 this session, which is continuation of the lecture on the introduction to platform economy. I am Professor Sushmita Narayan, this is part of the NPTEL sessions on supply chain digitization. In this session, I would be picking up a few examples with respect to understanding the need for platform economy. And we will end this particular lecture with an overview of platform economy concept. Just to give you an overview of what we saw in the last session is we saw that specific supply chain like this can be very complicated because of the number of transactions, the kind of information visibility that is required, the fact that customer needs to search for information related to prices related to entities, the fact that the seller needs to do that, the fact that in some cases such as intermediate players, they need to do on both sides of the value chain, this particular activity of selling, searching, evaluating and buying as well. Now, in summary what we had seen is that the supply chain is complicated because of the existence of several players, several transactions and the problems of visibility and the need for appropriate decision making skills at each stage. So, let us pick up an example and understand what could be the kind of complexity we could probably see this in practice. So, I am picking up an example over here. A simple example, let us say we have a customer who is interested in cooking. Now, this customer wants to make a specific kind of a dish and wants a type of spice which is required to create this dish ok. Now, this customer is located in Rajasthan and the customer has observed that the spice required for cooking this dish is not available locally. If that is the case then what would the customer do? The customer is going to cook the dish without the spice that is one option or the customer could cook the dish and substitute the spice with another ingredient which is maybe providing the same kind of flavor, taste, texture whatever be the requirement that the customer wants. So, the customer has basically and in Indian terms we call this as jugad. The customer has done something which is possible with whatever materials are available locally. But if we were to consider this problem, if we were to see the need for the customer is not met right. The customer was looking at creating a dish which will make everyone very happy which might help him or her demonstrate some cooking skills and which might actually make the dish very tasty. But the problem which has happened is that particular ingredient was not available locally. So, the need which was there for this particular spice was not met. As we can observe over here we find that in this particular example there is an opportunity that has been missed out. What could be that opportunity that has been missed out? Let us say this spice or this ingredient is available in the market not in Rajasthan, but in Delhi somewhere a little bit far away from where the customer is located. If the customer was actually aware of the presence of this vendor who is selling this spice and if the customer was very inclined to cooking this dish he or she would have taken up certain steps. He would have called up the vendor and asked him to deliver that item. Paid for that he could have made the trip to the vendor in Delhi, procured the item and then come back to Rajasthan and then made the dish. If that was the case that he cannot even bring the item back to Rajasthan, he might go to Delhi and even cook the dish. Provided the consumers of that dish were going to be present over there. There could be a variety of options that the customer would have chosen knowing that this vendor is actually present in Delhi is willing to sell the spice at a certain price at a certain quantity. Even if the quantity was not available the customer would have actually reached out to the vendor and figured out what could be ways to obtain that quantity in a specific span of time. So, lot of planning could have been carried out with a bit of information which the customer could have used in order to make this decision. So, this is a missed opportunity and like I already have discussed before this creates an inefficiency within the value chain that in other terms the value is not being created whatever value was required is missed out it has not been created. And the simple problem here being that the information related to the availability of the ingredient is not present with the person who wants to use this ingredient. This is an important opportunity that you know maybe another company might want to see and understand and try to enter into this market in order to sell the items to the customer who is present in Rajasthan. So, you can observe over here there is a need for some way in order to make this particular buyer aware of simple information about the market and this information may or may not come at a price to the customer. Let us pick another example which is similar to this and presenting a different type of idea or element or complexity so to speak. So, in this example that you see here example 2 I am picking a company there is a company some unnamed company over here XYZ that is trying to sell high quality compressors to manufacturers who are making household appliances and it wants to sell these compressors in the international market alright. So, compressors are very often used in the electronics electrical appliances industry and it is quite very well known kind of element within heavy industries as well. So, it would make sense that you would like to reach an international market with whatever you have manufactured if you are able to produce high quality products. Now, the company is new let us say that the company is new to this market what would they do? A very typical process that could be followed by some of these companies is to send out their sales persons into different kinds of possible networking places one of the places that they could send them out is to an international exhibition where this company XYZ is demonstrating their compressors. They are showing how the compressor works they are also showing what are some of the features of the compressors what would be some of the uses and in an exhibition this exhibition might have visitors from different kinds of industries. Now, it obviously depends upon where this exhibition is actually located and accordingly what kind of visitors are going to be attracted to this exhibition if the company is interested in an international market they would want to enter into an international exhibition as well. And after some amount of interactions and networking between the sales person or the people at the stall with other companies who are visiting them they are able to manage to kind of convince a manufacturer who is mid size in order to purchase the product which is the compressor. In order to do so they would have also negotiated over several rounds they would have demonstrated the product they would have traveled to the company they would have also you know sat with the client potential client many times and made quite a bit of effort in order to identify what are the needs of the client and then finally, if the client requests a bid because they are also purchasing compressors from others in the market they would have to enter into the process of bidding in order to sell the product to the manufacturer. As you can see this is quite an opportunity, but a very difficult opportunity that the company has to obtain and as a result of this they have made the sale after a long process of negotiations after quite a bit of paperwork which could be involved in this process. But since it is just one mid size manufacturer which they found in an international exhibition they are unable to break even because of low volumes that they end up selling. So, in other words if they have to actually break even they would need to visit more exhibitions they would need to have their sales persons interacting with more customers personal touch doing a lot of this in order to actually result in a successful transaction. So, it is not easy to carry out B2B transactions also because it requires a lot of networking a lot of negotiations a lot of communication that is involved between the vendor and potential client. So, what is a missed opportunity over here is what is of interest to us. If XYZ the company was able to reach out to more manufacturers quickly without the need for let us say demonstrating in several international exhibitions it could have sold more of the product not only that it could have attracted more clients who are also competitive. So, it would not be constrained to sell to just one company they would have had more clients better business and as a result they might be in a better position of power to negotiate with the potential clients. So, as you can see here there is an opportunity which is present in this kind of a transaction as well. Now, let me pick up a third example now this third example that I have picked up is an example in food delivery sector very very popular nowadays youngsters are often purchasing food online and getting it delivered to the doorstep, but it is also now becoming a trend with older adults as well it is a very very popular mode of transaction that happens which has happened after the growth of e-commerce within the country and across the globe. So, what is the case example that I am picking up? Let us say we are looking at a company that is making last mile same day deliveries to customers from cloud kitchens. So, in essence I am not talking about a restaurant, but a cloud kitchen which is going to primarily work on just producing the product and selling it to the customer through the delivery partner it is a same day delivery very common nowadays to have same day not only same day in India it is becoming very common to have 10 to 20 minute deliveries as well and it is becoming a competitive opportunity for companies to enter into such markets quite a bit of disruption that is happening in last mile sector which is what makes this example also interesting. So, what is the scenario that I am picking over here? Let us say there is a customer potential customer of this product and this customer has ordered for two different items from two different, but nearby cloud kitchens. So, in other words we have let us say the customer has ordered one dish which is let us say the main course and one dish which is a dessert the dessert may be from a bakery and the main dish may be some regional cuisine that they are interested in eating. So, these are two different items two different cloud kitchens that need to be attached for this transaction. So, what could be the issue which happens here? The company ends up sending two delivery partners for both these items separately remember the cloud kitchens are actually nearby, but despite that the company is sending across two separate delivery partners to each of the cloud kitchens and the customer is receiving the product from the two cloud kitchens after the delivery partners have visited. So, what do we understand from this? The customer's need is met the customer wanted the items the main cuisine or the main dish as well as the side dish or the dessert that was of interest, but the customer is not happy. So, this is a service quality issue that we are facing the customer is not interested in answering the doorbell multiple times in order to receive various dishes and is not happy to receive separate deliveries. So, why is this a problem? This could be a problem because next time onwards the customer might actually not order maybe the dessert and would just order the main dish. So, which means you have lost business for one of the cloud kitchens that is one possibility in the future. Another problem that could occur over here is the customer is not happy with this kind of separation in the deliveries and might move to another company who is doing food delivery services. So, you can lose out on customer loyalty not only for one of the products, but for both the products and the customer might leave the channel altogether. So, this is a problem this is a problem which is a service level issue despite the fact that the need is met for the customer. Now, another challenge could also arise let us say at the same time you are having a requirement for another delivery to be made to a different customer, but you do not have delivery partners because you have assigned both of them to this customer. As a result there is unavailability of delivery partners and for a different customer the business transaction is cancelled or denied which means it is possible that you will also lose this potential customer not only now, but also in the future. So, this is going to become an issue it could become a large issue or a big issue of significant business impact for the company going ahead if this is going to recur with several potential customers something which is very very undesirable as such. So, over here again we look at what is the missed opportunity that we had this particular case. Our missed opportunity over here was that we had two delivery partners and two customers. So, ideally speaking we should have had one delivery partner assigned to each customer, but as a result of this mismatching that we have carried out as the company one of the deliveries has been not made and in the other case two separate deliveries have been made. So, our missed opportunity is in assigning one delivery partner to each customer and it could be possible that we could do this by taking in some piece of information again this relates to two aspects one is the visibility of information and the second aspect being a decision making problem. So, it is possible that maybe one of the delivery partners was ok to visit both the kitchens and then visit the customer. So, in such a case we could have assigned that delivery partner to the trip for the two items and the other partner was not that interested who could not be incentivized also in order to take this trip can be assigned to the different customer. So, you can see here there is a missed opportunity for matching the right delivery partners to the right customer locations as well as to the right orders as such. We see these kinds of problems which we have seen in example one, in example two, in example three and multiple variants of these problems in many business transactions. And all of these problems as you can see here are not necessarily supply chain related in the sense in terms of whether we can store a product or not, but they are related to simple things like what information is available to me how can I make a decision which matches the right resource to the right customer or to the right supplier. Simple decisions like this which need to be taken up quite often in real time. And if they are not done in real time given the way the economy is functioning there is a good chance that a competitor will come into the market and take it up as well. So, over here we see that there is an opportunity for bringing in some kind of an intermediary who helps in making this information visible to multiple players in connecting these multiple players. So, in other words there is need this shows that there is need for a platform or an intermediary platform. And what will that platform do? It will provide visibility of several elements within business transactions whether it is with respect to players such as your buyers, your sellers, service providers, customers, government bodies, financial institutions. It can relate to any kind of entity who is interested in some kind of a transaction. Visibility of prices, visibility of locations, visibility of product or service characteristics. So, you would be interested for example, in knowing what does your shampoo bottle look like right. You would be interested in knowing what will the restaurant that you want to eat at actually look like what are the aesthetics of the restaurant. What is the kind of seating which is going to be present in a theater right. What would be the rating or reviews for various resources? This is quite often used in order to identify or position the right kind of products and services within the market. This information helps in creating very very competitive transactions within the marketplace. So, this is what we call as the utility of a platform. Now, ultimately the platform facilitates players to make decisions quickly and safely. It can remove unnecessary interactions and biases also to some extent if done in a very regulated manner it is possible. Such that you know the players are not feeling afraid of making their decisions as well. You are not interested in purchasing the product from a specific shop. You should not be afraid of purchasing it from another shop. And by doing this via a platform it removes the need for you to be afraid of doing that. So, what is the platform helping you to do? The platform economy connects the players with each other and it enables social as well as economic transactions. Now, this is interested because we are talking about the social element also and the economic element also. So, what are some of the examples of this? Let us see. In a traditional platform economy the most popular examples that are present are that of our local markets, Mondays, the Souk, Bazaars, very very popular examples. And why are they called platform economies? It is because multiple players are able to visit a location whether it is buyers or sellers and they are able to interact with each other and they are able to make a trade. A very common and popular example for platform economies in which are intermediary takes a place or a role is that of matchmaking. In olden days we had matchmakers we also have that today who are basically people who you know who will identify potential matches for marriage. They would review the profiles of the groom potential groom potential bride and they would see which match would be the best considering family history and several other parameters. This is a business in itself a very very strong business which has been there across the globe not just in India. And as you can observe over here these platforms are primarily offline and the interactions and transactions happen on location. Now I was saying that the transactions can be social as well as economic. In some cases the transaction is just social. You might be visiting or gathering and meeting a lot of people there is no economic transaction that is happening over there and in some cases it could be social as well as economic. For example, markets, bazaars in traditional rural economies most of the people who are visiting those markets also know each other. So, it becomes a place for also interacting with people with same interests as well. But today we live in a digital age and in this digital age are examples are Amazon, Flipkart, Facebook. As you can see these are places for carrying out economic transactions. Social transactions in the sense you are also able to provide your own reviews of the product interact with other parties. Facebook is an example purely for social transactions, but it has marketplaces as well where economic transactions can take place. Ola and Uber are good examples of aggregators who work on the platform economy concept where they try to match drivers with customers or commuters. Then we have the example of matchmaking business even within the digital age such as Shadi.com which is a very popular example in India, but we have other examples. I have written Facebook erroneously over here. So, you might just disregard that and then we have examples such as Ariba. Now Ariba is an interesting example because it relates to B2B transactions. B2B transactions in the sense we are talking about buyers and suppliers in the business domain who are companies and entities themselves who are trying to reach out to each other. Then we have in India a very popular example which has come up now which is the government e-marketplace. It is also called as GEM used by several entities who would like to purchase products for their organization. It is open for government entities as well as private entities in order to purchase. It provides these marketplaces such as Amazon, Ariba, GEM. They provide a platform where the companies are able to demonstrate what their products are and the potential customer is able to make a decision as to whether to purchase or not. Not only that, they are able to take these decisions sometimes with the help of some decision support tools which might be provided. For example, you would have seen very commonly in Amazon Flipkart you are able to look at other potential options which are similar to the product that you are purchasing and this helps you to make a decision. The primary feature over here is that these platforms are virtual. They enable both virtual that is online and offline transaction between parties. So, you can make the entire transaction digital in the sense you purchase the product and you completely paid up as well online using perhaps your UPI or banking transactions or you might pay to the delivery partner who delivers the product to you that is an example of an offline transaction that is taking place. So, we can observe that the platform economy in the digital age is providing hybrid transactions to occur. It is able to connect several parties together and if we were to consider what it actually looks like it would look like something like this. This is an example of an e-commerce website that I have taken which you might be visiting frequently. So, the customer is logging on to this website they are able to see the products. Another customer is also logging in able to see the products. Sellers are able to demonstrate their products on the website promote them even if they pay the platform some amount of a fee that is also possible. And once let us say a seller is matched to the end customer because of the decision taken up by the end customer then one or more of the transportation service providers may be linked to the physical transaction that is taking place. And in order to enable the transactions a financial institution may also take part in this such that digital payments are being carried out by the end customer payments to the transportation service provider via the seller. However, it may be is carried out and it is completely transparent when we consider the role of a financial institution enabling this. There may be several other parties also such as technology service providers etc etc who might be part of this particular platform. As you can see all of them need to be affiliated with this platform in order to have these transactions carried out. So, you might need to be a loyalty member or a member on the website you might need to have a login access some sort of affiliation needs to be created for each of these parties and that is an essential service in itself that the platform provides some kind of security to all of the members that the participants of these transactions or the entities of these transactions are known to some extent. So, what we call such type of platforms because they are enabling several parties to engage with each other is multi-sided platform that caters to several players at once. So, with that we conclude the discussion on the introductory aspects of the platform economy and how it relates to the supply chain and various other business problems that could exist, how it can help improve these problems by providing a place physical or virtual in order to carry out transactions in a seamless manner with as much information as possible provided to various entities, security in terms of types of transactions so on and so forth. So, with that we end this session and I will see you in the next session. Thank you very much.