products so
39:52they developed a fiveyear strategy under
39:54that they focused uh especially on
39:58restructuring their supply chain where
39:59they talked about governance Global
40:01procurement supply chain manager the
40:03engagement of suppliers and technology
40:06so under that they came up with the
40:08promise that now we'll uh streamline our
40:11supply chain boosting its ability to
40:14meet uh whatever growth rates we are
40:17expecting so in that process they merged
40:19their 30 their houses into five big
40:23distribution hubs so in that scenario
40:26you can see there they reduce the
40:28inventory and this was their one of the
40:30policy measure that they want to go for
40:32zero inventory instead of maintaining at
40:35inventory at 30 location they reduced it
40:37to five only so then they ensured cross
40:41doing because they are not maintaining
40:43inventory so they went for cross doing
40:45and then you can see because of orders
40:48are frequently now influenced by factors
40:51that are hard to predict so it is very
40:53important to come up with your you know
40:56AI ml w forecasting procedures right
40:59measures so that forecasting accuracy
41:02can be uh uh ensured can be enhanced and
41:06when they ensured this you can see they
41:08witness stronger partnership with the
41:10suppliers because now through AIML and
41:13iot network they are immediately sharing
41:17their production plans with the uh
41:20suppliers right so key takeaway from
41:22this cpfr strategy is they increased the
41:25accuracy by 10% for forecasting accuracy
41:28result in 10% reduction in the inventory
41:31no need to keep that high inventory
41:33because your forecasting is very very
41:36accurate right and sales volume also
41:38boost by
41:405% so a couple of more cases you can see
41:44very small cases just to highlight how
41:46they are implementing different supply
41:48chain strategy iton which is worldwide
41:51known us organization handling your
41:54power management your electrical
41:56hydraulic system system mechanical
41:58systems right so they developed
41:59resilient during resilient supply chain
42:01strategy during the pandemic to ensure
42:04that if even the material shortage is
42:06there or labor shortage is there any
42:09disruption is there they are ready for
42:10that right so how they are ready by
42:13multi-sourcing increasing supplier
42:15collaboration and connecting to its
42:17endtoend supply chain so this is the
42:20supply chain strategy which they
42:22implemented right Intel is another
42:24organization right so they
42:27they developed this ethical sourcing of
42:30supply chain they ensured that whatever
42:32raw material like tin tungsten gold or
42:35titanium whatever they are procuring
42:37they those sources are Conflict Free
42:40right and because these are the sources
42:42where we are always talking about
42:44degrading the environment so they
42:46ensured RFID tags on their packaging and
42:50bags so that you can easily identify
42:52that the what is the origin of those
42:54sources those metals they are procuring
42:56and you can in the end ensure the
42:59ethical sourcing so uh these are couple
43:02of the cases you can just go through how
43:04they are implementing different supply
43:06chain strategies right so uh for these
43:09books I referred initially you can go
43:11for strategic management by Robert and
43:14debit then Strategic Management another
43:17uh competitiveness and globalization by
43:19hit Ireland and Robert and then
43:21competitive strategy analysis by Robert
43:23M Grant right so these are some of the
43:25books and references you can can go
43:27through that's all from this session
43:29thank you very much

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