VUCA in Supply Chain Management

Introduction

In today’s volatile, uncertain, complex, and ambiguous (VUCA) world, supply chains are not only influenced by these characteristics but are increasingly exhibiting VUCA features themselves. VUCA was defined by Bennett and Lemoine (2014) with the following traits:

Volatility: Supply chain events are unexpected or unstable, but their impacts can generally be predicted based on available information.

Uncertainty: The cause and effect of supply chain events are understood, yet other details about the events remain unknown.

Complexity: Both the supply chain and its environment have numerous interconnected parts and variables, making it challenging to establish clear cause-and-effect relationships.

Ambiguity: Supply chain events are unexpected, and the causal relationships behind them are unclear.

As the global economy evolves and global enterprises cooperate deeply, modern supply chains involve many interdependent actors across different countries, resulting in substantial flows of materials, funds, and information. This complex network structure adds to the overall complexity of supply chains, making them even more susceptible to VUCA characteristics.

The increasing complexity of supply chains contributes to higher levels of volatility and uncertainty, leading to increased ambiguity in their operations. This situation is aggravated by the VUCA environment and the inherent VUCA features of supply chains, making disruptions more likely. Conventional risk management approaches, which follow steps of identification, evaluation, response, and monitoring, are inadequate to address these challenges, especially considering many risks are unforeseen. To effectively counteract these issues, it has become crucial to focus on constructing resilient supply chains, as a means to enhance the ability to respond to disruption risks.

Concept of Supply Chain Resilience

The concept of “supply chain resilience” was introduced by Rice and Caniato (2003) and formally defined by Christopher and Peck (2004) as the ability of a supply chain to return to its original state or move to a more desirable state after being disrupted. Scholars have reached a consensus that it involves the adaptive capability of a supply chain to prepare for unexpected events, respond to disruptions, and recover from them. Various metrics have been developed to evaluate supply chain resilience, including capabilities-based measurements, quantitative metrics, performance-based metrics, and topological network indicators.

The focus of existing literature largely centers around strategies for improving supply chain resilience, categorized into proactive and reactive approaches. Proactive strategies involve preparing for disruptions, while reactive strategies focus on recovering a supply chain after a disruption. Proactive strategies include network structure design, supplier selection, redundancy, flexibility, diversification, and building social capitals. Reactive strategies have received less attention, but emerging technologies like cloud computing and blockchain are increasingly recognized as tools that can enhance supply chain resilience by improving visibility, anticipation, and adaptability.

Research Methodology on supply chain resilience

Various theories have been applied to the study of supply chain resilience. Commonly used theories include the resource-based view (RBV), dynamic capability theory, relational view, and complexity theory/complex adaptive systems. RBV emphasizes that a firm’s competitive advantage comes from valuable and irreplaceable resources, suggesting that firms must continually integrate and reallocate resources to enhance supply chain resilience. Dynamic capability theory and relational view focus on understanding the capabilities and relationships firms need to develop to achieve resilience in a rapidly changing business environment. Complexity theory/complex adaptive systems, on the other hand, considers supply chain firms as self-organized and self-adaptive entities, adapting nonlinearly to their dynamic external environment.

Research on supply chain resilience employs various methodologies, categorized into three groups. Firstly, scholars often develop conceptual frameworks to build resilience in different contexts. Secondly, quantitative modeling approaches are widely adopted, including mathematical modeling, decision analysis, network modeling, and simulation. These methods address different aspects, such as optimizing supply chain structures, evaluating resilience, characterizing network interactions, and solving large-scale optimization problems. Lastly, empirical studies, such as case studies and surveys, are growing, focusing on examining the factors influencing supply chain resilience and developing resilience metrics.

Future Research on Supply Chain Resilience in Era of VUCA

The future directions for supply chain resilience research primarily emphasize responses to VUCA risks. However, there are other important areas for exploration. For instance, choosing among multiple strategies for building resilience and unifying conflicting evaluation metrics pose intriguing challenges. Additionally, investigating how supply chain resilience impacts integration and potentially reshapes firm boundaries in favor of resilience over efficiency is significant.

A holistic approach is crucial when studying supply chain resilience. Rather than fragmented efforts, resilience should be developed within a coopetition context, recognizing the propagation of risks along the supply chain and the cost-intensive nature of resilience-building. Given the multidimensional challenges of the VUCA era, interdisciplinary research and diverse methodologies are essential.

Reference – Gao, Y., Feng, Z. and Zhang, S., 2021. Managing supply chain resilience in the era of VUCA. Frontiers of Engineering Management, 8(3), p.465.

The Role of Operations Management in ‘Make in India’

What is Make-In-India?

Since its inception in 2014, Make in India has emerged as a transformative strategy, aiming to establish India as a prominent global hub for manufacturing and investment. By extending a warm invitation to investors worldwide, the initiative has played a pivotal role in shaping the trajectory of India’s economic development, emphasizing the concepts of ‘Self-Sufficiency’ and ‘Aatmanirbhar’. Noteworthy progress has been achieved by Make in India, with a particular focus on 27 key sectors, incorporating both strategic manufacturing and service industries.

Vision

With the goal of surpassing China’s industrial might, India has actively sought foreign investments for new industrial development, concurrently strengthening its existing industrial framework. Setting an ambitious target of 12–14% annual growth in the manufacturing sector, the nation aspires to raise the sector’s contribution to the gross domestic product from 16% to 25%. Additionally, there is a strong emphasis on fostering export-oriented growth, positioning India as a significant participant in the global trade landscape.

Operational Initiatives to support Make In India

In a bid to simplify the business landscape, the Indian government has undertaken several measures to enhance the ease of conducting business within the country. A recent stride in this direction is the launch of the National Single Window System (NSWS). This platform has been specifically designed to streamline the approval and clearance process for investors by integrating multiple pre-existing clearance systems from various ministries and departments of both the central and state governments. Additionally, the government has implemented various initiatives to foster manufacturing and investments, including the reduction of corporate taxes and the enforcement of the Phased Manufacturing Program. To ensure the quality of locally manufactured goods, the government has introduced meticulous quality control orders. In 2020–21, the ‘Make in India’ campaign received a substantial boost through the introduction of the Production-Linked Incentive (PLI) schemes across 14 key manufacturing sectors, alongside a $10 billion incentive plan aimed at building a robust semiconductor and display design ecosystem within the country. Furthermore, the One-District-One-Product (ODOP) initiative has been put into action, facilitating the promotion and production of unique products from every district, thereby providing artisans and manufacturers with a global platform for socioeconomic growth. Complementing these efforts is the recently launched ‘Gatishakti’ program, which focuses on establishing multimodal connectivity for manufacturing zones. This program, spearheaded by the Prime Minister, is set to enhance logistical efficiency, thus ensuring the smooth movement of goods and people, reducing logistics costs, and enhancing market accessibility and opportunities.

Government projects like the Golden Quadrilateral, Sagarmala and Bharatmala Pariyojana, among others, are designed to speed up trade while cutting costs and time associated with logistics.

Key Concerns

India’s manufacturing sector faces multifaceted challenges that hinder the full realization of the ‘Make in India’ initiative. The productivity and skills gap within Indian factories remains a persistent issue, partly attributable to the scarcity of skilled labour. A recent McKinsey report underscores this concern, highlighting a significant productivity disparity between Indian manufacturing workers and their counterparts in Thailand and China. Moreover, the small scale of industrial units poses obstacles to achieving economies of scale, hindering the adoption of modern equipment and the establishment of robust supply chains, thus limiting the sector’s potential for growth. Infrastructure bottlenecks further exacerbate the operational challenges, with intermittent power outages and sluggish transportation infrastructure impeding the smooth movement of goods. These issues, coupled with incomplete labour reforms and land acquisition laws, underscore the critical need for a comprehensive regulatory overhaul to create a more conducive environment for foreign investment and to propel the ‘Make in India’ campaign towards its envisioned success.

Conclusion

The operational efficiency of the government plays a pivotal role in determining its overall effectiveness in carrying out various activities. Successful operations hinge on the seamless coordination of resources, labour skills, and supply chain management tasks, ultimately influencing the overall output. Effectively positioning the product in the market, considering crucial time and cost factors, is a key aspect of this process. The future success of India in the upcoming decade will significantly rely on the adaptability and enhancement of managerial approaches towards production and global product distribution. This underscores the increasing importance and role of operations management in shaping India’s trajectory in the years ahead.

References

1. https://thecsrjournal.in/enabling-make-india-csr/make-in-india-logo/
2. https://www.mapsofindia.com/maps/india/sagarmala-project-network-map.html
3. https://zeenews.india.com/news/education/make-in-india-importance-of-operations-management_1495891.html
4. https://www.linkedin.com/pulse/importance-operations-management-its-role-make-india-raju-gundala-/
5. https://99notes.in/upsc-notes/general-studies-3/indian-economy/infrastructure/industrial-infrastructure/
6. https://www.facebook.com/TheIndiaBusinessGroup/photos/a.1801453439881019/4202811179745221/
7. https://drishtiias.com/daily-updates/daily-news-analysis/make-in-india-4

Restaurant Supply Chain Management: From Farm to Table

Restaurant Industry

Food is one of the basic needs of a human’s life. The Restaurant Industry associates a new level of leisure with food.

The first question that comes up is, what does the Restaurant Industry exactly entail? The Restaurant Industry is primarily a service industry that provides food services. The service is the journey of ingredients from farms to your tables with the additional “dine-in” experience a restaurant offers. The emphasis on the “dine-in” differentiates the restaurant industry from the broad umbrella of the Food Service Industry.

Supply Chain Management in the Restaurant Industry

What does Supply Chain Management for the Restaurant Industry circumscribes? It is a series of interconnected processes ranging from procuring raw materials to converting them into food served on your plate. The complexity of it can be seen in the number of SKUs or Menu Items and, consequently, the collaborators a restaurant business has. The more SKUs a restaurant keeps, the higher the number of raw materials and processes involved, thus increasing the complexity of the supply chain.

Importance of SCM in Restaurant Industry

The importance of the supply chain can be seen in the cost breakdowns of a restaurant business. The three most significant costs for a restaurant are Food & Beverage and Labor in the same order. The costs associated with food and beverage are procurement, transportation and inventory management. The aforementioned cost headers fall under the purview of supply-chain management. Thus, supply chain management could result in efficient operations and optimised costs for a restaurant.

From Farm to Table

The journey from farms to your plates has a general pattern of stages.

The first stage is the procurement of raw materials. The procurement happens on a spectrum of quality and quantity. The quantity helps you negotiate better prices. Procuring the right amounts is always gruelling due to the accurate forecasts of consumer demands required. The quality gets you customers, and you can even charge a premium price. The emphasis is on building good relations with a variety of suppliers. The suppliers may range from local farmers to wholesale distributors as per the needs presented by the consumer base and positioning of the restaurant.

The next stage requires carefully transporting the procured materials to the operation site. Different food ingredients that the businesses procure as raw materials have varied transportation requirements. For Example, Two food ingredients can have different advised temperature requirements. Furthermore, the suppliers can be scarcely concentrated across geographies. Thus, clubbing of transportation can also be a difficult task. There is a need to efficiently plan the distribution network so logistics requirements and suppliers can be aggregated.

The next stage is where the labor work their magic and process the procured materials into the food served. The food then finally arrives on the customer’s tables.

Another inert aspect of the supply chain is Inventory Management. It helps the restaurants maintain an optimal stock of ingredients required across SKUs. This avoids failure to meet demand as well as the spoilage of inventory.

Recent Disruptions

The restaurant industry functions on a very intricate network of supply chains. The recent years have put a lot of strain on these networks.

The COVID-19 pandemic rendered this network in shambles. The global social distancing norms and lockdowns led to a steep dip in demand. Simultaneously, there was a shortage of labour. The industry does not work in silos. There were domino effects of significant supply chain disruptions, such as the blockage of the Suez Canal. The costs of raw materials and logistics have been rising. The pandemic also led to changes in consumer dining habits. A shift was observed from dine-ins to takehomes and deliveries even in the post-pandemic era.

Tackling the Disruptions

The restaurant industry responded by showing flexibility in the menu items. The scarcity of some raw materials led to the inclusion of more seasonal menu items and increased the frequency of menu rotation.

There has been a shift to local sourcing. This hedges the uncertainties of global supply chains and also appeals to customers who are vocal about local.

The Restaurant Industry has come up with innovative ideas to diversify revenue streams. Such concepts include DIY meal kits, brand merchandise, and hybrid grocery restaurants.

The restaurant industry is navigating one of the most challenging periods in recent memory. The supply chain disruptions of the past few years have underscored the importance of agility, adaptability, and resilience. While some disruptions may be temporary, many indicate broader global economic and consumer behaviour shifts. As such, restaurants would do well to take the lessons learned during this period and use them to build more robust and flexible operations for the future.  

SUPPLY CHAIN MANAGEMENT AND SUSTAINABILITY

Zena Krishnoo

In recent years, customers, workers, investors, and governments have increased pressure on businesses to demonstrate better environmental stewardship and social responsibility. This occurs at a time when the business case for sustainable operations strengthens annually. With increasing demand from shareholders, investors, and the international community to integrate sustainability into all supply chain elements, there has perhaps never been a more crucial time to abandon outmoded procedures in favor of environmentally-focused innovations. However, a
sustainable supply chain encompasses much more than just the environment. Sustainability combines social, economic, and environmental elements in which neither is sacrificed for the other.
Many organizations have begun to focus on supply chains since they use a significant amount of resources and money and are usually a source of unneeded waste. Thus, supply chain sustainability has become an important company objective. Companies have begun measuring their products and services environmental and social effects over their entire life cycles. Here are some fundamental definitions and answers to frequently asked questions to help you better understand supply chain sustainability:
Supply chain:
A supply chain is a connected system of organizations, activities, information and resources designed to source, produce and move goods from origination to a final destination—typically from a supplier to an end customer.
Supply Chain Management:
In commerce, supply chain management is the management of the flow of goods and services including all processes that transform raw materials into final products between businesses and locations. (Wikipedia contributors, 2022)
Sustainable Supply Chain Management:
A sustainable supply chain is one that fully integrates ethical and environmentally responsible practices into a competitive and successful model.
How to make your supply chain (more) sustainable?
There is no “quick fix” when it comes to incorporating sustainability into the supply chain, but a firm may attain a bottom line characterized not just by profit but also by people and the planet by implementing the necessary changes incrementally.
➢ Map out Your Supply Chain
Without an in-depth understanding of your supply chain, it is doubtful that you can even begin adopting significant sustainability reforms. In any case, how can you identify essential adjustments without a visual grasp of what they are?
Therefore, the initial step towards sustainability is to map out the complete supply chain. This will help you identify risks and waste drivers while correctly depicting global suppliers’ social, economic, and environmental difficulties. Then, you’ll be able to examine how human and natural resources are utilized at every stage of the operational and manufacturing process, indicating where adjustments may be made.
➢ Ensure Ethical Sourcing
As a manager of the supply chain, you must be able to observe how your suppliers produce and extract raw materials to guarantee they adhere to sustainability standards. This emphasis on raw materials is incredibly vital in supply networks. Although it is impossible to forecast the impacts of climate change, the nations from where these minerals are collected will probably be affected. This is a broad issue that requires a long-term approach, but there are modest steps you can take to incorporate sustainability into your business. Changing your pallet supplier to a local one, for instance, will cut transit delays and the accompanying expenses and minimize any carbon dioxide (CO2) emissions involved with travel.
On a lesser scale, basic hacks, such as becoming entirely paperless by using digital communication and documentation, will assist you in preserving the environment.
➢ Change Your Mentality
Education remains a crucial component in the delayed (and in some cases nonexistent) progress toward sustainability. Even though certain sustainability measures need physical procedure modifications, this is typically achievable only once behavioral and cultural adjustments are
established. Therefore, gaining respect and understanding from your personnel and suppliers is vital in attaining sustainability of the supply chain.
By implementing internal training programs that teach the significance of your purpose to both existing and new employees, everyone will become aligned with the same objective, allowing you to work for a community outcome every day. Showcase success stories, utilize data to build momentum within your firm, and have your team generate ideas for incorporating sustainable practices into more specialized business activities to achieve this goal.
➢ Collaborate with Other Companies
No matter how hard they try, individuals cannot handle complex supply chain difficulties on their own, whether on a corporate or personal basis. You may, however, become a voice for change and communicate this message to rivals who operate in comparable sectors of the supply chain,
pushing them to join in efforts to build sustainable practices that will ultimately benefit you all. These sorts of collaborations will enable you to define a single standard to which your suppliers can be held responsible, eliminating mountains of paperwork and allowing you to influence the
industry’s future as a whole.
Benefits of Supply Chain Sustainability
Sustainability in the supply chain benefits not only the company’s own interests and those of its stakeholders but also society and the planet as a whole. Companies have recognized, for instance, that extreme weather disruptions and growing resource scarcities posed by climate change threaten their business continuity.
Here are five frequently cited business activities that benefit from sustainability:

1. Supply chain operations: Recent examples demonstrate that energy costs decrease when companies set emission targets with suppliers and assist them in identifying potential improvement areas.
2. Branding: Consumers are more concerned than ever about goods’ origin and manufacturing process. Researchers at the Sloan School of Management at MIT discovered that consumers might pay 2% to 10% more for products with transparent supply chains.
3. Investor relations: Institutional investors are cognisant of the reputational risk associated with supply chain activities that are not sustainable. In recent years, the media has highlighted several reckless supply chain activities, and in certain instances, this has harmed the stock values of some companies. These stories have uncovered enterprises that import electronic components, maintain unsafe working conditions, utilize vendors that habitually damage local waterways, and acquire faulty components or harmful substances.
   Additionally, a recent Gallup study revealed that almost half of investors are interested in sustainable investing funds.
4. Corporate culture: According to demographers, Millennials desire more significance in their employment. Sustainability plays a crucial part in determining a company’s corporate culture and values, which significantly impact the recruiting and retention of personnel.
5. Compliance: Global governments are legislating more supply chain sustainability to fulfill the 2030 deadline set by the United Nations for meeting Sustainable Development Goals such as clean water for everyone. The scope of government restrictions includes the
   traceability of medications, the disposal of electronic equipment, and the avoidance of conflict minerals.
   Conclusion
   Many global firms demand fair labor and environmental policies in their supply chains. Adopting the MNCs’ sustainability strategies is a solid start. All businesses can do more. They should provide consistent messages to vendors that economic, social, and environmental needs are important. They should provide procurement authorities with the same message and encourage them to achieve economic, environmental, and social goals. These authorities should gather supplier data, assess their sustainability performance, and engage them in continuous improvement efforts. MNCs should cooperate with their suppliers’ procurement departments to spread sustainability criteria throughout their supply networks. Supply chains are only as strong as their weakest link.

Operations in F1 racing

An Article by Lakshmi Naraayan – IPM 2018 Batch, IIM Indore

Introduction
Formula one, or simply F1; is called the pinnacle of motorsport just because it has the most advanced technology and the fastest car on the planet. Due to the extremely advanced tech, manufacturing a formula one car can cost around $10 – $15 million dollars. On the flip side, these cars have to be transported to all the venues around the world for race weekends including all spare parts, computers, pit crew, necessary infrastructure, etc. So how do teams do it flawlessly? Let’s find out.

Overview
A typical F1 season consists of 20 race weekends on average, across 5 continents with 10 teams and 20 drivers competing for the world championship.

It’s estimated that for the 2021 season, teams spent around $8 million dollars on just logistics itself, and is expected to increase to $10 million dollars since the 2023 F1 season is going to have a record-breaking 24 race weekends in a span of 9 months. All the teams mostly use a combination of roadways, airways, and waterways to move their equipment, cars, and crew.

Road Travel
Road travel is frequently employed to transport competitors to all European races because all teams are currently based in Europe. The vehicles, supplies, and equipment are delivered to the race sites by liveried articulated lorries. The automobiles are all stripped of their aero packaging before being packaged and transported by road. The vehicles are cushioned and set up on an elevated platform within the truck to prevent movement or damage. Trucks are used to move every vehicle, tool, and
spare part needed for the racing weekend. Tires, fuel, and other equipment are independently delivered by regional partners and technical contractors. The logistics issue is especially difficult for international, or “flyaway,” races. For these races, crucial and non-critical parts must be transported, accordingly. The chassis, tires, motors, wings, computers, and IT racks are among the essential components.

Sea Travel
While noncritical items include things like tools and jacks kept in the garage. Non-critical parts are stored in sets and shipped to multiple locations well before a race because they don’t change throughout the season. These kits are typically shipped by sea. Despite the slower mode of delivery, having numerous sets ensures that the teams can ship them far in advance so that they arrive on time. Before being shipped, the vehicles are stripped down to their bare needs. The engine, transmission, front and rear
wings, any additional aerodynamic components, mirrors, and suspension components are all disassembled. Each of these parts is kept in its own foam-slotted box. As a safety measure, some teams go above and beyond and use bubble wrap and the chassis is packaged under custom coverings.

Air Travel
For air travel, all teams transport their goods in specially designed cargo containers. Currently, most teams use cargo planes that Formula One Management and DHL (official logistics partner of F1) hire. All
of the teams are in Europe; therefore, these jets travel from Munich and London to wherever the event is taking place. When two races are back-to-back, there is a direct route between them. To ensure that everything goes as planned, additional equipment must be brought. According to an article by Wired; Each team has 40 sets of tires, 2,500 liters of petrol, 200 liters of engine oil, and 90 liters of coolant, in addition to enough spare parts to rebuild their vehicles.

How do they plan it all beforehand?

Some race weekends happen back-to-back called “double headers” or even worse “triple headers” where races happen for three straight weeks. While it may be an exciting thing for F1 fans. Logistically, it’s a nightmare for all the teams to transport the machinery and crew to ensure smooth race weekends. Months of preparation went into the relocation. Three months before the first races of the season, in January, each of the ten teams pack five sets of shipping containers. Each of these sets came with a kit that included goods for the kitchen, various appliances, furniture including seats and tables, and numerous garage-related objects. These larger, more affordable pieces of equipment are transported by sea since it is significantly less expensive than flying them. There is always one available even though ocean shipping takes longer because there are five sets. Shanghai, China; Baku, Azerbaijan; Melbourne, Australia; Sakhir, Bahrain; and Montreal, Canada received the first five kits in January. Following each
race, the kits were then packed up and delivered to the next flyaway race site without a kit; the Australian kit was sent to Singapore, the Bahraini kit to Russia, the Chinese kit to Japan, the Azerbaijani kit to the United States, and the Canadian kit to Mexico. When there are no more tracks to send kits to toward the conclusion of the season, the kits are returned to the teams’ home bases for the winter. To give you an example, The weekend after the Bahrain Grand Prix in 2018, which was held at Sakhir, Bahrain, the Chinese Grand Prix was held in Shanghai, China. Everything needed to be disassembled on Sunday evening in Bahrain and ready for use by Thursday morning in China. To sum up, 10 Formula 1 team had to efficiently pack, relocate, and reassemble their paddocks after traveling 4,000 miles with all of their gear within 58 hours.
Conclusion
Every year, Formula 1 teams accomplish this amazing achievement without a hitch thanks to meticulous preparation and skilled labor. There has been no incident in recent years when a team has missed out on a race due to transportation glitches.

References:
* https://f1chronicle.com/how-formula-1-cars-are-transported/
* https://logistics.asia/the-insane-logistics-of-formula-1/
*https://www.youtube.com/watchv=6OLVFa8YRfM&ab_channel=WendoverProductions
*https://www.youtube.com/watchv=MH6Loko0BOA&ab_channel=FORMULA1
*https://www.youtube.com/watchv=nXiyfyjqkm0&ab_channel=PodiumF1

Dedicated Freight Corridors: Importance in bringing down logistics cost

Article by- Rachee Dhabarde

What is Logistics? :-
Logistics means movement of physical goods from one point to another in the value chain of a product.

Logistics in India:
The logistics in India mainly happens by Road. Then most of the logistics takes place by railways, waterways and airways. In terms of cost, waterways are the cheapest mode of transport followed by the railways. Currently, the railway tracks for passenger trains and the fright transport trains are the same. The logistics industry in India is expected to grow at a compound annual growth rate (CAGR) of 15.5% between FY2019 and FY2024. The logistics sector employs around 22 million people and a potential to create another 1.2 million jobs by 2025.

Logistics by railways in India:
As mentioned above, currently in India, same railway tracks are being used to transport the goods and the passengers. This basically has two negative impacts on both the goods and the passenger transports. Firstly, the passenger trains have the highest priority in terms of transport clearance. If any clash happens between a goods train and a passenger train travelling on same track, the passenger train is given the first priority to go ahead. This results in a big halt for the goods train which eventually results in a huge delay for the goods transport. This delay means goods which were supposed to reach the destination in 2 days reach it after 8 days.
This basically results in a huge cost for the company delivering as well as receiving the goods.
Secondly, the use of same tracks for both types of trains means the tracks has to undergo frequent maintenance activities. This is because tracks have to bear the weight of both types of trains resulting in high amount of wear and tear. So the tracks require frequent repairs and not doing so may result in a fatal accident.
In terms of profits, 63% of the profits gained by the railways come from the freight transport while the remaining 27% comes from the passenger trains. Even so, the passenger trains take upper priority in terms of transport. Also, the expenses done on the passenger trains are 110% of the revenues earned. This is mainly because of the salaries of the maintenance staff, electrical supply, washroom cleanings, water supply expenses, customer helpline attendees’ wages, railway police salaries and other administrative costs associated with the passenger trains. In contrasts, freight trains require bare minimum maintenance and runs on a very little
overhead costs. We can say that the passenger trains are like the spoilt kid of Indian railways who has high demands and low returns while the Fright trains are hardworking elder child who has low demands and brings high value to the family.

Dedicated Freight corridors- a sense of justice to freight trains?
To tackle the problem of interruptions to freight trains from passenger trains, Indian government has launched Dedicated Freight Corridors (DFC) project. As the name suggests, the project will focus on building
dedicated railway tracks for the freight trains where only goods carrying trains will run uninterrupted. A new company, DFCCIL or Dedicated Freight Corridor Corporation of India Limited has been formed to take care of the DFC project.

Under the DFC project, 2 DFCs, Western and Eastern DFC has been planned. Out of this, around 600 km of track is currently operational on the eastern DFC while the western DFC is under construction. The DFC project is planned to be completely operational by March 2023. The Western DFC tracks measures around 1504 km while the eastern track measures 1856 km.

DFC Symbol–

The DFC tracks are being made attached to the proposed logistics parks. The problem with Indian logistics parks was that it had no connection with any railway track, so the intermediate transport was used be
done by road. This added to extra unnecessary expenses in the logistics costs. Now, the DFC trains will halt at the logistics [arks directly and loading and unloading can take place easily at the logistics park itself.
The trains that will run on the DFC tracks will have a specially made WAG-12 engine. The engine is being made in collaboration by a French company Alstom and Indian railways. It is a two section engine being
manufactured in Madhepur and have maintenance facilities in Saharanpur and Nagpur. Wag-12 is a 3 phase engine which is more powerful than single phase engine and it weighs 180 ton. The power of the engine is
12000Hp capable of carrying 6000 tons of load. That is equivalent to 600 trucks of loads..!!

Why the project was needed?
Currently, the logistics cost in China is 6% while for India its 30%. That means, a good manufactured for ₹100 reaches at ₹ 106 to customers in China while for ₹130 in India. This puts India behind the competitive
advantage over China in terms of logistics. So tackle this problem and compete with china, DFC was very necessary. Also, in terms of infrastructure, current freight platforms are only 700 meters long while the DFC platforms will be 2 Km long. So a huge amount of goods can be loaded and unloaded simultaneously. This will reduce the time taken to transport the goods. Current average speed of freight trains is just 30 Km/hr while the DFC trains will have a whopping 100 Km/hr speed. That’s a huge reduction in time taken for the fright transport. This is estimated to bring the logistics cost to 18%. Still less than China but this will be start. By using DFC, 24-hour goods transportation can be done and round 13000 tons of goods can be transported at a time as the DFC trains are double-stacked. That means one container on top of the other for the whole length of the train. Also, level crossing is avoided in DFC which means less accidents plus time saving. This will lead to saving of insurance money as well as delay costs. In conclusion, the DFC project will act as blessing for the logistics industry in India, bringing down the cost of logistics by reducing supply time, maintenance cost, saving time for transport and most of all, creating a positive image of India as a cost efficient manufacturing hub for many international firms. This will surely help to boost India’s 3 Trillion dollar economy target.

Green Supply Chain in India

The idea of incorporating environmentally sound practices into the established supply chain is known as a sustainable or green supply chain. The need to incorporate changes towards sustainability is imminent and organizations around the globe are already transitioning towards sustainability using the 3CIs i.e. Continuous Innovation, Continuous Improvement and Continuous Interactions. ITC, PepsiCo, Coca-Cola, ONGC, TCS, State Bank of India and L&T are some organizations that have ventured into this space in India.

The transition towards sustainability  can involve procedures including choosing a supplier and buying supplies, designing a product, making and assembling it, distributing it, and managing its end-of-life. The green supply chain involves value addition and/or value creation through the operations of the entire chain, as opposed to mitigating the negative effects of business and supply chain activities. Unquestionably, the primary objective of a green supply chain is to reduce air, water, and waste pollution. On the other hand, green operations also improve a company’s performance by reducing waste production, reusing and recycling products, cutting manufacturing costs, increasing asset efficiency, cultivating a positive reputation, and increasing customer satisfaction.

As environmental consciousness grows globally, businesses are coming under intense pressure from various stakeholders, including the government and consumers, to reduce their negative environmental impact. In order to gain a competitive edge, the corporate sector must take into account integrating sustainable practices into their business processes in the manufacturing and service sectors. Since the last few decades, the effects of climate change, waste, and air pollution issues have grown, drawing more attention to the need for specialists to think more sustainably and create the best available solutions.

India has already developed into one of the largest economies in the world and is a prestigious member of the trillion-dollar club. In this scenario, the environment and ecology have been severely impacted by the rise in energy demand and consumption, the rise in greenhouse gas emissions, and the scarcity of vital natural resources including land, water, and oil. These problems require immediate attention and priority treatment. Consumers in today’s technologically advanced society are more aware of and engaged with ecological issues, and as a result, they are adapting their behavior to fit a socially responsible lifestyle.

Going green can help businesses make long-term profits while simultaneously saving the environment and reducing their influence on it.

Additionally, the media generates beneficial attention for the businesses that carry out green efforts. Positive media attention for going green can improve the company’s reputation greatly. Therefore, businesses who actively participate in going green will become more visible and credible. Putting in place a green initiative program also guarantees that businesses will abide by any future environmental legislation or regulations.

Thus, green supply chain management (GSCM) is becoming more important as a result of the depletion of raw materials, degradation of the environment, overpopulation of wastelands, and rising pollution levels. In today’s cutthroat business market, it’s important to be environmentally friendly in addition to having stronger commercial acumen and profits.

Green SCM can help organisations in the following ways:

Savings: The green movement offers chances for long-term savings. Companies must demonstrate their long-term commitment by sticking with the GSCM investment.

Lower risk: Companies can minimize risks that frequently result in expenses or losses by purchasing greener goods or services. Environmentally friendly measures can be used and followed to reduce risks such as those associated with illegal extraction techniques.

Increase in revenue: Leveraging tools like green supply-chain management, businesses are competing to increase the efficiency of their business processes and decrease the use of energy and materials.

Indirect yield: – Being environmentally friendly allows an organization to significantly cut waste, safeguard natural resources, and improve its brand image.

Organizations can adopt various strategies to enhance their supply chain towards sustainability further. It involves strategies and policies like biomimicry, Environment friendly product and package, Adoption of clean technologies, Green Stakeholders, Waste Management, Reverse logistics and e-waste management.

The relevance of the supply chain’s sustainability will only increase over time, according to the industry. It takes continuous time and effort to implement and improve the green capabilities. The organizations’ current methods of operation are harming the environment, not just in India but all around the world. Soon, the harm done to our planet will be irreparable. The businesses are working hard to create environmentally friendly production facilities. Green distribution and warehouse strategies have helped businesses become leaner and more effective. As the idea is still in its infancy in India, there is not a lot of awareness of green SCM. raise awareness and distribute knowledge about GSCM practices and highlight the advantages for businesses in terms of cost and efficiency, a framework must be put in place. The management of the green supply chain should be viewed as a vital component of the company by the leaders as it can contribute to cost competitiveness and value creation over a longer period of time.

References:

http://www.ciiblog.in/green-supply-chain-management/

Inventory Management using AI-powered IoT Devices

Inventory is the stock of a resource used by an organization. There are mainly three categories of inventories: Raw materials, Work in process, and Finished goods. Planning and controlling inventories is crucial for organizations because they represent a commitment to monetary resources. Inventory management is the most debated topic in manufacturing. Why is inventory tracking important? Inventory management is a critical component of the supply chain and is responsible for overall corporate profitability and performance. Failure to balance incoming and outgoing inventory can severely destabilize a productive firm.

This balancing act can be difficult; on the one hand, you need to have an adequate supply of products, especially during peak seasons; on the other hand, you should avoid being overstocked. Keeping track of your company’s assets and understanding their status allows you to avoid unanticipated downtime and expenses. Product supervision from the factory to the warehouse and stores is essential to inventory management. Keeping track of numbers and availability dramatically improves work efficiency. Traditional Inventory management systems have issues such as the absence of real-time inventory data, decentralized control, and imprecise projection of demand and supply. 

IoT is one of the most dynamic and fascinating information and communications technology innovations. The Internet of Things is a massive network in which various physical items equipped with sensors, processing power, software, and other technologies are connected to the Internet or other communication networks. The sensors continuously communicate data about the devices’ operational state across the web. IoT enables devices to exchange real-time data without requiring human intervention.

Many firms are rapidly employing IoT devices to increase supply chain visibility. Sensors in IoT devices detect and report on various critical environmental parameters such as temperature, location, light, and humidity. They may also support businesses in assuring quality control throughout their supply chains. IoT technology may also improve visibility in production, inventory management, and predictive maintenance in warehouses and retail establishments.

IoT devices can help reduce human labor and errors while enhancing processing speeds and warehouse efficiency. Companies are installing IoT sensors in their warehouses to track the movement and consumption of goods and other assets. Businesses are also using shelf sensors to provide real-time inventory data to their management system. By ensuring that inventory levels and equipment placements are easily identified and constantly monitored, IoT and smart warehouse management are contributing to the avoidance of costly and time-consuming errors.

Now the question arises of how IoT can be implemented for efficient inventory management. All items tracked in an inventory management system that employs IoT and RFID technology are equipped with an RFID tag. Each tag has a unique identification number (UID) that contains encoded digital data about an inventory item, such as a model number, batch number, and so on. RFID readers are used to scanning these tags. When an RFID tag is scanned, a reader sends this information to the cloud for processing. The cloud also sends information about the reader’s position and the moment the data was recorded. Based on this information, the cloud determines the object’s location with the matching ID, provides a visual representation of the findings, and shows real-time updates.

The Internet of Things has been shown to increase real-time communication in logistics and inventory management. Sensors and gadgets attached to various inventory-related products aid in touch by monitoring data in real-time. IoT allows you to locate the location of every item in your inventory. We can trace its exact position, delivery status, transit status, projected arrival time, etc. The less human intervention required, the better for an inventory management system. The presence of each item in the inventory can be ensured through automatic data gathering of inventory items.

Warehouse management is focused on maximizing the efficient use of that area. The available space in a warehouse can be better allocated once the utilization pattern is established. More frequently used items might be kept closer to the access points to improve warehouse efficiency. Artificial intelligence has allowed us to create clever algorithms that can help us track and manage inventory far better than an ordinary humans. AI technologies will aid in discovering trends that humans cannot see by carefully analyzing IoT data. This procedure will undoubtedly improve inventory management decision-making.

Monitoring solutions offered by IoT that use GPS coordinates to capture data about fleet or equipment transit status aid in improved fleet management and usage, limiting unlawful access and optimizing the entire process. Inventory management based on IoT is crucial in estimating the lead times required to assemble all the parts necessary for manufacturing. High lead times are detected to reduce stumbling blocks produced by the absence of a critical role, which causes manufacturing process stoppages.

Most businesses might benefit from implementing IoT for inventory management. However, various problems must be addressed before IoT’s full-fledged inventory management adoption, such as investment costs, security, scalability, and standards that allow devices to interact. Despite these challenges, the investment cost of IoT technology has been decreasing. Many firms recognize the significant financial benefits of IoT-based inventory management and thus implement IoT for effective inventory management.

Regardless of issues with IoT adoption, IoT Inventory Management continues to improve and offers opportunities for advancement. It is increasingly becoming an efficient and cost-effective technique in supply chain management. This technology has numerous benefits, and several readily available industrial solutions may assist firms in remaining competitive. So in this era of Information technology, It’s time to capitalize on this and handle your inventory management issues.

Knowledge Economy and Business Strategy

The briskly developing world economy is transforming into one that relies more on intellectual capital and skills and less on the manufacturing process. The rapid spread of knowledge and the growing reliance on computerisation, big data analytics, and automation drive this colossal change in the business landscape as the need for updating management strategies grows.

Peter Drucker, a management consultant, developed the concept of a “knowledge economy” in the 1960s. Drucker coined the term to characterise the transition from economies based on manual labour and primary production to those that are knowledge-based and require higher levels of education and training. The knowledge-economy is a structure of production and consumption of knowledge-intensive operations, such as data gathering, analysis, and synthesis.

The rapid pace of this transformation can be attributed to the widespread adoption of ICT, Big Data, and automated processes across industrialised economies. Greater numbers of highly educated workers requiring specialised knowledge or expertise are a hallmark of knowledge-based economies.

Human expertise is the business product or productive asset in a knowledge-based economy which can be traded for profit and these intangible knowledge-based assets are called intellectual capital. The innovation, research, and rapid technological advancement that underpin a knowledge economy allow it to function largely independently. There is a high level of computer literacy among workers, and efforts are being made to advance AI and algorithmic developments that will allow for more precise financial and business forecasting.

Michael Porter, a professor at Harvard Business School, argues that for a business to gain competitive advantage in today’s knowledge-based economy, businesses must be responsive, adaptable, and innovative. Furthermore, it needs to invest a considerable percentage of its resources toward research and development.

Early on, many manufacturers noticed issues in their supply chains, but they needed more understanding and insights to implement effective solutions. While there are other contributing factors, it became clear that a lack of ownership was often at the heart of businesses’ inability to achieve operational goals. No one at the company was in charge of the logistics of supply. Now, if you work for a company that relies heavily on its employees’ knowledge, ask yourself: Who within your company is in charge of creating company-wide knowledge? This is where the Knowledge Supply Chain comes into the picture.

Knowledge Supply Chain

Typically, the physical “tangible aspects such as the raw materials, trucks, and storage facilities associated with supply chains are the first things that come to mind when the term is mentioned. However, supply chains encompass more than just the transformation of raw materials and the distribution of finished goods; they also include the “knowledge supply chain.”

“Knowledge workers” are those whose jobs require them to “plan, acquire, search, analyse, organise, store, programme, distribute, market, or otherwise contribute to the conversion and trade of information.” Those in the knowledge economy are those who put their own and others’ expertise to good use.

The information and knowledge management roles are filled by individuals who, in most cases, need more authority to coordinate the many, often competing, activities that take place across the many, often autonomous, groups that make up an organisation. If the manufacturing industry is any indication, the worst case scenario is when you have multiple independent groups reporting directly to the CEO, who is not the right person to run your knowledge supply chain. One more thing to take away is the importance of working together on a project. Companies with efficient supply chains often employ cross-departmental teams.

The Knowledge Economy in Force – A few live cases

The influence of the knowledge economy is visible in virtually every sector of the economy that you think of. Automation and “just-in-time” inventory management systems and the crusade toward developing driverless cars are all examples of how the knowledge economy is impelling traditional manufacturing sectors like the automotive industry to transform.

The healthcare sector is an important contributor as well as a major primary beneficiary of the knowledge economy. The growth of telemedicine services, widespread use of 3D and robotic surgical aids, and accelerated research and development of new medicines result from the information economy.

An excellent illustration of the knowledge economy is the ICT (information and communications technology) sector, which is concerned with the convergence of communications services and IT, as well as the development of an information infrastructure. Connecting data storage facilities like computer servers with the means of transmission, like cell phones, is a primary goal of the ICT industry to maximise the usefulness of the information.

Since the turn of the century, companies have raised their IT spending by more than 50%, a figure that reflects the technology’s centrality to the success of modern enterprises. Companies working on developing cutting-edge technologies like AI and robotics are currently experiencing the fastest expansion rates in the IT/ICT sector.

Challenges of the Transformation into a Knowledge Economy

The process of shifting from an industrial to a knowledge-based economy gives rise to numerous challenges. Many workers lack the knowledge and abilities to do their jobs effectively in today’s knowledge-based economy.

Companies can help employees adapt to the transformation by providing them with more opportunities for on-the-job training and offering financial assistance to pursue additional education and training outside of work.

What does it mean for Businesses?

• If you feel that, in your organisation, information management (and implicitly knowledge management) is treated as a cost centre rather than a profit centre then the concept of KSC may help you position information management as a source of strategic advantage rather than a necessary nuisance.
• The innovation of R&D-heavy companies is increasingly dependent on their ability to cultivate a wide range of external relationships to foster innovation. Organising complete business processes throughout a value chain of multiple companies is a crucial benefit of thinking about these networks in terms of a supply chain.
• The focus can easily be diverted from the careful thinking and design of a solution to the business problem and technology when managers, whether in IT or any other department, place too much emphasis on the technology itself (such as this deep learning technology or that blockchain technology, or whatever the hype du jour happens to be).
• While data and the quality of data are crucial to success in the knowledge era, other factors such as cultural shifts, business process changes, and operational adjustments must also be carefully considered and accounted for in the overall ROI evaluation.

References

1. Knowledge Economy. (n.d.). Retrieved December 10, 2022, from https://corporatefinanceinstitute.com/resources/economics/knowledge-economy/
2. The Concept and Importance of Knowledge Supply Chains. (2019, August 21). Retrieved December 10, 2022, from https://www.copyright.com/blog/the-concept-and-importance-of-knowledge-supply-chains/
3. Cuofano, G. (2022, January 2). What Is The Knowledge Economy? The Knowledge Economy In A Nutshell – FourWeekMBA. Retrieved December 11, 2022, from https://fourweekmba.com/knowledge-economy/

Quantum Computing in Logistics and Supply Chain Management

IBM has always been a leader in technology and recently with the introduction of its 433 qubit quantum computer Osprey has achieved a big milestone in the race. It packs three times more qubit than the previous version named Eagle. Their current roadmap involves achieving a 4000 qubit quantum system by 2025. Before reaching this milestone they have 2 more quantum systems in the pipeline 1212 qubit Condor and 1386 qubit flamingo in 2023 and 2024 respectively.

Understanding the processing power of QC

There are a lot of open problems in the management which require a lot of computation power. These problems range from forecasting to finding the optimal solution to the last-mile problem. Quantum computing exponentially raises the speed of computing. If we consider the current quantum computer its processing speed is way faster than the current supercomputer. Leaving aside the theoretical power of Quantum technologies, even the current practical problems can be solved using the processing power of quantum computers. Due to the presence of the probabilistic nature of an electron, we can generate a string of random bits which can be used for solving the pressing problem of security. Many cryptographic algorithms are vulnerable to various statistical attacks that quantum technology can provide. This provides a lot of applications in the field of management. 

Let us first understand the concept of qubit

Imagine tossing a coin and assigning heads as 0 and tails as 1. An attacker can rig the coin to his advantage. Similar other ways to generate the classical bits can also be manipulated or interrupted. Now imagine an election passing through a sheet, there are two possible outcomes: either it will reflect or pass through the sheet. We can assign the respective phenomenon as 0 and 1. The bigger question is can we manipulate the process at any stage? The answer is a big No, even if we capture the electron midway it will collapse. This phenomenon makes sure that there is a 50% chance that we get either 0 or 1. The core of security lies in the probabilistic nature of qubit states which does not exist in classical cases. 

Quantum Computers can handle complex data for decision-making models compared to their classical counterparts. The ability to work with different types of data types helps in optimizing Inventory management and logistics in the supply chain. Problems such as Newsvendor problem/Last mile delivery is difficult with conventional computers. Because of the entanglement property of electrons, we can exponentially increase the speed of computation. Because of something called the No Cloning Theorem, a qubit cannot be copied and data cannot be retrieved unlike in classical settings. Integrating it with IoT can simulate the process and can be used for the maintenance of the machine. If you can find a highly efficient route in record time, quantum computers can perform multiple models simultaneously with processing speed a million times faster than the classical computers which makes it suitable for optimizing a classical scenario. 

Currently, It is not very feasible to implement QC in the supply chain industry due to high prices and impracticality. The error rate in QC is also high compared to classical computers due to the perturbation of electrons. Researchers all around the world are trying hard to restrict these errors. With Applications of QC, we can achieve great success with respect to the supply chain industry. Alongside AI & IoT, QC is one of the many digital tools that manufacturers can use to optimize and streamline their processes. 

This is becoming increasingly important as the trend of personalization of consumer goods continues and orders become more complex. With a processing speed up to 100 million times faster than traditional computers, quantum computers can perform multiple models simultaneously, making this technology particularly suitable for optimizing the classic scenario if you find a highly efficient route in record time.

References:

1. https://www.allerin.com/pilates/blog/understanding-the-scope-of-quantum-computing-in-improving-supply-chain-management
2. https://www.ibm.com/thought-leadership/institute-business-value/report/quantum-logistics