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Volume 09, Issue 01, September 2019.
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“Where there is no Standard there can be no Kaizen.” - Taiichi Ohno
Supply Chain Analytics – Shaping Supply Chain of Future
The advancement in the use of technology like artificial intelligence and the supply chain analytics has transformed the supply chain from not being limited as a tool to increase efficiency, but a mode for competitive advantage is enabling the organisations to adapt for the future while prospering. Supply chain analytics is no more an IT tool for dashboards but embedded in the business model for accurately informed decision making enabling organisations to turn large stream of data into valuable insights. Forces like volatile customer demand that poses the challenge of managing a large variety of products with the reduced life cycle, changing geopolitical scenarios like changing trade policies and evolving technology and the digitalisation are shaping up the modern supply chain. From efficient to flexible supply chain management system, the strategy to survive and thrive the challenging environment has transformed. Supply chain today requires the ability to identify, evaluate and execute all the available scenarios of the chain for an informed decision that too on a rapidly changing environment. Being agile is a dramatic shift from being efficient that solely focuses on optimising cost using traditional techniques like minimising procurement cost at the expense of large quantity and long lead time, longer manufacturing runs for better resource utilisation, freight with full container load to reduce transportation cost. Supply chain analytics provides end to end visibility, actionable insights, analytical decision support and execution to make the system more agile and ready for future challenges. Technological advancement like the use of Internet of things provides the opportunity to build connected business solution while generating an unprecedented amount of data and expectations to develop meaningful insights aiding business operations and timely as well as accurate decision support that is critical to business continuity. The unique volume of raw data changing in real-time poses a severe challenge of transforming them into information restricting omission of a decision critical data while providing complete supply chain visibility. Hence directing efforts to generate meaningful information with the goal of increasing consumer value is the key in supply chain analytics. The information extracted from the data with tools like trends and correlations would pave way to operational, tactical or strategic natured prescriptive actions, in turn, guiding the overall business operation. From descriptive and diagnostic analytics to predictive and prescriptive analytics, supply chain analytics has transformed itself from generating historical data in the past to producing decision and action targeted to achieve the outcome in the present thereby embedding itself in the key business operations. The challenge now lies with defining the objective that the supply chain analytics need to focus on. Business operations working in
silos is a self-caused wound and the supply chain is the first to be affected by misaligned and conflicting KPI. Thus incentivising KPI and decision making that targets the benefit of the business is imperative for the success of supply chain analytics. With a growing competitive environment, supply chain analytics is getting more acceptance in the mainstream business. While there are challenges like lack of clean & filtered data, segmented functioning of departments, a complex algorithm which still requires optimisation and is sort of black box for the industry, short-sighted business vision and skill gap that hinders the mainstream use of analytics. Going forward, these challenges must be taken care of to gain widespread acceptance and reap the potential benefit out of analytics. As of now, supply chain analytics with the premise of answering questions is continuously adapting to become more intelligent is providing an excellent promise for the future. Analytics is no longer a burden or IT expense but an asset to leverage actionable insights for the business to grow, advent opportunities and mitigate risk. With the rapid evolution of technology and digitalization, supply chain today needs to be hyper-connected and automated producing insights that promote the business operations and its continuity. Source: Forbes, 2019; Newswire, 2019
~ Tuhin Banerji (18 JGBS)
Drones – A new transport mode In supply chain management drones can be used for several different purposes from the supply of raw materials from the warehouse to production facilities. In management of warehousing, drones may be the best new way of tracking inventory by using RFID, QR-codes, and IoT. Drones may obsolete the forklifts and manual labour for transportation of small boxes inside distribution centres. Outside distribution centres UAVs may be used to disburse supplies to different processing plants. Further, in case of last-mile activities being time and again the most expensive, time consuming and labour-intensive activity, but by using drones’ these adversaries can be changed as they have the potential to deliver goods faster so also is the cost of delivery. Although it is a developing technology, it's ease of use and abundant availability makes it a potent medium for use it as a last-mile delivery trouble-shooter. With the use of drones, we can imagine about placing an order and getting it delivered to your front door within 30 minutes. Organisations like Amazon, Zomato, Uber foods and Google are experimenting the same, specifically for lightweight deliveries. Drones have found use in farming (spraying pesticides, monitoring plant health, seed sewing and mapping crop yield), mining (raw material extraction), searching, and surveying applications. There will be most valuable to deliver the necessary items to people in hinterlands during natural calamities such as
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How it all Began
In this issue
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flood, earthquake and cyclone-affected areas. The use of drones is going to increase in coming times in the fields of processing, warehousing and distribution activities, facilitating the management of even work-in-process inventory. Inside of the facilities, drones may perform safety audits, checking of structural stability, a leaking roof or fly across premises for recovery of forgotten tools – which will not only reduce working time but also improve the working conditions. While one should cherish the technology facets of drones as a future model of transportation, they still face several limitations, especially in India (Ministry of Civil Aviation, India, Drone Regulations, 2018), such as: Regulations: Till date, drones are only allowed to operate up to a height of 400 feet, which is too low to work in cities, due to high rise buildings. Privacy, Safety and security risks: Drones in the sky will pose a risk to safety and secrecy to personal as well as to defence establishments, which will pose a threat to an individual as well as to national security. Risk of collision: The anti-collision technology, yet not incorporated; may cause accidents. Hacking and theft: Drones being highly vulnerable to theft and hacking without anti-theft and anti-hacking capabilities; can be potential weapons for harming installations and person by hacking and may pose a threat for a nation. Operating conditions: In weather conditions such as high wind speed and rain, their capabilities will be limited, and this will not be ideal for operation. Technology limitations: Till dates commercials drones have limited battery life, which makes the operation of drones limited to confined locations and are not suitable for continual services. Source: Impact of Drones in Supply Chain Management (Doyle, 2018)
~ Trinath Ojha (18 JGBS)
Blockchain - the game changer for supply chain management The Blockchain is a distributed database containing records of digital information or happenings that renders them tamperresistant. Although many users can access, monitor or add information, they still cannot alter or censor it. The original information remains which leads to rendering a perpetual and public trail or chain of trades. Perhaps the most potent use of blockchain technology is Bitcoin, a currency system that stormed technologically savvy traders. The intriguing thing would be that the blockchain protocols are used for non- monetary purposes. Although initially envisioned for financial transactions, companies of all kinds have become creative with the blockchain leader since it can be used to record, track and authenticate transactions of virtually anything that retains the intrinsic value. From travel sharing to cloud storage to campaigning, companies in all industries start to see the real potential of the blockchain. If blockchain technology permits us to track all types of transactions more safely and robustly, imagine the carnage it presents all across the supply chain. As the product changes its hands, each transaction builds a new history of the product or service from production to sale. Blockchain can transform current supply chain models while reducing costs and increasing efficiency. Its four uses would include existence, ownership, tracking, and storage. Presently, supply chain leaders continue to remain woefully misguided about technologies near future. They may comprehend all their other real purpose, but the implementation of blockchain technology in the commercial world certainly appears mostly out of reach. Consequently, supply chain managers could not realise that investment in blocks and technology might be the only way of successfully mitigating this radical change in the standard operating procedure. Source: Supply Chain 247.com, 2019
PUZZLE Dilemma: There are six trucks. Three filled and three empty
arranged alternatively. Arrange the trucks such that all the loaded trucks and unloaded trucks are together. You can move only one truck.
~ Purva Sikri (17 JGBS) HOW ALL IT BEGAN UPS, the world's largest package delivery company, was founded by two teenagers with a bicycle and $100 borrowed from a friend. Although it’s almost impossible to find a product without a barcode today, they first began to show up in the supermarkets in 1974. Barcodes initially were designed to keep track of railway cars as they travelled across the country.
Solution: Unload the material of 5th truck into the 2nd truck. The puzzle is an example of benchmarking. Benchmarks are the “what,” and benchmarking is the “how”. It is the way through which one can find the best way to perform a task in a particular company, by a competitor or by entirely different industry. This information can then be used to identify gaps in an organisation’s processes to achieve a competitive advantage. It focuses on the best practices and provides opportunities to strive for continuous improvement. Benchmarking techniques further can be categorised based on internal, competitive and strategic benchmarks. If a company has set appropriate benchmark parameters, it can achieve efficiency and effectiveness in doing more with a lot less.
~ Payal Jain (17 JGBS)
STUDENT FEEDBACK OCTANE is a good platform to keep you updated in a fast paced and ever-changing business world. Its articles are standout as its keeps pulse on how change affects business activities. ~ Chitla Sinha (19 IIFT)
Editorial Board: Purva Sikri, Lovlin Swain Faculty In-charge: Saroj Koul Jindal Global Business School, Delhi NCR Contact us: octaphi@jgu.edu.in Previous issues of OCTANE-The Octaphi Newsletter: http://issuu.com/octaphi/docs