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In this issue Student Articles Puzzle Student Feedback
Volume 10, Issue 01, September 2020.
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Supply Chain is the science. Logistics is the art. ~ Kristen Fabry, US Navy
Transboundary Crisis – a Viewpoint Today’s societies are deeply intertwined, and their complexities stretch beyond all geographical borders. This very nature has made the existing risk management framework defunct to counter new age boundaryless disruptions. Disturbances, which are cross-functional, cross-territorial, cross-political and cross-temporal, lead to what is known as transboundary disruption. Transboundary crisis come in various shapes and sizes, but they all share some common characteristics: Boundaryless: Interwoven and web-like, the transboundary crisis spread across countries and continents just like wildfire. Globalisation is one of the core drivers of boundaryless disruptions. Hard to determine its origin: The epi-centre of the transboundary crisis is hard to locate, and many perspectives and different theories run around them. Lack of information about its genesis makes it all the more challenging. No off-the-shelf solution: Transboundary crisis does not have a fixed resolution and challenges human instinct at all levels to counter it. Lack of any existing solution leads to unnecessary losses in the ecosystem, and humanity runs a race against time to cut its losses. Multifaceted and Multilayered attack: Transboundary crisis attacks across several layers, resulting in several setbacks and making it very difficult to contain the damage. The ongoing global pandemic, Covid-19, is a perfect example of one of the biggest transboundary crisis events of our lifetimes. Coronavirus emerged in China during late 2019 and spread across boundaries and nations. Declared as a global pandemic on 11 March 2020 it continues to spread with more than 30 million confirmed cases in six months. Many theories are going around on the possible origin of the virus, and several
countries are working tirelessly to develop a vaccine. All treatments are aimed to provide supportive care for symptoms of the disease. Covid-19 has created a health emergency all over the world, and people are locked down in their homes. The business has been closed, transport infrastructure has been crippled, and consumption has been limited to only essential commodities and medical supplies. Unemployment has touched new heights, and financial disaster is in the making. Its attack has been multifaceted and multilayered. Unlike other disturbances, which cause operational turbulences within a supply chain, the transboundary crisis leads to high impact disruptions, whose time frame is hard to predict. They are often characterised as long-term disturbances with unpredictable scaling and simultaneous interruptions across the complete global supply chain. Global supply chains have been tested to their limits with many industries exposed due to lack of preparedness for such disruptions. Theoretically, for any country, there are two ways to counter a transboundary crisis. First one is to decouple itself from the rest of the world and second to improvise a strategy of protecting complexity. None of them is a straightforward solution to this crisis. It remains a research challenge to study its different guises and the most suitable intervention that can be adopted in each of those manifestations. ~ Anurup Arora (JGBS 2019)
Analytics and 3PL Logistics companies connect firms to respective markets by providing various services, including multimodal transportation, freight forwarding, warehousing, and inventory management. They are essential for global manufacturing and local distribution, which is complex and multilocational. Current business practices prefer outsourcing for distribution by Third-party Logistics (3PL) providers. The company acts as a “third party” facilitator between seller/manufacturer (the “first party”) and buyer/user (the “second party”). The primary duties of 3PL firms are to provide transportation, warehousing, strategy, and information support to shippers to optimise the whole supply chain. The concept of 3PL works in two ways, first shippers work with 3PL, and the secondly 3PL is working with shippers. Mutual understanding is necessary to get a better supply chain network collaboration. Analytics is required to solve complicacy in establishing a network. Real-time stock availability, distance from the location to serve, which warehouse to choose, handling of return or rejected items are resolved with analytics. Massive data is required to handle by shipper based firms, and they are not efficient to deal with this own, they are dependent on 3PL. Satisfactorily serving by 3PL firms to the shipper will help to retain them for a long time. Majority of Fortune 500 companies are dependent on 3PLs allowing firms to concentrate on their core business. To ensure that the supply chain is efficient, profitable, and a win-win situation for both the shippers and 3PLs ▪ need to think about strategic process analysis of data before planning and operating (Shipper/3PL Analytics);
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OCTANE -The Octaphi Newsletter ▪ to attract shippers for greening efforts for fuel-efficient driving, electric vehicle and proper utilisation of load (Green Logistic); ▪ de-risking of the supply chain from the volatile international market by Global trade management (Supply Chain Finance) and ▪ inclusion of AI and ML for route optimisation and warehousing to overcome customer expectation of delivery, penalty on late delivery. The logistic sector is a lucrative domain from a business point of view and least affected in the period of Covid-19. Pandemic has boomed e-commerce, and that has brought new opportunities for the logistics sector. The 5PL or Fifth Party Logistic is a new evolving supply chain logistic solution for an organisation based on analytics and strategy involved in it to improve the existing model further. Source: (Annual 3PL Study, 2020)
~ Ravi Kushwaha (JGBS 2019)
Reshaping the Mobility industry Covid-19 disruption is going to have a longterm consequence on consumer behaviour, government policies, and regional trends. The automotive and mobility industry is also worst affected and needs to build new strategies around the evolving trends and influences, which may differ from region to region. For example, in the pre-corona era, we used to decide the mode of transport that we would be using before going to a place. A few factors would only influence this decision. Some of them being time to destination, convenience, price of the trip, space and privacy, avoidance of congestion, and more. But now, the risk of infection is our primary concern, it even overtakes important factors like destination time and even, price. Transport options that offer physical distancing will benefit the most out of every other opportunity. Walking and cycling have become favourite choices. Governments around the world are also making changes in their respective countries, be it influencing the lifestyle choices of its citizens or mobility norms across the country. Most of them are opting for policies favouring low emission cars or setting emission standards. In some cities, local governments are continually making decisions to construct EV charging structure,
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car lanes, and pedestrian walkaways, as consumer behaviour shifted in this pandemic. For instance, Paris has pledged to invest $325 million for a better bicycle network. Also, Berlin is to remodel some residential streets as “play streets” on certain days of the week. As such, Governments are likely to play a decisive factor in the mobility industry’s future. Due to Covid-19, industries were exposed to their disadvantages more so than ever. Companies to overcome weaknesses, must come together collaboratively and consolidate operations so that they have a cost advantage with the newly adopted scale of operations. IT industries, who have not been affected much by this pandemic as compared to the traditional economy, can offer help. For example, they can help the automotive and micro-mobility sector by introducing new technological upgrades, or by digitising their sales channels and core processes. Companies who use digital media are performing better as compared to their competitors. Apart from making changes in their operations and administration, companies need to re-focus and reprioritise their technology improvements. Covid-19 has turned the mobility industry upside down. Apart from adhering to current consumer behaviour, business environment, hyperlocal mobility, rules of regulators, a new collaboration with different industries, and innovations, the need to come up with a resilient and agile business model has become more critical. Also, the ACES “autonomous driving, connected cars, electrified vehicles and shared mobility” trends are not going to change even after the virus ends. Crossindustry collaboration would be the need of the hour for the traditional companies to stay in business. These collaborations can take several different forms: ▪ Original equipment manufacturers can use the existing platforms of their competitors for new technology development ▪ share capital expenditures while pursuing joint R&D ▪ use new acquisitions or cooperation to access new customers and markets, or ▪ improve the supplier’s network by using the last man standing” strategy to increase market power. Source (McKinsey, September 2020)
~ Anushreya Baruah (JGBS 2020)
Floor Markings • Indicate where inventory should be stored • Define loading and unloading areas for inventory • Mark aisles, pathways, and hazardous areas • Help visitors find their way around unfamiliar areas • Direct flow of traffic within the facility
Student’s Feedback Corner OCTANE has been on top of my weekly reads. Not only are the briefs current but also have an eye on the future. They help us get in touch with the advancements in SCM, enabling bubbling ideas to connect theoretical concepts. ~ Amrinder Singh (JGBS 2019) Octane is an intriguing material distributed by Octaphi. I anxiously sit tight for the new issues which help me to build my insight in the field of operations/supply chain. ~Arpit Agarwal (Univ. of Maryland)
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