SCM needs to be looked at from competitiveness point of view. SC can be made competitive by investing rightly into various priorities.

1. Supply Chain
Management for Global
Competitiveness
S G Deshmukh
ABV-Indian Institute of Information Technology & Management ,
Gwalior
Int Conference on Managing Supply Chain for Global Competitiveness
IIIE and RCOEM Nagpur 25 Oct 2013
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2. Acknowledgement
This presentation is based on extensive
information sharing sessions with
 Prof
R P Mohanty (VC, SOA)
 Prof Manoj Tiwari (IIT Kgp), Prof Ravi Shanker(IITD), Dr
Jitesh Thakkar (IITKgp)
 Thankful
to numerous research scholars and
faculty members from various institutes for
making us realize the importance of SCM in
today's competitive scenario.
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3. Before I begin..
You may look at some of my presentations
available at
http://www.slideshare.net/SanjeevDeshmukh/presentations
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4. 
Speaking points..
About SCM.
 Imperatives & Implications
 1:

Shelf life
 2: Digital environment everywhere
 3: Sharing & Connectivity
Global competitiveness report
 Implications for SCM
 Closing remarks..
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5. IT is making world flatter !
(Thanks to Friedman)



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
Outsourcing dominated paradigm
Team work and leadership assumes new meaning
Geography has become history: Time and distance are no
longer the important variables
Mobile dense and multimedia rich environment has accelerated
digital environment.
Connectivity has made the global village possible
Working on-line, flexi-time, tele/videoconferencing, and
continuous learning are changing the traditional notions of how
work gets done.
Internet is changing the way we communicate with –
Source : Fridman, T L, The World is flat: Farrar, Straus &
Giroux , 2005
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6. Observations..

Transformation taking place
 The way we communicate has changed.
SCM is no exception to this !
 Traditional way of conducting business
has drastically changed.
 Demanding customers and changing
technology
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7. Supply Chain Management..
..a network of facilities and
distribution options that performs
the functions of procurement of
materials, transformation of these
materials into intermediate and
finished products and the
distribution of these finished
products to customers…..
Mohanty R P & Deshmukh S G,(ed,) 2011,
Handbook of Supply Chain Management, Excel
Books

8. Today's market..

increasingly competitive markets with new
entrants providing superior products and
services
 visible shift from seller to a buyer's market with
increasing consumer emphasis on price and
quality
 the necessity for an industry to succeed in
globalised economy.

9. Today's customer

Very much enlightened ?
 Guided /influenced by web/mobile/media
 Short attention/retention span ?
 Has now options, as he can choose, what
he would like to buy from various
alternatives, and also he can dictate
terms.
 Youthful? Energetic? Ready to spend ?

10. 
Observations..
Supply Chain Management has matured as a
discipline
 Developments in IT have made integration
possible
 Basic issues in SCM : Management of Material
Flow, Information Flow and Money Flow
 Basic principles can be applied to a variety of
contexts

11. Goal of SCM…

“to manage upstream and downstream
relationships with suppliers and customers
in order to create enhanced value in the
final market place at less cost to the
supply chain as a whole”
M Christopher

12. Typical key words in SCM..

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
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


Integration
Interfaces
Sharing
Collaboration
Inventory
Information
IT

13. Insights..





Inventory manifests in various forms
Inventory and information can be exchanged
Managing lead time helps in management of
inventory
Modelling helps in understanding issues from a
different perspective
Performance needs to be measured on various
dimensions (hence BSC, SCOR etc.)

14. Imperative 1:
Shortened product shelf life

Web enabled world: Number of ideas getting
generated, developed and produced
 Faster product life cycle
 Shelf life has shortened considerably (example:
mobile phones, tablets)
 Pressure on manufacturing
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15. Implications

You have to update continuously and must
know the state-of-the-art
 You have to innovate continuously
 Continuous up gradation about customer
feedback
 Proper synchronization between design,
operations and supply chain
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16. Imperative 2:
Digital environment everywhere !

17. Implications

You can not afford to be invisible in the digital
world
 Someone is going to measure you and make
you visible !
 You and your products/services are constantly
indexed, searched
 You are also under constant onslaught of new
and emerging ideas !
 Your availability 24x 7 basis !
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18. Imperative 3 :
Sharing & connectivity !




Connecting with suppliers and
customers
Sharing of information
Professional networks
Social networks

19. Implications

Sharing of information/Knowledge made easy
through IT
 You must share and connect
 Your collaborator may be anywhere in the
globe available 24 x 7 basis
 Power & influence of social media as a
binder!
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20. Example: Apple vs Amazon ?
http://blog.kinaxis.com/2012/12/apples-and-oranges-wellactually-apple-and-amazon/
Miles Trevor Blog 13 Dec 2012

21. Comparison on…




Agility – the ability to quickly and cost-effectively shift
amounts and/or types of production and delivery to
improve operational performance in volatile conditions
Collaboration – the ability to work across organizational
boundaries to solve systemic operational problems and
create new value for both customers and partners
Execution – the consistent and reliable delivery against
commitments and within budgeted expenses
Innovationhttp://blog.kinaxis.com/2012/12/apples-and-orangeswell-actually-apple-and-amazon/
Miles Trevor Blog 13 Dec 2012

22. Why talk about competitiveness?
Traditional thinking: competition is driven by the 4P’s



Today: supply chain capabilities determine competitiveness!
Wal-Mart versus K-Mart
Compaq/HP versus Dell
A final product is not the sole goal


Customer experience is determined by supply chain: quality, cost, delivery
Significant proportion of value sourced from suppliers!
Supply chains are connected systems enabled by IT

Competitiveness of one tier is a function of the supply and distribution functions,
i.e. surrounding tiers.
“Value Chains compete, not individual companies!”
(Christopher 1992)

23. Creating a competitive supply
chain
1.
Develop strategic objectives and tactics, decide
competitive priorities
2.
Integrate and coordinate various activities in the
internal supply chain through IT
3.
Coordinate activities with suppliers with customers in a
collaborative manner
4.
Coordinate planning and execution across the supply
chain in a digital environment
5.
Form strategic partnerships

24. Supply Chain : Competitive priorities
1. Quality
2. Cost
3. Flexibility
4. Velocity
5. Customer
service

25. Velocity

Inventory velocity
 The
rate at which inventory(material) goes
through the supply chain

Information velocity
 The
rate at which information is
communicated in a supply chain

26. Competitive priorities :
Sand Cone Model
Cost
Customer service
Flexibility & Velocity
Quality

27. Challenges

Barriers to integration of organizations

Getting top management on board

Dealing with trade-offs

Small businesses

Variability and uncertainty

Long lead times

28. Supply Chain Issues
Strategic
Issues
Design of the
supply chain,
partnering
Tactical Issues
Inventory policies
Purchasing policies
Production policies
Transportation
policies
Operating Issues
Production planning and
control

29. Long term strategy





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
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Enhance focus on competitiveness
Creating conditions for investment in and growth of the
manufacturing sector
Lowering the cost of manufacturing
Investing in innovations
Strengthening education and training at all levels
Adoption of global best practices in SCM
Right market framework, competition and regulation
Issues relating to competitiveness in small and medium
industries
Infrastructure development

30. Perspectives on competitiveness
Competitiveness is a concept comprising of the potential, the
process and the performance.
GMR (2001)
To be competitive, several factors must exist: the desire to win,
commitment or perseverance and the availability of certain
resources.
Khalil (2000)
Competitiveness is defined in terms of ‘helping business to win’,
‘price’, product range and quality and ‘distribution and marketing’.
Dou and
Hardwick(1998)
Competitiveness arises or results from firm-specific initiatives like:
better management, leveraging and stretching of resources.
Hamel and Prahlad
Ability to design, produce and /or market products or services
superior to those offered by competitors, considering the price
and non-price qualities.
Cruz and
Rugman(1992)
Competitiveness is synonymous with productivity and is assumed
To capture quality feature as well as efficiency feature.
Porter (1990)
Competitiveness is the ability to raise income as rapidly as
competitors and to make investments necessary to keep up with
Them in the future.
Scott (1989)
Extent to which a business sector offers potential for growth and
attractive return on investment
WCR(1994)
(1993)

31. Competitiveness..


Extent to which a business sector satisfies the needs of
customers from the appropriate combination of the
following product/service characteristics: price, quality,
innovation , and satisfies the needs of its constituents;
for example, workers in terms of involvement, benefit
programmes, training, and safe workplace; offers
attractive return on investment and also offers the
potential for profitable growth.
Company competitiveness is defined as "the ability to
design, produce and/or market products superior to
those offered by competitors, considering the price and
non-price qualities" (WCR, 1991).

32. Global Competitiveness..


The Global Competitiveness Report 201213, published 5th. Sept 2012
Ranking of 144 countries on 12 selected
criteria
http://www.weforum.org/issues/global-competitiveness

33. The Global Competitiveness
Report

Launched in 1979 covering 112
countries
 Goal: to provide a benchmarking tool
for policymakers and business leaders
 Today 144 countries in the gambit

34. Definition of competitiveness
 “The


set of institutions, policies, and
factors that determine the level of
productivity of a country”
The level of productivity, in turn, sets the
sustainable level of prosperity that can be
earned by an economy.
Source: GCR, 2011

35. Global Competitiveness Index framework
Key for factor-driven
economies
Key for efficiency-driven
economies
Key for innovation-driven
economies
The Global Competitiveness Index
A. Basic Requirements
B. Efficiency Enhancers
C. Innovation &
Sophistication Factors
1. Institutions
5. Higher education
and training
11. Business
sophistication
2. Infrastructure
6. Goods market
efficiency
12. Innovation
3. Macroeconomic
environment
7. Labor market
efficiency
4. Health and primary
education
8. Financial market
development
9. Technological
readiness
10. Market Size

36. Global Competitiveness Index 2012-13
select economies ranking
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf
Rank
Score
(Out of 144) Economy
1
2
3
7
8
10
13
20
29
32
37
59
65
Switzerland
Singapore
Finland
United States
United Kingdom
Japan
Taiwan
Australia
China
Oman
Kuwait
India
Philippines
5.72
5.67
5.67
5.47
5.45
5.40
5.28
5.12
4.83
4.62
4.56
4.32
4.26

37. The Global Competitiveness Report
12 Pillars of competitiveness
•Institutions
•Infrastructure
•Macro-economic environnent.
•Health & basic education
•Higher education & training
•Market efficiency – goods
•Market efficiency – labour
•Market efficiency –finance
•Technological readiness
•Market size
•Business sophistication
•Innovation
factor-driven
economies
efficiency-driven
economies
innovation-driven
economies

38. GCR economies..
Source:
http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_201213.pdf
Stage
Labeled as
No
Examples
Stage 1
Factor driven economy
38
Countries
India, Kenya, Ghana
Transition from Stage 1 to 2
17
Countries
Egypt, Libya, Srilanka
Efficiency driven economy
33
countries
China,Indonesia,Thaila
nd
Transition from Stage 2 to 3
21
countries
Argentina, Chile,
Malaysia
Innovation driven economy
35
Countries
Australia, UK, USA
Total
144
countries
Stage 2
Stage 3

39. Global Competitiveness Index
Goods market efficiency components
Intensity of local competition
Extent of market dominance
Institutions
Effectiveness of anti-monopoly policy
Infrastructure
Extent and effect of taxation
Macroeconomic environment
Health and primary education
Total tax rate
Number of procedures required to start a
business
Higher education and training
Time required to start a business
Goods market efficiency
Agricultural policy costs
Labor market efficiency
Prevalence of trade barriers
Trade tariffs
Financial market development
Prevalence of foreign ownership
Technological readiness
Business impact of rules on FDI
Market size
Burden of customs procedures
Business sophistication
Innovation
Imports as a percentage of GDP
Degree of customer orientation
Buyer sophistication

40. Global Competitiveness Index
Financial market development
components
Availability of financial services
Institutions
Infrastructure
Macroeconomic environment
Affordability of financial services
Financing through local equity
market
Health and primary education
Ease of access to loans
Higher education and training
Venture capital availability
Goods market efficiency
Labor market efficiency
Restriction on capital flows
Financial market development
Soundness of banks
Technological readiness
Regulation of securities exchanges
Market size
Legal rights index
Business sophistication
Innovation

41. Global Competitiveness Index
areas for improvement
Business sophistication components
Institutions
Local supplier quantity
Infrastructure
Macroeconomic environment
Local supplier quality
Health and primary education
State of cluster development
Higher education and training
Nature of competitive advantage
Goods market efficiency
Value chain breadth
Labor market efficiency
Financial market development
Control of international distribution
Technological readiness
Production process sophistication
Market size
Extent of marketing
Business sophistication
Willingness to delegate authority
Innovation
Reliance on professional management

42. Global Competitiveness Index
Institutions
Infrastructure
Innovation components
Macroeconomic environment
Health and primary education
Capacity for innovation
Higher education and training
Quality of scientific research institutions
Goods market efficiency
Company spending on R&D
Labor market efficiency
University-industry collaboration in R&D
Financial market development
Government procurement of advanced
technology products
Technological readiness
Market size
Business sophistication
Innovation
Availability of scientists and engineers
Utility patents per million population

43. Implications of GCR..

Various activities in SCM can enhance
competitiveness: Example: Infrastructure,
Penetration of ICT, Business
sophistication, Innovation etc.tor
 Competitiveness can be visualized at
 Industry
level
 Sectorial level
 National level
 Global level

44. Closing remarks..

Digital environment and IT has made
SC a challenging task
 Merging of product and service supply
chains
 Several issues in SCM
 Framework of Global Competitiveness
report provides an opportunity for
improvement in SC

45. Well Known Conferences for
Practitioners in SCM

Council of SCM Professionals
Conference
 POMS Conference

Gartner Supply Chain Executive
Conference (17-18 Sep , 2012 at London,
UK)

46. Useful web resources …

http://www.theferrarigroup.com/supplychain-matters/
 http://blog.kinaxis.com/
 http://www.scmr.com/blogs

47. Thank you &
stay in touch..
deshmukh.sg@gmail.com
http://www.slideshare.net/SanjeevDeshmukh
http://sgdeshmuk.blogspot.in/
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