Student Articles Crossword Puzzle Do You Know?? Industry Facts
Volume 07, Issue 01, January 2018.
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“Where there is no Standard there can be no Kaizen.” - Taiichi Ohno
The Kodak Moment for Automotive Supply Chains 21st century has been an age of rapid and dynamic industrial disruption. The Automotive industry is no different due to the lithium-ion batteries which remind us the Kodak case where the photography industry was disrupted by digital camera. The events leading to Battery Electric Vehicles (BEV) is almost same which has totally a different cost and experience from what we are used to. Similar to the digital cameras evolution, the batteries are getting more efficient and cheaper year after year. With Paris ‘Climate Deal’, environmental driven pressures will further trigger the entire industry disruption. The changes will have their impact on the supply chain as well. For instance, an 8-cylinder engine has approximately 1200 parts as compared to electric engine which has only 20 parts. As fresh entrants in the industry emerge to capitalize on the new market opportunity, the existing suppliers would need to innovate and reshuffle their product portfolios. The distribution of profit among the existing supply chain is bound to change with the restructuring of the existing distribution systems and there would be close collaboration of component manufacturers with the battery manufacturers as battery is almost one third of the total car cost. Original Equipment Manufacturers (OEMs) need to defend their competitive positioning against the new component suppliers. OEM, hence, would thrive on battery specification to differentiate and have a competitive edge from others. Established OEMs are hesitant to invest in dedicated battery factories instead see partnerships like BMW with Samsung or Tesla with Panasonic as a strategy to get batteries from these battery specialists.
The battery manufacturers at the same time are developing proprietary technology to have their competitive edge. With BEV market accelerating, the existing car companies and their suppliers if remain as sitting ducks will also be part of another Kodak moment of industry disruption. Source: DHL, 2017
~ Subhasis Pradhan (16 JGBS)
Industry Facts Key attributes of a Resilient Supply Chain Four Pillars: ✓ ✓ ✓ ✓
Visibility Flexibility Collaboration Control
Supported by: – Governance – People – Process – Technology
Procurement Strategies for Supply Chain Success Supply chain efficiency is of huge interest these days for many companies especially for those where competition is very high and product differentiation is low. Hence, to achieve competitive advantage it is necessary to make the supply chain agile and efficient. There are many fronts where the supply chain can be made efficient, such as inventory management, turnaround time reduction, returns management, etc. but then the immense potential lies in sourcing or procurement. In general procurement accounts for majority of the supply chain or production costs in the way it is implemented. In order to ensure an efficient and effective supply chain the best way is the consolidation of various suppliers.
Combined Buyer groups and Supplier Segmentation/Rationalization are two strategies which help in reduction in procurement costs leading to supply chain efficiency. Combined buying groups helps in better spend analysis and volumes within an organization. It avoids resource duplication and enables standardization of material or service effectively. Also, supplier segmentation leads to rationalization and helps in evaluation of relative importance of suppliers which can be done by grouping of purchases over a specific period of time. Supplier consolidation benefits in both in the short and long-term due to the reduction in supply chain cost and capital cost. It facilitates strategic sourcing methods leading to lowering of purchased costs and enhancing buying power. Process costs such as individual transactions and associated costs also get lowered when dealing with fewer suppliers, resulting in significant savings and supply chain efficiency. Thus, consolidated procurement offers cost benefits with better supply chain efficiency and effectiveness. Source: Inbound Logistics, 2017.
~ Aishwarya Martin (17 JGBS)
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How it all Began
In this issue
OCTANE-The Octaphi Newsletter
Source: Supply Chain Brain, 2017
~ Abhilash Sharma (17JGBS)
How it all Began…………. In 1939, Bill Hewlett and Dave Packard founded HP in Packard’s garage with an initial investment of $538. Their first product was an audio oscillator and their first customer was Walt Disney, who purchased eight oscillators to develop sound system for the movie Fantasia. The HP Garage, Palo Alto is known as the birthplace of Silicon Valley and HP is now one of the largest companies in the world.
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Clues: Across: 1. A capacity constraint resource whose available capacity limits the organization ability to meet the product volume, mix or demand. 2. A written guarantee that the producer will replace or repair defective parts or perform the service to the customer satisfaction. 3. The maximum length of time that an activity can be delayed without delaying the entire project. 4. The maximum rate of output of a process or a system. Down: 5. Process with low customer contact and little service customization. 6. Handling a wide assortment of services or products efficiently. 7. A Japanese word that refers to cards used to control the flow of production through a factory. 8. Automatically stopping the process when something is wrong and then fixing it inline as they occur.
~ Swetaparna Tripathy (17 JGBS)
Student’s Feedback Corner Octane is a good platform to keep you updated in a fast paced and ever-changing business world. Its articles are standout and, I strongly recommend Octane reading as its keeps pulse on how change affects business activities. ~ Sneha Kaushal (17 IIFT) Octane an insightful source enlightening the world of supply chain industry and all the new things happening in this industry. I truly recommend all management professionals to read this newsletter. ~ Apoorv Choubey (16 MDI) ~
Editorial Board: Saroj Koul, Vasudha Kamra Jindal Global Business School, Delhi NCR Contact us: octaphi@jgu.edu.in
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Answers – Vol. 6, Issue 4:
Product returns are unavoidable in a supply chain, especially when ecommerce players are concerned. With an urge to increase the customer base i.e. adding new customers and maintaining the existing customer base by repeat purchases, e-commerce companies are providing all sorts of convenience and benefits by formulating attractive return policies. But the increasing returns ratio is a matter of concern as it adds extra logistics cost and also companies are not sure of getting desired value from the returned product. Hence, it is necessary to adopted strategies to manage and reduce the product returns and to develop policies which will benefit the loyal customers and at the same time avoid those customers who are shopping just for fun. The key levers of managing product returns are: 1. Prevention is better than cure. Hence, a small spend on quality checks will reduce product returns significantly. 2. Setting up of in-house refurbishment facility will help in reducing the turnaround time from returned to salable stocks. 3. Identification and categorization of returned goods such as repair or scrap or recycling etc. will help in taking quick action and save from the unnecessary costs associated with it. 4. Outsourcing of return hubs is beneficial and a winwin situation for both the ecommerce company having country-wide presence and an outsourced vendor dealing with enough volumes. 5. Centralization and developing a well-integrated network of customer support operations will help in reducing communication gap between departments within the organization and also facilitates quick resolution of customer issues, resulting in customer satisfaction. 6. Consolidation of reverse logistics operations will also help in cost reduction while managing returns.
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Across: 1. GANTT 3. EFFICIENCY 6. BATCH Down: 2. BUFFERING 4. DOWNTIME 5. KAIZEN 7. CAPACITY PROGRESS; 8. FORECAST.
Managing Returns Efficiently: Key Strategies
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