COVAX - the best SC to be developed!!!

 

With the world economies suffering from the COVID Virus or as more commonly known by the Americans – The Wuhan Virus, the world has moved into a state of deglobalization. Countries have closed their borders; international flights have been grounded and the country leaders are talking about becoming self-sufficient.

Some countries have stopped the visas of other nationality people whereas some have increased the import duties to encourage the self-sufficiency and self-reliance concept.

It is not that these decisions were taken in a blink of the eye moment, but there were incidences which led to such decisions like the supply of faulty testing kits.

But the Questions that haunt us right now are: With the death tolls continuously rising and the economies crashing, will the countries continue to support deglobalization? What if one country achieves a breakthrough and all the other countries (Powerful, developed nations) are fighting with each other leave alone suppressing the under-developed and developing nations to get their hands on the magical life-saving formula? What would be the best way to save maximum number of lives by ensuring “THE MOST RESPONSIVE SC TO DATE”?

From the data gathered by the WHO website, we understand that, there are currently 169 candidates in the list with 26 top contenders in their human trial phase.

 

Let us, for the sake of discussion, say that Russia’s SPUTNIK V is successful in making the vaccine, and it has a production capacity of 100,000 dozes per day. The population of the world is 7.8 Billion as per the data taken from google.com, by doing the basic calculations, we can see that it will take around 7800 days which is almost 215 years for each and every person on the face of Earth to be vaccinated, (assuming that only one manufacturer is present). It is obvious that the drug maker will increase its production over the time period and also the other drug makers in the world will try to imitate the formula and make similar drugs and the time might be reduced. Speaking very optimistically, and taking all the capacity enhancement procedures, it will at least take 50 years for 7.8 Billion People to get the vaccine.

 

Not having a properly designed SC, may lead to a World War III between the powerful nations who will try to save their people which will lead to further destruction rather than curbing it. It is therefore very important that the decision makers think about a unique, robust and most responsive supply chain and make the vaccine available around the globe in the least possible time.

The work for developing a COVAX (as the WHO calls it) is ongoing at an unprecedented speed. Some of the countries which are in the race are:

1.      Russia

2.      USA

3.      India

4.      China (with no one buying from it due to past experience)

5.      Germany

 

Another important factor is the shelf life of the vaccine and the conditions in which it has to be transported from the drug maker to billions of people around the globe. As per the field experts, the vaccine will have to be transported at 2 to 8^oC, which is another feather in the hat of problems.

The suggestions from a logistics student perspective would be, the world leaders in logistics operations, to start building and investing to develop a supply chain that the world has never witnessed before. All the three modes; Land, Water and Air, should be used to the maximum capacity to transport the vaccine; in return, the drivers of this robust logistics system should be vaccinated first, so that they are motivated to help save the mankind.

Proper and directed decisions to be taken and all the contenders in the world should be connected initially to increase the production capacity, so that all the netizens of the world can be vaccinated at the earliest.

 

The supply chain of vaccines

 

Since its discovery in December 2019, the COVID-19 pandemic is responsible for more than 26.9 M confirmed infections and over 880 K deaths. A vital race is on as humanity begins to adapt its response to the epidemic–a race to find, develop and deliver a potentially life-saving vaccine.

In order for a vaccine to successfully minimize or eradicate an infectious disease, the supply chain must function optimally to fulfill vital demand areas while still maintaining vaccine viability.

There are several factors that make a vaccine supply chain unique:

• The Cold Chain: Most vaccines must be transported and stored in a constant cold chain of temperatures ranging from two to eight degrees Celsius – from manufacturing all the way through to the immunization of a patient. This places a strain on the delivery, particularly in the last mile, when vaccines are distributed to remote populations in countries with limited infrastructure and electricity.
• Packaging: Decisions around single syringes versus multi-dose vials affect supply chain capacity.
• Ancillary Products: Glass vials, stoppers, needles, syringes, raw materials, and more are all needed for successful administration of the vaccine.
• Production Planning: The long production timelines and short shelf-lives require a combination of accurate demand forecasting and agile product planning.

Restricted storage capacity, particularly within the cold chain, can lead to waste if the inventory and need exceed the ability of the supply chain to transport a vaccine continuously from source to final destination. But limited storage space can also be offset in a health facility or warehouse by adjusting delivery frequency, direction, mode of transportation, or even facilitating vaccine distribution.

IKEA - A lesson in sustainable supply chain leadership

 IKEA -A lesson in sustainable supply chain leadership

I ,Gayathri Nair pursuing MBA at Amrita school of business, find it distressing to see the lack of environmental awareness and concern business houses show towards our planet . So sustainability as a concern was on top of my yardstick for assessing the culture of businesses.  It's here that IKEA stands as a beacon of hope

Introduction : 

The awareness that we are not the owner of the earth ,water ,air and sky but mere custodians for the gen next has seen the birth of "sustainability " in all walks of life .sustainability reads as avoiding the depletion or rape of natural resources so that the fragile ecological apple cart is not overturned 

Sustainability as a way of life has permeated most businesses and the global furniture giant IKEA is the best example of sustainable supply chain management .

IKEA : An introduction 

With a vision " to create a better everyday life for the many people " IKEA ,the Swedish multinational company with its parent company in the Netherlands has firmly entrenched itself in the market for ready to assemble furniture ,kitchen accessory and home accessories . Born in the creative mind of a 17 year old, Ingvar kampard in 1943 , IKEA has grown into a global brand name to be reckoned with in the field of furniture retailing 

Modernist furniture which requires minimalistic effort in assembling and adhering to environmental friendly guidelines is the USP of IKEA 

 

There are around 433 IKEA stores in 52 countries making them undoubtedly the king .

 

 

The ownership Hierarchy : 

IKEA ownership is a maze of intricate web of not for profit and for profit corporations .the corporate structure is bi bifurcated into operations and franchising 

Commitment to environment : A legacy 

 minimizing the use of formaldehyde ,replacing polyvinyl chloride in wall papers ,home textiles ,furniture etc , do away with acid curing lacquers, reducing the use of chromium for metal surfaces are some of the epic changes put in place 

Sustainable supply chain leadership : Commitment for life

Leading the sustainability way and being a shining beacon of hope for sustainability ,IKEA has pulled out all their stops while drafting their sustainable supply chain planning . They have been the flag bearers in the arena of investing in renewable and efficiency and have addressed the elephant in the room by making all their 12,000 deliverables from renewable ,recycled and environment friendly resources 

IKEA has an IWay code of conduct in place . This is the yardstick that has to be met while sourcing and distributing their resources .they have pumped in 1.1 billion dollars in sustainable supply chain that covers companies developing renewable energy , re-forestry and bio materials . A small step for a business but a giant leap for the safety of the planet 

Sustainable sourcing : Foundation of green living 

The main resources that IKEA makes use of is cotton and wood . They have been trying to use organic , those which limit the use of pesticides , fertilizers and minimize the wastage of water .

IKEA is pumping in sizeable investment in sustainable forestry and works in association with organizations like the Global Forest Watch . They aim to make 100 percent of their wood from sustainable sources 

This is a promise to keep the forests intact as well as finding a continuous and inexhaustible flow of raw materials to keep their operations intact 

Reforestation : Ensuring replenishing of the forest cover 

Depleted forest cover is not just an environmental concern but also a hazardous business bottleneck 

IKEA will not source wood from diminishing tropical forests , sensitive mangroves and ecologically fragile areas as it will sound the death-knell for the planet .IKEA is an active participation in a whole lot of viable reforestation drives . IKEA is the leader in the wood furniture scorecard ,an assessment body on wood sourcing policies determined by the National Wildlife Federation and the Sustainable Furnishings Council 

Reduce ,recycle and reuse .... The three R's of packaging 

Single use plastics are no longer welcome in IKEA and it's in-house restaurants . Continuous research aimed at developing alternative forms of fully biodegradable packaging from mushrooms is in place .the " fungi packaging " is funky and Eco friendly . This will stop the reels of Styrofoam , polystyrene from slowly choking earth to death .

IKEA has put in place a strong policy to measure and mitigate risk . They are constantly innovating measures to reduce the carbon footprints .

IKEA is a beacon in the arena of sustainable retail space .

 

Handling Supply chain disruptions

Welcome back Readers I’m Sivakami - A final year MBA student from Amrita School Of Business majoring in Marketing and operations. I have found my space to explore on the various verticals in the area of  Logistics and supply chain and of course not limited to theories and  empirical studies 😅. So come lets discover on our never ending territory 😇 

    Everytime, I reach out to the supermarket nearby to get some goodies, I have always seen the shelves neatly stacked. Infact I always got what I needed with plenty of options and brands. I have wondered how retail stores maintain their stock despite the over hiking footfalls. But once the pandemic hit us hard I was able to figure out the answer to this. The supply chain disruptions actually draw our attention towards supply chain dependencies that we are otherwise not aware of.

    Sometimes these supply chain disruptions are small and localized which may affect only a few businesses. Other times it is globally felt.For instance when the asian markets are hit, it is felt by global economies since Asia is the main source for a diverse range of suppliers. One of the recently seen supply chain disruptions is COVID -19 Pandemic. We are witnessing the effect of global pandemic which has a massive supply chain impact because the number of people, regions, and global companies affected can upend normal operations at every stage of the production line.

    So in these circumstances, we probably won’t get much advance notice about disruptions to the supply chain, so it’s a good idea to make sure we plan ahead for any eventuality. So here we will be discussing the strategies for managing supply chain disruptions.

• Create a supply chain emergency plan.
• Build up inventory
• Conduct a supply chain vulnerability audit
• Identify backup suppliers
• Diversify supply base
• Partner with a logistics expert
• Adopt risk evaluation tools

  

  Firstly it is important for us to create a supply chain emergency plan or a backup plan, especially when it comes to supplies. Secondly, building up inventory. Stockpiles of essential supplies will help us in withstanding disruption. In other words, this might mean having a store of finished goods, components or even raw materials to maintain business if supply chains are temporarily cut off. Thirdly conducting a supply chain vulnerability audit will help us in analyzing the risk and see where the weakest links in the supply chains are and also develop alternatives for such areas. It can also be helpful to assess potential environmental, social, and political conditions that may impact the supply routes. 

    Identifying suppliers in other geographic locations and building a relationship with them can give us an edge over others. We can also diversify our supply base by setting up supply chains in different places. This will make us ensure that we'll always be able to get at least some goods amidst any disruption. Sometimes the risk evaluation tools help us in sensing the potential threats in the market. AI-enabled mapping and environmental analysis solutions, aggregate apps that provide geopolitical overviews, and systems that can evaluate cyber threats. Even social media can be used as a predictive tool to identify potential shortages and disruptions

    In times of trouble, having a good long-term plan in place or a strong crisis management strategy is essential.Supply disruptions are inevitable, but by planning your response carefully, evaluating potential supply chain risks, and diversifying your suppliers, you can help prepare for even the most unprecedented of circumstances.

Happy reading from Sivakami :)

Supply Chain - The Basics

 

Supply Chain - The Basics

With the world suffering from COVID-19 for the past 9 – 10 months, everyone is talking about the global supply chain being disrupted, how the products are not able to reach the customers and how there is a supply shortage across the world.

To understand these demand shortages, we should first understand what is a supply chain. This article deals with the basics of a supply chain.

“A Supply Chain is a well-connected network between the supplier, manufacturer and the end consumers. The basic function of a Supply Chain is to ensure a smooth flow product, finances and information through these channels.”

                                   

                                                                         

Now, we will explode the supply chain into its components as shown in figure 1, to understand each component better and also how to make the supply chain more agile.

(Please note, we will be discussing the SC with respect to a manufacturing firm)

Vendor: In any manufacturing unit, there are numerous suppliers that basically provide the firm with the raw materials (or even finished product) that it requires for producing the finished goods which have some value to the customer and the end consumer. The people or firms that supply the raw materials to the manufacturing unit, are called Vendors. Any firm will have more than one vendor, this is done in order to:

• 1.     Mitigate the quality defects that may arise due to poor raw materials.
• 2.     Remove the monopoly of one vendor (*thereby reducing the bargaining power of the vendor)
• 3.     To manage the variations in lead time.
• 4.     To have sufficient inventory.
• 5.     Provide a buffer (back up) in case of any emergencies.

There are generally two types of products that a manufacturing firm requires:

1.    Main Materials: That are required for the production of the Finished products. Eg: Plastic Pellets for a plastic manufacturing plant, Bamboo & wood for Paper manufacturing, Aluminum ingots for Aluminum extrusion company.

2.     Auxiliary Materials: These materials are not used in production directly, but without them, the production is not possible. These are materials that are required for almost all the manufacturing firms but varies in sizes & quantities. For eg: Bearings, Welding Rods, Tools kit, Stationery Items, Other machinery spare parts.

Sourcing: As the name suggests, it is the activity that takes care of the sourcing of raw materials, this department deals with calculating the lead time, the available inventory of raw materials and the orders in pipeline that have to be fulfilled by the firm and how much raw material is required to complete the process. It is also the duty of Sourcing department to select the vendor and authorize the vendor to supply to the firm. While a vendor is external to the firm, sourcing department is internal to the firm. The decision to select or reject a particular vendor is taken based on

• 1.     The past history of the vendor.
• 2.     The lead time required to supply the raw materials.
• 3.     The cost at which the raw material as compared to the price in the market.
• 4.     The quality of the raw materials being supplied.
• 5.     The capacity of the vendor to supply the required quantity.

Inbound Storage/ Transportation: Once the order has been placed to the vendor, it becomes the responsibility of the vendor to ensure that the raw material is made available to the firm at the promised date. The vendor first produces or sources the raw materials from its suppliers and then moves it forward to the firm that is his customer. Once the material is received, a GRN (Good received Note) is prepared and sent to the production department or maintenance department (depending whether the material received is a RM or auxiliary material). A supervisor or engineer from the respective department inspects the received products and acknowledges that the received products are as per the requirement. Once this is done, two things happen almost parallely:

1.     The payment procedures for the vendor starts.

2.     The products are stored in the warehouse.

Operations: This is the part of the Supply Chain where the VALUE addition is done to the Raw Material with the help of the 5Ms of the manufacturing, i.e. Man, Material, Machine, Method & Money. Various operations are performed by using various machines and technical skills of manpower and Standard Operating Procedures and the Value (that the end consumer pays for) is created in this step.

Outbound: Once the Value is added to the RM, it becomes a finished product that has to be carried with utmost care till it reaches the end consumer that it is intended for. The finished goods are stored in the finished good warehouse, till the transportation is arranged and the FGs are shipped to their future owners. During the industrialization era, the thinking of the firms was “I will produce what I am able to produce, if you want it you buy it”, quoting Mr. Henry Ford “The customers can have any color they want as long as it is black” and a filled finished good warehouse was considered very good and the firm was said to be good in production, but as of date, the thinking has completely changed, only if the firm is able to sell all of its finished good inventory, will it be able to make some money to pay its vendors, employees & also make some profits. So, as of date many companies produce as per the market demand and their primary objective is to keep the FG warehouse empty.

Customer: A customer is someone who buys your finished goods and gives it to the end consumer. A Customer maybe a distributor, wholesaler or retailer. They basically bridge the gap between the consumer and the manufacturer. However, in some cases, customer may itself be the consumer (for eg: Factory outlets, in Mysore, a Reid & Taylor manufacturing unit has their own shops, just outside the manufacturing unit), in this case they have eliminated the distributor and hence the amount that the consumer pays for the product includes the commission amount that is paid to the distributor, wholesaler & retailer and also the transporter that moves the material from one customer to other, whereas if the consumer goes to the factory outlet and buys the product, all these costs are removed, and hence the consumer gets the product for a much cheaper cost as compared to when bought at a retail outlet.

Consumer: Consumer in the most economic terms can be termed as the paying point for the product that the company has manufactured. The company produces a product for its end consumers and it is the supply chain that basically connects that product with the person for whom it was produced.

 Now, a question might be asked: How does a company know what does the customer want?

That is the job of the marketing department personnel, they go out to the market and talk to customers & the consumers and find out their requirements and that information flows back to the manufacturing firm. Based on this information, the firm decides what is to be produced and in what quantities, and what are the other resources required to produce the required products. Based on this information, suppliers are informed and the raw materials are procured.

Once the consumer requirements are met, the consumer pays for the product to the retailer, who then removes his costs & profits and pays the remaining amount to the wholesaler, and then the finances flow to the manufacturer via distributor.

 

 

 

Humanitarian Supply Chain (HSC)

                               

December 26, 2004 a day not to be forgotten in History, Yes we are talking about the massive tsunami which swept millions of lives and livelihood of people of South East Asia. True that during natural calamities like tsunami, we witness the damage it causes, the pain it leaves and certainly the lives it takes but now let us witness some lessons it teaches.

Humanitarian Supply Chain, a connecting thread between the donor and the beneficiary acts a relieving point in minimizing the human suffering and the loss.  The core activity of the Humanitarian Supply Chain is to provide the indispensable needs to the vulnerable groups as promptly as they can while the way they execute underlies certain predominant differences between commercial supply chain and HSC which opens up today's learning on Supply Chain . 

                            

Let us unwind the Humanitarian Supply Chain by starting to comprehend different players of the relief value chain of Tsunami 2004, and they were Donors, Humanitarians, Governments, Military and the Beneficiaries. And the engagement of these stakeholders can be implicated with relief value chain model developed by fritz institute in the year 2004

The operation of HSC  commences with preparedness stage which  acts beyond any specific disaster, it is the ready set stage set by the country’s Government to handle to the uncertainties, whereas the assessment stage is more specific to the type of disaster and to the region affected. In 2004 Tsunami, the major needs that were assessed for:  food, water, medicines, temporary tents and not clothes, winter jackets or canned food. After the assessment was done the humanitarians collected the goods from the various Donors fragmented throughout the globe.

When the goods were ready to be shipped; the ports and airports were opened and was fully packed with resources to receive the goods and to transfer it to the local logisticians. The area of beneficiaries who were to receive the goods were mapped by the regional Government. And these beneficiaries of damaged areas received the materials and food as per the prior mapping through the enabled military and Para military forces.Though the Humanitarian Supply Chain aimed to deliver the goods at greater promptness it suffered various major weaknesses during 2004 calamity and they were:

·   1.Transfer of unsolicited goods

·   2.Transfer of unsuitable goods

·   3.In adequate assessments

·  4. Lack of tools and technology to track

·   5.Co ordination and collaboration

Especially, Unsolicited and unsuitable donations wasted time and effort that went back in bringing them to the beneficiaries. In certain cases, the process of assessment took more time hence planning the blueprint delayed which caused the beneficiaries to suffer for few days without much medical or material support.  Like any other commercial supply chain, Humanitarian Supply chain posses  the relief chain model that came into existence and practice in 2004, where it stands as a benchmark for building further models. #Happy_Learning 4