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Lecture 39 : Supply Chain Coordination — Transcript

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0:01[Music]
0:22[Music]
0:25hello dear friends welcome back to nptl
0:27course on Logistics and supply chain
0:29manag M today we'll uh start discussion
0:32on supply chain coordination so under
0:35supply chain coordination we'll see uh
0:38majorly we have three players one is
0:41supplier backward supply chain another
0:43one is manufacturer where we are
0:45converting the raw material into
0:47finished one and then we hand over that
0:49finished product to the distributor
0:51right that is the forward supply chain
0:53right so we'll talk about the
0:56coordination among all these three
0:58players then we'll see where we are
1:00lacking as we are talking about supply
1:02chain coordination and what will be the
1:04effect on the performance when we are
1:06not coordinating throughout our one
1:08system and uh we'll talk about what are
1:11the obstacles uh we need to tap when we
1:14are talking about coordination in supply
1:16chain some managerial actions how we can
1:18improve on that and then we'll
1:21specifically we'll talk about the wul
1:23effect as one of very big obstacle uh to
1:26coordination we'll end this session with
1:29the couple of C of cases uh so
1:32coordination in the supply chain so when
1:34talking about coordination that means
1:36coordination all the functional
1:38activities within one organization like
1:41distributor warehousing management
1:44agency uh manufacturing uh
1:47co-manufacturer supplier right and
1:50within one functional unit one
1:52stakeholder what are functional units
1:55right all the functional units marketing
1:57production quality R&D ISO what are
2:01different units HR department purchase
2:03department so coordination among all is
2:07the first priority within one
2:08organization and then we are talking
2:10about coordination throughout the supply
2:13chain means all the stakeholders
2:15involved in that and those stakeholders
2:17are suppliers manufacturer Distributors
2:20and retailers right so the goal of the
2:23coordination is to optimize the overall
2:25performance and how we can do that by
2:28improving efficiency
2:30reducing cost enhancing responsiveness
2:33and ensuring the timely delivery so very
2:36small example let's say if we are very
2:40sure about the demand function right we
2:44know how much demand is going to be
2:46there tomorrow right so to meet that
2:49demand obviously we will share this
2:51information
2:53electronically throughout the supply
2:54chain so when we are sharing the same
2:58data throughout the supply chain without
3:00any modification without the
3:02intervention of any individual
3:04stakeholder that means same information
3:06will go to the supplier same information
3:10will go to the manufacturer to uh
3:13Warehouse to inventory to Transportation
3:16so that means in that case we can
3:20optimize the functions we can optimize
3:23the transportation function now because
3:25Transportation function knows that this
3:28is the these many units we need to
3:30transport tomorrow so we need this much
3:33truck capacity whether we can
3:36consolidate order for some other player
3:38or some other demand we can meet through
3:40that Journey or maybe this demand is
3:44individually enough we can transport by
3:47utilizing the full capacity this is one
3:49example right so this involves
3:51collaboration information sharing and
3:54synchronization obviously information
3:57sharing like I told you electronically
4:00should be shared throughout the supply
4:01chain talking about the key elements so
4:05demand forecasting is first Inventory
4:07management production planning
4:09Transportation Logistics and
4:10communication system are some of the key
4:13elements where we need to focus when we
4:15are talking about the coordination in
4:17the supply chain let's talk about the
4:20backward supply chain and coordination
4:22with the suppliers so first is demand
4:25forecast and planning collaborative
4:27forecasting that means if as as a
4:29manufacturer or seller I am predicting
4:32demand I am managing the markets my
4:35representatives are there in the market
4:38they are giving me facts and figures so
4:40that this is how I'm designing the fact
4:43uh my demand function how I will
4:46collaborate on collaborative forecasting
4:49when I'll share the sh same production
4:51schedule with my suppliers right so
4:54let's say if two suppliers or three
4:56suppliers are there
5:00so that means if I need to manufacture
5:02100 items depending upon the rating V1
5:05is the highest vendor rated right so
5:07maybe I'll say I'll seek maybe 45 units
5:11from this vendor then maybe another uh
5:1425 units from this vendor right then
5:18maybe another V3 is moderately uh rated
5:22so rest of the uh 40 items I'll seek
5:25from this
5:26vendor I think rest of 30 items whatever
5:29so because the rating is V1 is highly
5:32rated then V3 then V2 right so this is
5:36collaborative forecasting this
5:38collaborative forecasting will happen
5:40only when there is realtime sharing of
5:43information whatever sales Trend market
5:46conditions as a manufacturer or service
5:48providers or product providers we are
5:51realizing we are sharing the same
5:53information without any modification
5:55with our suppliers inventory management
5:58now vendor man managed inventory if we
6:00are talking about we are implementing
6:02vendor management inventory so that
6:04vendor is responsible for managing the
6:06inventory throughout the supply chain
6:08means up to the manufacturer so vendor
6:10may be managing the inventory in my
6:12manufacturing unit only right that also
6:15can happen or maybe they are maintaining
6:17inventory in the nearby storage house if
6:19whenever I need that as per just in time
6:22they will provide me the inventory so
6:25that also will happen when that close
6:28coordination is there when allowing my
6:30vendor that you can use my facility and
6:33keep the inventory there but I will pay
6:36you for that inventory when and as it is
6:39required and will be consumed through
6:42the production lines so this is another
6:44example of coordination in the uh with
6:47the suppliers another is quality
6:49assurance now like we design the quality
6:53Matrix right now this quality Matrix all
6:56the criteria what we are evaluating we
6:59can keep those criteria with us only
7:01quality description sheet like in the
7:04previous uh session we discussed about
7:06that whatever if you are measuring screw
7:09length screw dryer or screw maybe thread
7:12D so then you need to tell to your
7:15wender that these are the parameters
7:18important for you know for that
7:20particular component and you need to
7:21maintain like these parameters within
7:25this preference limit right so if you
7:27are sharing the quality standards
7:29whatever ever we have set up we need to
7:31share them so that we can minimize the
7:34need for returns and so that the No Loot
7:37should be sent back to the vendor
7:39because of rejection continuous
7:41Improvement when we are recording all
7:44those parameters we are know know that
7:48maybe one parameter the process is
7:51deviating we need to immediately inform
7:54our vendor that now we are deviating
7:57from the dimension and you need to take
7:59some Improvement steps Kapa corrective
8:01action and preventive action how you can
8:04Implement that so the next Point here is
8:06communication and collaboration so this
8:09will only happen sharing quality matrics
8:13providing continuous feedback minimizing
8:15the cost allowing them to operate in
8:18your unit will only happen when you are
8:20communicating regularly in a transparent
8:23way so that means communication with
8:26suppliers and manufacturer you need to
8:28align how
8:29how you will align your manufacturers uh
8:32your suppliers with your manufacturing
8:34strategies if you are implementing just
8:36in time you need to tell your supplier
8:39that this component we are looking for
8:41just in time so then only the person
8:43that supplier will maintain Justus in
8:45time system maybe that supplier now
8:47needs some training needs some help from
8:50you some technology some how they can
8:52manage the inventory software right so
8:55then you need to conduct the regular
8:57meetings with them integrated it system
9:01this is the platform where you can share
9:03that information right and you can track
9:07the information if you are sharing
9:09feedback how you are processing the
9:11order how you are tracking the inventory
9:13right what are your PL uh production
9:15planning right how you are designing the
9:18production plans for different models
9:19you are running in your production house
9:21so if you are sharing that on the
9:23internet uh that it system information
9:26technology and same platform your vendor
9:29are attached so then your vendor will
9:31get the information without any
9:33deviation now let's talk about the other
9:36end of the supply chain which is ending
9:38with the Distributors so order
9:40fulfillment is the first function which
9:43our Distributors are doing right how
9:46quickly you are responding to customer
9:48demand you are picking the order packing
9:50the order and distributing the order and
9:52the last mild delivery how timely
9:55efficiently you are ensuring that right
9:57so then you need to collaborate with
9:59your
10:00manufacturer with manufacturer that
10:02these many units are demanded these are
10:05the features demanded this is the
10:06customer service level demanded you need
10:09to replenish the inventory as you are
10:12Distributing the product distribution
10:14planning so this will happen
10:16distribution routs you need to plan
10:18optimal uh roots and then schedule
10:21optimize the logistics and reduce the
10:23transportation cost so if you can
10:25optimize that Transportation Matrix so
10:28obviously you can reduce the the overall
10:29cost Inventory management stock
10:32replenishment as you are replenishing uh
10:35depleting the inventory right now let's
10:38say very simple example we are going to
10:42uh Walmart we are going to bishal Mega
10:45we are going to Spencers onetop solution
10:48or grocery store big grocery store so
10:51how it is happening there is one shelf
10:53they are maintaining all inventory on
10:55that shelf right so and this is one
10:58shelf right and this same inventory
11:01somewhere they are maintaining in the
11:02warehouse as well right so they are
11:05keeping all those product in the
11:06warehouse now there is this is one you
11:10can say the inventory the Safety stock
11:12they are maintaining and some stock they
11:14are maintaining on the shelf for daily
11:16selling purpose right
11:19now if you are sharing this information
11:22how many units are on the Shelf with the
11:25manufacturer with the suppliers how many
11:26units are in the ground this is strong
11:29parent right so when you are moving the
11:32items on the Shelf today you moved maybe
11:35500 items that information should be
11:37shared with all the stakeholders that
11:41500 items are moved to the shelf right
11:44ready to be sold right so then let's say
11:48out of 500 400 customer today picked the
11:51product or maybe not today why today
11:54whole day we are compiling even single
11:56minute if any customer is going to that
11:58shelf picking the product then he is
12:01going to be L counter right on that
12:03point of time when you are you know
12:05scanning the code and generating the
12:07invoices the billing information that
12:10point of time point of sale time how you
12:13can share that information completely
12:16that this moment four items are depleted
12:20from the Shelf store so we maintained
12:22500 inventory now we are left with
12:25496 so as soon as you will deplete keep
12:29on depleting the inventory the
12:31information will be shared with the
12:32transportation network with the
12:34warehousing with the manufacturer with
12:35the co- manufacturer with the
12:37distributor with the with the raw
12:39material suppliers right so in that way
12:41you you will be uh better in planning in
12:45managing the inventory keeping the
12:47Safety stock so that much item you need
12:49know to store customer service reliable
12:52delivery now you are interacting to
12:55customer through your distributor only
12:57your retailer is the main stakeholder
13:00who is directly you know interacting
13:03with that person who is ultimately going
13:05to consume your product and services so
13:07he is having the best information about
13:10the customer demand even if customer is
13:13rejecting your product picking some
13:14other competitor product why he's doing
13:16that he is having that knowledge how you
13:19can extract that information through
13:21your
13:22transparent or that fast communication
13:25Network right return management if any
13:27customer is manage uh uh you know asking
13:30for the returns how efficiently you are
13:33returning or exchanging the products
13:35that will also happen through your
13:37distribution Network only and if you are
13:39providing return we have seen that
13:42e-commerce industry is almost 50% of the
13:45customers are you know before placing
13:48order they are visiting whether the
13:50returns are eligible or not right so
13:53then data sharing and analytics now
13:57regarding your how you will plan your
14:00production accordingly you will share
14:02that production schedule with your with
14:04your raw material supplier so that
14:07distributor is going to you know provide
14:10you the insights about the customer
14:12demand and market trends any fluctuation
14:14in the market Trend you can record
14:16through your distribution Network right
14:18and then you can track that using the
14:20latest software you can analyze that and
14:23then you can make decision that uh for
14:25today you need to run only three models
14:27out of the five models you are providing
14:29in the uh selling in the market right
14:32because of whatever uh patterns you
14:35observed from the customer buying
14:36Behavior right so performance Matrix
14:40what are the key performance indicators
14:42in terms of uh delivery accuracy in
14:44terms of ontime delivery in terms of
14:47ontime return pickup in terms of correct
14:50billing information in terms of customer
14:52satisfection attached with so many
14:54different types of services we discussed
14:57you are providing to the customer right
14:59collaboration and communication joint
15:02business planning with the distributor
15:04if you are promising efficient supply
15:07chain how you can uh go for that and
15:10then you can maintain the minimum in
15:12inventory with the retailer so that you
15:13can be efficient but you don't want to
15:15be stock out right so realtime
15:18communication uh advanced communication
15:20tool we can use like the example I coded
15:23as soon as the customer is picking the
15:25product from the shelf and you are
15:27recording that through your s answers so
15:29it should be shared throughout your uh
15:32Network right so now coordination in the
15:34supply chain we talked about
15:36manufacturer versus suppliers
15:37manufacturer versus distributor but
15:39suppliers versus distributor is also
15:41equally important so let's talk about
15:44that but before going to that we'll see
15:46what are the interactions when we are
15:48going through the supply chain see
15:50suppliers provide the raw material as
15:53per the purchase order raised by the uh
15:57your manufacturing unit then suppliers
15:59and distributor both are managing our
16:02inventory because suppliers are managing
16:04the inventory of the raw material
16:07distributors are maintaining the
16:08inventory of our finished good but it's
16:10not only solely their responsibility as
16:13the manufacturer when we are predicting
16:16the demand in the market we need to
16:17predict them that way having said that
16:20that means we are predicting we need to
16:23plan the production accordingly how many
16:25models we need to run how many units
16:27each model requir
16:29right then finished goods are delivered
16:32from the manufacturer to the distributor
16:35Warehouse from where the warehouse may
16:37be a kind of order fulfillment center
16:40right where from where you are picking
16:42packing the product and finally
16:44delivering the product through end mild
16:46delivery Network right or maybe through
16:48the retailers then you are selling the
16:51product and maybe through your marketing
16:54advertisement whatever you are doing
16:56directly to the customer so then you are
16:57providing the product to to the
16:59retailers so these all are interactions
17:01happening through the supply chain just
17:02a quick review now suppliers and
17:06distributor coordination points purchase
17:09orders so when distributor clearly
17:12communicates their need to the supplier
17:15through purchase order that means I'm
17:17talking about the point of sales
17:20information so through the distributor
17:22it is not only directly going to the
17:25manufacturer but it should go to the raw
17:27material supplier as well production
17:29plan accordingly whatever you are
17:32placing order or you are going to place
17:34order to the manufacturer manufact that
17:37order will be shared with the raw
17:40material supplier only so that that will
17:41be effect should not be there that you
17:43placed order for five items then
17:46manufacturer planned for 15 items and
17:48then accordingly they placed order for
17:51uh raw material suppliers for the 15
17:53item if you need five items only so that
17:57should be production plan should be for
17:59five items and accordingly we should
18:01manage the inventory for producing the
18:03five items only right so delivery and
18:06transportation this should be then again
18:09attached because we need to ship only
18:12five items so then that Transportation
18:15will be efficient when they know that
18:17during that container they can ship
18:19maybe 15 items or 20 items but still you
18:22are transporting only five items right
18:24so how you can maybe you can consolidate
18:26orders from the other players or other
18:29Industries so that you can properly
18:31utilize the capacity of the vehicle lack
18:34of supply chain coordination and why it
18:37is there because there is no pure
18:39communication the collaboration among
18:42different entities one line that line of
18:45communication is not connecting through
18:47all so that means information which I
18:50talk talking about that should be shared
18:52throughout the network is not that
18:54transparent and that will leading to
18:56inefficiencies and sub optimal outcomes
19:00one example is let's say again because
19:04we again we are saying will be effect
19:06the one example is will be effect only
19:10where here the retailer plays the order
19:13for 10 items distributor again keeping
19:17in mind the Safety stock placed order
19:19for 15 items then manufacturer started
19:22production for 25 items placed order to
19:25raw material supplier for 30 items right
19:28so this is means inefficiency demand is
19:31only for 10 items you are planning for
19:3330 extra 20 that is inventory so
19:36inventory cost is not optimal in that
19:39way right so wo whip effect is caused by
19:42demand forecasting inaccuracies when you
19:45are not accurate with the forecasting
19:48techniques or sometime what you do
19:50instead of what what is there there is
19:53in manufacturer mind that if I'll
19:55produce 10 Again change over will be
19:58there for another model then again few
20:00items will produce then again we'll
20:01produce this one let us produce in one
20:04go 30 items right so that way the cost
20:08per unit item production cost we can
20:10decrease so that means you are trying to
20:13you know order batching consolidating so
20:16that that Transportation uh sorry
20:17manufacturing cost can be minimized but
20:19you just imagine the inventory cost
20:22handling cost you are producing extra so
20:25you need to make you know tradeoff
20:27between whether you are okay to take
20:29inventory cost more or you are okay with
20:32the manufacturing cost price
20:34fluctuations are also there sometimes so
20:36that also cause will be effect uh very
20:40uh quick example you might have seen if
20:43government is usually this happens
20:45because now there is Market forces are
20:47deciding the crude oil price and then
20:50accordingly companies are you know
20:52changing the every day they are changing
20:54P petrol and diesel price but earlier
20:57what used to happen the they used to
20:59announce that today midnight we are
21:01going to revise petrol price by 5 rupees
21:04up or down so if it is up you will see
21:07huge line will be there like they will
21:09store the petrol for whole of the life
21:12that is not happening but still we have
21:14seen that so anyway if they can save 500
21:17Rupees is enough for them right but if
21:19it is going to reduce no one will be
21:21there on the petrol pump because you
21:24know after midnight you will get cheaper
21:26price so this is also price fluctuation
21:30will also sometimes cause will be
21:31perfect because for that midnight if it
21:34is going to drop maybe for 12 hours 24
21:38hours whenever you got the information
21:40prior you will not go to buy but it's
21:43not that there is no demand there is
21:45demand but because people are waiting
21:48for that period after that they will
21:50Rush all and then there will be suddenly
21:52spike in the demand but actual demand is
21:55still saturated in any City the number
21:57of vehicles are still almost same right
22:01people driving cars or Vehicles almost
22:03same right lack of information sharing
22:06is there right so then we discussed this
22:09negative impact of the wul bip increased
22:12cost excess inventory stock out right so
22:15we'll discuss in detail how this overall
22:18if there is no coordination in the
22:19supply chain will affect our different
22:22cost right what are the obstacles to
22:24coordination in supply chain first is
22:27inventive obstacle because we we don't
22:30want to you know innovate we don't want
22:32to go for new technology even if the new
22:36technology is for betterment still we
22:38will as a human being will show
22:40resistance to that right so that is very
22:44obvious human tendency information
22:46processing obstacles so correct
22:50information we are not sharing with our
22:52stakeholders somewhere because we are
22:54man manipulating the processes we don't
22:56want that if we are charging one vendor
23:00is charging some other price other
23:01vendor is charging some other price we
23:03don't want that information to be
23:05transparent to every vendor because then
23:07everyone will try to you know inflate
23:09the prices then quality level how they
23:11are maintaining and what we are
23:13expecting different level of services
23:15Maybe for One vendor we have different
23:17negotiation policy for other vendor we
23:19have different negotiation policy so
23:21then we don't want to share the
23:22information if those kind of things are
23:24there so then obviously that will be
23:26obstacle to information then another is
23:29maybe you want to share the information
23:32the quick information coming from the
23:34customer throughout your supply chain
23:35but you don't have that strong in it
23:39platform where you are sharing the
23:40information right operational obstacles
23:43production bottl next or capacity
23:45constraints suddenly you are getting the
23:47demand spike is there but you are not
23:50able to meet because of your limited
23:52capacity and then production bottleneck
23:54because some processes in the production
23:57are taking more time let's say very
24:00simple example I'll give you this stage
24:02is taking 5 Seconds this is taking
24:05somewhere 6 second this is taking 10
24:07seconds this is taking 7 seconds again
24:10this stage is there taking 6 seconds
24:12like this so if I'll try to smooth this
24:16production line I I can see this third
24:19stage is taking almost double than the
24:21first stage this is going to be the
24:24bottleneck in the production how it is
24:26going to be the bottleneck because this
24:29person will produce two but it will be a
24:31this person will be able to produce
24:33forward only one that means after every
24:37one cycle there will be double inventory
24:41so there will be the pile in the end of
24:44this their semi-finished good and maybe
24:46we need to smooth this production
24:48bottleneck we'll assign two persons
24:51sitting on this stage those can process
24:535 Second 5 Second and we can smooth on
24:56the production the next bottleneck will
24:58be 7 seconds so how we can remove those
25:01bottlenecks so Transportation delays
25:04quality control problems if you are
25:05struggling with the quality your whole
25:08whole lot is maybe somewhere stuck at
25:11the OKC end you have produced those many
25:14units but your OPC department is saying
25:16outgoing quality control is saying that
25:19there is some problem with the lot you
25:21need to inspect the whole quality that
25:23means you just imagine 50,000 items are
25:26packed you are opening all the items
25:27because there is some serious concern
25:30right pricing obstacles I told you
25:34because different pricing policy with
25:36different vendors so then lack of
25:39transparency is there right and you you
25:41want to keep the power negotiation power
25:43with you only so then you don't want to
25:45disclose behavioral obstacle is one
25:48thing where I told you uh resistance to
25:51change human nature right and then lack
25:54of trust is also there because uh if we
25:57we are operating in Industry there are
26:00some players today maybe those are our
26:02suppliers you never know tomorrow they
26:04will be grow so big that they will
26:08acquire our manufacturing unit right so
26:11or maybe they will start expanding into
26:14that particular industry this happens
26:16many a time so will be effect this we
26:18have seen the information is this much
26:20only and over the stage how this is
26:24manipulated how this is you know
26:27inflated
26:28Amplified right
26:30so the one very basic lesson from this
26:34is if you are going to include so many
26:37players then every stage there is you
26:41know uh amp amplification of the
26:44information so if you reduce only one to
26:46two so this information will be
26:49inflation will be reduced right so that
26:51means but then there are some Industries
26:54where you need this long structure so
26:57what you'll do you you can only
26:59implement it infrastructure your
27:01technology where you know quick
27:03information sharing will be there that
27:06any information is being recorded at any
27:08point either distributor end or raw
27:10meter supplier end or wholesaler or
27:13retailer anywhere doesn't matter maybe
27:1620 players are involved in that supply
27:18chain even then same information you
27:21will me throughout the network you will
27:24share
27:25transparently right so uh and how this
27:29is caused because of order batching
27:31price fluctuation lack of information
27:33sharing we are facing this will be
27:35effect right and when will be effect is
27:39there inefficiency increased cost excess
27:41inventory stock out poor customer
27:43service will be there we'll see how it
27:45will impact our performance you can see
27:47manufacturing cost will increase now one
27:50person may say argue that how
27:52manufacturing cost will increase we are
27:53manufacturing 10 units or we are
27:55manufacturing 100 units yes when you are
27:57man ufacturing in bul then the because
28:01once you will standardize the process
28:03you can minimize the total cost per unit
28:06uh cost of production but if you'll
28:09quickly change over from one model to
28:11other model then again there will be
28:14more cost right inventory cost there is
28:16no coordination all are keeping the
28:18inventory retailer is also maintaining
28:21distributor wholesaler carry forward
28:22agent all those players manufacturer is
28:25also maintaining the inventory then Co
28:28manufacturers are maintaining raw materi
28:29everywhere you are maintaining inventory
28:32and throughout this network you have
28:34deployed 20 storage houses warehouses we
28:37are you keeping inventory that all
28:40inventory is non value adding activity
28:43wastage right so that cost replenishment
28:46lead time because those many players are
28:49there no KCK information sharing lead
28:51time will increase right so
28:54Transportation will increase sometimes
28:56you are transporting 10 units sometime
28:59100 units but you know the maximum unit
29:01you can transport 200 so that capacity
29:05you are not utilizing fully right
29:07shipping and receiving cost will
29:09increase level of product availability
29:12because there is no clear communication
29:15so sometimes you are made uh uh you know
29:19storing extra inventory sometimes you
29:21are out of stock that will happen
29:23because there is no coordination and
29:25profitability obviously will decrease
29:28why because this cost overall cost will
29:31increase so your margins will
29:33decrease some managerial actions we can
29:36take to you know improve the overall
29:38performance we can Define better pricing
29:41strategies we can stabilize the orders
29:43we can build those strategic partnership
29:46through the coordination so first is
29:48aligning goals and incentives aligning
29:51goals across the supply chain
29:53see this will be only possible when all
29:57the states stakeholders can see the
29:59win-win situation if I'm saying that we
30:01want to be responsive throughout our
30:04Network that means we need to maintain
30:07the
30:08inventory through our retailer we need
30:10to maintain the
30:12variety we need to provide the quality
30:16we need to provide the highest level of
30:18services through our Network and network
30:21means distributor retailer or online if
30:23we are selling so this responsiveness
30:26means throughout Network we need to
30:28share variety that means variety
30:30components will
30:32be delivered by raw material suppliers
30:35variety means retailer will maintain the
30:37variety warehousing partner will
30:39maintain the variety manufacturing unit
30:42production unit will produce all the
30:44variety possible right so then you need
30:47to align but then when you are saying
30:49variety you are providing and maximum
30:51share as a manufacturer you are
30:53capturing so then why your retailer will
30:56be responsive because you are not sh you
30:59are sharing risk with him but you are
31:00not sharing the incentives with him so
31:03that incentives overall whatever
31:06incentives are there level the of
31:09services you are providing how much risk
31:11the person is taking or stakeholder is
31:13taking throughout that methodologically
31:16meticulously you should share the
31:18incentives also throughout that supply
31:21chain pricing for coordination so now uh
31:26implementing pricing strategy like we
31:28should not use lot size based quantity
31:31discount but we should maybe two-part
31:34tariff some fixed cost some variable
31:36cost maybe if we are more volume uh
31:40maybe uh incentives we can give right
31:42discounts we can give if they are coming
31:44with the uh more quantity right then
31:47contracts such as buyback Revenue
31:49sharing and quantity flexibility can
31:52also optimize the product availability
31:54and supply chain profits right alerting
31:57sales force incentive so there is one
32:00approach selling if you are selling to
32:02your retailer that is not the ultimate
32:05objective you should sell through your
32:07end product to the end user selling to
32:10retailer means your retailer is you only
32:14you one supply chain right so if you are
32:17producing selling to retailer but
32:19retailer is not able to sell further
32:21then it is a problem then improving
32:24information visibility and accuracy this
32:26is what I was talking about point Point
32:28of Sales
32:29data so as soon as you are scanning that
32:33product code quickly that information
32:35should be shared this is what point of
32:37sale data is implementing collaborating
32:40forecasting and planning where your all
32:43stakeholders are there and if I'm
32:46forecasting the demand all the
32:48stakeholders should be there and they
32:50should also see if I'm looking for
32:53demand function how accordingly
32:55Transportation agency needs to to behave
32:58how accordingly warehousing needs to
33:01design their function how accordingly
33:03raw material uh providers should uh plan
33:07their Productions right designing single
33:10stage control of replenishment it should
33:12not be
33:13that uh retailer is placing order with
33:16the wholesaler wholesaler is placing
33:17order with the distributor distributor
33:19is placing with the manufacturer
33:20manufacturer with co- manufactur Co man
33:22with the raw material supply that should
33:24not happen one replenishment order
33:27should be shared throughout the supply
33:29chain without any uh intervention in
33:32that right so we have some softwares uh
33:36for that uh uh vendor managed inventory
33:40and warehouse management inventory so
33:43that we can use for better decision
33:45making improving the overall performance
33:48operational performance so first is if
33:50you can reduce the lead time you are
33:52sure about the information this much
33:55order is required you can process that
33:57order and then you can you know reduce
34:00the lead time the delivery time you are
34:02required to uh deliver the product to
34:05the End customer reducing lot size so
34:08smaller lot size reduce fluctuation
34:12between supply chain stages but then
34:14smaller lot size problem is with
34:16manufacturing cost that will increase
34:19but then the inventory cost will
34:20decrease right so decreasing information
34:23Distortion that will help you if you are
34:25producing in uh small lot size right
34:29operational Improvement that lower fixed
34:31ordering transportation and receiving
34:34cost can facilitate this reduction in
34:37cost right rationing So based on your
34:41past data like I talked about that if
34:44there is sudden spike in the demand
34:46because they uh heard this news that uh
34:49today midnight petrol price is going to
34:51increase so then everyone will go to
34:54your you know petrol pump and they will
34:57start ref fing to the full capacity they
34:59have they will fill all the cans
35:00whatever they are having right but how
35:03you can stabilize the demand during that
35:05by implementing rationing schemes right
35:08so that that is artificial inflation
35:11because if today they are coming for
35:12with that all demand if they are coming
35:15maybe after two days then maybe for next
35:1810 days they will not come so what you
35:20will do during those 10 days so you need
35:22to stabilize that demand and next is
35:25designing pricing strategy to stabilize
35:27the orders so again the best strategy
35:30which is opted by Walmart is everyday
35:32low pricing so we have seen that during
35:35the seasonal offers or maybe the
35:37festival season offers the demand
35:40through your placing orders through
35:41Amazon flip
35:43cart increases by 60
35:4660% that means you are not stabilizing
35:50the demand if you are not stabilizing
35:52the demand during that time you need to
35:54produce more that means you will acquire
35:57extra resources machines Manpower extra
36:00facility but then because season is gone
36:02for maybe that season is only for one
36:04month or two months then after that what
36:06you will do with the extra resources so
36:09the other strategy is how you can
36:11stabilize the demand uniformally so that
36:14accordingly you can manage the capacity
36:16and that capacity can be properly you
36:19can efficiently use that full capacity
36:23building TR strategic partnership and
36:25Trust so trust and information sharing
36:28are two parameters which are important
36:30only then your coordination will be
36:32there right so if you are sharing the
36:34full information with the stakeholders
36:37you'll get their trust as well right so
36:40and in that way you need not to
36:42duplicate the efforts right if you are
36:44sharing partial information with them or
36:48what if any conflict arises between that
36:50can be there right conflict can
36:52stakeholders are going with you all the
36:55time there can be conflicts related to
36:57delivery related to Quality related to
36:59pricing all that but how you are
37:02negotiating how you are settling the
37:04disputes so whether you came across some
37:08common mechan mechanism where you are
37:10implementing that and you are resolving
37:12all your conflicts how efficiently you
37:15are doing that and this already we have
37:17discussed the supply chain macro
37:19processes where we talked about in one
37:21session the uh customer relationship
37:24management forward supply chain where we
37:26are talking about how we are selling the
37:28things products to the customers or
37:30Services how we are negotiating how we
37:32are dealing with their after sales
37:34Services order management whatever
37:36queries customers are having we are
37:38handling through customer relationship
37:40management internal supply chain within
37:42that internal manufacturing unit how we
37:45are planning the production how we are
37:47scheduling our activities how we are
37:49sequencing our activities how we are
37:51utilizing the capacity demand we are
37:53planning Supply we are planning supplyer
37:55relationship management all activities
37:57is focusing on the relationship between
38:00supplier and manufacturer so we are
38:03negotiating with them on quality cost
38:06price variety changeovers different
38:08models right any disputes delivery all
38:11those things we are sharing the design
38:13specifications all those things will
38:15happen with the supplier relationship
38:17management so here is case study of
38:19Amazon and we'll see quickly how Amazon
38:23has leveraged on this strong their
38:25strong it infrastructure and D very
38:28strong customer relationship management
38:31and then this the uh the this Amazon's
38:35CRM success is its ability to you know
38:38customize product offering to the
38:40individual customers so whatever your
38:43you know tailored kind of supply chain
38:46so where they are as per your
38:48requirement they are providing you the
38:50products now you can also feed your
38:52requirements in the uh if any product
38:55specification so accordingly they will
38:57provide you the products right so very
38:59strong with the maintaining their
39:01customer relationship management this is
39:03particularly one click ordering system
39:05we are under industry 4.0 now Amazon is
39:09implementing see if I'm
39:11repetitively there are so many products
39:13we are buying right and very routine
39:16products are also there if I'm taking
39:18sugar or tea right so tea leaves
39:21whatever I'm buying I'm buying a fixed
39:23brand right and in fixed size right so
39:26whenever I need to place order for tea
39:30why I need to search all the brands pick
39:32that brand what is the size what is the
39:34price so there should be one push button
39:37I'm pressing that immediately everything
39:39is done the order is placed the payment
39:43is also done automatically because that
39:45is very fixed brand and the Amazon
39:49should know that I'm buying this sugar
39:51brand this tea brand this size or any
39:55flavor or any product right in this much
39:57quantity I'm pushing that button so they
39:59are providing you that this this is
40:02under industry 4.0 where you will just
40:04push the buttons and you will place the
40:06repetitive orders so that information
40:08accurately is shared because the routine
40:10orders in that way Amazon can be
40:12efficient right and if any customized
40:15products are there then you can provide
40:17your information and then they can
40:19provide that uh customized products as
40:21well so you see with this customer
40:24relationship how efficiently they are
40:26managing I need not to those routine
40:29items what extra you will do right you
40:31cannot do anything else so this is one
40:34example so uh see there are RAR
40:39instances when customer need to call the
40:41center right so even if they need to
40:45call the center Amazon should provide
40:47them the best positive experience that
40:49means because they are always facing
40:52problem so many customers are calling
40:54sometimes maybe wrong billing
40:56information wrong delivered in wrong
40:58maybe return is not picked so many
41:01problems can be there so then if it is
41:05there how they are enhancing your
41:07experience if they are experiencing
41:10heavy traffic on their uh call centers
41:13they are just asking you that you can
41:16just push the call back button send the
41:18message we'll call you back as per your
41:21availability you just mention the time
41:22we'll call you back right so there are
41:24so many softwares sa Erp or vle
41:27Salesforce Microsoft they are managing
41:29all the products but the beauty of
41:32Amazon's backend team it team they are
41:34developing all these Innovative
41:36platforms within house right so that is
41:39providing them the uh Competitive Edge
41:42another example is Hindustan oil limited
41:46which is again financially they are
41:49doing very well providing different
41:51products and then also customer
41:54centering approach where they are
41:55focusing on quality they are focusing
41:57fusing on delivery research and
41:59development the latest lubricants oil
42:02whatever products they are providing to
42:04you right so you can see their success
42:08can be attributed to its strategic
42:10approach that is based on customer
42:13satisfaction commitment to Quality and
42:16sustainability investment in research
42:18and development and that is happening
42:20through their efficient Supply Chain
42:22management that ensures the timely
42:25delivery the variety the quality and to
42:29the large customer base right so they
42:33provide diverse range of product and
42:35services including refining marketing
42:37distribution of petroleum products right
42:40and the revenue is uh is also growing uh
42:44uh significantly right so this is uh and
42:48then they are ensuring the
42:49sustainability measures also they where
42:51they are promoting you know how they can
42:53reduce the carbon footprint how they can
42:55you know deal with those because uh
42:58petroleum products are you know usually
43:00when we are using that those products
43:03the high carbon footprint is there but
43:05still they are coming with the counter
43:07measure how and where they can reduce
43:09that right so we can conclude now this
43:13uh this coordination among all the
43:15stakeholders manufacturers their forward
43:19supply chain with the distributor
43:20reverse supply chain with the
43:22stakeholders how they can collaborate
43:25connect in such a way that any point
43:27point of time they are getting any
43:28information that should be shared
43:30throughout so that they can maintain
43:32that strong and healthy relationship
43:34built on trust transparency and shared
43:38goals so incentives are also shared in
43:41that way if my objective is also
43:43optimized your objective is also
43:45optimized in that way we'll all together
43:48work for that so in that way
43:50collaborating planning forecasting and
43:52replenishment will help you you know to
43:55throughout the supply chain to manage
43:57the efficiency and Effectiveness so this
44:00is all about supply chain coordination
44:02these are some of the references so
44:05thank you very much

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