 Hello everyone, welcome to this course on supply chain digitization. This course is offered by Indian Institute of Management Mumbai by three faculty members including myself, Professor Priyanka Verma and my colleagues, Professor Sushmita Narayana and Professor Devabrata Das. In this session, we will be going to cover the fundamentals on supply chain management and we will try to understand what is the supply chain and how the supply chains are different for different products or different types of surfaces. So if I ask you what is the supply chain, there is a term which is used over here called as chain. A chain is typically formed of different links as we all know. So when we connect these links, we can say that a chain is formed. So how does this link is playing a major role in supply chain and how a supply chain is formed? By definition, the supply chain is nothing but it is an interconnected journey of raw materials, components and finished goods before their assembly and sale to customers. The purpose of supply chain is to ensure that the products are made, manufactured and for manufacturing, we will be getting different raw materials and components from different suppliers which are then used for making the final product and that is moved through different links you can say and is ensured that it reaches to the final customer. So if I try to correlate the supply chain and the chain which we are referring over here, the different links of the supply chain are nothing but they are the different players in a given supply chain and every link has got to play a very important role depending upon the position in the supply chain and what is expected from them. For example, the supplier of the raw material has to play a critical role of ensuring that the raw material reaches to the manufacturing plant in right time, in right quantity and with right quality. These are some major expectations from the raw material supplier. Similarly, at the manufacturer the expectations are that the how these raw materials are converted into finished products which are now ready to be transported to the next link which can be your warehouse or it going forward it can be a distributor or finally it can be a retailer. So if you see starting from supplier and then to the manufacturer then to the warehouse, distributor and finally to the retailer the product moves but in different forms, in different shapes, in different ways and reaches to the retailer from where the customer can take their product easily. This is a very simple supply chain problem and this is an example of a traditional supply chain but let us try to understand this topic further to look into the different types of supply chains as well. As we discussed about the supply chain, let us look into this example once again through a simple scenario where we have got suppliers and the suppliers are responsible for making or getting the raw material, sometimes these raw materials are readily available or sometimes these raw materials needs to be extracted assuming that they are some type of metals or so on depending upon the components or the products that you are trying to manufacturers. These raw materials can then be used for making certain components which is again as you can see these are the component manufacturing, these are the another set of players. Finally once these components are ready they are being assembled at the assembly units you can see and from assembly once the final product is ready the products can be distributed via distribution centers and from here the products can be moved directly to the retailers from where the end consumers can pick their products. So again you can see that how many layers of players are involved in the supply chain totally depends on the type of the products that you are trying to provide and also the processes involved are dependent on the type of products and their different requirements that has to be taken care. So with this little bit of discussion we get a sense that the supply chains are different or in another way we can say that not all supply chains are same. To understand this point into more detail let us look into the supply chain of automobile. So automobile again is made up of different type of components and let us try to understand these numbers into some detail. Automobile has got raw material suppliers for making any type of automobile requires more than 1000 suppliers who are responsible for getting raw materials components or for different other related parts or equipments and these suppliers are again supplying to this sub component manufacturers these sub components can be dashboards or transmission or it can be engines as you can see different suppliers are supplying to different component manufacturers and we can see a pairing which is shown over here that which supplier is meant to which component manufacturers even in a given automobile for making these components you will require more than 500 suppliers and once these sub components are ready these components are then used for assembly and there is one process called as interior assembler which uses all these sub components for designing the interior part of the vehicle whereas we have power train assembler which uses components like transmission and engine and ensure that the engine part is assembled over here. Once all these components the major part of the automobile is ready the final assembly is done and you can see that there are sometimes you require 1000 unique components at the final assembly level as well. Once the final product is ready it is shipped to dealers to the dealers obviously we have shown a very simple supply chain over here to show the movement of final vehicle final product from assembler to the dealers but it can have multi layer of distribution centers also installed between the final assembler and between the dealers as well this totally depends upon the geography that has to be covered and finally once a product is available at the dealer side the consumers can book their vehicle easily which actually involves so many suppliers have playing critical role supplying some individual components supplying some unique components and which are further assembled to form sub components and then to final assembly where which helps you in making a final product. So, this is again a very interesting example of automobile supply chain let us see some more examples the another example which you will try to understand is about pharmaceutical supply chain. So, in pharmaceutical supply chain we know that we will require majorly two type of components one is the raw materials which are required for making your medicines or other type of related pharmaceutical products and the second type of products or supplies that we need is related to the packaging material. So, how a supply chain starts from the identification of the raw material supplier and the packaging material suppliers and these suppliers can transport your product through rails through road and thus forms your inbound logistics the suppliers are supplying to the manufacturers which is playing a critical role with R&D and accordingly the medicines or the pharma company was they keep developing new products with the help of R&D the input is further given to the R&D supplier and PM supplier which again provides this updated components or updated supplies to the manufacturers which uses this material to make the final product. So, there is a very critical role between the R&D and PM suppliers, manufacturers and R&D in pharmaceuticals which helps you in updating your latest requirements and the products are accordingly manufactured with the help of R&D as well. So, these three departments are coming together to ensure that the right products are made as per the requirement of the patients and once the product is ready it is sent via again different mode it can be again rail or road to the central warehouses. From here the one part of supplies are given to the exports and that is why we have got export agents involved over here. The second part is going for clearing and forwarding agents from where the products are moved to the distributors to the stockists and sometimes with the same semi wholesalers as well. The distributors are giving to the hospitals from where the consumers can get their products. The stockists are responsible to fulfill the requirement of retailers and pharmacies. From here also consumers can get these medicines. Parallely the semi wholesalers are also responsible to give to retailers and pharmacies. Again from here you can see the consumers can also pick up the product. So, this is again a very looks like very jumbled network over here but as we know that depending upon the requirement of these products at the till the last point in any given state this type of network is very important and here lot of players are coming together whether it is a distributor whether it is a stockist or whether it is a semi wholesaler or a retailer everybody is playing a very critical role to ensure that the product reaches to the consumers in the right form for its proper utilization. The next example which we will take is about supply chain in oil and gas industry. Again here if you see in the exploration step these oil and gas can be exploited and from here either via pipeline or via ship this the oil and gas is transported to the production area and from there again via pipeline or transportation or via ship transportation it is stored in the crude oil storage and the mode of transportation you can see is very different here. Here we are using either pipelines for transporting or ships for transporting. After crude oil storage the product is moved to the refinery where again all the different processes related to distillation and similar activities are done and the products are further transported via pipeline and ship to the storage terminals from where the products can be moved directly to the retailer end or to the industrial markets or to the commercial markets. In doing this last stage of delivery we can use any type of transportation mode it can be pipeline, rail, road or tanker type of transportation. So we can see that starting from the beginning of exploration step till the product reaches to the markets which are of again of different types the transportation modes are changing the way these products are processed and stored is also changing and the different drivers or different players which are involved in the supply chain are again changing and the roles are also very different. So again the soil and gas is a very different example which is trying to help us in understanding that why not all supply chains are same. Let us take one last example over here this is about e-commerce supply chain we all are using e-commerce nowadays a lot. So let us see that how this e-commerce industry works. So typically any e-commerce industry the customer places the order and the information about the order booking is captured which is passed to these three PL central warehouse as you can see from here. The information has all the details about the type of the product which is booked by the customer the quantity attached with the products along with the price at which the customer has agreed or the amount which he has paid he or she has paid. So once the three PL central warehouses receive this information the given information is again passed to the suppliers who are responsible for providing these products. Once the supplier gets an idea about what product is required by the customer the product is shipped back to the three PL central warehouse. You can see from here the orange line is indicating you the physical movement of the goods whereas a black or blue line is trying to capture the information from the previous player. So from three PL central warehouse once it has received the product from the supplier the product is now shipped to the three PL local warehouse and it is kept over here at this site the decision about the last mile delivery is made and the product is now moved to the final customer ensuring that the product reaches to the customer in the desired time slot with the customer has ordered. So this is a very interesting example of a e-commerce supply chain as you can see from here that the manufacturers are not present it is only the suppliers of the product which are playing a key role in this type of supply chain and also we can see that there is not much role of the raw material suppliers or component supplier in this particular supply chain. So we have seen different example in this session whether it is pharma whether it is auto automobile supply chain whether it is e-commerce supply chain or it is oil and gas supply chain one thing that is coming very prominently is that not all supply chains will have all the players involved with that. It is not necessary that a manufacturer is present in all the supply chain or a distributor is present in all the supply chain and so on. It simply depends upon the type of the business model and also the requirement of that particular player in that supply chain. So a last example what we have seen which is about e-commerce it clearly indicate us that the raw material supplier is not required. Parallely the manufacturer is not required however if you start tracing the supply chain for the suppliers obviously the manufacturers and their raw material supplier will also come into the picture but right now we have just focused on looking into the supply chain with the e-commerce perspective that is why we have not considered the other element attached to the suppliers of the product. So with this we have seen in this session that what is a supply chain how supply chain works what are the different players or who are the different players in the supply chain and what are the different types of supply chain. We have picked up very few examples over here you can map this example in real world and pick up any product and try to trace their supply chain see that which supplier is available and why. In this way we can try to understand the way any supply chain functions we can also understand the role of these players very clearly. With this we will end today's session hope to meet you all soon in the next session. Thank you everyone.